MOX SUSPENSION ON THE TABLE IN THE EVENT OF SEQUESTRATION

The Obama Administration is considering suspending the Mixed Oxide Fuel Fabrication Facility under construction at the Savannah River Site in the event that the across-theboard budget cuts known as sequestration are implemented, NW&M Monitor has learned. The cuts, which are set to be implemented in March barring action by Congress, are set to reduce the National Nuclear Security Administration’s budget by 7.3 percent. That adds up toabout $721 million for NNSA’s weapons and nonproliferation programs, based on enacted funding levels. The possibility is forcing the Administration to weigh continuing progress on the MOX facility against other nuclear security goals, NW&M Monitor has learned.

NNSA this week did not elaborate on the potential impacts of sequestration. “We continue to work with OMB to plan for how we accomplish our mission should Congress not act to avoid sequestration,” NNSA spokesman Josh McConaha said in a written response. “By the nature of the process, most of our programs and projects would see some impact if sequestration were to become a reality, but I’m not going to speculate on which would be impacted the most.”

New Baseline Under Development

The MOX Facility is designed to dispose of 34 metric tons of surplus plutonium by converting it into fuel for nuclear reactors, part of a fissile materials disposition agreement established with Russia in 2000. But the project has run into a number of challenges, including the lack of a utility that has dedicated to buying the fuel. While the Tennessee Valley Authority has publicly expressed interest, in recent months utility officials have said a decision on MOX has taken a back seat to other priorities (NW&M Monitor, Vol. 16 No. 38). Costs have also risen for the project since the most recent baseline, developed in 2007, put the price tag at $4.86 billion total with a 2016 startup. Though the NNSA has not yet released the new baseline it is finalizing, the project cost is expected to rise by as much as $2 billion. Contributing factors to the increased costs include hiring and retention issues, a lack of qualified vendors and subcontractors and problems with obtaining specialty components from a long-dormant nuclear industry. MOX contractor Shaw AREVA MOX Services referred a request for comment to NNSA.

The suspension of MOX would not be the first major Department of Energy project to be put off by the Obama Administration after years of work and billions of dollars spent. Last year, the NNSA announced that due to shrinking budgets it planned to defer construction of the Chemistry and Metallurgy Research Replacement-Nuclear Facility slated for Los Alamos National Laboratory in order to instead focus on the Uranium Processing Facility. And in 2010, DOE cancelled the long-awaited Yucca Mountain geologic repository as it was nearing completion, instead deciding to take another look at its nuclear waste policy.

Official: No Immediate Impact on Nuke Security

While emphasizing that he supports the MOX mission, former NNSA Deputy Administrator For Defense Nuclear Nonproliferation Will Tobey said this week that putting MOX on hold when large cuts are imminent would have a number of advantages. “It’s a large program that would entail a fair amount of savings. And it deals with material that isn’t in need of urgent attention in terms of security,” Tobey, a senior fellow at Harvard’s Belfer Center for Science and International Affairs, told NW&M Monitor. “It’s not clear that a decision to delay the program would have an immediate impact on the security of fissile material. Whereas slowing down other programs, like research reactor conversion, would presumably have a direct impact on the security of fissile materials.”

In its Fiscal Year 2013 budget request, the NNSA requested about $921 million for its fissile materials disposition programs, which is largely taken up by the MOX program, out of about $2.46 billion in total for its nonproliferation account. Other nonproliferation programs include Second Line of Defense, which experienced a heft budget cut in the Fiscal Year 2013 budget request, and the Global Threat Reduction Initiative, which has been at the center of the Administration’s commitment to secure vulnerable nuclear materials around the world.

Graham Cites ‘Serious Issues’ With MOX Suspension

The deferral of MOX would lead to stiff opposition to the project’s backers in Congress, however, chief among them Sen. Lindsey Graham (R-S.C.). “Sen. Graham would have serious issues with a decision to suspend MOX,” spokesman Kevin Bishop said in a written response. Rep. Joe Wilson (R-S.C.), whose district includes the Savannah River Site, is also engaged in supporting the project and was circulating a letter among Congressional colleagues backing MOX late last week. “If the Administration decides to suspend the MOX program at the Savannah River Site, our national security here at home could be affected. Not only does this facility provide for a safer America, it also promotes energy independence, two initiatives the Obama Administration claims to support,” Wilson spokeswoman Caroline Delleney said in a written response.

Halt Could Lead to Stiff Fines, Difficult Restart

Halting MOX could lead to hefty penalty payments in an deal reached with the state of South Carolina in which it agreed to accept plutonium shipments from across the DOE weapons complex. Under current law 1 metric ton of MOX fuel must be produced by the end of 2014. Failing that, 1 metric ton of plutonium must be removed from South Carolina. Fines of $1 million per day, and up to $100 million a year, kick in if the production objective is not met by the start of 2014. While that deadline wasextended recently due to delays in the project, it is unclear what the result will be if the project is suspended.

Any suspension of the project would also likely lead to consequences that would make it very difficult to restart the project down the road. Chief among those would be the loss of high-demand nuclear qualified workers. Currently the project employs about 2,300 people, about half of which are construction workers. And while the roof of the facility is expected to be completed in late March, there are still a number of openings in the building that could allow the elements to enter and corrode materials that have been installed. Tobey also noted that total project costs will naturally increase with any kind of delay. “You can expect the baseline for the project will go up if they do delay it,” he said. “It has already been controversial and adding cost to it will only add controversy to it.”

Another consideration would be the potential impacts on the agreement with Russia, which has also committed to dispose of 34 metric tons of its plutonium. But Tobey said that may not be a major obstacle. “I don’t necessarily see it as a significant issue with the Russians as long as they can assure them that the intention is to complete the project,” he said. “I would think that they would be able to go to the Russians and say we’ve made an enormous investment in this plant, we are X percent complete with construction, we fully intend to finish it, but because of this extraordinary budget circumstance it’s going to take a bit longer.”

—Kenneth Fletcher