“GAO’s review of DOE’s Excess Uranium Management and Uranium Transfers Involving USEC”

Uranium has been enriched for over 60 years in the United States to fuel commercial nuclear power plants and for national security purposes. The Department of Energy (DOE) requires low-enriched uranium (LEU) to produce tritium, which is used to enhance the power of U.S. nuclear weapons. DOE has stated that, to produce tritium, it can only use unobligated LEU—uranium that under international agreements is not obligated to only be used for peaceful purposes. Since its establishment in 1998, USEC Inc. (USEC) has been the only company that, according to DOE, could produce unobligated LEU for tritium production. However, in December 2011, USEC informed DOE that it was considering ceasing enrichment at its sole operating enrichment facility because of decreased demand for LEU and high production costs associated with the facility’s World War II-era, energy intensive enrichment technology. Following this announcement, DOE took several actions to ensure the availability of an assured source of unobligated LEU for up to 15 years of tritium production and to support USEC’s development of next-generation American Centrifuge technology. Specifically, between 2012 and 2014, DOE conducted four uranium transactions involving USEC and transferred appropriated funds to USEC on eight occasions. A May 2014 Government Accountability Office (GAO) report raised legal, risk management, and market impact concerns with the four uranium transactions. In that report, GAO recommended steps to improve the transparency of DOE’s future uranium transactions. USEC ultimately ceased enrichment at its enrichment facility in May 2013, and the United States lost what DOE considered to be its sole supplier of enrichment services for national security purposes. Further, the future of the American Centrifuge technology remains uncertain. In an October 2014 report, GAO found that DOE’s practice of using only unobligated LEU to produce tritium has not been thoroughly examined since 1998 and that other legal interpretations of international agreements exist that affect uranium enrichment for national security purposes. GAO recommended that DOE work with other agencies to review DOE’s practice of using only unobligated LEU for tritium production. This paper will present GAO’s findings and recommendations and provide updated information on DOE’s uranium transactions.