CBO analysis of S. 1790 re pits compared to AoA, EA, and FY20 budget request

September 3, 2019

Dear colleagues --

In case you need this quickly --

CBO's Aug. 23, 2019 estimates, based on NNSA's, are grossly comparable to prior estimates, toward the high end for SRS and the low end at LANL. See below.

CBO's estimate of LANL program costs FY20-24 looks low to me as noted. As previously written, LANL plans to hire 1,400 more people, net of retirements, at TA-55. That is much more than previously estimated and will cost, in itself, roughly $0.3 B/year.

CBO's estimate of zero capital costs for pits in FY25-30 is ridiculous.

Here's the kicker. The LANL site planning process is capturing and expressing what appear to be billions of dollars in additional required capital costs in the 2020-2030 period, both within DOE and external to it (e.g. in the proposed new ~ 35 miles of highway and bridge, which on the back my envelope look to cost roughly $400 M if all goes "well"). The bridge would compete for the honor of being the highest bridge in the U.S. and would be quite long as well.

The highway is needed because there isn't enough housing available in Los Alamos County, which has little buildable area, and no matter what is done about that it still will be too expensive for craft and service workers to live there. In addition LANL believes it must tap the Albuquerque labor market more effectively to stabilize its workforce. This is their solution.

Basically, the industrial pit mission can't be done at LANL without a lot of other LANL and non-LANL improvements that don't have "for pits" written in bold on them but are nonetheless necessary for that industrial mission.

I don't think Congress understands that all this will cost.

Best,

Greg

PS: See:

• "US$13 billion plutonium construction plan" (International Construction, KHL, 2 Sep 2019), referring to LANL alone
  
• View of canyon and one of four proposed bridge alternatives, from a 1990 draft environmental impact statement. This alternative would be the highest bridge in the U.S. The other possibilities are slightly lower but longer, with a second bridge crossing a second deep canyon east of the Rio Grande.

https://www.cbo.gov/system/files/2019-08/s1790.pdf

pp. 9-10

Plutonium Pit Production. Section 8102 would require the National Nuclear Security Administration (NNSA), the nuclear weapons arm of the Department of Energy, to produce at least 80 plutonium pits each year by 2030. Plutonium pits are components of nuclear missiles and bombs that are involved in the detonation of those weapons. Currently, NNSA produces three or four plutonium pits annually at the Los Alamos National Laboratory in New Mexico [actually, LANL hasn't produced any War Reserve pits since 2011] and has the capacity to increase that rate to 10 pits. To achieve the goal of producing 80 pits each year, the agency plans to manufacture at two sites. NNSA plans to increase production at the Los Alamos facility to 30 pits each year by 2026. It also plans to modify a plutonium disposal plant at the Savannah River site in South Carolina to produce another 50 pits annually by 2030. On the basis of information from NNSA, CBO estimates that it would cost $5.7 billion over the 2020-2024 period to increase production to 80 plutonium pits each year at two sites—an increase of about $5 billion over the cost of current production. Most of that increase would be spent to upgrade the two facilities.

CBO estimates that onetime costs for upgrading both facilities would total $4.3 billion over the 2020-2024 period and $6.8 billion in total. On the basis of information from NNSA, CBO estimates that upgrading the Los Alamos facility to meet the goal of producing 30 pits annually would cost $2.3 billion. The upgrades would include installing additional equipment to produce pits, training and qualifying new personnel, and implementing other measures needed to increase production to 30 pits annually. In addition, the agency would need to improve the Savannah River site, which it estimates would cost $2 billion over the 2020-2024 period and $4.5 billion in total.

Currently, NNSA spends about $130 million annually to produce plutonium pits at the Los Alamos facility. On the basis of information provided by the agency, CBO expects that the agency would increase the production rate to about 20 plutonium pits in 2024 [that would be one year earlier than required by law and current policy, which NNSA says in testimony will be difficult to meet]. CBO estimates that it would cost about $0.6 billion over the 2020-2024 period for the additional people and materials needed to reach that production level [NNSA estimated $1 B]. CBO expects that the Savannah River site would start producing plutonium pits after 2024 [that is two years faster than NNSA's fastest estimate of earlier this year, which in turn is faster than predicted in 2018 (Parsons), 2017 (NNSA), or 2019 (IDA)]. In 2029, when CBO anticipates that directed rate of production would be reached [despite NNSA (2017) and IDA (2019) saying it would be nearly impossible to do by 2030], it would cost $1.2 billion annually to operate both facilities and produce 80 pits each year, CBO estimates.

Compare to FY2020 Budget Request for Pu Sustainment, FY2020-2024: $5.6751 B. This agrees with CBO above.

Capital cost comparison:

* The AoA assumed "$2 B" (one significant digit) plus "$1 B" in program costs. The Parsons EA did not mention a figure for the ≥30 ppy capability at LANL.