Critics fear $7 billion SRS boondoggle

Building costs soar at nuclear fuel conversion plant near Aiken

sfretwell@thestate.comJanuary 27, 2013 

Savannah River Site

US DEPARTMENT OF ENERGY

  • What is MOX? “Mixed oxide” is made by blending weapons-grade plutonium with uranium to make fuel for atomic power plants. About 5 percent of the MOX fuel is made up of plutonium. It has rarely been used in the U.S. but is regularly relied on in some European power plants, particularly in France. Why it’s important The U.S. wants to turn 34 metric tons of plutonium no longer needed for nuclear bombs into MOX fuel for use in commercial power plants. The effort is part of an international nuclear non-proliferation agreement with Russia. Critics say plutonium-blended MOX is dangerous and should not be used in commercial power plants. Supporters say current technology is so sophisticated it would reduce any danger.

Construction costs have skyrocketed by as much as $2 billion at the Savannah River Site’s most ambitious project, a plutonium fuel factory that is years from completion and still in need of customers after more than a decade of planning, records show.

The mixed-oxide fuel factory will turn Cold War-era weapons-grade plutonium into material that can be used in nuclear power plants to make electricity. The facility, the only one of its kind in the U.S. and a cornerstone of an international nuclear arms agreement with Russia, is currently projected to cost $4.8 billion.

But the price tag could rise to nearly $7 billion when the federal government provides new cost estimates, according to a recent letter to the U.S. Department of Energy and those who track issues concerning the SRS complex near Aiken. The new cost estimates are expected this year.

An energy department report published last month shows that the mixed oxide fuel factory is in danger of falling behind schedule and costing more than anticipated. The DOE’s Project Dashboard report gave the mixed-oxide factory complex a red rating, the most serious of three categories on the progress of agency construction projects.

Officials with the energy department referred questions to the National Nuclear Security Administration, a DOE division that is overseeing the project.

NNSA officials either declined comment or did not return telephone calls when asked about the costs and progress.

The security administration also refused a request by The State newspaper to tour the project site last week. The newspaper rarely has been turned down for visits to the 310-square-mile Savannah River Site, the federal nuclear weapons complex that is home to the mixed-oxide fuel plant. The fuel-making process is one of SRS’s main new missions, now that nuclear weapons are no longer the site’s focus.

It was not clear why the DOE and the security administration were hesitant to discuss the matter, but The State learned Friday that federal auditors have been at the Savannah River Site to look at the mixed-oxide fuel complex. Staff with the Government Accountability Office visited SRS Jan. 15-17, the GAO confirmed. The visit was part of an “ongoing assessment” of the mixed-oxide fuel plant, a GAO spokesman said.

Meanwhile, federal officials are scrambling to find a utility that will use the mixed-oxide fuel, commonly called MOX. The project’s sole customer, Duke Energy, pulled out of the project in 2009. The Tennessee Valley Authority has expressed interest, but the federally owned company hasn’t decided whether to burn MOX fuel at its atomic energy plants in Tennessee and Alabama.

“The MOX program may be both wasting taxpayer dollars and ultimately failing to reduce our stores of surplus weapons grade plutonium,” U.S. Rep. Ed Markey, D-Mass., said in a Jan. 14 letter of concern to U.S. Energy Secretary Steven Chu.

Markey, a long-time critic of MOX, asked the Department of Energy to provide updated cost estimates and a new timetable for completing the fuel factory. Project managers have said the 600,000-square-foot plant will be producing fuel by 2018.

“Even more troubling than these cost overruns are reports that NNSA lacks customers for the MOX product that is costing so much to produce,” Markey’s letter said.

U.S. Sen. Lindsey Graham, a South Carolina Republican and one of the MOX project’s biggest boosters, is aware of the cost issues and “has repeatedly emphasized to DOE and the contractors, that with the attention this project gets, it needs to be run as the most efficient, well managed program in the government,” according to an email Friday from his communications director, Kevin Bishop.

Bishop said Markey’s questions are coming from “the most anti-nuclear member of the House.” The MOX factory is important for the U.S. to comply with terms of its nuclear non-proliferation agreement with Russia, Bishop said.

Getting rid of atomic weapons

Both the U.S. and Russia have agreed to make 34 tons of surplus, weapons-grade plutonium unusable for nuclear bombs as part of the accord first discussed in the 1990s.

The Department of Energy chose the MOX plant to comply with terms of the agreement. President George W. Bush committed $3.8 billion toward the MOX plant in 2002 and construction began in 2007.

America’s excess plutonium, a key ingredient in nuclear bombs, will go toward the creation of mixed-oxide fuel and will no longer be of use for atomic bombs, according to plans.

“The public will benefit because 34 metric tons of weapons-grade plutonium will be used to power their homes instead of used as nuclear warheads,” Graham’s office said in an email Friday to The State. “It is the ultimate turning swords into plow shares.”

Graham and supporters of the MOX plant note that it will provide jobs and a new mission to SRS. About 1,000 people are expected to be employed at the plant, a contractor told South Carolina officials last month. The Savannah River Site now employs 10,000 to 12,000 people, but that number is down sharply from when SRS was at the peak of Cold War weapons production.

Mixed-oxide fuel is regularly burned in European nuclear power plants, but not in the U.S. It is controversial in America because plutonium is deadly and takes centuries to decay. Uranium fuel is used in U.S. power plants. Uranium fuel has its own hazards but is not considered by critics to be as dangerous.

Rising costs and questions about the time it is taking to finish the MOX project aren’t unique at SRS. The Department of Energy also is grappling with a multi-million dollar increase in the price of another SRS plant that will be used to neutralize high-level atomic waste now stored in more than 40 huge tanks at the site.

Some critics of the MOX plant say the U.S. should have chosen to mix the excess plutonium with nuclear waste and turn it into glass – which is considered safer to store –rather than using plutonium for fuel in commercial reactors.

Sara Barczak, who tracks nuclear issues for the Southern Alliance for Clean Energy, said costs and future use of MOX fuel verify “some fairly serious concerns with the mixed oxide fuel program.”

Tom Clements, a longtime anti-nuclear activist with the Alliance for Nuclear Accountability, was more blunt in his assessment. He said today’s rising costs reflect only current conditions. But the site has a history of cost questions, Clements said. Records that Clements said he has reviewed show the MOX plant, at one point in the past, was estimated to cost about $1.8 billion. Now, the project could cost as much as $7 billion, he said, referring to Markey’s letter.

“If you look at spending on the MOX plant, you’d think we are rolling in dough and have no budget problems whatsoever,” Clements said. “Nobody is minding the store on this.”

Markey’s letter to Chu, citing a report in the Nuclear Weapons and Materials Monitor publication, raised concerns about the eventual cost of the project. The Monitor, a Washington, D.C., publication that tracks nuclear weapons materials issues, said the cost could be as much as $2 billion more than now projected.

But congressional budget writers also expressed concern last year about both the construction costs and the annual operating costs. A Senate budget committee said the estimated annual operating costs for the MOX project have risen 200 percent in two years. The current estimated annual operating costs are about $500 million, the Senate committee said.

A House report reviewed by The State newspaper said the MOX plant could be up to $900 million more expensive than estimated and appears to be in jeopardy of overrunning its “projected completion date by months, if not years.”

The plant is to be completed by 2016 and producing its first batch of fuel by 2018, MOX contractors said last month.

“Construction continues to slip behind schedule due to unanticipated complexity of the work, poor contractor performance, delays in procurements and the inclusion of additional work scope,” the U.S. House budget report said. “The (DOE) is now reporting internally that the total project costs could be understated by as much as $600 million to $900 million.”

Asking why

Why costs have risen isn’t completely known.

But those familiar with the project say it’s because of the difficulties of finding qualified subcontractors and retaining skilled workers, as well as the rising expense of nuclear materials.

Shaw AREVA MOX Services, the company managing the project for the government, declined to discuss the cost issues when contacted by The State. But the company’s chief executive was optimistic during a presentation to the S.C. Governor’s Nuclear Advisory Council last month in Columbia.

Kelly Trice, president of Shaw AREVA MOX Services, told the council he expects the first eight fuel assemblies to be produced in 2018. He said his company has heard from several utilities interested in using MOX fuel. And he noted that the Tennessee Valley Authority has signed an agreement expressing interest in using MOX.

Shaw AREVA officials say the MOX fuel could be offered at a discount to utilities.

Barczak, however, questioned whether the Tennessee Valley Authority would buy MOX fuel. The TVA is awaiting the results of a final environmental impact statement this spring to determine whether to buy MOX. The environmental study would weigh the risks of using MOX fuel at the company’s Browns Ferry and Sequoyah atomic plants, both of which are aging.

“Do you really want to mess around with using an experimental fuel in an aged set of reactors?” she asked.

Reach Fretwell at (803) 771-8537.

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