[Federal Register Volume 81, Number 7 (Tuesday, January 12, 2016)]
[Notices]
[Pages 1409-1411]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-00388]


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DEPARTMENT OF ENERGY

National Nuclear Security Administration


Excess Uranium Management: Secretarial Determination of No 
Adverse Impact on the Domestic Uranium Mining, Conversion, and 
Enrichment Industries

AGENCY: National Nuclear Security Administration, Department of Energy.

ACTION: Notice.

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SUMMARY: On December 18, 2015, the Secretary of Energy issued a 
determination (``Secretarial Determination'') covering the lease of 
high-assay low enriched uranium for medical isotope production projects 
through the Department's Uranium Lease and Take-Back Program (ULTB). 
The Secretarial Determination covers transfers of up to 500 kilograms 
uranium (kgU) per year of low enriched uranium (LEU) at up to 19.75 
percent uranium-235 in the two years following approval of the 
determination to support molybdenum-99 production. For the reasons set 
forth in the Department's ``Analysis of Potential Impacts of Uranium 
Transfers on the Domestic Uranium Mining, Conversion, and Enrichment 
Industries,'' which is incorporated into the Determination, the 
Secretary determined that these transfers will not have an adverse 
material impact on the domestic uranium mining, conversion, or 
enrichment industry.

FOR FURTHER INFORMATION CONTACT: Mr. Peter Karcz, ULTB Program Manager, 
U.S. Department of Energy, 1000 Independence Avenue SW., Washington, DC 
20585, telephone 202-586-0488, or email [email protected].

SUPPLEMENTARY INFORMATION: The Department of Energy (DOE) holds 
inventories of uranium in various forms and quantities--including low-
enriched uranium (LEU) and natural uranium--that have been declared as 
excess and are not dedicated to U.S. national security missions. Within 
DOE, the Office of Nuclear Energy (NE), the Office of Environmental 
Management (EM), and the National Nuclear Security Administration 
(NNSA) coordinate the management of these excess uranium inventories. 
NNSA down-blends excess highly-enriched uranium to high-assay low-
enriched uranium--above the commercial level of 5 wt-% and up to about 
19.75 wt-% of the isotope U-235--in support of its nonproliferation 
objectives and missions. Common applications of such high-assay 
materials are as fuels for domestic and foreign research reactors and 
as target materials for the production of medical isotopes.
    This notice involves high-assay LEU transfers of this type to 
support molybdenum-99 producers in such applications. These transfers 
fulfill a directive in the American Medical Isotope Production Act of 
2012 (Pub. L. 112-239, Division C, Title XXXI, Subtitle F, 42 U.S.C. 
2065) for the Department to establish a program to make low enriched 
uranium available, through lease contracts, for irradiation for the 
production of molybdenum-99 for medical uses. These transfers also 
support U.S. nuclear nonproliferation initiatives, by providing a path 
for down-blended highly enriched uranium (HEU) and encouraging the use 
of LEU in civil applications in lieu of HEU.
    These transfers are conducted in accordance with the Atomic Energy 
Act of 1954 (42 U.S.C. 2011 et seq., ``AEA''), as amended, and other 
applicable law. Specifically, Title I, Chapters 6 and 14 of the AEA 
authorize DOE to transfer special nuclear material; LEU is a type of 
special nuclear material. The USEC Privatization Act (Pub. L. 104-134, 
42 U.S.C. 2297h et seq.) places certain limitations on DOE's authority 
to transfer uranium from its excess uranium inventory. Specifically, 
under section 3112(d) of the USEC Privatization Act (42 U.S.C. 2297h-
10(d)), DOE may make certain transfers of natural or low-enriched 
uranium if the Secretary determines that the transfers ``will not have 
an adverse material impact on the domestic uranium mining, conversion 
or enrichment industry, taking into account the sales of uranium under 
the Russian Highly Enriched Uranium Agreement and the Suspension 
Agreement.''
    On December 18, 2015, the Secretary of Energy issued a 
determination (``Secretarial Determination'') covering the lease of 
high-assay low enriched uranium for medical isotope production. The 
Secretarial Determination covers leases of up to the equivalent of 500 
kilograms of LEU at up to 19.75 percent uranium-235 per year for two 
years following approval of the determination to support molybdenum-99 
producers. The Secretary based his conclusion on the Department's 
``Analysis of Potential Impacts of Uranium Transfers on the Domestic 
Uranium Mining, Conversion, and Enrichment Industries,'' which is 
incorporated into the determination. The Secretary considered, inter 
alia, the requirements of the USEC Privatization Act of 1996 (42 U.S.C. 
2297h et seq.), the nature of uranium markets, and the current status 
of the domestic uranium industries, as well as sales of uranium under 
the Russian HEU Agreement and the Suspension Agreement.

    Issued in Washington, DC.
Anne M. Harrington,
Deputy Administrator for Defense Nuclear Nonproliferation, National 
Nuclear Security Administration.

    Set forth below is the full text of the Secretarial Determination.
SECRETARIAL DETERMINATION FOR THE SALE OR TRANSFER OF URANIUM
    I determine that the lease of up to the equivalent of 500 kgU of 
19.75%-assay low enriched uranium per calendar year to support the 
development and establishment of molybdenum-99 production capabilities 
will not have an adverse material impact on the domestic uranium 
mining, conversion, or enrichment industry. I base my conclusions on 
the Department's ``Analysis of Potential Impacts of Uranium Transfers 
on the Domestic Uranium Mining, Conversion, and Enrichment 
Industries,'' which is incorporated herein. As explained in that 
document, I have considered, inter alia, the requirements of the USEC 
Privatization Act of 1996 (42 U.S.C. 2297h et seq.), the nature of 
uranium markets, and the current status of the domestic uranium 
industries. I have also taken into account the sales of uranium under 
the Russian HEU Agreement and the Suspension Agreement.

Date: December 18, 2015.
Ernest J. Moniz,
Secretary of Energy

Analysis of Potential Impacts of Uranium Transfers on the Domestic 
Uranium Mining, Conversion, and Enrichment Industries

I. Introduction

A. Legal Authority

    DOE manages its excess uranium inventory in accordance with the 
Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq., ``AEA''), as 
amended, and other applicable law. Specifically, Title I, Chapters 6 
and 14 of the AEA authorize DOE to transfer special

[[Page 1410]]

nuclear material. Low enriched uranium (LEU) is a type of special 
nuclear material.
    The USEC Privatization Act (Pub. L. 104-134, 42 U.S.C. 2297h et 
seq.) places certain limitations on DOE's authority to transfer uranium 
from its excess uranium inventory. Specifically, under section 3112(d) 
of the USEC Privatization Act (42 U.S.C. 2297h-10(d)), DOE may make 
certain transfers of natural or low-enriched uranium if the Secretary 
determines that the transfers ``will not have an adverse material 
impact on the domestic uranium mining, conversion or enrichment 
industry, taking into account the sales of uranium under the Russian 
Highly Enriched Uranium Agreement and the Suspension Agreement.'' (42 
U.S.C. 2297h-10(d)(2)(B)). The validity of any determination under this 
section is limited to no more than two calendar years subsequent to the 
determination (see Section 306(a) of Division D, Title III of the 
Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 
113-235)).

B. Transactions Considered in This Determination

    The American Medical Isotopes Production Act of 2012 (Pub. L. 112-
239, Division C, Title XXXI, Subtitle F, 42 U.S.C. 2065, ``AMIPA'') 
directs the Department to establish a program to lease LEU for 
irradiation to produce molybdenum-99 in the United States without the 
use of highly enriched uranium (HEU). This Uranium Lease and Take Back 
(ULTB) program will involve providing high-assay LEU (LEU enriched 
above 5 wt-%, but below 20 wt-% of U-235) to parties engaged in 
commercial production of molybdenum-99 in the United States for medical 
uses. As directed in AMIPA, the leased material will be used as either 
driver fuel for reactors employed in medical isotope production, as 
target material for irradiation and extraction of molybdenum-99, or 
both. The exact uses and designs vary by producer, but fission-based 
production usually involves fabrication of uranium targets for 
irradiation in a reactor, followed by chemical processing to extract 
the Mo-99 for packaging into a generator and delivery to a 
radiopharmacy.
    The materials considered in this analysis will be provided during 
calendar years 2016 and 2017 and will consist of no more than 500 kgU 
enriched over 5 and up to 19.75 wt-% of the isotope U-235 in any 
calendar year.\1\ Assuming a tails assay of 0.20 wt-% U-235, it would 
require approximately 19,100 kgU of natural uranium hexafluoride and 
approximately 22,600 separative work units (``SWU'') to produce that 
quantity of 19.75 wt-% LEU.
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    \1\ If any leases include material at an assay other than 19.75 
wt-%, the amount will be converted so that the total amount in any 
calendar year is equivalent to no more than 500 kgU at 19.75 wt-%.
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II. Analytical Approach

    This analysis evaluates two forecasts: One reflecting the state of 
the domestic uranium industries if DOE goes forward with these 
transactions, and one reflecting the state of the domestic uranium 
industries if DOE does not go forward with them. DOE compares these two 
forecasts to determine the relevant impacts on the domestic uranium 
industries. In conducting this comparison, DOE has developed a set of 
factors that this analysis considers in assessing whether DOE's uranium 
transfers will have an ``adverse material impact'' on the domestic 
uranium mining, conversion, or enrichment industry:
1. Prices
2. Production at existing facilities
3. Employment levels in the industry
4. Changes in capital improvement plans and development of future 
facilities
5. Long-term viability and health of the industry
6. Russian HEU Agreement and Suspension Agreement
    While no single factor is dispositive of the issue, DOE believes 
that these factors are representative of the types of impacts that the 
proposed leases may have on the domestic uranium industries. Not every 
factor will necessarily be relevant on a given occasion or to a 
particular industry; DOE intends this list of factors only as a guide 
to its analysis.

III. Assessment of Potential Impacts

    There is currently no commercial supplier of high-assay LEU on the 
open market. Modern enrichment facilities are technologically able to 
produce such materials. However, due to the economics of enrichment, 
owners and operators of such enrichment facilities have chosen not to 
pursue enrichment of high-assay LEU. Doing so would entail investment 
both for tooling up for higher enrichment and for regulatory licensing 
(chiefly from the Nuclear Regulatory Commission). Commercial power 
market projections of demand in the nuclear medicine industry for LEU 
in future years range from tens to hundreds of kilograms. Compared to 
the demand of the commercial power market, which requires thousands of 
metric tons of enriched uranium and associated conversion services, the 
production of small amounts of high-assay material is not likely to be 
economically viable for private industry. Additionally, with the 
closing of the Paducah Gaseous Diffusion Plant in 2013, the only 
remaining operational uranium enrichment facility in the U.S. is that 
operated by Louisiana Energy Services, LLC, which is licensed by the 
Nuclear Regulatory Commission to possess uranium only up to 5 wt-% U-
235,\2\ meaning no domestic commercial uranium enrichment facility is 
currently licensed to possess the high-assay LEU contemplated for 
lease.
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    \2\ U.S. Nuclear Regulatory Commission, Materials License. 
License Number SNM-2010, Amendment 57, Docket Number 70-3103.
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    There is currently no foreign commercial producer or supplier of 
high-assay low enriched uranium for use in domestic research reactors 
or medical isotope production applications. The high-assay LEU that is 
produced internationally, for example to convert Russian-supplied 
reactors from highly enriched uranium (HEU) cores, is noncommercially 
produced by state-owned enterprises for official purposes via 
downblending excess HEU.
    It is also not feasible for commercial molybdenum-99 producers to 
use commercial available assays of LEU (i.e. LEU enriched to 5 wt-% U-
235 or less) instead of high-assay LEU. Given the specialized uses, 
designs, and regulatory requirements of the fuels and targets used for 
these isotope production purposes, it would be technologically and 
financially infeasible for reactor operators to replace DOE-sourced 
high-assay LEU by converting the reactors to use commercial-assay LEU; 
likewise fabricating targets using commercial-assay LEU would limit 
their effectiveness sufficiently to make them uneconomical. Therefore, 
low-assay LEU use would prevent the reactor or target from achieving 
the same performance or efficiency and thus from being used for their 
intended purposes.
    Given the lack of domestic commercial production or supply of such 
materials and challenges to using or finding an alternative supply, an 
analysis of the impact of the proposed leases based on an assessment of 
the six factors listed in Section II is straightforward. Since the DOE 
material would not supplant material available on the commercial 
market, it would not displace primary production of uranium 
concentrates, conversion services, or

[[Page 1411]]

enrichment services. Thus, there will be no meaningful impact on the 
domestic uranium industries with respect to any of the factors.
    Even if the DOE leases would displace production among the domestic 
uranium mining, conversion, or enrichment industry, the amount would be 
so small that the effects would be minimal. With respect to the three 
uranium industries, to produce the amount of LEU in the proposed leases 
from primary production would require about 50,000 pounds of uranium 
concentrates (U3O8), 19,100 kgU of conversion 
services, and approximately 22,600 SWU of enrichment services. By 
comparison, the entire global fleet of nuclear reactors is expected to 
need in 2015 approximately 160 million pounds 
U3O8, 56 million kgU of conversion services, and 
about 45 million SWU.\3\ For further comparison, the U.S. uranium 
mining industry produced approximately 4.9 million pounds of 
U3O8 in 2014.\4\ The domestic conversion industry 
consists of only one facility. In recent years, that facility has 
produced between 11 and 12 million kgU. As mentioned above, there is 
only one currently operating enrichment facility in the U.S. The total 
capacity of that facility is currently about 3.7 million SWU. The 
Suspension Agreement with the Russian Federation allows for the sale of 
Russian natural uranium and SWU into the United States with 
restrictions ranging between 11.9 and 13.4 million pounds 
U3O8 equivalent per year between 2014 and 2020 
(73 FR 7705 at 7706, Feb. 11, 2008).\5\
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    \3\ These estimates of global requirements come from an analysis 
prepared by Energy Resources International, Inc. (ERI). This report 
is available at http://www.energy.gov/ne/downloads/excess-uranium-management. DOE tasked ERI to prepare this analysis to assess the 
potential effects on the domestic uranium mining, conversion, and 
enrichment industries of the introduction into the market of uranium 
transfers that are not the subject of this assessment. ERI develops 
its requirements forecasts for various customers. Because of ERI's 
general expertise in the uranium markets and contacts with market 
participants, DOE believes ERI's general market information is 
reliable.
    \4\ EIA, Domestic Uranium Production Report Q3 2015, 2 (October 
2015). Based on data from the first three quarters of 2015, uranium 
concentrate production is down in the United States compared to the 
corresponding quarters of 2014. Even accounting for this decrease, 
the effect of an additional 50,000 pounds U3O8 
would be minimal. In just the first three quarters of 2015, the 
domestic uranium mining industry produced over 2.7 million pounds 
U3O8. Id
    \5\ The Russian HEU Agreement allowed for the sale of LEU 
derived from Russian downblended HEU. This agreement ended in 
December 2013.
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    Given how small these DOE leases would be compared to global 
reactor requirements, domestic production, and imports from the Russian 
Federation under the Suspension Agreement, DOE concludes that leases at 
this level would have almost no impact on the domestic uranium mining, 
conversion, or enrichment industry with respect to any of the six 
factors listed in Section II.
    DOE recently issued a determination that certain transfers of 
natural uranium in exchange for cleanup services at the Portsmouth 
Gaseous Diffusion Plant and of LEU in exchange for downblending 
services will not have an adverse material impact on the domestic 
uranium industries. The analysis supporting that determination also 
considered various other past transfers, the uranium from which may 
still be affecting markets, and the impacts of the Russian HEU 
Agreement and Suspension Agreement (80 FR 26,366 at 26,385). DOE also 
issued a determination that the transfer of up to the equivalent of 25 
kgU of 19.75% assay LEU per calendar year to support the development 
and demonstration of molybdenum-99 production capabilities will not 
have an adverse material impact on the domestic uranium industries (80 
FR 65,727). In reaching the conclusion that leases of up to 500 kgU per 
year of high-assay LEU will have a minimal impact on the domestic 
uranium industries, DOE takes account of the various transfers assessed 
for its recent determinations.

IV. Conclusion

    For the reasons discussed above, these leases will not have an 
adverse material impact on the domestic uranium mining, conversion, or 
enrichment industry, taking into account the Russian HEU Agreement and 
Suspension Agreement.

[FR Doc. 2016-00388 Filed 1-11-16; 8:45 am]
BILLING CODE 6450-01-P