Uranium Enrichment

Pursuant to a congressional request, GAO reviewed proposed uranium enrichment legislation to determine its impact on uranium prices, uranium production, employment, environmental issues, foreign competition, and decommissioning costs.

GAO found that the legislation would: (1) restructure the Department of Energy's (DOE) uranium enrichment program as a government corporation to improve its competitiveness in domestic and international markets; (2) require DOE to purchase $750 million of domestic uranium ore over 5 years; (3) establish a uranium mill tailings cleanup fund; (4) establish a fund to pay for decommissioning uranium enrichment facilities; and (5) require the corporation to recover only a small fraction of the current program's past unrecovered costs. GAO also found that: (1) the proposed DOE purchase of domestic uranium may not significantly increase production, since producers have large inventories, and may increase nationwide mining employment by 2,000 to 3,000 workers; (2) domestic producers believed that the purchase would help them maintain their business; (3) state officials and uranium ore producers supported the establishment of the cleanup fund, although states and the Environmental Protection Agency opposed provisions that limited owners' cleanup responsibilities; (4) worldwide excess uranium enrichment production capacity significantly contributed to increasingly heavy international competition; (5) DOE estimated that it could cost more than $5 billion to bring three enrichment plants into compliance with environmental legislation and decontaminate, clean up, maintain, or demolish the sites; and (6) DOE planned to share decommissioning costs between the federal government and the commercial enrichment program.