    [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

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                      ______

                             U.S. GOVERNMENT PUBLISHING OFFICE

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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.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    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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