By Kenny Fletcher and Todd Jacobson
NS&D Monitor
Feb. 21, 2014
Signaling a potential major change in the Obama Administration’s surplus plutonium disposition strategy, the National Nuclear Security Administration dispatched a consultant to the Savannah River Site this week to examine options for terminating Shaw AREVA MOX Services’ contract for construction of the MOX plant at the site, either as part of a shutdown of the project or as part of a new contracting strategy, NS&D Monitor has learned. The move comes as contract talks continue between the contractor, the Department of Energy and members of South Carolina’s Congressional delegation. At the same time, DOE is expected to soon announce a path forward for plutonium disposition after assessing possible alternatives to MOX.
The consultant sent to MOX this week is retired DOE official David Darugh, who notably was chief counsel during the shutdown of the Superconducting Supercollider Project in Texas, which was cancelled by Congress in the 1990s. Darugh went on to serve as chief counsel at DOE’s Savannah River Operations Office until retiring in 2002, according to his LinkedIn profile, and currently runs an inn in northern Georgia. When reached for comment this week, Darugh said he was “not permitted to talk about the MOX project.” When asked if he was working on MOX, he declined to comment. Contractor Shaw AREVA MOX Services referred request for comment to NNSA, which declined to comment on the issue this week.
The MOX plant under construction is designed to convert 34 metric tons of surplus plutonium into fuel for nuclear reactors as part of an agreement with Russia. However, the project has experienced significant cost increases—the latest estimate, from late 2012, put construction costs at $7.7 billion, about $3 billion higher than previous estimates. Last spring DOE announced it would slow work on the project and dispatched a team to examine alternatives to building the plant while still fulfilling commitments to Russia. That assessment has largely wrapped up, and an announcement on a path forward for the project is expected in conjunction with the release of the President’s Fiscal Year 2015 budget request next month.
Reports of $30 Billion Lifecycle Cost
Meanwhile, longtime MOX supporter Sen. Lindsey Graham (R-S.C.) and Sen. Tim Scott (R-S.C.) have stepped up in defense of the project. Recently Graham has become involved in contract talks between DOE and MOX Services. However, DOE’s insistence on a fixed-price contract became a sticking point in discussions in recent months (NS&D Monitor, Vol. 18 No. 2). Last week Graham, Scott and newly minted Senate Energy and Natural Resources Chair Mary Landrieu (D-La.) met with DOE Secretary Ernest Moniz and DOE Senior Advisor John MacWilliams, who led the DOE review of alternatives to the MOX plant. This week Hill staff again met with DOE and contractor officials on the project.
The news of a potential termination plan for the MOX project comes amidst reports of a new estimate for total lifecycle cost for the MOX project that could approach $30 billion. However, the NNSA released a draft $24 billion lifecycle cost estimate last spring, according to a Government Accountability Office report released this week (see related story). That estimate would include costs such as commissioning, operation and operations of a waste handling facility, in addition to remaining construction costs. “We have to find productive ways to drive that cost down from $30 billion,” Graham told the Aiken Standard late last week. “The contractor’s performance has been excellent, so we need to find a way to share costs and drive that number down.”
Rep. Wilson: Termination Would Be ‘Strictly Political’
Talk of a termination plan for MOX has also sparked outrage from ardent MOX supporter Rep. Joe Wilson (R-S.C.), whose district includes Savannah River. “Any decision by the Administration to stall or terminate MOX is reckless and strictly political. By taking either of these measures, the American taxpayers will incur billions in cleanup costs, key nonproliferation objectives will be derailed, and weapons grade plutonium will be stranded with no path forward,” Wilson said in a statement. “My colleagues and I in the United States Congress are determined to fight back against this possible decision. In the coming weeks, I plan to launch a campaign against any attack by the Administration to help secure the future of this project. The President has chosen to play politics with our nation’s nuclear nonproliferation strategy and this will not be tolerated.”
MOX Shutdown More Expensive Than Previous Efforts?
While the NNSA is expected to take a look at potential termination of the MOX project, such a move would likely be much more complex than the shutdown of the Super Conducting Super Collider, one industry observer told NS&D Monitor. The plant is over 60 percent complete and is constructed of thick concrete and rebar and is already equipped with with specialized equipment. “MOX isn’t just a hole in the ground like the SCSC – it will be a lot more complicated and expensive to stop the MOX program and put the building into cold storage,” the observer said.
