A multibillion-dollar U.S.-led effort to stem the threat
of a terrorist nuclear blast is slowly unraveling because of huge cost overruns
at a federal installation in South Carolina and stubborn resistance in Moscow
to fulfilling the program's chief goal, according to U.S. officials and
The 13-year-old Energy Department program, authorized in
agreements with Moscow spanning three presidents, is meant to transform excess
plutonium taken from retired U.S. and Russian nuclear weapons into fuel for
nuclear plants, so that it can't be stolen and misused.
But that ambitious goal has been blocked by a tangle of technical,
diplomatic, and financial problems. The Obama administration is now considering
cancelling the project, an idea that has provoked furious opposition from some
Republican lawmakers who say it is vital to U.S. national security.
Its potential demise has provoked cheers from some leading
arms control and nonproliferation experts, however. They say that as a result
of little-noticed revisions to the underlying pact with Moscow on the
plutonium's disposal, the deal might actually wind up promoting Russia's
production of as much or more plutonium as it was supposed to eliminate.
To keep its end of the bargain, the United States has
spent more than a decade and $3.7 billion building a problem-plagued factory
for making the plutonium-laced reactor fuel, located at the government's
Savannah River complex south of Aiken. Its construction and related costs have
recently hit more than $680 million a year, but Congress is now considering a
White House plan to shrink that spending substantially.
Russia has begun construction of a similar fuel factory in
a tunnel complex deep in a mountain near Zheleznogorsk in Russia at an
estimated cost of more than $2 billion, but current and former U.S. officials
say Moscow is still counting on at least $400 million promised by Washington
to help defray its costs.
The U.S. plant, now in the sixth year of construction, is beset
by technical problems, and its total estimated cost is more than $6 billion above
its original $1 billion budget. Its design is still incomplete, and there are
no customers in the United States as yet for the so-called Mixed Oxide (MOX) fuel
it will make from a mixture of plutonium powder and standard reactor fuel.
Government audits have cited blown deadlines, poor
oversight, and multiple construction snafus at the plant, making it a new,
embarrassing symbol of mismanagement by the department's National Nuclear
Security Administration, which oversees all U.S. nuclear weapons-related work.
The agency's large projects have repeatedly appeared on
the government's "high risk" list of those vulnerable to fraud, waste, and
A close look at the factory's history reveals it had a weak
contract from the outset. Officials in Washington initially paid little
attention to it, despite the project's scope. Shoddy contracting practices cost
the government more than $1.38 billion in avoidable expenses, and it has
suffered quality control problems involving its steel rebar, piping, and other key
The government's current estimate is that the plant will not
begin operation before 2019, seven years late. Estimates of its operating costs
over a 15- to 20-year period range from $8 billion to $12 billion, meaning that
it could cost around $20 billion in total to create fuel rods from all 34 tons
of the plutonium that Washington has promised to eliminate.
But even if the government finds buyers for the fuel -- which
seems doubtful -- it will not recoup more than $2 billion of its expenses,
according to the Congressional Research Service. At the current price tag,
eliminating each pound of plutonium at the U.S. plant may cost roughly
$243,000, according to Matthew Bunn, a nuclear expert at Harvard.
So far, around $3.7 billion has been spent on the fuel
factory, which could wind up an abandoned concrete shell in the middle of a
pine forest. Another $700 million was used to design a related plutonium
dismantlement facility that the NNSA never built.
Those expenditures have helped make it the single most
expensive U.S. nonproliferation project now underway, according to independent
A deal born in a crisis
When the disposal effort was first conceived in the 1980s,
it was considered a top priority because the collapse of the Russian economy raised
fears that some of that country's huge stockpile of fissile materials might be smuggled
into rogue states or be seized by terrorists. In the right hands, only nine
pounds of plutonium -- an amount the size of a baseball -- is needed to make a
bomb as powerful as the bomb dropped on Hiroshima.
American officials never worried much about the security
of their own stockpile, but agreed to eliminate some of it to ensure that the
Russians did likewise. Problems arose from the start, however, because the two
countries disagreed about how to implement the deal.
Washington initially wanted to seal the plutonium in glass
and ceramic and bury it in deep holes. Russia, in contrast, pressed for the
solution that both sides adopted: to burn it as fuel in reactors.
"The U.S. has always looked at plutonium as a
proliferation risk," said Kenneth Bromberg, who helped set up the Energy
Department's Office of Fissile Materials Disposition in the early 1990s and ran
it from 2004 to 2011. "The Russians have always looked at it as an energy
Ernest Moniz, an MIT physicist who became energy secretary
last month -- after a delay in his confirmation inspired by Republican efforts
to rescue the project -- played a key role in resolving the early impasse while
serving in the Clinton administration. His June 2000 deal, approved by the two
countries' presidents, called for both sides to use the plutonium mostly as a
reactor fuel, as Moscow sought.
But the deal also demanded that almost all of the fuel be
burned in standard reactors, a process that would block Russia from readily recovering
a lot of plutonium from the spent fuel.
Over the next few years, however, officials in both
capitals became disgruntled with Moniz's deal. Russia wanted to develop
different reactors, known as "breeders" because they can make more plutonium
as they consume, creating an almost limitless source of energy. Breeders
generate fast-moving neutrons that transform the uranium mixed into their fuel
into additional plutonium. And the Russians saw the MOX fuel -- to be paid for partly
by the West -- as ideal feedstock for their breeder program, which would help turn
their Cold War investment into cash.
The United States had abandoned plutonium breeders at the
urging of the Carter administration, over the nuclear industry's opposition, due
to fears that the technology could vastly expand global supplies of the nuclear
explosive. But Russia's ambitions found resonance with the Bush administration,
which included many breeder advocates and supporters of an expanded nuclear industry.
So when Russia's atomic agency chief, Alexander Rumyantsev,
proposed in a 2005 meeting in Paris to use the MOX fuel solely in breeder
reactors, Washington did not push back. Instead, by 2007, Bush administration
Energy Secretary Samuel Bodman agreed that Russia could renege on its promise
to use the fuel in standard reactors.
Bodman also recommitted Washington to providing $400
million in aid for the project and promised to seek additional sums from U.S.
allies. He declined comment for this article, but Linton Brooks, who served
from 2002 to 2007 as head of the NNSA, defended the arrangement.
Brooks said in an interview, "If the alternative is
having Russian and U.S. plutonium sit around for a long time, I'm fully happy
with what the administration did. I would not accept the view that we added to
proliferation rather than reduced proliferation."
Construction flaws emerge
By 2005, troubles at the Savannah plant had themselves
begun to proliferate, however. That year, Energy Department Inspector General
Gregory Friedman disclosed that technical obstacles and poor planning had caused
costs to more than triple. The design itself was flawed: It turned out that the
facility needed nearly 1,400 miles of electrical cabling, not 735 miles; it also
needed stronger and more costly engineering supports.
Friedman said lingering design problems had consumed
nearly half the construction funds, and that only a handful of Energy Department
employees were overseeing it. Monthly reports on the work were confusing and
misleading, and budgets lagged months behind. Mistakes in the purchase of
supplies also started to pile up, with a large delivery of the wrong steel
alone costing $680,000 to correct, according to a report by Friedman in 2009.
The contractors had little incentive to find efficient
solutions, Friedman said, because the NNSA had ignored warnings and signed a
contract in which the firms passed on to the government whatever costs they
When Obama took office, there was little consideration of
alternatives to the Bush administration's pact, which was not yet signed. It took
until April 2010 to finally nail down all the details in a deal between Secretary
of State Hillary Clinton and Foreign Minister Sergei Lavrov that contained a new
Under the original deal in 2000, Russian reactors used in
the program were essentially locked up: The country could not extract residual
plutonium from the fuel burned in those reactors for several decades, a
significant nonproliferation achievement.
But the Obama administration agreed to Russia's demand
that it immediately extract some plutonium from fuel burned in one of the breeders
used in the program. The deal also still called for the United States to share
technical and financial support that Russia could use to develop its breeder
reactors. Russia promised, however, to accumulate new plutonium only for
civilian power rather than new weapons.
Arms control advocates -- and a few administration
officials who privately express regrets -- say that as a result, Washington
will be helping Russia expand its plutonium production in the future, if it
chooses, or help others expand theirs.
"Down the road, we could see the MOX program in
Russia lead to the creation of more separated plutonium, not less," said Tom Z.
Collina, a senior analyst with the Arms Control Association. "That's one of
the dangers of the agreement. It could ultimately defeat the original purpose ... which
is to eliminate stocks of separated plutonium."
Anatoli Diakov, a Russian physicist who founded and
directed an arms control and energy study center in Moscow, said in an
interview that no matter what the United States does, Russia "is going to use
the plutonium fuel" in breeder reactors.
Breeder reactors, Russia's nuclear energy chief said last
year, "are the basis of our competitiveness" in the global contest for nuclear
plant construction contracts. The country is now discussing the sale of two to
Key U.S. lawmakers keep the program
This shift in the deal's fundamental terms -- from an
agreement meant to shrink the global stockpile of plutonium to one that could expand
it -- has sapped the support of some of the nonproliferation experts who helped
create it. Frank von Hippel, a White House science official in the early 1990s
who chaired a working group on the issue, said the MOX plant has "become from
my point of view a pretty meaningless program" that should now be killed.
"The problem ... is that Russia doesn't intend to dispose of its plutonium
permanently, right?" said von Hippel. "In fact, it's setting itself up to
produce and recycle its plutonium indefinitely." That creates risks "that this
stuff will get stolen, so in fact the security situation gets worse."
The last major attempt to kill the program occurred in
2005, when Rep. David Hobson, then chairman of the House Appropriations Energy
and Water Subcommittee, tried to block funding due to its rapidly rising costs
and Russia's plans to shift from standard reactors to breeders.
"It should never have been done," said Hobson, now 76,
about the factory's construction. "Everything I said would happen, has happened....
And there is no end in sight."
For years, the plant has been kept alive by South
Carolina's mostly Republican congressional delegation, which includes many
strident critics of federal spending, budget deficits, and mammoth public works
projects -- including Sen. Tim Scott and Rep. Joe Wilson. On the issue of the
MOX plant, which employs 2,100 workers, they have been hugely supportive.
Sen. Lindsey Graham joined others on Capitol Hill in
January in asserting that "the time has come for the president to face up to
the need to control federal spending." Since then, Graham has lectured DOE
officials at hearings on the diplomatic and security disaster that would ensue
if the Savannah River project was halted.
With three other Republican senators, Graham pledged in a
joint statement last month to hold up nominations and use the budget process
"to ensure the [MOX] program moves forward."
Graham declined to comment for this article. According to
an analysis by the Center for Public Integrity of campaign donations and
leadership committee receipts listed by the Center for Responsive Politics,
Graham has received $46,500 since 2001 from three private firms with a stake in
the MOX project. In total, the firms provided at least $437,000 in campaign
funds during this period to members of the four congressional committees that
decide the Energy Department's annual budget.
Rep. James Clyburn, who has long been a member of the
House Democratic leadership and who has boasted about helping block Hobson's
challenge to the plant, collected $51,000 in political funding from the firms, the
lobbyists and officers of which also donated $40,000 to a golf charity he runs.
Clyburn's spokeswoman, Hope Derrick, said the congressman "is solely motivated
by the best interests of the people and communities he serves in
The plant is being built by Shaw Areva Mox Services
LLC, which until this year was a joint venture between the Shaw Group and
Areva SA, the French government-owned international nuclear giant. Shaw, based
in Baton Rouge, was purchased in February by the Netherlands-based Chicago
Bridge & Iron NV -- which now controls 70 percent of the MOX project.
In the last three years alone, Areva and Shaw have spent a
total of $6.3 million to lobby for their legislative interests, including
efforts by at least four former congressmen and some former committee staffers
that advocated spending on MOX and nuclear issues, according to an analysis by
the Center for Public Integrity.
Kelly Trice, president of Shaw Areva MOX Services, the
lead contractor, has praised the progress at the plant. He blamed the overruns
mostly on the unexpected difficulty of finding and retaining qualified workers
and suppliers and a need to get regulatory approval for "every piece of
equipment, every piece of pipe, the concrete, even the dirt under the
New budget troubles arise
Austerity pressures in Washington have created new
obstacles for the companies and their lobbyists. The Obama administration,
after convening four high-level meetings about the MOX plant this spring, urged
a 50 percent cut in its planned spending in fiscal year 2014, to just $320
"Cost growth and fiscal pressure may make the project unaffordable,"
the Energy Department said in its formal budget proposal to Congress. A
spokesman for the department declined comment about the review now underway.
Joan Rohlfing, a former DOE official who is president of the
Nuclear Threat Initiative, a nonprofit group that promotes action to reduce the
dangers posed by plutonium, said she believes the project is still worth
completing. Halting "our near-term
ability to dispose of excess plutonium would be a setback to our ability to
reach critical security goals," she said.
Likewise, a Russian government official who has followed
the program closely denied that the breeder program undermined nonproliferation
goals and said the project was still worth pursuing to reduce the threat of a
theft of nuclear materials.
Bunn, who helped launch the effort, says the current deal is too modest and,
under the best of circumstances, would leave Russia with enough plutonium to
build more than 25,000 new nuclear weapons. Some things are worth doing for $10,
but not for $100, he says.
Von Hippel joined three other scientists last May in
advocating the burial alternative in a scientific journal article about
Britain's plutonium stocks. One co-author was Rodney Ewing, whom Obama has since
appointed to head a federal nuclear waste panel, and another was Allison MacFarlane,
now chair of the Nuclear Regulatory Commission. The MOX plant, if it is
completed, needs an NRC license.
Ewing, emphasizing that he was speaking for himself, said in
an interview that recent research leaves no doubt that plutonium can be locked
into a crystalline ceramic material and stored safely underground for tens of
thousands of years.
Administration officials say the main purpose of their "strategic
reassessment" is to reexamine the burial alternative. A DOE report in 2002
concluded it would cost hundreds of millions of dollars less than building the
MOX plant. But it cited two factors that trumped the cost savings then and may
do so again: Russia's hostility to the idea and the absence of "employment that
would have been created in South Carolina."
The Center for Public Integrity