Managing Critical Isotopes: Stewardship of Lithium-7 Is Needed to Ensure a Stable Supply
Published: 2013-09-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: About 13 percent of our nations electricity is produced by pressurized water reactors that rely on lithium-7, an isotope of lithium produced and exported solely by China and Russia, for their safe operation. Lithium-7 is added to the water that cools the reactor core to prevent the cooling water from becoming acidic. Without the lithium-7, the cooling waters acidity would increase the rate of corrosion of pipes and other infrastructurepossibly causing them to fail. Utilities that operate the pressurized water reactors have experienced little difficulty obtaining lithium-7, but they may not be aware of all the risks of relying on two producers.
GAO was asked to review the supply and domestic demand for lithium-7 and how risks are being managed. This report examines (1) what is known about the supply and demand of lithium-7, (2) what federal agencies are responsible for managing supply risks, and (3) alternative options to mitigate a potential shortage. GAO reviewed documents and interviewed officials from DOE, NNSA, and NRC, in addition to industry representatives. This report is an unclassified version of a classified report also issued in September 2013.
section_title: What GAO Found
paragraphs: Little is known about lithium-7 production in China and Russia and whether their supplies can meet future domestic demand. According to industry representatives, China and Russia produce enough lithium-7 to meet demand from U.S. pressurized water reactors, a type of commercial nuclear power reactor that requires lithium-7 for safe operation. However, China's continued supply may be reduced by its own growing demand, according to an expert that is familiar with China's plans. Specifically, China is building several pressurized water reactors and developing a new type of reactor that will require 1,000s of kilograms of lithium-7 to operate, rather than the 300 kilograms needed annually for all 65 U.S. pressurized water reactors. Relying on two producers of lithium-7 leaves U.S. pressurized water reactors vulnerable to lithium-7 supply disruptions.
No federal entity has taken stewardship responsibility for assessing and managing risks to the lithium-7 supply, but DOE is taking some steps. Risk assessment is the identification and analysis of relevant risks, communication of risks to stakeholders, and then taking steps to manage the risks, according to federal standards for internal control. Officials at DOE, the National Nuclear Security Administration (NNSA), and the Nuclear Regulatory Commission (NRC) told GAO they view lithium-7 as a commercial commodity for which industry is responsible. Industry representatives told GAO that they had no concerns about the lithium-7 supply, as they have experienced no problems in obtaining it. But GAO learned that industry representatives may not be familiar with all the supply risks. Notwithstanding, DOE plans to set aside 200 kilograms of lithium-7 and is funding research on lithium-7 production methods. DOE also studied lithium-7 supply and demand and concluded that no further action is needed. However, GAO found several shortcomings in its study, including that DOE underestimated the amount of lithium-7 used domestically. Industry estimates show that about 300 kilograms of lithium-7 are used annually in the United States, whereas DOE estimated that 200 kilograms are used annually. This and other shortcomings make it unclear if DOE's conclusion is correct that no additional action is needed.
Based on information from agency officials and industry representatives, GAO identified three options to mitigate a potential lithium-7 shortage: (1) building a domestic reserve is a low-cost option that could help in the short-term; (2) building a domestic production capability is a longer-term solution that could eliminate lithium-7 imports, but take about 5 years and cost $10-12 million, according to NNSA; and (3) reducing pressurized water reactors' reliance on lithium-7 is another longer-term solution, but may require years of research and changes in how reactors are operated.
section_title: What GAO Recommends
paragraphs: GAO recommends that the Secretary of Energy ensure a stable future supply of lithium-7 by directing the Isotope Program to take on a stewardship role for lithium-7 by taking steps, including fully assessing risks and accurately determining domestic demand. DOE concurred with the recommendation.

section_title: Letter
paragraphs: About 13 percent of our nation’s electricity is produced by 65 nuclear  power reactors that rely on enriched lithium hydroxide—a chemical that is  produced and exported only by China and Russia. Of the 100 commercial  nuclear power reactors in the United States, these 65 are pressurized  water reactors, a type of reactor that requires lithium hydroxide to be  added to the water that cools it. The lithium hydroxide is used in  pressurized water reactors to prevent the cooling water from becoming  acidic due to the addition of other chemicals that are critical to managing  the nuclear reaction. Without the lithium hydroxide, the cooling water’s  acidity would increase the rate of corrosion of pipes and other  infrastructure in the reactor—possibly causing them to fail. Lithium  hydroxide is made using lithium-7, an isotope of lithium that does not  interfere with the nuclear reaction within a reactor core. Lithium-7 is also  used in special purifiers called demineralizers that extract radioactive  material and contaminants from the cooling water. Low enriched lithium- 7 was produced in the United States by the Y-12 National Security  Complex (Y-12) in Oak Ridge, Tennessee, from 1955 to 1963 as a by- product of producing lithium-6, which is used in the nuclear weapons  program. DOE has not needed to produce additional lithium-6 since that  time and, according to Y-12 officials, the department sold the resulting  supply of low-enriched lithium-7 on the open market, except for a limited  quantity.lithium-7. According to industry representatives, utilities that operate  pressurized water reactors have experienced little to no problems  obtaining lithium-7 when they have needed it.
Today, industry relies on China and Russia for its supply of  Lithium-7 has not been produced in the United States since 1963, but a  portion of the low-enriched lithium-7 was further enriched and is stored by  the National Nuclear Security Administration (NNSA),  a semiautonomous  agency within DOE. Specifically, about 1,300 kilograms of lithium-7  (about 2,860 pounds), in the form of lithium hydroxide, was enriched to  99.99 percent—the level needed for use in pressurized water reactors— and stored at Y-12. However, according to Y-12 documentation, this  supply has become contaminated during storage and would need to be  purified before it is usable in a pressurized water reactor. NNSA makes  this supply available to DOE’s Isotope Development and Production for  Research and Applications program (Isotope Program) to sell for  research and other purposes. Similarly, NNSA makes other isotopes  available to the Isotope Program to sell, including helium-3, on which we  previously reported.pronged mission is to: (1) produce or distribute isotopes in short supply,  their associated by-products and surplus materials, and deliver isotope- related services; (2) maintain the infrastructure required to produce and  supply isotopes and related services; and (3) investigate and develop   According to DOE, the Isotope Program’s three- new or improved isotope production and processing techniques that can  make new isotopes available for research and other applications.
The 65 pressurized water reactors that rely on lithium hydroxide are  owned and operated by utility companies and provide electricity to the  electrical grid. For the purposes of this report, these utilities, as well as  trade organizations, such as the Electric Power Research Institute  (EPRI), make up the nuclear power industry that relies on lithium-7. All  commercial nuclear power reactors in the United States, including the 65  pressurized water reactors, are regulated by the Nuclear Regulatory  Commission (NRC) through licensing, inspection, and enforcement of its  requirements. NRC’s regulations govern certain aspects of the cooling  water, according to NRC officials, but not the specific chemicals used in  the cooling water, including lithium-7. Utilities that operate pressurized  water reactors purchase their lithium hydroxide from lithium-7 brokers.  According to industry representatives and lithium-7 brokers, there are  three brokers that purchase lithium hydroxide directly from China or  Russia and then sell it to U.S. companies for use in pressurized water  reactors and in the manufacture of demineralizers. While some utilities  and demineralizer manufacturers may purchase lithium-hydroxide directly  from China or Russia, according to a lithium-7 broker, most lithium  hydroxide used in the United States is purchased through the three  brokers.
In light of the risk of relying on two suppliers for a critical component used  in most of the nation’s commercial nuclear power reactors, you asked us  to review lithium-7 supply and demand in the United States. This report  examines (1) what is known about the supply and domestic demand for  lithium-7; (2) the responsibilities of DOE, NRC, and other entities in  assessing risks to the lithium-7 supply, and what, if anything, has been  done to mitigate a potential supply disruption of lithium-7; and (3)  additional options, if any, identified by government officials and industry  representatives for mitigating a potential lithium-7 shortage. In September  2013, we reported to you on the results of our work in a classified report;  this is an unclassified version of that report.
subsections: section_title: Scope and Methodology
paragraphs: To determine what is known about the supply and domestic demand for  lithium-7, we analyzed data provided by industry representatives,  reviewed agency and industry documents, and interviewed agency  officials and industry representatives. Specifically, to understand the  supply and domestic demand of lithium-7, we reviewed data from the  three brokers that purchase lithium hydroxide from China and Russia and  sell it to utilities and other companies in the United States. To assess the  reliability of the data, we interviewed lithium-7 brokers about the data and  found the data to be sufficiently reliable for purposes of this report. We  also obtained information on China’s supply and demand for lithium-7  from an expert on nuclear reactors at the Massachusetts Institute of  Technology that was identified by DOE and Y-12 officials. Additionally,  this expert has been working with DOE in its meetings with scientists from  the Chinese Academy of Sciences regarding China’s research on new  reactor designs. We also reviewed documents provided by DOE, Y-12,  and two utilities that operate pressurized water reactors—Tennessee  Valley Authority (TVA) and Exelon. We also interviewed representatives  of companies that buy, sell, and/or handle lithium hydroxide, including  Ceradyne, Inc., Isoflex, Nukem Isotopes, and Sigma Aldrich and officials  from DOE, NNSA, and Y-12.
To examine the responsibilities of DOE, NRC, and other entities in  assessing risks to the lithium-7 supply, and what, if anything, has been  done to mitigate a potential supply disruption of lithium-7, we reviewed  documents from DOE, Y-12, and NRC. We also interviewed officials from  DOE’s Isotope Program and the Office of Nuclear Energy; NNSA’s Office  of Nuclear Materials Integration, Office of Nuclear Nonproliferation and  International Security, and Y-12; and NRC. We also interviewed  representatives from Exelon, TVA, EPRI, North American Electric  Reliability Corporation, Nuclear Energy Institute, Pressurized Water  Reactors Owners Group, Ceradyne, Inc., and Isoflex. In addition, we  compared actions DOE is taking to manage and communicate lithium-7  supply risks with federal standards for internal control.
To identify additional options, if any, for mitigating a potential lithium-7  shortage, we reviewed technical articles and documents from industry  and academia, DOE, Y-12, and NRC. We also interviewed officials from  DOE’s Isotope Program, Office of Nuclear Energy, and Idaho National  Laboratory; Y-12; and representatives from Exelon, TVA, and EPRI.
We conducted this performance audit from June 2012 to September 2013  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.
section_title: Background
paragraphs: Lithium-7 was produced in the United States as a by-product of enriching  lithium-6 for the United States’ nuclear weapons program. Lithium-7 and  lithium-6 are derived from natural lithium, which contains about 92.5  percent lithium-7 and about 7.5 percent lithium-6. Lithium-6 was enriched  in the United States by separating it from lithium-7 using a column  exchange process, called COLEX, that required very large quantities of  mercury, which can harm human health and the environment. Y-12 built a  COLEX facility and began operations in 1955 and used it through 1963 to  enrich lithium-6 and lithium-7. Y-12 experienced several problems with  the COLEX process, including equipment failures, worker exposure to  mercury, and mercury contamination of the environment. Y-12 shut the  COLEX facility down in 1963 and has not operated it since then. While  the United States still has a stockpile of lithium-6, DOE sold the lithium-7  by-product to commercial companies, though some was enriched and still  remains stored at Y-12.
Lithium-7 is used in two functions of a pressurized water reactor—to  produce lithium hydroxide that is added to the cooling water to reduce the  acidity, and lithium-7 is added to demineralizers to filter contaminants out  of the cooling water. The cooling water becomes acidic due to the  addition of boric acid, which contains boron-10, an isotope of boron that is  used to manage the nuclear reaction in the core—the use of both boron- 10 and lithium hydroxide is based on reactor core design requirements  and water pH requirements for corrosion control. Lithium hydroxide, made  with lithium-7 rather than lithium-6, is added to the cooling water to  reduce the acidity of the water and boric acid. Lithium-7 is used rather  than lithium-6 or natural lithium, which contains lithium-6, because lithium- 6 would react with nuclear material in the reactor core to produce tritium,  a radioactive isotope of hydrogen. According to industry representatives,  lithium hydroxide is added directly to the cooling water, via a chemical  feed tank, when a pressurized water reactor is started up after being shut  down, such as after refueling. Lithium-7 is also used in special water  purifiers—called demineralizers—that remove radioactive material and  impurities from the cooling water. Figure 1 shows the flow of water  through a typical pressurized water reactor, though some variations  among reactors may exist. As the cooling water circulates in the primary  cooling loop, as shown in figure 1, some of the water flows through pipes  to the demineralizers and the chemical feed tank where the lithium  hydroxide is added.
section_title: Little Is Known about Lithium-7 Production, Creating Uncertainty about the Reliability of the Future Supply
paragraphs: There is no domestic production of lithium-7, and little is known about the  lithium-7 production capabilities of China and Russia and whether they  will be able to provide future supplies. China and Russia produce lithium- 7 as a by-product of enriching lithium-6 for their nuclear weapons  programs, according to a DOE official, much like the United States  previously did. Because of the secrecy of their weapons programs, China  and Russia’s lithium-7 production capabilities are not fully known,  according to lithium-7 brokers. According to industry representatives,  lithium-7 brokers, and NNSA documents, China and Russia have  produced enough lithium-7 to meet the current U.S. demand, which is not  expected to increase a significant amount in the near future, based on  DOE’s information that shows five new pressurized water reactors  scheduled to begin operating by 2018. Additionally, during the course of  our review, utilities announced that four pressurized water reactors would  be decommissioned, eliminating their demand for lithium-7.
China’s continued supply of lithium-7 may be reduced by its own growing  demand created by the construction of new reactors and the development  of new reactor designs. China’s demand is expected to increase because,  according to information from DOE, the International Atomic Energy  Agency, and an expert on nuclear reactors who has met with Chinese  scientists on this topic, China is constructing over 25 pressurized water  reactors that are scheduled to begin operating by 2015. Additionally,  China is planning to build a new type of nuclear power reactor—a molten  salt reactor—that will require dramatically larger amounts of lithium-7 to  operate. China is pursuing the development of two different types of  molten salt reactors, according to the expert, each of which will result in a  reactor that requires 1,000s of kilograms of lithium-7 to operate, rather  than the approximate 300 kilograms (about 660 pounds) annually needed  for all 65 U.S. pressurized water reactors combined, according to lithium- 7 brokers. China’s first molten salt reactor is expected to be finished by 2017, and the second reactor by 2020, according to the reactor expert.Furthermore, molten salt reactors require a more pure form of lithium-7— 99.995 percent, or higher—than what is currently produced by China and  Russia, according to the reactor expert and a lithium-7 broker. To obtain  the higher enriched lithium-7, according to the reactor expert who is  familiar with China’s research, China built a small facility that will feed in  lower-enriched lithium-7 and enrich it to the higher level of purity that is  needed. An Isotope Program official suggested to us that China’s new  facility could increase the available supply of lithium-7 for pressurized  water reactors. However, according to the reactor expert, this new facility  may reduce the supply of lithium-7 available for export since it uses  lithium-7 as feedstock. This expert said that China has obtained lithium-7  from its own supplies and has purchased additional lithium-7 from Russia  to enrich in its own facility, possibly making China a net importer of  lithium-7. It is unknown, however, whether China has enough lithium-7 for  its increased nuclear fleet and molten salt reactors, or if it will need to  import additional quantities, which could reduce the available supply of  lithium-7. For example, one lithium-7 broker told us in June of this year  that China had no lithium-7 that it could sell to this broker.
Russia’s supply of lithium-7, on the other hand, may be largely available  for export because Russia is believed to have very little domestic demand  for lithium-7. Russia’s fleet of pressurized water reactors does not use  lithium hydroxide because they were specifically designed to use  potassium hydroxide to lower the cooling water’s acidity. However,  because Russia’s production capacity of lithium-7 is not known, U.S.  utilities cannot be assured that Russia will continue to meet their demand  for lithium-7 as China’s demand increases. For example, one lithium-7  broker told us in June 2013 that he is having difficulty getting lithium-7  from Russia, though he is unsure if it is because Russia is unable to meet  demand or for some other reason.
The risk of relying on so few producers of lithium-7 leaves the 65  pressurized water reactors in the United States vulnerable to supply  disruptions. In 2010, for example, we reported on the challenges faced by  the Department of Defense when it experienced supply disruptions in rare  earth elements—17 elements with unique magnetic properties that are   Specifically, we reported that a  produced almost exclusively in China.Department of Defense program was delayed due to a shortage of rare  earth elements. Controlling most of the market on rare earth materials  production, China caused a shortage when it decreased its exports of  rare earth materials. At the time of our report, the Department of Defense  and other federal agencies were taking steps to mitigate a shortage to  prevent future supply disruptions. In the case of lithium-7, according to  representatives of two utilities, if not mitigated, a lithium-7 shortage could  possibly lead to the shutdown of one or more pressurized water reactors.  Pressurized water reactors are temporarily shut down to refuel about  every 18 months, after which time lithium-7, in the form of lithium  hydroxide, is added to the cooling water, according to industry  representatives. TVA representatives explained that nuclear reactors are  scheduled for refueling during times when there is low demand for  electricity, such as the spring or fall, when there is less need for heating  or air-conditioning of homes and businesses. During peak times of  electricity use, such as the summer months, commercial nuclear reactors  are critical for maintaining the stability of the electrical grid, according to  industry representatives. Without lithium hydroxide or some alternative,  industry representatives told us that they would not be able to restart the  pressurized water reactors after refueling. According to NRC officials,  operating a pressurized water reactor without lithium-7 could be done, but  it would significantly increase the corrosion of pipes and other  infrastructure.
section_title: No Entity Has Taken Stewardship Responsibility for Assessing and Managing Risks to the Lithium-7 Supply, but DOE Is Taking Some Actions
paragraphs: No federal entity has taken stewardship responsibility for assessing risks  to the lithium-7 supply for the commercial nuclear power industry.  However, DOE has taken some steps in this area. Specifically, DOE  studied lithium-7 supply and demand and concluded that no further action  is needed, but our review found shortcomings in DOE’s study.
subsections: section_title: No Entity Has Taken Stewardship Responsibility for Lithium-7 Risk Assessment
paragraphs: No federal entity has taken stewardship responsibility for assessing and  managing risks to the supply of lithium-7 for commercial use. Federal  stakeholders—DOE, NRC, and NNSA—told us they view lithium-7 as a  commercial commodity for which industry is responsible. Officials in  DOE’s Isotope Program told us that because lithium-7 is a material  bought and sold through commercial channels and used by industry,  industry is responsible for monitoring the supply risks and managing  those risks as it would do for any other commercial commodity. The  Isotope Program produces isotopes that are in short supply and not those  that are produced commercially and not in short supply. Notwithstanding,  Isotope Program officials told us that the program’s mission includes  isotopes that have the potential for being in short supply and that they see  the Isotope Program’s role as being the lead office within DOE on issues  related to lithium-7. Additionally, an Isotope Program official told us that  the program must be careful not to address lithium-7 risks too  aggressively because that may signal to industry stakeholders that DOE  is taking responsibility for mitigating these risks—risks that DOE views as  the responsibility of industry to manage.
NRC officials also told us that they believe industry is better suited to  address any problems with the lithium-7 supply because the utilities are  more likely to be aware of and have more information related to supply  constraints than NRC or other federal government agencies. Similarly,  officials in DOE’s Office of Nuclear Energy said that, in their view, industry  is responsible for addressing lithium-7 risks, and their office’s role is to  serve as liaison between DOE and industry. One DOE official said that  industry probably would be aware of a shortage before any government  agency would be. An official in NNSA’s Office of Nuclear Materials  Integration noted that NNSA is responsible for ensuring there is a  sufficient supply of lithium-7 for federal demand but not for industry’s  demand. Furthermore, this official said that utilities are in the electricity  business and should, therefore, assume the responsibility of assessing  and managing risks. This official also stated that, in his view, given the  importance of lithium-7 to the nuclear power industry, the commercial  market would respond by increasing production to bring supply and  demand into balance. However, our review found no other countries with  the capability to enrich lithium-7 and, as described above, it is unclear if  Russia and China will be able to meet increased demand.
We reported in May 2011 on the importance of stewardship responsibility  for critical isotopes. Specifically, our review found that a delayed  response to the shortage of helium-3 in 2008 occurred because, among  other things, there was no agency with stewardship responsibility to  monitor the risks to helium-3 supply and demand. The shortage was  addressed when an interagency committee took on a stewardship role by  researching alternatives and allocating the limited supply, among other  things. In that report, we recommended the Secretary of Energy clarify  which entity has a stewardship role for 17 isotopes that are sold by the  Isotope Program. In its comments on that report, NNSA stated that it  could implement our recommendation, but to date, DOE and NNSA have  not determined which entity or entities should serve as steward for  lithium-7, and no federal entity has assumed such responsibility.
The nuclear power industry may not be concerned about lithium-7 supply  disruptions because it may not be aware of all the risks. Industry  representatives we spoke with said that they have no concerns over the  lithium-7 supply because they have not experienced any supply  problems. For example, representatives from one utility said they have  never had a problem obtaining lithium-7 so they did not see a need to  consider actions to mitigate future supply disruptions. Similarly,  representatives from EPRI said that they are not doing any work related  to lithium-7 because there is no demonstrated need. However, EPRI  representatives said they were surprised to recently learn from DOE that  China is researching the development of molten salt reactors. These  representatives said that such a development is important for EPRI’s  considerations of the lithium-7 issue. EPRI representatives told us they  need to learn about all the factors relating to the current and future supply  and demand of lithium-7 so those factors can be incorporated into EPRI’s  decision-making process and long-term planning. We discussed this point  with DOE officials, and they were surprised to hear that industry was  previously uninformed about China’s development of molten salt reactors.  An official from DOE’s Office of Nuclear Energy told us the risks to the  lithium-7 supply had been discussed with industry representatives in  October 2012, including China’s increased domestic demand for new  reactors and for research on molten salt reactors, all of which could  impact the lithium-7 supply.
In addition to the longer term supply challenges created by increased  Chinese domestic demand for lithium-7, there are also the recent  examples of brokers facing supply disruptions. As previously discussed,  two of the lithium-7 brokers told us they are having difficulty obtaining  lithium-7 from China and Russia. Given the recent nature of this  information, the uncertainty over whether these are isolated difficulties or  indicative of a trend, and that the impact has not yet been felt by utilities,  could also contribute to industry’s current assessment that the risks of a  possible lithium-7 supply disruption are low. Some industry  representatives stated that, if there is a shortage, the federal government  should be involved to ensure the reliability of the electrical grid.example, EPRI representatives said that, in the event of shortage, EPRI’s  role would be to research options for replacing lithium-7, but also said that  government involvement is needed to ensure the reliability of the  electrical grid.
GAO/AIMD-00 -21.3.1. not have access to all the sources of information that are available to  DOE.
section_title: DOE Studied Lithium-7 Supply and Demand and Concluded That No Further Action Is Needed, but Its Study Has Shortcomings
paragraphs: DOE studied the supply and demand of lithium-7 and concluded that no  further action is needed to mitigate a potential lithium-7 shortage, but our  review found shortcomings in its assessment of domestic demand and  the mitigation measures it identifies for industry to consider implementing.  In conducting this study, Isotope Program officials collaborated with  officials in DOE’s Offices of Nuclear Energy and Intelligence and  Counterintelligence and NNSA’s Office of Nuclear Materials Integration  and had discussions with EPRI and other industry representatives.
DOE’s study, which was completed in May 2013, identifies some risks to  the lithium-7 supply, describes several actions that industry could take to  help mitigate a shortage, and lists the steps that DOE’s Isotope Program  is taking, or plans to take. According to DOE’s study, there are several  risks to the lithium-7 supply that could result in a shortage in a matter of  years. Specifically, DOE’s study points out that increasing demand for  lithium-7 from construction of additional pressurized water reactors and  the development of molten salt reactors are risks to the lithium-7 supply  because demand could exceed the supply in a matter of years, if  production does not increase. The study also points out the risks of  relying on two foreign suppliers for lithium-7 and notes that a supply  shortage is a low probability risk, but it is one with high consequence.  DOE’s study also describes several actions that industry could take to  help mitigate a lithium-7 shortage. In its discussions with industry  representatives, representatives identified the following four actions that  the nuclear power industry could take should a shortage of lithium-7  occur:  recycling lithium-7 from the demineralizers; increasing the burnable poisons in the reactor fuel;reducing the acidity of the cooling water to reduce the amount of  lithium-7 needed by using boric acid that is enriched with boron-10,  which would reduce the amount of boric acid added to the cooling  water, thus reducing the acidity; and developing alternative sources of lithium-7, including building a  domestic lithium-7 production capability.
DOE’s study of lithium-7 also lists two steps the Isotope Program is taking  and concludes that no further action is needed. First, the study states that  the Isotope Program will work with NNSA to prevent its inventory of  contaminated lithium-7 at Y-12 from being disposed of or distributed  without approval from DOE and will request that NNSA retain 200  kilograms (441 pounds) of this inventory to be purified and then sold to  the nuclear power industry in the event of a supply disruption.according to Isotope Program officials, as part of its mission to support  isotope production research and development, the program is also  funding research on enriching lithium-7 without employing the mercury- intensive COLEX method that was previously used. The study concludes  that the listed steps serve as an acceptable short-term strategy for  mitigating the risks of a lithium-7 shortage and concludes that no  additional action is needed.
Nevertheless, our review found several shortcomings in DOE’s study  regarding its assessment of domestic demand for lithium-7 and the  feasibility of the actions it says industry can take to mitigate the risks of a  supply disruption. First, our review found that DOE’s Isotope Program, as  well as Y-12, underestimated domestic demand for lithium-7. While  studying lithium-7 supply and demand, DOE’s Isotope Program and Y-12  both estimated annual domestic demand for lithium-7 to be about 200  kilograms per year, whereas the lithium-7 brokers estimated domestic  demand to be over 300 kilograms (662 pounds) per year, on average,  from 2008 through 2012. Isotope Program and Y-12 officials told us that  their estimate of 200 kilograms per year includes lithium-7 used in cooling  water, but it does not include lithium-7 used in demineralizers, which the  lithium-7 brokers did account for. Second, DOE’s study concludes that  there is enough lithium-7 in inventory held on-site at reactors to keep the  reactors operating during the approximately 7 months required to purify  Y-12’s lithium-7. However, DOE officials involved in the study said they  did not collect any data from utilities to determine what quantities they  held in inventory, and industry representatives told us that they are not  aware of any entity that keeps records of the amount of lithium-7  inventory held at utilities across the industry. Some industry  representatives also said that there is no standard practice for when to  purchase lithium-7 or how much inventory to have on hand and that they  believe inventory practices vary from utility to utility.
Regarding the measures the study indicates industry can take to mitigate  a potential lithium-7 supply shortage, our review found that DOE’s study  provides more optimistic assessments than industry’s view about the  challenges involved in implementing these actions. For example, DOE’s  study characterizes the process for recycling lithium-7 from  demineralizers to be straightforward and of low technical risk, and it  states that recycling can be implemented within a year. However,  according to representatives of a utility with whom we spoke, there is no  existing method to retrieve and recycle the lithium-7 from the  demineralizers. According to EPRI representatives who provided  information for DOE’s study, the process is challenging because  extracting lithium-7 from the demineralizers may require a special process  to separate it from the other materials in the demineralizers, some of  which pose radiation risks. In addition, there are also application  challenges to recovering the lithium-7, such as modifying the plants to  implement the process. EPRI representatives estimated it would take  more than a year to develop the technology, and potentially many years  to address the application challenges before this process could be  implemented. Another mitigation option that DOE’s study identifies is  increasing burnable poisons—isotopes added to the nuclear fuel to help  control the nuclear reaction—that would decrease the amount of boron  required in the cooling water, in turn reducing the amount of lithium-7  needed to decrease acidity. The study states that doing so should not  take a long time to implement, based on the premise that the modified  fuel could be changed when plants refuel, which is about every 18  months. EPRI representatives, however, said this would be a longer  process because any given fuel assembly is typically in the reactor for  three operating cycles of 18 months each, which means a fuel assembly  would be in the reactor for a total of about 4½ years before being  replaced. Also, according to NRC officials, a change in the fuel would  require extensive modeling, testing, and regulatory reviews, which could  take considerably longer than 4½ years. As a result of the shortcomings  in DOE’s study, combined with the recent supply problems reported by  brokers, as we previously discussed, it is unclear if its conclusion is  correct that no additional actions need to be taken.
section_title: Additional Options Exist to Mitigate a Potential Lithium-7 Shortage
paragraphs: Based on information from government officials and industry  representatives, we identified three options for mitigating a potential  lithium-7 shortage in the near and long term, which could be implemented  by government, industry, or even a committee of federal and industry  stakeholders. The three near- and long-term options are: building a  domestic reserve of lithium-7, building domestic capability to produce  lithium-7, and reducing pressurized water reactors’ reliance on lithium-7.
The first option—building a domestic reserve of lithium-7—is a relatively  low-cost option and would provide a fixed quantity of lithium-7 that, in the  event of a shortage, could be used until a long-term solution is  implemented. Establishing a domestic reserve would involve building up a  stockpile of lithium-7 by importing an additional quantity above what is  needed each year, purifying all or a portion of the existing supply of  lithium-7 at Y-12 to make it suitable for use in pressurized water reactors,  or a combination of these two. Stockpiling could be accomplished by  individual utilities or, for example, by a steward that could maintain the  supply for all utilities. Increasing imports to establish a domestic reserve  could be initiated immediately, and the cost would be based on the  market price of lithium-7, which is currently less than $10,000 per  kilogram (about 2.2 lbs). However, stockpiling lithium-7 would have to be  carefully managed to avoid a negative impact on the market—stockpiling  lithium-7 too aggressively could cause the price to increase or otherwise  disrupt the available supply. A second way to help build up a reserve is  the purification of all or a portion of the 1,300 kilograms of lithium-7 at Y- 12. DOE has plans to set aside 200 kilograms of the 1,300 kilograms of  lithium-7 at Y-12, which could be purified and sold to utilities. DOE  estimates it would take about 7 months to purify 200 kilograms and cost  about $3,000 per kilogram for a total cost of about $600,000; purifying the  remainder of the 1,300 kilograms would likely incur additional costs.
The second option—building a domestic lithium-7 production capability— is a longer-term solution that would reduce or eliminate the need for  importing supplies, but it would take several years to develop the  technology and construct a production facility. While lithium separation  was done in the United States until 1963 using the COLEX process, DOE  and Y-12 officials told us that the COLEX separation method will not be  used for a new production facility because of the large quantities of  mercury it requires. Officials from DOE and Y-12, as well as industry  representatives, identified several other potential separation techniques  that do not use mercury, such as solvent extraction, a process in which  the components to be separated are preferentially dissolved by a solvent  and are thus separated, and electromagnetic separation, a process that  uses electric and magnetic fields to separate isotopes by their relative  weights. While these techniques have been developed and used to  separate other materials—for example, electromagnetic separation was  used to separate isotopes of uranium—further development of the  techniques specifically for use with lithium-7 would be needed, according  to DOE documentation. In particular, DOE’s Isotope Program is funding a  proposal from scientists at Oak Ridge National Laboratory and Y-12 to  conduct research on lithium separation techniques using solvent  extraction processes, which have been used in the pharmaceutical  industry. If successful, according to Y-12, its proposed research would  provide the basis for an industrial process to produce lithium-7. According  to Y-12 officials, the entire research and development process, and the  construction of a pilot facility capable of producing 200 kilograms of  lithium-7 per year, would take about 5 years and cost $10 to $12 million.
The third option—reducing pressurized water reactors’ reliance on  lithium-7–is also a longer-term option that would generally require  changes in how reactors are operated and may produce only modest  reductions in the use of lithium-7. Four possible changes that could be  made to reactors include the following:
Lithium-7 can be recycled from used demineralizers. According to  industry representatives, the chemistry required for the recycling  process would be challenging, would require plant modifications, and  may pose risks to workers due to the presence of radioactive  materials. This option would reduce the amount of lithium-7 needed  for demineralizers but not reduce the amount of lithium-7 needed for  the cooling water.
Potassium hydroxide can be used in lieu of lithium hydroxide in the  cooling water. According to nuclear power industry representatives,  making such a change would require about 10 years of research to  test the resulting changes in the rate of corrosion of pipes and other  infrastructure in the reactor.
Using enriched boric acid in the cooling water in place of natural boric  acid would require less boric acid to be used, which would reduce the  acidity of the water and result in less lithium-7 being needed.  According to industry representatives, however, enriched boric acid is  expensive, and this change may require plant modifications and would  only modestly reduce the amount of lithium-7 needed.
The nuclear fuel used in pressurized water reactors could be modified  to reduce the need for boric acid and thus also reduce the amount of  lithium-7 needed. According to industry representatives, however, this  would be expensive and require long-term planning because utilities  typically plan their fuel purchases for refueling 1½ to 4½ years in  advance. According to one utility, changing the fuel could also have  widespread impacts on operations and costs that are difficult to  quantify.
Industry representatives characterized all four possible changes to  pressurized water reactors for reducing the demand for lithium-7 as  requiring significant modifications to reactor operations at all 65  pressurized water reactors. Furthermore, these possible changes would  need to be studied in more detail to determine the associated cost, time,  and safety requirements before implementation and, if necessary,  approved by NRC, all of which may take several years.
section_title: Conclusions
paragraphs: DOE studied the lithium-7 supply and demand situation, including  identifying some supply risks, and is undertaking some actions to help  mitigate a potential shortage, such as setting aside 200 kilograms of  lithium-7 as a reserve. However, relying on two foreign producers to  supply a chemical that is critical to the safe operation of most of the  commercial nuclear power reactors in the United States places their  ability to continue to provide electricity at some risk. Furthermore, the  recent problems some brokers reported in obtaining lithium-7 from Russia  and China, combined with China’s increasing demand for lithium-7  suggest that the potential for a supply problem occurring may be  increasing. DOE has not taken on stewardship responsibility, in part  because lithium-7 it is not in short supply, at which time it could fall under  the Isotope Program’s mission. However, waiting for a critical isotope with  increasing supply risks to become short in supply before taking action  does not appear consistent with the mission of the Isotope Program.  Because no entity has assumed stewardship responsibility for lithium-7,  supply risks may not have been effectively communicated to industry,  which could then weigh the risks and respond appropriately. Furthermore,  there is no assurance that the risks have been fully analyzed and  mitigated, as outlined in federal standards for internal control. Similarly, a  shortage of helium-3 occurred in 2008 because, among other things,  there was no agency with stewardship responsibility to monitor the risks  to helium-3 supply and demand. The shortage was addressed when an  interagency committee took on a stewardship role by researching  alternatives and allocating the limited supply, among other things. Some  DOE officials have described lithium-7 as a commercial commodity used  by industry and, therefore, they assert that industry is responsible for  addressing any supply problems, despite its importance to the electrical  grid; NNSA and NRC concur that industry is responsible. Yet, industry is  not in a position like DOE to be aware of all the risks. DOE has studied  lithium-7 supply and demand to guide its decisions related to lithium-7.  However, its study contains shortcomings, including underestimating the  domestic demand, and may be underestimating the technological  challenges industry will face in trying to adjust to a supply disruption.  These shortcomings bring into question DOE’s conclusion that no  additional actions are needed to mitigate a potential lithium-7 shortage. In  the end, without a full awareness of supply risks and an accurate  assessment of domestic demand, utilities may not be prepared for a  shortage of lithium-7. This leaves the reactors that depend on lithium-7  vulnerable to supply disruptions that, if not addressed, could lead to their  shutdown.
section_title: Recommendation for Executive Action
paragraphs: To ensure a stable future supply of lithium-7, we recommend that the  Secretary of Energy direct the Isotope Program, consistent with the  program’s mission to manage isotopes in short supply, to take on the  stewardship role by fully assessing supply risks; communicating risks, as  needed, to stakeholders; ensuring risks are appropriately managed; and  fully and accurately determining domestic demand.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOE and NRC for review and  comment. In written comments, DOE’s Office of Science’s Acting  Director, responding on behalf of DOE, wrote that DOE concurred with  our recommendation. DOE’s written comments on our draft report are  included in appendix I. In an e-mail received August 15, 2013, NRC’s  Audit Liaison in the Office of the Executive Director for Operations stated  that NRC generally agreed with the report’s content and recommendation.  DOE and NRC provided technical comments that we incorporated as  appropriate.
In its comment letter, DOE concurred with our recommendation and  stated that, in its view, ongoing efforts by DOE’s Isotope Program satisfy  the recommendation. Specifically, DOE’s letter states that to further  address lithium-7 utilization, demand, and inventory management, the  Isotope Program has initiated the development of a more in-depth survey  coordinated directly with the power industry through the Electric Power  Research Institute—a new undertaking that we learned about after  providing a draft of our report to DOE for comment. We believe that this  undertaking is especially important since we found that few people in  industry were aware of the lithium-7 supply risks.
In its written comments, DOE also states that the report includes several  inaccurate descriptions of the federal role with respect to the response to  lithium-7 availability and demand. Specifically, DOE does not agree with  our characterization that there is a lack of federal stewardship for  assessing and managing risks to the lithium-7 supply. DOE states that it  has been active in assessing and managing supply risks, including  engaging with stakeholders, forming an internal working group, and  identifying actions to be taken to mitigate a shortage.
We disagree and believe that DOE’s comment letter overstates both the  department’s level of awareness of lithium-7 supply risks and its  involvement in mitigating these risks. At no time during our review did any  DOE official characterize DOE as a steward of lithium-7 or state that the  agency will manage supply risks. Notably, during our review, the Director  of the Facilities and Project Management Division, who manages the  Isotope Program, told us that the Isotope Program is not the steward of  lithium-7, nor should it be. Regarding engagement with stakeholders, we  found that Isotope Program officials were aware of only two of the three  key brokers of lithium-7 until we informed them of the third broker during a  meeting in June 2013—over a year after the program became aware of a  potential lithium-7 supply problem. Moreover, at this same meeting,  program officials were not yet aware of recent lithium-7 supply problems  experienced by two of the three lithium-7 brokers. Regarding mitigation  actions, while DOE states in its comment letter that industry stakeholders  identified actions for consideration should a shortage of lithium-7 occur,  industry stakeholders told us that they were not aware that their input was  being used for a DOE study and would not characterize the actions as  DOE did in its study.
We also disagree with DOE’s comment letter suggesting that the  shortcomings identified in our report regarding the department’s demand  estimates for lithium-7 were simply due to differences between our  estimates and the DOE internal working group’s estimates as a result of  the demand quantities identified being for specific and different  applications. To identify the actions needed to mitigate a lithium-7  shortage, all the uses of lithium-7 must be considered. By not accounting  for the lithium-7 used in demineralizers, DOE left out an important use of  lithium-7 that may represent about one-third of the total demand for  pressurized water reactors. As DOE engages collaboratively with industry  for ensuring a stable supply of lithium-7, accurately accounting for lithium- 7 demand will be essential.
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If you or your staff members have any questions about this report, please  contact David C. Trimble at (202) 512-3841 or trimbled@gao.gov or   Dr. Timothy M. Persons at (202) 512-6412 or personst@gao.gov. Contact  points for our Offices of Congressional Relations and Public Affairs may  be found on the last page of this report. GAO staff who made key  contributions to this report are listed in appendix II.
section_title: Appendix I: Comments from the Department of Energy
section_title: Appendix II: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to the individuals named above, Ned H. Woodward, Assistant  Director; R. Scott Fletcher; Wyatt R. Hundrup; and Franklyn Yao made  key contributions to this report. Kevin Bray, Cindy Gilbert, Karen Howard,  Mehrzad Nadji, and Alison O’Neill also made important contributions.