Government
3:48 pm
Mon June 9, 2014

Audit Finds DOE Acted Illegally in Transferring Enriched Uranium to USEC's Paducah Plant

Credit Department of Energy

A report from the Government Accountability Office finds that the Department of Energy may have illegally transferred uranium to the troubled United States Enrichment Corporation, potentially costing taxpayers hundreds of millions of dollars.

USEC operates the DOE-owned Paducah Gaseous Diffusion Plant and is currently in shutdown phases and reorganizing through Chapter 11 bankruptcy

Read Highlights from the Government Accountability Office's Report Here

The GAO charges that the DOE transferred spent uranium, or tails, stored in Paducah to USEC to re-enrich and sell between 2012-13. The move did not receive presidential approval as required by the USEC Privatization Act of 1998. 

GAO Director of Natural Resources and Environment David Trimble explains why the  the deal violated the law. 

“They did not obtain a presidential determination that giving up the material was in the national security interests of the United States," said Trimble. "That is required by the USEC Privatization Act. They did not obtain this, they claim they relied on another document for that certification. Our report goes into why we don’t think that was sufficient justification.” 

Trimble says the DOE was also inconsistent in their method of estimating the value of uranium tails.

“The key here is that tails were viewed as a liability for the purposes of these transfers and then at other times DOE decided that they were an asset," said Trimble. "So it sort of was what was convenient at the time of the transaction and they were able to choose an evaluation method. Our report recommends they be transparent and consistent in their approach.”

Senator Edward Markey (D-Mass) and Representative Michael Burgess (R-Texas) requested the audit of DOE's dealings with USEC after bankruptcy was declared. 

In a release, USEC officials stated that the company "supports DOE’s goals at a minimal cost to the government," but didn't address the report’s findings directly. 

USEC: 

In its role as the sole U.S. uranium enrichment company, USEC supports the long-term energy and national security of the United States, and it has worked with the Department of Energy to assure that the country has a viable means of meeting these security requirements well into the future. USEC’s transactions with the Department to support the mid-term needs of the U.S.  Government for unencumbered low enriched uranium and the development and deployment of a  U.S. uranium enrichment technology for the long-term supply of LEU to produce tritium have  supported these goals at minimal cost to the government.

USEC's lease on the facility is being transferred back to the DOE which is in negotiations to lease the plant to GE Hitachi's Global Laser Enrichment once cleanup is completed. USEC has been gradually laying off employees since May 2013. 

Congressman Ed Whitfield has been a supporter of keeping USEC's jobs in Paducah.  He says that whatever the findings reveal about the DOE's dealings, the plant's process of decommission and decontamination has brought economic benefits to Paducah. 

"While we are still analyzing GAO’s report, the extension of the gaseous diffusion plant in Paducah prolonged 1,200 jobs, provided necessary uranium for national security purposes, saved the government nearly $150 million in avoided maintenance costs, and provided numerous other benefits," said Whitfield.

"Since the gaseous diffusion plant has now ceased operations, Senators McConnell, Paul and I are committed to ensuring the gaseous diffusion plant is decommissioned and decontaminated as safely and efficiently as possible and to working with DOE to assist in bringing new development to Paducah." 

The report states that the DOE disagreed with the report's findings. But Trimble says the DOE now has 60 days to file its own report to Congress detailing how they’re acting upon the GAO's recommendations.