[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]






                                     

                         [H.A.S.C. No. 114-54]

               PLUTONIUM DISPOSITION AND THE MOX PROJECT

                               __________

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON STRATEGIC FORCES

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                            OCTOBER 7, 2015




                                     

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                    SUBCOMMITTEE ON STRATEGIC FORCES

                     MIKE ROGERS, Alabama, Chairman

TRENT FRANKS, Arizona                JIM COOPER, Tennessee
DOUG LAMBORN, Colorado, Vice Chair   LORETTA SANCHEZ, California
MIKE COFFMAN, Colorado               RICK LARSEN, Washington
MO BROOKS, Alabama                   JOHN GARAMENDI, California
JIM BRIDENSTINE, Oklahoma            MARK TAKAI, Hawaii
J. RANDY FORBES, Virginia            BRAD ASHFORD, Nebraska
ROB BISHOP, Utah                     PETE AGUILAR, California
MICHAEL R. TURNER, Ohio
JOHN FLEMING, Louisiana
                 Drew Walter, Professional Staff Member
                         Leonor Tomero, Counsel
                           Mike Gancio, Clerk
























                            C O N T E N T S

                              ----------                              
                                                                   Page

              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Cooper, Hon. Jim, a Representative from Tennessee, Ranking 
  Member, Subcommittee on Strategic Forces.......................     2
Rogers, Hon. Mike, a Representative from Alabama, Chairman, 
  Subcommittee on Strategic Forces...............................     1

                               WITNESSES

Klotz, Hon. Frank G., Administrator, National Nuclear Security 
  Administration.................................................     2
MacWilliams, John J., Senior Advisor to the Secretary of Energy, 
  U.S. Department of Energy......................................     4
Mason, Thom, Ph.D., Director, Oak Ridge National Laboratory......     5

                                APPENDIX

Prepared Statements:

    Cooper, Hon. Jim.............................................    42
    Klotz, Hon. Frank G..........................................    44
    Mason, Thom..................................................    50
    Rogers, Hon. Mike............................................    41

Documents Submitted for the Record:

    Letter to Mr. Wilson from CB&I Power.........................    63

Witness Responses to Questions Asked During the Hearing:

    Mr. Forbes...................................................    67
    Mr. Garamendi................................................    70
    Mr. Norcross.................................................    70
    Mr. Rogers...................................................    67

Questions Submitted by Members Post Hearing:

    Mr. Garamendi................................................    73
    Mr. Wilson...................................................    75
 
               PLUTONIUM DISPOSITION AND THE MOX PROJECT

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
                          Subcommittee on Strategic Forces,
                        Washington, DC, Wednesday, October 7, 2015.
    The subcommittee met, pursuant to call, at 3:34 p.m., in 
room 2118, Rayburn House Office Building, Hon. Mike Rogers 
(chairman of the subcommittee) presiding.

 OPENING STATEMENT OF HON. MIKE ROGERS, A REPRESENTATIVE FROM 
      ALABAMA, CHAIRMAN, SUBCOMMITTEE ON STRATEGIC FORCES

    Mr. Rogers. Good afternoon. The subcommittee will come to 
order.
    Welcome to our hearing on Plutonium Disposition Program and 
the MOX Project.
    To our witnesses, thank you for being here. We know it 
takes a lot of time to prepare and get ready for these things, 
and I really appreciate your investment. Your contributions 
make a big difference to our ability to do our jobs.
    Our distinguished witnesses today are the Honorable Frank 
Klotz, Administrator, National Nuclear Security Administration 
[NNSA]; Mr. John MacWilliams, Associate Deputy Secretary, U.S. 
Department of Energy [DOE]; and Dr. Thom Mason, Director, Oak 
Ridge National Laboratory.
    This hearing is examining one of the Department of Energy's 
largest and highest profile construction projects. The MOX 
Project and the broader Plutonium Disposition Program have been 
the subject of several recent reviews. The leaders of two of 
those reviews are at the witness table today: Mr. MacWilliams 
and Secretary Moniz' internal assessment team, and Dr. Mason 
led the independent Red Team. They have both also been involved 
in figuring out what DOE should do about key uranium 
capabilities that are critical to our national security.
    Gentlemen, you seem to get all the easy issues.
    They are joined by General Klotz, who is no stranger to 
difficult challenges. General Klotz has the overall 
responsibility for executing the program as head of the NNSA.
    We look forward to hearing from all of you about the 
Department's current status on this program as the committee 
looks to help the Nation determine what is in the best 
interests of the taxpayer and our national security.
    With that, let me turn to our ranking member for any 
statement that he might like to make.
    [The prepared statement of Mr. Rogers can be found in the 
Appendix on page 41.]

STATEMENT OF HON. JIM COOPER, A REPRESENTATIVE FROM TENNESSEE, 
        RANKING MEMBER, SUBCOMMITTEE ON STRATEGIC FORCES

    Mr. Cooper. Thank you, Mr. Chairman.
    I ask unanimous consent that my opening statement would be 
put into the record. And I would like to make some additional 
oral remarks.
    Mr. Rogers. Without objection, so ordered.
    Mr. Cooper. Thank you.
    Welcome to the witnesses.
    And I am glad we are having this oversight hearing. It has 
been a long time since this committee has had one--by some 
counts, almost 10 years. A lot has happened in that time. And I 
am worried that, as we enter the month of October and head 
toward Halloween, that really the subject of this hearing is a 
horror story for the American taxpayer. Because we all want a 
good outcome, and yet this has been way more expensive and way 
slower than anybody really could have imagined 10, 15 years 
ago.
    I almost want to dedicate this hearing to a former 
colleague of ours, a Republican Congressman named Dave Hobson, 
who spotted the trouble way back 10 or 15 years ago. He wanted 
to do something about it; he was unable to. And then he later 
reported in 2007 he was politically pressured not to do 
anything about it.
    So there have been various people for a long time trying to 
do the right thing for the American taxpayer. I hope that we 
can do it today. Dr. Mason's testimony, I think, will make 
clear that, whatever we decide, we need to decide something. We 
can't let the day of decision just keep on waiting.
    So I am hopeful that we will read the studies. I 
congratulate the Department of Energy and NNSA for having 
followed Congress' mandate to do these studies and to report, 
you know, what we can expect unless we take a prompt decision.
    So I thank the witnesses, and I look forward to your 
testimony.
    [The prepared statement of Mr. Cooper can be found in the 
Appendix on page 42.]
    Mr. Rogers. Thank you.
    We will now ask each of our witnesses to make an opening 
statement and summarize their opening statements in 5 minutes. 
Your written testimony will be accepted for the record.
    General Klotz, I understand you have one written statement 
for the Department of Energy.
    And, Mr. MacWilliams, no statement?
    Mr. MacWilliams. That is correct.
    Mr. Rogers. Okay.
    General Klotz, you are recognized for a verbal opening 
statement.

   STATEMENT OF HON. FRANK G. KLOTZ, ADMINISTRATOR, NATIONAL 
                NUCLEAR SECURITY ADMINISTRATION

    General Klotz. Thank you, Chairman Rogers, Ranking Member 
Cooper, other members of the subcommittee. It is an honor, as 
always, to appear before you on behalf of the Department of 
Energy and the National Nuclear Security Administration. Again, 
we thank you for your continued support for our nuclear 
security mission and for our people.
    We also appreciate the opportunity to discuss plutonium 
disposition and the Mixed Oxide, or MOX, Fuel Fabrication 
Facility project with you today. And I appreciate the fact you 
will put our written statement into the record.
    Let me state at the outset that the Department remains 
committed to the Plutonium Management and Disposition 
Agreement, or PMDA, between the United States and Russia and 
will continue to support the mission to dispose of 34 metric 
tons of excess U.S. weapons-grade plutonium.
    At the same time, the Department has been working to 
determine if there are opportunities to make the current MOX 
fuel approach for plutonium disposition more efficient since it 
has become clear that this approach will be significantly more 
expensive than originally anticipated.
    There have been, as you noted, several efforts over the 
last 2 years to analyze the current MOX fuel approach and 
alternatives, including a 2014 internal Department of Energy 
review; the 2015 congressionally mandated independent 
assessments by The Aerospace Corporation; and, most recently, a 
2015 Red Team review, tasked by the Secretary of Energy and 
conducted by a team of U.S. and U.K. experts led by Dr. Thom 
Mason, the Director of Oak Ridge National Laboratory.
    Consistently, these analyses have concluded that the 
projected lifecycle costs of the MOX fuel approach for 
plutonium disposition will be in the range of $30 billion to 
$50 billion and possibly higher and will require approximately 
a billion dollars a year, in escalated dollars, for decades for 
construction and for the operational expenses for the life of 
the project.
    With the challenging and uncertain budget environment and 
with a lifecycle cost in excess of $30 billion, we believe 
there will be insufficient long-term funding available to 
support the MOX fuel approach and do all the other things which 
the administration and the Congress have called upon the 
Department of Energy and NNSA to do in its full portfolio of 
activities.
    Further, these analyses have all concluded that there is an 
alternative option that would be less than half the cost of the 
MOX fuel approach and have far lower risks, the so-called 
dilution and disposal approach.
    The fiscal year 2015 appropriations and authorization acts 
directed that construction of the MOX Project continue in 
fiscal year 2015 at a level of $345 million. The fiscal year 
2016 continuing resolution, which funds the Department through 
December 11, 2015, maintains the status quo for this project. 
As such, the Department has been continuing construction of the 
MOX facility despite the fact that, in our view, this funding 
level is too low to make any significant progress in completing 
the project.
    While these studies were underway throughout the last two 
calendar years, the Department has been discussing with 
individual Members of Congress and with staff the best path 
forward.
    We have also raised our ongoing analysis of plutonium 
disposition options with our Russian counterparts. The U.S.-
Russian PMDA provides for disposition by irradiation or any 
other method as may be agreed by the two parties to the 
agreement. As we determine our path forward as a Nation, we 
will continue these discussions with the Russians.
    So, again, Mr. Chairman, thank you for the opportunity to 
be here. And I look forward to answering your questions and Mr. 
Cooper's questions as well as the other members of the 
subcommittee.
    [The prepared statement of General Klotz can be found in 
the Appendix on page 44.]
    Mr. Rogers. Thank you, General.
    Mr. MacWilliams, you are recognized for 5 minutes.

    STATEMENT OF JOHN J. MACWILLIAMS, SENIOR ADVISOR TO THE 
         SECRETARY OF ENERGY, U.S. DEPARTMENT OF ENERGY

    Mr. MacWilliams. Thank you, Chairman Rogers, Ranking Member 
Cooper, and members of the subcommittee. I appreciate the 
opportunity to appear before you today to discuss the 
Department of Energy's efforts to dispose of surplus weapon-
grade plutonium, which is a topic of great importance to 
Secretary Moniz and to Deputy Secretary Sherwood-Randall.
    I am, as was mentioned, the Department of Energy's 
Associate Deputy Secretary, and I also serve as the Secretary's 
senior finance advisor. I have a private-sector background and 
have focused most of my career on investment and financing in 
the energy sector since about the mid-1980s. I joined the 
Department in June of 2013, and I have had the opportunity 
since then to work closely with Administrator Klotz on a 
variety of national security issues, including the Plutonium 
Disposition Program.
    Shortly after I joined the Department, the Secretary asked 
me to lead a new special working group that he established in 
June of 2013 focused on plutonium disposition. As part of our 
efforts to determine ways to improve the efficiency of the 
plutonium disposition mission--which, as General Klotz just 
mentioned, it remains a critical and very important mission--
the working group undertook a detailed analysis of our 
disposition options.
    The Plutonium Disposition Working Group includes the Office 
of the Administrator as well as the Offices of Defense Nuclear 
Nonproliferation, Nuclear Energy, Acquisition and Project 
Management, General Counsel, and Congressional and 
Intergovernmental Affairs.
    And the Department issued a report with the working group's 
analysis of surplus weapon-grade plutonium disposition options 
in April of 2014. The analysis concluded that the projected 
lifecycle costs of the MOX fuel approach for plutonium 
disposition would be approximately $30 billion.
    I think it is important at the outset to clarify that the 
MOX fuel approach lifecycle cost includes much more than just 
the MOX Fabrication Facility, which is located at Savannah 
River. Rather, it is the entire disposition program, which 
starts with pit disassembly and conversion, then moves into the 
MOX Fabrication Facility. Wastes come out in the Waste 
Solidification Building. We then have waste qualification and, 
ultimately, reactor modifications necessary to burn the fuel in 
light-water reactors.
    The analysis also concluded that there is an alternative 
option that would be less than half the cost of the MOX fuel 
approach and have far fewer risks, and that is the dilution and 
disposal approach, which we will discuss today at length.
    Our efforts to reexamine the ways that we are implementing 
our plutonium disposition mission are part of a larger focus in 
the Department on improving our performance of major projects 
across the enterprise. As you are well aware, we manage some of 
the most truly one-of-a-kind projects, very difficult projects, 
often handling radioactive conditions. And, in light of these, 
we have struggled, and we have been on GAO's [Government 
Accountability Office's] high-risk list since the inception of 
that list in the 1990s.
    To meet those challenges, the Secretary has instituted a 
number of changes to improve our performance on major projects, 
and he has made improving management performance at the 
Department of Energy a top priority, which has been recognized 
by GAO and others. In fact, in 2013, GAO narrowed its DOE focus 
to only the contracts and projects over $750 million in the 
Department's Office of Environmental Management and also in 
NNSA.
    In addition, since the creation of NNSA's Office of 
Acquisition and Project Management in 2011, they have delivered 
on an $800 million project portfolio, approximately $60 million 
or 7\1/2\ percent below budget.
    In the last year, the Secretary has issued two significant 
decision memos. One of those created the Project Management 
Risk Committee, which I chair.
    So the reforms and processes that we are instituting at DOE 
with respect to project management are critical steps to 
ensuring we continue to be responsible stewards of taxpayers' 
dollars. We are encouraged by the work that we have done over 
the last 2 years, but we recognize that many challenges remain, 
including the Plutonium Disposition Program. We look forward to 
working with Congress to ensure that the program is on the best 
path forward.
    Thank you. And I will be pleased to answer your questions.
    Mr. Rogers. Thank you.
    And, Dr. Mason, you are recognized for 5 minutes.

 STATEMENT OF THOM MASON, PH.D., DIRECTOR, OAK RIDGE NATIONAL 
                           LABORATORY

    Dr. Mason. Chairman Rogers, Ranking Member Cooper, and 
members of the committee, thank you for this opportunity to 
appear before you today.
    My name is Thomas Mason. I am Director of the U.S. 
Department of Energy's Oak Ridge National Laboratory. And, as 
General Klotz has told you, Secretary Moniz tasked me with 
assembling and leading a Red Team to assess options for 
disposing of surplus weapons-grade plutonium.
    We were directed to consider the mixed oxide fuel, or MOX, 
approach that is the current baseline, an alternative entitled 
``dilute-and-dispose,'' and any other alternatives that we 
viewed as meriting consideration. In particular, we were asked 
to evaluate the previous assessments of plutonium disposition 
options and reconcile cost differences among them, analyze ways 
that the MOX approach might be modified to reduce its cost, and 
examine risk assumptions and their impact on the cost.
    The Red Team reviewed a number of previous assessments of 
plutonium disposition options, and, as part of the process, we 
interviewed several members of the teams that conducted these 
assessments. We heard topical presentations on the MOX approach 
and potential alternatives. We were briefed by Ambassador 
Michael Guhin of the U.S. State Department and Dr. Siegfried 
Hecker, the former Director of Los Alamos National Lab, on the 
terms and history of the Plutonium Management and Disposition 
Agreement and interactions with Russian scientific leaders that 
led up to this agreement. We conducted site visits and 
interviews at Los Alamos, the Waste Isolation Pilot Plant, or 
WIPP, and the Savannah River Site. And, finally, we reviewed 
the prior cost analyses to assess annual funding needs for a 
successful disposition program, focusing on the three most 
recent assessments.
    We quickly screened out most of the potential alternatives, 
including some that were addressed in the Plutonium Working 
Group [PWG] assessment that John MacWilliams was involved in, 
primarily because they had sufficient uncertainties in terms of 
cost and schedule that we concurred with the prior assessments 
that did not consider them near-term options for an alternative 
pathway.
    The two remaining alternatives, the baseline MOX approach 
and the dilute-and-dispose, are those addressed in the Phase 1 
Aerospace assessment of the PWG report.
    The Aerospace team reached four primary conclusions: The 
PWG cost and schedule estimates were performed in reasonable 
accord with accepted best practices. The programmatic risks 
were generally underestimated for both the MOX approach and the 
dilute-and-dispose alternative; and that the dilute-and-dispose 
alternative cost less than the MOX. Finally, they concluded 
that the MOX approach is essentially nonviable at anticipated 
capital funding levels because of the time needed to complete 
construction of the MOX Fuel Fabrication Facility, up to 86 
years at $350 million a year.
    We agreed with the first three conclusions and, 
importantly, the conclusion that the best-case scenario for MOX 
was substantially more expensive than the worst-case scenario 
for dilute-and-dispose. We did find that the assertions 
regarding the time needed to complete the MOX Fuel Fabrication 
Facility at reduced funding levels were not able to take into 
account possible optimization of the project effort at reduced 
funding levels. However, as I said, we concurred with the 
primary conclusion regarding the relative cost.
    We also reviewed the High Bridge critique of the Aerospace 
report, and the primary concern expressed by High Bridge was 
that the MOX risk elements and resulting impact costs are 
overstated and inconsistent and that the dilute-and-dispose, 
which they refer to as ``downblend,'' risk elements are 
understated.
    While we concurred with findings that the MOX lifecycle 
costs in the Aerospace report were overstated, as described, 
due to the extension of the project over very long durations 
and the impacts of escalation, we disagreed with their 
contention that dilute-and-dispose should have a risk profile 
commensurate with a complex nuclear facility construction 
project in its early stages, given that it can begin already in 
existing facilities and has much smaller capital investment 
requirements in order to optimize its production rate.
    And, in fact, the simplest statement that we can arrive at 
in terms of understanding the cost differences is that the 
dilute-and-dispose option is essentially a subset of what is 
needed for MOX. All of the requirements for pit disassembly and 
oxidization are necessary in either scenario. In the case of 
MOX, you then have to go on to convert that into nuclear fuel 
in the MOX Fuel Fabrication Facility, hence the additional 
cost.
    And, in particular, the dilute-and-dispose uses much 
simpler technology than MOX, so the technical risks are 
reduced. And it has already been demonstrated in the 
dispositioning of weapons plutonium material from the Rocky 
Flats facility.
    So the primary risks associated with the dilute-and-dispose 
option are not so much cost and schedule risks; they are risks 
associated with getting Russian concurrence with the 
modification of the PMDA. Such modification is allowed for in 
the agreement, but, of course, it does require concurrence. We 
believe there is a sufficient technical basis to constitute a 
good starting point for those negotiations, although there can 
be other factors beyond technical merits that could influence 
their outcome.
    And, also, receiving agreement from the State of New Mexico 
for the optimal regulatory pathway for dilute-and-dispose is 
another factor that can impact the overall viability, 
particularly due to its impacts on the WIPP capacity.
    The bottom line in terms of relative cost we analyzed in 
terms of the operating cost requirement on an annual basis in 
unescalated dollars, the dilute-and-dispose option, we believe, 
can be executed at basically the current funding level of 
roughly $400 million a year, whereas successful execution of 
the MOX plan would require ramping up over the next 2 years or 
so to more like $700 million to $800 million a year. In both 
cases, you would have to sustain that funding over the multi-
decade operating life of the facility against inflation, so it 
would escalate over time.
    So, I think at that point, I am over my time, so I will 
conclude, and we can turn to questions.
    [The prepared statement of Dr. Mason can be found in the 
Appendix on page 50.]
    Mr. Rogers. I thank all the witnesses.
    And now I will recognize myself for questions.
    The Plutonium Management Disposition Agreement between the 
U.S. and Russia, as amended, requires the U.S. to pay Russia 
$400 million to help Russia hold up its end of the deal. That 
is pretty hard to believe, given what Russia is up to around 
the world right now.
    How much of this assistance has been paid to Russia so far? 
Will any current or prior-year funding be paid to Russia for 
these purposes in 2016? How much of these funds are currently 
available and on your books? And what is the plan for the $400 
million in U.S. assistance mentioned in fiscal year 2017-2018?
    General Klotz, I guess you are the perfect person for this 
question.
    General Klotz. I am. And thank you. And anticipating that 
you might ask this question, Mr. Chairman, I carefully quizzed 
our staff.
    The United States has not provided Russia with any funding 
towards the $400 million commitment. No funds will be paid to 
Russia in current or prior-year funding towards this 
commitment. And, in accordance with recent congressional 
direction, all Russia program funds that were appropriated to 
meet U.S. PMDA obligations were rescinded, and there are 
currently no funds available within the NNSA available to 
support Russian plutonium disposition.
    Mr. Rogers. Great. Well, given that so many senior U.S. 
military leaders are saying they are our biggest threat, it is 
going to be a virtual impossibility to get more money out of 
Congress for Russia.
    The Waste Isolation Pilot Program, or WIPP, in New Mexico 
is a key part to making the dilute-and-dispose option work, but 
WIPP has been shut down for over a year and a half due to a 
radiation leak. What risks are in the dilute-and-dispose option 
given the uncertainty surrounding WIPP?
    Dr. Mason.
    Dr. Mason. WIPP is a critical asset for a number of 
programs. It is required for the ongoing operations of 
facilities, a lot of the cleanup activity, so it is certainly 
urgent that it be restarted.
    We estimated that it would take roughly 5 years to prepare 
for initial shipments to WIPP, assuming that a decision was 
made to transition to that pathway. And you have to go through 
a termination process, obviously, in the MOX Fuel Fabrication 
Facility. That will entail some cost.
    And, also, there is some preparatory work in terms of 
reaching an agreement with the Russians and establishing the 
framework for monitoring of the agreement, which would be done 
under the auspices of the International Atomic Energy Agency.
    And based on the visit that we made to WIPP and the 
discussions with the Federal officials there, we believe 5 
years is consistent with the timeframe that is envisaged for 
not only the restart of WIPP, which is within the next year or 
so, but also dealing with the backlog and getting back up to a 
full operational status. So we don't see a major inconsistency 
there.
    Mr. Rogers. Are the costs of expanding WIPP as well as 
redoing the regulations and agreements with New Mexico included 
in the dilute-and-dispose option? And how much will that cost?
    Dr. Mason. What you might call the baseline approach to 
dilute-and-dispose would be following the protocols and 
procedures that were used to disposition the Rocky Flats 
material, which included diluting the plutonium oxide to 10 
percent with the diluent, the details of which are classified, 
but it is often referred to as ``stardust'' as a sort of 
shorthand. And that pathway is currently permitted in terms of 
both the transportation to WIPP and the emplacement in WIPP.
    However, it would be optimal to explore the possibility of 
increasing the fraction of plutonium oxide. That has the effect 
of reducing the duration and therefore the cost of the project 
and reducing the consumption of volumetric capacity at WIPP. 
That would require additional regulatory approval both from NRC 
[Nuclear Regulatory Commission] for transportation and also 
permitting actions in the State of New Mexico to permit 
disposition in WIPP.
    Mr. Rogers. Well, this is kind of a follow-up to that. Your 
Red Team says that, quote, ``Perceived fundamental barriers to 
dilute-and-dispose approach, namely WIPP capacity limits and 
the PMDA compliance, are not viewed as insurmountable by the 
Red Team but should be retired as early as possible in the 
planning phase for this option as possible,'' closed quote.
    How quickly could you know if these fundamental barriers 
can be resolved successfully?
    Dr. Mason. Well, as I said, in terms of the WIPP and New 
Mexico, you can initiate within the already-approved framework 
at this 10 percent dilution. What you would like to do is, as 
quickly as possible, get to a more optimal pathway at higher 
concentration and also explore with the State possibly changing 
the basis for calculating the amount of waste deposited in 
WIPP.
    At the moment, per the agreement with the State, it is 
calculated based on the volume of container rather than the 
volume of the waste. And if you could get an agreement to 
actually look at the waste volume, that would obviate the need 
for any modification to the Land Withdrawal Act.
    As I said, those aren't a barrier to starting the process 
but would have to happen in a timely way in order to avoid 
consuming the full capacity of WIPP at the lower dilution rate. 
So, given that it would take 5 years to be ready to begin 
emplacement, there is probably time for such discussions, 
although, obviously, the near-term focus is on restart.
    In terms of the Russian agreement, that is a little harder 
to assess the duration, because, quite frankly, there are 
factors around getting an agreement with the Russians that may 
have nothing to do with plutonium disposition and the technical 
merits. And it is a little bit hard for us to, you know, 
consider all the possible geopolitical scenarios that might 
slow that down or speed it up.
    As we stated in the report, we believe that the U.S. has a 
solid negotiating position to initiate those discussions based 
on the fact that, from a technical point of view, in our 
judgment, this is an acceptable disposition, in that it puts 
the material beyond use by state or non-state actors, which is 
the intent of the agreement. And the fact that there has been 
prior modification, you know, is a good basis for the 
discussion.
    But it is a little hard for us to project, you know, how 
other extraneous factors, be they, you know, Ukraine, Syria--
pick your problem--could slow down or, you know, if things 
improved, speed that up. Although 5 years is probably not an 
unreasonable window.
    Mr. Rogers. All right. Thank you.
    Before I turn it over to the ranking member, I ask 
unanimous consent that non-committee members be allowed to 
participate in today's hearing after all subcommittee members 
have had an opportunity to ask questions. Is there objection?
    Hearing none, the Members will be recognized at the 
appropriate time for 5 minutes.
    With that, I turn it over to my friend and colleague from 
Tennessee, the ranking member, Mr. Cooper.
    Mr. Cooper. Thank you, Mr. Chairman.
    The topic of today's hearing is extraordinarily technical, 
so let me try to simplify it.
    I think the real news of this hearing is that most all the 
experts agree that there is a new and better and cheaper way to 
dispose of this plutonium. That is good news. Now, that option 
is called the dilute-and-dispose option. That is good news.
    But, Congress being Congress, there is a lot of inertia, 
and there are some folks who may prefer what is now the worst 
and more expensive and slower option, which is the one we have 
been fooling with all these years.
    The key thing, politically, is to realize that no one here 
today is talking about taking money away from South Carolina. 
Because, as the Red Team testimony says on page 5 here--let me 
quote. ``The Red Team concluded that the dilute-and-dispose 
alternative could be executed at current annual funding 
levels,'' about $400 million per year in fiscal year 2015 
dollars.
    The real question of this hearing is, if we are forced, due 
to the fact that we are in love with the older, worse, more 
expensive technology--force American taxpayers to double or 
triple their commitment to South Carolina and the other parts 
of the supply chain, I think they are okay where they are. You 
know, $300 million or $400 million a year, let's get the new 
and better technology, let's dispose of this in the new, more 
affordable, more reliable, more enlightened way, and let's kiss 
the old technology goodbye. Because we simply cannot afford to 
double or triple the commitment.
    So I have the utmost respect for my friends from South 
Carolina, all of them. The delegation is awesome. Mr. Wilson is 
particularly awesome. He does a great job supporting his 
constituents. But $300 million or $400 million a year is 
enough, on top of the $12 billion that various government 
agencies--DOE, DOD [Department of Defense]--are already 
spending in direct support to South Carolina.
    So if you look at it on a chart--and we have a chart of 
this, if my colleagues would be interested--the MOX money is 
almost insignificant. But do they have a right to force that 
MOX money to go up to double or triple? I just don't think so. 
We are doing enough already. The MOX money is the little dark 
part on the very top there. You see it is a rising slope.
    So why can't we just maintain current funding levels, 
maintain current employment levels, maintain current job 
levels, but get the technology right as we dispose of this 
plutonium? That should do no injury to our friends in South 
Carolina. That should preserve our nonproliferation goals. That 
should help us prevent this terrible squeeze on the DOD/DOE 
nuclear budget. Because we don't know where the funding is 
going to come from.
    I believe, General Klotz, didn't you say the funding is 
insufficient to continue the MOX facility? Didn't you use the 
word, adjective, ``insufficient''?
    General Klotz. If I could quote my boss, the Secretary of 
Energy, it is less than optimal for completing the project.
    Mr. Cooper. Well, I love euphemisms.
    So, again, the question is whether we embrace this new and 
better approach, this more affordable, more reliable approach 
that is at the same cost--no one is talking about taking away 
money from South Carolina or from Savannah River or anything 
like that. The only real question for this committee is whether 
we force ourselves and the American taxpayer to double or 
triple that commitment by sticking with this old, largely 
outmoded technology.
    So I would urge my committee members to put it in that 
light. We are not hurting anybody here. We are just trying to 
choose the better technology to achieve our national security 
goals.
    Mr. MacWilliams.
    Mr. MacWilliams. Thank you, sir. A couple points.
    We absolutely agree with the comments you made about 
Savannah River. General Klotz and I and the Secretary have made 
repeated trips to Savannah River, and the Department very 
strongly believes that Savannah River is not a closure site. We 
want to see it have a long and prosperous future. And we are 
very open to work with Congress and to look for new mission, to 
expand existing infrastructure, to look at things like creating 
a strategic plan, overall strategic plan, for the site; finding 
investment to expand the mission of the lab, which has done 
truly extraordinary work for the country in the last couple of 
years. So, certainly, on that point.
    With respect to the costs, the Secretary has said numerous 
times that MOX, you know, will accomplish the mission 
technically. And so, if money were not an issue, MOX would be a 
straightforward way to go. But, unfortunately, as you have 
indicated, it is an issue.
    One can look at different assumptions. I am happy to get 
into and explain any of those different assumptions. But 
whether it is Dr. Mason's group talking about $700 million to 
$800 million in unescalated dollars or whether it is the number 
that the Secretary and the Department has used recently, that 
essentially we believe it is about a billion dollars each year 
for the lifecycle of the project.
    Because we used inflation, which I believe Aerospace also 
used, using the Engineering News-Record, which goes back to 
1915, so it was a 40-year construction average, which uses 
about 4.2 percent inflation--but one can differ on inflation 
assumptions, which I believe is why Dr. Mason chose not to 
inflate.
    But, essentially, a billion dollars a year to get this 
done, it just doesn't seem to be within the scope of what is 
practical. Whereas the dilution-and-disposal approach, we 
believe, would take about $400 million a year, and we would 
agree with Dr. Mason's report that there may be opportunities 
to lower that.
    General Klotz. Mr. Cooper, if I could, let me just add to 
what Mr. MacWilliams said about the importance of Savannah 
River in South Carolina to us.
    Looking at it strictly from the NNSA perspective, Savannah 
River is the site of where we do most of our tritium 
operations, which is one of the most important commodities that 
we have to deal with within the weapons program of the NNSA.
    In addition, other aspects of Savannah River and South 
Carolina are extraordinarily important to our nonproliferation 
mission. L Basin, K Area, H Canyon are extraordinarily 
important in carrying out efforts that we undertake across the 
globe to reduce materials that might be attractive to 
terrorists or would-be proliferators.
    So we are in it for the long haul with Savannah River. And 
I agree with Mr. MacWilliams and the Secretary that there are a 
lot of neat and interesting and worthy things that we would 
love to be doing at Savannah River over not just the short term 
but the long-term future.
    Mr. Cooper. Thank you, General.
    And, to reiterate, this hearing should be good news for 
America and good news for South Carolina. We can do both at 
current funding levels, but not if we double or triple it. So 
let's keep it where it is.
    Thanks.
    Mr. Rogers. I thank the gentleman.
    The Chair now recognizes Chairman Forbes for 5 minutes.
    Mr. Forbes. Mr. Chairman, first of all, I want to thank you 
for your unbiased and analytical approach to this issue and so 
many more that come before this subcommittee.
    I thank Mr. Cooper for his persistence and passion on this 
issue, and just acknowledge that what seems to some as inertia 
may be to others due diligence. And I think the goal of 
everyone on this subcommittee and on this full committee is to 
get it right. But many of us also heard voices coming over here 
telling us that reducing our military significantly over the 
last several years was the right thing to do. When they look at 
the world today, they realize they were dramatically wrong on 
that. So we want to get it right.
    And, Dr. Mason, the question I would ask for you is kind of 
following up on what the chairman asked, but in the Red Team 
report you state that the WIPP capacity limits and the PDMA 
compliance are not viewed as insurmountable. Who did the Red 
Team consult with at the State Department and in New Mexico 
State government to come to this conclusion?
    Dr. Mason. With the State Department, it was Ambassador 
Guhin, who has had responsibility for the agreement, who 
briefed us. And, as I mentioned, we also spoke with Sig Hecker, 
who had a lot of early experience interacting with the Russians 
in some of the discussions leading up to the agreement.
    And, you know, the takeaways from those discussions were 
that, you know, first off, as I noted, there has been 
modification to the agreement in the past to accommodate what 
you might characterize as Russian national interest with their 
desire to proceed with the fast reactor program. And so it is 
not unreasonable, if the decision were made to proceed down a 
different pathway in the U.S. national interest, to propose 
that.
    However, according to Ambassador Guhin, the Russians were 
not interested in negotiating a hypothetical. They were aware 
that there were discussions going on about possible----
    Mr. Forbes. And I don't want to cut you off because I would 
love for you to have time. I just have 3 minutes.
    So, basically, you talked to two people?
    Dr. Mason. Well, of course, in addition to relying on the 
expertise on the Red Team, that is correct.
    Mr. Forbes. Yeah, but the Red Team was consulting with two 
people with the State Department.
    How about the New Mexico State government?
    Dr. Mason. With New Mexico, our primary interactions were 
at WIPP with the contractors and Federal officials on the site 
who have been the ones dealing with the State.
    Mr. Forbes. So you were talking to the contractors there 
that would be doing----
    Dr. Mason. And to the DOE officials who were responsible 
for the negotiations that are ongoing at the moment in terms of 
WIPP restart, yes.
    Mr. Forbes. Okay. So, then, basically, your report 
suggesting this was not viewed as insurmountable was two people 
at the State Department and the contractors and the people at 
Department of Energy and New Mexico State government.
    Let me move on to a second question the chairman raised to 
you. How can you be confident that using a downblending option 
at the Waste Isolation Pilot Plant in New Mexico will only cost 
$400 million annually, given its capacity limits and with it 
currently being closed?
    Dr. Mason. Well, as I noted, the likely timeline for being 
ready to initiate shipments to WIPP is 5 years down the road, 
which allows sufficient time for the current plans for restart 
and resumption of full-scale activities to unfold. So, from 
that point of view, the current restart schedule does not 
interfere with the likely timeline for dilute-and-dispose.
    In terms of the capacity limits, there are a number of 
options. At the current mechanism for disposal, using the 10 
percent dilution that was demonstrated for the Rocky Flats 
material, there is not sufficient capacity at WIPP to 
accommodate all 34 metric tons based on the calculations of the 
needs for the EM program.
    However, there are a couple of options for addressing that 
prior to even consideration of whether or not there is any need 
to modify the Land Withdrawal Act, which defines that limit. 
Those options include some things that are within the purview 
of the Department, in terms of making more efficient use of the 
resource by packing containers more fully. And some of the 
options would require negotiation with the State of New Mexico, 
in terms of the methodology for calculating the volume of waste 
that is in place and----
    Mr. Forbes. And my time is about--I have 20 seconds left. 
But if you could, for the record, just submit to us, if you 
would, the analysis that you did to make sure those options 
could actually be done, instead of just recognizing there are 
potential options. We always have a lot of options.
    Dr. Mason. Sure.
    Mr. Forbes. We need to run down to make sure that we 
actually can do them and what the analysis that went behind 
them to do. And, again, just talking to a couple people, we 
need a little bit more than that.
    [The information referred to can be found in the Appendix 
on page 67.]
    Mr. Forbes. So thanks, Dr. Mason.
    With that, Mr. Chairman, I yield back.
    Mr. Rogers. I thank the gentleman.
    The Chair now recognizes the gentleman from California, Mr. 
Aguilar, for 5 minutes.
    Mr. Aguilar. Thank you, Mr. Chairman.
    Thank you, gentlemen.
    Director Mason, if you could just expand a little bit on 
that. In your testimony, you mentioned that 75 percent of the 
money, under the dilute-and-dispose option, the WIPP option, 75 
percent of the money appropriated over the next 3 years would 
go toward the MOX facility, while the rest would go toward WIPP 
prep. You have also mentioned a 5-year window, a 5-year 
transition and termination.
    So can you kind of walk me through the difference between 
the 3- and 5-year window?
    Dr. Mason. Sure.
    The 5 years is how long we would estimate it would take to 
be ready to make a shipment to WIPP. And part of the reason for 
that is, for the first 3 years of that period, a substantial 
fraction of the funds would be required to, in an orderly and 
responsible way, close out the activities at the MOX Fuel 
Fabrication Facility.
    So that would decline over the 3 years, and you would use 
the funds that were made available then to begin ramping up the 
activities towards WIPP emplacement, which would then occur, 
you know, at the end of the 5 years.
    Mr. Aguilar. Conversely, then, 75 percent of the allocation 
would go toward ramping down----
    Dr. Mason. Yes.
    Mr. Aguilar [continuing]. The existing operation. Can you 
talk a little bit about, you know, what goes into that cost 
structure and why that is?
    Dr. Mason. Sure. And recognize this is a rough estimate 
based on termination costs associated with other large capital 
projects. And, obviously, it would be the subject of a 
negotiation, but it is our best estimate.
    Some of the cost is just associated with the fact that you 
would want to leave the project in an appropriate physical 
condition, prevent egress of water and so forth, so that the 
asset there would be preserved. We did not consider possible 
alternative uses for the facility, but, obviously, you would 
want to leave the facility in a state where the investment that 
has been made in a, you know, seismically qualified, high-
security facility would be preserved in the event that an 
alternative use was identified. So that involves some physical 
work, to put the facility in that state, since it is open to 
the environment now to allow access for construction purposes.
    There would also be termination costs associated with the 
various contractual requirements for procurement of equipment 
and construction. Those all have to be negotiated. And you have 
to continue to pay project staff during the time period that 
you are going through that process.
    So that would be the rough mix of things, should the 
decision be made to pursue that.
    Mr. Aguilar. I guess that kind of leads into the--my next 
question would be, you also discussed the worst-case scenario 
in your testimony, and you mentioned that the worst-case 
scenario from the WIPP side--the costs associated are better 
than the best-case scenario for MOX.
    So can you walk us through what some of the complications 
could be? I am hearing you say that those negotiations to, kind 
of, ramp down, that could be a potential variable within the 
wind-down cost structure.
    Dr. Mason. Yeah, there is obviously uncertainty associated 
with the termination costs. The other sorts of risks that we 
considered in looking at that is, as we have seen, you know, 
the existing facilities that would be used, you know, can be 
subject to perturbations in their operations. PF4, for example, 
which would be used for disassembling the pits, is coming out 
of a process where it has been down for a period of time. And, 
obviously, over a multi-decade operating activity, that sort of 
thing can interrupt the operation and extend the duration.
    And there are some capital investments needed in order to 
optimize the throughput on the dilute-and-dispose. And, 
obviously, those are projects that have associated with them 
risks and contingencies. Kind of ballpark estimate for adding 
the additional lines to K Area is around $200 million, but that 
is a preconceptual number, so it could increase.
    And then there are the standard uncertainties associated 
with the fact that there will be escalation of salaries and 
everything else over the operating life. Those are hard to 
estimate over that long period of time. And, you know, 
obviously, from year to year, you can have budget fluctuations 
that you have to adapt to in your schedule, and those can 
translate into project risks in terms of cost and duration.
    Mr. Aguilar. I appreciate you walking me through this.
    Thank you, Mr. Chairman. I will yield back.
    Mr. Rogers. I thank the gentleman.
    The Chair now recognizes Mr. Coffman for 5 minutes.
    Mr. Coffman. Thank you, Mr. Chairman.
    My questions are to the cost overruns on the construction 
of the MOX facility, in that, originally, in 2002, cost 
estimates to build the MOX facility were $1 billion; by 2007, 
when construction began, the cost estimate rose to $4.8 
billion; and, in 2014, the total design and construction costs 
rose to $7.8 billion.
    I just had an issue back home with the building of a 
veterans hospital that was dramatically over budget. And the VA 
[Department of Veterans Affairs], clearly, is not a 
construction management entity, and they demonstrated that on 
this project. The Army Corps of Engineers has since taken over 
this project, a project that started out at $600 million that 
wound up to, I think, almost $1.7 billion.
    And part of the legislation to fully fund the hospital was 
to strip the Veterans Administration of their construction 
management authority for any project in excess of $100 million 
and give that to entities like the Army Corps of Engineers who 
do it for a living. It is their day job; it is their focus.
    And I want to know--I think I heard something, projects 
over $750 million. That seems like an awfully high number to 
me. Could you comment on that further?
    Mr. MacWilliams. Yes, sir. I did say that the GAO had 
removed us from the high-risk list for projects of that size. 
And you are correct, that is a large number.
    Essentially, as I came in and started to look at our 
project performance, to say it has been challenging would be 
overly polite, actually. And I would be happy to discuss some 
of the reasons behind these overruns, if that would be helpful 
to you, sir.
    But what I was referring to is that, subsequent to NNSA 
putting in their Office of Acquisition and Project Management 3 
years ago, which was designed to deal with some of these 
problems, their performance on their smaller projects, the rest 
of their portfolio, has been quite good.
    Mr. Coffman. How do you define smaller projects?
    Mr. MacWilliams. The $800 million, below 750.
    Mr. Coffman. Oof. That--okay.
    Mr. MacWilliams. No, and so the--you are correct, sir, that 
when you look at where the money is in these projects--and this 
is the problem that we face, and we face this across the 
Department----
    Mr. Coffman. Right.
    Mr. MacWilliams [continuing]. That if you look at where the 
money is in these four or five large projects, they are 
historical projects, and we do have problems. And I can get 
into the reasons if you----
    Mr. Coffman. There are entities in the Federal Government, 
whether GSA [General Services Administration], whether NAVFAC 
[Naval Facilities Engineering Command], whether the USAC or the 
Army Corps of Engineers, that they are professionals. I mean, 
this is what they do. And there are agencies, like the VA, who 
have just lost this construction management authority, and 
agencies, you know, like the DOE, that choose to go out on 
their own. And I think it is the taxpayers that suffer for 
this.
    And I really think that--I wish agencies in the Federal 
Government would focus on what their core mission is and not 
venture out to areas that they have redundant, inefficient 
capability on.
    I wonder if you could respond to that.
    Mr. MacWilliams. Yes, sir. And I would point out that, as 
we began to look, when we started looking at this a couple 
years ago, this project, one of the first things we did was 
bring the Army Corps of Engineers in to look at estimates of 
the MOX Fabrication Facility construction cost. At the time--
this was almost 2 years ago, and it was a preliminary 
analysis--they concluded that they felt the MOX Fabrication 
Facility would cost $10 billion at that point. There has been 
underfunding for 2 years, so I am sure that if they were to 
look at it again it would be higher than that.
    But you are raising a very legitimate point, given the 
history of the Department. The reason that we put in very 
substantial project management changes is because of these 
problems. I will just point out one, not to take away from your 
point, the value of your point, sir, is that NNSA, for 
example--immature design is one of the biggest problems we 
face----
    Mr. Coffman. And let me----
    Mr. MacWilliams. Okay.
    Mr. Coffman. The Army Corps of Engineers was not brought in 
at the beginning. Am----
    Mr. MacWilliams. No, sir.
    Mr. Coffman [continuing]. I correct? So, yeah, of course, 
they are pricing the mismanagement that has already been done 
on the project into that figure.
    Go ahead, please.
    Mr. MacWilliams. No, I was just going to make one point, 
and then we can get into others as you wish.
    The immature design, so we get into design-build-design, is 
a huge problem. And so, actually, NNSA now has a rule that is 
mandated that we will not get into nuclear projects unless we 
have 90 percent design complete. So I recognize that is only 
one point, but that is to address one of the biggest issues 
that we have had.
    Mr. Coffman. It is just unnecessary and inefficient to have 
these redundant abilities created in every department of the 
Federal Government. It is unnecessary. There are elements in 
the Federal Government that do this for a living.
    And I hear the same thing in the VA, when we were going 
through this process, about how they were going to get better, 
about how they were working through it. And if we look back at 
the VA historically, you will find throughout the decades they 
made the same commitments and never delivered. And, again, it 
is just--it is a waste of taxpayer dollars to have this 
redundant capability, and it needs to go away.
    And, with that, Mr. Chairman, I yield back.
    Mr. Rogers. I thank the gentleman.
    The Chair now recognizes the gentleman from California, Mr. 
Garamendi, for 5 minutes.
    Mr. Garamendi. Thank you.
    First, a quick question: AREVA has claimed that 
construction is nearly 70 percent complete. Do you agree? And 
how much work would have to be redone to move into this dilute 
process?
    Mr. MacWilliams. Thank you, sir, for the question.
    We don't agree. And the reason we don't agree is that we 
are required to look at cost to complete. So----
    Mr. Garamendi. How much would have to be redone if you are 
going to this other dilute process?
    Mr. MacWilliams. Well, we are at 35 to 41 percent. That is 
where we are, sir. And if you are referring to rework, sir, 
currently, the contractor is running at a rate of 25 percent 
rework.
    Mr. Garamendi. Thank you. Wanted to get that on the record.
    Russia is using a fast reactor system. Is that correct?
    Mr. MacWilliams. Yes, sir.
    Mr. Garamendi. How far along are they on their process?
    Mr. MacWilliams. The BN-800 is nearing operations as we 
speak, sir.
    Mr. Garamendi. I see.
    All right. What is the U.K. doing in its disposition of 
plutonium?
    Dr. Mason. Actually, one reason that we included on our 
team some representatives from the U.K. is because they are 
also going through a process of trying to analyze their options 
for dealing with a considerable quantity of civil plutonium, 
120 tons. At the moment--or, actually, it may be 140. I correct 
myself.
    At the moment, their current plans have not been fully 
finalized. They are considering a MOX option for a portion of 
that inventory, although there is some that will be unsuitable 
for MOX due to its chemical composition. But they are also 
pursuing R&D [research and development] into geological 
disposition pathways in parallel. They are not as far along in 
terms of their decision process, but----
    Mr. Garamendi. Are they considering a fast reactor?
    Dr. Mason. Not to my knowledge, no.
    Mr. Garamendi. The analysis here indicates that an American 
fast reactor doesn't exist. Is that correct? It doesn't exist 
for this purpose.
    Dr. Mason. In fact, there isn't an operating fast reactor 
in the U.S. The last facility, the Fast Flux Test Reactor at 
Hanford, was shut down----
    Mr. Garamendi. Is that the integral fast reactor?
    Dr. Mason. The FFTF, no, it is a different facility. We 
have not operated one for a number of years.
    Mr. Garamendi. Did we have an integral fast reactor 
operating in the United States?
    Dr. Mason. Idaho has in the past operated fast breeder 
reactors but not for a number of years.
    Mr. Garamendi. So we actually had the technology. Is that 
technology in existence today?
    Mr. MacWilliams. Arguably, the technology was developed in 
the U.S. originally--actually, as was most of the technology 
behind the MOX option. However, we are not currently 
aggressively pursuing other possible reactor technologies in 
general.
    Mr. Garamendi. Does GE [General Electric] have the license 
for the integral fast reactor?
    Mr. MacWilliams. We will have to check that. I don't want 
to make something up----
    Mr. Garamendi. It does.
    Mr. MacWilliams [continuing]. On the fly.
    Mr. Garamendi. It does. I am surprised you don't know.
    In fact, I am not at all surprised. I guess I should not be 
surprised because the Department seems to have dismissed the 
fast reactor as an option and moved on to study the MOX and the 
downblend-and-dispose option. Is that correct?
    Mr. MacWilliams. Actually, sir, when we did our 2014 study 
as part of that, we did a very actually comprehensive study, NE 
[Office of Nuclear Energy] did, on the fast reactor. Because, 
as the Russians are showing, a fast reactor would accomplish 
the mission. The issue became that it would be a new start. The 
cost estimate was approximately $50 billion, and it would take 
many, many years with complexity.
    But it was looked at. We have a study which I think----
    Mr. Garamendi. Is Russia willing to sell its fast reactor 
to us?
    Mr. MacWilliams. I can't answer that. I haven't asked them 
that.
    Mr. Garamendi. Well, apparently they have one. Apparently 
they are using it for the very same purpose that we would use 
this. And you didn't bother asking Russia or didn't bother 
looking at their technology. Is that correct?
    Mr. MacWilliams. To my knowledge, we have not asked Russia 
whether----
    Mr. Garamendi. Why?
    Mr. MacWilliams [continuing]. We could buy a reactor.
    Mr. Garamendi. Why?
    Mr. MacWilliams. I don't have an answer for that, sir.
    Dr. Mason. I could comment if I----
    Mr. Garamendi. I find that unacceptable. But, please, tell 
me why, since there is a technology available, a fast reactor 
available in Russia--you cited the name of it--why didn't you 
look at that as an option? Any of the three of you.
    Dr. Mason. I can comment on the Red Team. We did consider 
the fast reactor option in our analysis----
    Mr. Garamendi. Did you consider the Russian fast reactor?
    Dr. Mason. Our consideration was not a specific fast 
reactor design----
    Mr. Garamendi. Thank you.
    Dr. Mason [continuing]. So it was----
    Mr. Garamendi. General, did you consider it?
    General Klotz. No, I did not.
    Mr. Garamendi. Why not?
    General Klotz. I wasn't part of this review, and the NNSA 
doesn't build reactors. That is another part of the Department 
of Energy. But what I understand----
    Mr. Garamendi. I find it incomprehensible. We are looking 
at tens of billions of dollars here. And we know that there 
exists in Russia a fast reactor that is operating or will very 
soon be operating to dispose of plutonium. And the brilliant 
scientists and generals didn't bother to ask if maybe the 
Russian reactor or something similar to it could be used to 
this purpose? Is that correct?
    Mr. Rogers. The gentleman's time has expired.
    The Chair now recognizes the gentleman from South Carolina, 
Mr. Wilson, for 5 minutes.
    Mr. Wilson. Thank you, Mr. Chairman, and thank you, Ranking 
Member Cooper, for your leadership.
    And I am grateful to be here with NNSA, with DOE, with 
National Labs. I have a unique perspective of your 
professionalism. I am the only Member of Congress who has 
actually worked at the Savannah River Site and worked at DOE, 
and so I know the professionalism of the people that you work 
with.
    In fact, it is my humble opinion that an indication of your 
success has been the level of completion of the Mixed Oxide 
Fuel Fabrication Facility. Indeed, it has been completed 67.3 
percent. We have 160,000 cubic yards of structural concrete in 
place. I remember the first time I visited, it looked like a 
forest of rebar. And so I have seen it come to life. And the 
thought of creating a facility that can take weapons-grade 
plutonium and convert it into fuel, I sincerely hope that we 
can proceed.
    And, further, 19 of 31 of the modules are installed in the 
pipe gallery. We have the gloveboxes received in place. Over 
and over again, there actually has been, I believe, tremendous 
success and achievement.
    And, with that in mind, too, General Klotz, the State of 
South Carolina, I feel like, is--I am concerned about South 
Carolina. This is, of course, adjacent to our beloved Georgia, 
Peach State. And so this is a concern of both States, that the 
agreement of our State was to accept the highly radioactive 
weapons-grade plutonium and to process it and move it out. And 
it is a concern for the people that I represent. That is the 
greatest concern that we have.
    With that in mind, what has been proposed is to use the 
Waste Isolation Pilot Plant in New Mexico. But, General Klotz, 
is the commitment still to South Carolina, to the people of our 
State, Georgia, our neighbors, that indeed this weapons-grade 
plutonium will be removed from our presence?
    General Klotz. Yes, Congressman, it most definitely is. 
And, of course, one of the questions becomes, you know, which 
pathway will get there sooner and quicker.
    Mr. Wilson. But, gosh, to convert weapons-grade plutonium 
into fuel as opposed to some inert storage facility that--and 
that goes to WIPP itself.
    And another person who has an extraordinary clarity on this 
issue is Bill Richardson, the former Governor of New Mexico, 
former Secretary of Energy. And in the Aiken Standard newspaper 
on August 21st, he had a letter, which was printed, to Senator 
Harry Reid saying, quote, ``As a former Secretary of Energy and 
Governor of New Mexico, I can assure you that WIPP in our 
lifetimes has the same chance of accepting weapons-grade 
plutonium that Yucca Mountain has for accepting spent nuclear 
fuel. It is self-deluding to claim otherwise.''
    Is the Secretary correct or not?
    Mr. MacWilliams. Well, we have great respect for the 
Secretary and his service to the country. He may have forgotten 
that there is already 4.8 metric tons of plutonium that has 
been delivered in exactly this format into WIPP.
    Mr. Wilson. But we also know, too, as we are talking about 
this technology, the MOX facility that currently exists in 
France. And so, as we were talking about the technology, it has 
been proven, and it will work.
    With that in mind, at the WIPP site, there was an incident 
where there was airborne radiation particles in February 2014 
at the WIPP site. It has certainly, General, been placed in a 
closed facility. Is it currently open or not?
    General Klotz. It is not currently operational. The 
expectation is by sometime during next year, the year 2016, it 
will be up and operational again.
    This is a very, very important site to the Department of 
Energy, to the Nation, because it is where we can store 
transuranic waste. And so the Secretary and the entire 
Department are seized with the importance of returning WIPP to 
full operation as soon as we possibly can.
    Mr. Wilson. And so you indicated it will be open within the 
next 2 years?
    General Klotz. By the end of 2016.
    Mr. Wilson. And, as I conclude, I appreciate your service, 
but I can't wait to invite my colleagues to visit the mixed 
oxide fuel facility, MOX facility. It is adjacent to the 
Augusta National Golf Course, Sage Valley Golf Course. It is a 
world-class place. I want John Garamendi to be there and see 
it.
    So thank you very much.
    General Klotz. Well, I can attest, Congressman, you give a 
great tour through the facility.
    Mr. Rogers. The gentleman's time has expired. I thank the 
gentleman.
    The Chair now recognizes Mr. Norcross for 5 minutes.
    Mr. Norcross. Thank you, Mr. Chairman and certainly Ranking 
Member Cooper, for allowing me to sit in.
    Having spent the better part of my life in the industry, I 
hear much of the testimony, and it is not unique to this 
project, but the MOX facility, when it first started to put a 
shovel in the ground, how much of the project was design-
finished? What percentage?
    Mr. MacWilliams. Sir, obviously, I wasn't there, but from 
my understanding, it was about 20 to 25 percent design-
incomplete, which is obviously a significant problem.
    Mr. Norcross. So the original cost estimates were based on 
a 20 percent completed design.
    Mr. MacWilliams. Somewhere between 20, 25, yes, sir.
    Mr. Norcross. We usually call that throwing darts in the 
night and hoping you hit a bull's-eye. So the original premise 
here was horrible at least.
    How far along--you said it was 90 percent design-completed. 
Now, from when it actually started, how many design changes 
took place in that time? What I am trying to ascertain here is 
the incremental increases and why they occurred.
    Mr. MacWilliams. Sure. I can't give you the exact number, 
though I will take it for the record and get you----
    Mr. Norcross. Round numbers.
    Mr. MacWilliams [continuing]. The exact number, but the 
issue that you are referring to is exactly on point, which is 
it is this design-build-design problem.
    [The information referred to can be found in the Appendix 
on page 70.]
    Mr. MacWilliams This project was originally based on, as 
Congressman Wilson mentioned, some French designs. The problem 
is that this is a weapon-grade plutonium, and the French design 
is civil plutonium. And there are a number of complexities, 
including NRC licensing and other things, robotics, the way we 
approach safety in this country. And so the complexities of the 
design were not properly appreciated, in addition to the 
regulatory costs, and that is one of the major issues.
    But the issue that you are focusing on was one of the first 
issues that we focused on when we put together our review, 
which is why the NNSA now requires 90 percent design-complete 
before it will go forward.
    Mr. Norcross. And we understand, we want to get things 
completed very quickly. Just start and we'll figure it out----
    Mr. MacWilliams. That is what happened.
    Mr. Norcross [continuing]. Which is the most expensive way 
to ever do a project.
    Mr. MacWilliams. Yes, sir.
    Mr. Norcross. So let's move on, the same if we go to WIPP. 
Is that 100 percent designed, the type of facility we would 
build?
    Mr. MacWilliams. WIPP, first of all, was used in our study, 
in the 2014 study, as a reference case. And the reason it was a 
reference case is it was the only existing repository that 
could accept defense true waste. And, as I mentioned, 4.8 
metric tons of this plutonium using dilute-and-dispose has been 
shipped there, including a small amount from Savannah River.
    So the process is proven. Dr. Mason could speak in more 
technical terms about the technical risk there, if you wish, 
but it is a proven process that we have been using. In fact, 
until the incident that was referred to at WIPP, plutonium was 
scheduled to be continued to be shipped.
    Mr. Norcross. So when we look at that--and the agreement is 
with Russia. And it was mentioned earlier. What makes us think 
that they will agree to this change?
    Mr. MacWilliams. The--and General Klotz can speak to this.
    We did have, in addition to what Dr. Mason said, we did, 
about a year ago, have a DOE-State Department team go over and 
talk with the Russians. And, basically, the message--it was a 
good conversation, because the agreement, as I think we are all 
aware, provides disposition by reactor or other methods as 
agreed to by the parties, which is what the Russians availed 
themselves of in 2010.
    So the team went over, had the conversation. And, 
basically, the message that came back was the Russians were 
willing to have a conversation, but they said you need to 
figure out what direction you want to go in, then come back, 
and we will have a conversation.
    But I think General Klotz also can give you some 
firsthand----
    General Klotz. No, I think Mr. MacWilliams, sir, has given 
a very fair rendition of the response we have gotten from 
technical people on the Russian side.
    As recently as a couple weeks ago, Secretary Moniz raised 
it in conversation with Mr. Sergey Kiriyenko, who is the head 
of Rosatom in Russia, and, basically, it was the same response. 
You know, we recognize that you acceded to our desire to amend 
the agreement in 2010 to allow for the approach which the 
Russians are now pursuing; when you have a plan, come back to 
us, and we will sit down and negotiate.
    But, also, I think as Dr. Mason laid out, there are a lot--
I have spent most of my lifetime in negotiations with the 
Soviet Union and Russia. There are a lot of other political, 
economic, strategic variables that get injected into any 
discussion with them on any issue in this area.
    Mr. Norcross. Well, you certainly said a mouthful there, 
because you are suggesting that the Russians are going to be 
reasonable. And I guess we all hope that, but, certainly, that 
is a large mountain to climb.
    I yield back my time. Thank you.
    Mr. Rogers. I thank the gentleman.
    The Chair now recognizes Dr. Wenstrup for 5 minutes.
    Dr. Wenstrup. Well, thank you, Mr. Chairman.
    Mr. MacWilliams, thank you for being here today. I know we 
have had some of these discussions before that I would like to 
talk about today.
    Mr. MacWilliams. Yes, sir.
    Dr. Wenstrup. And I know you understand that I am 
frustrated with DOE's recent decision to demobilize the uranium 
enrichment D&D [decontamination and decommissioning] project in 
Piketon, Ohio. And I think it is incredibly shortsighted to do 
this, especially in light of the Iran deal, where we are seeing 
that the world's largest sponsor of state terrorism is now 
maintaining 6,000 centrifuges and continue to enrich uranium.
    DOE's decision to demobilize this project was based on data 
that was collected for a report that DOE was mandated by 
Congress to complete in April and which we received Monday 
night.
    And my question is, if the United States must have the 
technology for a fully domestic source of enriched uranium to 
support our nuclear Navy, what is DOE's long-term plan to 
ensure that we do not lose the research and the workforce gains 
that were made in Piketon, Ohio, while also maintaining 
immediate production capabilities for a domestic source of 
enriched uranium?
    It seems like we are diving into a black hole, shutting 
things down when they are spinning things up. And for our 
national security interest, we need to keep this maintained and 
ready to run.
    Mr. MacWilliams. Thank you, sir. And I want to answer that. 
I also wanted to say in a related subject that we have been 
discussing that, per conversations that we had with you this 
week, we have been working to finalize our plan for spending 
under the CR [continuing resolution], pursuant to direction 
from the Secretary.
    We will be giving updated funding guidance and direction to 
FBP [Flour-BWXT Portsmouth], the contractor, today to spend at 
a higher level to avoid involuntary layoffs for D&D 
[decommissioning and demolition] activities at Portsmouth, 
which I recognize is separate, sir. And so the contractor is 
going to issue a notice to employees later today.
    To go to your exact question, sir, as we talked about last 
week, the first important point here is these potential layoffs 
are clearly regrettable, but the administration remains 
committed to reestablishing a domestic enrichment capability--
--
    Dr. Wenstrup. Okay. My question, though, originally--and I 
appreciate that----
    Mr. MacWilliams. Yeah.
    Dr. Wenstrup [continuing]. Is we are going to have a time 
down----
    Mr. MacWilliams. Yes, sir.
    Dr. Wenstrup [continuing]. Where we do not have this 
capability up and running, and that is my concern.
    Mr. MacWilliams. Yeah.
    Dr. Wenstrup. The other thing is, when I spoke to Secretary 
Moniz last night, I said, do you have an estimate of what the 
cost is to shut down the ACP [American Centrifuge Project], 
this project?
    Mr. MacWilliams. Yeah.
    Dr. Wenstrup. And he said, ``No, I don't know. Let me get 
back to you.'' Now, to me, that is a huge component to the 
equation.
    Mr. MacWilliams. Sure.
    Dr. Wenstrup. If it cost a billion dollars to shut it 
down----
    Mr. MacWilliams. No, it does not.
    Dr. Wenstrup. I am just throwing this out as an example.
    Mr. MacWilliams. Yeah.
    Dr. Wenstrup. But you don't know. He didn't know--and it 
cost $350 million, say, to maintain it for 7 years, and we are 
able to flip a switch and produce what we need to protect our 
country at a moment's notice----
    Mr. MacWilliams. Right.
    Dr. Wenstrup [continuing]. Then that is the wise business 
decision.
    Mr. MacWilliams. Right.
    Dr. Wenstrup. He didn't even know.
    Mr. MacWilliams. Okay. Well, I can----
    Dr. Wenstrup. So I am very concerned about that. You are 
making decisions on a report we were supposed to have in April 
that we didn't get----
    Mr. MacWilliams. Yes, sir.
    Dr. Wenstrup [continuing]. And didn't get a chance to weigh 
in, and you don't even know what these costs are, and you are 
making a decision. And I just--I am sorry, I find that really 
irresponsible and a threat to our national security 
capabilities.
    Mr. MacWilliams. So, sir, as we discussed, what we are 
talking about doing is having to stand down 120 test 
centrifuges. We do not have a capability--those centrifuges 
don't have a capability today to provide us the material that 
we need.
    But the cost that you are referring to is approximately 
$100 million to $150 million. Under our agreements with 
Centrus, they have obligations to pick up a very large portion 
of that, obviously provided they have the financial means to do 
that. That is the answer.
    Dr. Wenstrup. So let me ask you this. So when it comes to, 
say, tritium, I mean, you say that the AC-100 design, that 
technology is as good as we can have right now, right?
    Mr. MacWilliams. Yes, sir. That is the technology that we 
plan to use.
    Dr. Wenstrup. Okay. And the report indicates that building 
out a national security plan based on that technology would 
require 1,400 centrifuges.
    Mr. MacWilliams. Yes, sir.
    Dr. Wenstrup. So how can we meet our tritium needs and 
build out these 1,400 centrifuges if we are dismantling the 120 
that we have?
    Mr. MacWilliams. Because the 120 that we have, the purpose 
of those was to continue to prove out the technology, and they 
have essentially neared the end of their useful life. They 
would not be centrifuges that we would add into the 1,400 for a 
variety of reasons.
    So what we are doing immediately, because we are not 
standing down--this is important to say this, that we are 
continuing with the program, we are not putting a cold standby. 
We are issuing--we will issue a RFI [request for information] 
to build out. The issue, however, sir, is that it is going to 
take 5 to 7 years to reestablish that capability, but we are 
starting that now.
    Dr. Wenstrup. What is our capability, when this plan is 
played out, on a moment's notice to produce enriched uranium 
that we may need based on whatever may happen in the----
    Mr. MacWilliams. That capability does not exist today. It 
does not exist today. It will take us 5 to 7 years to 
reestablish, but the standing down of the 120 centrifuges does 
not affect that.
    Dr. Wenstrup. You say that they are at the end, but they 
are the only thing that we have.
    Mr. MacWilliams. But they are not--they are running on--
they are not producing material for this purpose.
    Dr. Wenstrup. But they could.
    My time has expired. Thank you.
    Mr. MacWilliams. Thank you, sir.
    Mr. Rogers. The gentleman's time has expired.
    The Chair now recognizes the gentleman from Nebraska, Mr. 
Fortenberry, for 5 minutes.
    Mr. Fortenberry. Thank you, Mr. Chairman, for accommodating 
my interest in sitting on the committee. And I thank the 
members of the committee for your consent in allowing me to 
testify before you today and ask you questions.
    I am Jeff Fortenberry from Nebraska. I am on the 
Appropriations Committee and the Energy and Water Subcommittee, 
so we see this issue, as well. And, frankly, if I could be just 
right up front with you, this conversation would be very boring 
if it wasn't so essential, because we keep talking about the 
same things over and over again.
    And it has been repeated today, but I want to go back 
through the numbers. In 2002, the initial cost estimate was $1 
billion; 2007, it is now $4.8 billion; today, it is estimated 
to be $7.8 billion.
    So every year we go through this debate. This year, the 
Appropriations Committee allocated and the committee marked 
$345 million, which is not enough to build it out, not enough 
to close it down. So we are kind of saying, sort of, maybe, we 
will continue to think about it, if it is possible in the time 
that we have while we are serving, but then somebody else might 
have to deal with it later. We will punt.
    You are doing that, we are doing that, everybody is doing 
that. So a decision has to be made whether or not this is a 
viable project or whether the alternatives are real enough to 
continue an alternative, to pursue an alternative pathway.
    From my perspective, this is a fragile program with a very 
unclear future. And the alternatives that have been laid out, 
they are a responsible way to look at the diversion of limited 
public resources to deal with a very significant problem.
    Now, I was very interested in the line of questioning that 
Mr. Garamendi, who is gone now, was asking about, alternative 
disposal through fast reactors.
    But, first, let me ask you this. How much funding has been 
spent to date on the MOX facility and its related programs and 
infrastructure? We have various numbers floating out there, so 
could you give us your number?
    And then what percentage of completion are we in regarding 
the facility? What percent complete are we in? And do you and 
the contractors agree on these figures?
    Mr. MacWilliams. Thank you, sir.
    The amount of funding on the MOX facility itself, through 
July, was about $4.8 billion. When you add in the rest of the 
program, you are north of $6 billion because that adds in the 
Waste Solidification Building, which is essentially complete, 
and some of the other program----
    Mr. Fortenberry. So, totally completed, the cost would be 
what?
    Mr. MacWilliams. Totally, for the whole lifecycle--for the 
whole program?
    Mr. Fortenberry. However you define it.
    Mr. MacWilliams. Yeah. Well, it is important that we look 
at the whole program, not just the MOX Project. There are 
various estimates. Our number was north of $30 billion, but 
estimates range as high as $50 billion.
    Mr. Fortenberry. Okay. So appropriating $345 million a 
year, what does that buy?
    Mr. MacWilliams. Nothing.
    Mr. Fortenberry. How could that money be better used?
    Mr. MacWilliams. $400 million--well, I think we agree with 
the Red Team's conclusions, essentially. And General Klotz----
    Mr. Fortenberry. Now, by the way, during the appropriations 
debate, I offered an amendment to reduce the program by a very 
small amount, simply to divert the money to other 
nonproliferation programs, more so as a statement to begin to 
try to have a reasoned debate about the quality of this 
investment.
    And I really did appreciate, frankly, up front, the 
conversation about how you successfully--if we went another 
direction--successfully transition this commitment to the South 
Carolina-Georgia community in other ways. And I think that is 
very important. But I think we have to look at the mission of 
this particular policy and whether or not it is feasible.
    General Klotz. I agree. And, as I said at the outset, you 
know, from looking at it from the perspective of NNSA and the 
whole range of portfolio that we have that includes a rather 
large weapons program as well as nonproliferation, emergency 
response, and counterterrorism, it is a question of, in a 
constrained budget, you know, how can you afford to cover the 
many tasks which the administration and the Congress have asked 
us to do.
    So if we can achieve the disposition of 34 metric tons of 
excess weapons-grade plutonium through a less costly way than 
the path that we are currently embarked upon, then that is why 
this is of such interest to----
    Mr. Fortenberry. Can I ask one other question? Who has the 
prime contract for building the facility?
    Mr. MacWilliams. CB&I Shaw. And then AREVA is also 
involved. It is MOX Services, which is a joint venture between 
both companies. AREVA, going forward, if we built the project, 
would handle the marketing as well.
    Mr. Fortenberry. AREVA is a French company?
    Mr. MacWilliams. Yes, sir.
    Mr. Fortenberry. And they purchased Shaw or have partnered 
with Shaw?
    Mr. MacWilliams. No, no, they are a separate company. They 
have a joint venture, which they call MOX Services.
    Mr. Fortenberry. But it is my understanding AREVA took over 
some major component recently. Is that correct? Changed the 
nature of the agreement in relation to----
    Mr. MacWilliams. Well, AREVA has had some reorganization in 
other areas. They have had some financial issues, and so they 
have had reorganization----
    Mr. Fortenberry. How much of the $345 million goes to a 
French company?
    Mr. MacWilliams. I can't answer that, sir.
    Mr. Fortenberry. All right. Thank you, Mr. Chairman.
    Mr. Rogers. I thank the gentleman.
    The Chair now recognizes the vice chairman of the 
committee, Mr. Lamborn, for 5 minutes.
    Mr. Lamborn. Thank you, Mr. Chairman.
    I know we have touched on this some already, but let me get 
into a little more detail, because this is so important.
    And, Dr. Mason, I would like to direct a few questions to 
you.
    About the PMDA, the Plutonium Management and Disposition 
Agreement, with Russia, depending on who you talk to, it seems 
like you get different answers about whether it is even 
possible to renegotiate that or how difficult it might be. Can 
you elaborate on that, please?
    Dr. Mason. Sure.
    I think the first point that we considered was, did we 
ourselves consider in particular the dilute-and-dispose 
alternative an acceptable disposition? Because if you can't 
convince yourself, you would obviously have little chance of 
convincing the Russians. And so our conclusion was that it was 
an acceptable pathway, in the sense that it did put the 
material beyond use for all practical purposes and therefore 
met the intent of disposition.
    So, having satisfied ourselves on that question, you then 
have to ask, okay, if we have convinced ourselves, what are the 
prospects for reaching an agreement with the Russians?
    As I noted in my remarks, and I think General Klotz has 
made similar remarks, from the point of view of entering into 
the discussion, we judge that there is a reasonable negotiating 
position for the U.S. based on the fact that, first, as I said, 
it is an acceptable disposition pathway in terms of putting the 
material beyond use, akin to what has been called the spent-
fuel standard, which was first discussed in a 1994 National 
Academy study, not identical but meeting many of the same kind 
of characteristics, and the fact that there has been prior 
modification to the agreement to accommodate Russian national 
interests.
    And so the difficulty is, that may all be true and you 
still might not reach a conclusion for reasons that have 
nothing to do with the merits of the argument. That is a little 
harder for us to judge as a technical committee. We are not 
diplomats, and so, to some extent, we viewed that broader 
question as one that was a little bit beyond our purview and 
really restricted our analysis to, is this a viable technical 
pathway and is there a good basis for negotiation. And, on 
those two points, we felt that there was reasonable basis for 
negotiation.
    Mr. Lamborn. Now, for any one of you, then, if there was a 
renegotiation, would there be any risk to the whole issue of 
proliferation?
    If you are saying, Dr. Mason, that some of these things 
were beyond what you felt really comfortable, I would like to 
know from the rest of you, who might be a little more 
comfortable with that question, is proliferation being brought 
into question?
    General Klotz. I think there are--you know, the major 
concern we have with and the reason why we pursue disposing of 
excess weapons-grade plutonium is, if you have no need for it, 
it is best to get rid of it so that it does not fall into the 
wrong hands, whether that would be would-be proliferators at 
some point or if it turns out to be terrorists who would use 
special nuclear materials for their activities. So that is 
fundamentally why both sides in this agreement have pursued 
getting rid of this excess weapons-grade plutonium.
    At the same time, we have also been getting rid of excess 
high-enriched uranium that is no longer necessary for weapons 
programs. And, in fact, through a very successful program we 
have with the Russians that is referred to as, you know, 
Megatons to Megawatts, we have actually been burning that 
uranium in U.S. civil nuclear reactors for a number of years 
for purposes beyond which it was originally intended.
    Dr. Mason. I think there is another important point on this 
which has to do with the timing.
    The original agreement had an objective of beginning the 
process by 2018. Our understanding is the Russians are close to 
that, maybe delayed a little bit. But even in, you know, the 
event that they are successful in their current schedule and 
start their fast reactor, it is highly unlikely that they would 
begin dispositioning their weapons plutonium until the U.S. was 
dispositioning its. They have other sources of plutonium that 
they would use. So you will not begin the disposition in either 
country until both countries are prepared to move.
    So there is a certain urgency in beginning, just because, 
as General Klotz mentioned, the whole point is to not have it 
sitting around, susceptible to any sort of untoward use. And, 
obviously, you know, the shorter the duration before you get 
rid of it, the greater the reduction in risk.
    Mr. Lamborn. Thank you, Mr. Chairman. I yield back.
    Mr. Rogers. I thank the gentleman.
    The Chair now recognizes himself for a second round of 
questions.
    General Klotz, the Russians sought an amendment to the PMDA 
with the United States, and the Obama administration signed off 
on it, allowing Russia to use its 34 metric tons of excess 
plutonium in a, quote, ``fast breeder,'' close quote, reactor.
    Is such a reactor technically capable of producing 
additional plutonium for Russia? How much plutonium will Russia 
put into this reactor? And has the U.S. been able to gain 
access to the reactor to make sure we know what they are up to?
    General Klotz. If I could, Mr. Chairman, not being a 
nuclear scientist, if I could defer that to Dr. Mason, I think 
he would probably give you a more technically correct and 
precise answer than I could possibly give.
    Mr. Rogers. I thank you.
    Dr. Mason.
    Dr. Mason. I think that the first point on the Russian 
program and the reason that the Russians proposed it is it was 
their intent to build a fast reactor anyway, so, in some sense, 
there was no additional cost incurred to build a special-
purpose facility.
    Of course, that reactor could be fueled on either civil 
plutonium or weapons-grade plutonium. And it is intended, by 
its design, to be a breeder--in other words, to produce more 
fissile material as part of its operation for energy purposes. 
So, through its operation, you will be making more plutonium.
    The modification to the PMDA provides requirements for the 
operating cycle under which the weapons-grade plutonium is 
burned in order to change the isotopic composition in a way 
that the plutonium produced in the reactor is not suitable for 
use in weapons. And that is part of the agreement as amended in 
2010.
    Mr. Rogers. Okay.
    General Klotz, as a rough order-of-magnitude estimate, how 
much did it cost the U.S. to produce the 34 metric tons of 
plutonium that we are talking about in the PMDA? And what were 
the production costs in dollars, human health, and 
environmental damage?
    General Klotz. I don't know the cost of how much it cost us 
to produce 34 metric tons. I could take that for the record and 
will give you an estimate of that process, which took place, 
unfolded over years during the cold war period.
    [The information referred to can be found in the Appendix 
on page 67.]
    Mr. Rogers. Do you have a----
    General Klotz. No.
    Mr. Rogers. No rough estimate?
    General Klotz. No, sir.
    Mr. Rogers. Okay.
    With that, I will yield to the ranking member for any 
questions he may have.
    Mr. Cooper. Thank you, Mr. Chairman.
    Although this has been a technical and calm hearing so far, 
I think a couple of bits of testimony are truly startling. I, 
at least, was amazed.
    One was the difference in outlook on completion of the MOX 
facility. The company seems to think it is 67 percent complete. 
The owner, the United States Government, seems to think it is 
35 to 41 percent complete.
    Whoa. The contractor is supposed to be working for us, and 
we see things so differently? Like, whoa. That is a big failure 
of communication, at the very least.
    Mr. MacWilliams.
    Mr. MacWilliams. Yes, sir. Well, we do have a longstanding 
difference with the contractor on this point.
    Let me explain our numbers in a little more detail.
    We are required to look at percentage completion, so cost 
to complete. So our current estimate is $12 billion to $14 
billion for the MOX Fabrication Facility. As I mentioned, the 
Army Corps of Engineers, when they looked at it a couple years 
ago, were around $10 billion and up, but that was preliminary, 
and now there have been delays for 2 years. So I can't speak 
for them, but I am sure it would be a little bit north of that.
    So if we spent $4.8 billion so far, you know, you just do 
the math and you put that over $12 billion to $14 billion, and 
you get the range that I gave you of 35 to 41 percent.
    Now, in addition, Congressman Wilson is, you know, 
absolutely right and the picture shows that there has been a 
lot of work done, and some very good work, in terms of civil 
engineering, et cetera. This is a very, very complex project, 
and the difficult work, the more difficult work remains to be 
done. And that tends to be the instrumentation; the piping is 
very complicated.
    I mentioned the 25 percent rework rate. The contractors 
estimated a 2.5 percent rework rate, and we are running 25 
percent at this point. So there is a difference in view, and 
that is the reasons.
    Dr. Mason. And if I could add, we noted in our report that 
the relationship between the NNSA, the project staff, and the 
contractor is not good. There is little trust, in both 
directions. You know, there are reasons that both parties to 
that disagreement will point to for their distrust, but it does 
mean that, should the decision be made that it is necessary to 
stick with MOX, that has to be addressed, because it is not 
functioning well in terms of their relationship at the moment.
    And the disagreement about the percent complete is really 
just one manifestation of that disconnect. And, actually, it is 
both--you know, a percent is a fraction. And the disagreement 
is both in the numerator, how much work has been done, and in 
the denominator, how much work is it going to take to complete 
the project.
    Mr. Cooper. Well, the second most startling bit of 
information was the one that Mr. MacWilliams just referenced 
again. Any project that has 25 percent rework? Like, oh, my 
gosh. Because that means you build it, then you have to tear it 
down 25 percent and redo it. So we get to pay twice, as a 
taxpayer? Like, whoa.
    And then it turns out there is even a disparity there, 
because the company says it is only 2.5 percent.
    Well, this is unbelievable. This really gets to core 
competency and viability of the project, I would think.
    Mr. MacWilliams.
    Mr. MacWilliams. Sir, just to clarify one thing, I can't 
speak for the contractors, whether they would today say that it 
is 2.5 percent. The numbers we are seeing is 25 percent. What I 
was saying is, in their original planning, which produced some 
of these cost estimates, the assumption was 2.5 percent.
    Mr. Cooper. Dr. Mason was telling me earlier about the 
faulty incentive structure that NNSA or someone had put out 
there, where it was fee based on placement of equipment. So, in 
some cases, apparently, the company would go ahead and place 
the equipment, even though it blocked access to other 
equipment, just so they get their fee. So we would pay to place 
the equipment, to move the equipment, and then replace the 
equipment. So, in that case, we got to pay three times for the 
same work. That seems too unbelievable to be true.
    Dr. Mason. Well, and I think that is an origin of some of 
the distrust. And, as you know, you do wind up essentially 
paying 3X in those instances.
    The contractual arrangement, as it stands right now, is 
really not functioning for the management of the project. The 
project has been without a baseline for really nearly 3 years. 
And so, again, as we stated in the report, if the decision is 
to continue with the MOX, there would have to be what I would 
judge to be a rather difficult negotiation take place. It is 
not a case where you can simply, as might occur, you know, if 
you were building a home, fire the contractor and hire a new 
one. AREVA actually owns the IP [intellectual property] 
associated with it, and so there would have to be significant 
restructuring of the contractual arrangement in order to 
provide a rational basis for future work.
    General Klotz. I think, if I could, Mr. Cooper, I think 
this goes--part of the distrust which exists has a lot to do 
with uncertainty. I mean, this is a program, this is a project 
of which there has been some great uncertainty over the past 
couple years. It is uncertainty that is felt, you know, by the 
Federal force down there that has responsibility for oversight. 
It is uncertainty that is felt by the contractor and the labor 
force, and some uncertainty felt by the good citizens of South 
Carolina and Georgia.
    Mr. Cooper. This brings me to a final point that wasn't 
revealed in testimony yet but it was in General Klotz's written 
testimony, where he says, ``If a decision were made to complete 
construction of the facility''--the MOX facility--``the 
contractor would be requested to provide a baseline change 
proposal to complete the facility, a specified annual funding 
level, and a new contract cost proposal would be negotiated.''
    This just gets us to the point that Dr. Mason was just 
talking about. In a homeowner situation, you don't like the 
contractor, you fire him, you get somebody new. Here, AREVA 
owns the IP. You essentially can't fire them. They are already 
failing to communicate or on a completely different page, maybe 
a different planet, on this. And then we would have to enter 
into new contract cost negotiations with them.
    These wouldn't be negotiations; this would be a hostage-
taking. And we are already the hostage here. We would have no 
leverage at all in this situation, would we?
    Mr. MacWilliams. Sir, the reason we haven't done a baseline 
change proposal is, essentially, we have been waiting to do 
studies to see where we are. Because, as you are aware, that is 
a multiple-year process, many million dollars required. And so, 
at this point, at least in our perspective, there have been 
numerous studies, and it is pretty clear that the MOX Project 
is going to be very, very expensive.
    I would also say that we have been talking about AREVA a 
lot, but it is MOX Services, which is a joint venture. And so I 
think that the purpose here is certainly not to demonize the 
contractor in any way, but it is a joint venture between CB&I 
and AREVA.
    Dr. Mason. And I would also like to point out that, in 
noting that there was little trust, that was in both 
directions----
    Mr. MacWilliams. Yeah.
    Dr. Mason [continuing]. In the sense that the contractor 
does not feel that they have the trust and confidence in the 
Department either, partly for the reasons of uncertainty that 
were mentioned. And so, you know, like any relationship, it is 
not working in both directions.
    Mr. Cooper. Failure to communicate is usually two ways.
    A final point. When it comes to not dealing with NNSA but 
with the NRC, it was my impression from talking to Dr. Mason 
that the MOX joint venture approach was to engage in 
redundancy. When they wanted to lower risk, they would have 
redundant or backup systems. So, that way, essentially, we get 
to pay twice, but that had the net effect of lowering risk. But 
it is completely a different approach than we use in this 
country to solve problems.
    Could you elaborate, Dr. Mason?
    Dr. Mason. Actually, the redundancy that you refer to, I 
think, even predates the contract award. It goes back to some 
of the original design thinking. And, you know, it is 
illustrative of a challenge that I have seen, for example, when 
we looked at the uranium production facility in a different 
exercise. It has been mentioned already, some of the 
difficulties that the Department has encountered in setting 
requirements.
    And I am reminded of a remark that I saw attributed to 
General Odierno when asked why some of the DOD major 
acquisitions have not yielded weapons systems. The phrase he 
used was ``utopian requirements.'' And I think that is very apt 
in this instance. And sometimes fear of what the regulator 
might do, whether it is the Nuclear NRC or DOE and its self-
regulating mode for other facilities, has on occasion led to 
very conservative decisionmaking that gives the appearance of 
reducing risk but may actually increase it because of the cost 
that is occurred in avoiding difficulties that may or may not 
actually materialize.
    Mr. Cooper. Uh-huh.
    Well, thank you, Mr. Chairman.
    Mr. Rogers. The Chair now recognizes the gentleman from 
California, Mr. Garamendi, for 5 minutes.
    Mr. Garamendi. Thank you.
    From the previous testimony, there was no discussion with 
Russia about the BN-800. Is that correct?
    Mr. MacWilliams. To my knowledge, sir, there wasn't, but I 
would be happy to go back to NE and find out.
    Mr. Garamendi. Thank you.
    Was there any discussion with General Electric Hitachi 
about their fast reactor design?
    Dr. Mason. The analysis that we looked at of the fast-
reactor option was actually based on work that had been done by 
the Department's Office of Nuclear Energy, which had been doing 
an analysis of a potential fast reactor as a component of the 
nuclear energy mission. That did include consideration of a 
number of the different designs that have been proposed, 
including those that have been mentioned.
    And the reason that our group, the Red Team, did not 
further pursue that option is because, were you to pursue a 
fast-reactor option, you would have to build both a fuel 
fabrication facility, which is the, you know, current topic, 
and a reactor. So, because of that, it did not offer any 
obvious----
    Mr. Garamendi. Did you explore the potential for doing both 
of those?
    Dr. Mason. Yes, we did, relying on the analysis that has 
been done by the Office of Nuclear Energy, which I would leave 
it to my colleagues to----
    Mr. Garamendi. Mr. MacWilliams.
    Mr. MacWilliams. Yes, sir. The Office of Nuclear Energy did 
have conversations with GE. I can get you more information if 
that would be helpful for you, sir. In our studies----
    Mr. Garamendi. Well, the question is, was it helpful to 
your analysis?
    Mr. MacWilliams. It was incorporated into the study. There 
was a----
    Mr. Garamendi. And how was it helpful to your analysis?
    Mr. MacWilliams. The analysis that our working group, which 
included representatives from NE, did--and they did a very 
comprehensive study on the fast reactors, which we would be 
happy to give you another copy of. And the essential conclusion 
was that, while it would accomplish the mission, it would be 
roughly a $50 billion project.
    Mr. Garamendi. At an expenditure level of $300 million or 
$400 million a year forever.
    Mr. MacWilliams. You are correct, sir, that we----
    Mr. Garamendi. Did you take----
    Mr. MacWilliams. It was $500 million, and the reason we 
looked at that is so we could compare all options.
    Mr. Garamendi. Well, I would just simply share with 
everybody, it is a fool's errand to base all of this analysis 
on the appropriation level rather than on what it would cost to 
do the process.
    Mr. MacWilliams. We would be happy to give you the 
unconstrained funding number, which is still very, very 
substantial, sir, for a brand-new fast reactor.
    Mr. Garamendi. Well, I will make the point once again. You 
did not analyze any of this based upon what it would actually 
cost but, rather, assuming a funding level from the Federal 
Government that, frankly, would stretch all of these options 
out to kingdom come.
    Mr. MacWilliams. NE did look at an unconstrained case, sir. 
I just----
    Mr. Garamendi. Did you?
    Mr. MacWilliams. No. Our NE group did a study this thick on 
this----
    Mr. Garamendi. I don't care how thick the study is.
    Mr. MacWilliams. But they did a very comprehensive--which 
did look at unconstrained funding, and I would be happy to 
provide it for the record.
    Mr. Garamendi. Did anybody ask General Electric Hitachi 
what it would cost to build the reactor and the fuel 
fabrication system?
    Mr. MacWilliams. My understanding is they had extensive 
conversations with GE, and I would be happy to provide more 
information for you.
    Mr. Garamendi. Please do so. And when will you deliver it 
to me?
    Mr. MacWilliams. Let me go back, and we will do it 
promptly, sir.
    Mr. Garamendi. No, that is not an answer. Next week? Week 
after next?
    Mr. MacWilliams. I will get you information by the end of 
next week, sir.
    Mr. Garamendi. Thank you.
    [The information referred to can be found in the Appendix 
on page 70.]
    Mr. Garamendi. I think I still have some more time. Let's 
talk about the dilute process. What exactly is it? And what is 
the result of the dilute? What is the nature of the material at 
the end of the result of the dilute?
    Dr. Mason. Sure.
    So the first step in the process is to convert the material 
from whatever form it is in, which is typically metal for the 
majority of the material, into oxide, which is accomplished in 
a furnace, an oxidizing furnace.
    That oxide then is mixed in a very simple mechanical 
operation with a diluent that is given the name ``stardust.'' 
The exact constituents of it are classified because it is 
intended to make it very difficult to reconstitute the 
plutonium into a----
    Mr. Garamendi. Very difficult but possible to reconstitute 
using a mechanical process?
    Dr. Mason. Yes, because in order to get the plutonium out, 
you would have to do a chemical process, and the constituents 
of the diluent are designed to make that chemical process very 
costly and difficult.
    So the final material you end up with is a blend of oxides, 
just loose oxides like--it looks like sand you would find on a 
beach. It isn't, however, very much like sand you would find on 
a beach.
    Mr. Garamendi. Could you please deliver to me a detailed 
description of what that is and what the end result of that 
process is and the potential for reconstitution of that 
material back into a weapons-grade plutonium? Can you do that?
    Mr. Rogers. The gentleman's time has expired.
    Mr. MacWilliams. We can do that, sir.
    [The information referred to can be found in the Appendix 
on page 70.]
    Mr. Rogers. The Chair now recognizes Mr. Wilson for the 
final questions of the afternoon.
    Mr. Wilson. Well, thank you so much, Mr. Chairman.
    And, indeed, I appreciate the information being provided 
today. It is really reassuring to me, as a former DOE employee, 
a person who has worked at the Savannah River Site. Actually, 
your service gives me confidence, because I know of the health 
and safety that is at the Savannah River Site, the level of 
populations of South Carolina and Georgia that really 
appreciate the record of safety that we have at that site.
    And, indeed, I also share with my colleagues a concern 
about the cost, obviously. And I have been asking about that 
since day one. And so much of it--and there has been 
terminology used: percentage of design completion, rework, 
utopian requirements. So much of the increase in cost, as has 
been explained to me, has been due to change of specifications.
    It is in good faith by everybody involved. It is not 
because of persons not being interested in health and safety, 
but because you are interested in health and safety. It is due 
to changes in technology over the years, the experience that 
has been with the facility in France, over and over again. And 
that is my interest, about health and safety.
    But, as we do talk about the cost, Dr. Mason, the Red Team 
had a situation of disagreeing with Aerospace relative to the 
$47 billion lifecycle cost. And so what was the disagreement?
    Dr. Mason. Yes. Of the four primary conclusions of the 
Aerospace report, the one where we did have a different 
conclusion related to their analysis under constrained funding 
scenarios. So, while we agreed with their overall conclusion in 
terms of the relative cost of the two options in their Phase 1 
report, the difficulty was that they did not have access to the 
detailed resource-loaded schedules that would allow them to 
reoptimize the schedule at different funding levels.
    And so they did what I think any of us would have done with 
that same limited information and made their best estimate, but 
it really didn't give them the flexibility to try and 
reoptimize and replan the work, and, therefore, extended the 
duration, you know, in the case of $350-million-a-year cap on 
construction out to 86 years. And we believe that you could do 
better than that with a proper replan of the schedule and a 
rebaseline.
    Mr. Wilson. And I appreciate that.
    And it is always, actually, been frustrating to me about 
lifecycle cost. By using that terminology, I think of 
purchasing a car. If you use the lifecycle cost, what the cost 
of it was and what the cost of maintaining it, filling it with 
fuel, whatever, insurance, goodness, you would buy no car. Who 
would know what the cost would be? You would have to have 10 
Red Teams to figure out what the cost would be. But the net 
result is you wouldn't do it, you wouldn't buy a vehicle.
    And so that is why I hope we look at this. And that is the 
reason that I brought the map, or the picture today of the 
facility. Because whether it is 33 percent completed or, as I 
think it is, nearly 70 percent completed, if you look at it, 
hey, it is virtually completed. And the interior equipment is 
being installed as we are here today.
    But it is a testimony to the people that you work with and 
that you helped train for the health and safety and the 
appreciation in our State and our neighbors, Georgia, for the 
Savannah River Site.
    And so I would like to, again, conclude by letting 
everybody know that I can't wait for my colleagues to visit. It 
is a beautiful community. It is very humbling for me to have 
the opportunity to represent it. And I can't wait for them to 
see the actual facility and the percentage of completion.
    And, with that, I will yield my time.
    Mr. Rogers. I thank the gentleman.
    The Chair wants to, again, thank the witnesses for their 
time and commitment and your contributions today. You have been 
very helpful.
    I would remind the panelists that we will leave the record 
open for 10 days. If anybody has any additional questions--I 
know I have a few that I couldn't get to--we will submit them 
to you. And if you could just respond to them in a timely 
manner, I would appreciate that.
    And, with that, we are adjourned.
    [Whereupon, at 5:20 p.m., the subcommittee was adjourned.]

      
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                            A P P E N D I X

                            October 7, 2015

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                            October 7, 2015

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                   DOCUMENTS SUBMITTED FOR THE RECORD

                            October 7, 2015

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              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                            October 7, 2015

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             RESPONSE TO QUESTIONS SUBMITTED BY MR. ROGERS

    General Klotz. Following the Cold War, the United States stopped 
producing plutonium for weapons purposes and, as such, no longer 
assigns a value for the plutonium. Dealing with the environmental 
legacy of the Cold War remains a significant challenge, but the 
Department of Energy (DOE) is committed to cleaning up the 
environmental legacy of nuclear weapons production by decontaminating 
and decommissioning facilities that provide no further value, 
remediating soil and ground water contaminated with radioactive and 
hazardous constituents, and fulfilling its commitments to reduce risk 
and complete cleanup across all DOE sites.   [See page 29.]
                                 ______
                                 
              RESPONSE TO QUESTION SUBMITTED BY MR. FORBES
    Dr. Mason. The current administrative capacity of the Waste 
Isolation Pilot Plant (WIPP), as established by the Land Withdrawal Act 
(LWA), is 6.2 million cubic feet (176,000 cubic meters) of waste, 
although a much greater capacity is physically possible. According to 
subject matter experts interviewed by the Plutonium (Pu) Disposition 
Red Team (Red Team) at WIPP, this administrative capacity limit was 
derived from the U.S. Department of Energy's (DOE) early estimates of a 
transuranic (TRU) waste disposal rate over the course of the then-
anticipated WIPP operating life. The current method for volume 
accounting established in the WIPP Resource, Conservation, and Recovery 
Act (RCRA) permit is based on the external container volume, regardless 
of how much waste is actually contained within that volume. Thus, of 
the 176,000 m\3\ capacity, approximately 91,000 m\3\ of waste (based on 
the sum of external container volumes) has already been emplaced. Of 
the 85,000 m\3\ left, 60,000 m\3\ are already subscribed to other DOE 
programs based on waste forecasts from around the DOE complex, leaving 
just 25,000 m\3\ to potentially host the dilute and dispose Pu 
disposition option without modifying the LWA.
    If criticality control overpacks (CCOs, see Figure 1) with a 380 g 
fissile material limit are used as an authorized payload container 
within the TRUPACT-II, and Pu is blended to less than 10% by mass, then 
the 34 MT of excess Pu discussed in the Pu Management and Disposition 
Agreement (PMDA) would be packaged into approximately 89,500 CCOs, each 
taking up 55 gallons of WIPP's administrative capacity despite the fact 
that only a small percentage of the container volume is actually waste 
(see Figure 1). In total, approximately 18,600 m\3\ of the remaining 
25,000 m\3\ of unsubscribed remaining capacity would be utilized (about 
75%).
    However, this assumes no buffer in the fissile gram loading, and 
the Red Team learned that it is more likely that an administrative 
limit of 300-320 g per CCO would be used to ensure compliance with the 
package limit. With a conservative 300 g limit, 23,600 m\3\ would be 
utilized at WIPP. After adding ancillary TRU waste generated during 
processing, one could reasonably conclude that all of the remaining 
25,000 m\3\ of unsubscribed remaining WIPP administrative capacity 
would be utilized by the dilute and dispose option. Thus, in theory no 
modification of the LWA would be needed to support the dilute and 
dispose option.

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             Figure 1: The Criticality Control Overpack

    However, as discussed in the Red Team report, there may not yet be 
a full accounting of volumes of future TRU waste requiring disposal at 
WIPP. Thus, it would be wise to preserve as much of the existing 
capacity as possible to support on-going and future programs beyond the 
immediate Pu Disposition Program. One option for doing this could 
potentially be within the control of the Pu Disposition Program: 
Increasing Pu loading per container. The Pu Disposition Working Group 
(PDWG) report discussed this augmentation of the dilute and dispose 
option in some detail, and the Red Team described it as a potential 
efficiency improvement that could be implemented at any point during a 
dilute and dispose project. In brief, the PDWG report suggested that 
individual container loading up to 1 kg of Pu could be feasible, albeit 
with certain security considerations. This larger quantity of blended 
plutonium would be packaged into 35-gallon 9975 Type B shipping 
containers for shipment instead of CCOs. Assuming an administrative 
limit of 900 g per 9975 container, only about 6,000 m\3\ (about 24%) of 
the remaining unsubscribed administrative capacity at WIPP would be 
utilized (including ancillary waste), leaving the rest to support 
future DOE operations, and far fewer shipment and handling evolutions 
would be required. However, the 9975 container would require 
certification for shipment to WIPP, and the quantity of material 
involved in each shipment may require additional safeguards and 
security measures which could offset some of the cost savings. Even 
without any cost savings though, the preservation of valuable existing 
WIPP administrative capacity would be worth investigating the 
feasibility of this potential enhancement.
    A technically simpler and less expensive approach would be to 
change the current method of accounting for waste volume disposed at 
WIPP. WIPP subject matter experts have estimated that a typical 
disposed container may only be filled to less than 70% of its volume, 
often due to other limitations. In the case of CCOs, only a maximum of 
3.3 gallons of the 55-gallon CCO volume would actually contain waste 
material. The rest is interior packaging and dunnage. A Class III RCRA 
permit modification allowing capacity accounting at WIPP to be based on 
actual waste volume instead of external container volume would greatly 
increase the available remaining administrative capacity at WIPP (by 
nearly 90%) after excess Pu disposition is completed, as shown in 
Figure 2.

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Figure 2: Effect of Different Enhancements of the Base Dilute and 
                Dispose Option on WIPP Space Utilization

    While it was evident to the Red Team that modification of the LWA 
is not a prerequisite to implementation of the dilute and dispose 
alternative, without implementing the enhancements discussed above 
there is a risk that Pu disposition may eventually stimulate such a 
consideration. It is important to realize, however, that the dilution 
process would take many years to complete. Thus, even if the diluted 
volume ultimately threatens to exceed the remaining administrative 
capacity at WIPP under the LWA, mitigating actions, such as the 
improvement of disposal efficiency via higher Pu loading per container 
or an enhanced volume accounting technique at WIPP, would not have to 
be executed in the near term. But the Red Team noted that these kinds 
of enhancements should be implemented as a matter of national policy 
regardless of the excess Pu disposition approach in order to preserve 
WIPP as a national resource. Efforts to improve container volume 
utilization and/or WIPP volume accounting practices are best 
implemented as soon as possible to optimize the utilization of precious 
WIPP disposal space.   [See page 13.]
                                 ______
                                 
            RESPONSE TO QUESTIONS SUBMITTED BY MR. GARAMENDI
    Mr. MacWilliams. The Department of Energy is providing a copy of 
the April 2014 Report of the Plutonium Disposition Working Group: 
Analysis of Surplus Weapon-Grade Plutonium Disposition Options, which 
includes the unconstrained funding case for the fast reactor option for 
plutonium disposition in Appendix B. [The report is retained in 
committee files and can be viewed upon request. The report is also 
available at http://www.nnsa.energy.gov/sites/default/files/nnsa/04-14-
inlinefiles/SurplusPuDispositionOptions.pdf]   [See page 33.]
                                 ______
                                 
            RESPONSE TO QUESTIONS SUBMITTED BY MR. NORCROSS
    Mr. MacWilliams. There have been two NNSA-directed changes to the 
U.S. MOX Fuel Fabrication Facility (MFFF) project. In 2010, a change to 
the facility was requested by MOX Services and approved by NNSA to 
allow for the manufacture of multiple types of MOX fuel. The 
modifications would provide MFFF with the capability to produce fuel 
for both Boiling Water Reactors (BWR) and Pressurized Water Reactors 
(PWR) as well as the next generation of nuclear reactors. The contract 
with MOX Services was modified in December 2010 to add this scope of 
work for a cost of $34 million. In addition, part of the Pit 
Disassembly and Conversion Facility (PDCF) scope was identified to be 
added to the MFFF. The $242 million estimate for adding this work to 
the MFFF was included in the 2012 Baseline Change Proposal but has not 
been added to the contract. It is important to note that this is a 
design-build contract in which MOX Services initiates design changes as 
it completes design. One of the lessons learned by the Department from 
this project and other projects is ensuring that the design is at least 
90 percent complete before baselining complex nuclear work. Since this 
project was baselined, MOX Services has made approximately 33,050 
design changes as they have completed their design due to design 
maturity issues, discovery of design omissions, and constructability 
issues. The design changes initiated by MOX Services have had a much 
larger impact on total project cost than the Department's requested 
changes.   [See page 21.]

?

      
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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                            October 7, 2015

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                  QUESTIONS SUBMITTED BY MR. GARAMENDI

    Mr. Garamendi. Did you consider the use of existing Fast Reactor 
technology, such as the Russian BN-800, when doing your analysis of 
Advanced Disposition Reactors? If not, why not?
    General Klotz and Mr. MacWilliams. Yes, in the Department's April 
2014 Report of the Plutonium Disposition Working Group: Analysis of 
Surplus Weapon-Grade Plutonium Disposition Options, the Department 
analyzed the use of a fast reactor. The Department used the DOE-owned 
Advanced Liquid Metal Reactor design as a reference case for the 
analysis.
    Mr. Garamendi. Did you discuss the use of PRISM reactors with GE 
during the course of your analysis of Advanced Disposition Reactors? If 
not, why not?
    General Klotz and Mr. MacWilliams. The Plutonium Disposition 
Working Group considered using the GE-owned design as a data point. 
However, inclusion of the GE-owned design may have adversely impacted 
GE's ability to compete in a future procurement if that option was 
ultimately pursued. Thus, the Department used DOE-owned Advanced Liquid 
Metal Reactor design information as a reference case in the fast 
reactor analysis. In addition, the Department performed reactor core 
design work to optimize the plutonium disposition aspects of the 
reference case.
    Mr. Garamendi. Did you consider the use of existing Fast Reactor 
technology, such as the Russian BN-800, when doing your analysis of 
Advanced Disposition Reactors? If not, why not?
    Dr. Mason. The Pu Disposition Red Team considered fast reactor 
technology as a potential alternative to the MOX baseline approach, but 
elected not to include it in the options for more detailed analysis: 
``An early consensus was struck within the Red Team on the ability to 
screen out most alternative approaches to Pu disposition based on the 
available background reading . . . The [Advanced Disposition Reactor] 
ADR option involves a capital investment similar in magnitude to the 
MFFF but with all of the risks associated with first-of-a kind new 
reactor construction (e.g., liquid metal fast reactor), and this 
complex nuclear facility construction has not even been proposed yet 
for a Critical Decision (CD)-0. Choosing the ADR option would be akin 
to choosing to do the MOX approach all over again, but without a 
directly relevant and easily accessible reference facility/operation 
(such as exists for MOX in France) to provide a leg up on experience 
and design.'' To reach this conclusion, the Red Team received a 
detailed briefing from Deputy Assistant Secretary John Herczeg of DOE's 
Office of Nuclear Energy on the ADR option (``The Advanced Disposition 
Reactor Study: An Analysis of Plutonium Disposition Options Using 
Advanced Fast Reactors, July 10, 2015''), and consulted an extensive 
library assembled specifically for the Red Team, including the 
following relevant documents:
      DOE Report of the Plutonium Disposition Working Group: 
Analysis of Surplus Weapon-Grade Plutonium Disposition Options, April 
2014 (Final Options Report)
      Excess Plutonium Disposition: The Failure of MOX and the 
Promise of Its Alternatives, E.S. Lyman, December 2014
      Alternatives to MOX: Direct-disposal options for 
stockpiles of separated plutonium, F. von Hippel and G. MacKerron, 
International Panel on Fissile Materials, April 2015
      Management and Disposition of Excess Weapons Plutonium, 
Committee on International Security and Arms Control, National Academy 
of Sciences report, 1994 (NAS Report on Management and Disposition of 
Excess Weapon Pu)
      Business Case, DOE's Proposed Baseline Approach for 
Disposing of Surplus Plutonium, April 2007 (Plutonium Disposition 
Business Case FINAL--April 30, 2007)
      Progress on approaches to the management of separated 
plutonium--Position paper, Nuclear Decommissioning Authority, January 
2014
      DOE/MD-0002, Summary Report of the Screening Process To 
Determine Reasonable Alternatives For Long-Term Storage And Disposition 
Of Weapons-Usable Fissile Materials, DOE Office of Fissile Materials 
Disposition, March 29, 1995
      2010 PMDA Protocol--Protocol to the Agreement Between the 
Government of the United States of America and the Government of the 
Russian Federation Concerning the Management and Disposition of 
Plutonium Designated as no Longer Required for Defense Purposes and 
Related Cooperation
      (OUO) SE&PID-13-0003, Revision D, Preliminary Program 
Execution Plan for the National Nuclear Security Administration Fissile 
Materials Disposition Program, July 31, 2013
      2014 Plutonium Disposition Working Group Analysis of 
Surplus Weapon-Grade Plutonium Disposition Options, presentation by 
Sachiko McAlhany, July 8, 2015
      UK Plutonium Disposition Programme Overview, presentation 
by United Kingdom National Nuclear Laboratory, July 2014
    We examined the fast reactor option generically without focusing on 
any one reactor design such as the Russian BN-800 or GE PRISM designs 
referenced in the questions. Our conclusions about the level of detail 
on cost, licensing, and overall feasibility as well as the observation 
that switching to a fast reactor option implies construction of both a 
fast reactor and a MOX Fuel Fabrication Facility with the resulting 
implications for overall program cost are not affected by the specific 
fast reactor design considered.
    Mr. Garamendi. Did you discuss the use of PRISM reactors with GE 
during the course of your analysis of Advanced Disposition Reactors? If 
not, why not?
    Dr. Mason. The Pu Disposition Red Team considered fast reactor 
technology as a potential alternative to the MOX baseline approach, but 
elected not to include it in the options for more detailed analysis: 
``An early consensus was struck within the Red Team on the ability to 
screen out most alternative approaches to Pu disposition based on the 
available background reading . . . The [Advanced Disposition Reactor] 
ADR option involves a capital investment similar in magnitude to the 
MFFF but with all of the risks associated with first-of-a kind new 
reactor construction (e.g., liquid metal fast reactor), and this 
complex nuclear facility construction has not even been proposed yet 
for a Critical Decision (CD)-0. Choosing the ADR option would be akin 
to choosing to do the MOX approach all over again, but without a 
directly relevant and easily accessible reference facility/operation 
(such as exists for MOX in France) to provide a leg up on experience 
and design.'' To reach this conclusion, the Red Team received a 
detailed briefing from Deputy Assistant Secretary John Herczeg of DOE's 
Office of Nuclear Energy on the ADR option (``The Advanced Disposition 
Reactor Study: An Analysis of Plutonium Disposition Options Using 
Advanced Fast Reactors, July 10, 2015''), and consulted an extensive 
library assembled specifically for the Red Team, including the 
following relevant documents:
      DOE Report of the Plutonium Disposition Working Group: 
Analysis of Surplus Weapon-Grade Plutonium Disposition Options, April 
2014 (Final Options Report)
      Excess Plutonium Disposition: The Failure of MOX and the 
Promise of Its Alternatives, E.S. Lyman, December 2014
      Alternatives to MOX: Direct-disposal options for 
stockpiles of separated plutonium, F. von Hippel and G. MacKerron, 
International Panel on Fissile Materials, April 2015
      Management and Disposition of Excess Weapons Plutonium, 
Committee on International Security and Arms Control, National Academy 
of Sciences report, 1994 (NAS Report on Management and Disposition of 
Excess Weapon Pu)
      Business Case, DOE's Proposed Baseline Approach for 
Disposing of Surplus Plutonium, April 2007 (Plutonium Disposition 
Business Case FINAL--April 30, 2007)
      Progress on approaches to the management of separated 
plutonium--Position paper, Nuclear Decommissioning Authority, January 
2014
      DOE/MD-0002, Summary Report of the Screening Process To 
Determine Reasonable Alternatives For Long-Term Storage And Disposition 
Of Weapons-Usable Fissile Materials, DOE Office of Fissile Materials 
Disposition, March 29, 1995
      2010 PMDA Protocol--Protocol to the Agreement Between the 
Government of the United States of America and the Government of the 
Russian Federation Concerning the Management and Disposition of 
Plutonium Designated as no Longer Required for Defense Purposes and 
Related Cooperation
      (OUO) SE&PID-13-0003, Revision D, Preliminary Program 
Execution Plan for the National Nuclear Security Administration Fissile 
Materials Disposition Program, July 31, 2013
      2014 Plutonium Disposition Working Group Analysis of 
Surplus Weapon-Grade Plutonium Disposition Options, presentation by 
Sachiko McAlhany, July 8, 2015
      UK Plutonium Disposition Programme Overview, presentation 
by United Kingdom National Nuclear Laboratory, July 2014
    We examined the fast reactor option generically without focusing on 
any one reactor design such as the Russian BN-800 or GE PRISM designs 
referenced in the questions. Our conclusions about the level of detail 
on cost, licensing, and overall feasibility as well as the observation 
that switching to a fast reactor option implies construction of both a 
fast reactor and a MOX Fuel Fabrication Facility with the resulting 
implications for overall program cost are not affected by the specific 
fast reactor design considered.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. WILSON
    Mr. Wilson. in your reply to the question of what $345 million a 
year for MOX Fuel Fabrication Facility construction ``would buy,'' you 
stated ``nothing.'' However, 1,800 men and women are currently at work 
on the MOX Project, the physical structure being completed, glove boxes 
being delivered, tested and installed, progress being made even at the 
rate of $345 million per year. How does your statement square with MOX 
Services' claim that 4 percent construction progress has been made per 
year even at $345 million, and that the facility is nearing 70 percent 
construction completion this year--which until recently DOE has defined 
as engineered, procured and physically built according to a certified 
Earned Value Management System? In fact, in testimony earlier this 
year, General Klotz stated that that construction of the MOX Fuel 
Fabrication Facility is ``over 60 percent'' complete, but you now claim 
35 to 41 percent. Why has DOE changed its definition of percentage 
completion to one based on DOE's estimated costs to complete--is there 
any basis for this metric, and does DOE define project percentage 
completion for any other construction project by this basis, such as 
for UPF? If in fact 4 percent construction progress is being made at 
$345 million per year, even by the most conservative measures wouldn't 
construction be MFFF complete in under 10 years, not in more than 50 
years?
    Mr. MacWilliams. Standard Earned Value Management practice measures 
project completion percentage by dividing the value of work completed 
against the total budget to complete a project. Given the latest 
estimates of total cost to complete the project, the lowest case is 
$9.4 billion and the highest case is $21 billion. Assuming that the 
$4.5 billion spent to date was all earned towards project completion, 
the percent completion is 21-48 percent.
    Additionally, MOX Services' June 30, 2013 estimate, at $350 million 
annual funding assumption without the additional project scope needed 
to oxidize metal, was $9.4 billion. Given this estimate, and in 
accordance with MOX Services' earned value reporting, the MOX project 
is significantly less than the 70 percent complete.
    Mr. Wilson. In your testimony you claim that by DOE's measure, the 
MOX Project has a rework rate of 25 percent. Would you explain how you 
get to those figures? According to industry studies, on a typical 
project, rework costs between 2 percent and 20 percent of the project 
cost, but the MOX Project record shows that the rework cost to date is 
less than 0.5 percent--far less than that which is typical of large 
construction projects. In fact, the rework on this project has been 
approximately $8 million of the $4.5 billion spent to date. Do you care 
to comment on this discrepancy?
    Mr. MacWilliams. Until recently, MOX Services has not tracked re-
work. Based on field observations, NNSA believed that there was 
significant re-work that needed to be better managed. In the fiscal 
year (FY) 2015 Award Fee Plan, NNSA included a specific criterion for 
rework to drive the management and minimization of unnecessary rework. 
In anticipation of the Award Fee criterion, MOX Services issued the 
initial version of a procedure for the tracking and trending of re-work 
in September 2014. The $8 million reported for re-work was only for re-
work in direct accounts in FY 2015. Supporting work (e.g., engineering, 
construction management, quality assurance) is not tracked and would be 
in addition to the $8 million. HVAC, pipe and electrical were the 
primary commodities being installed in FY 2015 and these items had a 
re-work rate of approximately 25 percent. These re-work rates are 
significantly higher than what MOX Services is utilizing in their 
budget projections, which included a re-work rate of 2.5 percent.
    Mr. Wilson. In 2013, DOE and the contractor completed a critical 
milestone in the advancement of the mission of the MOX Fuel Fabrication 
Facility with finalization of the Blanket Commercial Agreement (BCA), 
providing the necessary framework from which AREVA can begin 
negotiating contracts for MOX fuel sales with U.S. nuclear utilities. 
However, while DOE has claimed that no customers have signed contracts 
for the fuel that will be produced by the MOX Fuel Fabrication 
Facility, to date DOE has refused to sign the BCA that will allow the 
contractor to negotiate those very sales contracts. In fact, several 
U.S. utilities have invited the contractor to discuss the purchase of 
MOX fuel once the BCA is signed, and the Red Team agrees that there 
will be customers for the MOX fuel--sales for which would provide a 
significant benefit to American ratepayers and offset some of the costs 
of the non-proliferation program. Why does DOE refuse to sign the BCA?
    Mr. MacWilliams. NNSA negotiated and finalized a blanket commercial 
agreement with Areva to market the fuel that would be fabricated at the 
U.S. MOX Fuel Fabrication Facility to Areva's customers. However, NNSA 
has deferred signing the agreement since the Department is currently 
analyzing options to complete the plutonium disposition program more 
efficiently.
    Areva has indicated that it has identified U.S. utilities 
interested in MOX fuel, but thus far will not share the names of the 
utilities with the Department despite repeated requests and the 
Department's offer to sign a nondisclosure agreement. Regardless, 
depending on the uranium market prices, the Department has calculated 
the potential revenue stream from the sale for MOX fuel to be between 
$500 million and $1 billion over the lifetime of a program with a total 
cost exceeding $30 billion.

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