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[Federal Register Volume 76, Number 160 (Thursday, August 18, 2011)]
[Notices]
[Pages 51357-51358]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-21067]

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DEPARTMENT OF ENERGY

Notice of Availability: American Assured Fuel Supply

AGENCY: The U.S. Department of Energy.

ACTION: Notice of availability.

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SUMMARY: The U.S. Department of Energy (DOE) is creating the American 
Assured Fuel Supply (AFS), a reserve of low enriched uranium (LEU) to 
serve as a backup fuel supply for foreign recipients to be supplied 
through U.S. persons, or for domestic recipients, in the event of a 
fuel supply disruption. DOE is committed to making the AFS available to 
eligible recipients in the case of supply disruptions in the nuclear 
fuel market. This effort supports DOE's nuclear nonproliferation 
objectives by supporting civil nuclear energy development while 
minimizing proliferation risks. This notice announces the availability 
of the AFS and the DOE policy and process for eligible recipients to 
purchase LEU from the AFS.

FOR FURTHER INFORMATION CONTACT: Rich Goorevich, Senior Policy Advisor, 
Office of Nonproliferation and International Security, National Nuclear 
Security Administration, U.S. Department of Energy, 1000 Independence 
Ave., SW., Washington, DC 20585, Tel: 202-586-0589, Fax: 202-586-1348.

SUPPLEMENTARY INFORMATION:

I. Background

    The Secretary of Energy is authorized pursuant to the Atomic Energy 
of 1954, as amended (Pub. L. 83-703), and the Nuclear Non-Proliferation 
Act of 1978 (NNPA) (Pub. L. 95-242) to encourage the widespread use of 
atomic energy for peaceful purposes, and to enter into and distribute 
nuclear material in cooperation with other nations where appropriate 
safeguard measures are in place to ensure the material is properly 
controlled and used for peaceful purposes. Consistent with those 
responsibilities and missions, in 2005, Secretary of Energy Samuel 
Bodman announced that the United States would set aside 17.4 metric 
tons of surplus highly-enriched uranium (HEU) to be down-blended to LEU 
and held in reserve to address disruptions in the nuclear fuel supply 
of foreign recipients that have good nonproliferation credentials. This 
initiative was originally referred to as the Reliable Fuel Supply 
Initiative, and more recently renamed the American Assured Fuel Supply 
(AFS).
    Congress appropriated $49,540,000 in the Consolidated 
Appropriations Act, 2008 (Pub. L. 110-161) to fund a portion of the 
International Atomic Energy Agency's (IAEA) International Nuclear Fuel 
Bank (INFB) initiative, which is envisioned as an LEU reserve that will 
be administered by the IAEA and that will serve as a back-up for global 
supply disruptions. Congress, in the Explanatory Statement accompanying 
the House Appropriations Committee Print (which in this Act was given 
the same effect as a joint explanatory statement), noted that the INFB 
freed up the LEU set-aside initiated pursuant to Secretary Bodman's 
2005 announcement, and recommended DOE also ``allow U.S. interests to 
purchase uranium fuel from the Reliable Fuel Supply [now the AFS] in 
the event of supply disruption.'' (H. Approp. Cmte. Print at 592.)
    The AFS is intended to complement the INFB. Specifically, the AFS 
will support countries that pursue peaceful civilian nuclear programs 
by providing a back-up source of fuel in the event of a supply 
disruption that threatens the normal operation of their programs. In 
addition, in accordance with the congressional request, the AFS will be 
available to address supply disruptions affecting domestic nuclear 
power plants. The AFS reserve is modest in size and designed to not 
disrupt or replace market mechanisms. Rather, it is to be drawn upon 
only in the event of

[[Page 51358]]

demonstrated need and after all other market options are exhausted.
    The National Nuclear Security Administration (NNSA), a semi-
autonomous agency within DOE, is responsible for the administration and 
implementation of the AFS. Down-blending of the 17.4 metric tons of 
surplus HEU began in 2007 and is scheduled for completion in 2012. When 
complete, the down-blending will result in approximately 290 metric 
tons of LEU, of which approximately 230 metric tons will form the 
reserve. The remainder will be used to pay for the down-blending and 
processing costs.
    For additional information on the potential environmental impacts 
of DOE's ongoing HEU disposition activities and the AFS initiative in 
particular, please see ``Amended Record of Decision: Disposition of 
Surplus Highly Enriched Uranium Environmental Impact Statement,'' also 
published in today's Federal Register.

II. Policy and Process for Accessing AFS Material

    DOE intends to implement the following policies and processes to 
evaluate requests for purchases and the sale of LEU from the AFS.
    Policy. DOE intends for the AFS to be made available to eligible 
recipients that meet certain nonproliferation criteria in the case of 
supply disruptions in the nuclear fuel market. DOE will sell LEU from 
the AFS consistent with applicable laws, regulations, and Departmental 
policies concerning excess uranium disposition. DOE will sell LEU to 
U.S. persons who will in turn sell to domestic or foreign recipients 
only where DOE has confirmed that there is a fuel supply disruption 
that cannot be addressed by normal market mechanisms. If foreign 
reactor operators face a supply disruption, the AFS will be available 
to them through their U.S. suppliers.
    The sale of LEU from the AFS will be conducted consistent with the 
policies and guidance in the ``Secretary of Energy's 2008 Policy 
Statement on Management of Department of Energy's Excess Uranium 
Inventory'' (March 11, 2008) and the DOE Excess Uranium Inventory 
Management Plan. In all cases, the U.S. person purchasing the LEU must 
meet all applicable licensing requirements and other authorizations for 
the possession, use, and transportation of nuclear materials. If the 
AFS is used to supply a foreign recipient, the U.S. person exporting 
the LEU must obtain or possess an appropriate license from the Nuclear 
Regulatory Commission. DOE will establish the price of the LEU at the 
time of delivery using commercially acceptable market indices, to the 
extent practical, and ensure that reasonable value is obtained. All 
proceeds from the sale will be deposited in the U.S. Treasury.
    Process. Any U.S. person requesting to purchase LEU from the AFS 
must submit a request in writing to the NNSA Office of Nonproliferation 
and International Security. The request must set forth facts 
demonstrating that there is a fuel supply disruption for which fuel 
cannot be obtained through normal market conditions and that the end-
user, if foreign, has good nonproliferation credentials. In addition, 
the request must include specific information about the purchase, 
including but not limited to: the time and place of delivery; the 
desired quantity and composition of LEU; the recipient and associated 
country of final end-use; confirmation of qualification for an export 
license, as required; and, if applicable, information on any 
intermediate consignee and country. Any foreign persons requesting to 
purchase LEU from the AFS can do so through their U.S. supplier.
    The U.S. person purchasing LEU from the AFS will be solely 
responsible for transportation, insurance, safety, and liability issues 
once title to the LEU transfers. The LEU will be in the form of uranium 
hexafluoride at a specific assay (generally 4.95% U-235); DOE will 
assume no responsibility beyond certification that the LEU meets ASTM 
International, formerly American Society for testing (ASTM), 
specifications and is of a certain quantity and assay.
    DOE will respond to requests within a reasonable time period, 
consistent with the requester's needs, the circumstances surrounding 
the request, and other relevant and necessary governmental interests. 
DOE reserves the right to prioritize requests, and to seek additional 
information as necessary to review the request.
    DOE will establish an AFS Committee, which will be responsible for 
reviewing requests for LEU in the AFS and make recommendations to the 
Secretary of Energy on the sale of LEU from the AFS. The Committee will 
be chaired by the NNSA Office of Nonproliferation and International 
Security and include representatives from NNSA's Office of Fissile 
Material Disposition, DOE's Office of Nuclear Energy, DOE's Office of 
Environmental Management, and the DOE and NNSA Offices of General 
Counsel. For transactions that trigger the requirements of section 
3112(d) of the USEC Privatization Act, DOE will assess the impact of a 
sale from the AFS on the domestic uranium market, and will provide its 
recommendation to the Secretary to make the requisite determination 
that the transfer will not have an adverse material impact on the 
domestic uranium enrichment, conversion, or mining industries.
    DOE will receive concurrence from the Department of State, and 
consult with the Department of Commerce and the Department of Defense, 
prior to the approval and sale of AFS material to a U.S. person for use 
in a foreign country. For all sales from the AFS, DOE will notify other 
federal agencies (e.g., U.S. Nuclear Regulatory Commission, Department 
of State, Department of Commerce and the Department of Defense) prior 
to the sale, as appropriate.

III. Projected Timeline

    The LEU for the AFS will come from down-blending 17.4 metric tons 
of HEU. When complete, the down-blending will result in approximately 
290 metric tons of LEU, of which approximately 230 metric tons will 
form the reserve. The remainder will be used to pay for the down-
blending and processing costs. This will leave the AFS with 
approximately 6 reloads for an average 1000 MW reactor. The down-
blending will be completed in 2012.
    As of the publication of this notice, most of the down-blending for 
the AFS has been completed. DOE will begin accepting requests for 
purchases of the AFS material pursuant to the above-stated policy and 
process at this time.

    Issued in Washington, DC, this 13th day of May, 2011.
Steven Chu,
Secretary, U.S. Department of Energy.
[FR Doc. 2011-21067 Filed 8-17-11; 8:45 am]
BILLING CODE 6450-01-P
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