In 1994, the United States declared 38.2 metric tons of weapons-grade  plutonium as surplus to national security needs. In 2000, DOE announced in a record of decision that it would construct a  pit disassembly and conversion facility, a MOX fuel fabrication facility, and  an immobilization facility at SRS. In addition, according to NNSA  documents, NNSA plans to obtain plutonium from nonpit forms in two  ways. Construction Projects Appear to Be Meeting Cost Targets, but the MFFF Has Had Schedule Delays

The MFFF and WSB construction projects both appear to be meeting their  cost targets, but the MFFF project has experienced some delays over the  past 2 years. According to the  data and project officials, delays during 2008 were due primarily to the  delivery of reinforcing bars that did not meet nuclear quality standards. However, NNSA has not sufficiently planned for such a  contingency. In addition, NNSA has not sufficiently planned for the  maturation of critical technologies to be used in pit disassembly and  conversion operations. However, it appears unlikely that NNSA will be able to establish a pit  disassembly and conversion capability in time to produce the plutonium  feedstock needed to operate the MFFF beginning in 2021, due to the  amount of time and effort needed to reconsider alternatives and construct  a facility as well as the amount of uncertainty associated with the agency’s  new proposal. NNSA Has One Potential Customer for Most of Its MOX Fuel, but Outreach to Others May Be Insufficient

NNSA has offered several incentives to attract customers for its MOX fuel  and is working toward a formal agreement for the Tennessee Valley  Authority (TVA) to purchase most of this fuel. However, NNSA’s outreach  to other utilities may not yet be sufficient to inform potential customers of  incentives to use MOX fuel. However, despite the incentives offered, as of October 2009 the majority of  the utilities that we interviewed expressed little or no interest in becoming  MOX fuel customers. When  asked to consider the proposed incentives, however, 8 utilities expressed  such interest. NRC Has Been Reviewing the MFFF’s License Application and Has Identified Issues with Construction Practices

NRC is responsible for licensing the MFFF to produce fuel for commercial  nuclear reactors. DOE Included Nuclear Safety in Management Reviews of the Projects, but Oversight by DOE’s Independent Nuclear Safety Entities Has Been Limited

Although DOE has incorporated elements of nuclear safety in management  reviews of the MFFF and the WSB projects that were conducted as part of  its critical decision review process, DOE’s independent nuclear safety  entities were minimally involved. Regarding nuclear safety oversight of the WSB project, which is solely  regulated by DOE, we found that HSS had not conducted any oversight  activities or participated in any critical decision reviews. Specifically,  although the WSB is considered a category 2 (high-hazard) nuclear facility,  it is categorized as a nonmajor project. We have concerns with these options, including:    NNSA’s use of a “wait-and-see” approach to the ARIES project, and the  implications this may have on the ability of the ARIES project to meet its  current and future production goals;   the implications of the use of fuel-grade plutonium on the design and  safety of the MFFF, and the extent to which DOE has adequately  determined how much additional material throughout the DOE complex  may be suitable and available for use by the MFFF;     how DOE plans to establish limited pit disassembly processes given the  current lack of a definitive strategy for pit disassembly operations; and    how DOE plans to adjust the MOX fuel production schedule, and the  implications this may have on the cost and schedule for operating the  MFFF and DOE’s ability to attract potential MOX fuel customers. This plan  should include, at a minimum, the following five items: (1) the actions  needed to ensure that the ARIES project will meet its existing production  goals, and the cost and schedule associated with any needed expansion of  the project; (2) an assessment of how much additional plutonium material,  including fuel-grade plutonium, is available within the DOE complex for  use as feedstock for the MFFF; (3) an assessment of the effect on the  design and safety of the MFFF from the use of fuel-grade plutonium as  feedstock; (4) an assessment of potential changes to the MOX fuel  production schedule and the effect of these changes on the cost and  schedule for operating the MFFF; and (5) an assessment of the cost and  schedule associated with obtaining a limited but sufficient pit disassembly  process to produce feedstock for the MFFF. Agency Comments and Our Evaluation

We provided the Department of Energy, the National Nuclear Security  Administration, and the Nuclear Regulatory Commission with a draft of  this report for their review and comment. We also toured the ARIES facility at  DOE’s Los Alamos National Laboratory (LANL) in New Mexico and  interviewed officials involved in the project. We interviewed officials from NNSA’s Office of Fissile  Materials Disposition, HSS’s Office of Independent Oversight, and the  Chief of Defense Nuclear Safety.
Why GAO Did This Study

The end of the Cold War left the United States with a surplus of weapons-grade plutonium, which poses proliferation and safety risks. Much of this material is found in a key nuclear weapon component known as a pit. The Department of Energy (DOE) plans to dispose of at least 34 metric tons of plutonium by fabricating it into mixed oxide (MOX) fuel for domestic nuclear reactors. To do so, DOE's National Nuclear Security Administration (NNSA) is constructing two facilities--a MOX Fuel Fabrication Facility (MFFF) and a Waste Solidification Building (WSB)--at the Savannah River Site in South Carolina. GAO was asked to assess the (1) cost and schedule status of the MFFF and WSB construction projects, (2) status of NNSA's plans for pit disassembly and conversion, (3) status of NNSA's plans to obtain customers for MOX fuel from the MFFF, and (4) actions that the Nuclear Regulatory Commission (NRC) and DOE have taken to provide independent nuclear safety oversight. GAO reviewed NNSA documents and project data, toured DOE facilities, and interviewed officials from DOE, NRC, and nuclear utilities.

What GAO Found

The MFFF and WSB projects both appear to be meeting their cost targets for construction, but the MFFF project has experienced schedule delays. Specifically, the MFFF and WSB projects are on track to meet their respective construction cost estimates of $4.9 billion and $344 million. However, the MFFF project has experienced some delays over the past 2 years, due in part to the delivery of reinforcing bars that did not meet nuclear quality standards. Project officials said that they expect to recover from these delays by the end of 2010 and plan for the start of MFFF operations on schedule in 2016. The WSB project appears to be on schedule. NNSA is reconsidering its alternatives for establishing a pit disassembly and conversion capability. However, it seems unlikely that NNSA will be able to establish this capability in time to produce the plutonium feedstock needed to operate the MFFF, due to the amount of time and effort needed to reconsider alternatives and construct a facility as well as the amount of uncertainty associated with NNSA's current plans. NNSA had previously planned to build a stand-alone facility near the MFFF construction site to disassemble pits and convert the plutonium into a form suitable for use by the MFFF. However, NNSA is now considering a plan to combine this capability with another project at an existing facility at the Savannah River Site. NNSA officials could not estimate when the agency will reach a final decision or establish more definitive cost and schedule estimates for the project. However, NNSA's new alternative depends on an aggressive, potentially unrealistic schedule. In addition, NNSA has not sufficiently planned for the maturation of critical technologies to be used in pit disassembly and conversion operations, some of which are being tested at the Los Alamos National Laboratory in New Mexico. NNSA has one potential customer for most of its MOX fuel, but outreach to other utilities may be insufficient. NNSA is in discussions with the Tennessee Valley Authority to provide MOX fuel for five reactors. NNSA plans to offer several incentives to potential customers, including offering to sell MOX fuel at a discount relative to the price of uranium fuel. In interviews with the nation's nuclear utilities, GAO found that while many of the utilities expressed interest in NNSA's proposed incentives, the majority of utilities also expressed little interest in becoming MOX fuel customers. This suggests that NNSA's outreach to utilities may not be sufficient. NRC is currently reviewing the MFFF's license application and has identified several issues related to construction. However, oversight of the MFFF and the WSB by DOE's independent nuclear safety entities has been limited. For example, DOE's Office of Health, Safety, and Security has not conducted any oversight activities or participated in any project reviews of the WSB, despite the WSB's status as a high-hazard nuclear facility. In addition, NNSA's Chief of Defense Nuclear Safety has not conducted any nuclear safety oversight activities for the MFFF project and has not conducted all oversight activities for the WSB project that are required by DOE order.