These tails are also known as depleted uranium because the material is  depleted in uranium-235 compared with natural uranium. However,  DOE still maintains over 700,000 metric tons of depleted uranium tails in  about 63,000 metal cylinders in storage yards at its Paducah, Kentucky,  and Portsmouth, Ohio, enrichment plants. Tails have historically been considered a waste product because  considerable enrichment processing is required to further extract the  remaining useful quantities of uranium-235. DOE Has Options for the Tails but Has Not Finished a Comprehensive Assessment of Them

DOE’s potential options for its tails include selling the tails “as is,” re- enriching them, or storing them indefinitely. Although we  found that DOE generally has authority to carry out the re-enrichment and  storage options, the department has not finished a comprehensive  assessment of these options, and it is still evaluating the details of how  such options might be implemented. DOE’s Legal Authority to Sell the Tails in Their Current Form Is Doubtful

While selling the tails in their current unprocessed form is a potential  option, we believe that DOE’s authority to conduct such sales is doubtful  because of specific statutory language in 1996 legislation governing DOE’s  disposition of its uranium. Should Congress grant DOE the needed legal authority by amending the  USEC Privatization Act or through other legislation, firms such as nuclear  power utilities and enrichment companies would be interested in  purchasing at least that portion of the tails with higher concentrations of  extractable uranium-235 as a valuable source for nuclear fuel. Although DOE would have to pay for re-enrichment, it might obtain more  value from selling the re-enriched uranium instead of the tails if its re- enrichment costs were less than the discount it would have to offer to sell  the tails as is. Storing the tails indefinitely could prevent DOE from taking advantage of  the large increase in uranium prices to obtain potentially large amounts of  revenue from material that was once viewed as waste. Moreover, once the tails were converted into a more stable form of  uranium oxide, DOE’s costs to re-enrich the tails would be higher if it later  decided to pursue this approach. Instead,  the policy statement states that this effort will occur “in the near future.”

	DOE’s Depleted Uranium Inventory Is Potentially Worth Billions of Dollars, but Many Factors Could Greatly Change Its Value

At current uranium prices, we estimate DOE’s tails to have a net value of  $7.6 billion; however, we would like to emphasize that this estimate is very  sensitive to changing uranium prices, which recently have been extremely  volatile, as well as to the availability of enrichment capacity. Appendix I: GAO’s Legal Analysis of DOE’s Current Authority to Manage Depleted Uranium

	Introduction and Summary of Conclusions

As part of the Government Accountability Office’s review of the  Department of Energy’s (DOE) potential options for managing its  inventory of excess depleted uranium (also known as “tails”), we  examined DOE’s legal authority to implement three basic options: (1) re- enriching the tails and then selling or transferring them, (2) storing the un- enriched tails indefinitely, and (3) selling or transferring the inventory of  tails “as is.”
We conclude that DOE has general authority under the Atomic Energy Act  to carry out the first and second options—to re-enrich and then sell or  transfer the tails, as well as to store them indefinitely. However, we believe that because of constraints on DOE’s  AEA authority in the USEC Privatization Act, the department’s authority to  sell or transfer tails in their current form is doubtful and that under rules  of statutory construction, DOE likely lacks such authority under current  law.
Why GAO Did This Study

Since the 1940s, the Department of Energy (DOE) has been processing natural uranium into enriched uranium, which has a higher concentration of the isotope uranium-235 that can be used in nuclear weapons or reactors. This has resulted in over 700,000 metric tons of leftover depleted uranium, also known as "tails," that have varying residual concentrations uranium-235. The tails are stored at DOE's uranium enrichment plants in Portsmouth, Ohio and Paducah, Kentucky. Although the tails have historically been considered a waste product and an environmental liability, recently an about tenfold increase in uranium prices may give DOE options to use some of the tails in ways that could provide revenue to the government. GAO's testimony is based on its March 31, 2008, report entitled Nuclear Material: DOE Has Several Potential Options for Dealing with Depleted Uranium Tails, Each of Which Could Benefit the Government (GAO-08-606R). The testimony focuses on (1) DOE's potential options for its tails and (2) the potential value of DOE's tails and factors that affect the value. It also contains an analysis of DOE's legal authority to carry out the potential options. In its report, GAO recommended that Congress consider clarifying DOE's statutory authority to manage depleted uranium. GAO also recommended that DOE complete a comprehensive uranium management assessment as soon as possible.

What GAO Found

DOE's potential options for its tails include selling the tails "as is," re-enriching the tails, or storing them indefinitely. DOE's current legal authority to sell its depleted uranium inventory "as is" is doubtful, but DOE generally has authority to carry out the other options. The department has not finished a comprehensive assessment of these options and is still evaluating the details of how such options might be implemented. DOE's authority to sell the tails in their current unprocessed form is doubtful. Because of specific statutory language in 1996 legislation governing DOE's disposition of its uranium, we believe that DOE's authority to sell the tails in unprocessed form is doubtful and that, under rules of statutory construction, DOE likely lacks such authority. However, if Congress were to provide the department with the needed authority, firms such as nuclear power utilities and enrichment companies may be interested in purchasing these tails and re-enriching them as a source of nuclear fuel. DOE could contract to re-enrich the tails. Although DOE would have to pay for re-enrichment, it might obtain more value from selling the re-enriched uranium instead of the tails if its re-enrichment costs were less than the discount it would have to offer to sell the tails as is. DOE could store the tails indefinitely. While this option conforms to an existing DOE plan to convert tails into a more stable form for long term storage, storing the tails indefinitely could prevent DOE from obtaining the potentially large revenue resulting from sales at currently high uranium prices. The potential value of DOE's depleted uranium tails is currently substantial, but changing market conditions could greatly affect the tails' value over time. Based on February 2008 uranium prices and enrichment costs and assuming sufficient re-enrichment capacity is available, GAO estimates the value of DOE's tails at$7.6 billion. However, this estimate is very sensitive to changing uranium prices, which recently have been extremely volatile, as well as to the availability of enrichment capacity.