	Scope and Methodology

To determine what is known about the supply and domestic demand for  lithium-7, we analyzed data provided by industry representatives,  reviewed agency and industry documents, and interviewed agency  officials and industry representatives. In addition, we  compared actions DOE is taking to manage and communicate lithium-7  supply risks with federal standards for internal control. Little Is Known about Lithium-7 Production, Creating Uncertainty about the Reliability of the Future Supply

There is no domestic production of lithium-7, and little is known about the  lithium-7 production capabilities of China and Russia and whether they  will be able to provide future supplies. According to industry representatives,  lithium-7 brokers, and NNSA documents, China and Russia have  produced enough lithium-7 to meet the current U.S. demand, which is not  expected to increase a significant amount in the near future, based on  DOE’s information that shows five new pressurized water reactors  scheduled to begin operating by 2018. China’s continued supply of lithium-7 may be reduced by its own growing  demand created by the construction of new reactors and the development  of new reactor designs. Additionally,  China is planning to build a new type of nuclear power reactor—a molten  salt reactor—that will require dramatically larger amounts of lithium-7 to  operate. China is pursuing the development of two different types of  molten salt reactors, according to the expert, each of which will result in a  reactor that requires 1,000s of kilograms of lithium-7 to operate, rather  than the approximate 300 kilograms (about 660 pounds) annually needed  for all 65 U.S. pressurized water reactors combined, according to lithium- 7 brokers. The risk of relying on so few producers of lithium-7 leaves the 65  pressurized water reactors in the United States vulnerable to supply  disruptions. According to NRC officials,  operating a pressurized water reactor without lithium-7 could be done, but  it would significantly increase the corrosion of pipes and other  infrastructure. No Entity Has Taken Stewardship Responsibility for Assessing and Managing Risks to the Lithium-7 Supply, but DOE Is Taking Some Actions

No federal entity has taken stewardship responsibility for assessing risks  to the lithium-7 supply for the commercial nuclear power industry. Federal  stakeholders—DOE, NRC, and NNSA—told us they view lithium-7 as a  commercial commodity for which industry is responsible. The nuclear power industry may not be concerned about lithium-7 supply  disruptions because it may not be aware of all the risks. As previously discussed,  two of the lithium-7 brokers told us they are having difficulty obtaining  lithium-7 from China and Russia. DOE Studied Lithium-7 Supply and Demand and Concluded That No Further Action Is Needed, but Its Study Has Shortcomings

DOE studied the supply and demand of lithium-7 and concluded that no  further action is needed to mitigate a potential lithium-7 shortage, but our  review found shortcomings in its assessment of domestic demand and  the mitigation measures it identifies for industry to consider implementing. In its discussions with industry  representatives, representatives identified the following four actions that  the nuclear power industry could take should a shortage of lithium-7  occur:  recycling lithium-7 from the demineralizers; increasing the burnable poisons in the reactor fuel;reducing the acidity of the cooling water to reduce the amount of  lithium-7 needed by using boric acid that is enriched with boron-10,  which would reduce the amount of boric acid added to the cooling  water, thus reducing the acidity; and developing alternative sources of lithium-7, including building a  domestic lithium-7 production capability. The third option—reducing pressurized water reactors’ reliance on  lithium-7–is also a longer-term option that would generally require  changes in how reactors are operated and may produce only modest  reductions in the use of lithium-7. Conclusions

DOE studied the lithium-7 supply and demand situation, including  identifying some supply risks, and is undertaking some actions to help  mitigate a potential shortage, such as setting aside 200 kilograms of  lithium-7 as a reserve. Recommendation for Executive Action

To ensure a stable future supply of lithium-7, we recommend that the  Secretary of Energy direct the Isotope Program, consistent with the  program’s mission to manage isotopes in short supply, to take on the  stewardship role by fully assessing supply risks; communicating risks, as  needed, to stakeholders; ensuring risks are appropriately managed; and  fully and accurately determining domestic demand.
Why GAO Did This Study

About 13 percent of our nations electricity is produced by pressurized water reactors that rely on lithium-7, an isotope of lithium produced and exported solely by China and Russia, for their safe operation. Lithium-7 is added to the water that cools the reactor core to prevent the cooling water from becoming acidic. Without the lithium-7, the cooling waters acidity would increase the rate of corrosion of pipes and other infrastructurepossibly causing them to fail. Utilities that operate the pressurized water reactors have experienced little difficulty obtaining lithium-7, but they may not be aware of all the risks of relying on two producers.
GAO was asked to review the supply and domestic demand for lithium-7 and how risks are being managed. This report examines (1) what is known about the supply and demand of lithium-7, (2) what federal agencies are responsible for managing supply risks, and (3) alternative options to mitigate a potential shortage. GAO reviewed documents and interviewed officials from DOE, NNSA, and NRC, in addition to industry representatives. This report is an unclassified version of a classified report also issued in September 2013.

What GAO Found

Little is known about lithium-7 production in China and Russia and whether their supplies can meet future domestic demand. According to industry representatives, China and Russia produce enough lithium-7 to meet demand from U.S. pressurized water reactors, a type of commercial nuclear power reactor that requires lithium-7 for safe operation. However, China's continued supply may be reduced by its own growing demand, according to an expert that is familiar with China's plans. Specifically, China is building several pressurized water reactors and developing a new type of reactor that will require 1,000s of kilograms of lithium-7 to operate, rather than the 300 kilograms needed annually for all 65 U.S. pressurized water reactors. Relying on two producers of lithium-7 leaves U.S. pressurized water reactors vulnerable to lithium-7 supply disruptions.
No federal entity has taken stewardship responsibility for assessing and managing risks to the lithium-7 supply, but DOE is taking some steps. Risk assessment is the identification and analysis of relevant risks, communication of risks to stakeholders, and then taking steps to manage the risks, according to federal standards for internal control. Officials at DOE, the National Nuclear Security Administration (NNSA), and the Nuclear Regulatory Commission (NRC) told GAO they view lithium-7 as a commercial commodity for which industry is responsible. Industry representatives told GAO that they had no concerns about the lithium-7 supply, as they have experienced no problems in obtaining it. But GAO learned that industry representatives may not be familiar with all the supply risks. Notwithstanding, DOE plans to set aside 200 kilograms of lithium-7 and is funding research on lithium-7 production methods. DOE also studied lithium-7 supply and demand and concluded that no further action is needed. However, GAO found several shortcomings in its study, including that DOE underestimated the amount of lithium-7 used domestically. Industry estimates show that about 300 kilograms of lithium-7 are used annually in the United States, whereas DOE estimated that 200 kilograms are used annually. This and other shortcomings make it unclear if DOE's conclusion is correct that no additional action is needed.
Based on information from agency officials and industry representatives, GAO identified three options to mitigate a potential lithium-7 shortage: (1) building a domestic reserve is a low-cost option that could help in the short-term; (2) building a domestic production capability is a longer-term solution that could eliminate lithium-7 imports, but take about 5 years and cost $10-12 million, according to NNSA; and (3) reducing pressurized water reactors' reliance on lithium-7 is another longer-term solution, but may require years of research and changes in how reactors are operated.

What GAO Recommends

GAO recommends that the Secretary of Energy ensure a stable future supply of lithium-7 by directing the Isotope Program to take on a stewardship role for lithium-7 by taking steps, including fully assessing risks and accurately determining domestic demand. DOE concurred with the recommendation.