Officials with the U.S. Department of Energy did not have the authority to transfer uranium resources to USEC Inc.
A report with the U.S. Government Accountability Office (GAO) brought up legal concerns with four uranium transactions that supplied USEC with operating cash in 2012 and 2013. Three of the four transactions involved transferring ownership of depleted uranium tails, a product of the enrichment process generally considered to be an environmental liability, “but can have value as an asset when uranium market conditions make tails re-enrichment economical in lieu of enriching natural uranium.” The GAO reported stated “in two transactions, DOE accepted ownership of tails, along with liability for disposal costs, in exchange for other benefits. In a third transaction, DOE transferred ownership of tails to a third party to be re-enriched by USEC. The fourth involved the transfer of uranium material other than tails.”
In DOE’s transfer of the tails to a third party - the largest of the four - GAO said DOE likely did not have authority to transfer tails under restrictions imposed by the USEC Privatization Act. DOE countered, saying it had sufficient authority under the Atomic Energy Act, but GAO noted that even if DOE had the authority, it did not meet the Act’s requirement to charge a price for the tails because DOE transferred the tails without charging anything at all. In another transaction, DOE “transferred ownership of uranium material obtained to meet national security needs without obtaining a presidential determination that the uranium was no longer necessary for national security needs,” which is also required under the Act.
DOE funded about 80 percent of USEC’s American Centrifuge Project in Ohio, but that funding ended in January 2014. USEC is transitioning the Paducah Gaseous Diffusion Plant in Kentucky back to DOE. USEC filed for Chapter 11 bankruptcy the following March as part of a financial restructuring plan.
To read GAO’s report and recommended actions, click here.
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