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United States Government Accountability Office: 
GAO: 

Testimony: 

Before the Subcommittee on Energy and Power, Committee on Energy and 
Commerce, House of Representatives: 

For Release on Delivery: 
Expected at 1:30 p.m. EDT:
Monday, June 13, 2011: 

Nuclear Material: 

DOE's Depleted Uranium Tails Could Be a Source of Revenue for the 
Government: 

Statement of Gene Aloise, Director:
Natural Resources and Environment: 

GAO-11-752T: 

GAO Highlights: 

Highlights of GAO-11-752T, a testimony before the Subcommittee on 
Energy and Power, Committee on Energy and Commerce, House of 
Representatives. 

Why GAO Did This Study: 

Since the 1940s, the Department of Energy (DOE) has been processing 
natural uranium into enriched uranium, which has a higher 
concentration of the isotope uranium-235 that can be used in nuclear 
weapons or reactors. This has resulted in over 700,000 metric tons of 
leftover depleted uranium, also known as “tails,” that have varying 
residual concentrations of uranium-235. The tails are stored at DOE’s 
uranium enrichment plants in Portsmouth, Ohio and Paducah, Kentucky. 
Although the tails have historically been considered a waste product, 
increases in uranium prices may give DOE options to use some of the 
tails in ways that could provide revenue to the government. 

GAO’s testimony is based on its March 2008 report (GAO-08-606R). GAO 
updated the analysis in its 2008 report to reflect current uranium 
prices and actions taken by DOE. The testimony focuses on (1) DOE’s 
options for its tails and (2) the potential value of DOE’s tails and 
factors that affect the value. 

In its 2008 report, GAO suggested that Congress consider clarifying 
DOE’s statutory authority to manage its tails. No action on this 
recommendation has been taken to date. Also, GAO recommended that DOE 
complete a comprehensive uranium management assessment. DOE issued a 
uranium management plan in December 2008 that addressed GAO’s 
recommendation. 

What GAO Found: 

DOE’s potential options for its tails include selling the tails “as is,”
 re-enriching the tails, or storing them indefinitely. DOE’s current 
legal authority to sell its depleted uranium inventory “as is” is 
doubtful, but DOE generally has authority to carry out the other 
options. 

* DOE’s authority to sell the tails in their current unprocessed form 
is doubtful. Because of specific statutory language in 1996 
legislation governing DOE’s disposition of its uranium, DOE’s 
authority to sell the tails in unprocessed form is doubtful, and under 
the rules of statutory construction, DOE likely lacks such authority. 
However, if Congress were to provide the department with the needed 
authority, firms such as nuclear power utilities and enrichment 
companies may be interested in purchasing these tails and re-enriching 
them as a source of nuclear fuel. 

* DOE could contract to re-enrich the tails. Although DOE would have 
to pay for re-enrichment, it might obtain more value from selling the 
re-enriched uranium instead of the tails if its re-enrichment costs 
were less than the discount it would have to offer to sell the tails 
as is. 

* DOE could store the tails indefinitely. This option conforms to an 
existing DOE plan to convert tails into a more stable form for long 
term storage, but storing the tails indefinitely could prevent DOE 
from obtaining the potentially large revenue resulting from sales at 
current high uranium prices. 

DOE issued a comprehensive uranium management plan in December 2008 
that stated that the department would consider selling depleted 
uranium or re-enriching it to realize best value for the government 
and that it would begin selling or re-enriching depleted uranium in 
2009. However, to date, DOE has not sold or re-enriched any of its 
depleted uranium and, according to DOE officials, has no current plans 
to do so. 

The potential value of DOE’s depleted uranium tails is currently 
substantial, but changing market conditions could greatly affect the 
tails’ value over time. Based on May 2011 uranium prices and 
enrichment costs and assuming sufficient re-enrichment capacity is 
available, GAO estimates the value of DOE’s tails at $4.2 billion—-
about $3.4 billion less than GAO’s March 2008 estimate. However, this 
estimate is very sensitive to changing uranium prices, which have 
dropped since GAO’s March 2008 report was issued. GAO’s estimate is 
also very sensitive to the availability of enrichment capacity. In 
particular, DOE would have to find a company with excess enrichment 
capacity beyond its current operations, which may be difficult if 
large amounts of enrichment processing were required. 

View [hyperlink, http://www.gao.gov/products/GAO-11-752T] or key 
components. For more information, contact Gene Aloise at (202) 512-
3841 or aloisee@gao.gov. 

[End of section] 

Chairman Whitfield, Ranking Member Rush, and Members of the 
Subcommittee: 

Thank you for the opportunity to discuss our work on the Department of 
Energy's (DOE) inventory of depleted uranium as you consider options 
for using this inventory in ways that could benefit the U.S. 
government. As you know, since the 1940s the government has been 
processing natural uranium into enriched uranium. This increases the 
concentration of the isotope uranium-235, which is necessary to make 
the material useful in nuclear weapons or reactors. The generation of 
enriched uranium over many decades has resulted in approximately 
700,000 metric tons of leftover depleted uranium, also known as 
"tails," that have varying residual concentrations of uranium-235 
remaining. DOE stores these tails at its uranium enrichment plants in 
Portsmouth, Ohio, and Paducah, Kentucky. DOE is assessing its options 
on how to best manage this large accumulation of tails. Although the 
tails have historically been considered a waste product and an 
environmental liability, increases in uranium prices may give DOE 
options to use that portion of the tails with the highest residual 
concentrations of uranium-235 in ways that could be a source of 
revenue to the government. 

My testimony today is based on our March 31, 2008, report to the House 
Committee on Energy and Commerce, the Senate Committee on Energy and 
Natural Resources, and the Chairman of the Subcommittee on Oversight 
and Investigations, House Committee on Energy and Commerce.[Footnote 
1] We also testified on this subject before the Subcommittee on 
Oversight and Investigations, House Committee on Energy and Commerce 
on April 3, 2008.[Footnote 2] In our March 2008 report, we recommended 
that the Secretary of Energy develop a comprehensive uranium 
management assessment that should contain detailed information on the 
types and quantities of depleted, natural, and enriched uranium the 
department manages and an assessment of DOE's options for this 
material. Consistent with our recommendation, DOE issued a 
comprehensive uranium management plan in December 2008. This plan 
stated, among other things, that DOE would consider selling depleted 
uranium or re-enriching it to realize best value for the government 
and that it would begin selling or re-enriching depleted uranium in 
2009. However, to date, DOE has not sold or re-enriched any of its 
depleted uranium, and, according to DOE officials, has no current 
plans to do so. 

My testimony today discusses (1) DOE's potential options for 
beneficially reusing or indefinitely storing its tails and (2) the 
potential value of DOE's tails and factors that affect the value. 

In preparing this testimony, we updated information from our prior 
report. Specifically, we obtained the most recent data on the 
quantities and uranium-235 concentrations of tails in DOE's inventory 
and uranium price data to update our model of the potential value of 
DOE's tails. We developed this model for our March 2008 report. The 
model uses standard formulas to determine the amounts of enriched 
uranium and tails produced from given quantities of uranium and 
enrichment services. The model also uses uranium price data that we 
obtained from nuclear industry trade publications. These data are 
commonly used in the nuclear industry as standard measures of the 
market price for uranium. We interviewed knowledgeable DOE officials 
to determine the extent to which these data are used by the department 
and the industry and determined that the data were sufficiently 
reliable for the purposes of our report. Our prior work on DOE's 
depleted uranium, as well as the work conducted for this statement, 
was performed in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

Background: 

Since the 1940s, one mission of DOE and its predecessor agencies has 
been processing uranium as a source of nuclear material for defense 
and commercial purposes. A key step in this process is the enrichment 
of natural uranium, which increases its concentration of uranium-235, 
the isotope of uranium that undergoes fission to release enormous 
amounts of energy. Before it can be enriched, natural uranium must be 
chemically converted into uranium hexafluoride. The enrichment process 
results in two principal products: (1) enriched uranium hexafluoride, 
which can be further processed for specific uses, such as nuclear 
weapons or fuel for nuclear power plants; and (2) leftover "tails" of 
uranium hexafluoride. These tails are also known as depleted uranium 
because the material is depleted in uranium-235 compared with natural 
uranium.[Footnote 3] 

Since 1993, uranium enrichment activities at DOE-owned uranium 
enrichment plants have been performed by the U.S. Enrichment 
Corporation (USEC), formerly a wholly owned government corporation 
that was privatized in 1998. However, DOE still maintains over 700,000 
metric tons of depleted uranium tails in about 63,000 metal cylinders 
in storage yards at its Paducah, Kentucky, and Portsmouth, Ohio, 
enrichment plants (see figure 1). It must safely maintain these 
cylinders because the tails are dangerous to human health and the 
environment. Uranium hexafluoride is radioactive and forms extremely 
corrosive and potentially lethal compounds if it contacts water. In 
addition, DOE also maintains large inventories of natural and enriched 
uranium that are also surplus to the department's needs. 

Figure 1: Uranium Cylinder Storage Yard at DOE's Paducah Uranium 
Enrichment Plant: 

[Refer to PDF for image: photograph] 

Source: DOE. 

[End of figure] 

Tails have historically been considered a waste product because 
considerable enrichment processing is required to further extract the 
remaining useful quantities of uranium-235. In the past, low uranium 
prices meant that these enrichment services would cost more than the 
relatively small amount of uranium-235 extracted would be worth. 
However, an increase in uranium prices--from approximately $21 per 
kilogram of uranium in the form of uranium hexafluoride in November 
2000 to about $160 per kilogram in May 2011--has potentially made it 
profitable to re-enrich some tails to further extract uranium-235. 
Even with the current higher uranium prices, however, only DOE's tails 
with higher concentrations of uranium-235 (at least 0.3 percent) could 
be profitably re-enriched, according to industry officials. 

DOE Potentially Has Options for the Tails but Has Not Implemented Its 
December 2008 Plan for Selling or Re-Enriching Them: 

DOE's potential options for its tails include selling the tails "as 
is," re-enriching them, or storing them indefinitely. However, DOE's 
legal authority to sell the tails in their current form is doubtful. 
We found that DOE generally has authority to carry out the re-
enrichment and storage options. As we said earlier, DOE issued a 
comprehensive uranium management plan in December 2008 in response to 
a recommendation in our March 2008 report. In this plan, DOE stated 
that it would begin selling or re-enriching depleted uranium in 2009. 
However, to date, DOE has not done so and, according to DOE officials, 
has no current plans to sell or re-enrich this material. 

DOE's Legal Authority to Sell the Tails in Their Current Form Is 
Doubtful: 

While selling the tails in their current unprocessed form is a 
potential option, we believe that DOE's authority to conduct such 
sales is doubtful because of specific statutory language in 
legislation governing DOE's disposition of its uranium. In 1996, 
Congress enacted section 3112 of the USEC Privatization Act,[Footnote 
4] which limits DOE's general authority, under the Atomic Energy Act 
[Footnote 5] or otherwise, to sell or transfer uranium. In particular, 
section 3112 explicitly bars DOE from selling or transferring "any 
uranium"--including but not specifically limited to certain forms of 
natural and enriched uranium--"except as consistent with this 
section." Section 3112 then specifies conditions for DOE's sale or 
transfer of natural and enriched uranium of various types, including 
conditions in section 3112(d) for sale of natural and low-enriched 
uranium from DOE's inventory. To ensure the domestic uranium market is 
not flooded with large amounts of government material, in section 
3112(d), Congress required DOE to determine that any such inventory 
sales will not have a material adverse impact on the domestic uranium 
industry. Congress also required in section 3112(d) that DOE determine 
it will receive adequate payment--at least "fair market value"--if it 
sells this uranium and that DOE obtain a determination from the 
President that such materials are not necessary for national security. 

However, neither section 3112(d) nor any other provision of section 
3112 explicitly provides conditions for DOE to transfer or sell 
depleted uranium. Because section 3112(a) states that DOE may not 
"transfer or sell any uranium…except as consistent with this section," 
and because no other part of section 3112 sets out the conditions for 
DOE to transfer or sell depleted uranium, we believe that under rules 
of statutory construction, DOE likely lacks authority to sell the 
tails. While courts have not addressed this question before and thus 
the outcome is not free from doubt, this interpretation applies the 
plain language of the statute. It also respects the policy 
considerations and choices Congress made in 1996 when presented with 
the disposition of DOE's valuable uranium in a crowded and price- 
sensitive market. This reading of DOE's authority is consistent with 
how courts address changes in circumstances after a law is passed: 
Statutes written in comprehensive terms apply to unanticipated 
circumstances if the new circumstances reasonably fall within the 
scope of the plain language. Thus, under the current terms of section 
3112, DOE's sale of its tails would be covered by the statute's 
general prohibition on sale of uranium, even if tails were not part of 
the universe Congress explicitly had in mind when it enacted the 
statute in 1996.[Footnote 6] 

Should Congress grant DOE the needed legal authority by amending the 
USEC Privatization Act or through other legislation, firms such as 
nuclear power utilities and enrichment companies would be interested 
in purchasing at least that portion of the tails with higher 
concentrations of extractable uranium-235 as a valuable source for 
nuclear fuel. For example, our March 2008 report stated that officials 
from 8 of 10 U.S. nuclear utilities indicated tentative interest in 
such a purchase. Individual utilities were often interested in limited 
quantities of DOE's tails because they were concerned about depending 
upon a single source to fulfill all of their uranium requirements. 
Multiple utilities acting together as a consortium could mitigate 
these concerns and purchase larger quantities of tails. The report 
also noted that some enrichment firms also told us of some interest in 
purchasing portions of the inventory, but their anticipated excess 
enrichment capacity to process the tails into a marketable form 
affected both the quantity of tails they would purchase and the timing 
of any purchase. 

Our March 2008 report noted that potential buyers suggested various 
commercial arrangements, including purchasing the tails through a 
competitive sale, such as an auction, or through negotiations with 
DOE. However, industry officials told us that buyers would discount, 
perhaps steeply, their offered prices to make buying tails attractive 
compared with purchasing natural uranium on the open market. That is, 
DOE might get a discounted price for the tails to compensate buyers 
for additional risks, such as rising enrichment costs or buyers' 
inability to obtain sufficient enrichment services. In addition, 
potential buyers noted that any purchase would depend on confirming 
certain information, such as that the tails were free of contaminants 
that could cause nuclear fuel production problems and that the 
cylinders containing the tails--some of which are 50 years old and may 
not meet transportation standards--could be safely shipped. 

DOE Could Re-enrich Its Tails: 

Although DOE's legal authority to sell the tails in their current form 
is doubtful, DOE has the general legal option of re-enriching the 
tails and then selling the resulting natural or enriched uranium. DOE 
would have to contract for enrichment services commercially because 
the department no longer operates enrichment facilities itself. 
Furthermore, DOE would have to find a company with excess enrichment 
capacity beyond its current operations, which may be particularly 
difficult if large amounts of enrichment processing were required. 
Within the United States today, for example, there are only two 
operating enrichment facilities: DOE's USEC-run Paducah, Kentucky, 
plant and the URENCO USA facility located near Eunice, New Mexico. In 
the case of the Paducah plant, almost all of its enrichment capacity 
is already being used through 2012, when the plant may stop operating. 
In the case of URENCO USA, the facility is still under construction 
and it is not yet operating at full capacity. Other companies are also 
constructing or planning to construct new enrichment facilities in the 
United States that potentially could be used to re-enrich DOE's tails. 

Although DOE would have to pay for re-enrichment, it might obtain more 
value from selling the re-enriched uranium instead of the tails if its 
re-enrichment costs were less than the discount it would have to offer 
to sell the tails as is. Representatives of enrichment firms with whom 
we spoke at the time of our 2008 report told us they would be 
interested in re-enriching the tails for a fee. The quantity of tails 
they would re-enrich annually would depend on the available excess 
enrichment capacity at their facilities. 

Additionally, as noted above, prior to selling any natural or enriched 
uranium that results from re-enriching tails, DOE would be required 
under section 3112(d) of the USEC Privatization Act to determine that 
sale of the material would not have a material adverse impact on the 
domestic uranium industry and that the price paid to DOE would provide 
at least fair market value. Section 3112(d) also would require DOE to 
obtain the President's determination that the material is not needed 
for national security. 

DOE Could Store the Tails: 

DOE also has the general legal option to store the tails indefinitely. 
In the late 1990s, when relatively low uranium prices meant that tails 
were viewed as waste, DOE developed a plan for the safe, long-term 
storage of the material. DOE has constructed new facilities at its 
Paducah plant and its closed Portsmouth uranium enrichment plant to 
chemically convert its tails into a more stable and safer uranium 
compound that is suitable for long-term storage. The facilities are 
currently undergoing system checks and once they begin operating in 
2011, DOE estimates it will take approximately 25 years to convert its 
existing tails inventory. 

As our March 2008 report noted, storing the tails indefinitely could 
prevent DOE from taking advantage of the large increase in uranium 
prices to obtain potentially large amounts of revenue from material 
that was once viewed as waste. DOE would also continue to incur costs 
associated with storing and maintaining the cylinders containing the 
tails. These costs amount to about $4 million annually. Sale (if 
authorized) or re-enrichment of some of DOE's tails could also reduce 
the amount of tails that would need to be converted and, thereby, save 
DOE some conversion costs. 

Moreover, once the tails were converted into a more stable form of 
uranium oxide, DOE's costs to re-enrich the tails would be higher if 
it later decided to pursue this approach. This is because of the cost 
of converting the uranium oxide back to uranium hexafluoride, a step 
that would be required for re-enrichment. However, according to DOE 
officials, after the conversion plants begin to operate, the plants 
would first convert DOE's lower concentration tails because they most 
likely would not be economically worthwhile to re-enrich. This would 
give DOE additional time to sell or re-enrich the more valuable higher-
concentration tails. 

DOE Has Not Implemented Its December 2008 Plan to Sell or Re-enrich 
Some of Its Tails: 

Our March 2008 report noted that DOE had been developing a plan since 
2005 to sell excess uranium from across its inventories of depleted, 
natural, and enriched uranium to generate revenues for the U.S. 
Treasury. In March 2008, DOE issued a policy statement that 
established a general framework for how DOE plans to manage its 
inventories. However, we noted that the March 2008 policy statement 
was not a comprehensive assessment of the sales, re-enrichment, or 
storage options for DOE's tails. The policy statement lacked specific 
information on the types and quantities of uranium that the department 
has in its inventory. Furthermore, the policy statement did not 
discuss whether it would be more advantageous to sell the higher-
concentration tails as is (if authorized) or to re-enrich them. It 
also did not contain details on when any sales or re-enrichment may 
occur or DOE's legal authority to carry out those options under 
section 3112 of the USEC Privatization Act. It also lacked information 
on the uranium market conditions that would influence any DOE decision 
to potentially sell or re-enrich tails. Further, it did not analyze 
the impact of such a decision on the domestic uranium industry, and it 
did not provide guidance on how a decision should be altered in the 
event that market conditions change. Although the policy statement 
stated that DOE would identify categories of tails that have the 
greatest potential market value and that the department would conduct 
cost-benefit analyses to determine what circumstances would justify re-
enriching and/or selling potentially valuable tails, it did not have 
specific milestones for doing so. Instead, the policy statement stated 
that this effort will occur "in the near future." 

Our March 2008 report therefore recommended that DOE should complete 
the development of a comprehensive uranium management assessment as 
soon as possible. We stated that the assessment should contain 
detailed information on the types and quantities of depleted, natural, 
and enriched uranium the department currently manages and a 
comprehensive assessment of DOE's options for this material, including 
the department's authority to implement these options. Furthermore, we 
stated that the assessment should analyze the impact of each of these 
options on the domestic uranium industry and provide details on how 
implementation of any of these options should be adjusted in the event 
that market conditions change. 

In December 2008, DOE issued an "Excess Uranium Inventory Management 
Plan." Among other things, the plan states that DOE would begin 
selling or re-enriching depleted uranium in 2009. However, the 
department has not, to date, sold or re-enriched any of its depleted 
uranium. According to DOE officials, the department currently has no 
plans to sell or re-enrich this material. 

DOE's Depleted Uranium Inventory Is Potentially Worth Billions of 
Dollars, but Many Factors Could Greatly Change Its Value: 

At current uranium prices, we estimate DOE's tails to have a net value 
of $4.2 billion; however, we would like to emphasize that this 
estimate is very sensitive to changing uranium prices, which recently 
have been extremely volatile, as well as to the availability of 
enrichment capacity. This estimate assumes the May 2011 published 
uranium price of $160 per kilogram of natural uranium in the form of 
uranium hexafluoride and $153 per separative work unit--the standard 
measure of uranium enrichment services. Our model also assumes the 
capacity to re-enrich the higher-concentration tails and subtracts the 
costs of the needed enrichment services. It also takes into account 
the cost savings DOE would realize from reductions in the amount of 
tails that needed conversion to a more stable form for storage, as 
well as the costs to convert any residual tails. 

As noted above, this estimate is very sensitive to price variations 
for uranium as well as to the availability of enrichment services. 
Uranium prices are very volatile, and a sharp rise or fall in prices 
could greatly affect the value of the tails. For example, our March 
2008 report estimated the tails had a net value of $7.6 billion. This 
estimate was based on the February 2008 published uranium price of 
$200 per kilogram of natural uranium and $145 per separative work 
unit. Prices for uranium have since fallen from $200 per kilogram of 
natural uranium to $160 per kilogram. There is no consensus among 
industry players whether uranium prices will fall or rise in the 
future or on the magnitude of any future price changes. Furthermore, 
the introduction of additional uranium onto the market by the sale of 
large quantities of DOE depleted, natural, or enriched uranium--
assuming DOE obtains authority to sell depleted uranium--could also 
lead to lower uranium prices. Therefore, according to DOE's uranium 
management plan, DOE is limited to selling no more than 10 percent of 
the domestic demand for uranium annually. This is intended to help 
achieve DOE's goal of minimizing the negative effects of DOE's sales 
on domestic uranium producers. However, this limit lengthens the time 
necessary to market DOE's uranium, increasing the time the department 
is exposed to uranium price volatility. These factors all result in 
great uncertainty of the valuation of DOE's tails. 

In addition, the enrichment capacity available for re-enriching tails 
may be limited, and the costs of these enrichment services are 
uncertain. For example, at the time of our March 2008 report, USEC 
only had a small amount of excess enrichment capacity at its Paducah 
plant. If it used the spare capacity, USEC would only be able to re-
enrich about 14 percent of DOE's most economically attractive tails 
between now and the possible closing of the plant in 2012. Although 
USEC officials told us at the time of our March 2008 report that the 
company was willing to explore options to extend the Paducah plant's 
operations beyond 2012 and dedicate Paducah's capacity solely to re-
enriching DOE's tails after this point, negotiations between the 
company and DOE would be needed to determine the enrichment costs that 
would be paid by DOE. The Paducah plant uses a technology developed in 
the 1940s that results in relatively high production costs. Even if 
the Paducah plant were to be dedicated entirely to re-enriching DOE 
tails after 2012, over a decade would be required to complete the work 
because of limitations on the annual volume of tails that can be 
physically processed by the plant. This lengthy period of time would 
expose DOE to risks of uranium price fluctuations and increasing 
maintenance costs. 

USEC and other companies are constructing or planning to construct 
enrichment plants in the United States that utilize newer, lower-cost 
technology. However, these facilities are not expected to be completed 
until some time over the next decade. It is unclear exactly when these 
facilities would be fully operating, the extent to which they will 
have excess enrichment capacity to re-enrich DOE's tails, and what 
enrichment costs DOE could expect to pay. For example, the size of the 
fee DOE may have to pay an enrichment company to re-enrich its tails 
would be subject to negotiation between DOE and the company. 

In summary, as was the case when we reported in March 2008, the U.S. 
government has an opportunity to gain some benefit from material that 
was once considered a liability. Under current law, however, one 
potential avenue for dealing with DOE's depleted uranium tails--sale 
of the material in its current form--is likely closed to the 
department. Obtaining legal authority from Congress to sell depleted 
uranium under USEC Privatization Act section 3112 or other legislation 
would provide the department with an additional option in determining 
the best course of action to obtain the maximum financial benefit from 
its tails. Our March 2008 report therefore suggested that Congress 
consider clarifying DOE's statutory authority to manage depleted 
uranium, under the USEC Privatization Act or other legislation, 
including explicit direction about whether and how DOE may sell or 
transfer the tails. Depending on the terms of such legislation, a sale 
of DOE's tails could reap significant benefits for the government 
because of the potentially large amount of revenue that could be 
obtained. In any event, enacting explicit provisions regarding DOE's 
disposition of depleted uranium would provide stakeholders with 
welcome legal clarity and help avoid litigation that could interrupt 
DOE's efforts to obtain maximum value for the tails. 

DOE's issuance of a comprehensive uranium management plan in December 
2008 provided welcome clarity on the department's plans for marketing 
its uranium. Unfortunately, DOE has failed to follow-through with the 
actions laid out in its plan. By not following its plan to sell or re- 
enrich some its tails beginning in 2009, DOE has increased uncertainty 
in the uranium market about its ultimate plans for its depleted 
uranium tails. In addition, DOE continues to be unable to quickly 
react to changing market conditions to achieve the greatest possible 
value from its uranium inventories. 

Chairman Whitfield, Ranking Member Rush, and Members of the 
Subcommittee, this completes my prepared statement. I would be happy 
to respond to any questions you or other Members of the Subcommittee 
may have at this time. 

GAO Contact and Staff Acknowledgments: 

If you have any questions or need additional information, please 
contact Gene Aloise at (202) 512-3841 or aloisee@gao.gov. Contact 
points for our Offices of Congressional Relations and Public Affairs 
may be found on the last page of this statement. Major contributors to 
this statement were Ryan T. Coles (Assistant Director), Antoinette 
Capaccio, Karen Keegan, and Susan Sawtelle. 

[End of section] 

Footnotes: 

[1] GAO, Nuclear Material: DOE Has Several Potential Options for 
Dealing with Depleted Uranium Tails, Each of Which Could Benefit the 
Government, [hyperlink, http://www.gao.gov/products/GAO-08-606R] 
(Washington, D.C.: Mar. 31, 2008). 

[2] GAO, Nuclear Material: Several Potential Options for Dealing with 
DOE's Depleted Uranium Tails Could Benefit the Government, [hyperlink, 
http://www.gao.gov/products/GAO-08-613T] (Washington, D.C.: Apr. 3, 
2008). 

[3] Uranium is categorized by concentration of uranium-235, expressed 
as a percentage "assay." Natural uranium has an assay of about 0.7 
percent uranium-235. For use in a nuclear reactor or weapon, natural 
uranium must be enriched to increase its assay to a level required for 
its ultimate use. For example, low enriched uranium (LEU), which is 
used in commercial nuclear power reactors, typically has an assay of 
between 3 and 5 percent uranium-235. Highly enriched uranium (HEU), 
which is used in nuclear weapons, has an assay of greater than 20 
percent uranium-235 and can have an assay of greater than 90 percent. 
The depleted uranium tails have varying assays below the 0.7 percent 
assay of natural uranium. DOE's tails range from less than 0.15 to 
about 0.66 percent uranium-235. 

[4] USEC Privatization Act, Pub. L. No. 104-134, § 3112, 110 Stat. 
1321-344, 42 U.S.C. § 2297h-10. 

[5] Atomic Energy Act of 1954, as amended, 42 U.S.C. §§ 2011 et seq. 

[6] GAO's detailed legal analysis can be found in appendix I of 
[hyperlink, http://www.gao.gov/products/GAO-08-606R]. 

[End of section] 

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