Problems in Managing Critical Isotopes May Leave the US Subject to Surprise Shortages
(Washington, DC) -The Government Accountability Office (GAO) released a report today that examines the Department of Energy’s management of its Isotope Program which provides more than 300 critical isotopes for sale to commercial entities and research facilities for use in nuclear medicine, homeland security, industrial applications and a wide-range of research activities. The report titled “Managing Critical Isotopes: DOE’s Isotope Program Needs Better Planning for Setting Prices and Managing Production Risks,” was requested jointly by Mr. Brad Miller (D-NC), Ranking Member, Subcommittee on Energy and Environment and Mr. Paul D. Tonko (D-NY), Ranking Member, Subcommittee on Investigations and Oversight.
In the last Congress, the Committee investigated serious problems in the Energy Department’s management of Helium-3 gas, a non-radioactive isotope that has played a vital role in the detection of radioactive and nuclear threat material at America’s borders and ports. The GAO’s examination of the DOE’s Isotope Program was follow-up to that initial investigative work.
“The Department of Energy’s proper management of isotopes is critical to the Nation’s health, safety and security,” said Mr. Miller. “In the Helium-3 crisis we witnessed the significant effect a supply shortage of one isotope may have on a wide range of industries, medical and other research efforts and our nation’s national security. This report shows that the effective management of the department’s isotopes still has a long way to go.”
This recent GAO review found that the Isotope Program does not maintain a concise listing of its high-priority isotopes, for instance, making a determination of the program’s most important or highest risk isotopes extremely difficult. In addition, the program has not been conducting annual assessments of the pricing of its commercially available isotopes which has undermined the program’s ability to know if it is recovering appropriate costs for its production and sale of these isotopes or not.
Rather than relying on one consolidated list that prioritizes all isotopes produced or managed by the Isotope Program in order of importance, for instance, the program relies on five distinct “high-priority” lists. In addition, it does not have clear or consistent objectives regarding the ability to maintain the supply of the program’s most important isotopes without interruption or supply shortages. “Without clearly defined objectives that lay out what the program is trying to accomplish,” the GAO wrote, “the Isotope Program cannot be assured that its current risk assessment and mitigation efforts are focusing on the most significant issues that could impede achievement of its mission. For example, the program does not have objectives that could provide direction about which of the five high-priority isotope lists warrant the most attention.”
The GAO noted that one isotope, Thallium-203, is listed as the most important stable isotope on one of the five lists, but does not even appear on the other four lists, for instance. They observed similar inconsistencies with other isotopes as well. This makes the program’s ability to properly manage the supply of its most important isotopes prior to supply short-falls emerging inadequate. The program is in the midst of undertaking a 5-year strategic planning effort which will hopefully address some of these issues.
“I appreciate the fact that the DOE’s Isotope Program is beginning to engage in a strategic planning exercise,” said Mr. Tonko, “but I don’t believe we can wait five years to act on some of the recommendations provided by GAO in this report. Future shortages may not be preventable or detectable before they occur, but implementing the GAO’s recommendations will help provide a more solid foundation for effectively managing the Isotope Program office.”
DOE Isotope Pricing Policy.
The DOE is supposed to assess the pricing of most isotopes annually under a decades old policy taking into account various factors such as supply, demand and the full cost of production. But the agency’s Isotope Program has not done this. “As a result,” GAO determined, “the Isotope Program does not know if its full cost recovery prices for isotopes are set at appropriate levels so as not to distort the market, and may be forgoing revenue that could further support its mission.” At the time of GAO’s review DOE was reviewing their policy on pricing isotopes. That policy was finalized after GAO completed its review, but GAO was able to review it recently and found that it fails to address their recommendation to clearly define the factors the Isotope Program intends to consider when setting prices for isotopes sold commercially.
The GAO report concluded: “Managing the production and sale of over 300 different isotopes for various research, commercial, industrial, and medical applications is a daunting task. With a wide variety of customers, whose needs may change over time, it is difficult for the Isotope Program to determine demand, plan production, and project revenue streams to avoid shortages of important isotopes, or interruptions in the revenues that help to sustain the program.”
The GAO made four recommendations to the Secretary of Energy: 1) Clearly define the factors to be considered in setting prices for isotopes sold commercially; 2) Create clear goals and objectives to serve as a basis for risk assessment, identify potential risks to its program’s goals and determine what actions are necessary to manage those risks; 3) Consolidate and prioritize the five high-priority isotope lists; and 4) Establish clear guidance for managing the program’s revolving fund to ensure it is sufficient for use in helping to resolve unexpected revenue losses.
“Managing Critical Isotopes: DOE’s Isotope Program Needs Better Planning for Setting Prices and Managing Production Risks,” Government Accountability Office, GAO-12-591, available here: https://www.gao.gov/products/GAO-12-591
Uploaded Files
Related Content
Next Article Previous Article