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

Letter

Background

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.

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

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.

Countries Are Not Returning All of the HEU because They Are Planning to Use It in Research Reactors or Lack Funding

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).

DOE Has Not Revised Fees to Account for Changes in the Fuel Acceptance Program

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.

DOE Plans to Complete the Return of HEU to Russia by 2009 at a Cost of about $100 Million

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.

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

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.

Environmental Assessments and Other Factors Could Cause Delays

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.)

DOE Is Considering Ways to Accelerate the Return of HEU to Russia

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.

Conclusions

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.

Recommendations for Executive Action

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.

Agency Comments and Our Evaluation

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.

Scope and Methodology

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.

Appendix I: Details of HEU and LEU Fuel Returned to the United States

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.

Appendix II: Comments from the Department of Energy