The federal government is mishandling the MOX project through improper cost evaluations and ongoing attempts to abandon construction of the plutonium-conversion facility, according to a group that advises the governor of South Carolina on nuclear issues.
The South Carolina Nuclear Advisory Council (SCNAC) issued its report this month following a site visit to the MOX plant at DOE’s Savannah River Site near the city of Aiken. The panel said the Department of Energy, its semiautonomous National Nuclear Security Administration (NNSA), and MOX contractor CB&I AREVA MOX Services must identify “a method for clearly establishing the actual projected cost and schedule of the MOX project that is free of influence and special interests.” Doing so, it said, “is the only path to establishing the facts upon which sound public policy decisions can be made.”
The report came after three members of the nine-person SCNAC took an Aug. 29 tour of the Mixed Oxide Fuel Fabrication Facility (MFFF) – an unfinished plant that would convert 34 metric tons of nuclear weapon-usable plutonium into commercial nuclear fuel. The project would meet the U.S. commitment under the terms of a 2000 agreement with Russia that requires each nation to dispose of the same amount of plutonium.
The Energy Department broke ground on the MFFF in 2007. The facility is still under construction, and has endured cost increases and missed timetables DOE has attributed to mismanagement and unforeseen issues in a first-of-its-kind program in the United States. The entire MOX project, which includes MFFF construction, plutonium processing, and other operations, was originally estimated to cost $17 billion. The Energy Department has spent $5 billion to date and estimates it will cost another $46 billion to finish the project, with a projected completion year of 2044 – two decades after the original forecast of around 2024.
But the SCNAC disputed those estimates based on the inflation figure the NNSA is using. The agency in 2012 mandated a 4 percent inflation rate each year when making cost projections for the MOX project. By comparison, the MOX contractor uses a 2.3 percent inflation rate in its estimates. The SCNAC wrote that using a 4 percent inflation rate, combined with a projected fixed amount of $350 million in annual funding, is throwing off the actual life-cycle cost of the project.
“Each year, 4% of the $350 million in fixed funding would be consumed by inflation,” the council wrote. “The loss of funding to the 4% accounting practice means there is less money to perform work. That in turn pushes out the schedule and makes the impact of the 4% inflation rate even more significant as each year passes.”
An NNSA spokesperson responded via email that the inflation rate was chosen based on 40 years of historical cost information in the construction industry. “This was verified against two other sources, the Turner Cost Index and Construction Analytics Index, whose 20 year average is in this range,” the spokesperson wrote.
Another primary issue raised by the council is the federal government’s insistence on abandoning MOX in lieu of downblending – a method that would dilute the plutonium at SRS and permanently store the processed material at an off-site repository such as the Waste Isolation Pilot Plant in New Mexico.
Under both the Obama and Trump administrations, the Energy Department has said downblending would cost $17 billion and take less time. But the SCNAC believes switching methods would impact work already done, and would cost more than the DOE projects. The council added that downblending would come with a host of uncertainties, including scheduling and unforeseen costs.
Sticking to the agency’s position of recent years, the NNSA spokesperson wrote: “We have a proven method called Dilute and Dispose that is less expensive, has far lower risks, and can be implemented decades sooner than the MOX approach.”
The council wrapped up its report by recommending that DOE abandon attempts to switch methods, and keep funding MOX. The group also recommended that all of the appropriations go toward construction. Finally, the council is requesting a nonbiased assessment of how much the project will cost to complete.
“Require a peer group review for accuracy, completeness and inclusion of all relevant costs. Report the results to Congress for consideration during the FY19 budget deliberations,” it stated.
The council sent a letter to South Carolina Gov. Henry McMaster, detailing its observations and concerns. McMaster’s office was contacted on the issue, but did not respond. The recommendations have also been given to DOE, but it is unclear how much weight they actually hold, or how much stock the department will put into them.
