Nuclear Nonproliferation: DOE Needs to Consider Options to Accelerate the Return of Weapons-Usable Uranium from Other Countries to the United States and Russia
Published: 2004-11-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Many foreign nuclear research reactors use highly enriched uranium (HEU) fuel. Because HEU can be used in nuclear weapons, the Department of Energy (DOE) has two programs to return HEU from foreign reactors to either the United States or Russia. The U.S. fuel acceptance program includes HEU exported by the United States to 34 countries, 11 of which have returned all of their HEU. The program also includes low enriched uranium (LEU) fuel, which would be very difficult to use in a nuclear weapon. DOE imposes a fee on high-income countries to partially offset the cost of disposing of HEU and LEU fuel in the United States. Under the Russian fuel return program, DOE assists in the return of Russian-origin HEU from 14 countries to Russia. GAO was asked to examine (1) the status of DOE efforts to recover remaining inventories of U.S.-origin HEU and the extent to which the fees imposed on high-income countries support these efforts, and (2) the cost and time frame for completing the Russian fuel return program.
section_title: What GAO Found
paragraphs: For a number of reasons, including the cost of converting reactors from HEU to LEU fuel, DOE has not reached agreement with reactor operators in 11 of the 23 countries that still have U.S.-origin HEU to return all of the HEU to the United States. In contrast, reactor operators in 12 of the countries either have signed contracts with DOE to return all of their U.S.-origin HEU or are developing their own means of disposal. DOE is considering offering incentives to foreign research reactors to return their HEU to the United States but so far has not determined what incentives it will offer and to which countries. DOE has not revised the fees imposed on high-income countries since establishing the fuel acceptance program in 1996. However, DOE reserved the right to change the fees in response to changes in circumstances. While lowering the fees for returning HEU may encourage additional reactors to participate in the program, DOE could recover a greater portion of the disposal costs by raising the fees for accepting LEU. DOE plans to complete the Russian fuel return program by 2009 and estimates the program could cost about $100 million, but this estimate and time frame may not be reliable because of uncertainties associated with planning future shipments. The shipments to date have all consisted of fresh (unused) HEU fuel, which DOE considers the highest priority for returning to Russia because it is more vulnerable to theft. DOE is facing delays in returning spent HEU fuel, which has been used in a reactor, in part because Russia is planning to conduct an environmental assessment for each shipment. DOE has asked Russia to conduct a single environmental assessment for the spent HEU fuel in all of the countries participating in the program to expedite future shipments of spent fuel, but so far Russia has not agreed to this. DOE is considering ways to accelerate the program that could also increase the cost of the program by more than $30 million.

section_title: Letter
paragraphs: Civilian nuclear research reactors around the world use and store highly  enriched uranium (HEU) fuel. The reactors are used in medicine,  agriculture, and industry and for basic scientific research. The United  States and the Soviet Union began providing the HEU used by many of  these reactors in the 1950s. HEU can also be used as a key component in  making a nuclear weapon. As a result, the United States has a long- standing nonproliferation goal of reducing the amount of HEU that is used  and stored at these reactors. To accomplish this goal, the Department of  Energy (DOE) has established three programs: one program to convert the  reactors from HEU to low enriched uranium (LEU) fuel, which is  considered to be less of a proliferation threat because it is very difficult to  use in nuclear weapons, and two related programs to take back HEU from  foreign research reactors for safe storage and disposal in either the United  States or Russia, depending on the HEU’s origin.
We reported on DOE’s progress in implementing the first program—the  Reduced Enrichment for Research and Test Reactors (RERTR) program— in July 2004. Since 1978, the goal of this program has been to get research  reactors around the world to convert from HEU fuel to LEU fuel. In our  report, we found, among other things, that 66 of the 105 research reactors  included in the program continue to use HEU fuel for a number of reasons,  including lack of funding for conversion to LEU and technical setbacks in  developing LEU fuels to replace HEU. We recommended that DOE  evaluate the costs and benefits of providing additional incentives to  foreign research reactor operators to convert to LEU. DOE’s two related  programs for returning HEU to the United States or Russia are the Foreign  Research Reactor Spent Nuclear Fuel Acceptance (FRR SNF) program,  created in 1996, and the Russian Research Reactor Fuel Return (RRRFR)  program. DOE began discussions with Russia on the Russian fuel return  program in 1999 and signed a bilateral agreement in 2004. Figure 1 shows  an example of a fuel assembly used in a research reactor.
DOE’s fuel acceptance program is designed to return U.S.-origin HEU from  34 countries to the United States for safe storage and disposal and to  encourage foreign research reactors to convert to LEU fuel. Currently, 11  of the 34 countries have returned all of the HEU to the United States, and  23 still possess U.S.-origin HEU fuel. The scope of the fuel acceptance  program includes an estimated 5,000 kilograms of HEU that the United  States exported to research reactors in the 34 countries as well as an  estimated 15,000 kilograms of LEU. DOE included LEU fuel in the scope of  the program, even though LEU does not pose the same proliferation risk  as HEU, because operators of many foreign research reactors had no other  way to dispose of LEU fuel. Reactor operators need a means to dispose of  spent fuel, and by including LEU in the fuel acceptance program, DOE  provides operators of foreign research reactors with an assured means of  disposing of spent fuel even after converting to LEU.
DOE imposes a fee on research reactors in high-income countries (as  defined by the World Bank), such as the Netherlands and Japan, to offset  as much as possible the cost of fuel disposal in the United States. The fees  were not intended to cover the full cost of managing foreign research  reactor spent fuel or the long-term cost of permanent disposal; DOE kept  the fees low to encourage research reactor operators to participate in the  program. DOE reserved the right to modify the fees at any time in  response to a change in circumstances, including the cost of managing the  fuel in the United States. The fees charged to reactors in high-income  countries, which were established in 1996, do not exceed $3,750 to $4,500  per kilogram of LEU (depending on where in the United States the LEU is  shipped) and $4,500 per kilogram of HEU. DOE generally charges less for  LEU fuel to avoid penalizing foreign reactors that convert to LEU. DOE  does not impose fees on research reactors in non-high-income countries  and, in addition, pays for most of the cost of transporting their spent fuel  to the United States in order to encourage them to participate in the  program.
DOE originally planned for the fuel acceptance program to end in 2009.  DOE had anticipated that by 2009 operators of foreign research reactors  would have made their own arrangements for managing U.S.-origin spent  fuel, such as commercial reprocessing (a method for treating fuel prior to  final disposal) or development of domestic disposal facilities, thereby  eliminating the need to return the fuel to the United States. However, one  of the LEU fuels developed by the RERTR program cannot be easily  reprocessed, hindering efforts to dispose of spent LEU fuel other than by  returning it to the United States. To assist foreign research reactors in  developing other spent fuel management options, DOE’s RERTR program  is working to develop a new reprocessable LEU fuel that foreign reactor  operators can switch to once it is developed and available commercially.  In 2003, a group of foreign research reactor operators petitioned DOE to  extend the program beyond 2009, citing technical setbacks in the  development of a reprocessable LEU fuel. The reactor operators feared  the expiration of DOE’s fuel acceptance program and the delay in  developing a new LEU fuel would leave reactors without a way to dispose  of spent fuel. In April 2004, the Secretary of Energy announced his  intention to extend the U.S. fuel acceptance program beyond the original  2009 end date. DOE is considering extending the program by 5 or 10 years  to support the reactor operators that have converted their reactors to LEU.
DOE’s final program, aimed at facilitating the return of HEU to Russia, has  identified research reactors in 17 countries (mostly in the former Soviet  Union and Eastern Europe) that have Russian-origin fuel. DOE pays the  cost of transporting and disposing of HEU fuel in Russia. The Secretary of  Energy has estimated that there are about 4,000 kilograms of Russian- origin fuel in the 17 countries. So far, DOE has provided assistance to  return about 100 kilograms of fresh (unused) HEU fuel from 5 countries  (Bulgaria, Libya, Romania, Serbia, and Uzbekistan) for storage at two  nuclear facilities in Russia—Dmitrovgrad and Novosibirsk. In addition,  DOE plans to pay Russia to “blend down” the HEU returned to  Dmitrovgrad to LEU, thereby reducing the risk that the material could be  used in a nuclear weapon. In return, operators of foreign research reactors  with Russian-origin HEU fuel must agree to shut down or convert their  reactors to LEU.
In response to your request, we examined DOE efforts to recover HEU  fuel from foreign research reactors and assessed (1) the status of DOE  efforts to return remaining inventories of U.S.-origin HEU for storage and  disposal in the United States and the extent to which the fees DOE  imposes on high-income countries support these efforts, and (2) DOE’s  estimate of the cost and time frame for completing the Russian fuel return  program.
To address these objectives, we analyzed documentation from both  programs, including inventories of HEU fuel and data on fuel returned to  date. We also analyzed DOE data on expenditures in support of the fuel  acceptance program and fees paid by reactors in high-income countries to  return their fuel to the United States. To obtain information on how the  program is working, we interviewed operators of research reactors in  Belgium, Germany, the Netherlands, Poland, Portugal, Romania, and  Ukraine. We discussed the status of the programs with DOE and Russian  officials and with officials in the other countries we visited. We conducted  our review from July 2003 to October 2004 in accordance with generally  accepted government auditing standards.
subsections: section_title: Background
paragraphs: Civilian nuclear research reactors located throughout the world contribute  to the development of nuclear power, basic and applied science, and  isotope production for medicine and industry. While many of the reactors  use LEU fuel, others use or have inventories of HEU. The fuel acceptance  program and Russian fuel return program are part of the Global Threat  Reduction Initiative announced by the Secretary of Energy in a speech on  May 26, 2004, to secure, remove, or dispose of a broad range of nuclear  and radiological materials that are vulnerable to theft. The programs also  benefit foreign research reactors by providing them with a way to dispose  of spent fuel.
DOE’s fuel acceptance program identified 34 countries with U.S.-origin  HEU eligible for return to the United States. Research reactors in 11 of the  34 countries have returned all of the HEU to the United States. In the  remaining 23 countries, 11 have returned a portion of their U.S.-origin  HEU, and 12 have not returned any HEU (see fig. 2). In total, DOE  estimates it has recovered 914 kilograms of HEU fuel, enough to build an  estimated 20 nuclear weapons. (See app. I for a list of the countries that  have returned HEU and LEU fuel to the United States and the amount  returned.)
The fuel returned to the United States is mostly stored at DOE’s Savannah  River Site, with a small portion also stored at DOE’s Idaho National  Engineering and Environmental Laboratory. DOE anticipates that it will  ship the fuel to the geologic repository at Yucca Mountain in Nevada for  final disposal, assuming the facility is completed as planned. DOE  completed an environmental impact statement and established the fuel  acceptance program in 1996. The fuel acceptance program is a  continuation of previous programs that allowed foreign research reactors  to dispose of U.S.-origin fuel in the United States.
In a February 2004 review, DOE’s Office of Inspector General (IG) found  that DOE was likely to recover about half of the HEU eligible under the  fuel acceptance program, in part because the participation of countries  with U.S.-origin fuel is voluntary and some countries have chosen not to  participate. Furthermore, the IG found that the program did not include  another 12,300 kilograms of HEU that the United States had exported  because DOE, when establishing the fuel acceptance program in 1996,  limited the types of fuel that would be eligible for return. The IG  recommended that DOE determine whether the fuel acceptance program  should be expanded to include all HEU exported by the United States and  whether improvements could be made to encourage greater participation  of countries that have HEU fuel covered by the program. The IG also  recommended that DOE determine whether the National Nuclear Security  Administration (NNSA) could more effectively manage the program, which  is currently being managed by DOE’s Office of Environmental  Management. In response, the Secretary of Energy announced that the  program would be transferred to NNSA and combined with DOE’s Russian  fuel return program, already being managed by NNSA. According to DOE  officials, DOE plans to address, through a separate program, the IG  recommendation regarding U.S.-origin HEU not currently covered under  the fuel acceptance program because returning additional inventories of  HEU to the United States would require an analysis of environmental  impacts, including how the material would be stored. DOE officials said  they do not want to delay the proposed extension of the fuel acceptance  program in order to allow time to conduct such an analysis.
DOE has identified 17 countries with Russian-origin fuel, 14 of which have  HEU fuel that DOE has included under the Russian fuel return program.  The 14 countries are Belarus, Bulgaria, the Czech Republic, Germany,  Hungary, Kazakhstan, Latvia, Libya, Poland, Romania, Serbia, Ukraine,  Uzbekistan, and Vietnam. Two countries, Germany and Romania, have  both U.S-origin and Russian-origin HEU fuel.
DOE has provided funding and technical assistance for shipments of about  100 kilograms of fresh HEU fuel to Russia from 5 countries—Bulgaria,  Libya, Romania, Serbia, and Uzbekistan. (The State Department and the  Nuclear Threat Initiative, a private foundation, also participated in the  removal of HEU from Serbia.) The fresh HEU fuel from Bulgaria, Libya,  Serbia, and Uzbekistan was shipped to the Research Institute of Atomic  Reactors in Dmitrovgrad for downblending into LEU to reduce the risk of  the material being used in a nuclear weapon. As of October 2004, DOE  had signed a contract with Dmitrovgrad to downblend the HEU from  Serbia and was negotiating contracts to downblend the HEU from  Bulgaria, Libya, and Uzbekistan. A DOE official estimated that  Dmitrovgrad would complete the downblending of the HEU from Serbia  by spring 2005, after resolving technical difficulties encountered in the  downblending process. DOE officials said that the HEU fuel from Romania  was sent to the Novosibirsk site in Russia, because the Dmitrovgrad  facility did not have the technical capability to downblend the HEU fuel  from Romania. (Table 1 summarizes the five shipments of fresh HEU to  Russia.)
Unlike DOE’s fuel acceptance program, the Russian fuel return program  does not include LEU fuel because DOE does not consider LEU a  proliferation risk. DOE cooperates with the International Atomic Energy  Agency (IAEA) and the State Department to implement the Russian fuel  return program. For example, IAEA conducts fact-finding missions in  preparation for fuel shipments with assistance from DOE.
section_title: Eleven of the 23 Countries with U.S.- Origin HEU Do Not Have Plans to Return It to the United States or Dispose of It Domestically
paragraphs: DOE has not reached agreement with research reactor operators in 11 of  the 23 countries that still have U.S.-origin HEU to return all of the HEU to  the United States. The reactor operators have not made arrangements to  return the HEU for a number of reasons, including the cost of conversion  to LEU. DOE is considering offering incentives to reactor operators to  convert to LEU and return their HEU to the United States but thus far has  not determined what incentives it will offer and to which countries. In  contrast, reactor operators in 12 of the 23 countries that still have U.S.- origin HEU either have signed contracts with DOE to return all of the HEU  to the United States by 2009 or are developing their own means to dispose  of HEU fuel.
DOE has proposed extending the fuel acceptance program by 5 or 10  years, but the fees imposed on research reactors in high-income countries  have not been changed since 1996. According to DOE and State  Department officials, DOE’s proposed extension of the time frame of the  fuel acceptance program would benefit operators of research reactors that  the United States encouraged to convert to LEU because the only  currently available option for disposing of the type of LEU fuel used by  some reactors is returning it to the United States. The extension of the  program will primarily result in more LEU being returned to the United  States by reactors that have converted to LEU fuel that cannot be  reprocessed. DOE set the fees at a level to encourage reactor operators to  convert to LEU fuel and return HEU rather than to cover the disposal cost  in the United States. However, DOE reserved the right to change the fees  in response to changes in circumstances.
subsections: section_title: Countries Are Not Returning All of the HEU because They Are Planning to Use It in Research Reactors or Lack Funding
paragraphs: Operators of research reactors in 11 of the 23 countries that still have U.S.- origin HEU have not made arrangements to return the HEU for a number  of reasons. (Table 2 lists the 11 countries that do not have plans to return  all of their U.S.-origin HEU and the current status of any decision to  participate in the fuel acceptance program.) Research reactors in some of  the countries do not plan to continue using the HEU but have not reached  an agreement with DOE on returning it to the United States. For example,  according to a DOE official, the operator of a university research reactor  in Austria would like to return its HEU to the United States but lacks  funding for transportation. According to the official, DOE hopes to  combine Austria’s remaining HEU with a shipment of spent fuel from  Greece or Turkey to reduce the transportation cost to the operator of the  Austrian reactor.
Other research reactor operators have not made a decision to convert  their reactors to LEU. For example, operators of research reactors in  Jamaica and Mexico may continue using their HEU fuel, which is sufficient  to last many years. Similarly, while most research reactors in Japan have  returned U.S.-origin HEU fuel, two Japanese research reactors have not  made plans to convert to LEU fuel and participate in the fuel acceptance  program. As we reported in our July 2004 review of the RERTR program,  while operators of some foreign research reactors have agreed to fund  conversion of their reactors from HEU to LEU, others either do not want  to incur the additional cost of conversion or do not have the necessary  funding. Research reactor operators in South Africa and Turkey are  considering converting to LEU, which could lead to returning U.S.-origin  HEU to the United States. (The research reactor operator in Turkey has  partially converted the reactor to LEU fuel but must completely convert  before it can return its HEU. However, the reactor operator does not  currently have the LEU fuel needed to complete the conversion process.)
In Iran, Israel, and Pakistan, DOE relies on State Department diplomatic  efforts to encourage the countries to participate in the fuel acceptance  program. Each of the three countries has one research reactor with U.S.- origin HEU fuel. The research reactors in Iran and Pakistan have  converted to LEU fuel, but according to a State Department official,  informal approaches to discuss the possible return of HEU from these two  countries have been unsuccessful. The official said that recovering the  HEU from Iran and Pakistan would require a political breakthrough  similar to ones that enabled DOE to facilitate the removal of HEU from  Serbia and Libya under the Russian fuel return program in August 2002  and March 2004, respectively. The State Department official said that the  operators of the Israeli research reactor have expressed interest in  converting their reactor to LEU, which would be the first step in possibly  returning the HEU to the United States. However, the Nuclear Suppliers  Group, the international body that governs the export of nuclear  technologies, prohibits the export of LEU fuel to Israel. Therefore, unless  the reactor shuts down, it will likely continue to use its supply of HEU fuel  rather than return it to the United States.
DOE is considering whether to offer additional incentives to the reactor  operators that have not agreed to return HEU to the United States to  encourage their participation in the fuel acceptance program. According to  a State Department official, such incentives could influence some research  reactors that are not participating in the fuel return program to return  their HEU to the United States. For example, DOE could offer to purchase  LEU fuel to replace HEU fuel that is still being used in the reactors. The  State Department official said that if a research reactor agrees to shut  down rather than convert to LEU, DOE could offer other incentives, such  as research grants.
Operators of research reactors in 12 of the 23 countries that still have U.S.- origin HEU fuel have either agreed to return the material to the United  States or are developing alternative disposal options. DOE officials said  they have signed contracts with reactor operators in Australia, Germany,  Greece, Portugal, Romania, and Taiwan to return their U.S.-origin HEU to  the United States by 2009, the original end date of the fuel acceptance  program. As part of these arrangements, the reactor operators in these  countries have agreed to convert to LEU fuel or shut the reactors down by  2006. For example, Australia is building a new research reactor that uses  LEU fuel to replace an older research reactor, scheduled to be shut down,  that previously used HEU. The reactor operator in Romania has agreed to  return its HEU after it receives new LEU fuel, which is currently being  manufactured, to replace the HEU. Six countries—Argentina, Belgium,  Canada, France, the Netherlands, and the United Kingdom—are  developing alternatives to disposing of U.S.-origin HEU in the United  States. DOE officials said they support the efforts of these countries to  develop their own means of disposal. For example, Argentina has reached  an agreement with DOE to blend down part of its remaining inventory of  U.S.-origin HEU for fabrication into LEU fuel for use in Argentina’s  research reactors. As part of this agreement, the one remaining research  reactor in Argentina that currently uses HEU fuel will convert to LEU fuel  and ship its HEU fuel to the United States. In Belgium, a reactor operator  is sending spent U.S.-origin HEU fuel to France for reprocessing, which  includes diluting the HEU into LEU and returning radioactive waste to  Belgium for long-term disposal in an underground repository. As another  example of a country that is developing an alternative means of disposal,  the Netherlands has returned some of its U.S.-origin HEU and also  completed a storage facility in 2003 for the disposal of nuclear waste,  including spent fuel from research and power reactors located in the  country. The facility is designed to store the spent fuel for 100 years (see  fig. 3).
section_title: DOE Has Not Revised Fees to Account for Changes in the Fuel Acceptance Program
paragraphs: DOE has not revised the fees it charges to research reactors in high- income countries since 1996. DOE reserved the right to change these fees  if circumstances changed, and in fact, a number of changes will affect the  costs of the program. Among the changes that will affect the costs of the  fuel acceptance program is the proposed extension of the program, which  would primarily result in more LEU being returned to the United States by  reactors that have converted to LEU fuel that cannot be reprocessed.  According to DOE and State Department officials, DOE’s proposed  extension will help reactor operators that the United States encouraged to  convert to LEU because the only currently available option for disposing  of the LEU fuel (other than in countries such as the Netherlands that have  developed their own means of disposal) is returning it to the United States.  For example, research reactor operators in Australia, Germany, Japan, and  Sweden petitioned DOE to extend the program beyond 2009, so that they  would have a way to dispose of LEU fuel. A number of the reactor  operators have either converted to LEU fuel or, in the case of Australia,  are building a new research reactor that uses LEU fuel to replace an older  reactor that used HEU fuel.
DOE’s primary objective when setting the fees in 1996 was to keep them  low enough to encourage research reactors to return HEU to the United  States rather than to cover the full cost of disposing foreign research  reactors’ spent fuel in the United States. For example, DOE set the fees at  a rate competitive with the estimated cost of reprocessing, so that reactor  operators would choose to participate in the program rather than  reprocess spent fuel. Furthermore, DOE set the fees it charges for  accepting LEU from research reactors in high-income countries at a level  to encourage the reactors to convert to LEU. However, DOE also decided  when setting the fees that it would try to recover as much of the cost of  managing spent fuel from foreign research reactors as possible. For this  reason, DOE reserved the right to revise the fees in response to changes in  circumstances, including the cost of managing spent fuel in the United  States. The fees paid by research reactors in high-income countries have  covered about 84 percent of DOE’s expenditures for the fuel acceptance  program through fiscal year 2004. From fiscal year 1996 through fiscal year  2004, DOE received $97.3 million in fees from research reactors in high- income countries for disposal of HEU and LEU fuel in the United States.  In comparison, DOE estimates that it spent $116.1 million from fiscal year  1996 through fiscal year 2004 to implement the fuel acceptance program.  These expenditures include the cost of transporting spent fuel from  research reactors in non-high-income countries and part of the cost of  operating the facilities where fuel is placed in interim storage but not the  permanent disposal costs. (See app. I for a list of the fees paid by research  reactors in high-income countries.) DOE officials agreed that given  changes in the fuel acceptance program, including the proposed extension  of the program by 5 or 10 years, reassessing the fees charged to research  reactors in high-income countries is warranted.
section_title: DOE Plans to Complete the Return of HEU to Russia by 2009 at a Cost of about $100 Million
paragraphs: DOE plans to complete the Russian fuel return program by 2009 and  estimates the program could cost about $100 million, but this estimate and  time frame may not be reliable because of uncertainties associated with  planning future fuel shipments. The program is facing delays in returning  spent HEU fuel because Russia is planning to conduct an environmental  assessment for each shipment of spent HEU fuel, and complex  negotiations are needed to arrange some shipments. DOE supports  Russia’s efforts to examine the environmental impacts of returning spent  HEU fuel to Russia. DOE has asked Russia to conduct a single  environmental assessment for all spent fuel in all of the countries  participating in the program, which would help expedite future shipments  of spent fuel, but so far, Russia has not agreed to this. Furthermore,  according to DOE officials, Russia has not agreed to a fixed fee for  accepting future shipments of spent fuel because the costs of managing  the fuel in Russia could increase. DOE is considering ways to accelerate  the Russian fuel return program that could also increase the cost of the  program by more than $30 million.
subsections: section_title: DOE’s Cost Estimate Is Uncertain because Russia Plans to Set the Price for Shipments of Spent HEU Fuel on a Case-By-Case Basis
paragraphs: DOE’s estimate for completing the program for $100 million is subject to a  number of uncertainties, including the cost of returning spent HEU fuel to  Russia. DOE officials said they expect shipments of spent fuel, which is  more difficult to dispose of, to cost more than fresh fuel shipments. For  example, Russia’s estimate of the transportation and disposal costs for the  shipment of spent fuel from Uzbekistan is $5.7 million. This amount  includes the cost of transportation, security, and storage of the spent HEU  fuel in Russia as well as a spent fuel management fee, which pays for  improvements to store the fuel in an environmentally safe manner.  According to DOE officials, Russia has not agreed to a fixed fee for  accepting future shipments of spent fuel because the costs of managing  the fuel in Russia could increase. While DOE officials said the fees paid to  Russia do not include profit, the terms of the agreement between DOE and  Russia stipulate that the United States or a third party will pay the costs of  returning HEU to Russia.
On the other hand, the cost of returning fresh HEU fuel to Russia is more  certain. DOE officials estimate that each shipment generally costs about  $400,000. In addition, the DOE official in charge of the Material  Consolidation and Conversion project, which pays for downblending the  HEU fuel shipped to Dmitrovgrad in Russia, said that DOE has a stable  price that it pays for downblending the fuel into LEU. DOE’s Russian fuel  return program has so far spent about $1.5 million in support of four of the  shipments of fresh HEU fuel to Russia.
section_title: Environmental Assessments and Other Factors Could Cause Delays
paragraphs: One of the main uncertainties in DOE’s plan to complete the Russian fuel  return program by 2009 is the schedule for shipping spent HEU fuel to  Russia. DOE has not yet provided assistance to return spent HEU fuel.  According to DOE officials, the main obstacle is Russia’s requirement that  an environmental assessment be conducted prior to each shipment of  spent fuel, which has been irradiated in a reactor and is therefore more  radioactive and difficult to dispose of than fresh fuel. For example, DOE  signed an agreement with Uzbekistan in March 2002 to begin work on  returning spent HEU fuel to Russia, but as of July 2004, the Russian  government had not completed the environmental assessment for the  shipment. Russian officials told us that future environmental assessments  would take less time. However, if a similar amount of time is required for  future assessments, spent fuel shipments could be delayed. DOE officials  said they have asked the Russian government to conduct a single  environmental assessment for the entire scope of the program in order to  expedite future shipments of spent fuel. Such an assessment could be  similar to the one DOE conducted prior to initiating the U.S. fuel  acceptance program. DOE’s assessment conducted for the fuel acceptance  program identified the major components required to complete the  program, including the total amount of HEU fuel, U.S. ports where the fuel  would be shipped, and where and how the fuel would be disposed of.  However, so far the Russian government has not agreed to such an  assessment.
The schedule for the Russian fuel return program also depends on the  level of cooperation in the countries where Russian-origin HEU fuel is  located. In coordination with Russia and IAEA, DOE prioritized shipments  of fresh HEU to Russia based on the amount of HEU located at a facility  and security concerns in the region. However, DOE officials said they have  acted quickly to take advantage of opportunities that arise to remove HEU  fuel from a facility. For example, DOE removed fresh HEU fuel from Libya  in March 2004, after the country unexpectedly agreed to participate in the  program. Similarly, Romanian officials told us that high-level support  within the Romanian government for the Russian fuel return program  resulted in the shipment of HEU taking place very quickly. DOE officials  said that other countries with Russian-origin HEU might be reluctant to  participate in the Russian fuel return program. For example, DOE officials  said they had encountered difficulties in negotiating with Belarus and  Kazakhstan on returning their inventories of HEU to Russia. A Russian  official also told us that Belarus has no intention of returning fresh HEU to  Russia. Similarly, according to DOE officials, a facility in Ukraine hopes to  build a new research reactor that would be fueled by its inventory of  Russian-origin HEU. If the facility decides not to return its HEU to Russia,  DOE would try to work with the facility to downblend it into LEU.
Another factor that affects DOE’s schedule for the Russian fuel return  program is the development of new LEU fuels to replace HEU in research  reactors that cannot convert to currently available LEU fuels. In our July  2004 report on the RERTR program, we identified several research  reactors that use Russian-origin HEU fuel that cannot currently convert to  LEU. For example, a research reactor in Poland is waiting for the  development of a new LEU fuel before it can convert. However, the  projected completion of a replacement LEU fuel has been delayed from  2006 until 2010 as a result of technical setbacks in the development  process. DOE officials said that rather than try to return the fresh HEU  fuel from these reactors to Russia before a replacement LEU fuel is  available, the Russian fuel return program would return the HEU as spent  fuel, after it is used up in the reactors. Consequently, although DOE  officials have said they plan to return all fresh HEU to Russia by 2005,  some Russian-supplied research reactors that cannot convert to currently  available LEU fuels could continue to store fresh HEU fuel after that date.  (DOE has identified 4 countries for removal of fresh HEU by 2005— Belarus, Kazakhstan, Ukraine, and Uzbekistan.)
section_title: DOE Is Considering Ways to Accelerate the Return of HEU to Russia
paragraphs: DOE has developed proposals for accelerating the Russian fuel return  program that could increase the cost of the program by over $30 million.  DOE would like to complete the program by 2009, 4 years sooner than its  original time frame of 2013. According to DOE officials, one possibility is  to purchase casks that could be used to transport spent HEU fuel by air  rather than by train and would also be able to hold more fuel, requiring  fewer shipments. While the shipments of fresh HEU fuel to date have all  been by air, currently DOE and Russia do not have access to casks that are  qualified according to IAEA standards for shipment of spent fuel by air.  Without the high-capacity casks, DOE must transport spent fuel by train.  DOE estimates that the high-capacity casks would require a one-time  expenditure of $5.5 million.
DOE officials also said they are considering a “mobile melt-and-dilute”  system for transforming spent HEU fuel into blocks of LEU. The  equipment for this system could be transported to reactors that possess  spent HEU fuel and be used to blend down the HEU on site, without  returning the fuel to Russia. DOE would use the system as a stopgap  measure in response to potential delays in returning spent HEU fuel to  Russia, alleviating security concerns at foreign research reactors with  Russian-origin spent HEU. DOE officials said they anticipate that the LEU  blocks could then be returned to Russia at a later date. Development of  the system has begun at DOE’s Savannah River Site, but DOE has not yet  decided whether to seek funding for this proposal.
DOE had hoped to facilitate the return of spent HEU fuel to Russia by  using casks that are currently used to store Russian-origin spent HEU fuel  in Germany. DOE officials said that, with Germany’s cooperation, the  Russian fuel return program would first provide assistance for returning  spent HEU fuel from Germany to Russia and then reuse the casks for  shipments of spent HEU from other countries. However, the German  government has not agreed to participate in the Russian fuel return  program. In a December 2000 letter to IAEA, Germany cited a number of  issues that would require clarification before it would agree to participate  in the program, including how spent HEU fuel returned to Russia would be  safeguarded and disposed of. Officials at the site in Germany where the  HEU is stored said they would be willing to participate in the Russian fuel  return program and that returning the HEU would reduce the need for  security at the facility. However, German government officials told us that  Germany plans to dispose of its Russian-origin spent HEU fuel  domestically and keep the casks for long-term storage of the fuel. One  official said that concerns over Russia’s ability to secure the HEU played a  role in Germany’s decision to not participate in the Russian fuel return  program.
section_title: Conclusions
paragraphs: DOE’s efforts to recover U.S.-origin HEU for safe storage and disposal in  the United States have resulted in the return of enough HEU to build more  then 20 nuclear weapons. However, despite DOE’s intention of  accelerating the fuel acceptance program, there are still 11 countries that  have not made plans to return all of their U.S.-origin HEU to the United  States. Lack of funding for conversion to LEU is one of the reasons foreign  research reactors continue to use HEU. Foreign research reactors that do  not plan to convert to LEU generally also do not have plans to return HEU  fuel to the United States. In our July 2004 report on DOE’s RERTR  program, we recommended that DOE evaluate the costs and benefits of  providing incentives to foreign research reactors that use U.S.-origin HEU  to convert to LEU. If DOE decides to provide such incentives, operators of  some foreign reactors may decide to return their HEU fuel to the United  States as well as convert to LEU. We encourage DOE to consider the  increased likelihood of recovering additional amounts of HEU as one of  the benefits of providing additional incentives to foreign research reactors  to convert to LEU. Similarly, lowering the fees for accepting HEU could  encourage additional research reactors in high-income countries to return  the nuclear material to the United States. These actions could support  DOE’s efforts to accelerate the fuel acceptance program.
When DOE implemented the fuel acceptance program in 1996, it reserved  the right to adjust the fees to meet changing circumstances. Currently, one  of the biggest potential changes in the program is DOE’s proposed  extension of the program to continue providing operators of research  reactors that converted to LEU fuel with a means of disposing of spent  fuel. While we support DOE efforts to assist foreign research reactors that  have converted to LEU in accordance with U.S. nonproliferation  objectives, the original intent of DOE’s fuel acceptance program was not  to indefinitely accept spent LEU fuel at below the full cost of disposal.  DOE has not revised the fees that research reactors in high-income  countries pay for returning their spent fuel to the United States since 1996.  Continuing the current fee structure through the end of as much as a 10- year program extension would mean keeping the 1996 fees set at the same  level for 23 years. While lowering the fees for returning HEU may  encourage additional countries to participate in the fuel return program,  re-evaluating the fees for accepting LEU fuel, taking into account DOE’s  proposed extension of the program, may show that DOE could raise the  fees and recover a greater portion of the total disposal costs for accepting  LEU from high-income countries. DOE may be able to raise the fees while  still encouraging operators of foreign research reactors to convert to LEU  fuel and without unduly penalizing foreign reactors that have already  converted.
DOE faces a complex set of issues for each shipment of HEU to Russia,  such as environmental requirements in Russia and negotiations with the  countries that are returning their HEU to provide them with incentives to  participate in the program. While DOE would like to accelerate the return  of HEU to Russia, these issues have the potential to cause delays. For DOE  to complete the program as quickly and as efficiently as possible, the  cooperation of Russia and countries that have Russian-origin HEU is  essential. We support DOE’s efforts to work with Russia to resolve issues  that stand in the way of returning HEU as quickly as possible and to  pursue options such as purchasing high-capacity casks that support DOE’s  objective of accelerating the Russian fuel return program.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of Energy and the Administrator of the  National Nuclear Security Administration take the following two actions:    consider offering incentives to foreign research reactors to return HEU to  the United States, including lowering the fees that DOE charges for  accepting HEU fuel from high-income countries; and   evaluate raising the fees for accepting LEU fuel from research reactors in  high-income countries to recover as much of the cost for disposing of the  fuel in the United States as possible, if doing so would not adversely affect  the conversion of reactors to LEU and the return of HEU or create  unmanageable financial burdens for the reactors.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided draft copies of this report to the Departments of Energy and  State for their review and comment. In its written comments (presented as  app. II), DOE concurred with our recommendations. State did not provide  written comments. Both DOE and State provided technical comments,  which we incorporated into the report as appropriate.
section_title: Scope and Methodology
paragraphs: To review the progress of DOE’s fuel acceptance program, we analyzed  program documentation including DOE’s February 1996 Final  Environmental Impact Statement on a Proposed Nuclear Weapons  Nonproliferation Policy Concerning Foreign Research Reactor Spent  Nuclear Fuel, the May 1996 Record of Decision establishing the program,  and the DOE IG’s February 2004 audit report on the program. In addition,  we analyzed documents outlining the structure of fees DOE imposes on  research reactors in high-income countries for returning HEU and LEU   fuel to the United States and how the fees were derived. We analyzed data  from DOE on the amount of HEU and LEU fuel returned to the United  States, the plans of countries that still have U.S.-origin HEU for  participating in the program, and the amount of fees paid by research  reactors in high-income countries. We also interviewed key officials at  DOE; the State Department; the DOE facilities in South Carolina and Idaho  where HEU and LEU fuel from foreign research reactors is being placed in  interim storage; and DOE’s Argonne National Laboratory, which has  expertise on the amount and type of U.S.-origin HEU and LEU at foreign  research reactors.
We visited five countries that have U.S.-origin HEU—Belgium, Germany,  the Netherlands, Portugal, and Romania. We selected a nonprobability  sample of countries based on a number of criteria. In particular, we  selected three countries that have returned HEU to the United States  under the fuel acceptance program (Germany, the Netherlands, and  Romania) and two countries that have not returned HEU to the United  States (Belgium and Portugal). In addition, we selected three high-income  countries (Belgium, Germany, and the Netherlands), one non-high-income  country (Romania), and one country that transitioned into a high-income  country (Portugal). During our site visits, we met with research reactor  operators and government officials responsible for regulating the research  reactors and the disposal of spent research reactor fuel. We asked a  standard set of questions concerning reasons for participating or not  participating in DOE’s fuel acceptance program, plans for participating in  the future, options for disposing of spent fuel other than returning it to the  United States, and the potential extension of the fuel acceptance program  beyond 2009. In addition to visiting five countries with U.S.-origin HEU, we  interviewed representatives of the Australian, Jamaican, and Swedish  research reactor operators and the group of research reactors that  petitioned DOE to extend the fuel acceptance program beyond 2009.
We assessed the reliability of data obtained from DOE on the amount of  HEU and LEU fuel returned to the United States and the amount of fees  paid by research reactors in high-income countries. In particular, officials  at the DOE facilities in South Carolina and Idaho where the fuel is stored  provided responses to a standard set of data reliability questions covering  issues such as data entry, access, and quality control procedures. We  asked follow-up questions whenever necessary. We also performed a  series of checks on the data to ensure that it was complete and accurate.  We found several errors in the data that we brought to the attention of  DOE officials, who then reviewed the data and provided corrections.  Based on our assessment, we determined that the data provided by DOE  was sufficiently reliable for our purposes. We converted dollar amounts of  DOE expenditures for the fuel acceptance program and fees received from  research reactors in high-income countries into constant fiscal year 2004  dollars.
To review the progress of DOE’s Russian fuel return program, we analyzed  program documentation on the amounts and locations of Russian-origin  HEU at foreign research reactors; reports on DOE fact-finding missions to  research reactors in seven countries included in the Russian fuel return  program; DOE’s agreements with Russia and Uzbekistan on the program;  and letters between the IAEA and countries with Russian-origin HEU on  their potential participation in the program. In addition, DOE provided  documentation on shipments of fresh HEU it has supported to date. We  discussed the program with key DOE and State Department officials. We  also traveled to Russia to discuss the program with Russian officials  responsible for implementing the program with DOE and reviewing the  environmental assessment for returning spent HEU fuel.
We visited four countries that have Russian-origin HEU—Germany,  Poland, Romania, and Ukraine. We selected a nonprobability sample of  countries based on a number of criteria. In particular, we selected one  country that had returned HEU to Russia under the Russian fuel return  program (Romania) and three that had not returned HEU. In addition, we  selected the two countries that are eligible to participate in both the U.S.  fuel acceptance program and the Russian fuel return program (Germany  and Romania). During our site visits, we met with research reactor  operators and government officials responsible for regulating the research  reactors and the disposal of spent research reactor fuel. We asked a  standard set of questions concerning reasons for participating or not  participating in the Russian fuel return program, plans for participating in  the future, and options for disposing of spent fuel other than returning it to  Russia.
As part of our review of both programs, we also analyzed NNSA’s 2004  Global Research and Test Reactor Security Initiative Report and attended  an annual international conference organized by DOE’s RERTR program.  For technical expertise, we relied on GAO’s Chief Technologist, who  participated in meetings with officials at Argonne National Laboratory.
We conducted our work from July 2003 to October 2004 in accordance  with generally accepted government auditing standards.
We are sending copies of this report to the Secretary of Energy; the  Administrator, National Nuclear Security Administration; the Secretary of  State; the Chairman, NRC; the Secretary of Homeland Security; the  Director, Office of Management and Budget; and interested congressional  committees. We will also make copies available to others upon request. In  addition, this report will be available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staff have any questions about this report, please call me at  (202) 512-3841. Key contributors to this report include Joseph Cook,  Jonathan McMurray, Mehrzad Nadji, Kirstin B.L. Nelson, Judy Pagano,  Peter Ruedel, F. James Shafer Jr., and Keith Rhodes, GAO’s Chief  Technologist.
section_title: Appendix I: Details of HEU and LEU Fuel Returned to the United States
paragraphs: Appendix I: Details of HEU and LEU Fuel  Returned to the United States (kilograms) (kilograms)
Fees (millions)
Dollars are in constant fiscal year 2004 dollars.
section_title: Appendix II: Comments from the Department of Energy