DEPARTMENT OF 

ENERGY

Excess Uranium Transfers

Statement of Allison Bawden, Acting Director,

Natural Resources and Environment

Testimony 

Before the Committee on Environment 

and Public Works, U.S. Senate

For Release on Delivery 

Expected at 10 a.m. ET

Wednesday, March 8, 2017

GAO-17-472T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-17-472T, a testimony

before the Committee on Environment and 

Public Works, U.S. Senate

March 8, 2017

DEPARTMENT OF ENERGY

Excess Uranium Transfers

What GAO Found

GAO has raised several issues related to the Department of Energy’s (DOE) 

excess uranium transfers in five reports, three testimonies, and a legal opinion 

issued from 2006 to 2015 as follows:

• DOE did not take steps to assess the technical quality of market impact 

studies conducted in April 2012 and January 2013. In part to ensure that its 

uranium transfers would not have an adverse material impact on the 

domestic uranium industry, DOE contracted for studies on the potential 

market impact of most of its planned uranium transfers. These studies 

concluded that these transfers would not result in adverse market impacts. In 

its May 2014 report, GAO reviewed these studies and found issues with their

analyses. For example, GAO found that DOE did not take steps outlined in 

its contracts or in departmental quality assurance guidance to assess the 

technical quality of these studies. GAO also found that the studies provided 

only limited detail about their methodology, data sources, and assumptions, 

although DOE’s quality assurance guidance states that DOE information 

disseminated to the public should contain such information. DOE officials 

stated that they did not examine the studies’ methodology or assess the 

studies’ technical quality because they wanted the studies to be independent, 

and they trusted the contractor to provide subject matter expertise that did 

not exist within DOE. GAO recommended that DOE take steps to evaluate 

the technical quality of the market studies for which it contracts. DOE neither 

agreed nor disagreed with this recommendation.

• DOE has not developed guidance for valuing its depleted uranium tails—

which historically have been considered waste and treated as an 

environmental liability; however, under certain conditions, some tails may 

have economic value and therefore be considered an asset. In May 2014, 

GAO recommended that DOE develop guidance for consistently determining 

the value of depleted uranium tails when transferring them as an asset. DOE 

disagreed with this recommendation and stated that it is not required to 

establish guidance for depleted uranium, and reiterated this position in 

August 2016. However, since that time, DOE has continued to receive 

commercial interest in its tails, underscoring that tails can be viewed as an 

asset. GAO continues to believe that having guidance that provides a 

consistent and transparent method for determining the value of tails is 

necessary to ensure that DOE is reasonably compensated for its material.

• DOE’s uranium transfers have, in some cases, violated federal law. In May 

2014, GAO concluded that DOE likely did not have authority to transfer tails

because of prohibitions imposed by the USEC Privatization Act. That law

prohibits DOE from selling or transferring “any uranium” to “any person” 

except in a manner consistent with the act. DOE disagreed with this 

conclusion, citing its general authority under the Atomic Energy Act to 

distribute source material. GAO suggested that Congress consider clarifying 

DOE’s authority to manage depleted uranium and provide explicit direction 

about whether and how DOE may sell or transfer it. Legislation introduced in 

the 114th Congress would have authorized DOE to transfer tails but it was 

not passed. 

View GAO-17-472T. For more information, 

contact Allison Bawden at (202) 512-3841 or 

bawdena@gao.gov.

Why GAO Did This Study

DOE maintains an inventory of 

uranium, including depleted uranium

“tails” resulting from the uranium 

enrichment process, and periodically 

sells or transfers excess uranium from 

its inventory. Under the Atomic Energy 

Act of 1954, as amended by the USEC 

Privatization Act, DOE’s sales and 

transfers of uranium are subject to 

certain conditions. For example, DOE 

must determine that sales or transfers 

of uranium will not have an adverse 

material impact on the domestic 

uranium market, among other things. 

This testimony highlights issues found 

in nine GAO products from July 2006 

through September 2015 related to 

DOE’s transfers of excess uranium. It 

focuses on (1) steps DOE has taken to 

assess the technical quality of 

contracted market impact studies, (2) 

whether DOE has developed guidance 

for valuing its uranium resources, and 

(3) whether DOE’s uranium transfers

have violated federal law. GAO 

reviewed relevant laws; documents, 

including transaction documents and 

contracts; and interviewed DOE, 

contractor, uranium industry 

representatives, and uranium market 

analysts.

Over nearly a decade, GAO has made 

numerous recommendations to 

improve DOE’s transfers of excess 

uranium. DOE has neither agreed nor 

disagreed on some recommendations 

and has disagreed with others. GAO 

will continue to monitor DOE’s 

implementation of these 

recommendations.
Letter

Page 1 GAO-17-472T 

Chairman Barrasso, Ranking Member Carper, and Members of the 

Committee:

Thank you for the opportunity to discuss our work on the Department of 

Energy’s (DOE) transfers of excess uranium.1 For more than 50 years, 

the federal government enriched uranium.2 These decades of federal 

uranium enrichment activities, and other sources, generated an extensive 

uranium inventory that DOE maintains.3 DOE periodically sells or 

transfers excess uranium from its inventory—material that has been 

deemed excess to national security missions—to achieve other DOE 

missions. For example, DOE sells or transfers its excess uranium to fund 

environmental cleanup of a shuttered uranium enrichment plant in 

Portsmouth, Ohio.4 This activity is also supported using annual 

appropriations.

Sales or transfers of uranium by DOE have the potential to adversely 

impact the domestic uranium industry. DOE’s sales and transfers of 

uranium are subject to certain conditions under the Atomic Energy Act of 

1954, as amended by the USEC Privatization Act, including a required 

determination by the Secretary of Energy that the transfer will not have an 

adverse material impact on the domestic uranium market.5 To help inform 

 1

We define uranium transfers as the exchange of natural, enriched, or depleted uranium 

“tails,” or uranium enrichment services between DOE and another party.

2

Uranium enrichment involves separating uranium-235—the form, or isotope, that 

undergoes fission to release enormous amounts of energy in nuclear reactors and 

weapons—from uranium-238 to increase the concentration of uranium-235. 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 

power plants, and (2) leftover “tails” of uranium hexafluoride, which also are called 

depleted uranium because the material is depleted in uranium-235 compared with natural 

uranium.

3

DOE’s inventory of uranium comes from a variety of sources, including the dismantling of 

some of the nation’s nuclear weapons, as well as material remaining from U.S. 

government enrichment activities before 1993. In 1992, the U.S. government established 

the United States Enrichment Corporation (USEC) as a government corporation to take 

over operations of DOE’s enrichment facilities and to provide commercial uranium 

enrichment services for the U.S. government and utilities that operate nuclear power 

plants. In 1998, USEC was privatized under the USEC Privatization Act. Pub. L. No. 104-

134, 110 Stat. 1321, 1321-335 (1996) (codified as amended at 42 U.S.C. §§ 2297h2297h-13 (2017)).

4

For this activity, DOE transfers uranium from its inventory as payment for cleanup 

services provided by a contractor at Portsmouth.

5

See 42 U.S.C. §§ 2073, 2093, § 2297h-10 (2017).

Letter
Page 2 GAO-17-472T 

this determination, DOE has contracted with an external consulting firm to 

assess the market impact of planned uranium transfers.

A portion of DOE’s uranium inventory consists of depleted uranium “tails,”

which have historically been considered waste and treated as an 

environmental liability; however, under certain economic conditions, some 

tails may have economic value and therefore be considered an asset. For 

example, tails can be profitably re-enriched and used in lieu of natural 

uranium when the price of natural uranium is high or when the cost of 

enrichment services is low (see fig. 1 for an illustration of the nuclear fuel 

cycle). When DOE transfers tails for re-enrichment, the mining, milling, 

and conversion stages of the nuclear fuel cycle are bypassed.
Page 3 GAO-17-472T 

Figure 1: Nuclear Fuel Cycle

In this context, my testimony today highlights our findings from prior work 

on DOE’s management of excess uranium. Specifically, I will address 

three aspects of DOE’s management of uranium about which we have 

raised issues for nearly a decade: (1) DOE did not take steps to assess 

the technical quality of contracted market impact studies; (2) DOE has not 

developed guidance for valuing its uranium resources, particularly tails;

and (3) DOE’s uranium transfers have in some cases violated federal law. 
Page 4 GAO-17-472T 

My testimony is based on our five reports, three testimonies, and a legal 

opinion issued from July 2006 through September 2015.6 To conduct our 

prior work, we reviewed relevant laws; documents, including transaction 

documents and contracts; and interviewed DOE, contractor, uranium 

industry representatives, and uranium market analysts. Detailed 

information about the scope and methodology used to conduct this work 

can be found in each of our issued products. We conducted the work on 

which this statement is based 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.

The Atomic Energy Act of 1954, as amended, gives DOE general 

authority to transfer uranium related to its nuclear energy functions; to 

distribute natural uranium under certain conditions to qualified entities; 

and to sell, lease, grant, distribute, or otherwise make available enriched 

uranium under certain conditions. In 1996, Congress enacted the USEC 

Privatization Act to amend the Atomic Energy Act. The USEC 

Privatization Act restricted DOE’s authority to conduct certain transfers of 

uranium.7 In particular, Section 3112 prohibits DOE from transferring or 

selling uranium except as consistent with the act’s terms and conditions.

For example, DOE is authorized to sell natural uranium and low-enriched 

 6

GAO, Department of Energy: Transactions Involving USEC Inc. Since 1998, GAO-15-730 

(Washington, D.C.: Sept. 10, 2015); GAO, Department of Energy: Management of Excess 

Uranium, GAO-15-475T (Washington, D.C.: Apr. 22, 2015); GAO, Department of Energy: 

Enhanced Transparency Could Clarify Costs, Market Impact, Risk, and Legal Authority to 

Conduct Future Uranium Transactions, GAO-14-291 (Washington, D.C.: May 9, 2014); 

GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington, 

D.C.: Feb. 28, 2012); GAO, Excess Uranium Inventories: Clarifying DOE’s Disposition 

Options Could Help Avoid Further Legal Violations, GAO-11-846 (Washington, D.C.: Sept. 

26, 2011); GAO, Nuclear Material: DOE’s Depleted Uranium Tails Could Be a Source of 

Revenue for the Government, GAO-11-752T (Washington, D.C.: June 13, 2011); GAO, 

Nuclear Material: Several Potential Options for Dealing with DOE’s Depleted Uranium 

Tails Could Benefit the Government, GAO-08-613T (Washington, D.C.: Apr. 3, 2008); 

GAO, Nuclear Material: DOE Has Several Potential Options for Dealing with Depleted 

Uranium Tails, Each of Which Could Benefit the Government, GAO-08-606R 

(Washington, D.C.: Mar. 31, 2008); and GAO, Department of Energy: December 2004 

Agreement with the United States Enrichment Corporation, B-307137 (Washington, D.C.: 

July 12, 2006).

7

See 42 U.S.C. § 2297h-10 (2017).

Background
Page 5 GAO-17-472T 

uranium from its stockpile if (1) the President determines the material is 

not necessary for national security needs; (2) the Secretary of Energy 

determines the sale will not have an adverse material impact on the 

domestic uranium mining, conversion, or enrichment industries; and (3) 

the price paid will not be less than the fair market value of the material. 

DOE has satisfied the second requirement for a secretarial determination 

with individual determinations of market impact signed by the Secretary of 

Energy for each transaction or group of transactions. DOE has issued 

several secretarial determinations over the past few years pertaining to its 

uranium sales and transfers and the impact on the domestic uranium 

mining, conversion, and enrichment industries.8 For example, DOE 

issued a secretarial determination on May 1, 2015, which covers 

continued transfers of uranium for, among other activities, cleanup 

services at the Portsmouth plant at rates of up to the equivalent of 2,500 

metric tons of natural uranium per year in 2015 and up to the equivalent 

of 2,100 metric tons of uranium (MTU) in each year thereafter.9

To help inform the Secretary’s determinations, DOE has contracted with 

Energy Resources International, Inc. (ERI), a nuclear fuel consulting firm, 

to develop studies analyzing the potential impact of planned uranium 

transfers on the market and has previously made these studies available 

on its public website. With respect to the third requirement pertaining to 

fair market value, DOE previously maintained a pricing policy for uranium 

that at various times specified standard prices or a market value standard 

for depleted uranium.10 Such a pricing policy generally informed DOE 

determinations as to the value of tails until the early 1990s, but DOE has 

not relied on this policy since the mid-1990s.

 8

The duration of the secretarial determinations is limited to no more than two calendar 

years subsequent to the determination. Consolidated and Further Continuing 

Appropriations Act, 2015, Pub. L. No. 113-235, div. D, tit. III, § 306(a), 128 Stat. 2130, 

2324 (2014).

9

Excess Uranium Management: Secretarial Determination of No Adverse Impact on the 

Domestic Uranium Mining, Conversion, and Enrichment Industries, 80 Fed. Reg. 26,366, 

26,366 (May 7, 2015).

10See for example, DOE Pricing Policy Change for Sale of Uranium Depleted in Isotope U235, 47 Fed. Reg. 17,110 (Apr. 21, 1982). See also notices from DOE’s predecessors in 

operating the enrichment facilities, Atomic Energy Commission, Uranium Hexaflouride: 

Base Charges, Use Charges, Special Charges, Table of Enriching Services; 

Specifications and Packaging, 32 Fed. Reg. 16,289 (Nov. 29, 1967); Energy Research 

and Development Administration, Uranium Heraflouride (sic): Base Charges, Use 

Charges, Special Charges, Table of Enriching Services; Specifications, and Packaging: 

Revisions, 42 Fed. Reg. 51,635 (Sept. 29, 1977).
Page 6 GAO-17-472T 

In addition, DOE has previously attempted to manage the market impact 

of its uranium tails transfers by adopting guidance to limit the amount of 

transfers. For instance, in 2008, DOE adopted a guideline to generally 

restrict sales and transfers of uranium to no more than 10 percent of the 

annual U.S. requirements for nuclear fuel, which according to DOE at the 

time, generally would ensure that such transfers would not have an 

adverse material impact on the domestic uranium industry. In 2013, DOE 

announced its decision to discontinue using its 10 percent guideline for 

limiting uranium sales and transfers and stated that it could meet its 

statutory and policy objectives without one. In May 2014, we found that 

DOE officials did not consult with industry representatives before deciding 

to discontinue using its 10 percent sales and transfer guideline.

The global uranium market entered an extended recession following the 

Fukushima Daiichi nuclear reactor accident. On March 11, 2011, a 

magnitude 9.0 earthquake and subsequent tsunami devastated 

northeastern Japan and severely damaged the Fukushima Daiichi nuclear 

power plant. The accident led to a review of civilian nuclear power 

programs worldwide. For example, following the accident, the Japanese 

government directed that all but 2 of Japan’s 50 civilian nuclear power 

reactors be shut down pending a complete safety review.11 In addition, 

Germany accelerated the shutdown of its nuclear power reactors. 

Specifically, on June 30, 2011, after the Fukushima Daiichi accident, the 

German parliament voted to permanently shut down its nuclear power 

plants by the end of 2022. This vote followed the suspension of 

operations of 8 of Germany’s 17 nuclear power plants. The shutdown of 

nuclear power reactors has reduced the demand for uranium conversion 

and enrichment services resulting in an oversupply of enriched uranium 

and a lower market price.

In nine products we issued from 2006 to 2015, we have raised several 

issues related to DOE’s excess uranium transfers, including that: (1) DOE 

did not take steps to assess the technical quality of contracted market 

impact studies; (2) DOE has not developed guidance for valuing its 

uranium resources; and (3) DOE’s uranium transfers have in some cases 

violated federal law.

 11GAO, Nuclear Safety: Countries’ Regulatory Bodies Have Made Changes in Response 

to the Fukushima Daiichi Accident, GAO-14-109 (Washington, D.C.: Mar. 6, 2014).

GAO’s Prior Work 

Has Found Issues 

Related to DOE’s 

Uranium Transfers
Page 7 GAO-17-472T 

In May 2014, we found that DOE did not take steps to assess the 

technical quality of two market impact studies ERI conducted for DOE in 

2012 and 2013.12 These studies concluded that DOE’s planned uranium 

transfers would not result in adverse market impacts. DOE used these 

market impact studies, in part, to inform the Secretary’s statutorily 

required determinations about whether DOE sales or transfers of uranium 

would have an adverse material impact on the domestic uranium mining, 

conversion, or enrichment industries. However, we found that DOE did 

not take steps outlined in its contracts or in departmental quality 

assurance guidance to assess the technical quality of these studies. For 

example, we found that DOE’s contract with ERI included a statement of 

work providing that, at regular intervals, DOE would formally evaluate the 

contractor’s performance, and that the evaluation could include the 

technical quality of the contractor’s deliverables, among other things. In 

addition, DOE’s Information Quality Guidelines set forth quality assurance 

steps and procedures to ensure the technical quality of information that 

DOE makes publicly available.13 The ERI studies were published on 

DOE’s website, but DOE officials told us that they neither conducted an 

assessment of the technical quality of the studies nor requested any 

additional information from ERI about the studies. According to DOE 

officials, they did not examine the studies’ methodology or assess the 

studies’ technical quality because they wanted ERI’s studies to be 

independent and did not want to influence their results. DOE officials told 

us that they contracted with ERI to provide subject matter expertise that 

did not exist within DOE and trusted ERI to provide that expertise. 

However, if DOE did not have the internal subject matter expertise to 

review the studies, another tool available to the department—specifically 

discussed in DOE’s Information Quality Guidelines—is peer review, which 

 12The April 2012 study projected the potential market effects during calendar years 2012 

through 2033 for three DOE uranium transfers, and the January 2013 study projected the 

market impact during calendar year 2013 for one transaction. See GAO-14-291 for 

additional details.

13These guidelines—developed by DOE as required by the Information Quality Act and 

under associated guidelines issued by the Office of Management and Budget—set forth 

quality assurance steps and procedures to ensure the quality and objectivity of information 

that DOE makes publicly available. The guidelines state that DOE should seek to ensure 

that information disseminated to the public meets a basic level of quality, which is 

measured by the objectivity of the information and whether the information is accurate, 

clear, complete, and reliable. Consolidated Appropriations Act, 2001, Pub. L. No. 106-554 

Title V § 515 (a), 114 Stat. 2763A-153 to 2763A-154 (2000) (commonly referred to as the 

Information Quality Act).

DOE Did Not Take Steps 

to Assess the Technical 

Quality of Market Impact 

Studies for Which It 

Contracted
Page 8 GAO-17-472T 

is generally defined as the process of having independent experts assess 

the technical and scientific merit of studies. Nonetheless, ERI’s principal 

author told us that the two studies were not peer-reviewed by a third 

party.

In our May 2014 report, we also found that ERI’s studies provided limited 

detail about their methodology, data sources, and assumptions, even 

though DOE’s Information Quality Guidelines direct such information to 

be included in publicly disseminated documents.14 For example, ERI did 

not provide information about the sources of data it used to develop its 

market supply curves, which were fundamental to its market analysis. We 

also identified shortcomings in the studies that raise questions about their 

conclusions, which DOE used to inform the Secretary of Energy’s 

statutory determinations that its uranium transfers would not have an 

adverse material impact on the domestic uranium market. For example, 

we identified concerns about ERI’s assumption that DOE’s planned 

uranium transfers would not have a cumulative effect on the term 

market.15 Similarly, in September 2011, we also identified concerns with 

the results of two market impact analyses ERI conducted for DOE in 

November 2009 and December 2010 because of issues related to the 

economic model developed by ERI.16

To ensure the quality, credibility, and transparency of any future uranium 

market impact studies, in our May 2014 report we recommended that 

DOE (1) conduct assessments of the quality of its future market impact 

studies consistent with DOE’s Information Quality Guidelines or have an 

independent third party conduct a peer review and (2) require that the 

studies include information on the methods, data sources, and 

assumptions used consistent with DOE’s Information Quality 

Guidelines.

17 DOE neither agreed nor disagreed with the first part of this 

 14See GAO-14-291.

15Specifically, we identified several concerns with the certainty of ERI’s conclusions 

regarding the effect of DOE’s uranium transfers on the term and spot markets, including 

(1) the completeness of the data ERI used to develop the market supply curves, which 

were fundamental to its term market analysis; (2) ERI’s assumption that DOE’s planned 

uranium transfers would not have a cumulative effect on the term market; and (3) ERI’s 

model that it developed for its analysis of the spot market, which accounts for some, but 

not all, factors that can affect spot market prices. See GAO-14-291 for our analysis of 

ERI’s market impact studies and discussion of these concerns.

16See GAO-11-846.

17See GAO-14-291.
Page 9 GAO-17-472T 

recommendation and stated that it would continue to consider the 

applicability of its Information Quality Guidelines to independent analyses 

of the potential market impact of the proposed transactions and take 

appropriate steps if applicable. DOE did not comment on the second part 

of our recommendation to include information on the methods, data 

sources, and assumptions in its studies. We continue to believe that DOE 

should require that its future studies contain such information to ensure 

their quality, credibility, and transparency.18 However, DOE has taken 

some steps that are consistent with the intent of these recommendations. 

For example, in notices published in the Federal Register in December 

2014 and July 2016, in anticipation of new secretarial determinations 

covering future transfers of uranium, DOE solicited public input on the 

potential effects of DOE transfers of excess uranium on the domestic 

uranium mining, conversion, and enrichment industries.19

In our May 2014 report, we found that DOE did not have guidance for 

valuing depleted uranium tails.20 Specifically, we found that DOE did not 

have guidance for determining the value of tails when they are treated as 

an asset in a transaction and, as a result, DOE estimated the tails it 

transferred for re-enrichment in a 2012 transfer had a potential value 

ranging from $0 to $300 million. For this 2012 transaction, DOE decided 

that the tails it transferred had no value because tails are typically 

considered to be an environmental liability and, therefore, the transaction 

had no cost to the department. However, because the tails were reenriched and used in lieu of natural uranium, we found that the tails were 

an asset in the context of this transaction and, therefore, should have had 

some value. Moreover, in other cases, DOE has determined that tails do 

have value. For example, in a DOE 2005 transfer of tails, DOE charged a 

 18In April 2014, ERI released a report assessing additional proposed DOE transfers. In 

that assessment, ERI does not make any conclusion about whether or not the release of 

DOE inventories into the commercial markets will result in an adverse material impact. 

Instead, ERI notes that, in accordance with the USEC Privatization Act, any determination 

of adverse material impact is made by the Secretary of Energy. 

19Excess Uranium Management: Effects of DOE Transfers of Excess Uranium on 

Domestic Uranium Mining, Conversion, and Enrichment Industries; Request for 

Information, 79 Fed. Reg. 72,661 (Dec. 8, 2014); Excess Uranium Management: Effects of 

DOE Transfers of Excess Uranium on Domestic Uranium Mining, Conversion, and 

Enrichment Industries; Request for Information, 81 Fed. Reg. 46,917 (July 19, 2016).

20See GAO-14-291. As will be discussed in more detail below, DOE likely does not have 

authority to sell depleted uranium tails, but if DOE does sell it, DOE policy requires DOE to 

ensure that the department receives reasonable value in return for transferred uranium.

DOE Does Not Have 

Guidance for Valuing Its 

Uranium Tails
Page 10 GAO-17-472T 

price for its tails. We concluded that without guidance for how to value its 

tails in the context of transactions that treat them as an asset, DOE 

cannot ensure the government is reasonably compensated for its uranium 

transfers.

Having guidance that provides a consistent and transparent method for 

determining the value of tails is particularly important because—as we 

reported in March 2008—uranium prices are very volatile, and a sharp 

rise or fall in prices could greatly affect the value of DOE’s tails inventory 

depending on when transfers occur.21 At the time of that report, we 

concluded that the dramatic increases in uranium prices in 2008 had 

presented the U.S. government with an opportunity to gain potentially 

billions of dollars from depleted uranium tails material that was once 

considered a liability.22 In June 2011, GAO reported that DOE’s depleted 

uranium tails inventory had a net value of $4.2 billion. However, since 

2011, the market prices for uranium have decreased, and the composition 

of DOE’s tails inventory has changed in part because of transfers, thereby 

lowering the value of DOE’s remaining inventory. In 2014, as part of 

technical assistance provided to Congress, GAO calculated the June 

2014 value of DOE’s inventory at then-current uranium prices using a 

model developed by uranium experts at a DOE site and found that the 

estimated value of DOE’s tails inventory was about $1 billion.

In May 2014, we recommended that DOE develop guidance for 

consistently determining the value of depleted uranium tails when 

transferring them as an asset. DOE disagreed with this recommendation 

and stated that it was not required to establish guidance or a pricing 

policy for depleted uranium and to do so would hinder DOE’s ability to 

maximize the value received by the government in a given transaction. In 

August 2016, DOE reiterated this position and stated that the 

department’s response is unchanged and no actions have been taken 

that are specific to this recommendation. Since that time, DOE has 

continued to receive commercial interest in its uranium tails, underscoring 

that the tails can be viewed as an asset. For example, in November 2016, 

DOE announced that it had agreed with GE-Hitachi’s Global Laser 

Enrichment (GLE) to sell depleted uranium for re-enrichment over a 40-

 21See GAO-08-606R.

22While we concluded that DOE’s authority to sell depleted uranium tails was doubtful, we 

found that DOE generally has authority to re-enrich and then sell the tails.
Page 11 GAO-17-472T 

year period.23 According to the licensor of the GLE technology, the 

agreement facilitates the sale of approximately 300,000 tons of depleted 

uranium. The tails would be enriched at a proposed facility to be built in 

the early 2020s in Paducah, Kentucky, next to the shuttered Paducah 

uranium enrichment plant.24 Therefore, we continue to believe that having 

guidance that provides a consistent and transparent method for 

determining the value of tails in the context of a transaction is necessary.

Since 2006, we have reported on legal concerns with a number of 

transfers or potential transfers of uranium.25 In May 2014, we identified 

legal concerns with four DOE uranium transactions conducted from 2012 

through 2013.26 In a March 2013 transaction, for example, we found that 

DOE transferred ownership of uranium previously obtained for national 

security purposes without obtaining the required presidential 

determination that the uranium material was no longer necessary for 

national security purposes.27 For another transaction, in May 2012, we 

found that DOE likely did not have authority to transfer tails because of

specific prohibitions imposed by the USEC Privatization Act.28 As we 

explained in our May 2014 report—and had explained in our 2008 report 

when we addressed the same legal issue29—section 3112 of the USEC 

Privatization Act prohibits DOE from selling or transferring “any uranium”

to “any person” except in a manner consistent with the act. Because the 

act specifies no conditions for the sale or transfer of depleted uranium 

tails, in contrast to the act’s conditions for other types of uranium, 

statutory construction rules indicate DOE likely does not have authority to 

 23According to DOE officials, as of June 2014, DOE maintained approximately 525,000 

metric tons of uranium in the form of depleted uranium tails.

24The 2016 announcement followed a Request for Offers in July 2013 regarding its 

remaining inventories of tails. The Request for Offers specified that natural uranium 

created from the tails could not enter the market before 2019 and would have to be limited 

to 2,000 MTU natural uranium equivalent per year. See DOE Portsmouth/Paducah Project 

Office, Request for Offers for the Sale of Depleted and Off-Specification Uranium 

Hexafluoride Inventories, Request for Offers Number: DE-SOL0005845, July 3, 2013.

25See GAO-14-291, GAO-11-846, GAO-08-606R, and B-307137.

26See GAO-14-291.

27See GAO-14-291.

2842 U.S.C. § 2297h-10 (2017).

29See GAO-08-606R.

DOE’s Uranium Transfers 

Have, in Some Cases, 

Violated Federal Law
Page 12 GAO-17-472T 

sell or transfer depleted uranium. DOE disagreed with this conclusion, 

citing its general authority under the Atomic Energy Act to distribute 

source material.30 Even if that general authority applied to the transfer of 

depleted uranium, however, we found that DOE did not meet the Atomic 

Energy Act’s requirement to charge a price for the tails because it 

transferred them without charging any price at all.

To ensure the same type of scrutiny that Congress has required for the 

sale or transfer of DOE’s other valuable federal uranium assets—such as 

price, protection of the domestic uranium industry, and safeguarding the 

national security—in March 2008 and September 2011, we suggested 

that Congress consider clarifying DOE’s authority to manage depleted 

uranium and provide explicit direction about whether and how DOE may 

sell or transfer it.31 Legislation introduced in the 114th Congress would 

have authorized DOE to sell or transfer depleted uranium tails subject to 

certain conditions but was not passed.32

In our May 2014 report, we recommended that for each uranium 

transaction it conducts, DOE should publicly identify the legal authority it 

relies on and explain how the transaction meets the requirements of that 

authority. DOE disagreed with this recommendation and stated that it 

would not publicly report the authorities it relies on because it is not 

legally required to do this and because citing the law would disclose 

information “traditionally...protected as attorney work product or 

privileged pre-decisional documents.” Reporting DOE’s final decision on 

which law it has relied on for its transactions would breach no privilege, 

however, and we maintain that reporting this to Congress and the public 

would improve transparency. After we issued our report, Congress took 

action in the Consolidated and Further Continuing Appropriations Act, 

 30DOE stated that its position is “consistent with” section 3112’s broad prohibition because 

Congress included no conditions authorizing the sale or transfer of depleted uranium. This 

only reinforces GAO’s interpretation. Congress imposed conditions on DOE’s sale of all 

valuable uranium; because depleted uranium was not valuable in 1996, Congress did not 

need to address its sale or transfer and instead addressed its disposal in section 3113. 

When depleted uranium later became valuable, its sale or transfer remained prohibited 

unless and until Congress sets conditions to ensure appropriate management of this 

federal asset. See GAO-14-291 and GAO-08-606R.

31See GAO-11-846 and GAO-08-606R.

32SAVE Act, H.R. 614, 114th Cong. § 114 (2015); Excess Uranium Transparency and 

Accountability Act, H.R. 2544, 114th Cong. (2015); Excess Uranium Transparency and 

Accountability Act, S. 1428, 114th Cong. (2015).
Page 13 GAO-17-472T 

2015, to require what we had recommended: that DOE report to the 

Committees on Appropriations the provisions of law under which it 

conducts uranium transactions not less than 30 days prior to conducting 

the transaction.33

In July 200634 and September 2011,35 we reported on a different legal 

concern, finding that certain DOE uranium transfers were sales 

authorized by the USEC Privatization Act but that DOE violated federal 

fiscal law in how it handled proceeds from these transfers. Specifically, 

the miscellaneous receipts statute requires an official or agent of the 

government receiving money from any source on the government’s behalf 

to deposit the money into the Treasury.36 We found that DOE provided 

uranium to a company for sale to a third party and allowed the company 

to keep the proceeds of the sales as payment for services rendered to 

DOE, but DOE did not deposit the value of the net proceeds from these 

uranium sales into the Treasury. Even with no money changing hands, 

we concluded that an amount equivalent to the value that went to the 

company should have gone to the Treasury. While our 2011 report noted 

that the transactions we analyzed in 2011 differed in some superficial 

respects from the transactions we analyzed in 2006, we found the core 

substance was the same and, as DOE officials told us in 2011, the 

department intentionally structured the disposition of federal assets to 

avoid payment of the proceeds for those assets into the Treasury. Our 

September 2011 report suggested that Congress consider providing DOE 

with explicit authority to barter excess uranium and to retain the proceeds 

from bartering, transferring, and selling uranium. Legislation introduced in 

the 114th Congress would have authorized DOE to barter uranium but it 

was not passed.37

 33Pub. L. No. 113-235, div. D tit. III, § 306(b) (2014).

34See B-307137.

35See GAO-11-846.

36Miscellaneous receipts statute, 31 U.S.C. § 3302(b) (2017).

37Excess Uranium Transparency and Accountability Act, H.R. 2544, 114th Cong. (2015); 

Excess Uranium Transparency and Accountability Act, S. 1428, 114th Cong. (2015).
Page 14 GAO-17-472T 

Chairman Barrasso, Ranking Member Carper, and Members of the 

Committee, this completes my prepared statement. I would be pleased to 

respond to any questions that you may have at this time.

If you or your staff members have any questions about this testimony, 

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points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this statement. GAO staff who made key 

contributions to this testimony are William Hoehn, Assistant Director; Eric 

Bachhuber, Antoinette Capaccio, Julia Coulter, Amanda K. Kolling, 

Katrina Pekar-Carpenter, and Steven Putansu.

GAO Contact and 

Staff 

Acknowledgments

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