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Agency Will Analyze Report’s Concerns, but Still Pushing to Reach 90 Percent Design Mark Next Year

KNOXVILLE, Tenn.—The National Nuclear Security Administration will continue to push toward reaching the 90 percent design threshold for the Uranium Processing Facility despite a recent report from the Pentagon’s Cost Assessment and Program Evaluation group that suggests the facility could cost billions more than the agency’s previous estimate. The recent CAPE report, which said the facility could cost between $10 and $12 billion—and as much as $19 billion under a worst case scenario— recommended the NNSA take a new look at the path forward for the multi-billion-dollar project, which had been estimated to cost as much as $6.5 billion. “DOE is continuing along the same concept phase,” acting NNSA Administrator Bruce Held said here this week at a Defense Nuclear Facilities Safety Board public hearing on the project and safety at the Y-12 National Security Complex.

Held’s comments came in response to a question from DNFSB member Sean Sullivan about whether the NNSA needed to rethink its strategy for getting out of Y-12’s aging 9212 complex and were the NNSA’s first about the CAPE report. “When we get to the 90 percent level and if it turns out we’re going to be too rich for what any reasonable budgetary projection is, we’re going to have to rescope and rethink,” Held added. “In that rethinking there has to be a very firm position because we can’t slip this thing to the right eternally.” DNFSB members several times raised concerns at the meeting about when the NNSA will be able to move out of 9212, which was built in the 1940s. The NNSA is currently planning to complete the move in 2025, but none of the scenarios suggested in the CAPE report had the move being completed any sooner than 2030.

Can UPF be Built as Envisioned?

While the CAPE study has not been publicly released, NW&M Monitor reported last week that the group analyzed a variety of funding scenarios for the project and used historical cost data from unique Department of Energy and DoD projects to come up with a “top down” estimate for the project. Under the most optimistic scenario, if the size of the 700,000 square foot building were trimmed back and funding was slightly constrained, the building would still cost approximately $12.5 billion and wouldn’t be completed until 2030, which is well after officials want to move production work out of Y-12’s 9212 complex. The $19 billion cost estimate involves a larger facility approximately 750,000- square-feet in size with severely constrained funding. That option would not be completed until 2040, according to officials. The dire report from CAPE has led officials and Congressional staffers to question whether the facility can be built as envisioned given budgetary pressure facing NNSA and the government.

Some of the differences in the cost range were also attributable to different funding profiles analyzed, officials with knowledge of the report told NW&M Monitor. The low end of the $10-to-$12 billion range assumes that during the peak of construction, approximately $1.4 billion would be spent on the project in consecutive years, and the project would still not be completed by 2025. Without getting into the report’s details, Held said different funding profiles and timelines could alter the cost of the project. “It’s like a house,” he said. “Your total cost is going to change whether you pay cash or you finance it in five years or you finance it in 30 years. So a lot of the span in the CAPE study comes from that.”

Held: NNSA, CAPE Working Together

On the sidelines of the meeting, NNSA Associate Administrator for Acquisition and Project Management Bob Raines declined to address the substance of the CAPE report, but he emphasized that the agency was staying on its current course. The agency is currently expected to hit the 90 percent design threshold next year and won’t start construction until the fall of 2015. “It’s prudent to do what the leadership of the NNSA has committed to do, which is inform ourselves of what the cost of this project is … and go to 90 percent design and then be able to get an accurate estimate,” Raines said. Held emphasized that the agency was taking the CAPE report into account as it designs the facility, but he said the agency would honor a commitment to Sens. Dianne Feinstein (D-Calif.) and Lamar Alexander (R-Tenn.) to not commit to a cost or schedule baseline until hitting the 90 percent design mark. “The CAPE study is certainly pushing us to think about things differently, or to think about the possibility of doing something differently, but right at the moment we have a commitment to the senators to do this and we’ll fulfill that commitment,” Held told NW&M Monitor after the public hearing.

The degree to which the NNSA will consider the CAPE report remained unclear. Held emphasized that the NNSA was working with CAPE as it refines its design. “I think CAPE and us need to come together on an approach and we’re working to do that,” he told NW&M Monitor. “We have a commitment though to the two senators that we will not be pushing out cost estimates that are not based on the 90 percent threshold. We need to fulfill that as we work with CAPE.” He added: “Certainly we must consider it. But we can’t just look around and reverse course. If we need to make modifications, we will.”

Another Strategy Shift on the Way?

As recently as earlier this year, the NNSA decided to defer an effort to build a massive plutonium facility at Los Alamos National Laboratory, abandoning plans to build the Chemistry and Metallurgy Research Replacement- Nuclear Facility and shifting to a plan that would utilize smaller facilities to meet the plutonium needs of the lab because of the rising cost of the project. The change in strategy was just the latest shift in thinking on the agency’s two massive infrastructure modernization projects. In the mid-2000s, the agency planned to build the two projects at the same time, but near the end of the Bush Administration officials began to worry that they might have to phase the two projects because of funding constraints. That changed during debate on the New START Treaty during President Obama’s first term when the Administration pledged to modernize the nation’s nuclear stockpile and weapons complex, but recent budgetary pressure has again raised questions about the viability of building multi-billion-dollar nuclear facilities, with CMRR-NF being the first casualty.

During the hearing, Held maintained that the agency would not make any early proclamations about cost or schedule. “We really want to nail down the design plan to a 90 percent level before we start making really detailed budgetary projections we have confidence in because we made that mistake in the past, coming up with budgetary projections before we really we had confidence in them,” Held said.

Alexander Will Consider CAPE Report

In a statement to NW&M Monitor, Alexander, the ranking member of the Senate Energy and Water Appropriations Subcommittee, said he would take the CAPE report into account during his oversight of the project. “The new Uranium Processing Facility project is vital but will be expensive,” he said. “To try to make sure that the Department spends no more money than absolutely necessary, Sen. Feinstein and I have insisted upon three things: (1) an independent review of costs and program, which the CAPE has conducted; (2) that the design be 90 percent complete before construction begins; (3) that the accountable government officials meet with the two of us regularly to report whether they are proceeding on time and on budget. Before the design is complete, I will carefully consider the CAPE team’s recommendation.”

Build UPF Underground?

At the DNFSB hearing, activist groups had another idea for building UPF: Put it underground. In a letter to the DNFSB, a coalition of 13 groups urged the Board to insist that the facility is built underground, rekindling an idea championed by the Project on Government Oversight during debate on the Highly Enriched Uranium Materials Facility. “Failure to do so will compromise all other safety efforts of the Board and place the community at risk—a risk which can be largely avoided if the UPF is designed as an underground or below-grade facility,” the groups wrote. According to the letter, putting the facility underground limits areas where would be attackers could exploit security vulnerabilities. “With the current above-grade design, the risk is 100% for a facility exposed in a narrow, shallow valley,” the groups wrote. “While a below-grade UPF would not eliminate all risk, it would dramatically reduce the risk to a level far below 100%; the security risk reduction would be reflected in a similar increase in the safety level of the facility.”

The letter was signed by representatives from the Alliance for Nuclear Accountability, Oak Ridge Environmental Peace Alliance, TriValley CAREs, Nuclear Watch New Mexico, Southwest Research and Information Center, Peace Farm, Portsmouth Residents for Environmental Safety and Security, Physicians for Social Responsibility, Fernald Residents for Environmental Safety and Health, Concerned Citizens for Nuclear Safety, Rocky Mountain Peace and Justice Center, Colorado Coalition for the Prevention of Nuclear War, and the Snake River Alliance. —Todd Jacobson

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