September 4, 2011 Press background and update

Many regional reporters are highly versed in the details of this project and
I have taken the liberty to try and provide new, detailed information to them.
 
For parties new to the issue, please see http://www.lasg.org/CMRR/open_page.htm. 
Our simplest two-page update is at http://www.lasg.org/CMRR/CMRR_summary_15Aug2011.pdf.

1. Senate Appropriations Committee poised to mark up Department of Energy (DOE), water projects, bill for FY2012 Tuesday and Wednesday of this coming week.

2. Among other programs, Obama's proposed surge in nuclear weapons spending -- not funded in the Republican-controlled House -- will receive the Committee's suggested funding.

3. Final passage of this and other funding bills by Congress by end of September considered unlikely, so Continuing Resolution (CR) contemplated to keep these and other agencies operating.

4. Initial Chemistry and Metallurgy Research "Replacement" Nuclear Facility (CMRR-NF) construction subcontract "Request for Expression of Interest" (REI) published as Los Alamos National Security (LANS) prepares for CMRR-NF construction.

5. Study Group files major brief in 10th Circuit Court of Appeals seeking review of Judge Herrera's decision to allow CMRR-NF to proceed without valid environmental impact statement (EIS).

6. Study Group reviewing possible additional National Environmental Policy Act (NEPA) litigation now that CMRR-NF Supplemental EIS (SEIS) is published. 

7. Record of Decision (ROD) under NEPA could be issued in early October; if Congress approves funding, CMRR-NF construction could begin at that time. 

8. Study Group prepares trip to Washington, DC to meet with congressional and executive branch decisionmakers, analysts.

9. Estimated impacts of proposed CMRR-NF have increased in final SEIS; vast concrete and electricity usage have increased further.

10. Largest government construction project in NM history to temporarily employ a 9-year average of 660 persons at most, many in NM only briefly, costing approximately $9 million per temporary job created, approximately ten times less than tax cuts and twenty times less than productive infrastructure and education investments.

1. Senate Appropriations Committee poised to mark up Department of Energy (DOE), water projects, bill for FY2012 Tuesday and Wednesday of this coming week.

Please see the Committee calendar, at http://appropriations.senate.gov/news.cfm?method=news.view&id=e8caa0df-976d-4008-8957-c74b2a9af65f. 

The House's markup dramatically cut proposed funding for National Nuclear Security Administration (NNSA) programs for fiscal year (FY) 2012.  The CMRR-NF and its associated Transuranic Waste Facility at Los Alamos National Laboratory were especially singled out for cuts, the only such cuts in the NNSA's infrastructure modernization program.  See http://www.lasg.org/ActionAlerts/Bulletin118.html and also:

• Pit Stop, US House budget would curtail LANL funding, Santa Fe Reporter, Aug 31, 2011 (new)
• House panel cuts budget for LANL nuke facility, Lab foes: Bill is vindication after project's court victory, Santa Fe New Mexican, Jun 16, 2011
• CMRR faces possible budget cut, Appropriation Committee recommends a $100 million reduction in funding next year, Los Alamos Monitor, Jun 16, 2011
• CMRR would be starting point of new arms race, Santa Fe New Mexican, Willem Malten, Aug 27, 2011

The Republican-led House would cut back NNSA's FY2012 Weapons Activities (WA) spending to the FY2011 level, plus inflation.  The House seeks a fundamental review of the project's requirements as well, among other reviews of NNSA's

See CMRR talk in Los Alamos, pdf, slides 3-8, for maps and schematics of the project.  A representative project schedule, showing its division into phases, can be found at http://lasg.org/CMRR/Litigation/Mello_aff1_ref/Par73_BRETZKE_16JUNE2010_slide7.pdf.

Here is the very short summary version of why, in our opinion, this project should be cancelled or delayed.

CMRR-NF should not be built because it is not needed for any core NNSA mission including maintaining a large and diverse nuclear stockpile indefinitely, it has very great opportunity costs for other NNSA and DOE programs and other compelling federal priorities, it is very managerially risky, it retards safety improvements at LANL, and it lacks clarity as to purpose, requirements, cost, and feasibility.  It should not be built now for a host of additional reasons such as its incompleteness of design, competition for internal resources, and low priority. Longer delays would bring greater net benefits – in dollars, program continuity, decreased management risk across the NNSA complex, and other benefits. For reasons that transcend federal control it may never be built and operated regardless of formal policy intentions for reasons including declines in oil imports, broad (and rapid) economic and social decline, and related supply chain issues.  CMRR-NF is already an embarrassing, politically-driven fiasco and together with other unrealistic NNSA/DoD plans should be paused while more realistic management plans for warheads and pits are developed for a range of stockpile configurations.  CMRR-NF is a flagship boondoggle that perfectly illustrates NNSA’s inept management, which damages national security.  (From Reasons Not to Build, or to Delay CMRR-NF, pdf, May 22, 2011)

The Senate authorizers for Weapons Activities (i.e. the Senate Armed Services Committee, SASC) were largely supportive.  As veteran industry reporter Todd Jacobsen wrote on 7/1/11,

Noting that managing the design and construction of the Chemistry and Metallurgy Research Replacement-Nuclear Facility and the Uranium Processing Facility will be “very challenging,” the Senate Armed Services Committee is moving to require NNSA to conduct a “true independent cost estimate” for both projects. According to language in the report accompanying the Senate’s version of the Fiscal Year 2012 Defense Authorization Act, the committee would also require the Government Accountability Office to review the cost estimates, which have soared over the last year. The Chemistry and Metallurgy Research Replacement- Nuclear Facility at Los Alamos National Laboratory is estimated to cost as much as $5.8 billion, while the NNSA has said the Uranium Processing Facility at the Y-12 National Security Complex could cost as much as $6.5 billion, though a cost estimate from the Army Corps of Engineers estimates that the cost could reach as high as $7.5 billion...

The NNSA has already committed to increasing the use of independent cost estimates on the projects and has said it will wait until both projects reach the 90 percent design threshold before committing to a cost and schedule baseline. NNSA has also enlisted the Pentagon and Department of Energy to validate estimates for the project. However, the committee wants to ensure that separate cost estimates for the projects are conducted, rather than reviews of other cost estimates. “Managing these projects in accordance with the DOE 413 order series and project management and guidance is essential for success, as is making sure that the projects have clearly defined and validated requirements that do not change,” the committee wrote in the report accompanying its version of the FY2012 Defense Authorization Act.

Bear in mind that construction is expected to begin long before a baseline for CMRR-NF is completed.  By the time 90% design would be achieved and a baseline created, approximately $100 million in construction would be completed.  It is this pre-baseline construction during FY2012 that the House markup (See http://www.lasg.org/ActionAlerts/Bulletin118.html) would prevent.

If an Energy and Water appropriations bill is to be passed, the full Senate must pass the Appropriations markup, a conference committee must iron out the (major) differences between the House and Senate versions, and the final conference bill passed by both houses.

2. Among other programs, Obama's proposed surge in nuclear weapons spending -- not funded in the Republican-controlled House -- will receive the Committee's suggested funding.

Historically, and probably next week as well, the Senate Appropriations Committee has been more generous to NNSA's Weapons Activities than the House.

In May, I briefed a bipartisan panel of three staff members from this Committee on the CMRR-NF project.  Despite this briefing, I expect this Committee to fully endorse CMRR-NF and will be pleasantly surprised if they do not or if they place conditions on it.

A key question is whether the Senate believes CMRR-NF and the Uranium Processing Facility (UPF) in Tennessee can be successfully pursued at the same time.  Todd Jacobsen again, quoting a study by the Army Corps of Engineers and two NNSA consulting firms on the UPF project:

Work on the CMRR-NF presents another complication [to UPF], the Corps said. The NNSA is planning to build both facilities concurrently and the Obama Administration has committed billions of extra money to modernize the nation’s weapons complex and nuclear arsenal, but the Corps suggested cost growth on either project could trigger problems on the other. “Significant cost growth of either project may result in a situation where constructing both projects with currently anticipated scopes is not feasible due to NNSA funding constraints,” the Corps wrote. “Significant delays to reaching full production capacity, construction phasing, or reduced functional capabilities may result if UPF is considered a lower priority than CMRR.”

3. Final passage of this and other funding bills by Congress by end of September considered unlikely, so a Continuing Resolution (CR) contemplated to keep these and other agencies operating.

Key questions include:

• What would be the ceiling available for Energy and Water appropriations as a whole?

• Will a special exception be created for NNSA or for Weapons Activities which exempts these programs from other discretionary spending cutbacks?
• Will CMRR-NF construction be allowed to start under a CR?

4. Initial Chemistry and Metallurgy Research "Replacement" Nuclear Facility (CMRR-NF) construction subcontract "Request for Expression of Interest" (REI) published as Los Alamos National Security (LANS) prepares for CMRR-NF construction.

See http://www.lanl.gov/orgs/sup/procurement/solicitations/secdoors/CMRR_Site_Utilities_Relocation_Aug2011.pdf.  More broadly, see http://www.lanl.gov/orgs/sup/procurement/solicitations/index.shtml.  All eight items on the LANL solicitation web page (as of today) pertain to CMRR-NF only.

In the fall of 2010 NNSA was also poised to initiate subcontracting (pdf, see p. 170) for the first stages of CMRR-NF construction (here is the whole project schedule, pdf), but LANL pulled all references to construction from its web site and held back all construction subcontracting during the course of litigation filed by the Los Alamos Study Group under the National Environmental Policy Act (NEPA). After the Study Group’s lawsuit was filed the NNSA initiated a Supplemental Environmental Impact Statement (SEIS) process, which is currently underway.

NNSA's "supplement analysis" did not find that an EIS or SEIS was warranted, but NNSA subsequently changed its mind after we filed our lawsuit.  (This is also what happened in the Study Group's DARHT lawsuit in 1994; DOE initiated an EIS after our litigation was filed.)  NNSA forestalled construction during the SEIS process, even though the initial construction packages were, in the summer of 2010, according to project director Steve Fong, "ready to go,"  NNSA and LANL held a "construction forum" in Espanola to prepare contractors, etc.  Here is NNSA arguing that they halted pending construction due to the SEIS.


It appears that with anticipated completion of the NEPA process (in NNSA's lights, at least), construction is again being prepared.  As noted in the House markup (pdf) $100 million of FY2012 spending is slated for construction.

5. Study Group files major brief in 10th Circuit Court of Appeals seeking review of Judge Herrera's decision to allow CMRR-NF to proceed without valid environmental impact statement (EIS).

Please see http://www.lasg.org/CMRR/Litigation/Appellant_Opening_Brief_31Aug2011.pdf.  The voluminous appendices which go with this document are not yet posted.

6. The Study Group is reviewing possible additional National Environmental Policy Act (NEPA) litigation now that CMRR-NF Supplemental EIS (SEIS) is published.

We may make a decision regarding this litigation soon.

7. A CMRR-NF Record of Decision (ROD) under NEPA could be issued in early October; if Congress approves funding, CMRR-NF construction could begin at that time.

(See above.)

8. Study Group prepares trip to Washington, DC to meet with congressional and executive branch decisionmakers, analysts.

Greg will be in Washington the week of September 12-16.

9. Estimated impacts of proposed CMRR-NF have increased in final SEIS; vast concrete and electricity usage have increased further.

Concrete usage is now up to as much as 400,000 cubic yards; temporary land "use" (i.e. destruction) up again to electricity usage has increased to 31% of all available electricity in Los Alamos, again requiring either a new transmission line to Los Alamos County or reconductoring the (two) old ones.

10. Largest government construction project in NM history to temporarily employ a 9-year average of 660 persons at most, many in NM only briefly, costing $9 million per temporary (9-year) job created at an estimated $6 billion for the project.

Thus this project, should it cost at least $6 billion as many believe it will, is estimated to create these temporary jobs at a cost of at least $1 million per job-year, in New Mexico.  (Other jobs would be created elsewhere, many of which would be outside the U.S..)  "These small increases [in employment] would have little or no noticeable impact on the socioeconomic conditions of the ROI [region of interest]."  (SEIS, p. 4-54).   Obviously no productive infrastructure, goods, or services would be created in the regional economy.  No permanent jobs would be created.

The comparative effects of different kinds of direct federal spending is the subject of a good 2007 paper by Robert Pollin and Heidi Gerrett-Peltier (http://www.ips-dc.org/reports/071001-jobcreation.pdf), which confirms a long line of prior work of the same ilk.  (John Fleck: this paper lacks the flaw we discussed in their later paper on "green jobs.")  Here is their Table 1.


To compare these job creation rates, it is necessary to inflate 2005 dollars to 2011 dollars (a factor 1.16).  This table implies a recurring (i.e. annual) shift of $1 billion in government expenditure, i.e. the units in column 1 are job-years per billion dollars spent.

Correcting for inflation (but not for anything else that has changed since 2005/7), here are Pollin and Garrett-Peltier's federal costs in 2011 dollars per job-year:

These jobs are national jobs, not just regional ones.  Nevertheless, under a wide range of assumptions, we can see that CMRR-NF would be an atrocious job creator, whether on a regional or national basis.  Add to this fact the lack of productive infrastructure, goods, and services, created, the lack of mobilization of private capital, and the fact that many of these jobs will be in the wealthiest county in the western U.S., the true nature of this kind of federal "pork" begins to emerge.

Employment stimulation using federal money to lure private investment can have much higher job creation rates, as for example in federal subsidy of wind and solar projects.  The key difference between generating renewable-source electricity and plutonium pits is that the former has, or can easily be made to have, a market.  Consumers buy it.  Nobody buys pits, hopefully, and that is the basic source of most of the economic inefficiency, the balance being associated with the extremely high average salaries involved.  NNSA weapons laboratory scientists average $180,000 in salaries and benefits per year, according to highly-informed federal sources I cannot reveal, much more than their counterparts elsewhere.

I will not develop these ideas further here, but they will be the topic of a public discussions in late September.  Stay tuned.

***ENDS***