[Senate Hearing 112-4]
[From the U.S. Government Publishing Office]


                                                          S. Hrg. 112-4
 
                     THE AMERICAN MEDICAL ISOTOPES 
                             PRODUCTION ACT 

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   TO

 RECEIVE TESTIMONY ON S. 99, THE AMERICAN MEDICAL ISOTOPES PRODUCTION 
                              ACT OF 2011

                               __________

                            FEBRUARY 1, 2011


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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            RICHARD BURR, North Carolina
MARY L. LANDRIEU, Louisiana          JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont             MIKE LEE, Utah
DEBBIE STABENOW, Michigan            RAND PAUL, Kentucky
MARK UDALL, Colorado                 DANIEL COATS, Indiana
JEANNE SHAHEEN, New Hampshire        ROB PORTMAN, Ohio
AL FRANKEN, Minnesota                JOHN HOEVEN, North Dakota
JOE MANCHIN, III, West Virginia      BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel
























                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator From Mexico....................     1
Brown, Roy W., Senior Director, Federal Affairs, Council on 
  Radionuclides and Radiopharmaceuticals.........................     7
Doane, Margaret M., Director, Office of International Programs, 
  Nuclear Regulatory Commission..................................    13
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     2
Staples, Parrish, Ph.D., Director, Office of European and African 
  Threat Reduction, Global Threat Reduction Initiative, Defense 
  Nuclear Nonproliferation, National Nuclear Security 
  Administration, Department of Energy...........................     3

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    25


              THE AMERICAN MEDICAL ISOTOPES PRODUCTION ACT

                              ----------                              


                       TUESDAY, FEBRUARY 1, 2011

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, 9:59 a.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 
chairman, presiding.

  OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM 
                             MEXICO

    The Chairman. Why don't we get started. Thank you all for 
being here. This is a hearing of the Senate Energy and Natural 
Resources Committee. Let me first, before we get started, 
welcome Senator Manchin, who has just joined our committee. As 
other newly assigned members come to the committee, we will 
certainly welcome them as well. But we'll have our first sort 
of organizing meeting probably in a week or 2 to discuss 
committee assignments and all of that.
    Today's hearing is on S. 99. That is the American Medical 
Isotopes Act of 2011. This bill is essentially the same bill 
that was reported out of this committee last Congress by 
unanimous consent, except that the program authorization has 
been lowered by $20 million to account for the fact that we are 
now in fiscal year 2011.
    The purpose of the legislation is to develop a reliable 
domestic supply of Molybdenum-99, which is used for 18 million, 
or 85 percent, of the medical isotope procedures performed 
annually in the United States. We currently have no domestic 
supply of this isotope and we rely on aging reactors in Canada 
and Europe to produce it. For the first time, the reactors in 
Canada and Europe were shut down last July and August for 
maintenance. That resulted in days when you could not get a 
Molybdenum-99 procedure.
    This bill will correct the problem by authorizing the 
Department of Energy to work with U.S. companies to produce a 
reliable domestic supply of Molybdenum-99 in order to avoid a 
future shortage. The bill also proposes a 14-year phaseout of 
exporting of highly enriched uranium, which is used to produce 
these isotopes.
    It seems to me that since we're now negotiating with Iran 
to supply their medical isotope reactor with low enriched fuel, 
we ought to lead by example and phaseout the export of the 
weapons-grade uranium to produce these isotopes. The technology 
exists to produce Molybdenum-99 from low enriched uranium. 
South Africa and Australia are currently doing so. This bill 
authorizes the Department of Energy to enter into cooperative 
agreements and for U.S. companies to do so as well.
    I want to thank the witnesses who are appearing today. Two 
of the witnesses testified on this bill in the last Congress. 
Dr. Staples, Mr. Brown, I thank you for appearing again today. 
Ms. Doane is the technical expert from the Nuclear Regulatory 
Commission, which has submitted formal written comments on the 
bill. She will not have an opening statement today, but will be 
at the witness table to answer any questions on how the Nuclear 
Regulatory Commission manages the export of special nuclear 
materials such as the highly enriched uranium used to produce 
Molybdenum-99.
    Let me call on Senator Murkowski for any statement she'd 
like to make.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman. It's good to be 
back at the committee.
    I would also like to welcome our new members on your side, 
Senator Franken and Senator Manchin. I think you will find this 
is a committee where we jump into the interesting, complex, 
sometimes contentious issues with great relish, but do so with 
a degree of civility, honesty, and attention to the work that 
yields good product. I think you'll enjoy the committee.
    We have a handful of new members joining on our side of the 
aisle. They are Senator Lee, Senator Paul, Senator Coats, 
Senator Portman, Senator Hoeven. We have a good group of 
members.
    As you point out, Mr. Chairman, our committee has had an 
opportunity to review the issue of the supply of nuclear 
medical isotopes, but in fairness to our new members, it is 
important that we do some reruns. We'll be seeing some of these 
as we proceed in the early part of this year, but very 
important issues.
    For those of you that are joining us here today, the 
chairman and I were discussing the new lighting. Apparently, 
I'm told that we are the first committee room in the Congress 
to be fully installed with the new LED lights. Of course we 
like them, because they are more energy efficient, but they do 
cast a different pall on the rest of you out there.
    I do want to thank you for scheduling this hearing.
    The Chairman. Next we're going to see if we can get some 
heat in the room--our next renovation.
    [Laughter.]
    Senator Murkowski. One step at a time, sir.
    You have given some good background on the issue relating 
to our domestic supply of nuclear medical isotopes, the fact 
that we have not had here in this country a domestic supply 
since 1989. We saw the shortages play out in 2009 and 2010 
within our medical communities. I understand that, while the 
supply currently is meeting a growing demand, the stability and 
the long-term viability of that supply is in question.
    The bill before us seeks to help promote the domestic 
production of Mo-99 to meet our country's needs. It's been just 
over a year that we had the hearing on this subject. I look 
forward to hearing from you, Dr. Staples and Mr. Brown, the 
progress that has been made thus far in moving toward a more 
domestic supply; and also interested in hearing what changes 
you believe may be needed to the legislation that we discussed 
last year.
    With that, I look forward to the comments.
    The Chairman. All right. Let me also join in welcoming 
Senator Franken. We're glad he's on the committee and look 
forward to his active participation.
    Dr. Parrish Staples is the Director of the Office of 
European and African Threat Reduction with the Global Threat 
Reduction Initiative, Defense Nuclear Nonproliferation, at the 
National Nuclear Security Administration in the Department of 
Energy. Mr. Roy Brown is the Senior Director of Federal Affairs 
with the Council on Radionuclides and Radiopharmaceuticals. We 
appreciate both of them being here.
    Dr. Staples, why don't you start and then Mr. Brown, and 
then we'll have some questions.

   STATEMENT OF PARRISH STAPLES, PH.D., DIRECTOR, OFFICE OF 
EUROPEAN AND AFRICAN THREAT REDUCTION, GLOBAL THREAT REDUCTION 
INITIATIVE, DEFENSE NUCLEAR NONPROLIFERATION, NATIONAL NUCLEAR 
         SECURITY ADMINISTRATION, DEPARTMENT OF ENERGY

    Mr. Staples. Thank you, Chairman Bingaman, Ranking Member 
Murkowski, and the other committee members, for the opportunity 
to testify about the National Nuclear Security Administration's 
support for accelerating the development of a domestic 
commercial supply of Molybdenum-99 without using highly 
enriched uranium. Today I will update you on the testimony 
provided to this committee in December 2009: first, the 
nonproliferation and medical benefits of S. 99, the American 
Medical Isotopes Production Act of 2011; second, NNSA's 
progress to accelerate the establishment of a non-HEU-based 
domestic commercial supply of Mo-99; and last, the changing 
global market conditions that could undermine our efforts for 
reliable domestic production of non-HEU-based Mo-99.
    Currently the United States depends entirely on foreign 
producers for all of our Mo-99. Of the world's major 
international suppliers, Canada, The Netherlands, and Belgium 
use HEU targets to produce this vital medical isotope. Only 
South Africa, which partnered with NNSA to convert its HEU-
fueled reactors to low-enriched uranium fuel, has begun LEU-
based Mo-99 production.
    NNSA frequently meets with the existing major global 
producers as part of its nuclear nonproliferation agenda to 
promote the development of a long-term reliable supply of Mo-99 
using LEU. World leaders at the 2010 Nuclear Security Summit 
and other fora underscored the need to minimize and, where 
possible, eliminate the use of HEU due to the grave threats 
posed by excess nuclear materials and the possible acquisition 
of such materials by terrorists or rogue States.
    As has been the case in 2009-2010, global shortages can 
occur with any change in the production schedule of the major 
producers. Under the leadership of the Office of Science and 
Technology Policy of the Executive Office of the President, an 
inter-agency working group which includes NNSA and many others 
are pursuing actions to minimize these near-term shortages.
    The 2009 National Academies report confirmed that 
production of Mo-99 is both technically and economically 
feasible. As a result, NNSA is demonstrating the feasibility of 
non-HEU-based production by working with four commercial 
entities to develop technology pathways to produce adequate 
quantities of Mo-99 for the United States. These include LEU 
solution reactor, neutron capture, and accelerator-based 
technologies. The strategy is to move away from reliance on a 
sole technology and a limited number of facilities, as is the 
case with the global Mo-99 market today.
    Now, despite the good progress, challenges remain that 
could obstruct the successful and accelerated establishment of 
a domestic supply of Mo-99. Just last week I represented the 
United States at the High-Level Group on Medical Radioisotopes 
hosted by the Organization for Economic Cooperation and 
Development's Nuclear Energy Agency. I would like to highlight 
the following main points of that discussion:
    First, there is recognition that the current industry has 
failed and that both commercial industry and governments cannot 
become complacent in their actions to reestablish a reliable 
supply of Mo-99 now that the Canadian and Dutch reactors are 
once again operational. A primary issue is that the major 
global producers have been, and generally continue to be, 
heavily subsidized by their governments. Such subsidies put at 
risk the economic viability of companies starting up high, tech 
capital-intensive businesses to produce non-HEU-based Mo-99.
    To provide a level playing field for U.S. companies, meet 
our nonproliferation goals, and build a non-HEU-based industry 
for Mo-99, there must be a concerted global commitment that all 
new or expanded long-term Mo-99 production be undertaken 
without HEU. Very importantly, we must achieve full cost 
recovery across the entire global commercial industry. Any 
foreign government subsidy of HEU-based production puts the 
objectives of this legislation at risk.
    We also have significant concerns about the scope, cost, 
and other implications of section 2[c], the Uranium Lease-
Takeback provision. In addition, that proposed sub-program 
could risk lengthening the timeframe to Mo-99 production if the 
schedule for implementing the proposed Uranium Lease and 
Takeback sub-program were to have any linkage to the expected 
production schedule of the commercial projects to produce Mo-
99.
    NNSA will use its existing well-established program 
management and procurement oversight tools to ensure that the 
innovative non-HEU-based technologies it supports are developed 
on schedule and that cost-shared funds are properly applied so 
that Mo-99 is delivered to the U.S. market on time and within 
anticipated costs. NNSA will also closely coordinate with the 
Nuclear Regulatory Commission and the Food and Drug 
Administration on reliability issues associated with the 
commercial use of these technologies.
    To summarize, the Department of Energy and NNSA believe 
that overall this legislation will be helpful in providing 
public visibility to critical nonproliferation goals and to 
equally critical medical needs. With clear commitment and 
sustained support, we can secure our citizens' health needs as 
well as their national security.
    Thank you, Senator Bingaman, Ranking Member Murkowski, and 
other members of the committee for your continued leadership in 
supporting this legislation and we look forward to working with 
you to address any issues raised here today. I appreciate the 
opportunity to testify and I'm ready to answer your questions.
    [The prepared statement of Mr. Staples follows:]

   Prepared Statement of Parrish Staples, Ph.D., Director, Office of 
    European and African Threat Reduction, Global Threat Reduction 
Initiative, Defense Nuclear Nonproliferation, National Nuclear Security 
                  Administration, Department of Energy
    Chairman Bingaman, Ranking Member Murkowski, and Committee Members, 
thank you for the opportunity to testify about the National Nuclear 
Security Administration's (NNSA's) support for accelerating development 
of a domestic commercial supply of Molybdenum-99 (Mo-99) without using 
highly enriched uranium (HEU). This effort is part of our larger global 
nonproliferation program to minimize and, where possible, eliminate the 
use of HEU in civilian nuclear applications, including in the 
production of medical radioisotopes. My testimony will update you on 
testimony provided to this committee in December 2009 about (1) the 
nonproliferation and medical benefits of S. 99, the American Medical 
Isotopes Production Act of 2011; (2) the NNSA's progress to accelerate 
the establishment of a non-HEU based domestic commercial supply of Mo-
99; and (3) changing global market conditions that could undermine our 
efforts for a reliable domestic production of non-HEU-based Mo-99.
    Mo-99 is the parent isotope of Technetium-99m, which is used in 
approximately 50,000 diagnostic medical procedures every day in the 
United States. It has a very short half life and therefore must be 
produced on a continuous basis to meet the needs of the medical 
community. Any interruptions in production can place patients at risk 
if diagnostic tests cannot be performed.
    Currently, the United States depends entirely on foreign producers 
for all of its Mo-99. Of the major international suppliers of 
commercial Mo-99, Canada, the Netherlands, and Belgium use HEU targets 
to produce this vital medical isotope. Only South Africa, which 
partnered with NNSA to convert its HEU reactor to low enriched uranium 
(LEU) fuel, has begun LEU-based Mo-99 production.
    Mo-99 production processes based on HEU utilize nuclear material 
enriched to the same degree as nuclear material used to produce nuclear 
weapons and improvised nuclear devices. World leaders at the 2010 
Nuclear Security Summit and other fora underscored the need to minimize 
and, where possible, eliminate the use of HEU due to the grave threats 
posed by excess nuclear materials and the possible acquisition of such 
materials by terrorists or rogue states. New technical advances in Mo-
99 production processes, many of which have been supported by the U.S. 
Department of Energy and NNSA working closely with industry and our 
national laboratories, are demonstrating that HEU is no longer 
required. S. 99, the American Medical Isotopes Production Act of 2011 
will encourage Mo-99 suppliers worldwide not to use HEU and to develop 
a reliable supply of Mo-99 for the U.S. medical community. Provisions 
of this legislation, in particular Section 5, are aligned with the 
NNSA's nonproliferation mission to assist in the conversion of research 
reactors and isotope production facilities worldwide from the use of 
HEU to LEU, and to establish a reliable supply of Mo-99 produced 
without the use of HEU in the United States.
    Furthermore, the HEU-free, U.S.-based Mo-99 production encouraged 
by the American Medical Isotopes Production Act of 2011 would serve as 
an example for eliminating HEU in the global medical isotope business. 
The proposed legislation will promote the reliable supply of Mo-99 to 
hospitals throughout our country and will ultimately ensure the level 
of patient care that our citizens require in a way that is consistent 
with our nuclear nonproliferation goals.
    As has been the case in 2009-2010, global Mo-99 shortages can occur 
with any change in the production schedules of the major producers. 
Unforeseen shutdowns due to technical problems or scheduled maintenance 
of the aging reactors currently producing Mo-99 can threaten the 
fragile supply chain for the much needed medical isotopes. Under the 
leadership of the Office of Science and Technology Policy of the 
Executive Office of the President, an Interagency working group, which 
includes NNSA and other Department of Energy offices, is pursuing the 
following actions: (1) investigating options to focus on near-term 
efforts to increase the supply to the U.S. during periods when the 
major suppliers will be out of operation; (2) coordinating efforts to 
maximize the success of the commercial sector to develop new longer-
term production capabilities for the U.S. medical community; and (3) 
working with representatives of the medical community to ensure 
communication about the timing of scheduled maintenance to more 
efficiently manage use of available Mo-99 supplies.
    NNSA frequently meets with the existing major global Mo-99 
producers as part of its nuclear nonproliferation agenda to promote the 
development of a long-term reliable supply of Mo-99 using LEU. NNSA's 
programs can also assist other countries with conversion, where 
possible. For example, with NNSA's support, the South African Nuclear 
Energy Corporation (Necsa) became the first major supplier to produce 
large-scale quantities of LEU-based Mo-99, and completed its first 
shipment of FDA-approved, LEU-based Mo-99 to the United States in 
December 2010. Necsa's achievement to produce large-scale quantities of 
LEU-based Mo-99 is an important nonproliferation advance as it 
demonstrates the technical viability of producing Mo-99 consistent with 
international commitments to minimize and eliminate the use of HEU in 
isotope production. With appropriate Congressional support, the long-
term goal of steady state production from LEU could be achieved 
globally, and could thus provide a complementary, consistent supply of 
the medical isotope to health care providers.
    The 2009 National Academies report confirmed that production of Mo-
99 is both technically and economically feasible, and as a result, NNSA 
is demonstrating the feasibility of non-HEU based Mo-99 production by 
working with four commercial entities to develop technology pathways to 
produce adequate quantities of Mo-99 for the United States. These 
include: LEU solution reactor technology; neutron capture technology; 
and accelerator technology. The strategy is to move away from reliance 
on a sole technology and a limited number of facilities, as is the case 
with the global Mo-99 market today. The goal is for each technology to 
be commercially successful, and therefore NNSA's approach is technology 
neutral. NNSA also makes available to these commercial partners the 
technical expertise of the U.S. national laboratories gained from their 
many years of work to develop non-HEU based Mo-99 production 
technologies. We share the goals of this bill and look forward to 
working with you to ensure the accomplishment of nuclear threat 
reduction activities and the development of a reliable supply of 
medical isotopes to the public, while ensuring greater Presidential 
flexibility.
    Despite the good progress, challenges remain that could obstruct 
the successful and accelerated establishment of a domestic supply of 
Mo-99. First, the major global producers have been and continue to be 
heavily subsidized by their governments. Such subsidies put at risk the 
economic viability of U.S. companies starting up high-tech, capital 
intensive businesses to produce non-HEU based Mo-99. A 2010 independent 
economic study by the Organization for Economic Cooperation and 
Development's Nuclear Energy Agency entitled ``An Economic Study of the 
Molybdenum-99 Supply Chain'', underscores this issue by citing that 
long-term subsidies have damaged industry's attempts to enter the 
global Mo-99 market. To provide a level playing field for U.S. 
companies, meet nonproliferation goals, and build a non-HEU based 
industry for Mo-99, there must be a concerted global commitment that 
all new or expanded long-term Mo-99 production be undertaken without 
HEU. Very importantly, we must achieve full cost recovery across the 
entire global commercial industry. Any foreign government subsidy of 
HEU-based production puts the objectives of this legislation at risk.
    We have significant concerns about the scope, costs, other 
implications of Section 2(c), the ``Uranium Lease and Take Back'' 
provision. In addition, the proposed program could risk lengthening the 
timeframe to Mo-99 production if the schedule of implementing the 
proposed ``Uranium Lease and Take Back'' subprogram were to have any 
linkage to the expected production schedule of the commercial projects 
to produce Mo-99.
    NNSA will use its existing, well-established program management and 
procurement oversight tools to ensure that the innovative non-HEU based 
technologies it supports are developed on schedule and that cost-shared 
funds are properly applied so that Mo-99 is delivered to the U.S. 
market on time and within anticipated costs. NNSA will also coordinate 
closely with the Nuclear Regulatory Commission and the Food and Drug 
Administration on regulatory issues associated with the commercial use 
of new technology.
    To summarize, the Department of Energy and NNSA believe that, 
overall, this legislation will be helpful in providing public 
visibility to critical nonproliferation goals and to equally critical 
medical needs. With clear commitment and sustained support, we can 
secure our citizens' health needs as well as their national security. I 
thank Senator Bingaman, Ranking Member Murkowski, and Members of the 
Committee for your continued leadership in supporting this legislation 
and we look forward to working with you to address any issues raised 
here today. I appreciate the opportunity to testify and am ready to 
answer your questions.

    The Chairman. Thank you very much.
    Mr. Brown.

 STATEMENT OF ROY W. BROWN, SENIOR DIRECTOR, FEDERAL AFFAIRS, 
       COUNCIL ON RADIONUCLIDES AND RADIOPHARMACEUTICALS

    Mr. Brown. Good morning, Mr. Chairman, Ms. Murkowski, 
members of the committee, and staff. My name is Roy Brown and 
I'm Senior Director of Federal Affairs for the Council on 
Radionuclides and Radiopharmaceuticals, or CORAR. I'm 
representing CORAR here today to testify on behalf of the 
American Medical Isotopes Act of 2011 and to answer questions 
from the committee.
    CORAR testified before both the Senate and House during the 
last Congress in support of the proposed predecessor 
legislation, H.R. 3276. Thus, we support S. 99 and the 
provisions contained in the legislation. We believe this 
legislation will provide critical funding, assurance of, and 
the regulatory framework necessary to establish the reliable 
medical isotope production capabilities in the U.S. This 
legislation is an important step toward a reliable source of 
medical isotopes for our patients and will contribute to 
enhancing supply well into the future.
    In U.S. hospitals and clinics, Technetium-99m, produced 
from Mo-99, is administered to more than 40,000 patients each 
day in the detection and staging of cancer, detection of heart 
disease, detection of thyroid disease, study of the brain and 
kidney function, and imaging of stress fractures. Thousands of 
other nuclear medicine procedures are conducted every day in 
the U.S. with radionuclides, such as I-131, I-125, You-90 and 
Xenon-133, in the diagnosis and treatment of diseases. These 
other isotopes are made as a byproduct of the Mo-99 production 
process. Nuclear medicine procedures not only improve the 
quality of life, but they save lives. A self-sustaining 
domestic supply of radionuclides used in nuclear medicine would 
ensure our patients receive the necessary care while reducing 
our health care costs.
    As a supporter of S. 99, CORAR would like to highlight four 
specific issues for the committee's consideration to ensure 
that the bill will accomplish its goals and serve the needs of 
U.S. patients. First, section 2[c] of the legislation contains 
an important provision requiring DOE to accept waste created by 
the production of medical isotopes from the DOE-leased uranium. 
This provision is important because currently there's no 
disposal pathway available in the U.S. for the types of 
radioactive wastes that will be generated in the production of 
Mo-99 and these other medical isotopes.
    It is critically important to the objective of this 
legislation that DOE accepts such radioactive waste at 
reasonable prices. These prices should be similar to what we 
would expect to pay for commercial disposal if commercial 
disposal waste facilities were available. This will help assure 
new medical isotope production facilities can be built and 
operated effectively.
    Second, the NRC has a comprehensive regulatory framework 
for the protection of the environment, workers, and the public. 
Any new reactor or production facility receiving funding under 
this legislation will be licensed by the NRC or equivalent 
Agreement State agency. Various aspects and operations of these 
facilities will also be regulated by the Food and Drug 
Administration, the Department of Transportation, the 
Environmental Protection Agency, as well as State and local 
regulatory agencies.
    We are concerned that acceptance of money from DOE for the 
development of medical isotopes for the development of medical 
isotope capability under this legislation may trigger 
duplicative nuclear--I'm sorry--National Environmental Policy 
Act, or NEPA, reviews. With these various levels of regulatory 
oversight, we do not believe NEPA will offer any more 
protection of the environment than already provided by NRC, 
FDA, DOT, and others. The triggering of NEPA by these new 
production facilities could seriously delay the project, which 
would not be consistent with the desired schedule and would 
significantly increase its costs.
    The NRC licensing process required for these new facilities 
is actually a NEPA process. As such, we would like to see NRC 
as the lead agency in the review to avoid a duplicative 
regulatory process which would be created by both NRC and EPA 
conducting their own NEPA review. If the NRC took the lead on 
this review, these new facilities would be required to pass a 
rigorous environmental NEPA review by NRC, while still allowing 
them to meet the time schedule necessary to meet patient 
demand.
    Several groups are working on the development of new types 
of isotope production reactors or have plans to utilize 
existing reactors for production of medical isotopes. Some of 
these reactors may fall into a licensing gap at NRC. These new 
reactors do not meet the definition of a research reactor under 
the language in section 4 of the Atomic Energy Act due to their 
production focus and lack of research being conducted there.
    These types of reactors also do not have the inherent risk 
or security concerns of large commercial nuclear power reactors 
which are licensed under section 103 of the Atomic Energy Act. 
CORAR would like to see S. 99 either revise section 104 of the 
Atomic Energy Act to recognize these types of reactors for the 
production of medical isotopes or direct the NRC to permit the 
licensing of these reactors under section 104 of the Atomic 
Energy Act. If assistance of this type could be included in the 
legislation, it would help expedite the licensing of these new 
reactors and bring these new sources of Mo-99 to market more 
quickly.
    Four, CORAR is aware of several promising efforts to 
develop new medical isotope production technologies. NNSA at 
DOE has already awarded cooperative grants to a number of 
projects based on different technological approaches. Given 
this legislation's intent to broadly serve American patients, 
future funding should be directed to the project or projects 
which stand the best chance of producing commercially 
meaningful quantities of medical isotopes within the timeframe 
envisioned in this legislation.
    We also would like to see the process by which DOE awards 
development money fully vetted through a regulatory--through a 
rulemaking or some other process where our industry or other 
interested parties can review and comment on DOE's proposed 
evaluation criteria and decisionmaking process for such 
projects.
    I'd like to thank you for the opportunity to testify here 
today. CORAR is supportive of this legislation and hopes to 
continue to work with the committee and staff to ensure both a 
swift and long-term solution to the medical isotope supply 
crisis for the benefit of the American patients.
    I'd be happy to answer any questions the committee may 
have. Thank you.
    [The prepared statement of Mr. Brown follows:]

 Prepared Statement of Roy W. Brown, Senior Director, Federal Affairs, 
           Council on Radionuclides and Radiopharmaceuticals,
    Good morning Mr. Chairman, Ms. Murkowski, members of the Committee 
and staff.
    My name is Roy Brown and I am the Senior Director of Federal 
Affairs for the Council on Radionuclides & Radiopharmaceuticals, or 
CORAR\1\. I am representing CORAR here today to testify on behalf of 
the American Medical Isotopes Act of 2011 and to answer questions from 
the Committee.
---------------------------------------------------------------------------
    \1\ The Council on Radionuclides and Radiopharmaceuticals, Inc. 
(CORAR) is comprised of companies which produce products utilizing many 
different radionuclides. CORAR members include the major manufacturers 
and distributors of radiopharmaceuticals, radioactive sources, and 
research radionuclides used in the U.S. for diagnostic and therapeutic 
medical applications and for industrial, environmental and biomedical 
research and quality control.
---------------------------------------------------------------------------
    CORAR testified before both the Senate and House during the last 
Congress in support of the proposed predecessor legislation, H.R. 3276. 
Thus, we support S. 99 and the provisions contained in the legislation. 
We believe this legislation will provide critical funding, assurance 
of, and the regulatory framework necessary to help establish reliable 
medical isotope production capabilities in the United States. This 
legislation is an important step towards a reliable source of medical 
radionuclides for our patients and will contribute to enhancing supply 
well into the future. In U.S. hospitals and clinics, Tc-99m (produced 
from Mo-99) is administered to more than 40,000 patients each day in 
the detection and staging of cancer, detection of heart disease, 
detection of thyroid disease, study of brain and kidney function, and 
imaging of stress fractures. Thousands of other nuclear medicine 
procedures are conducted every day in the U.S. with radionuclides, such 
as I-131, I-125, Y-90 and Xe-133, in the diagnoses and treatment of 
diseases. These nuclear medicine procedures not only improve the 
quality of life, but they save lives. A self-sustaining domestic supply 
of radionuclides used in nuclear medicine would ensure our patients 
receive the necessary care while reducing our health care costs.
    As a supporter of S. 99, CORAR would like to highlight four 
specific issues for the Committee's consideration to ensure that the 
bill will accomplish its goals and serve the needs of U.S. patients:

          1. Section 3c of the legislation contains an important 
        provision requiring DOE to accept waste created by the 
        production of medical isotopes from the DOE-leased uranium. 
        This provision is important because currently there is no 
        disposal pathway available in the U.S. for the types of 
        radioactive waste that will be generated in the production of 
        Mo-99 and other medical isotopes. It is critically important to 
        the objective of this legislation that DOE accepts such 
        radioactive waste at reasonable prices. These prices should be 
        similar to what we would expect to pay for commercial disposal, 
        if a commercial waste disposal facility were available. This 
        will help assure new medical isotope production facilities can 
        be built and operated effectively.
          2. The NRC has a comprehensive regulatory framework for 
        protection of the environment, workers and the public. Any new 
        reactor or production facility receiving funding under this 
        legislation will be licensed by the NRC or equivalent Agreement 
        State agency. Various aspects and operations of these 
        facilities will also be regulated by the Food & Drug 
        Administration (FDA), Department of Transportation (DOT) and 
        the Environmental Protection Agency (EPA), as well as state and 
        local regulatory agencies. We are concerned that the acceptance 
        of money from DOE for the development of medical isotope 
        capability under this legislation may trigger duplicative 
        National Environmental Policy Act (NEPA) reviews. With these 
        various levels of regulatory oversight, we do not believe NEPA 
        will offer any more protection of the environment than that 
        already provided by NRC, FDA, DOT and others. Triggering of 
        NEPA by one of these new production facilities could serious 
        delay the project and significantly increase its cost. We would 
        like to see a provision in the legislation that any federal 
        money spent on the development of medical isotopes to be exempt 
        from the requirements of NEPA.
          3. Several groups are working on the development of new types 
        of isotope production reactors or have plans to utilize 
        existing reactors for production of medical isotopes. Some of 
        these reactors may fall into a licensing gap at the NRC. These 
        new reactors do not meet the definition of a research reactor 
        under the language in Section 104 of the Atomic Energy Act 
        (AEA), due to their production focus and lack of research being 
        conducted. These types of reactors also do not have the 
        inherent risk or security concerns of large commercial nuclear 
        power reactors which are licensed under Section 103 of the AEA. 
        CORAR would like to see S. 99 either revise Section 104 of the 
        AEA to recognize these types of reactors for the production of 
        medical isotopes or direct the NRC to permit the licensing of 
        these reactors under Section 104 of the AEA. If assistance of 
        this type could be included in the legislation, it would help 
        expedite the licensing of these new reactors and bring these 
        new sources of Mo-99 to market more quickly.
          4. CORAR is aware of several promising efforts to develop new 
        medical isotope production technologies. DOE/NNSA has already 
        awarded cooperative grants to a number of projects based on 
        different technological approaches. Given the legislation's 
        intent to broadly serve American patients, future funding 
        should be directed to the project or projects which stand the 
        best chance of producing commercially meaningful quantities of 
        medical isotopes within the time frame envisaged in this 
        legislation. We also would like to see the process by which DOE 
        awards development money, fully vetted through a rulemaking or 
        some other process where our industry and other interested 
        parties can review and comment on DOE's proposed evaluation 
        criteria and decision-making process for such projects.

    Thank you for the opportunity to testify here today. CORAR is 
supportive of this legislation, and hopes to continue to work with the 
Committee and staff to ensure both a swift and long term solution to 
the medical isotope supply crisis for the benefit of American patients.
    I would be happy to answer any questions the Committee may have.

    The Chairman. Thank you both very much.
    Let me start with a few questions here. Dr. Staples, let me 
understand clearly the position that you articulated about this 
takeback requirement that is in the legislation. Mr. Brown, 
you've indicated, I think, the first of the four items that you 
talk about is that it's very important we keep that provision 
in there and there be some obligation to take this waste back.
    I'm just wondering, Dr. Staples, what is your view on that 
again? You stated it in your testimony, but I wanted to be 
clear on what it is.
    Mr. Staples. Our concern is that we cannot anticipate how 
the Uranium Lease Takeback program for the production of Mo-99 
actually would be implemented, and the legislation does not 
provide funding for that new service. If directed to do so, we 
would develop an approach that considers the goal of developing 
a sustainable commercial enterprise with thorough diligence for 
responsible and safe materials management. We recognize the 
importance of meeting those program objectives, but we do 
require further guidance and want to be ensured that the sub-
program, the Uranium Lease Takeback program, is not linked to 
the production of medical isotopes, just to ensure the timely 
development of isotopes for the medical community.
    The Chairman. We may need to look at that language and be 
sure that it meets the requirement that at the same time there 
is an obligation, which Mr. Brown has indicated is very 
important.
    On the question of how we ensure that the cost of the 
Molybdenum-99 that U.S. companies are producing or supplying 
will be competitive with that that we obtain overseas, Dr. 
Staples, what's your view on that?
    Mr. Staples. We are concerned about that. We are concerned, 
in fact, of the subsidies provided for the current industry, of 
how they produce the medical isotope, and that our U.S. 
companies will be undercut in the commercial market by foreign 
producers that are heavily subsidized by their governments. 
This is a serious challenge facing the fragile Mo-99 market and 
in order to ensure reliable supply we want to ask that a level 
playing field for all companies be provided, with full cost 
recovery across the global market.
    This actually is an issue that's been under discussion with 
all participants, both the suppliers and the customers, at the 
recent Nuclear Energy Agency meeting of the High-Level Group 
for Medical Radioisotope production. So it is recognized to be 
a concern throughout the industry for the long-term reliability 
of isotope supply of Mo-99 for the medical community, while at 
the same time we can achieve the nonproliferation objectives by 
using non-HEU-based production technologies.
    The Chairman. Mr. Brown, do you have a concern about this 
problem of the cost that U.S. companies would incur being 
undercut essentially by competition from overseas?
    Mr. Brown. As I said in my testimony, we're concerned that 
the waste takeback provision--that the cost we pay per cubic 
yard of waste to dispose of to DOE would be done at reasonable 
prices. We wouldn't want to pay exorbitant prices that would 
throw the economics of any isotope production off. So what 
we're asking for is a reasonable commercial rate for waste 
disposal.
    The Chairman. But you think with that, with a reasonable 
commercial rate for waste disposal, U.S. companies would be 
able to compete?
    Mr. Brown. We feel we could, yes.
    The Chairman. All right. Let me ask one other question, Dr. 
Staples, about what actions the Department is working on to 
move the Russians to produce Molybdenum-99 with low-enriched 
uranium.
    Mr. Staples. Yes. Recently, there were several press 
releases that came out about a supply being developed in Russia 
that was utilizing highly enriched uranium for the production 
of Mo-99. We intend to raise this issue at very high levels in 
meetings with various Rosatom officials, such as Director 
Kiriyenko, to dissuade Russia from the use of HEU, to ensure 
that their actions are consistent with their Presidential-level 
commitments that they have made at the April 2010 Nuclear 
Security Summit to minimize and, where possible, eliminate the 
use of HEU in civilian activities.
    The Chairman. Let me ask you one other question, Mr. Brown. 
Does your council currently see supply meeting U.S. demand for 
Molybdenum-99 or do you expect additional shortfalls in the 
near future?
    Mr. Brown. We are encouraged by some of the new efforts 
that are under way. We're very encouraged by some of the 
development work, the cooperative grants that DOE has issued 
for some new development facilities. We do see some bumps in 
the road coming out in the future. We hope to have these new 
facilities up and running to minimize any impact of that. But 
we're encouraged by the development work that's going on now.
    The Chairman. You're not alarmed by the prospect of 
shortfalls in the near future?
    Mr. Brown. There may be some shortfalls in the future, but 
we're encouraged by the development activities that are under 
way to make up for those.
    The Chairman. All right.
    Senator Murkowski. Just to follow onto that, given the 
legislation that we have in front of us, do you feel relatively 
comfortable that this will help us avoid those bumps in the 
road? Is this the level of assurance that you need if we can 
resolve the issue, for instance, with the takeback and some of 
the other issues you raised?
    Mr. Brown. This legislation will be very helpful to 
assuring the long-term supply of medical isotopes in the U.S. 
It sends us well on our way to developing a domestic supply, 
too, with the development money put in there for DOE to issue 
additional development grants.
    The Chairman. Let me ask, what currently happens to the 
waste product from a highly enriched uranium target? Where is 
the disposal? Where is it? What does it look like?
    Mr. Staples. It's stored, typically onsite at the four 
major global producers, in a variety of waste forms, under 
physical protection standards that meet IAEA protocol under 255 
Rev. 4, which is the guidelines for physical protection for 
such nuclear materials.
    Senator Murkowski. We had a discussion about the low 
enriched uranium. Is there more residual waste product from LEU 
as opposed to highly enriched uranium?
    Mr. Staples. In a simplistic conversion process from HEU to 
LEU where they would simply use a low enriched uranium target 
in place of a high enriched uranium target, yes, there would be 
additional waste that would be generated.
    Senator Murkowski. That becomes a significant factor in 
terms of how we deal with the disposal and how we deal with the 
waste?
    Mr. Staples. Disposition of waste in the nuclear industry 
is always expensive and complicated. However, the isotope 
production industry actually is not significantly large, that 
it would be a reasonable and addressable amount of waste that 
would be produced, be it from HEU or LEU. We are developing in 
our program, options to minimize the amount of waste produced 
and in some cases--and this is what the National Academies 
study validated, that we do have some technologies available 
that could actually reduce the volumes of waste that are 
produced with LEU-based production.
    Senator Murkowski. Given the current world production 
levels, how long does it take to accumulate enough of the 
radioactive waste product that's left over to really pose a 
proliferation risk?
    Mr. Staples. Currently on a global basis approximately 40 
to 50 kilograms of highly enriched uranium is used by the total 
global community for isotope production, which according to the 
IAEA definition of a ``significant quantity'' is roughly two 
significant quantities of nuclear material per year that is 
being accumulated by the current global production using highly 
enriched uranium.
    Senator Murkowski. The question has been raised by some in 
industry as to whether or not the legislation is technology-
neutral. Can either one of you speak to that?
    Mr. Staples. Yes, I can address that first, and then if Mr. 
Brown would like to follow. That is part of the strategy behind 
developing multiple technologies to ensure that we do not have 
a single point of failure. That is actually a common term of 
reference that we use, that we are technology-neutral with the 
neutron capture, the accelerator-based, and the solution 
reactor technologies not having any linkage to one of the other 
technologies, to ensure that we can be successful in 
implementation of the program.
    Senator Murkowski. Mr. Brown, it's technology-neutral in 
your opinion?
    Mr. Brown. Yes. So far we've seen DOE give development 
grants or cooperative grants to several different types of 
technologies. So far their doling out of money has been very 
fair across the board. One thing we would like to see, we would 
like to avoid giving out, supporting many, many, many different 
efforts at one time, some of which may not bear any fruit. We 
would rather see a focus on just a few areas that look more 
promising. So far, DOE has been doing a good job, we feel, 
giving out the development grants.
    Senator Murkowski. Here in the United States, where do we 
currently export our highly enriched uranium to for medical 
isotope production?
    Mr. Staples. Currently, we only export our HEU to Canada 
for the production of medical isotopes.
    Senator Murkowski. Just to Canada then. Where do the other 
reactors that provide the U.S. with the Mo-99, where do they 
get their HEU?
    Mr. Staples. The European reactors use European-obligated 
material, which is inside the European Community's control. 
Then South Africa utilizes indigenous material for their 
production of isotope, although as they transition to low-
enriched uranium production they are receiving some low 
enriched uranium from the U.S. for this production process.
    Senator Murkowski. Ms. Doane.

      STATEMENT OF MARGARET M. DOANE, DIRECTOR, OFFICE OF 
     INTERNATIONAL PROGRAMS, NUCLEAR REGULATORY COMMISSION

    Ms. Doane. We do provide--that's with respect to targets, 
but for HEU fuel there are HEU exports to the European 
reactors, to The Netherlands, to Belgium. We have a current 
application pending for France.
    [The prepared statement of Ms. Doane follows:]

     Prepared Statement of Margaret M. Doane, Director, Office of 
         International Programs, Nuclear Regulatory Commission
    Mr. Chairman and Members of the Committee on Energy and Natural 
Resources, thank you for inviting me to participate in this hearing 
today. As Director of the Nuclear Regulatory Commission's (NRC) Office 
of International Programs, I am pleased to have this opportunity to 
discuss NRC's licensing requirements for the exportation of highly 
enriched uranium (HEU) for the production of medical isotopes. My focus 
today will be on NRC's regulatory framework for licensing the export of 
HEU.
Framework for the Export of HEU
    I want to describe the NRC's process in detail so that the 
Committee on Energy and Natural Resources has an understanding of the 
framework in which the export of HEU from the United States is taking 
place. The Atomic Energy Act of 1954, as amended, (AEA) grants the NRC 
exclusive jurisdiction to license civilian exports and imports of 
source, special nuclear, and byproduct materials to and from the United 
States. The NRC's regulations governing such exports and imports are 
set forth in Title 10 of the Code of Federal Regulations, Part 110, 
``Export and Import of Nuclear Equipment and Material.''
    Since 2005, the NRC has licensed seven exports of HEU to Canada and 
Belgium for fabrication of fuel or targets for the production of 
medical isotopes. The export licenses to Belgium authorized export of 
HEU for fabrication of fuel for reactors that produce, among other 
things, medical isotopes and the export licenses to Canada authorized 
HEU as targets or for the fabrication of targets that are used in the 
National Research Universal (NRU) reactor for the production of medical 
isotopes. Of the seven licenses issued since 2005, there is only one 
active license. Currently, there are two pending applications from 
Canada and France for the export of HEU. For additional information on 
HEU export licenses issued by the NRC since 1992, please see the 
attached table.*
---------------------------------------------------------------------------
    * Table has been retained in committee files.
---------------------------------------------------------------------------
    Prior to issuing a license for the export of HEU for the production 
of medical isotopes, the NRC works closely with the Executive Branch to 
ensure that the export is consistent with applicable U.S. non-
proliferation laws and policies and is not otherwise inimical to the 
common defense and security of the United States. HEU may only be 
exported to countries that have in place an agreement for cooperation 
with the United States in accordance with section 123 of the AEA. These 
agreements set out the broad framework under which exports such as this 
may be authorized.
    Even when the United States has in place an agreement for 
cooperation with a country, the Commission must determine, on a case-
by-case basis, whether an individual export to that country meets the 
applicable export licensing criteria in Sections 127 and 128 of the 
AEA, as codified in the Commission regulations at 10 CFR Sec.  
110.42(a). Based on its evaluation, the NRC may impose additional 
requirements as conditions to the export license.
    Among other criteria, section 110.42(a)(3) requires the NRC to 
evaluate the adequacy of the physical protection measures in the 
country requesting the HEU. The physical protection guidelines are 
established by the International Atomic Energy Agency and are published 
in INFCIRC/225/Rev. 4, June 1999, ``The Physical Protection of Nuclear 
Material and Nuclear Facilities.'' The NRC participates in U.S. 
government physical protection bilateral visits to countries requesting 
HEU to confirm that the country's implementation of physical protection 
methods and procedures for U.S.-origin HEU is consistent with these 
international guidelines. The delegations conducting the physical 
protection visits include staff from the NRC; National Nuclear Security 
Administration (NNSA); Department of Energy (DOE); Department of State; 
and Department of Defense.
    Any licensee authorized to export HEU is responsible for compliance 
with all applicable requirements of Title 10 of the Code of Federal 
Regulations, including NRC's regulations related to transportation and 
packaging. Since 2005, all transportation of HEU has been conducted by 
DOE's Office of Secure Transportation in accordance with the DOE 
requirements and directives. These measures meet and exceed NRC's and 
Department of Transportation regulations in this area.
    For all HEU export license applications, the NRC would, as it did 
for each of the seven prior HEU applications, request the Executive 
Branch's judgment on the proposed export, including whether the 
proposed export would be inimical to the common defense and security of 
the United States or otherwise significant for nuclear explosive 
purposes, and whether the export would comply with the terms of the 
applicable agreement for cooperation. In the seven prior cases, the 
Executive Branch determined that the export would not be inimical to 
the common defense and security, would take place pursuant to the 
applicable agreement for cooperation, and were consistent with the 
provisions of the AEA.
    In the Energy Policy Act of 1992, Congress amended the AEA to 
require the NRC to adopt additional, more stringent criteria 
specifically for licensing exports of HEU. These criteria were designed 
to discourage the use of HEU and encourage the development and use of 
low-enriched uranium alternatives. Under Section 134 of the AEA, the 
NRC may issue a license for the export of HEU to be used as a fuel or 
target in a nuclear research or test reactor only if, in addition to 
meeting the other AEA requirements for exports of special nuclear 
material, the NRC determines that:

          (1) There is no alternative nuclear reactor fuel or target 
        enriched to a lesser percent than the proposed export that can 
        be used in the foreign reactor;
          (2) The proposed recipient of the uranium has provided 
        assurances that, whenever an alternative nuclear reactor fuel 
        or target can be used in that reactor, it will use that 
        alternative in lieu of HEU; and
          (3) The U.S. Government is actively developing an alternative 
        nuclear reactor fuel or target that can be used in that 
        reactor.

    More recently, in the Energy Policy Act of 2005, Congress further 
amended the AEA by adding a new section 134b., ``Medical Isotope 
Production,'' in which Congress continued to encourage the eventual end 
of reliance on HEU targets in the production of medical radioisotopes. 
In the new AEA section 134b., Congress lifted certain restrictions on 
exports of HEU to Canada, France, Belgium, Germany, and The Netherlands 
for the production of medical radioisotopes if the recipient country 
supplies an assurance letter to the United States that the HEU will be 
used solely for medical isotope production, and if the NRC determines 
that the HEU will only be irradiated in a reactor that uses alternative 
fuel or is the subject of an agreement with the United States to 
convert to alternative fuel when such fuel can be used in the reactor.
    The NRC is mindful of the importance of the supply of medical 
isotopes for diagnostic and therapeutic medical procedures. Therefore, 
the NRC carries out this export licensing regime in an efficient and 
effective manner. Our regulations require notice of the application to 
the public and the opportunity to request a hearing on whether the 
export is consistent with our regulations. We also accept and review 
written comments even when a hearing is not requested. Once the various 
views are obtained, we then reach a carefully considered decision in 
accordance with non-proliferation policies, laws and regulations.
Conclusion
    The NRC's exclusive jurisdiction to authorize the export HEU for 
production of radio pharmaceuticals for diagnostic and therapeutic 
procedures is regulatory in nature and exercised only in accordance 
with the statutory framework and Congressional policies established in 
the Atomic Energy Act. In carrying out its regulatory responsibilities, 
the NRC works effectively with the Executive Branch, the recipient 
countries, the public, exporters and importers to assure the exports 
will not be inimical to the common defense and security and are 
consistent with policies to use alternatives to HEU when appropriate.
    Again, I appreciate the opportunity to participate today and look 
forward to answering any questions the Committee may have.

    Senator Murkowski. Thank you, Mr. Chairman.
    The Chairman. Senator Manchin.
    Senator Manchin. Thank you, Mr. Chairman.
    First of all, let me just say that it's a pleasure and an 
honor to be on the committee, and I appreciate it very much. 
It's very meaningful for my State of West Virginia to be on the 
Energy Committee, and I'm sure we're going to have some 
interesting times and I look forward to it. I truly believe 
that the security of the Nation depends on the independence 
that we have in our production of energy, from every State 
doing everything they can.
    So I look forward to working with you, Mr. Chairman and 
Senator Murkowski and the entire committee, for that.
    Sir, if I may, trying to get up to speed and being the new 
kid on the block, but learning a little bit about this, I would 
just simply ask, what are the implications if we don't pass 
this legislation, if something for whatever reason--I know it 
got caught up in the 111th Congress. I don't think that's going 
to happen, but if it would what would be the scenario for you?
    Mr. Staples. There are two implications that are really 
driven by this legislation. One is the nuclear security 
implications of how we as a government are trying to address 
HEU minimization for threat reduction. That's actually--our 
commitment is consistent with the pledge that was made by the 
leaders at the Nuclear Security Summit in April 2010.
    Further implications are for the reliable supply of medical 
isotopes to the U.S. community. There are indications that the 
Canadian reactor, the NRU, where they currently produce Mol-99, 
the bulk of which is used here in the United States, will cease 
operations in the 2016 timeframe. At that point, our supply of 
medical isotopes is at serious risk for providing the various 
procedures that Mr. Brown alluded to recently, which is 
primarily the diagnosis of heart disease and then various other 
operations or activities that are performed.
    Senator Manchin. You had--in 2009 the National Academy of 
Science reported it found that the use of highly enriched 
uranium in the production of medical isotopes could be phased 
out and replaced by low enriched uranium by the 2016 to 2020 
timetable. You don't think that can be met?
    Mr. Staples. No, we do believe that we can address that 
concern. I have a significant amount of confidence in the 
activities that we are putting in place to develop these 
cooperative agreements with our commercial partners for 
reliable isotope supply, and we also have a significant amount 
of confidence to be able to transition the international 
producers to an LEU-based Mo-99.
    Senator Manchin. So the elimination from Canada will not 
cause a problem in the United States?
    Mr. Staples. If we are successful with developing our 
domestic cooperative agreements, that will be the replacement 
production capacity that the global medical community would 
require to maintain providing their services.
    Senator Manchin. What are the potential consequences to any 
of you there if it falls into the wrong hands, as far as our 
production?
    Mr. Staples. I believe that you're referring to the use of 
the highly enriched uranium?
    Senator Manchin. Yes, correct.
    Mr. Staples. Highly enriched uranium can be used by either 
terrorists or rogue states to construct an improvised nuclear 
device.
    Senator Manchin. Has there been any breach of that at all 
or any indication that that might be what they're trying to 
acquire, or do we have security checks in place to take care of 
that?
    Mr. Staples. I probably would like to take that question 
for the record and get back to you, just to make sure that I am 
properly attributing all of the events that might or might not 
have taken place.
    [The information referred to follows:]

    From the NNSA perspective, we are unaware of any indication of 
diversions of HEU from the Mo-99 production process.

    Senator Manchin. So we don't have any reported incidents 
where that's been breached?
    Mr. Staples. I am not positive of any definite activity 
that has taken place related to Mo-99 isotope production and 
highly enriched uranium.
    Senator Manchin. Thank you.
    The Chairman. Senator Burr.
    Senator Burr. Thank you, Mr. Chairman, and I thank you and 
Senator Murkowski for calling this hearing and for introducing 
the legislation.
    I think over the last several years, Mr. Brown, we have had 
a supply interruption affecting not just cancer patients, but 
all patients. I want to sort of go where Senator Manchin was 
and let you sort of take that and run.
    Dr. Staples' comment alarmed me greatly. He said: If we are 
successful. OK, let's approach it from another angle. If we're 
not successful, if the legislation is delayed, if we don't get 
the robust participation, if we can't find the private sector 
agreements, if the NRC doesn't license, and if production 
doesn't run on time, what happens to patients? I don't think 
they're sending us signs. Canada's going to shut down in 2016.
    Mr. Brown. It's clear, coming from Canada, they do plan on, 
from what we understand, re-licensing the NRU in 2011 for 
another 5 years, which will terminate in 2016. So that's pretty 
clear.
    We are very encouraged by the development activities that 
are under way now. There are several different private concerns 
looking at new technologies and new methodologies, new 
production facilities for Mo-99. So we're very encouraged by 
that.
    This legislation is very important because it helps us 
develop a domestic supply of Mo-99.
    Senator Burr. But if we don't have Mo-99, if we have an 
undersupply or no supply, what does that do to patient care?
    Senator Burr. It's used in 18 million procedures a year in 
the U.S. Every year, 18 million procedures. We did see 
shortages, as you know, in 2010 and it was impacted. Some 
hospitals were impacted by the shortage of Mo-99 and 
Technetium-99, so it did have an impact. Other technologies 
were employed. Other isotopes were used, for example Thalium-
201 for stress tests, for heart imaging. Thalium-201 was used 
instead of Technetium-99m. In some cases Fluorine-18 was used 
instead of Technetium-99m. In some cases other technologies, 
ultrasound, was used. Echo cardiography was used in place of 
Technetium. So there are other technologies.
    Senator Burr. If all those techniques, if all those tools 
were as good as Mo-99, we'd use them today.
    Mr. Brown. You're right. It's clear that Technetium-99m is 
the preferred method. It collects more diagnostic information. 
It's better quality information and it's cheaper.
    Senator Burr. Over the long run it costs less in the health 
care system. So we're talking about health care cost reduction.
    Mr. Brown. You're absolutely right.
    Senator Burr. Let me ask you. You talked about the waste 
stream. What is a reasonable price?
    Mr. Brown. I don't have that number off the top of my head. 
We can get back to you on that. What we're looking for is just 
we don't want to pay an exorbitant amount that would throw the 
economics of any new production facility off. We can get 
together with an answer on that.
    Senator Burr. Let me suggest to you that that's an 
important number to know, and it goes to the heart of what you 
said, Dr. Staples, that there has been talk, if I understood 
you correctly, that everybody globally would be guaranteed cost 
recovery, that all producers would be guaranteed cost recovery. 
How do we calculate what that is?
    Mr. Staples. In operating in the commercial industry, the 
issue now is that governments are providing various subsidies 
for their operations. Either the facilities are using 
facilities that were initiated through government construction 
and then they have transferred over to commercial activity, so 
they're fully amortized in terms of government funds rather 
than through the commercial activities; or waste disposition is 
provided for some of the activities that take place with the 
commercial producers.
    What we are discussing at the OECD meetings and the Nuclear 
Energy Agency is how to implement a full cost recovery for all 
of the commercial activities that are undertaken in this 
industry to ensure that they can develop and maintain their 
production as they would move into the future and that there is 
no--that there is no oversupply generated in the market, 
either, from any one entity that might be heavily subsidized 
and be able to prevent the introduction of another commercial 
activity from another country.
    Senator Burr. Two things. In the past the Department of 
Energy has asked companies to commit to facilities that can 
provide approximately 50 percent of the U.S. market demand for 
medical isotopes. I would suggest to you this could lead to a 
substantial oversupply in the market if all current suppliers 
provided 50 percent of the market.
    I guess I would ask, if we changed that word to 
``significant'' versus ``50 percent'' would that be sufficient 
and would it eliminate the risk of oversupply?
    Mr. Staples. It could eliminate the risk of oversupply. 
That's a very important point that you're making. As I stated 
before in the response with the likelihood of the Canadian 
reactor ceasing production in 2016, it's the importance that 
what we are developing in the United States would be 
replacement production capacity to complement the other 
production that takes place in the international market.
    There are significant dynamic forces at play in the global 
isotope production community and this is what we are trying to 
coordinate when we work with OECD to ensure that we can have 
reliable replacement supply. A significant amount of 
overcapacity is also required because of the manner in which 
the isotope is produced in reactors which regularly go through 
maintenance shutdowns and other periods, to ensure that, while 
we can maintain a minimum level, the overcapacity does need to 
be maintained within the industry to ensure that we always have 
the supply for the medical community.
    Senator Burr. Let me just raise for my colleagues this 
personal observation. When I see a marketplace that is going to 
be coordinated on reimbursement, government influence from the 
standpoint of cost calculations, I begin to see a marketplace 
that doesn't attract private dollars. I think what we're trying 
to set up in the United States is the injection of private 
capital to do this, though with the incentive of grants from 
the U.S. Government.
    So let me just say, we ought to be particularly careful 
that the net result of this is that we don't create something 
globally that is dominated by government, that takes the health 
care cost advantages that we have today and raises the cost 
precipitously to where new technologies for the delivery of 
care are not developed. I think at the same time you have to 
consider that 10 years ago we didn't use as many procedures, 
didn't use this. 10 years from now there may be many more 
procedures that utilize this. The supply needs may be much 
greater.
    Mr. Chairman, could I ask one question of Ms. ``DOWN''?
    Ms. Doane. Yes, ``DOANE.''
    Senator Burr. ``DOANE.''
    I guess my question is this. What's a reasonable timeframe 
for licensing and production, because the NRC is going to have 
to license, right?
    Ms. Doane. Yes. I think we've answered--when we answer 
these questions, typically we say: Of course, it depends on the 
application.
    Senator Burr. No, but let me just state this. There is the 
health of the American people at play here. So going into this 
we've got to have some certainty as to what the time line is 
for licensing.
    Then I'll turn to Mr. Brown as an industry person later on 
and say: Can you make the production capabilities? But if the 
NRC delays licensing, it doesn't matter how good we do from the 
standpoint of the NNSA or from DOE or from the industry; this 
isn't going to happen. We're going to have a gap.
    Ms. Doane. No, understandably. I think that we do 
understand the importance of licensing these production 
facilities and we have started pre-licensing review. I can't 
today give you an exact timeframe because the concepts are not 
completely developed yet.
    Senator Burr. There are no applications yet.
    Ms. Doane. There are no applications. But I can tell you 
that we are taking it seriously. We're doing a lot of pre-
application work and trying to establish processes that--we 
have processes in place, but actually standards and procedures 
that will help the proceedings run more smoothly.
    Senator Burr. What prescriptive legislation--what 
prescriptive language needs to be in this legislation to 
encourage the NRC to license new technologies that may be on 
the horizon that may not be the standard generation of LEUs 
today that NRC might be familiar with?
    Ms. Doane. It would be my opinion we don't need new 
legislation because our legislation--we have broad discretion 
to license new technologies. You can imagine with new reactors, 
for example, we're doing all kinds of new types of technology. 
I think we do have--I can take this back and ask the lawyers, 
but I think for now we have broad discretion and it's just a 
matter of setting up the guidelines and the procedures as we 
get the applications in.
    Senator Burr. The chairman's been awfully lenient with me 
and the only thing that I would say in concluding is that on 
the electric generation side there has been technology 
breakthroughs on smaller, compact nuclear generation units that 
have not been received warmly at the NRC because they're new. 
Now, I'm not going to tell you that there are applications that 
are out there, but there are technologies that are advancing 
and certainly things that show promise. Yet from a regulatory 
standpoint they don't seem to be moving with the progress that 
one would like.
    I only hope that that's not the case with new technologies 
as it relates to the LEU market and the production that we 
need.
    Mr. Chairman, I thank you.
    The Chairman. I would just make the point, I think I'm 
right that there are no applications for these small modular 
nuclear reactors, either.
    Ms. Doane. No. But we are doing, again, a lot of 
prelicensing work to make that run efficiently when we do.
    The Chairman. Senator Franken.
    Senator Franken. Thank you, Mr. Chairman, and thank you, 
Senator Murkowski, the ranking member, for welcoming me 
earlier.
    I apologize; I'm kind of jumping between this and the 
Judiciary Committee hearing. I did read your testimonies last 
night, but I did miss your oral testimonies today. So forgive 
me if I ask a question that you've already covered.
    I just want to say what an honor it is to be on this 
committee. It's so clear that energy is central to so many 
critical issues, the economy, our national security, the future 
of the planet, just those things.
    This is a question for pretty much any of you, probably--
for any of you: What is the global buy-in on going to low 
enriched uranium to make Mo-99, as opposed to highly enriched 
uranium? In other words, are the other nations that produce 
this, are they also going to be going to low enriched uranium?
    Mr. Staples. I can follow on. That again refers back to the 
discussions we just had last week at the OECD conference on 
medical isotope production. We also do discuss the issue of 
conversion of their facilities to low enriched uranium. As I 
mentioned, the South Africans have already begun converting 
their process over to LEU and in December provided the first 
LEU shipment for commercial distribution here to the United 
States.
    We are in discussions both with the Dutch and the Belgians 
about converting their processes. They have made statements 
that they are working in that direction. However, they do want 
to be assured that while they work toward conversion toward LEU 
that they don't impinge upon their ability to supply isotopes 
to the market today, because their production facilities have 
limited resources and they need to carefully manage how we work 
the conversion program at their facilities while they maintain 
the production capacity that's required for the medical 
community.
    Senator Franken. Mr. Brown, you just nodded.
    Mr. Brown. I would have to agree. I think there is general 
concurrence of the need to move from HEU to LEU. CORAR is 
certainly supportive of that, the philosophy in that bill, in 
the bill here.
    Senator Franken. Let me ask you then about Iran, because 
Iran is our probably biggest proliferation concern. In 2009 we 
came close to a confidence-building deal with Iran. Iran would 
ship its low enriched uranium out of the country; in return it 
would receive the fuel it needed for a research reactor that 
produces medical isotopes. But Iran backed out of the deal and 
now it's claiming that it needs more highly--to enrich more 
uranium to be highly enriched uranium for the purpose of 
producing medical isotopes.
    So my question is, if we move toward eliminating the use of 
highly enriched uranium in the production of medical isotopes, 
would that help to undercut the argument that Iran has and 
potentially other proliferators might make, that it needs to 
enrich its low enriched uranium more highly for medical 
purposes?
    Mr. Staples. Let me respond to that. I would say yes. Our 
efforts, in addition to the 2009 National Academies study, Mo-
99 production efforts by countries such as South Africa, 
Australia, and Argentina, and a recent IAEA-coordinated 
research project for indigenous production of Mo-99 without the 
use of HEU have all demonstrated that highly enriched uranium 
is not needed for medical isotope production.
    In fact, there's really no economic justification and very 
little technical justification for every country to produce its 
own enriched uranium for medical isotope production. The 
international commercial supply of LEU for medical isotope 
production is more than sufficient to meet the needs of the 
global medical community.
    So the global shortage that we face is primarily due to the 
limited large-scale processing facilities to take the 
irradiated targets and turn them into the medical commodity 
that's used by the community.
    Senator Franken. So presumably we could--I mean, our 
arguments with Iran don't necessarily prevail, but we can make 
the argument to them that they don't need highly enriched 
uranium to make these medical isotopes?
    Mr. Staples. That is correct.
    Senator Franken. OK. Since my time is up, thank you.
    The Chairman. If you have any other questions, go right 
ahead. Nobody here but us chickens. We're about to finish the 
hearing, so go ahead.
    Senator Franken. I've got some chickens over at the 
Judiciary that I've got to go see.
    The Chairman. All right. Thank you very much. Thanks for 
your very good questions.
    Senator Murkowski, did you have additional questions?
    Senator Murkowski. Just a couple quick ones.
    Mr. Brown, you mentioned the issue of NEPA review and 
further environmental analysis being something that could 
potentially delay the process. In addition to Senator Burr's 
good questions about the regulatory process, I think we 
recognize when we talk about bumps in the road or things that 
could be a problem, certainly I think when you interject the 
unknown morass of regulation or something like NEPA which is 
difficult to project.
    Dr. Staples, please provide your comments about the 
potential for delay with additional environmental assessment?
    Mr. Staples. We have been evaluating that process 
significantly to make sure that we can be successful with our 
technology-neutral activities. In some cases we do require 
significant NRC licensing approval for operation. Some of the 
other technologies have different NRC licensing requirements, 
such as the accelerator-based technology, which is essentially 
non-nuclear and utilizes no uranium for the production of 
medical isotopes.
    But regarding the NEPA, we have been in close contact with 
the Nuclear Regulatory Commission also, to coordinate our NEPA 
approaches to ensure that we do not have any duplicate 
processes and that we meet our NEPA obligations as a government 
and that we do this in the most efficient manner so that we can 
ensure the accelerated production of Mo-99 for the United 
States.
    Senator Murkowski. You don't view a NEPA review as being 
duplicative of the other reviews that are currently in place?
    Mr. Staples. We need to fulfill that obligation and we are 
working closely to coordinate our efforts with the NRC to 
accomplish that.
    Senator Murkowski. Is there something that we should or 
should not include in this legislation that would speak to that 
as an issue?
    Mr. Staples. I would actually like to take that as a 
question for the record, because we have put considerable 
thought into that and I don't think I could do full justice to 
the response here on the floor.
    The information referred to follows:]

    To ensure that NNSA's effort is in compliance with the National 
Environmental Policy Act (NEPA), GTRI is currently proceeding through 
the required NEPA approval process within the U.S. Department of 
Energy. The Nuclear Regulatory Commission (NRC) has NEPA requirements 
for the licensing process, and GTRI has been coordinating with the NRC 
in order to avoid any duplication of nEPA analysis efforts. We have 
recognized the potential for this risk to the schedule of the domestic 
production projects and are working to implement the required 
procedures while maintaining our accelerated schedule to produce Mo-99 
for the U.S. medical community.
    After a preliminary technical review of the various candidate 
technologies to enable the domestic production of Mo-99 within FY10-
FY14, important schedule risks and mitigation strategies have been 
identified. Among the most important of the schedule risks is the 
obligation to prepare analyses to fulfill the Department's NEPA 
obligations. In order to mitigate the schedule risk NEPA requirements 
pose to achieving domestic production within the timeframe of this 
legislation, high-level political support to expedite all NEPA analyses 
is necessary.

    Senator Murkowski. I would appreciate that.
    Let me ask a question just in terms of deliverability and 
how we move things, recognizing that it has a pretty short 
lifespan or shelf life, as it relates to the medical isotopes. 
What happens when you have an incident like we had in Europe 
with the eruption of the volcano that shut down air traffic for 
days, a week in certain areas?
    We talk about putting a process in place that is going to 
make sure that we have a good supply. But if we can't 
stockpile, how do we respond to disruptions like we've seen?
    Mr. Staples. That speaks perfectly to the point of 
developing a diverse, reliable supply with very few single 
points of failure and trying to disseminate the production 
globally to ensure that any one regional event does not impact 
the global medical community.
    Senator Murkowski. But right now, because you have so much 
production centered in Europe, you have a stumbling block if 
something happens.
    Mr. Staples. Yes. During the volcanic eruptions I do have 
the impression and understanding that we were impacted in terms 
of our supply of isotope for some periods of time.
    Senator Murkowski. The U.S. was?
    Mr. Staples. Yes.
    Senator Murkowski. I would assume----
    Mr. Staples. Europe.
    Senator Murkowski. Europe and beyond; would it not be?
    Mr. Staples. Yes.
    Senator Murkowski. So at this point in time, we don't have 
an answer in place as to how to respond.
    Mr. Staples. No. That's actually why your committee's 
support for this legislation is very important. We've mentioned 
last week at the OECD meeting not to become complacent as a 
community as we try to address that. Your continued support 
with this legislation will give us the motivation and the 
impetus to work with the commercial industry to ensure that we 
develop solutions as best as possible for the isotope supply.
    Senator Murkowski. Mr. Brown.
    Mr. Brown. This legislation also encourages developing of a 
domestic supply here in the U.S., where if there is another 
volcano we don't have to worry about flying planes from Europe 
to the U.S. If we're producing it here locally and have a 
domestic supply, obviously volcanoes in Iceland wouldn't be a 
problem. So that's why we're encouraged by this legislation. We 
think it would help encourage domestic supply.
    Senator Murkowski. Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    I didn't have any additional questions. Senator Manchin, 
did you have additional questions?
    Senator Manchin. I just want to thank you all so much, and 
the concern that you have and bringing it to our attention. I 
want to thank the chairman and Senator Murkowski for being so 
diligent on this issue, and I hope to see that we move quickly 
on it.
    The Chairman. I think that sums up my views as well. I hope 
we are able to move quickly on this legislation. Again, I thank 
all three of you for being here to give us your views, and we 
will conclude the hearing.
    [Whereupon, at 10:54 a.m., the hearing was adjourned.]
                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

      Responses of Roy W. Brown to Questions From Senator Bingaman
    Question 1. Can you please explain in more detail how CORAR would 
determine what it means by a reasonable fee for the fuel take provision 
in this legislation?
    Answer. A contract with DOE to accept the High Level Waste produced 
as a result of Mo-99 and other medical isotope production is critical. 
Under S. 99 the uranium would be leased from DOE and taken back. The 
legislation doesn't appear to determine whether the waste taken back is 
a commodity or a waste when received by DOE. How DOE categorizes the 
``waste'' is not that important, unless it makes a difference in the 
``reasonable fee''. While industry expects to pay for the waste 
disposal, we also cannot afford a heavy burden in the form of fees to 
take back the waste. A DOE program similar to what they do for research 
reactors might be a model--assuming the cost of providing and taking 
back uranium is reasonable. A High Level Waste fund, similar to what 
commercial power reactors have with their standard contracts, would be 
unworkable. CORAR recommends DOE charges a fee for this waste disposal 
that would be comparable to what commercial fees would be, if 
commercial waste disposal for this type of waste were available.
    Question 2. Do you see Positron Emission Tomography as a cost 
effective replacement to Molybdenum-99?
    Answer. Positron Emission Tomography (PET) is an emerging 
technology that provides a complementary option for imaging certain 
types of tumors and staging cancer. It currently provide approximately 
2 million imaging procedures each year in the U.S. compared to 
approximately 17 million using Tc-99m from Mo-99. It is more expensive 
than comparable Tc-99m studies, even though the cost for PET scans has 
steadily decreased over the last ten years. PET currently accounts for 
a small amount of myocardial perfusion imaging studies (including 
through use of rubidium-82 generators). F-18 based PET (half life of 
110 minutes, as opposed to 70 seconds for rubidium-82) for myocardial 
perfusion imaging will not become commercially available for at least a 
few more years. PET is currently more expensive than SPECT, but given 
the higher quality images, increased diagnostic certainty and potential 
for blood flow quantification with PET, even at a higher per procedure 
price, F-18 based PET could rapidly become a cost effective alternative 
to SPECT in a number of different contexts. Currently, PET is viewed to 
be complementary rather than a replacement for Tc-99m.
    Question 3. In CORAR's opinion what technology do you see as the 
quickest to market for domestically producing Molybdenum-99?
    Answer. There are several new technologies being examined for the 
production of Mo-99. The traditional methodology entails fissioning U-
235 with neutrons for the production of Mo-99 and other medical 
isotopes. Other technologies being examined include neutron capture 
using Mo-98, accelerator production of Mo-99 using Mo-100 targets, and 
production of Tc-99m using a proton beam from an accelerator onto a Mo-
100 target. The use of aqueous homogenous reactors, which have cost and 
waste reduction attributes, is also being developed. Many of these new 
technologies are being developed simultaneously. It is not clear yet 
which of these new technologies will lead to the most efficient 
production of Mo-99 with the shortest development time. For that reason 
CORAR feels it is important to promote all credible technologies on 
parallel paths and allow the most efficient method to emerge.
    Question 4. How large a market do you see Russia providing for 
Molybdenum--99 from Highly Enriched Uranium?
    Answer. The current supply chain of Mo-99 coming from Russia is the 
production at the Research Institute of Atomic Reactors in 
Dimitrovgrad. Initial quantities through the Nordion supply chain are 
expected to be incremental. Over several years, the expectation is to 
have supply available from the Russian Federation of up to 20% of 
global Mo-99 demand to back up Nordion's long-term requirements. The 
evaluation process, for samples of Mo-99 from the Russian Federation, 
has been initiated through the Nordion Canada facility. Nordion 
continues to work with the Russian Federation to bring this commercial 
back-up supply of Mo-99 on-line. Specific details of the supply 
agreement are confidential.
    The Russian supply agreement provides for the parties to address 
LEU conversion of the Isotope Mo-99 productions facilities. The timing 
and approach of conversion are currently under discussion for 
finalization.
    Following a meeting of the Nuclear Energy and Nuclear Security 
Working Group of the bilateral Russian-US Presidential Commission in 
Moscow on December 7th, 2010, an agreement was signed between Russian 
state nuclear energy company Rosatom and the DOE. The two organizations 
will initially consider the possibility of converting six Russian 
research reactors from HEU to LEU fuel.
    Nordion has also recently entered into a Framework Agreement with 
the Kurchatov Institute in the Russian Federation to collaborate in the 
development of medical isotope production capabilities using Liquid 
Homogenous Reactor technology, utilizing LEU-based production. This 
initiative is aimed at providing additional LEUbased Mo-99 production 
capacity from the Russian Federation.
    At the Kurchatov Institute in Moscow, the Argus reactor was 
originally commissioned in 1981 and is currently the only stationary 
LHR (Liquid Homogeneous Reactor) left in operation in the world. 
Conversion of the Argus reactor to LEU has been recently approved by 
Russian Government as a result of the recent agreement signed by Russia 
with US DOE.
    At present a conceptual modular production system with a capacity 
of 5-10% of the global Mo-99 demand is being considered. Multiple units 
could ultimately deployed using this technology depending on Markey 
dynamics. The timeframe to achieve commercial production of Mo-99 using 
this technology is currently being assessed and is expected to be 3-5 
years.
                                 ______
                                 
    Responses of Parrish Staples to Questions From Senator Bingaman
    Question 1. Can you please explain the contract you have undertaken 
with South Africa to produce Molybdenum-99 (Mo-99) from LEU, 
specifically technology used, the amount and duration?
    Answer. The National Nuclear Security Administration's Global 
Threat Reduction Initiative's (NNSA-GTRI) Mo-99 program has two 
separate missions: (1) highly enriched uranium (HEU) minimization 
through conversion of existing facilities and (2) support for 
accelerating existing commercial projects in the United States in the 
production of a domestic, non-HEU-based supply of Mo-99. GTRI entered 
into a contract with the South African Nuclear Energy Corporation 
(Necsa), and its subsidiary NTP Radioisotopes, in order to accelerate 
the conversion of their existing production capability from the use of 
HEU targets to low enriched uranium (LEU) targets. The technology 
utilized in the conversion process was developed and implemented by 
Necsa/NTP and is proprietary. The contract with Necsa is worth up to 
US$25M and is designed to accelerate the implementation of their 
technology and to complete the conversion of the facility by the end of 
2013. As this contract falls under GTRI's HEU minimization mission, it 
is intended to support Necsa in maintaining its current production 
capability as it transitions to LEU-based production. GTRI's support to 
South Africa is not intended to augment South Africa's ability to 
produce additional amounts of Mo-99 for the global market.
    Question 2. Were you able to convince any U.S. reactor operators to 
use the LEU technology developed by the NNSA before contracting with 
South Africa?
    Answer. Removing the HEU from South Africa is a high non-
proliferation priority, as HEU could be used to make a nuclear weapon 
if it fell into the wrong hands. NNSA is cooperating with the South 
Africans to remove the HEU while demonstrating that the reactor can 
still be used for isotope production. NNSA's efforts in the United 
States are quite different, as we are working to establish, rather than 
convert, Mo-99 production facilities. There has been no domestic 
production of Mo-99 since Cintichem's 1990 decision to decommission the 
Tuxedo reactor located in Tuxedo, New York.
    The decision for the specific technologies being developed for the 
conversion of existing international Mo-99 producers to LEU, or for 
development in the United States, is driven by the producers 
themselves. NNSA's LEU target technology is one of many possible 
technologies these producers may have used. The technology utilized in 
the conversion process in South Africa was developed by and is unique 
to Necsa/NTP and is proprietary. The contract between NNSA-GTRI and 
Necsa is designed to accelerate the implementation of Necsa's 
technology and to complete the conversion of the Necsa facility by the 
end of 2013.
    Each of the U.S. domestic projects uses a technology selected and 
implemented by the potential producer. As these are independent, 
commercial projects, GTRI is only providing support to accelerate their 
timeline to help ensure that the United States and its medical 
community have access to a reliable domestic supply of Mo-99 as soon as 
possible. The technology developed by NNSA and Argonne National 
Laboratory is publicly available and was an option under the recently 
issued Funding Opportunity Announcement. However, none of the proposals 
submitted from the domestic commercial entities utilized this specific 
technology.
    Responses of Parrish Staples to Questions From Senator Cantwell
    Question 3. Washington State University (WSU) in my state has a 
research reactor that has been fully converted to low enriched uranium 
(LEU) fuel, and is capable of supplying a significant portion of U.S. 
demand for molybdenum-99 and other medical isotopes. I commend the 
Department of Energy and the National Nuclear Security Administration 
for their efforts to establish grant programs to accelerate the 
development of a medical isotope industry that does not use highly 
enriched uranium (HEU). What is the current status of awarding grants 
for such projects?
    Answer. NNSA issued a Funding Opportunity Announcement (FOA) for 
LEU target technology and accelerator technology on March 26, 2010, 
which resulted in the selection of two cooperative agreement partners 
to demonstrate the accelerator technology.
    In general, large-scale quantities of LEU-target-based Mo-99 
production require a research reactor that operates steady-state, has a 
short operating cycle, can dedicate operating time to Mo-99 production, 
and runs with sufficient power and neutron flux to produce Mo-99. There 
are few facilities in the United States that meet these requirements. 
While there are some research reactors in the United States that could 
irradiate LEU targets, a processing facility with dedicated hot-cells, 
optimally co-located with the reactor, and with a staff experienced in 
isotope production using FDA good manufacturing practice are also 
necessary for producing Mo-99. The United States does not currently 
have hot-cells that are dedicated to this purpose, and the LEU-target 
technology project will likely require the construction of a new, co-
located processing facility.
    Question 4. What is involved in converting a reactor from HEU to 
LEU fuel? What is the typical timeline for such a conversion? What 
kinds of technological risks affect this timeline? How much reactor 
and/or Mo-99 production downtime would be required to make this 
conversion?
    Answer. The process to convert a reactor from HEU to LEU fuel 
follows a few generalized steps. First, feasibility models are 
calculated to demonstrate the viability of conversion, and to verify 
that commercially available fuel can be used safely in the reactor 
without disruption to the basic parameters required to achieve the 
facility's mission. Next, a detailed analysis and safety report is 
prepared in order to obtain regulatory approval. Finally, new LEU fuel 
is manufactured for the reactor for LEU-based operation upon its 
licensing conditions. The typical timeline for this process varies 
widely, but is generally not less than two years and in some cases can 
take as long as five years depending on resource availability.
    Additionally, some high performance reactors cannot be converted 
with existing qualified LEU fuels and require a new high-density LEU 
fuel, which NNSA is in the process of developing.
    Typically, the actual conversion process involving the insertion of 
LEU fuel is accomplished during a normal shutdown period for 
maintenance or during refueling operations. In either case, the 
physical process rarely takes longer than one month.
    The conversion process above describes the conversion of the 
reactor fuel from HEU to LEU. In addition to converting the reactor 
fuel, the targets used to produce Mo-99 also require conversion to LEU. 
By converting both the reactor fuel and Mo-99 targets, the use of HEU 
in civilian applications is significantly minimized worldwide.
    Question 5. In your opinion, would it be preferable to produce 
medical isotopes from an existing LEU-fueled source rather than an HEU-
fueled source that would need to be converted at a later date?
    Answer. Although LEU-fueled reactors are preferable from the 
perspective of nonproliferation, the decision of whether an HEU or LEU 
fueled facility would be considered preferable for isotope production 
is not determined by the level of enrichment of the fuel. For example, 
the specific design and size of the facility for isotope production, as 
well as other R&D projects, are more important for medical isotope 
production than the fuel enrichment. Isotope production is better 
suited to a facility specifically designed for large scale production, 
not necessarily whether the facility operates on an HEU or LEU-based 
fuel.
    That said, all of NNSA's Cooperative Agreement partners use 
technologies consistent with U.S. nonproliferation objectives, in that 
they do not utilize HEU in the production process.
    Question 6. Please give a brief overview of the technology options 
available for producing medical isotopes without HEU, and the current 
status of each from a technical and commercial feasibility standpoint.
    Answer. The basic strategy of NNSA's Mo-99 program is to accelerate 
the commercial establishment of a diverse and reliable domestic supply 
to avoid any single point of failure. NNSA is supporting three separate 
non-HEU-based technology pathways: solution reactor, neutron capture, 
and accelerator. The fourth technology described in this section, LEU 
target, is an available technology option, but one that ultimately was 
not pursued under the FOA. The goal of the program is to support the 
establishment of domestic commercial production as rapidly as possible 
where economic forces will dictate the future market for medical 
isotopes.
    The following technology options are alternatives to produce 
medical isotopes without the use of HEU.

          1. Solution Reactor Technology--Solution reactor technology 
        has been demonstrated and there is experience in operating 
        homogeneous solution reactors. Production rates for this 
        technology are expected to be among the highest of the 
        different technologies being considered, although additional 
        R&D on fuel solution chemistry during operation and the 
        recovery of Mo-99 from the irradiated fuel solution is 
        required. This production process generates radioactive waste, 
        although total amounts are less than those generated by the 
        standard fission-target technology.
          2. Neutron Capture Technology--This process is based on 
        neutron capture in targets of Mo-98. This is a well known 
        technology and is historically how Mo-99 was supplied to the 
        medical community when the industry was first being developed. 
        It is based on utilizing Mo-98 targets and a source of 
        neutrons, which are captured in the target resulting in the 
        production of Mo-99. As with the accelerator-based 
        technologies, this technology has the benefit of resulting in a 
        minimal amount of radioactive waste, compared to the standard 
        fission-target technology, although it has a lower specific 
        activity than fission-based Mo-99 processes. Since current 
        generators in the nuclear pharmacies cannot use the Mo-99 
        generated from this process, another design would need to be 
        developed.
          3. Accelerator Technologies--The first proposed accelerator 
        technology is based on exposing Mo-100 targets to high energy 
        gamma rays to induce a reaction that produces Mo-99. The major 
        components of this option are based on proven technologies. 
        Once the technology is demonstrated in a complete process, it 
        offers the possibility of relatively simple operation from the 
        standpoints both of the accelerator and the target processing 
        facility, because of the reduced radioactive environment in the 
        absence of fission products. This non-fission based technology 
        has the benefits of resulting in minimal radioactive waste 
        compared to the standard fission-target technology. R&D is 
        needed for the Mo-100 target designs and for the overall proof 
        of concept. The lower specific activity of the Mo-99 (compared 
        to fission-based processes) resulting from this process 
        prevents current generators from being suitable for use, 
        requiring the development of another generator design.
          The second proposed accelerator technology is based on 
        fissioning an LEU aqueous target through the introduction of 
        accelerator-produced neutrons. Since the technology fits into 
        the existing supply chain, where Mo-99 is extracted from 
        uranium fission products before it is purified, there may be a 
        lowered cost of production. R&D is currently underway to prove 
        the concept and scale up the concept for major production.
          4. LEU Target Technology--The irradiation of solid uranium 
        targets with a neutron source to produce Mo-99 is a 
        demonstrated technology currently used by the industry (most 
        current production is done with HEU targets). The overall 
        process (target preparation, irradiation, and dissolution) 
        using LEU targets is nearly identical to that of using HEU 
        targets and may therefore offer an easier transition for HEU-
        based producers. Production rates for a LEU target facility are 
        expected to be among the highest of the different non-HEU 
        technologies being considered. Development of the processing 
        facilities to dissolve the targets and extract Mo-99 needs to 
        take place to support eventual production; however, some LEU 
        production facilities are already in existence, such as in 
        Australia, Argentina and others, as listed in the 2009 National 
        Academies report ``Medical Isotope Production without Highly 
        Enriched Uranium.'' In addition, fission-based technology can 
        use existing Tc-99m generators, which will expedite the 
        delivery of Mo-99 to the market. However, among the 
        technologies considered, fission-based production generates the 
        most radioactive waste.
          NNSA is not providing support for this technology as the 
        company selected for demonstration of the LEU target technology 
        ultimately declined the FOA award.
          The Organization for Economic Cooperation and Development's 
        Nuclear Energy Agency (OECD-NEA) published a report, ``The 
        Supply of Medical Radioisotopes: Review of Potential 
        Molybdenum-99/Technetium-99m Production Technologies,'' that 
        describes both these and additional technical pathways to 
        producing Mo-99. It can be found on the OECD's website at: 
        http://www.oecd-nea.org/med-radio/reports/Med-Radio-99Mo-Prod-
        Tech.pdf. This report is currently the most conclusive study on 
        the potential technologies for producing Mo-99, and was 
        produced in response to a request by the OECD-NEA's High-Level 
        Group on the Security of Supply of Medical Radioisotopes (HLG-
        MR), of which Dr. Parrish Staples is one of two U.S. government 
        representatives.

                                    

      
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