The Front End of the Nuclear Fuel Cycle: Current Issues

Summary: Nuclear power contributes roughly 20% of the electrical generation in the United States. Uranium is the fundamental element in fuel used for nuclear power production. The nuclear fuel cycle is the cradle-to-grave life cycle from extracting uranium ore from the earth through power production in a nuclear reactor to permanent disposal of the resulting spent nuclear fuel.

Summary: The front-end of the nuclear fuel cycle considers the portion of the nuclear fuel cycle leading up to electrical power production in a nuclear reactor. The front-end of the nuclear fuel cycle has four stages: mining and milling, conversion, enrichment, and fabrication. Mining and milling is the process of removing uranium ore from the earth, and physically and chemically processing the ore to develop "yellow-cake" uranium concentrate. Uranium conversion produces uranium hexafluoride, a gaseous form of uranium, from uranium concentrate. Uranium enrichment physically separates and concentrates the fissile isotope U-235. The enriched uranium used in nuclear power reactors is approximately 3%-5% U-235, while weapons-grade enriched uranium is greater than 90% U-235. Nuclear fuel fabrication involves manufacturing enriched uranium fuel rods and assemblies highly specific to a nuclear power reactor.

Summary: Historically, the Atomic Energy Commission (AEC), a predecessor federal agency to the Department of Energy (DOE) and the Nuclear Regulatory Commission (NRC), promoted uranium production through federal procurement contracts between 1947 and 1971. Since the late 1980s, U.S. nuclear utilities and reactor operators have purchased increasingly more foreign-origin uranium for reactor fuel than domestically produced uranium. In 1987, about half of uranium used in domestic nuclear reactors was foreign origin. By 2018, however, 93% of uranium used in U.S. nuclear reactors was foreign origin. No uranium conversion facilities currently operate in the United States. There is one operational U.S. commercial uranium enrichment facility, which has the capacity to enrich approximately one-third of the country's annual reactor requirements. In addition to newly mined uranium, U.S. nuclear power reactors also rely on secondary sources of uranium materials. These sources include federal and commercial stockpiles, reenrichment of depleted uranium, excess feed from underfeeding during commercial enrichment, and downblending of higher enriched uranium.

Summary: The global uranium market operates with multiple industries exchanging uranium products and services through separate, nondirect, and interrelated markets. Producers, suppliers, and utilities buy, sell, store, and transfer uranium materials. Nuclear utilities and reactor operators diversify fuel sources among primary and secondary supply, and may acquire uranium from multiple domestic and foreign suppliers and servicers. For example, a nuclear power utility in the United States may purchase uranium concentrate that has been mined and milled in Australia, converted in France, enriched in Germany, and fabricated into fuel in the United States.

Summary: On January 16, 2018, two domestic uranium producersârepresentatives from the uranium mining/milling industryâpetitioned the U.S. Department of Commerce to conduct a Section 232 investigation pursuant to the Trade Expansion Act of 1962 (19 U.S.C. Â§1862) to examine whether U.S. uranium imports pose a threat to national security. The department found that uranium imports into the United States posed a threat to national security as defined under Section 232. In a July 12, 2019, memorandum, President Trump announced he did not concur with the Department of Commerce's "finding that uranium imports threaten to impair the national security of the United States as defined under section 232 of the Act."

Summary: The Section 232 uranium investigation into uranium imports has increased the discussion about the nuclear fuel supply chain and potential future U.S. uranium needs. Included in the July 12, 2019, memorandum, the Trump Administration established a Nuclear Fuel Working Group, to assess the challenges facing the domestic uranium industry and to consider options to "revive and expand the nuclear energy sector." Given uncertainties regarding the long-term viability of the domestic uranium production and commercial nuclear power sectors, continued issues associated with the front-end of the nuclear fuel cycle may persist.

The United States has more nuclear power reactors than any country worldwide. The 98 operable nuclear generating units provide approximately 20% of the electrical generation in the United States. Uranium is the fundamental element used to fuel nuclear power production. The front-end of the nuclear fuel cycle comprises the industrial stages starting with uranium extraction from the earth and ending with power production in a nuclear reactor. Congressional interest in the front-end of the nuclear fuel cycle is associated with many factors, including (1) domestic uranium production and supply, (2) concerns about increasing reliance on uranium imports, and (3) the economic viability of U.S. nuclear power reactors.

Historically, the U.S. Atomic Energy Commission (AEC), a predecessor federal agency to the Department of Energy (DOE) and the Nuclear Regulatory Commission (NRC), promoted uranium production in the United States through federal procurement contracts between 1947 and 1971. The majority of domestic uranium concentrate production prior to 1971 supported the development of nuclear weapons and naval propulsion reactors. After 1971, uranium mill operators produced uranium concentrate primarily for use in commercial nuclear power reactors.

By the late 1980s, nuclear utilities and reactor operators in the United States purchased more uranium from foreign suppliers than domestic producers. By 2017, 93% of the uranium purchased by U.S. nuclear utilities and reactor operators originated in a foreign country. Nuclear utilities and reactor operators diversify uranium supplies among multiple domestic and foreign sources, intending to minimize fuel costs. For example, a nuclear utility in the United States may purchase uranium concentrate that has been mined and milled in Australia, converted in France, enriched in Germany, and fabricated into fuel in the United States.

Examination of the current status of the front-end of the nuclear fuel cycle highlights broad policy questions about the federal government's role in sustaining or promoting nuclear fuel production in the United States. This report describes the front-end of the nuclear fuel cycle and the global uranium marketplace, analyzes domestic sources and imports of various types of uranium materials involved in the fuel cycle, and provides a discussion about the current issues. The back-end of the nuclear fuel cycle comprises the storage of spent nuclear fuel (SNF) after it is discharged from a nuclear reactor; however, issues associated with SNF storage and disposal are not discussed in this report. This report does not discuss potential environmental, public health, and proliferation issues associated with the front-end of the nuclear fuel cycle.

The front-end of the nuclear fuel cycle is composed of four stages:

Uranium mining and milling is the process of removing uranium ore from the earth and physically and chemically processing the ore to develop "yellowcake" uranium concentrate. Uranium conversion produces uranium hexafluoride (UF 6 ), a gaseous form of uranium, from solid uranium concentrate. Uranium enrichment separates and concentrates the fissile isotope U-235 in the gaseous UF 6 form to produce enriched uranium capable of sustaining a nuclear chain reaction in a commercial nuclear power reactor. Uranium fuel f abrication involves producing uranium oxide pellets, which are subsequently loaded into reactor-specific fuel rods and assemblies, which in turn are loaded into a nuclear power reactor.

The nuclear fuel produced from processing newly mined uranium ore through fuel fabrication is referred to as primary supply . The stages from uranium mining through uranium fuel fabrication are described in the following sections.

Stage 1: Mining and MillingâProduction of Uranium Concentrate

The front-end of the nuclear fuel cycle begins with mining uranium ore from the earth, through conventional (surface mining, open pits, underground) or nonconventional, in-situ recovery (ISR) methods. The type of extraction method employed depends on geology, ore body concentration, and economics. The majority of uranium resources in the United States are located in geological deposits in the Colorado plateau, Texas gulf coast region, and Wyoming basins. The United States has a relatively low quality and quantity of uranium reserves compared to the leading uranium-producing countries. For example, the Nuclear Energy Agency and the International Atomic Energy Agency rank the United States' reasonably assured uranium resources as 12 th worldwide.

Uranium milling involves physical and chemical processing of uranium ore to generate uranium concentrate (U 3 O 8 ), commonly called "yellowcake" uranium. Uranium milling operations crush and grind the mined ore, which is chemically dissolved with acid or alkaline solutions and subsequently concentrated. Milling operations produce a large quantity of waste material, termed tailings , relative to the amount of uranium concentrate produced. NRC estimates 2.4 pounds of yellowcake uranium oxide is produced from 2,000 pounds of uranium ore. The tailings, or waste material, generated by uranium milling operations prior to the 1970s were largely abandoned, exposing radioactive sand-like particles to be dispersed into the air, surface, and groundwater by natural erosion and human disturbances. The enactment of the Uranium Mill Tailings Radiation Control Act (UMTRCA; P.L. 95-604 ) authorized a remedial action program for cleanup of abandoned mill tailings prior to 1978 and authorized a regulatory framework to manage tailings generated at sites operating after 1978. In the United States, ISR methods have replaced conventional mining and milling by pumping acid or alkaline solutions through an underground ore body. After uranium in the ore is dissolved in solution, it is pumped to the surface and processed to produce uranium concentrate.

In the first quarter of 2019, five ISR facilities are operating in the United Statesâall in Wyomingâwith approximately 11.2 million pounds of annual production capacity, and one conventional uranium mill, located in Utah, in operation with an annual capacity of 6 million pounds of ore per day. Additionally, there are 13 million pounds of annual production capacity at 11 ISR operations permitted and licensed, partially permitted and licensed, developing, or on standby.

Stage 2: ConversionâProduction of Uranium Hexafluoride

Uranium concentrate is shipped to a uranium conversion facility where UF 6 is chemically produced. At room temperature, UF 6 is a solid, and it transforms to a gas at higher temperatures. UF 6 is described as "natural," as the isotopic composition has not been altered relative to the composition that exists in nature. According to the World Nuclear Association, there are six uranium conversion plants worldwide. The Honeywell plant in Metropolis, IL, is the only uranium conversion facility in the United States. It has not produced UF 6 since November 2017.

Stage 3: EnrichmentâProduction of Enriched Uranium

After uranium conversion, the UF 6 is feed material for uranium enrichment . Natural uranium has an isotopic composition of approximately 0.71% U-235, the fissile isotope of uranium. Civilian nuclear power fuel is generally enriched to 3%-5% U-235. Uranium enrichment in the United States was largely performed using a gaseous diffusion technology until 2013. Currently, one uranium enrichment plant, which employs gas centrifuge technology, operates in the United States. The gas centrifuge technology is described below.

Inflow UF 6 gasâreferred to as the feed âenters a gas centrifuge. The centrifuge spins at high speeds and centrifugal forces drive the slightly more massive U-238 isotopes outward, while less massive U-235 isotopes concentrate near the center of the centrifuge. The process repeats many times in a cascade of centrifuges, gradually increasing the isotopic composition of U-235 from 0.71% to 3%-5%. During this process, the chemical composition remains as UF 6 , while the isotopic composition of UF 6 has been modified. The product stream is enriched uranium hexafluoride (enUF 6 ) and the waste streamâcalled the tailsâis depleted uranium (DU).

The greater the difference in the isotopic composition of U-235 in the product and tails, the greater the energy requirements. Separative work units (SWUs) describe the energy required to enrich a given feed quantity to a given assay. Uranium enrichment yields a relatively higher mass of depleted uranium as the enriched uranium product.

Stage 4: FabricationâProduction of Uranium Oxide, Fuel Rods, and Assemblies

The final step in producing usable nuclear fuel involves fuel fabrication . At fabrication plants, enriched uranium is converted to uranium oxide (UO 2 ) powder and subsequently formed into small ceramic pellets. The pellets are loaded into cylindrical fuel rods and then combined to form fuel assemblies specific to a particular reactor. The fuel assemblies are loaded into the nuclear reactor for power production. The precise enrichment level and types of fuel rods and assemblies are specific to each reactor.

Secondary supplies describe uranium materials which may not have been directly processed through the front-end of the nuclear fuel cycle. Secondary supply may describe excess uranium from underfeeding during commercial enrichment, uranium materials held in commercial inventories, uranium held in the federal government's excess uranium inventory, and from the downblending of higher enriched uranium. According to DOE, secondary sources of uranium produced from reenrichment of depleted uranium and underfeeding represent the two largest sources of secondary supply in the market. A uranium market analyst estimated that all secondary supplies account for more than a quarter of total annual world uranium supply (48 million pounds U 3 O 8 equivalent) as of December 2018. The relative contribution of secondary uranium supplies may vary from year-to-year.

Uranium enrichment inherently involves a trade-off between energy requirements and quantity of product and tails produced. Enrichment operators aim to balance these requirements as the optimal tails assay. Under certain conditions, enrichment operators elect to underfeed , which generates tails with a lower assay relative to the optimal tails assay. Underfeeding allows the enrichment operator to supply the enriched uranium product at the assay desired, produce lower quantities of tails for storage and disposal, and use relatively less feed material. The trade-off is the higher energy requirement per enriched product. The excess feed material not enriched as a result of underfeeding is considered a secondary supply.

Uranium traders and brokers buy, sell, and store various types of uranium materials and have no direct operational role in producing or consuming nuclear fuel cycle material. The decision to buy, hold, and sell uranium materials is dependent on market conditions. For example, in 2014 the Senate Committee on Homeland Security and Governmental Affairs examined the activities of banks and bank holding companies in physical markets for commodities, including an examination of Goldman Sachs' involvement with buying and selling physical uranium products. Goldman Sachs described its activities in the uranium market as "buying uranium from mining companies, storing it, and providing the uranium to utilities when they wanted to process more fuel for their nuclear power plants." Goldman's physical uranium inventory valuation peaked in 2013 at $242 million, and the company planned on exiting the market by 2018 when their contracts with utilities had ended. The current status of Goldman's holdings is not publicly known, as uranium sales contracts are privately negotiated. EIA provides a list of uranium sellers to owners and operators of U.S. civilian nuclear power reactors, which may include companies involved with uranium operations at various stages of the front-end of the nuclear fuel cycle.

Nuclear utilities and reactor operators stockpile inventories of various types of uranium materials. The primary reasons to maintain stockpiles are economic considerations and to insulate their operations from potential supply chain disruptions. According to the U.S. Energy Information Administration (EIA), total uranium inventories for owners and operators of U.S. civilian nuclear power reactors more than doubled from 2002 to 2016 ( Figure 2 ). EIA tracked inventory quantities of specific uranium materials from 2007 to 2016. During that time, owners and operators of U.S. civilian nuclear power reactors increased inventories of uranium concentrate and enriched UF 6 by the largest relative margin. As of 2016, EIA reported the total uranium inventory for U.S. utilities was 128 million pounds U 3 O 8 (eq).

DOE maintains inventories of uranium both essential to, and excess to, national security missions. DOE maintains excess inventories of various types of uranium materials, which are sold on commercial markets to support cleanup services for former federal uranium enrichment facilities.

Some have expressed concern that DOE's uranium transfers are depressing uranium prices by introducing federal uranium materials into an already oversupplied market. In 2015, the House Oversight and Government Reform Subcommittee on the Interior examined the impact of the sales of DOE's excess uranium inventory. The Government Accountability Office (GAO) raised concerns about the transparency of methodology used to determine uranium transfer quantities, and expressed legal concerns with some DOE uranium transfers from 2012 through 2013. The Secretary of Energy determines whether transfers of uranium will adversely affect the domestic production uranium industry. In FY2017, Secretary of Energy Rick Perry determined natural uranium hexafluoride transfer of up to 1,200 metric tons of uranium (MTU) per year would not cause adverse material impact on domestic uranium producers.

Explanatory language in the conference report accompanying the Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, 2019 ( P.L. 115-244 , H.Rept. 115-929 ) directs DOE to end the uranium transfers and explains that $60 million above the budget request is appropriated in lieu of anticipated profits from those transfers. The DOE FY2020 budget request decreased funding requests for the Portsmouth cleanup by approximately $52 million, indicating DOE intends to resume uranium transfers in FY2020.

Global Uranium Market and Fuel Supply Chains

The uranium market operates with multiple industries exchanging uranium products and services through separate, nondirect, and interrelated markets. Producers, suppliers, and utilities buy, sell, store, and transfer uranium materials. For example, a contract may be established between a nuclear utility and a uranium producer for a given amount of uranium concentrate production over a certain number of years. The uranium producer generates uranium concentrate, which is shipped to a conversion facility. The utility contracts with a conversion facility to convert uranium concentrate to UF 6 . Finally, the utility may arrange a contract for uranium enrichment services.

Uranium transactions occur through bilateral contractual agreements between buyers, sellers, and traders. Civilian nuclear power utilities purchase uranium through long-term multiyear contracts or through the spot market as a one-time purchase and delivery. For uranium materials delivered in 2018, roughly 84% were purchased through long-term contracts and about 16% through spot market purchases.

In the United States, utilities may simultaneously arrange contracts with multiple uranium producers or suppliers for a given number of years. For example, a U.S. nuclear power utility may decide to engage with a uranium producer in Canada, a uranium conversion facility in the United States, a uranium enrichment facility in Germany, and a uranium fuel fabricator in the United States ( Figure 3 ). That same utility may arrange another contract for uranium concentrate from Australia, uranium conversion in France, uranium enrichment in the Netherlands, and uranium fuel fabrication in the United States. At the same time, the utility may also decide to acquire uranium materials from a secondary supply source or through a trader or broker. Traders or brokers may not produce uranium products or services, but they buy, sell, and store materials to utilities and other suppliers. In this way, nuclear utilities and reactor operators may seek to diversify nuclear fuel sources between primary and secondary suppliers to avoid supply disruptions.

The U.S. International Trade Commission (ITC) categorizes imports and exports by the Harmonized Tariff Schedule (HTS). ITC reports uranium imports relevant to the nuclear fuel cycle in different HTS categories and subcategories (see Table 1 ). For this report, CRS provides data from only the top five importing or exporting countries from 1992 through January 2019. Other countries may have contributed lesser amounts of uranium imports or exports over that time period, but those data were not included in this report.

Analysis of Uranium Supply to U.S. Nuclear Power Reactors

Since the late 1980s, U.S. nuclear utilities and reactor operators have purchased increasingly more foreign-origin uranium for reactor fuel than domestically produced uranium. Historically, the AEC, a predecessor federal agency to DOE and NRC, promoted uranium production through federal procurement contracts between 1947 and 1971. After 1971, uranium mill operators produced uranium concentrate primarily for the production of civilian nuclear energy. In 1987, about half of uranium used in domestic nuclear reactors was foreign origin; by 2018, EIA reported 93% of uranium used in domestic nuclear reactors was foreign origin.

The DOE recognizes the term domestic as physical facilities operating within the United States, regardless of a foreign corporation ownership. Several domestic uranium producers, suppliers, enrichers, and utilities operating in the United States have foreign ownership or are subsidiaries of foreign corporations. On the other hand, DOE does not consider brokers and traders of already milled, converted, or enriched uranium as part of the domestic industry, as they are not associated with physical production of those materials. The term foreign is used to describe any non-U.S. based facility or material origin.

The following sections describe domestic uranium sources and foreign imports associated with the front-end of the nuclear fuel cycle by year and country. Uranium materials sourced from various countries may be associated with that country's natural resources, operational fuel cycle facilities, and trade agreements with the United States. For example, Australia, one of the largest exporters of uranium concentrate to the United States, has the largest reasonably assured uranium resources worldwide, but it does not have a commercial nuclear power plant in operation. On the other hand, some overseas producers may not have the geologic resources to mine and mill uranium concentrate, but they may operate conversion or enrichment operations.

Uranium extraction worldwide has shifted away from conventional (underground or surface mining) to unconventional (ISR) methods. In 2016, ISR facilities produced about half of the annual global uranium concentrate. ISR methods are less capital-intensive operations relative to conventional mining methods, yet the uranium ore must be hosted within a geological formation suitable for extraction by ISR.

Preliminary data for domestic uranium concentrate production in the United States in 2018 totaled approximately 1.5 million pounds, the lowest domestic uranium concentrate production since the early 1950s. Domestic uranium concentrate production outlook remains low for 2019. EIA estimated the first-quarter domestic production of uranium concentrate was 58,000 pounds, approximately four times lower than any reported quarter since 1996.

Uranium ore and concentrates are imported into the United States from countries with considerable uranium production programs. According to the World Nuclear Association, the largest uranium-producing countries in the world in 2017 were, in order of uranium concentrate production: Kazakhstan, Canada, Australia, Namibia, Niger, Russia, Uzbekistan, China, the United States, and Ukraine.

Uranium concentrate imports are presented in Table 2 and Table 3 . As a practical matter, CRS combines "uranium ore and concentrates" ( Table 2 ) and "natural uranium oxide" ( Table 3 ) as similar materials produced from uranium mining and milling. In 2018, the United States imported the largest quantities of uranium concentrate from Canada and Australia at 4.2 million kg (11 million pounds U 3 O 8 (eq)) and 1.1 million kg (2.9 million pounds U 3 O 8 (eq)), respectively.

The United States does not currently have an operational uranium conversion facility to convert uranium concentrate to UF 6 . Consequently, uranium concentrate imported into the United States must be exported to a foreign country capable of conversion and enrichment services or stored in inventories.

The production of UF 6 is the second stage of the front-end of the nuclear fuel cycle. The United States currently has one commercial conversion facility, the Honeywell International, Inc. plant in Metropolis, IL. The facility suspended operations in 2018 due to "a worldwide oversupply of uranium hexafluoride" and is currently being maintained at a "ready-idle" status. With the Honeywell facility on standby, the United States does not have a domestic uranium conversion facility in operation. The Honeywell facility in Metropolis continues to be operated by ConverDyn Corporation as a warehouse and international trading platform for UF 6 and uranium concentrate. According to ConverDyn, 62 million pounds of UF 6 are stored at the facility as of 2018. According to the World Nuclear Association, the majority of commercial uranium conversion capacity is located in Canada, China, France, Russia, and the United States.

Since 1992, the United States' largest import source of UF 6 was from Canada (137 million kg). The next highest country providing UF 6 imports to the United States over that time period was the United Kingdom (5.6 million kg) ( Table 4 ).

The export trade data for UF 6 provide additional insight into the international flow of UF 6 , which is feed material for commercial uranium enrichment. The ITC has two types of export classifications, Domestic Exports and Foreign Exports . These definitions are not the same as the definitions for these terms as interpreted by DOE and described previously.

Domestic exports are "goods that are grown, produced, or manufactured in the United States and commodities of foreign origin that have been changed in the United States, including changes made in a U.S. Foreign Trade Zone, from the form in which they were imported, or which have been enhanced in value by further processing or manufacturing in the United States." ( Table 5 ) Foreign Exports "(re-exports) consist of commodities of foreign origin that have previously been admitted to U.S. Foreign Trade Zones or entered the United States for consumption, including entry into a CBP [U.S. Customs and Border Protection] bonded warehouse, and which, at the time of exportation, are in substantially the same condition as when imported." ( Table 6 )

The incidence of domestic ex ports may demonstrate domestic uranium concentrate that has undergone uranium conversion in the United States prior to export. Another explanation is that the incidence of domestic ex ports may indicate foreign mined and milled uranium concentrate imported into the United States that was converted and exported.

The incidence of foreign ex ports may indicate UF 6 imported into the United States that was reexported for enrichment services in a foreign country. This interpretation is consistent with the comments provided by ConverDyn, which stated that Honeywell operates as a "global trading warehouse." Since 2010, UF 6 foreign exports have totaled roughly 32 million kg to four countries: Russia, Germany, Netherlands, and the United Kingdom.

Historically, the federal government operated gaseous diffusion uranium enrichment facilities at Oak Ridge, TN, Paducah, KY, and Portsmouth, OH, which supplied enriched uranium for defense purposes during World War II and the Cold War. The federal government used uranium enrichment services at these sites to produce enriched uranium for private contracts to commercial nuclear power plants after 1967. As of 2019, these enrichment sites have ceased operations and are undergoing decontamination and decommissioning managed by DOE's Office of Environmental Management. DOE's estimated program life-cycle costs for decontamination and decommissioning collectively for the three sites range from $70.8 billion to $78.3 billion.

As of 2019, the Urenco gas centrifuge uranium enrichment facility near Eunice, NM, is the only operational uranium enrichment facility in the United States. The Urenco facility has the capacity to supply approximately one-third of the annual requirements for U.S. reactors. Several other domestic uranium enrichment facilities began NRC licensing, though no enrichment facilities are proceeding with construction.

According to the World Nuclear Association, the majority of commercial uranium enrichment services are performed in China, France, Germany, the Netherlands, Russia, the United Kingdom, and the United States. Smaller-capacity uranium enrichment plants are located in several other countries. Urenco operates uranium enrichment facilities in the United Kingdom, Germany, and the Netherlands.

According to the ITC trade data, the top five countries exporting enriched UF 6 to the United States in 2018 were the Netherlands (785,046 kg), Germany (591,108 kg), Russia (547,768 kg), and the United Kingdom (461,187 kg) ( Table 7 ).

Between 1993 and 2013, downblended Russian HEU supplied approximately half of the enriched uranium used in U.S. domestic reactors under the Russian HEU agreement, known as the Megatons to Megawatts program. This U.S.-Russian agreement provides for the purchase of 500 MT of downblended HEU from dismantled Russian nuclear weapons and excess stockpiles for commercial nuclear fuel in the United States. After the Megatons to Megawatts program expired in 2013, imports of enriched uranium from Russia decreased by approximately 50% ( Table 7 ). Today, the enriched uranium from Russia imported into the United States comes from mined and milled uranium concentrate, not from downblended uranium from weapons. The enriched uranium which is imported from Russia, or any other country, may have been mined and processed in various other countries, including material exported from the United States.

Three fuel fabrication facilities are located in the United States: (1) Global Nuclear Fuel Americas plant in Wilmington, NC, (2) Westinghouse Columbia Fuel Fabrication Facility in Columbia, SC, and (3) Framatome facility in Richland, WA. Fuel fabrication facilities are located in multiple countries, and may offer various services (conversion, pelletizing, rod/assembly) and capacity of those services.

ITC data separates uranium material by the type and quantity that physically entered or exited the United States. ITC data does not estimate the amount of uranium materials purchased by utilities for a given year. ITC data does not infer the quantities of uranium materials used, stored, or processed by a nuclear utility and reactor operator. ITC data differs from the EIA data reporting, which may combine purchases by country for uranium concentrate, uranium hexafluoride, and enriched uranium as equivalents of U 3 O 8 .

The EIA data indicates the country of origin of uranium purchased by U.S. nuclear utilities and reactor operators. EIA data does not necessarily indicate that those materials were directly imported into the United States as a given uranium material from that country.

Comparing ITC and EIA data for the country of Kazakhstan provides some insight into the flow of uranium materials through the global nuclear fuel cycle. According to the World Nuclear Association, Kazakhstan has been the world's leading producer of uranium concentrate since 2009 and produced 21,700 tons of uranium in 2018.

Between 2013 and 2017, uranium concentrate imports from Kazakhstan into the United States were 18% to 54% of the uranium purchases by U.S. nuclear utilities and reactor operators ( Figure 4 ). The difference between the uranium purchased by utilities and the uranium concentrate imported into the United States may represent some portion of the origin material which was converted, enriched, and/or stockpiled in other countries prior to being imported into the United States, in the same form or as a different uranium material.

For example, a portion of Kazakhstan uranium purchased by U.S. utilities may have been produced as uranium concentrate in Kazakhstan and subsequently transported to conversion facilities in France for the production of UF 6 . After conversion, the UF 6 may have been then transported to an enrichment facility in the Netherlands for the production of enriched UF 6 . Finally, the enriched UF 6 may have been imported into the United States for fuel fabrication and ultimately used in a U.S. nuclear reactor. This comparison of the reported EIA and ITC data with uranium purchases and imports from Kazakhstan illustrates how enriched UF 6 is imported from countries such as Germany, the United Kingdom, and the Netherlands, whereas U.S. nuclear utilities and reactor operators reportedly purchased no uranium originating from those countries. Uranium purchases and imports may vary from year to year.

On January 16, 2018, two U.S. domestic uranium mining companies petitioned the U.S. Department of Commerce (DOC) to investigate whether uranium imports from foreign state-owned enterprises, such as those in Russia, China, and Kazakhstan, pose a threat to national security. The investigation into uranium import restrictions sparked a debate between uranium producers; uranium mine and mill operators; and nuclear utilities, reactor operators, and suppliers. Uranium producers asserted that a heavy reliance on foreign uranium constitutes a national security risk and threatens the viability of domestic uranium production. Conversely, nuclear utilities and reactor operators contended that increased fuel costs from trade restrictions would place additional financial burdens on nuclear utilities, potentially causing the premature shutdown of economically marginal nuclear power plants.

Stakeholders on both sides of the debate generally agreed that the proposed quotas would increase fuel costs for nuclear utilities and increase revenues for domestic uranium mining. For example, a report sponsored by the Nuclear Energy Institute (NEI) concluded that a 25% quota could increase fuel costs by $500 million to $800 million annually and potentially higher in the years immediately following implementation. An economic study funded by the petitioners estimated uranium mining revenues from a 25% quota would increase by $551 million to $690 million per year and would increase fuel costs by $0.41 per megawatt-hour (MWh). Another study estimated that the $0.41 per MWh increase in fuel costs for nuclear generators would translate to approximately $317 million per year.

The uranium Section 232 investigation also raised policy questions about Congress's role under Section 232. Under current federal law, trade actions imposed by the President under Section 232 do not require congressional approval apart from actions related to petroleum imports.

Section 232 InvestigationâUranium Imports

Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. Â§1862) provides the President with the ability to impose restrictions on certain imports based on an affirmative determination by DOC that the product under investigation "is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security." The industry petition called for the President to enact a quota, pursuant to Section 232, on uranium imports such that "25% of the average historical consumption will be reserved for newly produced U.S. uranium." On July 18, 2018, DOC began an investigation into uranium imports under Section 232. The Department of Commerce's Bureau of Industry and Security (BIS) accepted public comments until September 10, 2018.

The statute establishes a process and timelines for a Section 232 investigation, but does not provide a clear definition of "national security," allowing the executive branch to use a broad interpretation, and the potential scope of any investigation can be expansive. DOC submitted a report to the President on April 14, 2019. The report has not been made public.

According to a presidential memorandum released by the Trump Administration on July 12, 2019, DOC determined "uranium is being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States as defined under section 232 of the Act." The President did not concur with DOC findings that "uranium imports threaten to impair the national security of the United States as defined under section 232 of the Act."

However, the President expressed significant concerns regarding national security, calling for a "fuller analysis of national security considerations with respect to the entire nuclear fuel supply chain...." The memorandum established a Nuclear Fuel Working Group, cochaired by the Assistant to the President for National Security Affairs and the Assistant to the President for Economic Policy, which will also include representatives from other executive branch agencies. The working group will "examine the current state of domestic nuclear fuel production to reinvigorate the entire nuclear fuel supply chain," and provide a report to the President within 90 days of the memorandum.

The Department of Commerce conducted a Section 232 investigation for uranium imports in 1988. The investigation was initiated at a time when U.S. utilities imported 37.5% of the actual or projected domestic uranium requirements from foreign sources for two consecutive years. No trade actions were imposed as a result of that investigation.

Concerns of Uranium Producers and Local Communities

Trade restrictions on uranium imports were generally supported by domestic uranium producers, national and state mining associations, and other companies associated with uranium production. Some elected officials, including the U.S. Senators from Wyoming, one of the largest uranium-producing states, supported trade actions on uranium imports. The Section 232 petition asserts that the long-term viability of the domestic uranium production industry is threatened by unfair market practices by foreign state-owned enterprises. Supporters of the petition anticipate trade quotas would provide domestic uranium producers relief by increasing the price of uranium, and subsequently increasing domestic uranium production. According to advocates of this approach, increased uranium prices and production may offer direct and indirect employment opportunities and economic stimulus to local economies.

The Wyoming Mining Association (WMA) offered support to uranium import actions in its comment letter:

WMA believes the petition sets forth a compelling case that the current state of the domestic uranium mining industry is not simply a result of foreign competition legitimately underpricing domestic producers. It now is clear that foreign, state-mandated and state-supported uranium production is thwarting our domestic industry's ability to compete in an oversupplied and underpriced market.

One of the domestic uranium producers who submitted the Section 232 petition to DOC expressed concern with the President's determination to not take actions on uranium imports. An Energy Fuels statement also suggests that the petition "has been very successful." The company further stated, "We are very pleased to have gained the attention and action of the Administration to address the energy and national security issues raised in the petition and Department of Commerce investigation."

Another U.S. uranium producer, Cameco, agreed with the President's determination to not take actions on uranium imports under Section 232. Cameco has uranium assets in the United States, Canada, and Kazakhstan. Cameco operates the largest operational uranium recovery capacity in the United States, the Smith Ranch-Highland ISR operation in Wyoming.

Concerns of Nuclear Utilities and Reactor Operators and Suppliers

Representatives from nuclear utilities and reactor operators, industry trade groups, think tanks, converters, enrichers, and foreign governments opposed the trade actions on uranium imports proposed by the petitioners. Nuclear utilities and reactor operators asserted that quotas on uranium imports may increase fuel costs, causing financially vulnerable nuclear reactors to shut down earlier than currently planned. The Ad Hoc Utilities Group (AHUG), collectively representing U.S. nuclear generators, asserted, "Imports assure the security of nuclear fuel supply and the reliability of the electric grid. Nuclear generators source from a diverse set of suppliers at all stages of the nuclear fuel cycle with the majority of supply coming from the U.S. and our allies in Canada, Australia, and Western Europe."

Operators of U.S. conversion and enrichment facilities in the United States publicly expressed concern with uranium import quotas. Malcolm Critchley, the marketing agent for ConverDyn, stated that quotas "would undoubtedly cause suppliers to divert uranium [from Honeywell].... to other locations outside of the United States if the supplier did not have a known domestic customer at the time of import."

U.S. uranium enrichers shared these concerns. Melissa Mann, the president of Urenco USAâthe only uranium enrichment operation in the United Statesânoted that with the ceased operations at Honeywell and the Department of Energy termination of its barter program, "there is currently no source of natural UF 6 in the United States." Urenco receives deliveries of UF 6 from Cameco's Port Hope facility in Canada and Orano's Comhurex II in France. She cautioned, "Should remedies in the uranium Section 232 investigation be imposed that disrupt deliveries of UF 6 to [New Mexico], operation of the facilityâand the $5 billion investment in the plantâcould be jeopardized," and "the lack of feed material to enrich would also jeopardize delivery of low enriched uranium to fuel fabricators, putting at risk utility reactor reload schedules and reactor operations."

Some utilities have dismissed claims about the dependence on foreign-sourced uranium and vulnerability to supply chain disruptions. For example, Dominion Energy noted that concerns with foreign supply disruptions were exaggerated because "in the past five years, our only delays or interruptions in nuclear fuel component deliveries have been from U.S. based fuel cycle suppliers."

In March 2018, the Trump Administration imposed tariffs on foreign imports of steel and aluminum pursuant to Section 232. This was the first implementation of trade actions under Section 232 since 1986. Some Members of Congress have questioned whether the Administration's use of Section 232 on steel and aluminum imports is an appropriate use of the trade statute and relies upon broad interpretations of the definition of national security. Bills have been introduced in both chambers ( H.R. 1008 and S. 365 ) in the 116 th Congress that would amend Section 232 to provide for congressional disapproval of certain trade actions with the enactment of a disapproval resolution.

The uranium Section 232 investigation was discussed in a September 6, 2018, hearing by the Senate Appropriations Committee, Subcommittee on Commerce, Justice, Science, and Related Agencies. At that hearing, Richard Ashooh, Commerce Assistant Secretary for Export Administration at BIS, suggested that the uranium investigation had prompted the agency to consider "creative ideas" outside of using import restrictions.

On February 5, 2019, the House Committee on Natural Resources requested from the uranium producers that had submitted the petition to the Department of Commerce, "All documents and communications ... relating to the Department of Commerce Section 232 Investigation on uranium."

As a broad policy matter, Congress may consider the federal role in issues associated with the front-end of the nuclear fuel cycle. The uranium materials and service industry delivers fuel for commercial nuclear power reactors, which is largely traded and purchased under private contracts in a global marketplace. Similar to other energy markets, uranium supply is an issue on which Congress may or may not elect to intervene.

As discussed previously, the United States ceased production of HEU for weapons in 1964, due to the determination of sufficient stockpiles. Fuel for nuclear naval propulsion is supplied by government HEU stockpiles, and the production of HEU for naval propulsion ended by 1992. Questions about the sufficiency of the defense uranium stockpile and future uranium requirements for defense and other purposes are beyond the scope of this report.

The financial viability in the short term and long term for domestic uranium producersâuranium miners and millersâin the United States remains uncertain. Domestic uranium production experienced a sharp decline during the early 1980s, and has remained at comparatively low levels over the past 25 years.

Recently, global demand for uranium has been depressed due to a number of factors, including the continued shutdown of most Japanese nuclear power reactors following the Fukushima Daiichi accident. In 2018, domestic uranium concentrate production was 1.5 million pounds, down approximately 40% from 2017, and at the lowest annual production levels since 1950. U.S. uranium producers have dealt with poor market conditions by decreasing production and imposing employment layoffs. Domestic uranium producers have reportedly engaged in purchasing uranium concentrate on the market at lower spot market prices to fill delivery obligations at relatively higher contract prices. States have proposed legislation intended to provide some financial relief for domestic uranium producers.

U.S. nuclear power plants face economic issues and a general uncertainty over their long-term economic viability. Of the 98 operating nuclear reactors, 12 are scheduled to shut down, prior to license expiration, by 2025. The Plant Vogtle nuclear expansion project in Georgia, currently the only new construction of nuclear power reactors in the United States, is reportedly billions of dollars over budget and years behind schedule. A 2018 report by the Union of Concerned Scientists asserts that roughly one-third of nuclear power plants are unprofitable and modest changes in costs may have profound impacts on other nuclear power plants' economic viability.

Some Native American tribes and public interest groups in the United States opposed trade actions on uranium imports due to concerns that uranium import restrictions would promote increased domestic uranium mining and milling operations. These groups suggested the health and environmental issues associated with historical uranium mining and milling have not been adequately addressed. Persistent soil, surface and groundwater contamination associated with historical uranium mining and milling remains a concern for some communities. For example, federal, state, and tribal agencies manage environment impacts associated with historical uranium mining and milling operations that occurred on Navajo Nation lands.

Given environmental impacts associated with historical domestic uranium mining and milling operations, Congress may consider examining potential long-term environmental or public health consequences of expanding domestic uranium production and the adequacy of bonding and long-term financial assurance requirements for current or future uranium production operations undergoing site reclamation and decommissioning.


Issues in the Reauthorization of Amtrak

Summary: Amtrakâofficially the National Railroad Passenger Corporationâhas been the national intercity passenger railroad since 1971, and currently serves over 500 stations on a network approximately 22,000 miles long. In some markets, such as the busy Northeast Corridor (NEC) connecting Washington, New York, and Boston, it has captured a greater share of intercity passengers than domestic airlines. In other, more rural markets, some see it as a vital link to the national transportation system despite low levels of ridership. Though Amtrak is legally a private for-profit corporation, the federal government controls the company's operations. A five-year authorization of federal funding for Amtrak was included in the Fixing America's Surface Transportation (FAST) Act of 2015 ( P.L. 114-94 ), which expires at the end of FY2020.

Summary: Since its inception, Amtrak has depended on annual appropriations from the federal government to cover its capital (infrastructure, vehicles) and operating (train crews, maintenance) costs. Amtrak's financial health has improved in recent years. In 2018, according to the railroad, revenue covered 79% of its expenses, the highest ratio it has ever reported. Amtrak's preferred metric for financial performance, its adjusted operating loss, declined to $168 million, but this figure does not take its capital needs into account. Increased contributions from commuter railroads that use the NEC have played an important role in reducing the need for federal support. Amtrak's ridership continues to increase, as does its relative share of passenger miles traveled, though both remain small on a national scale when compared to road and air traffic.

Summary: Despite these improvements, a large backlog of capital projects remains unfunded, and Amtrak remains under pressure to further reduce its need for operating subsidies. Capacity constraints will make further ridership increases difficult to achieve without capital expenditures for additional equipment and track improvements.

Summary: The Amtrak system is divided into two subsets for funding purposes, the NEC and the National Network (everything else), each facing its own set of challenges. Congress may want to explore opportunities to further differentiate these systems in terms of how they are funded and managed. Comparatively high revenues on the NEC compared to operating costs have prompted occasional proposals to either partially or fully privatize the existing service, while its large capital backlog and lack of a long-term dedicated funding source have raised questions about whether a new NEC-only funding mechanism is needed. The National Network, meanwhile, encompasses both short-distance corridors supported by state governments and long-distance routes that require the largest federal subsidies in the Amtrak system. Amtrak is under pressure to accomplish two goals that at times seem to work against one another: to serve as the national passenger railroad, including through the operation of long-distance routes, and to reduce or eliminate the need for federal subsidies. While Congress has repeatedly taken steps to preserve long-distance passenger trains, both the Trump Administration and Amtrak have voiced support for shifting focus away from long-distance trains and toward serving a larger number of shorter corridors. Any such rebalancing, however, would be contingent on state support that is far from certain.

Summary: Apart from funding, other issues facing Amtrak have been on the congressional agenda for years. On-time performance has seen only sporadic improvement since the enactment of a 2008 law designed to enforce the preferential treatment, codified in statute since the 1970s, of Amtrak trains running on freight tracks. Onboard food and beverage service, long seen by critics as a contributor to financial losses but by supporters as integral to the rail travel experience, has mirrored Amtrak as a whole in improving its financial performance while still falling short of goals set by Congress. Installation of a key safety technology mandated in 2008 is continuing according to federally approved schedules, but Amtrak routes that operate on track owned by freight or commuter railroads face the additional hurdle of demonstrating interoperability with those railroads' safety systems, putting the timeline to full implementation at risk.

Amtrakâlegally the National Railroad Passenger Corporationâwas created by the Rail Passenger Service Act of 1970 and began operating in 1971, taking over intercity passenger service from financially distressed private railroad companies. It originally did not own any rail infrastructure, eventually coming to own some assets cast off by bankrupt private railroads. It is operated as a private company and not a government corporation, but the President appoints the members of its Board of Directors and its primary stockholder is the U.S. Department of Transportation (DOT), with a small proportion of common stock held by other railroad companies. Amtrak currently serves over 500 stations in 46 states and the District of Columbia, running over 300 trains per day on a network approximately 22,000 miles long ( Figure 1 ).

Since 2008, Amtrak services have been grouped into three business lines: (1) the Washington-New York-Boston Northeast Corridor (NEC), (2) short-distance corridors under 750 miles long with service supported by state governments, and (3) long-distance trains serving destinations over 750 miles apart, usually once per day on an overnight schedule. Under the Fixing America's Surface Transportation (FAST) Act of 2015 ( P.L. 114-94 ), the state-supported short-distance and long-distance routes were grouped together into the National Network. Amtrak's Thruway network of over 150 intercity bus routes serves as a feeder service for passenger trips originating or terminating in cities off the rail system.

Over 31 million trips were taken on Amtrak in 2018, a company record. Amtrak system ridership has exceeded 30 million trips every year since 2011, and has increased 26% over the last 15 years, with much of that growth coming on Amtrak's state-supported short-distance corridors ( Figure 2 ). Approximately 48% of all Amtrak trips were taken on state-supported routes in 2018, compared with 38% on the Northeast Corridor and the remaining 14% on long-distance trains. State-supported routes have accounted for the plurality of Amtrak trips among its three business lines every year since 2005. One contributing factor to the growth of state-supported route traffic over that period is that Amtrak and its state partners have added new routes and additional daily trains.

Despite record ridership levels, Amtrak trains are roughly as full as they have been at any point in the past decade (see discussion of load factor below), and Amtrak passengers account for a small fraction of intercity passenger travel volume nationwide. In 2017, the most recent year for which such data are available, Amtrak generated 6.5 billion passenger-miles (one passenger-mile is equal to one passenger traveling one mile) of traffic volume; by comparison, domestic air travel generated 694 billion passenger-miles, over 100 times as many as Amtrak. Highway users generated an estimated 5.5 trillion passenger-miles in 2017, including 365 billion on buses, though this includes trips that are not intercity in nature. However, Amtrak passenger-miles have seen a greater cumulative percent increase since 2004 than highway passenger-miles, and saw a greater cumulative percent increase than domestic air passenger-miles from 2008 to 2015 before being overtaken in 2016 ( Figure 3 ). Though Amtrak ridership has been steady or rising in terms of trips taken, Amtrak passenger-miles have declined somewhat since 2013, suggesting an increase in shorter trips. The NEC is the only market in which Amtrak serves a larger proportion of intercity trips than airlines, with both lagging far behind highway travel. Lack of equipment and track capacity have inhibited Amtrak from increasing service on the NEC.

Amtrak's expenses exceed its revenues each year. In FY2018, Amtrak's revenues totaled $3.2 billion, against expenses of $4.1 billion, for a net loss of $868 million. That loss was covered by federal grants made to Amtrak by DOT (see the discussion of funding issues later in this report). Revenues covered 79% of the railroad's total expenses in FY2018, the highest ratio over the 15 years for which comparable data are available (see Figure 4 and Table 1 ).

Under pressure from Congress and several Administrations, Amtrak has reducedâbut not eliminatedâits reliance on federal subsidies to support its operations. Amtrak had net losses of roughly $900 million in each of FY2017 and FY2018, the first two years in the past 15 in which net losses were less than $1 billion. One important reason for this improvement is a doubling of revenue from commuter railroads using the NEC from pre-2016 to post-2016, due to higher payments required under the cost allocation policy established by Section 212 of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA; Division B of P.L. 110-432 ) and enforceable by the Surface Transportation Board (STB) under Section 11305 of the FAST Act.

By Amtrak's preferred metric, which adjusts the net loss by removing depreciation and certain other expenses, annual operating losses have been reduced to a figure smaller than $250 million in each of the past five fiscal years; this figure was over twice as large in nominal terms in the years prior to 2007 ( Figure 5 ). The effect is more dramatic when taking the effects of inflation into account; in constant 2019 dollars, the figure was four times as large in 2007 as it was in 2018. This metric, dubbed the a djusted o perating r esult , is seen by Amtrak as more closely reflecting the need for federal operating support, but it does not take the railroad's capital investment needs into account.

By another measure, which allocates costs and revenues to each available seat-mile of passenger capacity offered, Amtrak has recovered at least 96% of operating costs every year since 2014, up from below 80% in the preceding years ( Figure 6 ). One contributing factor to this improved financial performance is likely the requirement, contained in PRIIA, that operating losses on short-distance routes located off the NEC be offset by state funds, effective on the first day of FY2014.

One measure of efficiency is the passenger load factor, which measures what percentage of the available seats is being used by passengers. Amtrak's load factor has varied within a fairly narrow band since 2004. Its current load factor, 51%, is near the record load factor Amtrak reported in FY1988. Load factor varies across Amtrak's three business lines, with NEC and Long Distance trains at 58% and 57%, respectively, in FY2018, while state-supported routes lagged at 40%.

Improving load factor is one way of boosting revenue without increasing costs, but this can be difficult if passenger traffic is not distributed evenly along a route. Routes on which one station generates a large share of originating and terminating traffic are likely to have relatively low load factors in some segments but higher load factors in the "peak segment." For example, if a train on the NEC is sold out between Philadelphia and New York, Amtrak may not be able to accommodate passengers who wish to travel between Baltimore and New York, resulting in empty seats between Baltimore and Philadelphia. If Amtrak were to accommodate these riders with additional cars, this could reduce load factor even as it increases ridership.

As discussed above, Amtrak has never generated sufficient revenue to cover its operating and capital expenses. The Administration requests funding for Amtrak each year as part of its DOT budget request. Amtrak also submits a separate appropriation request to Congress each year; typically, that request is larger than the Administration's request. Table 2 shows the difference in the requests submitted for FY2020.

Congress addresses Amtrak's subsidy in the annual Transportation, Housing and Urban Development, and Related Agencies Appropriations Act. For most of Amtrak's existence, Congress has divided Amtrak's grant into two categories, operating and capital grants. The operating grant could be thought of as relating to Amtrak's annual cash loss, and the capital grant as relating to the depreciation of Amtrak's assets, as well as an amount for Amtrak debt repayments.

Congress changed the structure of federal grants to Amtrak in Title XI of the FAST Act. Starting in FY2017, Amtrak's appropriation has been divided between funding for the operationally self-sufficient NEC, which has large capital needs, and the National Network, which has modest capital needs (as the tracks are almost entirely owned and maintained by freight railroads) but runs an operating deficit of several hundred million dollars. The change was intended to increase transparency of the costs of Amtrak's two major lines of business and eliminate cross-subsidization between them; operating profits from the NEC and state access payments for use of the NEC will be reinvested in that corridor, and passenger revenue, state payments, and federal grants for the National Network will be used for that account.

Amtrak's reliance on annual appropriations has made it difficult to fund long-term capital projects. DOT's Inspector General has noted that the lack of long-term funding "has significantly affected Amtrak's ability to maintain safe and reliable infrastructure and equipment, and increased its capital program's annual cost." Amtrak's FY2020 budget request suggests a multiyear appropriation to provide some additional stability without fundamentally altering the mechanism by which Amtrak receives its federal funding.

Most federal funding for highway and transit programs is provided by a special form of budget authority, contract authority, which allows DOT to obligate funds from the Highway Trust Fund in advance of an appropriation. This permits DOT to commit to support highway projects that may take several years to complete. There have been proposals to create a similar trust fund for Amtrak, in order to provide a greater level of financial stability and permit such long-term funding of capital projects. Such efforts have faced objections from some Members of Congress opposed to Amtrak receiving federal funding. There is also a practical challenge to identifying a revenue source for an Amtrak trust fund. The Highway Trust Fund, which receives revenue from taxes on motor fuels and heavy trucks, is not authorized to spend money on intercity rail services; in any event, the revenues flowing into the fund are far below the level required to support the levels of federal highway and transit spending authorized by Congress, necessitating several transfers of money from the general fund since 2008. If a passenger rail trust fund were to be funded solely from a tax on passengers, the cost of Amtrak tickets could rise by several dollars per ticket at current ridership levels, potentially contravening the purpose of the fund by reducing ridership.

Maintaining and Improving the Northeast Corridor

Amtrak has stated that there is a $28.1 billion backlog of state-of-good-repair projects on the NEC, which Amtrak revenue alone is unable to fund, and which does not include capital projects deemed necessary to increase capacity. It seems unlikely that private investors would be prepared to provide that funding in exchange for a share of the operating profits generated by NEC passenger trains. The obstacles facing such an investor would be largely the same as the ones currently facing Amtrak: operating profits are insufficient to cover capital costs, and the ability to increase revenue by running additional trains into Penn Station in New York City, by far the most popular origin and destination point on the NEC, will be limited until and unless major capital improvements not included within the state-of-good-repair backlog, including a new tunnel under the Hudson River, are completed. The fragmented control of NEC infrastructure, some of which is owned by state governments, would persist even if Amtrak's assets in the corridor were operated by some private entity. A provision of the FAST Act required the Federal Railroad Administration (FRA) to solicit proposals to design, build, operate, and maintain high-speed rail systems on federally designated high-speed rail corridors, including the NEC. No such proposal was submitted for the NEC.

Plans to create a separate entity to own and/or operate the NEC, including as part of larger plans to reorganize or privatize the entire passenger rail system, have been proposed but have never been adopted in full. In 2002, the Amtrak Reform Council submitted its recommendations to Congress for a "restructured and rationalized national intercity rail passenger system" as required by the Amtrak Reform and Accountability Act of 1997. Among other measures, the council endorsed organizing NEC infrastructure assets under a separate government corporation that would control the assets and manage rail operations and capital improvements. The council admitted in its recommendations that this new infrastructure company would not be able to fund its own capital needs, and endorsed continued federal funding in addition to funds committed by the states. A similar suggestion, which was known as the Competition for Intercity Passenger Rail in America Act, was proposed in 2011 by the leadership of the House Committee on Transportation and Infrastructure but never introduced.

Some proposals have called for a dedicated funding source, backed by taxes or fees within the region served by the NEC. The thinking behind this is that restructuring of the NEC would be more attractive politically if it were dependent mainly on revenue raised within the region rather than on federal government resources. As the NEC passes through eight states and the District of Columbia, creation of a dedicated regional funding source is likely to require some form of interstate agreement, with each state concerned that its contribution is commensurate with the benefits it expects to receive.

Critics of Amtrak have often questioned the necessity of continuing to operate long-distance trains, which usually require the largest operating subsidies, both in total dollars and in dollars per trip or per passenger-mile. Proponents of passenger rail have contended that these operating losses are distorted by Amtrak accounting practices, pointing to the allocation of fixed costs to individual routes and the differing treatment of state and federal grant funds. Amtrak has responded that its accounting practices, based on a performance tracking system developed by DOT's Volpe Transportation Systems Center in conjunction with the Federal Railroad Administration (FRA) and Amtrak, accurately allocate costs among its various routes. Amtrak points out, for example, that while its California Zephyr between Chicago and Emeryville, CA, has greater revenue per trip than an average Northeast Regional train on the NEC, the long-distance train requires nine times as many employees, twice as much equipment, and more switching operations in rail yards for every trip. Amtrak has proposed shifting its focus from maintaining existing levels of service on all 15 long-distance routes currently in the Amtrak system to shorter corridors that would be supported by the states.

Amtrak is under pressure to accomplish two goals that at times seem to work against one another: to serve as the national passenger railroad, including through the operation of long-distance routes, and to reduce or eliminate the need for federal subsidies. Federal law provides that "Amtrak shall operate a national rail passenger transportation system which ties together existing and emergent regional rail passenger service and other intermodal passenger service." The phrase "national rail passenger transportation system" is defined to include "long-distance routes of more than 750 miles between endpoints operated by Amtrak as of the date of enactment of the Passenger Rail Investment and Improvement Act of 2008." However, Amtrak also has statutory power to discontinue routes, notwithstanding the above provisions.

In its FY2020 budget request, the Trump Administration proposed a reduction in annual appropriations to the National Network, with the expectation that either states would support continued operation of long-distance routes or Amtrak would discontinue them. The Administration proposed to offset this reduction with a $550 million appropriation to a new Restoration and Enhancements discretionary grant program, which would allow states to gradually ramp up to their full contributions, with a federal subsidy decreasing each year over a five-year period.

In its own FY2020 budget request, Amtrak requested an appropriation equal to the full $1.8 billion authorization contained in the FAST Act, but stated some support for changing the way the National Network is funded in the future (emphasis added):

Amtrak appreciates the Administration's focus on expanding intercity passenger rail service to today's many underserved cities and corridors across the nation. We believe that a modernization of the National Network, with the right level of dedicated and enhanced federal funding , would allow Amtrak to serve more passengers efficiently while preserving our ability to maintain appropriate Long Distance routes.

Removing federal support for long-distance service could create a circumstance in which, if one state along the route declined to contribute to its operating costs, Amtrak might be left with little recourse other than to discontinue the route. Proponents of continued long-distance train service point to the large proportion of trips taken on long-distance trains between origins and destinations other than the endpoints, and to the trains' relatively high load factor (57% in FY2018) compared to other Amtrak routes (58% on the NEC, 40% on state-supported routes), an indicator of efficient utilization of passenger space. However, depending on the number of cars in each train, this could conceal an inefficient utilization of engines and engineers, as a short train may require the same crew as a longer one no matter how many passengers are aboard.

Existing state-supported routes could also face service cuts due to a lack of state support. The Chicago-Indianapolis Hoosier State route was created in 1980 to provide service on days when the thrice-weekly Cardinal long-distance train did not operate. When PRIIA Section 209 went into effect at the beginning of FY2014, requiring the state of Indiana to cover all operating losses associated with the route, state political support began to wane, and the route was threatened with discontinuance. Under a different section of PRIIA, the state contracted with a private railroad company to operate the route, but that company withdrew from the agreement before the base contract period had expired, returning responsibility to the state government. The Hoosier State was discontinued on June 30, 2019, after Indiana declined to provide further funding.

Section 210 of PRIIA required Amtrak to generate performance improvement plans for all 15 of its long-distance routes, starting with the 5 worst-performing routes based on 2008 data. These reports contained a number of recommended actions to improve long-distance train performance according to various metrics: the Customer Satisfaction Index (CSI), on-time performance (OTP), and cost recovery (CR). There has been uneven improvement in long-distance train performance in the intervening years. Two routes have higher CSI scores (now referred to as eCSI scores) than they did in 2008, six routes have better on-time performance, and five have improved cost recovery rates. All other scores for these routes have stayed the same or worsened. The extent to which any actions taken as a result of the Section 210 plans either improved route performance or mitigated its decline is unclear.

Access to Freight Rail Infrastructure and On-Time Performance

Freight train interference is one cause of poor on-time performance on Amtrak routes. By law, Amtrak is to be given "preference" over other railroad traffic when using tracks it does not own. In practice this preference has been difficult to enforce, as freight railroads have little incentive to be overly accommodating to Amtrak trains, for which they are reimbursed only the incremental cost of Amtrak's use of their tracks. Sections 207 and 213 of PRIIA directed FRA, Amtrak, and STB to develop minimum on-time performance standards, and gave STB enforcement power over railroads that failed to meet these standards. Final metrics and standards went into effect in 2010, before being suspended in 2012 amid court challenges.

Following a series of court decisions that ultimately upheld Amtrak's role in developing performance standards but altered the role of the STB, FRA and Amtrak are free to reformulate new on-time performance standards. At a June 2019 Senate hearing, Amtrak CEO Richard Anderson said this could be completed in less than 90 days, though he declined to commit to a specific timeline. Anderson compared these standards to similar metrics in use in the commercial aviation industry.

Current law permits the U.S. Department of Justice (DOJ) to enforce Amtrak's statutory track preference. Anderson has noted in communications with lawmakers that DOJ has done so only once in Amtrak's history, against the Southern Pacific railroad in 1979. Amtrak has requested that a similar enforcement power be granted statutorily to Amtrak, going so far as to recommend specific bill language that would allow Amtrak to sue host railroads.

Another option is to make funding available to states to assist them in purchasing tracks used by passenger trains from their freight railroad owners. The state of Michigan pursued this strategy, using roughly $150 million in federal grant funds awarded in 2011 to purchase the 135-mile rail corridor from Kalamazoo to Dearborn on the Chicago-Detroit corridor. At the time of the transaction in 2012, previous owner Norfolk Southern Railway had placed several sections of the corridor under slow orders due to poor infrastructure conditions. After several years of repairs and construction funded in part by additional federal grants beyond those used to purchase the line, Amtrak's on-time performance on the Chicago-Detroit Wolverine service rose from 53% in FY2015 to nearly 70% in FY2016, though it has declined slightly since (and 70% is still below the 80% standard initially set under PRIIA 207).

Using a slightly different ownership structure, the state of North Carolina supports several passenger trains per day between Raleigh and Charlotte on tracks owned by the North Carolina Railroad, a state-owned entity that leases its tracks to Norfolk Southern. Norfolk Southern agreed to increased passenger service on the line in return for extensive public investment in improving and expanding the infrastructure. The number of daily trains offered by the state-supported Piedmont service has increased, and the service has exceeded the 80% on-time performance standard for state-supported routes in five of the past seven years.

Public ownership of rail infrastructure can be beneficial for passenger rail on-time performance because of the lessened incentive to give priority to freight traffic. Where a freight railroad may find it more profitable to delay passenger trains to accommodate freight trains, a public owner might give preference to passenger services instead. However, in situations that involve public-sector purchases of busy freight lines, it is likely that the affected freight railroads would demand protection for their services as a condition in any sale agreements. Freight railroads are less likely to give up control of their busiest main lines than in the case of parallel or secondary lines.

One issue that has hindered congressional efforts to encourage competition in passenger rail service is that freight railroads' statutory obligation to carry passenger trains applies only to trains operated by Amtrak. This may be one reason that states that have initiated state-supported routes have uniformly contracted with Amtrak to be the operator. For other operators to be able to compete with Amtrak on equal footing, legislation may be needed to address their rights to make use of freight railroads' infrastructure.

Amtrak has served food and beverages since it began operating in 1971, continuing the practice of its predecessor companies. As far back as 1981, Congress prohibited Amtrak from providing food and beverage service at a loss, and this prohibition is still in the statutes governing Amtrak:

Amtrak may ... provide food and beverage services on its trains only if revenues from the services each year at least equal the cost of providing the services.

The law does not define what is to be included in the "cost of providing the services." Amtrak has stated that providing food and beverage service is essential to meeting the needs of passengers, especially on long-distance trains, and it has interpreted the law as requiring that revenues cover the costs of food and beverage items and commissary operations but not the labor cost of Amtrak employees providing food service aboard trains. When on-board labor costs are excluded, Amtrak says, the service covers its costs. When labor costs are included, however, the service operates at a significant deficit (see Table 4 ).

Amtrak has taken measures, at Congress's direction, to reduce costs for food and beverage service. In 1999, it shifted from handling food and beverage supplies internally to contracting out such activities. More recently, Amtrak announced it would be discontinuing its traditional dining car service on several long-distance routes, in part to save money. A House proposal in the 112 th Congress would have required FRA to contract out Amtrak's onboard food and beverage service but acknowledged that the service may operate at a loss. Section 11207 of the FAST Act requires Amtrak to develop a plan to eliminate food and beverage service losses, and prohibits federal funds from being used to cover losses starting five years after enactmentâbut also provides that no Amtrak employee shall lose his or her job as a result of any changes made to eliminate losses. Congress provided that Amtrak could eliminate the losses on food and beverage service through "ticket revenue allocation." Although that phrase is not defined in the law, it implies that Amtrak could declare that a portion of the ticket prices paid by certain passengers is dedicated to food and beverage service, as it already does for passengers traveling in first-class accommodations.

Positive Train Control Interoperability Issues

Positive train control (PTC) is an interconnected system of signals and communication devices designed to prevent collisions and derailments by automatically slowing or stopping a train if its engineer fails to do so. The Railway Safety Improvement Act of 2008 (RSIA; Division A of P.L. 110-432 ) required all tracks used by passenger trains to be equipped with PTC by the end of 2015, now effectively extended to December 31, 2020, by subsequent laws and regulations.

All Amtrak-owned or -controlled track had PTC in operation on January 1, 2019, except approximately one mile of slow-speed track in the complex Chicago and Philadelphia terminal areas, and PTC is installed on 85% of other railroads' route miles that Amtrak uses. However, to fully comply with the PTC mandate, PTC-equipped Amtrak trains must be certified interoperable with all PTC systems installed by host railroads, and Amtrak's PTC system must be interoperable with other railroads' PTC-equipped trains that use its tracks. At the end of 2018, Amtrak had achieved interoperability with 2 railroads out of a total of 13 that use its tracks, though this does not necessarily reflect Amtrak's progress achieving interoperability with its host railroads.

The Government Accountability Office has found that of all railroads subject to the statutory mandate, only two commuter railroads have achieved full operation and full interoperability. If Amtrak does not achieve 100% interoperability with its host railroads by the deadline, absent a waiver or subsequent extension (which FRA has stated it will not issue), Amtrak would need to suspend rail service on noncompliant lines or risk enforcement action in the form of financial penalties for each day it operates in violation of the mandate.