By George Lobsenz
Senate appropriators have joined the Senate Armed Services Committee in questioning the National Nuclear Security Administration’s (NNSA) actions in regard to the construction of a major new warhead component facility in Kansas City, saying the semi-autonomous Energy Department weapons agency seems to be helping to pay for the project despite an earlier decision to have a private developer build it for long-term lease by the agency.
In approving their energy and water spending bill for fiscal year 2011 on July 22, the Senate Appropriations Committee echoed the armed services panel in suggesting that– notwithstanding the leasing arrangement–NNSA is providing federal funds to support the development of the so-called Kansas City Responsive Infrastructure Manufacturing and Sourcing (KCRIMS) project.
On other weapons-related issues, the appropriators directed NNSA to provide more detailed explanation of the costs and benefits of certain warhead modernization initiatives, including the possible addition of new safety and security features to the B61 warhead.
And the lawmakers expressed concern that NNSA is pressing ahead with construction of a major facility to convert surplus weapons plutonium into commercial reactor fuel without ensuring that sufficient plutonium feedstock will be available once the plant is ready for production.
In regard to DoE’s nuclear cleanup program, the Senate appropriators would significantly slash funding, providing only $5.26 billion, compared to $5.64 billion in the current fiscal year and the $5.58 billion sought by the administration. The committee did not explain the cut, but DoE over the last year has awarded millions of dollars in additional cleanup projects using money provided under the American Recovery and Reinvestment Act.
The questions about the KCRIMS project are not new, with some critics previously suggesting that NNSA was pursuing the leasing approach simply to avoid adding another expensive construction project to its budget; the agency already is asking Congress to fund several new multi-billion-dollar weapons facilities to modernize the U.S. nuclear weapons complex.
Congress and the Obama administration have generally supported NNSA’s modernization effort as necessary, including the KCRIMS project. The new facility will replace the existing Kansas City Plant, which makes nonnuclear components for warheads and is operated for DoE by Honeywell [HON]. The replacement plant will be significantly smaller than the current plant and is expected to reduce operating costs by more than $100 million per year.
In evaluating how to finance construction of the facility, NNSA concluded that it would be marginally cheaper over 20 years to lease the plant from a private developer than to have the government pay up front to build it.
But the Government Accountability Office (GAO), in an October 2009 report done for the Senate energy and water appropriations subcommittee on KCRIMS, found a major flaw in NNSA’s cost comparison analysis: It did not look at costs beyond 20 years.
“NNSA…officials acknowledge that while leasing a facility…under a 20-year scenario is less costly than purchasing, it can be more costly over the long term,” GAO said.
“Because [NNSA’s] analysis did not consider costs beyond 20 years, NNSA cannot be certain if other alternatives, such as purchasing the facility, might have offered lower costs over the longer term.
“Twenty years is far shorter than the useful life of a production facility that is properly maintained; the current [Kansas City Plant] has operated for more than 60 years,” GAO noted.
“However, in evaluating a financing method, [NNSA] compared alternatives using cost estimates limited to 20 years.”
In their report on the energy and water spending bill, Senate appropriators said they were “concerned about NNSA’s use of funds” for the KCRIMS project, which has an estimated price tag of $500-673 million and a life-cycle cost of $4.7 billion.
They said that while NNSA officials had asserted that privatization of the project would lower costs and assure operation by 2012, the project was delayed and the agency appeared to be providing federal funding for it.
“Ground-breaking for the new building has been delayed until at least August 2011 and the committee is concerned that some level of funding may be being used to supplement construction costs,” the appropriators said.
“The committee directs NNSA to identify funds for the KCRIMS project as a separate line item…with an explanation of how the funds will be used to support the project.”Much the same concerns about the KCRIMS project were voiced by the Senate Armed Services Committee in its report in June on the defense authorization bill for fiscal 2011.
“The committee notes that the budget request for [the Kansas City facility] includes funds for `unique facility upgrades for utility and interior requirements,'” the committee said in its report. “The committee questions why funds are needed for upgrades and unique requirements at a facility that is being built to NNSA specifications.
“The committee is concerned that NNSA may be supplementing the construction costs. The committee also notes that ground-breaking for the new building has been delayed until August 2011.”
On warhead modernization, the Senate Appropriations Committee ordered NNSA to provide a report to Congress on the new safety and security features it proposes to add to the B61 warhead during refurbishment. In addition to a cost-benefit analysis, the report must explain whether those changes might affect the warhead’s nuclear explosive package.
NNSA also was directed to provide a report to Congress on the possible cost savings of combining refurbishment of the nuclear and non-nuclear components of the B61 warhead.
In addition to saving an estimated $2 billion, the committee said combining the nuclear and non-nuclear refurbishment would “allow NNSA to consolidate the different variants of the B61 bomb into one variant that has the least special nuclear material” while also adding modern safety features and extending the life of the warhead for 30 years.
In regard to disposal of surplus weapons plutonium, the committee expressed concern that NNSA was pushing ahead on construction of the Mixed Oxide Fuel Fabrication Facility at the Savannah River Site in South Carolina without making adequate progress on facilities needed to provide feedstock to that facility, which is to convert weapons plutonium into commercial reactor fuel. The lawmakers said that could lead to delays in production from the so-called MOX facility.
The committee ordered NNSA to submit a report explaining how it would address the feedstock problem and how it could get more U.S. nuclear utilities to agree to buy mixed plutonium-uranium fuel to be produced by the MOX plant; at present, only the federal Tennessee Valley Authority is considering doing so.
On a key international nonproliferation program that dates from 1996, the committee said NNSA had completed security upgrades on 210 of the 229 buildings in Russia that store that country’s weapons-usable nuclear materials and warheads. It also said NNSA planned to complete upgrades at the remaining 19 buildings by 2012.
However, the committee expressed concern that Russia had not provided assurances that it would provide sufficient money to maintain the security upgrades in the future.
The appropriators asked NNSA to provide a report on Russia’s intentions, saying, “the committee wants assurances that the U.S. investment of $2.7 billion since fiscal year 1996 will not be squandered.”