WASHINGTON -- Apr 08 - USA TODAY

About 40,000 canisters of depleted uranium are spread out in rows at the Paducah (Ky.) Gaseous Diffusion Plant. An additional 20,000 are stored at a closed facility in Piketon, Ohio.

For years, the canisters and their contents have been considered worthless waste. Not anymore.

As worldwide uranium supplies shrink and prices soar, those canisters are getting a new look as a potential moneymaker for the federal government.

In 2000, uranium sold for about $7 per pound. Today, the price is about $73 per pound.

That means the uranium that could be recovered from the waste could be worth about $7.6 billion, according to the Government Accountability Office (GAO).

"Suddenly, this waste nobody wanted has become very valuable," said Rep. Ed Whitfield, R-Ky., in whose congressional district the Paducah plant is located.

Whitfield has introduced legislation directing the Department of Energy to re-enrich the depleted uranium, known as tails, into usable fuel for nuclear reactors.

The work would be done under contract with the United States Enrichment Corp. (USEC), which operates the Paducah plant. The Piketon facility ceased its uranium operations in 2001, making Paducah the only uranium-processing facility in the USA.

Whitfield's bill also would require profits from the sale of the re-enriched uranium be used for environmental cleanup at the Paducah and Piketon facilities.

Turning the depleted uranium into a marketable commodity would remove the burden to taxpayers of storing the material, Whitfield said at a recent hearing of the House Energy and Commerce Committee's oversight and investigations subcommittee. Storage is costing the government $200 million annually.

The re-enrichment work also would extend the life of the Paducah plant beyond its target closing date of 2012, thus helping its workforce.

"This is a win-win-win," Whitfield said at the hearing. "It seems to me the time to act is now."

The Energy Department, however, says some concerns need to be addressed first.

Dennis Spurgeon, assistant secretary for nuclear energy, told the House panel that the Energy Department would require a cost-benefit analysis and environmental assessment before any reprocessing.

The GAO said it doubted that the Energy Department has the legal authority to sell the depleted uranium as is. Spurgeon disputed that finding, saying the department can sell uranium -- and that depleted uranium also qualifies.

In any case, selling the depleted uranium on the open market could mean the material would end up being processed outside the USA, warned Robert Ervin, president of United Steelworkers Local 550, which represents 800 workers in Paducah.

"We need to be promoting a viable and healthy domestic-enrichment industry," Ervin said.

The nuclear industry is interested in the reprocessed uranium, said Marvin Fertel, executive vice president and chief nuclear officer at the Nuclear Energy Institute. Companies representing 61 generating units said they would be interested, or might be interested, in buying the fuel, he said.

Fertel said the government should consider doing two things at the same time: contracting with USEC for reprocessing some of the depleted uranium and auctioning some of it.

Whitfield said he plans to discuss with his colleagues the possibility of changing his bill to permit a combination of auctions and a reprocessing contract with USEC. (c) Copyright 2008 USA TODAY, a division of Gannett Co. Inc.