For immediate release April 28, 2021

NNSA announces huge cost increase for mysterious LANL plutonium warhead project

Project schedule extends well past legal deadline

NNSA's current public plan, as far as is known, is unsupported by its own studies & external reviewers

So what has NNSA actually approved? NNSA isn't saying.

Contact: Greg Mello, 505-577-8563 cell
Permalink * Prior press releases

Albuquerque, NM -- Today the National Nuclear Security Administration (NNSA) announced it had approved "Critical Decision One" (CD-1) for its "Los Alamos Plutonium Pit Production Project" (LAP4).

Plutonium "pits" are the cores of the first explosive stage in all U.S. nuclear warheads. With appurtenant explosives and triggering mechanisms, pits become atomic (fission) bombs.

CD-1 ("Approve Alternative Selection and Cost Range") is an early milestone in the development of any Department of Energy (DOE) line-item capital investment. (See footnote for special law applying in this case.)

NNSA's press release states:

CD-1 approval marks the completion of the project definition phase and the conceptual design as part of DOE’s Order 413.3B process for the acquisition of capital assets. NNSA identified its recommended approach to produce at least 30 plutonium pits per year to meet national security needs.

The CD-1 cost estimate for LAP4 is $2.7-$3.9 billion, with an overall project completion range of 2027-2028. Critical equipment is scheduled to be installed in time to achieve the 30 pits per year production capacity in 2026. The CD-1 cost estimate and project completion date ranges are preliminary estimates that will be refined as the project conceptual design is matured to the 90% design level required to achieve CD-2 (approval of the performance baseline). Consistent with industry best practices and DOE policy, NNSA will set the performance cost and schedule baseline at CD-2, which is expected in 2023.

NNSA leadership and LANL will continue to review this project to improve the fidelity of the current price estimate and schedule.

NNSA does not indicate what its "recommended approach" is at Los Alamos. Since late 2018, pit production plans have been required by Congress. With this decision there is now a formally-approved plan for pit production at Los Alamos National Laboratory (LANL), though it is not public. No comparable announcement concerning CD-1 for the Savannah River Plutonium Processing Facility (SRPPF) has yet been released, though it has been expected this month.

The preliminary cost range NNSA cites for LAP4 is $2.7-$3.9 billion (B; median $3.3 B).

Last February, NNSA's Fiscal Year (FY) 2021 Congressional Budget Request (FY21 CBR) estimated that LAP4 would require $1.75 B through FY25 (pp. 102, 106, & 193-198), by which year project expenditures were to be winding down (see slide 23 here for a more readable summary). No overall project cost estimate was provided last year.

That said, today's estimate is much greater than last year's implied total of close to $2 B. The higher end of today's preliminary cost range -- usually a better, but still usually low, predictor of the final cost -- is roughly double last year's implied cost, and an increase of about $2 B.

LAP4 does not include the majority of the costs necessary to prepare LANL to produce pits. In the FY21 CBR, NNSA predicted $4.19 B in operational costs over FY19-25 for "Plutonium Modernization," in addition to LAP4 costs over this period (pp. 102-106).

In addition, NNSA is spending billions on pit production preparations at LANL under other budget lines. Senator Heinrich has helpfully said that the Chemistry and Metallurgy Research Replacement (CMRR) Project, the Transuranic (TRU) Liquid Waste Facility (TLWF), and the TA-55 Reinvestment Phase III Project (TRP-III) were justified by the pit production mission. These add $1.4 B, $0.05 B, and $0.19 B respectively to the capital projects necessary to begin pit production. Still other capital improvement projects are also involved to one degree or another, such as site-wide improvements in electricity supply, access, security, and so on.

Last year we estimated (slide 29) total plutonium modernization, production start-up, and early pit production costs at LANL over the FY19-FY30 period at $14 B. With today's announcement, we would raise that estimate to $16 B.

It is not clear from the language in the press release whether NNSA intends to have "installed...the...capacity" to produce 30 pits per year (ppy) by 2026, or whether NNSA actually plans to produce 30 ppy in that year and every year afterwards. Installing equipment is one thing; for that equipment to be producing is quite another; to be producing reliably yet another; and to be producing reliably for the long haul yet something else again.

In June 2017 NNSA, under Obama appointee Frank Klotz, made a formal decision that pit production could only be temporary in PF-4 (pp. 2, 47-48).

The question of what plan NNSA has actually approved in this decision takes on special significance because three prior analyses recommended against producing pits with multiple shifts in PF-4, NNSA's current overall plan according to documents prepared under the National Environmental Policy Act (NEPA) (see here and here). The three studies which advise against this approach are NNSA's 2017 Analysis of Alternatives, 2018 Engineering Assessment, and the 2019 independent review by the Institute of the Defense Analyses, which called the current multiple-shift plan "very high risk."

Study Group director Greg Mello:

"Last year's revelation that it would be necessary to operate PF-4 on a 24/7, "surge" basis to produce as few as 20 pits per year at LANL was a real game-changer. This threw the entire notion that LANL could be a stable production site into limbo.

"Now, the huge cost for LAP4 being reported -- approximately double what NNSA said last year -- and the implied uncertainty as to whether LANL can actually meet the legally-required production schedule, throw further doubt on the wisdom of proceeding with industrial pit production at LANL.

"From December 1996 until May 2018, NNSA said that LANL was to have only an "interim" and pilot pit production role, a role which would last only until an adequate pit production facility could be built. NNSA confirmed that approach in 2017, saying that PF-4 should return to its original R&D role as soon as possible. Only after the intervention of the New Mexico senators was a permanent industrial role assigned to LANL.

"LANL pit production is earmarked for the proposed W87-1 warhead for the Ground-Based Strategic Deterrent. It is ironic that environmentalists and arms controllers who oppose GBSD and the W87-1 support pit production at LANL for that program.

"Emergency "surge" production in an old, small R&D facility in a highly seismic area close to residences is practically the definition of a heedless program. What's the rush?

"There is simply no need to produce pits in the 2020s, even if you think deploying 1,550 strategic warheads -- the New START limit -- is a grand idea, which it's not. One purpose of the MIRVable W87-1 is to be able to deploy hundreds more than that, in a pinch.

"In any case, LANL's facilities are simply too old and inherently unsafe, its location too impractical. Even with a much smaller stockpile LANL could not undertake this mission successfully. When and if the Savannah River Plutonium Processing Facility (SRPPF) comes on line -- which need not be any time soon -- LANL production will not be needed at all. NNSA is needless supporting two pit factories, solely for the sake of placating Democrats and the new-warhead lobby. Meanwhile it now appears that neither GBSD nor the W87-1 warhead --  which would use the new pits -- will be ready by 2030 for entirely other, non-pit reasons.

"So why is all this money being wasted at LANL? Why is the Los Alamos Pit Production Project not being cancelled right now?"

"We could go further. Why does the U.S. need new pits at all? If wisdom grew faster than pits and warheads aged, we wouldn't need any new pits at all."

Footnote:

The FY21 NDAA provides a potential “out” from impossible pit deadlines

Pit production requirements were modified by Section 3114 (pp. 992-993) in the fiscal year 2021 National Defense Authorization Act (FY21 NDAA; became law on 1/1/21). This new law creates conditions that could lead to a delay by up to 5 years in any or all of the 50 U.S.C. §2538a requirements, affecting LANL, SRS, or both.

If independent cost estimates (ICEs) find that either of the two main multibillion-dollar, never-before-attempted, decade-long plutonium infrastructure projects now underway at LANL and SRS could cost more than 115% of DOE's preliminary estimates (the "low confidence" case), the Commander in Chief of the U.S. Strategic Command (CINCSTRAT) may certify that pit production deadlines can be delayed by up to five years if the "deterrence missions" and "military effectiveness" of the U.S. nuclear weapons arsenal would not be degraded by such a delay. Alternatively, the CINCSTRAT may decide that current production deadlines must stand. The production deadlines are statutory, so it would be up to Congress to formally change them on the basis of this recommendation.

Regardless of what the CINCSTRAT decides, if either of the ICEs is more than 115% of DOE's estimate, DOE must either change the project in question or certify to Congress that its own cost estimate is accurate after all. It is remarkable that the law requires preliminary cost estimates (those available at "Critical Decision One" or “CD-1” in DOE parlance) to be as this accurate.

The law applies to two capital projects only: the "Los Alamos Plutonium Pit Production Project" (LAP4, DOE Project 21-D-512, pp. 193-198), which is to be completed in FY28; and the "Savannah River Plutonium Processing Facility Project" (SRPPF, DOE project 21-D-511, pp. 199-205), to be completed by FY31, followed by prove-in and production. The new law does not apply to supporting projects like waste management facilities, training centers, analytical laboratories, parking garages, office buildings, overall site improvements, etc. unless they are part of these two line items.

Most importantly, the law does not apply to operational ("program") spending. Thus the cost of preparing for pit production at both sites is much greater than the costs of just LAP4 and SRPPF. So far, these extra costs are far greater at LANL, where most pit production spending (this year, about three-fourths of it; see slides 23 & 26) is in relatively unaccountable “program” spending. The opposite is the case at SRS. Also, the scope of LAP4 does not include at least $200 M annually in supporting construction. SRPPF is a newer project; its comprehensiveness cannot yet be determined.

DOE has never completed any project of the scale and complexity of either LAP4 and SRPPF projects without large cost overruns and schedule slippage (pp. v-vi). This is the pattern for "megaprojects" worldwide; only roughly one in a thousand megaprojects delivers the estimated benefits on the estimated schedule, within the estimated budget. NNSA's management of large projects is particularly fraught: NNSA and its predecessor DOE Defense Programs have never left the Government Accountability Office's (GAO's) "high risk list" for waste, fraud, abuse, and mismanagement in four decades.

The previously-estimated “$3 B” cost for establishing a nominal 30 ppy production capability at LANL (slide 2) and now the narrow scope of LAP4 have given many parties the mistaken impression that pit production at LANL would be relatively cheap. The reality is otherwise. As will be discussed further below, each LANL pit would cost 6-10 times what a SRS pit would cost, and almost 100 times what NNSA has claimed, whether or not NNSA's pit production deadlines are relaxed by up to five years (slides 28-31).

*****ENDS*****