DoE uranium transfers in question

11 June 2014

The US Government Accountability Office has questioned the legality of four transactions involving the Department of Energy and US uranium enrichment company USEC.

The four transactions studied in depth by the Government Accountability Office (GAO) took place in 2012 and 2013. Three of them involved the transfer of depleted uranium tails or low-enriched uranium between the Department of Energy (DoE and USEC, providing USEC with operating cash to support the development of next-generation centrifuge technology in the period running up to the closure of the Paducah gaseous diffusion enrichment plant in May 2013.

The fourth transaction had nothing to do with nuclear power generation or the civil fuel cycle. It involved a complex series of transfers of tails for re-enrichment involving DoE, USEC, Energy Northwest and the Tennessee Valley Authority (TVA), and served to ensure the availability of domestic low-enriched uranium for the production of tritium needed to maintain US nuclear weapons. Since 2004, the USA's supply of tritium for use in its nuclear weapons program has been produced in TVA's Watts Bar nuclear power plant. DoE is legally obligated to use only domestically sourced uranium, enriched using domestic technology, to meet military needs so securing the uranium needed for its tritium program was made more pressing by the imminent closure of Paducah.

All of the transactions involve depleted uranium tails, a by-product of the enrichment process used to increase the proportion of fissile uranium-235 for use in nuclear fuel. By taking on the liability for the future disposal costs of tails, DoE effectively allowed USEC to free up funds that had been earmarked for such a purpose at a time when the USA's only domestic enrichment company was facing financial difficulty: The Paducah plant was approaching the end of its operating life, while the company's American Centrifuge project was facing ongoing financial problems. USEC filed for Chapter 14 bankruptcy protection in March 2014.

The GAO study identified legal concerns with all four transactions, questioning the DoE's legal authority to transfer the material to third parties and finding further problems concerning the department's failure to comply with legal requirements including transferring the material without charging any price for it, and failing to obtain the necessary presidential determination before transferring material that had previously been held for national security needs.

DoE's methods for valuing tails were also called into question in the report, which noted that when viewed as an asset, DoE's uranium tails might be valued at anything from zero to $300 million. The study also questioned the steps taken by DoE to fulfil legal requirements to assess impacts on the domestic uranium market before going ahead with the transfers.

Enrichment issue

Following the 2013 closure of Paducah, America has no uranium enrichment capability that meets DoE's military needs. The only enrichment plant of any kind is Urenco USA's facility in New Mexico, but this is absolutely off-limits to the American military due to Urenco's ownership (jointly by Germany, the Netherlands and the UK) and because it uses its own technology belonging to those nations.

The significance of this was not lost on GAO: "The nation is currently without an enrichment capability that can meet national security needs and be consistent with DoE's position that these needs be met using unobligated LEU," the report notes. "USEC and DoE had been looking toward the successful commercialization of the American Centrifuge technology to re-establish a domestic enrichment capability that can fulfil national security needs, but USEC's financial condition and the absence of project financing raise questions about when and how this will occur," it goes on.

Begging to differ

The GAO report noted that DoE had "generally disagreed" with the report's findings and recommendations in written comments submitted to the agency, asserting some aspects of GAO's legal analysis to be unfounded or erroneous. "We appreciate DoE's willingness in this regard, but it has offered no compelling reason to reach different conclusions than in our report. GAO and DoE therefore continue to disagree," the report notes.

Researched and written
by World Nuclear News