[Federal Register Volume 81, Number 7 (Tuesday, January 12, 2016)]
[Notices]
[Pages 1409-1411]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-00388]
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DEPARTMENT OF ENERGY
National Nuclear Security Administration
Excess Uranium Management: Secretarial Determination of No
Adverse Impact on the Domestic Uranium Mining, Conversion, and
Enrichment Industries
AGENCY: National Nuclear Security Administration, Department of Energy.
ACTION: Notice.
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SUMMARY: On December 18, 2015, the Secretary of Energy issued a
determination (``Secretarial Determination'') covering the lease of
high-assay low enriched uranium for medical isotope production projects
through the Department's Uranium Lease and Take-Back Program (ULTB).
The Secretarial Determination covers transfers of up to 500 kilograms
uranium (kgU) per year of low enriched uranium (LEU) at up to 19.75
percent uranium-235 in the two years following approval of the
determination to support molybdenum-99 production. For the reasons set
forth in the Department's ``Analysis of Potential Impacts of Uranium
Transfers on the Domestic Uranium Mining, Conversion, and Enrichment
Industries,'' which is incorporated into the Determination, the
Secretary determined that these transfers will not have an adverse
material impact on the domestic uranium mining, conversion, or
enrichment industry.
FOR FURTHER INFORMATION CONTACT: Mr. Peter Karcz, ULTB Program Manager,
U.S. Department of Energy, 1000 Independence Avenue SW., Washington, DC
20585, telephone 202-586-0488, or email [email protected].
SUPPLEMENTARY INFORMATION: The Department of Energy (DOE) holds
inventories of uranium in various forms and quantities--including low-
enriched uranium (LEU) and natural uranium--that have been declared as
excess and are not dedicated to U.S. national security missions. Within
DOE, the Office of Nuclear Energy (NE), the Office of Environmental
Management (EM), and the National Nuclear Security Administration
(NNSA) coordinate the management of these excess uranium inventories.
NNSA down-blends excess highly-enriched uranium to high-assay low-
enriched uranium--above the commercial level of 5 wt-% and up to about
19.75 wt-% of the isotope U-235--in support of its nonproliferation
objectives and missions. Common applications of such high-assay
materials are as fuels for domestic and foreign research reactors and
as target materials for the production of medical isotopes.
This notice involves high-assay LEU transfers of this type to
support molybdenum-99 producers in such applications. These transfers
fulfill a directive in the American Medical Isotope Production Act of
2012 (Pub. L. 112-239, Division C, Title XXXI, Subtitle F, 42 U.S.C.
2065) for the Department to establish a program to make low enriched
uranium available, through lease contracts, for irradiation for the
production of molybdenum-99 for medical uses. These transfers also
support U.S. nuclear nonproliferation initiatives, by providing a path
for down-blended highly enriched uranium (HEU) and encouraging the use
of LEU in civil applications in lieu of HEU.
These transfers are conducted in accordance with the Atomic Energy
Act of 1954 (42 U.S.C. 2011 et seq., ``AEA''), as amended, and other
applicable law. Specifically, Title I, Chapters 6 and 14 of the AEA
authorize DOE to transfer special nuclear material; LEU is a type of
special nuclear material. The USEC Privatization Act (Pub. L. 104-134,
42 U.S.C. 2297h et seq.) places certain limitations on DOE's authority
to transfer uranium from its excess uranium inventory. Specifically,
under section 3112(d) of the USEC Privatization Act (42 U.S.C. 2297h-
10(d)), DOE may make certain transfers of natural or low-enriched
uranium if the Secretary determines that the transfers ``will not have
an adverse material impact on the domestic uranium mining, conversion
or enrichment industry, taking into account the sales of uranium under
the Russian Highly Enriched Uranium Agreement and the Suspension
Agreement.''
On December 18, 2015, the Secretary of Energy issued a
determination (``Secretarial Determination'') covering the lease of
high-assay low enriched uranium for medical isotope production. The
Secretarial Determination covers leases of up to the equivalent of 500
kilograms of LEU at up to 19.75 percent uranium-235 per year for two
years following approval of the determination to support molybdenum-99
producers. The Secretary based his conclusion on the Department's
``Analysis of Potential Impacts of Uranium Transfers on the Domestic
Uranium Mining, Conversion, and Enrichment Industries,'' which is
incorporated into the determination. The Secretary considered, inter
alia, the requirements of the USEC Privatization Act of 1996 (42 U.S.C.
2297h et seq.), the nature of uranium markets, and the current status
of the domestic uranium industries, as well as sales of uranium under
the Russian HEU Agreement and the Suspension Agreement.
Issued in Washington, DC.
Anne M. Harrington,
Deputy Administrator for Defense Nuclear Nonproliferation, National
Nuclear Security Administration.
Set forth below is the full text of the Secretarial Determination.
SECRETARIAL DETERMINATION FOR THE SALE OR TRANSFER OF URANIUM
I determine that the lease of up to the equivalent of 500 kgU of
19.75%-assay low enriched uranium per calendar year to support the
development and establishment of molybdenum-99 production capabilities
will not have an adverse material impact on the domestic uranium
mining, conversion, or enrichment industry. I base my conclusions on
the Department's ``Analysis of Potential Impacts of Uranium Transfers
on the Domestic Uranium Mining, Conversion, and Enrichment
Industries,'' which is incorporated herein. As explained in that
document, I have considered, inter alia, the requirements of the USEC
Privatization Act of 1996 (42 U.S.C. 2297h et seq.), the nature of
uranium markets, and the current status of the domestic uranium
industries. I have also taken into account the sales of uranium under
the Russian HEU Agreement and the Suspension Agreement.
Date: December 18, 2015.
Ernest J. Moniz,
Secretary of Energy
Analysis of Potential Impacts of Uranium Transfers on the Domestic
Uranium Mining, Conversion, and Enrichment Industries
I. Introduction
A. Legal Authority
DOE manages its excess uranium inventory in accordance with the
Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq., ``AEA''), as
amended, and other applicable law. Specifically, Title I, Chapters 6
and 14 of the AEA authorize DOE to transfer special
[[Page 1410]]
nuclear material. Low enriched uranium (LEU) is a type of special
nuclear material.
The USEC Privatization Act (Pub. L. 104-134, 42 U.S.C. 2297h et
seq.) places certain limitations on DOE's authority to transfer uranium
from its excess uranium inventory. Specifically, under section 3112(d)
of the USEC Privatization Act (42 U.S.C. 2297h-10(d)), DOE may make
certain transfers of natural or low-enriched uranium if the Secretary
determines that the transfers ``will not have an adverse material
impact on the domestic uranium mining, conversion or enrichment
industry, taking into account the sales of uranium under the Russian
Highly Enriched Uranium Agreement and the Suspension Agreement.'' (42
U.S.C. 2297h-10(d)(2)(B)). The validity of any determination under this
section is limited to no more than two calendar years subsequent to the
determination (see Section 306(a) of Division D, Title III of the
Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L.
113-235)).
B. Transactions Considered in This Determination
The American Medical Isotopes Production Act of 2012 (Pub. L. 112-
239, Division C, Title XXXI, Subtitle F, 42 U.S.C. 2065, ``AMIPA'')
directs the Department to establish a program to lease LEU for
irradiation to produce molybdenum-99 in the United States without the
use of highly enriched uranium (HEU). This Uranium Lease and Take Back
(ULTB) program will involve providing high-assay LEU (LEU enriched
above 5 wt-%, but below 20 wt-% of U-235) to parties engaged in
commercial production of molybdenum-99 in the United States for medical
uses. As directed in AMIPA, the leased material will be used as either
driver fuel for reactors employed in medical isotope production, as
target material for irradiation and extraction of molybdenum-99, or
both. The exact uses and designs vary by producer, but fission-based
production usually involves fabrication of uranium targets for
irradiation in a reactor, followed by chemical processing to extract
the Mo-99 for packaging into a generator and delivery to a
radiopharmacy.
The materials considered in this analysis will be provided during
calendar years 2016 and 2017 and will consist of no more than 500 kgU
enriched over 5 and up to 19.75 wt-% of the isotope U-235 in any
calendar year.\1\ Assuming a tails assay of 0.20 wt-% U-235, it would
require approximately 19,100 kgU of natural uranium hexafluoride and
approximately 22,600 separative work units (``SWU'') to produce that
quantity of 19.75 wt-% LEU.
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\1\ If any leases include material at an assay other than 19.75
wt-%, the amount will be converted so that the total amount in any
calendar year is equivalent to no more than 500 kgU at 19.75 wt-%.
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II. Analytical Approach
This analysis evaluates two forecasts: One reflecting the state of
the domestic uranium industries if DOE goes forward with these
transactions, and one reflecting the state of the domestic uranium
industries if DOE does not go forward with them. DOE compares these two
forecasts to determine the relevant impacts on the domestic uranium
industries. In conducting this comparison, DOE has developed a set of
factors that this analysis considers in assessing whether DOE's uranium
transfers will have an ``adverse material impact'' on the domestic
uranium mining, conversion, or enrichment industry:
1. Prices
2. Production at existing facilities
3. Employment levels in the industry
4. Changes in capital improvement plans and development of future
facilities
5. Long-term viability and health of the industry
6. Russian HEU Agreement and Suspension Agreement
While no single factor is dispositive of the issue, DOE believes
that these factors are representative of the types of impacts that the
proposed leases may have on the domestic uranium industries. Not every
factor will necessarily be relevant on a given occasion or to a
particular industry; DOE intends this list of factors only as a guide
to its analysis.
III. Assessment of Potential Impacts
There is currently no commercial supplier of high-assay LEU on the
open market. Modern enrichment facilities are technologically able to
produce such materials. However, due to the economics of enrichment,
owners and operators of such enrichment facilities have chosen not to
pursue enrichment of high-assay LEU. Doing so would entail investment
both for tooling up for higher enrichment and for regulatory licensing
(chiefly from the Nuclear Regulatory Commission). Commercial power
market projections of demand in the nuclear medicine industry for LEU
in future years range from tens to hundreds of kilograms. Compared to
the demand of the commercial power market, which requires thousands of
metric tons of enriched uranium and associated conversion services, the
production of small amounts of high-assay material is not likely to be
economically viable for private industry. Additionally, with the
closing of the Paducah Gaseous Diffusion Plant in 2013, the only
remaining operational uranium enrichment facility in the U.S. is that
operated by Louisiana Energy Services, LLC, which is licensed by the
Nuclear Regulatory Commission to possess uranium only up to 5 wt-% U-
235,\2\ meaning no domestic commercial uranium enrichment facility is
currently licensed to possess the high-assay LEU contemplated for
lease.
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\2\ U.S. Nuclear Regulatory Commission, Materials License.
License Number SNM-2010, Amendment 57, Docket Number 70-3103.
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There is currently no foreign commercial producer or supplier of
high-assay low enriched uranium for use in domestic research reactors
or medical isotope production applications. The high-assay LEU that is
produced internationally, for example to convert Russian-supplied
reactors from highly enriched uranium (HEU) cores, is noncommercially
produced by state-owned enterprises for official purposes via
downblending excess HEU.
It is also not feasible for commercial molybdenum-99 producers to
use commercial available assays of LEU (i.e. LEU enriched to 5 wt-% U-
235 or less) instead of high-assay LEU. Given the specialized uses,
designs, and regulatory requirements of the fuels and targets used for
these isotope production purposes, it would be technologically and
financially infeasible for reactor operators to replace DOE-sourced
high-assay LEU by converting the reactors to use commercial-assay LEU;
likewise fabricating targets using commercial-assay LEU would limit
their effectiveness sufficiently to make them uneconomical. Therefore,
low-assay LEU use would prevent the reactor or target from achieving
the same performance or efficiency and thus from being used for their
intended purposes.
Given the lack of domestic commercial production or supply of such
materials and challenges to using or finding an alternative supply, an
analysis of the impact of the proposed leases based on an assessment of
the six factors listed in Section II is straightforward. Since the DOE
material would not supplant material available on the commercial
market, it would not displace primary production of uranium
concentrates, conversion services, or
[[Page 1411]]
enrichment services. Thus, there will be no meaningful impact on the
domestic uranium industries with respect to any of the factors.
Even if the DOE leases would displace production among the domestic
uranium mining, conversion, or enrichment industry, the amount would be
so small that the effects would be minimal. With respect to the three
uranium industries, to produce the amount of LEU in the proposed leases
from primary production would require about 50,000 pounds of uranium
concentrates (U3O8), 19,100 kgU of conversion
services, and approximately 22,600 SWU of enrichment services. By
comparison, the entire global fleet of nuclear reactors is expected to
need in 2015 approximately 160 million pounds
U3O8, 56 million kgU of conversion services, and
about 45 million SWU.\3\ For further comparison, the U.S. uranium
mining industry produced approximately 4.9 million pounds of
U3O8 in 2014.\4\ The domestic conversion industry
consists of only one facility. In recent years, that facility has
produced between 11 and 12 million kgU. As mentioned above, there is
only one currently operating enrichment facility in the U.S. The total
capacity of that facility is currently about 3.7 million SWU. The
Suspension Agreement with the Russian Federation allows for the sale of
Russian natural uranium and SWU into the United States with
restrictions ranging between 11.9 and 13.4 million pounds
U3O8 equivalent per year between 2014 and 2020
(73 FR 7705 at 7706, Feb. 11, 2008).\5\
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\3\ These estimates of global requirements come from an analysis
prepared by Energy Resources International, Inc. (ERI). This report
is available at http://www.energy.gov/ne/downloads/excess-uranium-management. DOE tasked ERI to prepare this analysis to assess the
potential effects on the domestic uranium mining, conversion, and
enrichment industries of the introduction into the market of uranium
transfers that are not the subject of this assessment. ERI develops
its requirements forecasts for various customers. Because of ERI's
general expertise in the uranium markets and contacts with market
participants, DOE believes ERI's general market information is
reliable.
\4\ EIA, Domestic Uranium Production Report Q3 2015, 2 (October
2015). Based on data from the first three quarters of 2015, uranium
concentrate production is down in the United States compared to the
corresponding quarters of 2014. Even accounting for this decrease,
the effect of an additional 50,000 pounds U3O8
would be minimal. In just the first three quarters of 2015, the
domestic uranium mining industry produced over 2.7 million pounds
U3O8. Id
\5\ The Russian HEU Agreement allowed for the sale of LEU
derived from Russian downblended HEU. This agreement ended in
December 2013.
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Given how small these DOE leases would be compared to global
reactor requirements, domestic production, and imports from the Russian
Federation under the Suspension Agreement, DOE concludes that leases at
this level would have almost no impact on the domestic uranium mining,
conversion, or enrichment industry with respect to any of the six
factors listed in Section II.
DOE recently issued a determination that certain transfers of
natural uranium in exchange for cleanup services at the Portsmouth
Gaseous Diffusion Plant and of LEU in exchange for downblending
services will not have an adverse material impact on the domestic
uranium industries. The analysis supporting that determination also
considered various other past transfers, the uranium from which may
still be affecting markets, and the impacts of the Russian HEU
Agreement and Suspension Agreement (80 FR 26,366 at 26,385). DOE also
issued a determination that the transfer of up to the equivalent of 25
kgU of 19.75% assay LEU per calendar year to support the development
and demonstration of molybdenum-99 production capabilities will not
have an adverse material impact on the domestic uranium industries (80
FR 65,727). In reaching the conclusion that leases of up to 500 kgU per
year of high-assay LEU will have a minimal impact on the domestic
uranium industries, DOE takes account of the various transfers assessed
for its recent determinations.
IV. Conclusion
For the reasons discussed above, these leases will not have an
adverse material impact on the domestic uranium mining, conversion, or
enrichment industry, taking into account the Russian HEU Agreement and
Suspension Agreement.
[FR Doc. 2016-00388 Filed 1-11-16; 8:45 am]
BILLING CODE 6450-01-P