April 26, 2013
TAXPAYERS FOR COMMON SENSE--Just how far will a member of Congress go to protect his pork? We've seen a lot of funny stuff over the years, but now a relatively noncontroversial cabinet-level nominee-- itself a rarity in Washington--is being held hostage over a boondoggle.
Senator Lindsey Graham (R-SC) put a hold on the confirmation of prospective Energy Secretary Ernest J. Moniz on Tuesday until Moniz or the Obama administration gives him the answers he wants on the future of a nuclear project in his home state. The Fiscal Year 2014 budget request released by the White House April 10 cut funding for the Mixed Oxide Fuel Fabrication Facility (MOX), a nuclear reprocessing plant located at the Savannah River Site in Aiken, South Carolina. The fact that Moniz received a nearly unanimous vote of confidence from the Senate Energy Committee last week did not faze Graham in the least (of course the one "no" vote was from Graham's fellow Palmetto State Senator, Tim Scott (R-SC)) . "This is the leverage I have, and I'm going to use it," Graham told reporters after meeting with Moniz on Wednesday.
We're not surprised funding for the facility was cut: We have pointed out MOX's shortcomings for years, and recommended halting construction altogether in our May 2012 report Spending Even Less, Spending Even Smarter. The MOX facility was designed to convert weapons-grade plutonium into mixed-oxide fuel for use in U.S. commercial nuclear reactors, per a 2000 agreement with Russia. Today, however, MOX is over budget, behind schedule, and has literally no market for its product.
In 2004, the National Nuclear Security Agency (NNSA) estimated the facility would cost $1.6 billion and be operational by 2007. In 2008, Shaw AREVA MOX Services (MOX Services)--the project contractor--lost its contract with the company that had signed on to buy the fuel, and no replacement buyers have appeared. Since fuel produced at MOX will be more expensive than conventional fuel, DOE will end up paying companies to take the fuel, if DOE can even find any takers.
In response to the project's expanding waistline, NNSA asked MOX Services to update cost and schedule estimates based on a "bottoms up" review. The new estimates, released late last year, pushed the cost to nearly $8 billion and the schedule back to November 2019. Estimated annual operating costs have also skyrocketed.
NNSA's justification documents for its FY14 budget request, released last week, identify the main reasons for project problems. These include submission of an initial baseline cost estimate before design was completed, increased costs for equipment, materials and labor, and high worker turnover due to competing jobs in the area. As a result, "cost growth and fiscal pressure may make the project unaffordable," according to the documents, so "NNSA will slow down the MOX project and other activities associated with the current plutonium disposition strategy" while assessing alternative ways to dispose of the plutonium. NNSA requested $320 million for MOX in FY14 (more than a 30 percent reduction from levels in the FY13 Continuing Resolution funding the agency that passed in March) to finish up construction.
Graham wants NNSA to fully fund the project into the future, insisting there is no alternative to MOX. In reality, alternatives such as burying or "vitrifying" the plutonium by mixing it with other waste could save money while meeting our commitments to Russia. The building will need a new mission in the not-too-distant future anyway: Though the facility is designed for a 40-year life, the plutonium work would finish up after just 15 years.
The administration should keep its fiscal sanity and resist any urge to tell Senator Graham what he wants to hear, and Senator Graham needs to face reality. Holding up a nominee won't turn a wasteful project into a good one, and we hope that whomever is ultimately confirmed as Secretary of Energy will see that.
Let us know what you think.
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