Nuclear Science

Production and distribution of isotopes, which have medical, industrial, and scientific applications, has been a long-standing mission of the Department of Energy (DOE). DOE now generates less than five percent of all worldwide isotope sales. DOE is having problems running its isotope sales program on a self-supporting basis, and, since 1990, program operating costs have exceeded revenues. Foreign competition and high operating costs have been the main factors discouraging the program's self-sufficiency. U.S. isotope users are concerned that DOE's commitment to operating the program on a self-sufficient basis may limit the domestic availability of some isotopes if DOE cannot produce them cost-effectively.

GAO found that: (1) DOE has experienced difficulty operating its isotope program on a self-supporting basis, primarily because the program cannot control radioisotope production costs, lacks sufficient funds to operate and maintain the equipment used to process stable isotopes, faces private-sector competition, and lacks capital to expand and improve program operations; (2) due to the lack of operating funds, the program has moved from its initial capitalization of $16 million in fiscal year (FY) 1990 to possible insolvency by the end of FY 1992; (3) cost factors affecting isotope production vary, depending on whether the facilities producing the isotopes exist primarily for other purposes or are dedicated solely to isotope production; (4) the isotope program pays a share of facility operating costs corresponding to the facility space used, when the facilities exist for other purposes, but when facilities are dedicated exclusively to isotope production, the program then takes responsibility for all costs, including capital expenses; (5) although program centralization was welcomed by DOE domestic isotope customers, there are concerns about the continued availability of certain isotopes from DOE; and (6) domestic isotope customers are primarily concerned about the possible adverse effects that the program's commitment to self-sufficiency may have on isotope availability, isotope research, and needed facility upgrades.