Report Ballooning MOX Costs to $47.5 Billion Criticized by Project Supporters
Kenneth Fletcher
NS&D Monitor
5/15/2015
While a highly scrutinized report on surplus plutonium disposition options released this week found that downblending the material for disposal would cost a fraction of turning it into mixed oxide (MOX) fuel, it details hurdles remaining for both approaches. The latest report on plutonium disposition options by Aerospace Corporation, a research and development and advisory firm specializing in national security space programs, came after Congress directed the National Nuclear Security Administration to commission a report examining plutonium disposition options. The total lifecycle cost for the MOX option stands at $47.5 billion if the project is funded at $500 million per year, according to the report’s findings, which have been challenged by MOX supporters who say it should be far lower. If the project is funded at $375 million per year, close to current levels, the total cost jumps to about $110 billion and the completion date stretches 100 years into the future to 2115.Total cost for downblending the plutonium for disposal would cost about $17.2 billion, the report states.
The report comes during the Obama Administration’s continued push to examine options for completing construction of the MOX plant at the Savannah River Site, designed to turn plutonium into fuel for commercial nuclear reactors. In early 2014, the NNSA moved to suspend work on the facility, which is needed to dispose of 34 metric tons of surplus plutonium as required under an agreement with Russia. The Administration cited large cost increases at the project, with a spring 2014 NNSA cost estimate placing the lifecycle cost of the facility at a total of $25 billion, including the cost to complete construction of the facility as well as related operations and eventual shutdown costs over the life of the project.
Contractor: About $3.3 Billion Needed to Complete Construction
About $4.5 billion has already been spent on building the plant, which is about 67 percent complete, according to contractor CB&I AREVA MOX Services, which is disputing the results of the Aerospace report. Contractor estimates put the cost to complete construction at $3.3 billion over five-to-nine years, with another $8 billion needed to operate it over 20 years. The NNSA this week did not respond to request for comment on the report.
Report Outlines Hurdles for Downblending
The downblending option would involve processing the plutonium at Savannah River or Los Alamos National Laboratory, mixing it with an inert material, and then disposing of it at an underground repository. The NNSA’s previous study pointed to the Waste Isolation Pilot Plant as a likely disposal site, but that facility remains shut down following a radiological release last year. The Aerospace report notes uncertainties with that facility, including that disposal at WIPP would require regulatory actions and amendment of the WIPP Land Withdrawal Act. “Resistance to facility expansion and additional storage capability is possible, and the resultant cost and schedule impacts are unknown at this time,” the report states. It adds later: “In the absence of WIPP, another facility would need to be constructed and certified for use, which would add significant time and cost to the Downblend Option.”
Another significant hurdle would be a required renegotiation of the Plutonium Management Disposition Agreement with Russia, which specifies a MOX approach for both countries. While Russia has changed its approach to irradiating the MOX fuel in fast reactors, “fundamentally the Russian approach is still a reactor-based one,” the Aerospace report states. “Russia may be reluctant to accept a disposition approach that is entirely reliant on geologic emplacement for the entire 34 MT.”
MOX Still Faces Design Work, Utility Commitment
For the MOX option, the report states that design work is still underway in several areas such as software and instrumentation and control systems. “The fact that design work is still incomplete or on-going suggests potential risk, particularly with integration of systems,” the report says. “The contractor indicated that the majority of related equipment has already been purchased and is currently in storage, which will help with limiting costs related to escalation. However, there is a flip side to this concept in that there is potential cost risk with expired warranties if this equipment is found to be malfunctioning during functional/operational testing and replacements are required. There is also potential for added costs related to obsolescence of equipment.”
The report also notes that there is no firm commitment yet from a U.S. utility to use the MOX fuel that would be produced by the facility. “Although the lack of a formal commitment by any utilities to participate in this program could be simply attributed to the timeline for which MOX fuel is expected to be available, there is some concern that fewer than expected utilities, or even no utility, will commit to using MOX fuel in the future,” the report states. “Fewer than expected utilities would result in a longer operations time to dispose of all 34 MT, which could result in drawing out the MOX Fuel program costs if production rates need to be adjusted to account for the fewer participants.” Additionally, if in the end no utility purchases the MOX fuel, “a significant amount of resource may be required to convert the unspent MOX fuel into a form for disposition,” the report states.
Lawmakers Question Study’s Results
The Administration’s move last year to shut down the MOX project led to opposition from lawmakers, leading to language in the Fiscal Year 2015 spending bill directing the NNSA to commission the Aerospace study. But that study came under significant fire from some lawmakers after details of the report emerged last month. House appropriators said the study does not provide a “full accounting” of the life cycle cost of downblending and disposal at the Waste Isolation Pilot Plant, according to a version of the Fiscal Year 2016 Energy and Water Appropriations Act completed last month. “For instance, the Department’s analysis does not account for the costs of operating and emplacing waste in WIPP for another twenty years beyond its current closure date of 2030,” the language added to the report accompanying the bill said.
South Carolina Sens. Lindsey Graham (R) and Tim Scott (R) and Rep. Joe Wilson (R) said they found it “difficult to understand” how it would cost so much to complete the project when it’s already largely built. “MOX will serve as our country’s means by which to honor a nuclear nonproliferation agreement with the Russian Federation. At a time when tensions are high between our two nations, we cannot afford to walk away from our side of the Agreement,” they said in a joint statement last month.
Contractor ‘Vigorously Disagrees’ With Report
Contractor MOX Services “vigorously” disagrees with the report’s findings, Bryan Wilkes, a spokesman for CB&I Project Services Group, said last month in a statement. “At this point, it seems like someone is just throwing darts at a wall with numbers on it,” Wilkes said. Wilkes also noted that negotiations last year on a new contract for the project would have shifted much of the risk in building the facility to the contractor. Those negotiations broke down and a new contract has not been completed. “The last offer a team of senior corporate leaders made to the Department of Energy and NNSA was never accepted or replied to, even after repeated attempts,” Wilkes said. “If it had been accepted, the work would have been completed with greater risk on the contractor and at a fraction of the cost of what the new numbers allegedly say.”
