Nuclear Nonproliferation: DOE Needs to Consider Options to	 
Accelerate the Return of Weapons-Usable Uranium from Other	 
Countries to the United States and Russia (19-NOV-04, GAO-05-57).
                                                                 
Many foreign nuclear research reactors use highly enriched	 
uranium (HEU) fuel. Because HEU can be used in nuclear weapons,  
the Department of Energy (DOE) has two programs to return HEU	 
from foreign reactors to either the United States or Russia. The 
U.S. fuel acceptance program includes HEU exported by the United 
States to 34 countries, 11 of which have returned all of their	 
HEU. The program also includes low enriched uranium (LEU) fuel,  
which would be very difficult to use in a nuclear weapon. DOE	 
imposes a fee on high-income countries to partially offset the	 
cost of disposing of HEU and LEU fuel in the United States. Under
the Russian fuel return program, DOE assists in the return of	 
Russian-origin HEU from 14 countries to Russia. GAO was asked to 
examine (1) the status of DOE efforts to recover remaining	 
inventories of U.S.-origin HEU and the extent to which the fees  
imposed on high-income countries support these efforts, and (2)  
the cost and time frame for completing the Russian fuel return	 
program.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-57						        
    ACCNO:   A13732						        
  TITLE:     Nuclear Nonproliferation: DOE Needs to Consider Options  
to Accelerate the Return of Weapons-Usable Uranium from Other	 
Countries to the United States and Russia			 
     DATE:   11/19/2004 
  SUBJECT:   Environmental monitoring				 
	     Fees						 
	     Foreign governments				 
	     Foreign policies					 
	     Intergovernmental relations			 
	     Nuclear facilities 				 
	     Nuclear proliferation				 
	     Nuclear reactors					 
	     Nuclear waste management				 
	     Nuclear waste storage				 
	     Research programs					 
	     Schedule slippages 				 
	     Uranium						 
	     Incentives 					 
	     DOE Foreign Research Reactor Spent 		 
	     Nuclear Fuel Acceptance Program			 
                                                                 
	     DOE Reduced Enrichment for Research and		 
	     Test Reactors Program				 
                                                                 
	     DOE Russian Research Reactor Fuel Return		 
	     Program						 
                                                                 
	     Russia						 

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GAO-05-57

United States Government Accountability Office

 GAO	Report to the Chairman, Subcommittee on Emerging Threats and Capabilities,
                    Committee on Armed Services, U.S. Senate

November 2004

NUCLEAR NONPROLIFERATION

DOE Needs to Consider Options to Accelerate the Return of Weapons-Usable Uranium
              from Other Countries to the United States and Russia

GAO-05-57

[IMG]

November 2004

NUCLEAR NONPROLIFERATION

DOE Needs to Consider Options to Accelerate the Return of Weapons-Usable Uranium
from Other Countries to the United States and Russia

                                 What GAO Found

For a number of reasons, including the cost of converting reactors from
HEU to LEU fuel, DOE has not reached agreement with reactor operators in
11 of the 23 countries that still have U.S.-origin HEU to return all of
the HEU to the United States. In contrast, reactor operators in 12 of the
countries either have signed contracts with DOE to return all of their
U.S.-origin HEU or are developing their own means of disposal. DOE is
considering offering incentives to foreign research reactors to return
their HEU to the United States but so far has not determined what
incentives it will offer and to which countries. DOE has not revised the
fees imposed on high-income countries since establishing the fuel
acceptance program in 1996. However, DOE reserved the right to change the
fees in response to changes in circumstances. While lowering the fees for
returning HEU may encourage additional reactors to participate in the
program, DOE could recover a greater portion of the disposal costs by
raising the fees for accepting LEU.

DOE plans to complete the Russian fuel return program by 2009 and
estimates the program could cost about $100 million, but this estimate and
time frame may not be reliable because of uncertainties associated with
planning future shipments. The shipments to date have all consisted of
fresh (unused) HEU fuel, which DOE considers the highest priority for
returning to Russia because it is more vulnerable to theft. DOE is facing
delays in returning spent HEU fuel, which has been used in a reactor, in
part because Russia is planning to conduct an environmental assessment for
each shipment. DOE has asked Russia to conduct a single environmental
assessment for the spent HEU fuel in all of the countries participating in
the program to expedite future shipments of spent fuel, but so far Russia
has not agreed to this. DOE is considering ways to accelerate the program
that could also increase the cost of the program by more than $30 million.

Spent Research Reactor Fuel in Transport to a U.S. Disposal Facility

                 United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
Eleven of the 23 Countries with U.S.-Origin HEU Do Not Have

Plans to Return It to the United States or Dispose of It Domestically DOE
Plans to Complete the Return of HEU to Russia by 2009 at a

Cost of about $100 Million Conclusions Recommendations for Executive
Action Agency Comments and Our Evaluation Scope and Methodology

                                       1

                                      6 7

12

19 22 24 24 24

Appendix I	Details of HEU and LEU Fuel Returned to the United States

  Appendix II Comments from the Department of Energy

Tables                                                                  
                   Table 1: Shipments of Fresh HEU Fuel to Russia          12 
             Table 2: Countries That Do Not Currently Have Plans to Return 
                                                                       All 
                                  U.S.-Origin HEU                          14 
            Table 3: HEU and LEU Fuel Returned to the United States, by    
                   Country, and Fees Paid by Research Reactor Operators in 
                               High-Income Countries                       28 

  Figures

Figure 1: Example of a Research Reactor Fuel Assembly 3 Figure 2: 34
Countries with U.S.-origin HEU Included in DOE's Fuel Acceptance Program 9
Figure 3: Facility in the Netherlands for Storage of Spent Fuel from
Research and Power Reactors 17

Abbreviations

DOE Department of Energy
FRR SNF Foreign Research Reactor Spent Nuclear Fuel Acceptance

program HEU highly enriched uranium IAEA International Atomic Energy
Agency IG Office of Inspector General LEU low enriched uranium MCC
Material Consolidation and Conversion project NNSA National Nuclear
Security Administration RERTR Reduced Enrichment for Research and Test
Reactors

program RRRFR Russian Research Reactor Fuel Return program

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
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copyright holder may be necessary if you wish to reproduce this material
separately.

United States Government Accountability Office Washington, DC 20548

November 19, 2004

The Honorable Pat Roberts

Chairman, Subcommittee on Emerging Threats and Capabilities Committee on
Armed Services United States Senate

Dear Mr. Chairman:

Civilian nuclear research reactors around the world use and store highly
enriched uranium (HEU) fuel. The reactors are used in medicine,
agriculture, and industry and for basic scientific research. The United
States and the Soviet Union began providing the HEU used by many of these
reactors in the 1950s. HEU can also be used as a key component in making a
nuclear weapon. As a result, the United States has a longstanding
nonproliferation goal of reducing the amount of HEU that is used and
stored at these reactors. To accomplish this goal, the Department of
Energy (DOE) has established three programs: one program to convert the
reactors from HEU to low enriched uranium (LEU) fuel, which is considered
to be less of a proliferation threat because it is very difficult to use
in nuclear weapons, and two related programs to take back HEU from foreign
research reactors for safe storage and disposal in either the United
States or Russia, depending on the HEU's origin.

We reported on DOE's progress in implementing the first program-the
Reduced Enrichment for Research and Test Reactors (RERTR) program- in July
2004.1 Since 1978, the goal of this program has been to get research
reactors around the world to convert from HEU fuel to LEU fuel. In our
report, we found, among other things, that 66 of the 105 research reactors
included in the program continue to use HEU fuel for a number of reasons,
including lack of funding for conversion to LEU and technical setbacks in
developing LEU fuels to replace HEU. We recommended that DOE evaluate the
costs and benefits of providing additional incentives to foreign research
reactor operators to convert to LEU. DOE's two related

1GAO, Nuclear Nonproliferation: DOE Needs to Take Action to Further Reduce
the Use of Weapons-Usable Uranium in Civilian Research Reactors,
GAO-04-807 (Washington, D.C.: July 30, 2004).

programs for returning HEU to the United States or Russia are the Foreign
Research Reactor Spent Nuclear Fuel Acceptance (FRR SNF) program, created
in 1996, and the Russian Research Reactor Fuel Return (RRRFR) program.2
DOE began discussions with Russia on the Russian fuel return program in
1999 and signed a bilateral agreement in 2004. Figure 1 shows an example
of a fuel assembly used in a research reactor.

2In this report, we refer to the FRR SNF program as the fuel acceptance
program and the RRRFR program as the Russian fuel return program.

             Figure 1: Example of a Research Reactor Fuel Assembly

Source: GAO.

DOE's fuel acceptance program is designed to return U.S.-origin HEU from
34 countries to the United States for safe storage and disposal and to
encourage foreign research reactors to convert to LEU fuel. Currently, 11

of the 34 countries have returned all of the HEU to the United States, and
23 still possess U.S.-origin HEU fuel. The scope of the fuel acceptance
program includes an estimated 5,000 kilograms of HEU that the United
States exported to research reactors in the 34 countries as well as an
estimated 15,000 kilograms of LEU. DOE included LEU fuel in the scope of
the program, even though LEU does not pose the same proliferation risk as
HEU, because operators of many foreign research reactors had no other way
to dispose of LEU fuel. Reactor operators need a means to dispose of spent
fuel, and by including LEU in the fuel acceptance program, DOE provides
operators of foreign research reactors with an assured means of disposing
of spent fuel even after converting to LEU.

DOE imposes a fee on research reactors in high-income countries (as
defined by the World Bank), such as the Netherlands and Japan, to offset
as much as possible the cost of fuel disposal in the United States. The
fees were not intended to cover the full cost of managing foreign research
reactor spent fuel or the long-term cost of permanent disposal; DOE kept
the fees low to encourage research reactor operators to participate in the
program. DOE reserved the right to modify the fees at any time in response
to a change in circumstances, including the cost of managing the fuel in
the United States. The fees charged to reactors in high-income countries,
which were established in 1996, do not exceed $3,750 to $4,500 per
kilogram of LEU (depending on where in the United States the LEU is
shipped) and $4,500 per kilogram of HEU. DOE generally charges less for
LEU fuel to avoid penalizing foreign reactors that convert to LEU. DOE
does not impose fees on research reactors in non-high-income countries
and, in addition, pays for most of the cost of transporting their spent
fuel to the United States in order to encourage them to participate in the
program.

DOE originally planned for the fuel acceptance program to end in 2009. DOE
had anticipated that by 2009 operators of foreign research reactors would
have made their own arrangements for managing U.S.-origin spent fuel, such
as commercial reprocessing (a method for treating fuel prior to final
disposal) or development of domestic disposal facilities, thereby
eliminating the need to return the fuel to the United States. However, one
of the LEU fuels developed by the RERTR program cannot be easily
reprocessed, hindering efforts to dispose of spent LEU fuel other than by
returning it to the United States. To assist foreign research reactors in
developing other spent fuel management options, DOE's RERTR program is
working to develop a new reprocessable LEU fuel that foreign reactor
operators can switch to once it is developed and available commercially.
In 2003, a group of foreign research reactor operators petitioned DOE to

extend the program beyond 2009, citing technical setbacks in the
development of a reprocessable LEU fuel. The reactor operators feared the
expiration of DOE's fuel acceptance program and the delay in developing a
new LEU fuel would leave reactors without a way to dispose of spent fuel.
In April 2004, the Secretary of Energy announced his intention to extend
the U.S. fuel acceptance program beyond the original 2009 end date. DOE is
considering extending the program by 5 or 10 years to support the reactor
operators that have converted their reactors to LEU.

DOE's final program, aimed at facilitating the return of HEU to Russia,
has identified research reactors in 17 countries (mostly in the former
Soviet Union and Eastern Europe) that have Russian-origin fuel. DOE pays
the cost of transporting and disposing of HEU fuel in Russia. The
Secretary of Energy has estimated that there are about 4,000 kilograms of
Russianorigin fuel in the 17 countries.3 So far, DOE has provided
assistance to return about 100 kilograms of fresh (unused) HEU fuel from 5
countries (Bulgaria, Libya, Romania, Serbia, and Uzbekistan) for storage
at two nuclear facilities in Russia-Dmitrovgrad and Novosibirsk. In
addition, DOE plans to pay Russia to "blend down" the HEU returned to
Dmitrovgrad to LEU, thereby reducing the risk that the material could be
used in a nuclear weapon. In return, operators of foreign research
reactors with Russian-origin HEU fuel must agree to shut down or convert
their reactors to LEU.

In response to your request, we examined DOE efforts to recover HEU fuel
from foreign research reactors and assessed (1) the status of DOE efforts
to return remaining inventories of U.S.-origin HEU for storage and
disposal in the United States and the extent to which the fees DOE imposes
on high-income countries support these efforts, and (2) DOE's estimate of
the cost and time frame for completing the Russian fuel return program.

To address these objectives, we analyzed documentation from both programs,
including inventories of HEU fuel and data on fuel returned to date. We
also analyzed DOE data on expenditures in support of the fuel acceptance
program and fees paid by reactors in high-income countries to return their
fuel to the United States. To obtain information on how the program is
working, we interviewed operators of research reactors in Belgium,
Germany, the Netherlands, Poland, Portugal, Romania, and

3According to a DOE official, this estimate includes LEU fuel in Serbia.

  Results in Brief

Ukraine. We discussed the status of the programs with DOE and Russian
officials and with officials in the other countries we visited. We
conducted our review from July 2003 to October 2004 in accordance with
generally accepted government auditing standards.

DOE has not reached agreement with research reactor operators in 11 of the
23 countries that still have U.S.-origin HEU to return all of the HEU to
the United States. Reactor operators in the 11 countries have not made
arrangements to return the HEU for a number of reasons, including the cost
of conversion to LEU. For example, some reactor operators are planning to
use their HEU, despite DOE's efforts to encourage them to convert their
reactors to LEU fuel and return the HEU fuel to the United States, because
they do not want to incur the expense of paying for conversion. In
addition, in some high-income countries such as Austria, the cost of
returning the HEU (including transportation) may be a factor in not making
plans to return the material to the United States. DOE is considering
offering further incentives to reactor operators to convert to LEU and
return their HEU to the United States but thus far has not determined what
incentives it will offer and to which countries. Finally, informal
diplomatic approaches to discuss the return of HEU from research reactors
in Iran and Pakistan have been unsuccessful. In contrast, operators of
reactors in 12 of the 23 countries that still have U.S.-origin HEU either
have signed contracts with DOE to return all of the HEU to the United
States by 2009 or are developing their own means to dispose of HEU fuel.
We recommend that DOE consider offering incentives to foreign research
reactors to return HEU to the United States, including lowering the fees
for returning HEU.

Furthermore, while DOE has proposed extending the time frame of the fuel
acceptance program by 5 or 10 years, it has not revised the fees it
charges to research reactors in high-income countries since establishing
the program in 1996. DOE set the fees at a level to encourage the reactors
to convert to LEU fuel and return HEU rather than to cover the disposal
cost in the United States. However, when DOE set the fees, it reserved the
right to change them in response to changes in circumstances. For example,
with the proposed extension of the program, the United States would accept
larger quantities of LEU from foreign research reactors than originally
planned. According to DOE and State Department officials, failure to
extend the fuel acceptance program would penalize operators of research
reactors that the United States encouraged to convert to LEU because the
only currently available option for disposing of the type of LEU fuel used
by some reactors is returning it to the United States.

Nevertheless, the proposed extension could justify an increase in the fees
charged to high-income countries. While lowering the fees for returning
HEU may encourage additional countries to participate in the program, DOE
could recover a greater portion of the cost of the program by raising the
fees for accepting LEU. We recommend that DOE evaluate raising the fees
for countries returning LEU to the United States.

DOE plans to complete the Russian fuel return program by 2009 and
estimates the program could cost about $100 million, but this estimate and
time frame may not be reliable because of uncertainties associated with
planning future shipments. The shipments to date have all consisted of
fresh (unused) HEU fuel, which DOE considers the highest priority for
returning to Russia because it is less radioactive than spent fuel and
therefore easier to handle and potentially steal. DOE has targeted four
more countries for removal of fresh HEU by 2005. However, DOE has not
provided assistance to return spent HEU fuel to Russia from any of the
countries. The Russian fuel return program is facing delays in returning
spent fuel because Russia is planning to conduct an environmental
assessment for each shipment, and complex negotiations are needed to
arrange some shipments. DOE has asked Russia to conduct a single
environmental assessment for all spent fuel in all the countries that are
participating in the program, which would help expedite future shipments
of spent fuel, but so far Russia has not agreed to this. DOE officials
said they expect shipments of spent fuel, which is more difficult to
dispose of, to cost more than fresh fuel shipments. While DOE has spent
about $1.5 million in support of four of the shipments of fresh HEU fuel,
Russia's estimate of the transportation and disposal costs for the first
shipment of spent fuel, from Uzbekistan, is $5.7 million. Furthermore,
according to DOE officials, Russia has not agreed to a fixed fee for
accepting future shipments of spent fuel because the costs of managing the
fuel in Russia could increase. DOE is considering ways to accelerate the
Russian fuel return program, such as purchasing a cask with a larger
capacity for transporting HEU fuel than currently available casks and
developing a new technology to dilute spent HEU fuel into LEU before
shipping it to Russia. DOE officials estimate that these options could
also increase the cost of the program by more than $30 million.

Background 	Civilian nuclear research reactors located throughout the
world contribute to the development of nuclear power, basic and applied
science, and isotope production for medicine and industry. While many of
the reactors use LEU fuel, others use or have inventories of HEU. The fuel
acceptance program and Russian fuel return program are part of the Global
Threat

Reduction Initiative announced by the Secretary of Energy in a speech on
May 26, 2004, to secure, remove, or dispose of a broad range of nuclear
and radiological materials that are vulnerable to theft. The programs also
benefit foreign research reactors by providing them with a way to dispose
of spent fuel.

DOE's fuel acceptance program identified 34 countries with U.S.-origin HEU
eligible for return to the United States. Research reactors in 11 of the
34 countries have returned all of the HEU to the United States. In the
remaining 23 countries, 11 have returned a portion of their U.S.-origin
HEU, and 12 have not returned any HEU (see fig. 2). In total, DOE
estimates it has recovered 914 kilograms of HEU fuel, enough to build an
estimated 20 nuclear weapons.4 (See app. I for a list of the countries
that have returned HEU and LEU fuel to the United States and the amount
returned.)

4The estimate of the number of nuclear weapons is based on the amount of
the isotope uranium-235 in the HEU fuel.

Figure 2: 34 Countries with U.S.-origin HEU Included in DOE's Fuel
Acceptance Program

Notes: In addition to the 34 countries with U.S.-origin HEU, the United
States exported LEU (but not HEU) to 7 countries-Bangladesh, Congo,
Finland,a Malaysia, Peru, Uruguay, and Venezuela. The amount of HEU
exported to some of the countries is small. For example, Indonesia has a
small amount of HEU used for the production of medical isotopes as well as
LEU fuel (but not HEU fuel), and the research reactor in Jamaica has only
a small amount of HEU fuel located in the core of the reactor.

aHigh-income countries at the beginning of the fuel acceptance program in
1996. According to DOE officials, Greece, Portugal, and South Korea are
now also considered high-income countries.

The fuel returned to the United States is mostly stored at DOE's Savannah
River Site, with a small portion also stored at DOE's Idaho National
Engineering and Environmental Laboratory. DOE anticipates that it will
ship the fuel to the geologic repository at Yucca Mountain in Nevada for
final disposal, assuming the facility is completed as planned. DOE
completed an environmental impact statement and established the fuel
acceptance program in 1996.5 The fuel acceptance program is a

5Prior to DOE's establishment of the fuel acceptance program, GAO issued a
report in March 1994 recommending that DOE complete environmental
requirements and begin accepting spent fuel from foreign research
reactors. See GAO, Nuclear Nonproliferation: Concerns with U.S. Delays in
Accepting Foreign Research Reactors' Spent Fuel, GAO/RCED-94-119
(Washington, D.C.: Mar. 25, 1994).

continuation of previous programs that allowed foreign research reactors
to dispose of U.S.-origin fuel in the United States.

In a February 2004 review, DOE's Office of Inspector General (IG) found
that DOE was likely to recover about half of the HEU eligible under the
fuel acceptance program, in part because the participation of countries
with U.S.-origin fuel is voluntary and some countries have chosen not to
participate.6 Furthermore, the IG found that the program did not include
another 12,300 kilograms of HEU that the United States had exported
because DOE, when establishing the fuel acceptance program in 1996,
limited the types of fuel that would be eligible for return. The IG
recommended that DOE determine whether the fuel acceptance program should
be expanded to include all HEU exported by the United States and whether
improvements could be made to encourage greater participation of countries
that have HEU fuel covered by the program. The IG also recommended that
DOE determine whether the National Nuclear Security Administration (NNSA)
could more effectively manage the program, which is currently being
managed by DOE's Office of Environmental Management. In response, the
Secretary of Energy announced that the program would be transferred to
NNSA and combined with DOE's Russian fuel return program, already being
managed by NNSA. According to DOE officials, DOE plans to address, through
a separate program, the IG recommendation regarding U.S.-origin HEU not
currently covered under the fuel acceptance program because returning
additional inventories of HEU to the United States would require an
analysis of environmental impacts, including how the material would be
stored. DOE officials said they do not want to delay the proposed
extension of the fuel acceptance program in order to allow time to conduct
such an analysis.

DOE has identified 17 countries with Russian-origin fuel, 14 of which have
HEU fuel that DOE has included under the Russian fuel return program. The
14 countries are Belarus, Bulgaria, the Czech Republic, Germany, Hungary,
Kazakhstan, Latvia, Libya, Poland, Romania, Serbia, Ukraine,

6DOE IG, Recovery of Highly Enriched Uranium Provided to Foreign
Countries, DOE/IG0638 (Washington, D.C.; Feb. 9, 2004).

Uzbekistan, and Vietnam.7 Two countries, Germany and Romania, have both
U.S-origin and Russian-origin HEU fuel.

DOE has provided funding and technical assistance for shipments of about
100 kilograms of fresh HEU fuel to Russia from 5 countries-Bulgaria,
Libya, Romania, Serbia, and Uzbekistan. (The State Department and the
Nuclear Threat Initiative, a private foundation, also participated in the
removal of HEU from Serbia.) The fresh HEU fuel from Bulgaria, Libya,
Serbia, and Uzbekistan was shipped to the Research Institute of Atomic
Reactors in Dmitrovgrad for downblending into LEU to reduce the risk of
the material being used in a nuclear weapon.8 As of October 2004, DOE had
signed a contract with Dmitrovgrad to downblend the HEU from Serbia and
was negotiating contracts to downblend the HEU from Bulgaria, Libya, and
Uzbekistan. A DOE official estimated that Dmitrovgrad would complete the
downblending of the HEU from Serbia by spring 2005, after resolving
technical difficulties encountered in the downblending process. DOE
officials said that the HEU fuel from Romania was sent to the Novosibirsk
site in Russia, because the Dmitrovgrad facility did not have the
technical capability to downblend the HEU fuel from Romania. (Table 1
summarizes the five shipments of fresh HEU to Russia.)

7According to DOE officials, three other countries-China, Egypt, and North
Korea-have Russian-origin research reactor fuel but are not likely
candidates for the program-China because it is a nuclear weapons state,
Egypt because it possesses only LEU, and North Korea because of its
development of nuclear weapons.

8The downblending is part of DOE's Material Consolidation and Conversion
(MCC) project, which pays to downblend HEU currently stored at sites in
Russia into LEU. For more information on the MCC project, part of DOE's
program for improving the security over weapons-usable nuclear material in
Russia, see GAO, Nuclear Nonproliferation: Security of Russia's Nuclear
Material Improving; Further Enhancements Needed, GAO-01-312 (Washington,
D.C.: Feb. 28, 2001).

Table 1: Shipments of Fresh HEU Fuel to Russia

Amount Country Date shipped (kilograms) Status

Serbia August 2002 48 In storage at Dmitrovgrad

Anticipated to be downblended to LEU by spring 2005

               Romania    September    14            Cannot be downblended at 
                               2003          Dmitrovgrad; sent to Novosibirsk 
                                                                      instead 
              Bulgaria     December    17           In storage at Dmitrovgrad 
                               2003           Contract for downblending under 
                                                                  negotiation 

Libya March 2004 16 In storage at Dmitrovgrad

Contract for downblending under negotiation

Uzbekistan September 3 In storage at Dmitrovgrad

2004 	Contract for downblending under negotiation

  Eleven of the 23 Countries with U.S.-Origin HEU Do Not Have Plans to Return It
  to the United States or Dispose of It Domestically

Sources: DOE and International Atomic Energy Agency.

Unlike DOE's fuel acceptance program, the Russian fuel return program does
not include LEU fuel because DOE does not consider LEU a proliferation
risk. DOE cooperates with the International Atomic Energy Agency (IAEA)
and the State Department to implement the Russian fuel return program. For
example, IAEA conducts fact-finding missions in preparation for fuel
shipments with assistance from DOE.

DOE has not reached agreement with research reactor operators in 11 of the
23 countries that still have U.S.-origin HEU to return all of the HEU to
the United States. The reactor operators have not made arrangements to
return the HEU for a number of reasons, including the cost of conversion
to LEU. DOE is considering offering incentives to reactor operators to
convert to LEU and return their HEU to the United States but thus far has
not determined what incentives it will offer and to which countries. In
contrast, reactor operators in 12 of the 23 countries that still have
U.S.origin HEU either have signed contracts with DOE to return all of the
HEU to the United States by 2009 or are developing their own means to
dispose of HEU fuel.

DOE has proposed extending the fuel acceptance program by 5 or 10 years,
but the fees imposed on research reactors in high-income countries

have not been changed since 1996. According to DOE and State Department
officials, DOE's proposed extension of the time frame of the fuel
acceptance program would benefit operators of research reactors that the
United States encouraged to convert to LEU because the only currently
available option for disposing of the type of LEU fuel used by some
reactors is returning it to the United States. The extension of the
program will primarily result in more LEU being returned to the United
States by reactors that have converted to LEU fuel that cannot be
reprocessed. DOE set the fees at a level to encourage reactor operators to
convert to LEU fuel and return HEU rather than to cover the disposal cost
in the United States. However, DOE reserved the right to change the fees
in response to changes in circumstances.

    Countries Are Not Returning All of the HEU because They Are Planning to Use
    It in Research Reactors or Lack Funding

Operators of research reactors in 11 of the 23 countries that still have
U.S.origin HEU have not made arrangements to return the HEU for a number
of reasons. (Table 2 lists the 11 countries that do not have plans to
return all of their U.S.-origin HEU and the current status of any decision
to participate in the fuel acceptance program.) Research reactors in some
of the countries do not plan to continue using the HEU but have not
reached an agreement with DOE on returning it to the United States. For
example, according to a DOE official, the operator of a university
research reactor in Austria would like to return its HEU to the United
States but lacks funding for transportation. According to the official,
DOE hopes to combine Austria's remaining HEU with a shipment of spent fuel
from Greece or Turkey to reduce the transportation cost to the operator of
the Austrian reactor.

 Table 2: Countries That Do Not Currently Have Plans to Return All U.S.-Origin
                                      HEU

Country Status

Austria 	One research reactor has returned all of its HEU to the United
States, but two additional reactors still have HEU- one has shut down but
not finalized plans for returning HEU, and another has not made a decision
to complete conversion to LEU and return HEU

Indonesia	Research reactor has agreed to stop using HEU for medical
isotope production by 2006 and return LEU fuel, but plans for returning
HEU are not finalized

Iran Research reactor has converted to LEU but there are no plans to
return HEU

Israel No plans to convert research reactor to LEU and return HEU

Jamaica No plans to convert research reactor to LEU and return HEU

Japan 	Most Japanese research reactors are returning HEU, but two reactors
do not have plans to convert to LEU and return HEU

Mexico No plans to convert research reactor to LEU and return HEU

Pakistan Research reactor has converted to LEU but there are no plans to
return HEU

South Africa Conversion of research reactor to LEU is under consideration

 South Korea Research reactor has shut down and returned spent HEU fuel but not
                           agreed to return fresh HEU

Turkey Conversion of research reactor to LEU is under consideration
(reactor has partially converted)

Sources: DOE and State Department.

Other research reactor operators have not made a decision to convert their
reactors to LEU. For example, operators of research reactors in Jamaica
and Mexico may continue using their HEU fuel, which is sufficient to last
many years. Similarly, while most research reactors in Japan have returned
U.S.-origin HEU fuel, two Japanese research reactors have not made plans
to convert to LEU fuel and participate in the fuel acceptance program. As
we reported in our July 2004 review of the RERTR program, while operators
of some foreign research reactors have agreed to fund conversion of their
reactors from HEU to LEU, others either do not want to incur the
additional cost of conversion or do not have the necessary funding.9
Research reactor operators in South Africa and Turkey are considering
converting to LEU, which could lead to returning U.S.-origin HEU to the
United States. (The research reactor operator in Turkey has partially
converted the reactor to LEU fuel but must completely convert before it
can return its HEU. However, the reactor operator does not currently have
the LEU fuel needed to complete the conversion process.)

9Many research reactors are designed to operate on a small amount of fuel
meant to last the life of the reactor, and conversion would require
purchasing LEU fuel and disposing of HEU fuel that the reactor operator
already purchased and is still usable.

In Iran, Israel, and Pakistan, DOE relies on State Department diplomatic
efforts to encourage the countries to participate in the fuel acceptance
program. Each of the three countries has one research reactor with
U.S.origin HEU fuel. The research reactors in Iran and Pakistan have
converted to LEU fuel, but according to a State Department official,
informal approaches to discuss the possible return of HEU from these two
countries have been unsuccessful. The official said that recovering the
HEU from Iran and Pakistan would require a political breakthrough similar
to ones that enabled DOE to facilitate the removal of HEU from Serbia and
Libya under the Russian fuel return program in August 2002 and March 2004,
respectively. The State Department official said that the operators of the
Israeli research reactor have expressed interest in converting their
reactor to LEU, which would be the first step in possibly returning the
HEU to the United States. However, the Nuclear Suppliers Group, the
international body that governs the export of nuclear technologies,
prohibits the export of LEU fuel to Israel.10 Therefore, unless the
reactor shuts down, it will likely continue to use its supply of HEU fuel
rather than return it to the United States.

DOE is considering whether to offer additional incentives to the reactor
operators that have not agreed to return HEU to the United States to
encourage their participation in the fuel acceptance program. According to
a State Department official, such incentives could influence some research
reactors that are not participating in the fuel return program to return
their HEU to the United States. For example, DOE could offer to purchase
LEU fuel to replace HEU fuel that is still being used in the reactors. The
State Department official said that if a research reactor agrees to shut
down rather than convert to LEU, DOE could offer other incentives, such as
research grants.

Operators of research reactors in 12 of the 23 countries that still have
U.S.origin HEU fuel have either agreed to return the material to the
United States or are developing alternative disposal options. DOE
officials said they have signed contracts with reactor operators in
Australia, Germany, Greece, Portugal, Romania, and Taiwan to return their
U.S.-origin HEU to

10The aim of the Nuclear Suppliers Group guidelines is to ensure that
nuclear trade for peaceful purposes does not contribute to the
proliferation of nuclear weapons. The guidelines stipulate that certain
items, including LEU, not be transferred to countries such as Israel that
have not agreed to full-scope IAEA safeguards. For more information, see
GAO, Nonproliferation: Strategy Needed to Strengthen Multilateral Export
Control Regimes, GAO-03-43 (Washington, D.C.: Oct. 25, 2002).

the United States by 2009, the original end date of the fuel acceptance
program. As part of these arrangements, the reactor operators in these
countries have agreed to convert to LEU fuel or shut the reactors down by
2006. For example, Australia is building a new research reactor that uses
LEU fuel to replace an older research reactor, scheduled to be shut down,
that previously used HEU. The reactor operator in Romania has agreed to
return its HEU after it receives new LEU fuel, which is currently being
manufactured, to replace the HEU. Six countries-Argentina, Belgium,
Canada, France, the Netherlands, and the United Kingdom-are developing
alternatives to disposing of U.S.-origin HEU in the United States. DOE
officials said they support the efforts of these countries to develop
their own means of disposal. For example, Argentina has reached an
agreement with DOE to blend down part of its remaining inventory of
U.S.-origin HEU for fabrication into LEU fuel for use in Argentina's
research reactors. As part of this agreement, the one remaining research
reactor in Argentina that currently uses HEU fuel will convert to LEU fuel
and ship its HEU fuel to the United States. In Belgium, a reactor operator
is sending spent U.S.-origin HEU fuel to France for reprocessing, which
includes diluting the HEU into LEU and returning radioactive waste to
Belgium for long-term disposal in an underground repository. As another
example of a country that is developing an alternative means of disposal,
the Netherlands has returned some of its U.S.-origin HEU and also
completed a storage facility in 2003 for the disposal of nuclear waste,
including spent fuel from research and power reactors located in the
country. The facility is designed to store the spent fuel for 100 years
(see fig. 3).

Figure 3: Facility in the Netherlands for Storage of Spent Fuel from
Research and Power Reactors

    DOE Has Not Revised Fees to Account for Changes in the Fuel Acceptance
    Program

DOE has not revised the fees it charges to research reactors in highincome
countries since 1996. DOE reserved the right to change these fees if
circumstances changed, and in fact, a number of changes will affect the
costs of the program.11 Among the changes that will affect the costs of
the fuel acceptance program is the proposed extension of the program,
which would primarily result in more LEU being returned to the United
States by reactors that have converted to LEU fuel that cannot be
reprocessed. According to DOE and State Department officials, DOE's
proposed extension will help reactor operators that the United States
encouraged to convert to LEU because the only currently available option
for disposing of the LEU fuel (other than in countries such as the
Netherlands that have developed their own means of disposal) is returning
it to the United States. For example, research reactor operators in
Australia, Germany, Japan, and Sweden petitioned DOE to extend the program
beyond 2009, so that they would have a way to dispose of LEU fuel. A
number of the reactor operators have either converted to LEU fuel or, in
the case of Australia,

11The fees do not cover all of the costs of managing spent fuel from
foreign research reactors, including the long-term cost of maintaining the
fuel in storage at the facilities in South Carolina and Idaho and
transporting the fuel to the planned final repository at Yucca Mountain.

are building a new research reactor that uses LEU fuel to replace an older
reactor that used HEU fuel.

DOE's primary objective when setting the fees in 1996 was to keep them low
enough to encourage research reactors to return HEU to the United States
rather than to cover the full cost of disposing foreign research reactors'
spent fuel in the United States. For example, DOE set the fees at a rate
competitive with the estimated cost of reprocessing, so that reactor
operators would choose to participate in the program rather than reprocess
spent fuel. Furthermore, DOE set the fees it charges for accepting LEU
from research reactors in high-income countries at a level to encourage
the reactors to convert to LEU. However, DOE also decided when setting the
fees that it would try to recover as much of the cost of managing spent
fuel from foreign research reactors as possible. For this reason, DOE
reserved the right to revise the fees in response to changes in
circumstances, including the cost of managing spent fuel in the United
States. The fees paid by research reactors in high-income countries have
covered about 84 percent of DOE's expenditures for the fuel acceptance
program through fiscal year 2004. From fiscal year 1996 through fiscal
year 2004, DOE received $97.3 million in fees from research reactors in
highincome countries for disposal of HEU and LEU fuel in the United
States.12 In comparison, DOE estimates that it spent $116.1 million from
fiscal year 1996 through fiscal year 2004 to implement the fuel acceptance
program. These expenditures include the cost of transporting spent fuel
from research reactors in non-high-income countries and part of the cost
of operating the facilities where fuel is placed in interim storage but
not the permanent disposal costs. (See app. I for a list of the fees paid
by research reactors in high-income countries.) DOE officials agreed that
given changes in the fuel acceptance program, including the proposed
extension of the program by 5 or 10 years, reassessing the fees charged to
research reactors in high-income countries is warranted.

12Dollars are in constant fiscal year 2004 dollars.

  DOE Plans to Complete the Return of HEU to Russia by 2009 at a Cost of about
  $100 Million

DOE plans to complete the Russian fuel return program by 2009 and
estimates the program could cost about $100 million, but this estimate and
time frame may not be reliable because of uncertainties associated with
planning future fuel shipments. The program is facing delays in returning
spent HEU fuel because Russia is planning to conduct an environmental
assessment for each shipment of spent HEU fuel, and complex negotiations
are needed to arrange some shipments. DOE supports Russia's efforts to
examine the environmental impacts of returning spent HEU fuel to Russia.
DOE has asked Russia to conduct a single environmental assessment for all
spent fuel in all of the countries participating in the program, which
would help expedite future shipments of spent fuel, but so far, Russia has
not agreed to this. Furthermore, according to DOE officials, Russia has
not agreed to a fixed fee for accepting future shipments of spent fuel
because the costs of managing the fuel in Russia could increase. DOE is
considering ways to accelerate the Russian fuel return program that could
also increase the cost of the program by more than $30 million.

    DOE's Cost Estimate Is Uncertain because Russia Plans to Set the Price for
    Shipments of Spent HEU Fuel on a Case-By-Case Basis

DOE's estimate for completing the program for $100 million is subject to a
number of uncertainties, including the cost of returning spent HEU fuel to
Russia. DOE officials said they expect shipments of spent fuel, which is
more difficult to dispose of, to cost more than fresh fuel shipments. For
example, Russia's estimate of the transportation and disposal costs for
the shipment of spent fuel from Uzbekistan is $5.7 million. This amount
includes the cost of transportation, security, and storage of the spent
HEU fuel in Russia as well as a spent fuel management fee, which pays for
improvements to store the fuel in an environmentally safe manner.
According to DOE officials, Russia has not agreed to a fixed fee for
accepting future shipments of spent fuel because the costs of managing the
fuel in Russia could increase. While DOE officials said the fees paid to
Russia do not include profit, the terms of the agreement between DOE and
Russia stipulate that the United States or a third party will pay the
costs of returning HEU to Russia.

On the other hand, the cost of returning fresh HEU fuel to Russia is more
certain. DOE officials estimate that each shipment generally costs about
$400,000. In addition, the DOE official in charge of the Material
Consolidation and Conversion project, which pays for downblending the HEU
fuel shipped to Dmitrovgrad in Russia, said that DOE has a stable

price that it pays for downblending the fuel into LEU. DOE's Russian fuel
return program has so far spent about $1.5 million in support of four of
the shipments of fresh HEU fuel to Russia.13

    Environmental Assessments and Other Factors Could Cause Delays

One of the main uncertainties in DOE's plan to complete the Russian fuel
return program by 2009 is the schedule for shipping spent HEU fuel to
Russia. DOE has not yet provided assistance to return spent HEU fuel.14
According to DOE officials, the main obstacle is Russia's requirement that
an environmental assessment be conducted prior to each shipment of spent
fuel, which has been irradiated in a reactor and is therefore more
radioactive and difficult to dispose of than fresh fuel. For example, DOE
signed an agreement with Uzbekistan in March 2002 to begin work on
returning spent HEU fuel to Russia, but as of July 2004, the Russian
government had not completed the environmental assessment for the
shipment. Russian officials told us that future environmental assessments
would take less time. However, if a similar amount of time is required for
future assessments, spent fuel shipments could be delayed. DOE officials
said they have asked the Russian government to conduct a single
environmental assessment for the entire scope of the program in order to
expedite future shipments of spent fuel. Such an assessment could be
similar to the one DOE conducted prior to initiating the U.S. fuel
acceptance program. DOE's assessment conducted for the fuel acceptance
program identified the major components required to complete the program,
including the total amount of HEU fuel, U.S. ports where the fuel would be
shipped, and where and how the fuel would be disposed of. However, so far
the Russian government has not agreed to such an assessment.

The schedule for the Russian fuel return program also depends on the level
of cooperation in the countries where Russian-origin HEU fuel is located.
In coordination with Russia and IAEA, DOE prioritized shipments

13The State Department also provided about $2 million to return fresh HEU
from Serbia. This amount included the cost of transportation as well as
funding for Dmitrovgrad to conduct research to overcome technical
difficulties with downblending the material to LEU. The Nuclear Threat
Initiative, a private foundation, contributed $5 million to address safety
and environmental problems at the facility in Serbia where the HEU was
stored in exchange for participating in the Russian fuel return program.
DOE did not provide information on its expenditures in support of the
shipment of fresh HEU fuel from Uzbekistan.

14The five shipments to date have all consisted of fresh HEU fuel.

of fresh HEU to Russia based on the amount of HEU located at a facility
and security concerns in the region. However, DOE officials said they have
acted quickly to take advantage of opportunities that arise to remove HEU
fuel from a facility. For example, DOE removed fresh HEU fuel from Libya
in March 2004, after the country unexpectedly agreed to participate in the
program. Similarly, Romanian officials told us that high-level support
within the Romanian government for the Russian fuel return program
resulted in the shipment of HEU taking place very quickly. DOE officials
said that other countries with Russian-origin HEU might be reluctant to
participate in the Russian fuel return program. For example, DOE officials
said they had encountered difficulties in negotiating with Belarus and
Kazakhstan on returning their inventories of HEU to Russia. A Russian
official also told us that Belarus has no intention of returning fresh HEU
to Russia. Similarly, according to DOE officials, a facility in Ukraine
hopes to build a new research reactor that would be fueled by its
inventory of Russian-origin HEU. If the facility decides not to return its
HEU to Russia, DOE would try to work with the facility to downblend it
into LEU.

Another factor that affects DOE's schedule for the Russian fuel return
program is the development of new LEU fuels to replace HEU in research
reactors that cannot convert to currently available LEU fuels. In our July
2004 report on the RERTR program, we identified several research reactors
that use Russian-origin HEU fuel that cannot currently convert to LEU. For
example, a research reactor in Poland is waiting for the development of a
new LEU fuel before it can convert. However, the projected completion of a
replacement LEU fuel has been delayed from 2006 until 2010 as a result of
technical setbacks in the development process. DOE officials said that
rather than try to return the fresh HEU fuel from these reactors to Russia
before a replacement LEU fuel is available, the Russian fuel return
program would return the HEU as spent fuel, after it is used up in the
reactors. Consequently, although DOE officials have said they plan to
return all fresh HEU to Russia by 2005, some Russian-supplied research
reactors that cannot convert to currently available LEU fuels could
continue to store fresh HEU fuel after that date. (DOE has identified 4
countries for removal of fresh HEU by 2005- Belarus, Kazakhstan, Ukraine,
and Uzbekistan.)

DOE Is Considering Ways DOE has developed proposals for accelerating the
Russian fuel return to Accelerate the Return of program that could
increase the cost of the program by over $30 million. HEU to Russia DOE
would like to complete the program by 2009, 4 years sooner than its

original time frame of 2013. According to DOE officials, one possibility
is

to purchase casks that could be used to transport spent HEU fuel by air

rather than by train and would also be able to hold more fuel, requiring
fewer shipments. While the shipments of fresh HEU fuel to date have all
been by air, currently DOE and Russia do not have access to casks that are
qualified according to IAEA standards for shipment of spent fuel by air.
Without the high-capacity casks, DOE must transport spent fuel by train.
DOE estimates that the high-capacity casks would require a one-time
expenditure of $5.5 million.

DOE officials also said they are considering a "mobile melt-and-dilute"
system for transforming spent HEU fuel into blocks of LEU. The equipment
for this system could be transported to reactors that possess spent HEU
fuel and be used to blend down the HEU on site, without returning the fuel
to Russia. DOE would use the system as a stopgap measure in response to
potential delays in returning spent HEU fuel to Russia, alleviating
security concerns at foreign research reactors with Russian-origin spent
HEU. DOE officials said they anticipate that the LEU blocks could then be
returned to Russia at a later date. Development of the system has begun at
DOE's Savannah River Site, but DOE has not yet decided whether to seek
funding for this proposal.

DOE had hoped to facilitate the return of spent HEU fuel to Russia by
using casks that are currently used to store Russian-origin spent HEU fuel
in Germany. DOE officials said that, with Germany's cooperation, the
Russian fuel return program would first provide assistance for returning
spent HEU fuel from Germany to Russia and then reuse the casks for
shipments of spent HEU from other countries. However, the German
government has not agreed to participate in the Russian fuel return
program. In a December 2000 letter to IAEA, Germany cited a number of
issues that would require clarification before it would agree to
participate in the program, including how spent HEU fuel returned to
Russia would be safeguarded and disposed of. Officials at the site in
Germany where the HEU is stored said they would be willing to participate
in the Russian fuel return program and that returning the HEU would reduce
the need for security at the facility. However, German government
officials told us that Germany plans to dispose of its Russian-origin
spent HEU fuel domestically and keep the casks for long-term storage of
the fuel. One official said that concerns over Russia's ability to secure
the HEU played a role in Germany's decision to not participate in the
Russian fuel return program.

Conclusions 	DOE's efforts to recover U.S.-origin HEU for safe storage and
disposal in the United States have resulted in the return of enough HEU to
build more

then 20 nuclear weapons. However, despite DOE's intention of accelerating
the fuel acceptance program, there are still 11 countries that have not
made plans to return all of their U.S.-origin HEU to the United States.
Lack of funding for conversion to LEU is one of the reasons foreign
research reactors continue to use HEU. Foreign research reactors that do
not plan to convert to LEU generally also do not have plans to return HEU
fuel to the United States. In our July 2004 report on DOE's RERTR program,
we recommended that DOE evaluate the costs and benefits of providing
incentives to foreign research reactors that use U.S.-origin HEU to
convert to LEU. If DOE decides to provide such incentives, operators of
some foreign reactors may decide to return their HEU fuel to the United
States as well as convert to LEU. We encourage DOE to consider the
increased likelihood of recovering additional amounts of HEU as one of the
benefits of providing additional incentives to foreign research reactors
to convert to LEU. Similarly, lowering the fees for accepting HEU could
encourage additional research reactors in high-income countries to return
the nuclear material to the United States. These actions could support
DOE's efforts to accelerate the fuel acceptance program.

When DOE implemented the fuel acceptance program in 1996, it reserved the
right to adjust the fees to meet changing circumstances. Currently, one of
the biggest potential changes in the program is DOE's proposed extension
of the program to continue providing operators of research reactors that
converted to LEU fuel with a means of disposing of spent fuel. While we
support DOE efforts to assist foreign research reactors that have
converted to LEU in accordance with U.S. nonproliferation objectives, the
original intent of DOE's fuel acceptance program was not to indefinitely
accept spent LEU fuel at below the full cost of disposal. DOE has not
revised the fees that research reactors in high-income countries pay for
returning their spent fuel to the United States since 1996. Continuing the
current fee structure through the end of as much as a 10year program
extension would mean keeping the 1996 fees set at the same level for 23
years. While lowering the fees for returning HEU may encourage additional
countries to participate in the fuel return program, re-evaluating the
fees for accepting LEU fuel, taking into account DOE's proposed extension
of the program, may show that DOE could raise the fees and recover a
greater portion of the total disposal costs for accepting LEU from
high-income countries. DOE may be able to raise the fees while still
encouraging operators of foreign research reactors to convert to LEU fuel
and without unduly penalizing foreign reactors that have already
converted.

DOE faces a complex set of issues for each shipment of HEU to Russia, such
as environmental requirements in Russia and negotiations with the
countries that are returning their HEU to provide them with incentives to
participate in the program. While DOE would like to accelerate the return
of HEU to Russia, these issues have the potential to cause delays. For DOE
to complete the program as quickly and as efficiently as possible, the
cooperation of Russia and countries that have Russian-origin HEU is
essential. We support DOE's efforts to work with Russia to resolve issues
that stand in the way of returning HEU as quickly as possible and to
pursue options such as purchasing high-capacity casks that support DOE's
objective of accelerating the Russian fuel return program.

Recommendations for 	We recommend that the Secretary of Energy and the
Administrator of the National Nuclear Security Administration take the
following two actions:

  Executive Action

o  	consider offering incentives to foreign research reactors to return
HEU to the United States, including lowering the fees that DOE charges for
accepting HEU fuel from high-income countries; and

o  evaluate raising the fees for accepting LEU fuel from research reactors
in

Agency Comments and Our Evaluation

  Scope and Methodology

high-income countries to recover as much of the cost for disposing of the
fuel in the United States as possible, if doing so would not adversely
affect the conversion of reactors to LEU and the return of HEU or create
unmanageable financial burdens for the reactors.

We provided draft copies of this report to the Departments of Energy and
State for their review and comment. In its written comments (presented as
app. II), DOE concurred with our recommendations. State did not provide
written comments. Both DOE and State provided technical comments, which we
incorporated into the report as appropriate.

To review the progress of DOE's fuel acceptance program, we analyzed
program documentation including DOE's February 1996 Final Environmental
Impact Statement on a Proposed Nuclear Weapons Nonproliferation Policy
Concerning Foreign Research Reactor Spent Nuclear Fuel, the May 1996
Record of Decision establishing the program, and the DOE IG's February
2004 audit report on the program. In addition, we analyzed documents
outlining the structure of fees DOE imposes on research reactors in
high-income countries for returning HEU and LEU

fuel to the United States and how the fees were derived. We analyzed data
from DOE on the amount of HEU and LEU fuel returned to the United States,
the plans of countries that still have U.S.-origin HEU for participating
in the program, and the amount of fees paid by research reactors in
high-income countries. We also interviewed key officials at DOE; the State
Department; the DOE facilities in South Carolina and Idaho where HEU and
LEU fuel from foreign research reactors is being placed in interim
storage; and DOE's Argonne National Laboratory, which has expertise on the
amount and type of U.S.-origin HEU and LEU at foreign research reactors.

We visited five countries that have U.S.-origin HEU-Belgium, Germany, the
Netherlands, Portugal, and Romania. We selected a nonprobability sample of
countries based on a number of criteria. In particular, we selected three
countries that have returned HEU to the United States under the fuel
acceptance program (Germany, the Netherlands, and Romania) and two
countries that have not returned HEU to the United States (Belgium and
Portugal). In addition, we selected three high-income countries (Belgium,
Germany, and the Netherlands), one non-high-income country (Romania), and
one country that transitioned into a high-income country (Portugal).
During our site visits, we met with research reactor operators and
government officials responsible for regulating the research reactors and
the disposal of spent research reactor fuel. We asked a standard set of
questions concerning reasons for participating or not participating in
DOE's fuel acceptance program, plans for participating in the future,
options for disposing of spent fuel other than returning it to the United
States, and the potential extension of the fuel acceptance program beyond
2009. In addition to visiting five countries with U.S.-origin HEU, we
interviewed representatives of the Australian, Jamaican, and Swedish
research reactor operators and the group of research reactors that
petitioned DOE to extend the fuel acceptance program beyond 2009.

We assessed the reliability of data obtained from DOE on the amount of HEU
and LEU fuel returned to the United States and the amount of fees paid by
research reactors in high-income countries. In particular, officials at
the DOE facilities in South Carolina and Idaho where the fuel is stored
provided responses to a standard set of data reliability questions
covering issues such as data entry, access, and quality control
procedures. We asked follow-up questions whenever necessary. We also
performed a series of checks on the data to ensure that it was complete
and accurate. We found several errors in the data that we brought to the
attention of DOE officials, who then reviewed the data and provided
corrections. Based on our assessment, we determined that the data provided
by DOE

was sufficiently reliable for our purposes. We converted dollar amounts of
DOE expenditures for the fuel acceptance program and fees received from
research reactors in high-income countries into constant fiscal year 2004
dollars.

To review the progress of DOE's Russian fuel return program, we analyzed
program documentation on the amounts and locations of Russian-origin HEU
at foreign research reactors; reports on DOE fact-finding missions to
research reactors in seven countries included in the Russian fuel return
program; DOE's agreements with Russia and Uzbekistan on the program; and
letters between the IAEA and countries with Russian-origin HEU on their
potential participation in the program. In addition, DOE provided
documentation on shipments of fresh HEU it has supported to date. We
discussed the program with key DOE and State Department officials. We also
traveled to Russia to discuss the program with Russian officials
responsible for implementing the program with DOE and reviewing the
environmental assessment for returning spent HEU fuel.

We visited four countries that have Russian-origin HEU-Germany, Poland,
Romania, and Ukraine. We selected a nonprobability sample of countries
based on a number of criteria. In particular, we selected one country that
had returned HEU to Russia under the Russian fuel return program (Romania)
and three that had not returned HEU. In addition, we selected the two
countries that are eligible to participate in both the U.S. fuel
acceptance program and the Russian fuel return program (Germany and
Romania). During our site visits, we met with research reactor operators
and government officials responsible for regulating the research reactors
and the disposal of spent research reactor fuel. We asked a standard set
of questions concerning reasons for participating or not participating in
the Russian fuel return program, plans for participating in the future,
and options for disposing of spent fuel other than returning it to Russia.

As part of our review of both programs, we also analyzed NNSA's 2004
Global Research and Test Reactor Security Initiative Report and attended
an annual international conference organized by DOE's RERTR program. For
technical expertise, we relied on GAO's Chief Technologist, who
participated in meetings with officials at Argonne National Laboratory.

We conducted our work from July 2003 to October 2004 in accordance with
generally accepted government auditing standards.

We are sending copies of this report to the Secretary of Energy; the
Administrator, National Nuclear Security Administration; the Secretary of
State; the Chairman, NRC; the Secretary of Homeland Security; the
Director, Office of Management and Budget; and interested congressional
committees. We will also make copies available to others upon request. In
addition, this report will be available at no charge on the GAO Web site
at http://www.gao.gov.

If you or your staff have any questions about this report, please call me
at (202) 512-3841. Key contributors to this report include Joseph Cook,
Jonathan McMurray, Mehrzad Nadji, Kirstin B.L. Nelson, Judy Pagano, Peter
Ruedel, F. James Shafer Jr., and Keith Rhodes, GAO's Chief Technologist.

Sincerely yours,

Gene Aloise Acting Director, Natural Resources and Environment

Appendix I: Details of HEU and LEU Fuel Returned to the United States

Table 3: HEU and LEU Fuel Returned to the United States, by Country, and
Fees Paid by Research Reactor Operators in High-Income Countries

                                      HEU             LEU 
                  Country     (kilograms)   (kilograms)       Fees (millions) 
                Argentina              29                 
                Australia              34                                $2.2 
                  Austria               3              71 
                   Brazil               5              62 
                   Canada              11                 
                    Chile               8                 
                 Colombia               3                 
                  Denmark               6             309 
                  Germany             102             301 
                   Greece               5                 
                Indonesia                             206 
                    Italy              23              47 
                    Japan             537             298 
              Netherlands              21                 
              Philippines               3              20 
                 Portugal                              29 

              Romania                     6                
              Slovenia                    5       35       
            South Korea             20            33       
               Spain                      4       12                  0.9 
               Sweden               47           296                 12.4 
            Switzerland             34            73                  3.4 
               Taiwan                     4       23                  1.6 
              Thailand                    4                
           United Kingdom                         17                  1.5 
              Uruguay                             16       
             Venezuela                            39       
               Total               914          1,887               $97.3 

Source: DOE.

Notes: The amount of HEU returned, 914 kilograms, is based on the total
uranium in the fuel after being used in a research reactor. It is
equivalent to 1,159 kilograms of total uranium before being used in a
reactor.

Dollars are in constant fiscal year 2004 dollars.

Appendix II: Comments from the Department of Energy

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