Neighbors Growing Together | Apr 26, 2019

SRS Plutonium Fuel (MOX) Program Life-Cycle Cost Surges to Over $20 Billion

By Thomas Clements | Mar 25, 2013
Photo by: Tom Clements A 2011 brochure by NNSA/Shaw AREVA MOX Services presents the now-defunct schedule for start-up and operation of the $7.7-billion MOX plant now under construction  at the Savannah River Site near Aiken, South Carolina.  NNSA has refused to reveal the new cost and schedule for the MOX plant and have left communications about this to the Government Accountability Office (GAO). Those closely tracking the MOX program always doubted both cost estimates and schedules presented.  With a $2.8 billion incresase in the MOX plant construction and a 3-year delay in the program, as announced by the GAO on March 20, 2013, the credibility of NNSA as a reliable partner has sunk further.  This should serve as a warning to the Tennessee Valley Authority (TVA) or any other nuclear utility pondering the use of experimental weapons-grade MOX (WG MOX) in their reactors.  WG MOX has never been used before on a commercial scale in any reactor world-wide and faces a host of licensing and testing hurdles.

Cost Increases Underscore Deepening Management Failure of MOX Program

 

Columbia, SC – The amount of money left to be spent on the Department of Energy’s (DOE) plutonium fuel (MOX) program has now jumped to more than $20 billion, a price tag which will only cause more damage to a mismanaged program that faces looming budget cuts.

Given the cost increase for the MOX plant construction, reported by the Government Accountability Office (GAO) on March 20 to have increased from $4.9 billion to $7.7 billion, an unofficial life-cycle cost estimate for all aspects of the MOX program has now hit $20.25 billion.

The MOX plant, now under construction at the Savannah River Site (SRS) in South Carolina, is under ever-increasing criticism due to out-of-control costs and no customers to use any MOX fuel which may be produced in the future if the plant can ever start up and operate.  Due to these increasing problems, the project is rumored to be slated for huge cuts when the DOE’s budget request to Congress is released on April 8.  The crippling cuts will likely signal the eventual end of the mismanaged program.

The DOE’s National Nuclear Security Administration (NNSA) has not presented a new MOX plant construction cost estimate since 2008 and has never presented any life-cycle cost.   In 2003, the cost of construction of the MOX plant was estimated by DOE to be $1.84 billion ($2.34 billion in 2013 dollars). (See page 772 of Fiscal Year 2004 budget request lined above).  That the current MOX plant cost estimate has gone up over 300% since 2004 further underscores the management break-down.

“Failure to present updated MOX cost figures is a management failure of massive proportions,” according to SRS watchdog Tom Clements.  “DOE should have been updating construction cost and life-cycle costs on an annual basis according to good management guidelines.  The tactic to cover up ballooning MOX costs to Congress and the public is now backfiring as the project spirals into chaos.”

The earlier life-cycle cost estimate by Tom Clements was $18.5 billion, a figure adjusted up from an $18 billion estimate of early 2012 due to information about costs for the MOX plant start-up which were recently revealed in a Freedom of Information Act (FOIA) request.

The life-cycle cost includes such things as construction costs, start-up costs, operating costs ($499 million/year) over the 20-year life, payment to utilities to use experimental MOX fuel, waste management, and decontamination costs.

“I once again challenge NNSA, as I did throughout 2012, to step up to the plate and release a new MOX plant cost estimate and a life-cycle cost estimate for the overall plutonium disposition program,” said Clements.  “NNSA’s refusal to reveal any cost information only confirms that management by NNSA and AREVA of the project is in shambles and that managers are incapable of carrying out the budget-busting project.”  So far, there have been no announcements of a change in the project management teams, which may only mean that problems will deepen.

Not only has management by NNSA’s Office of Fissile Materials Disposition and contractor  AREVA of on-the-ground project construction failed but project management oversight by the DOE’s Office of Acquisition and Project Management (APM) has been far too late in increasing oversight of the project to save it from massive cost overruns and delays.

At a March 20 hearing by the House Energy & Water Development Subcommittee, officials from DOE’s Office of Project Management and Acquisition strategically avoided revealing the current cost estimates for the MOX project in their written and oral testimony.   Due to the officials irresponsibly skirting the bad cost news, it was left to GAO to present the stunning news about cost increases and schedule delays:  “DOE is currently forecasting an increase in the total project cost for the MOX facility from $4.9 billion to $7.7 billion and a delay in the start of operations from October 2016 to November 2019.”

Even though the MOX construction project remains in the red zone in DOE’s project management “dashboard,” with the “project…expected to breach its Performance Baseline cost, schedule, or scope,” the official cost estimate for the project has remained frozen since 2008 at $4,857,129,000.  The fossilized cost estimate highlights the inability of DOE to properly manage costs, that DOE still has not instituted effective project management methods and that certain officials are attempting to cover up true costs.

MOX fuel made from weapons-grade plutonium has never been used anywhere in the world on a commercial basis and is regarded by the Nuclear Regulatory Commission as a “new fuel form.” NNSA/AREVA is pursuing the Tennessee Valley Authority (TVA) for MOX use but the current cost and schedule setbacks will serve as a clear warning about the unreliability of NNSA/AREVA as a business partner.

The GAO also pointed out that costs for the building to process MOX waste, the Waste Solidification Building (WSB), had also jumped significantly and that “DOE approved in December 2012 a revised performance baseline to increase the cost from the initial estimate of $344.5 million to $414.1 million and a delay in the start of operations from September 2013 to August 2015.”

It is believed that the roof of the MOX plant is now being completed, which presents a good stopping point for the project as the uses of the building are preserved.

The release of the final Supplemental Environmental Impact Statement on MOX use is still listed in the DOE’s EIS schedule as coming out in April 2013, but it is rumored that the release date has slipped and may be on hold until the self-induced confusion around the MOX program becomes clearer.

“Now, DOE must proactively take control of plutonium disposition and immediately begin a less costly and safer approach to dispose of plutonium as waste,” said Clements.  “In parallel, those responsible for the MOX debacle must be held accountable.”

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Note:  In a “from the insider” comment to the Augusta (Georgia) Chronicle article of March 21 - MOX plant cost revised to $7.7 billion, with three-year delay - the anonymous commenter, who claims to have worked on the MOX construction project, gives a scathing assessment of the on-the-ground state of affairs as NNSA attempts to copy AREVA’s MELOX plant to US regulations:

 

I worked at the Mox Project for 2.5 years as a mechanical engineer and it was the most messed up thing I have ever been a part of.  The management didn't understand basic design procedures and it became more of a cut and paste of an existing design to look like a new design.  At least from a distance. Massive weldments would look ok but in reality might be inches or even feet off from what they should be. You would only find this out when it came time to bolt it in place. Bills of materials would not match the assembly drawing. The sad part is all of this could easily been avoided if experienced people were steering the ship. The original budget was less than 2 billion and now it is moving to 8 billion with no end in sight not to mention 10 years behind. What a shame and waste.

 

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