    Fusion Energy: Definitive Cost Estimates for U.S. Contributions
    to an International Experimental Reactor and Better Coordinated
    DOE Research Are Needed (26-OCT-07, GAO-08-30).

    The United States is pursuing two paths to fusion
    energy--magnetic and inertial. On November 21, 2006, the United
    States signed an agreement with five countries and the European
    Union to build and operate the International Thermonuclear
    Experimental Reactor (ITER) in Cadarache, France, to demonstrate
    the feasibility of magnetic fusion energy. The United States also
    built and operates facilities to pursue inertial fusion energy
    research. This report discusses (1) U.S. contributions to ITER
    and the challenges, if any, in managing this international fusion
    program and (2) the Department of Energy's (DOE) management of
    alternative fusion research activities, including National
    Nuclear Security Administration (NNSA) initiatives. In performing
    this work, GAO analyzed budget documents, briefings, and reports
    that focused on research and funding priorities for the fusion
    program. GAO also met with officials from DOE, NNSA, and the ITER
    Organization in France.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-08-30
        ACCNO:   A77650
      TITLE:     Fusion Energy: Definitive Cost Estimates for U.S.
    Contributions to an International Experimental Reactor and Better
    Coordinated DOE Research Are Needed
         DATE:   10/26/2007
      SUBJECT:   Budget outlays
    	     Cost analysis
    	     Energy research
    	     Financial analysis
    	     Foreign governments
    	     Fusion
    	     Future budget projections
    	     Human capital planning
    	     Interagency relations
    	     Nuclear energy
    	     Nuclear facilities
    	     Nuclear reactors
    	     Program management
    	     Quality assurance
    	     Research and development
    	     Research and development facilities
    	     Research program management
    	     Schedule slippages
    	     Strategic planning
    	     Cost estimates
    	     Program coordination
    	     Program costs
    	     Program goals or objectives
    	     International Thermonuclear Experimental
    	     Reactor Project

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    GAO-08-30

         * [1]Results in Brief
         * [2]Background
         * [3]The United States Will Contribute $1.12 Billion Over 9 Years

              * [4]DOE Does Not Yet Have a Definitive and Independently Validat
              * [5]The United States Will Incur Additional Costs Because ITER I
              * [6]The ITER Organization Faces Management Challenges that May L

         * [7]Lack of Coordination, Competing Funding Priorities, and Huma

              * [8]DOE and NNSA Do Not Have a Coordinated Research Program for
              * [9]Decreases in Funding for Innovative Magnetic Fusion Devices
              * [10]DOE Does Not Have a Plan to Address Future Workforce Shortag

         * [11]Conclusions
         * [12]Recommendations for Executive Action
         * [13]Agency Comments and Our Evaluation
         * [14]GAO Contact
         * [15]Staff Acknowledgments

              * [16]Order by Mail or Phone

    Report to Congressional Committees

    United States Government Accountability Office

    GAO

    October 2007

    FUSION ENERGY

    Definitive Cost Estimates for U.S. Contributions to an International
    Experimental Reactor and Better Coordinated DOE Research Are Needed

    GAO-08-30

    Contents

    Letter 1

    Results in Brief 4
    Background 7
    The United States Will Contribute $1.12 Billion Over 9 Years to Help Build
    ITER, but Management Challenges May Affect Timing and Cost of Construction
    11
    Lack of Coordination, Competing Funding Priorities, and Human Capital
    Challenges May Hamper Progress in Alternative Fusion Research 18
    Conclusions 26
    Recommendations for Executive Action 27
    Agency Comments and Our Evaluation 28
    Appendix I Comments from the Department of Energy 31
    Appendix II GAO Contact and Staff Acknowledgments 33

    Figures

    Figure 1: The Fusion Reaction 7
    Figure 2: Countries Participating in ITER 10
    Figure 3: U.S. Contributions to ITER for Construction 13
    Figure 4: Section View of the Proposed Design for the ITER Reactor 16
    Figure 5: The Z-machine Creating an X-ray Pulse to Test Materials in
    Conditions of Extreme Temperature and Pressure 20

    Abbreviations

    DOE: Department of Energy:
    HAPL: High Average Power Laser:
    IFMIF: International Fusion Materials Irradiation Facility:
    ITER: International Thermonuclear Experimental Reactor:
    NIF: National Ignition Facility:
    NNSA: National Nuclear Security Administration:
    OFES: Office of Fusion Energy Sciences:

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. The published product may be reproduced
    and distributed in its entirety without further permission from GAO.
    However, because this work may contain copyrighted images or other
    material, permission from the copyright holder may be necessary if you
    wish to reproduce this material separately.

    United States Government Accountability Office
    Washington, DC 20548

    October 26, 2007

    The Honorable Byron Dorgan:
    Chairman:
    The Honorable Pete Domenici:
    Ranking Member:
    Subcommittee on Energy and Water Development:
    Committee on Appropriations:
    United States Senate:

    The Honorable Peter Visclosky:
    Chairman:
    The Honorable David Hobson:
    Ranking Member:
    Subcommittee on Energy and Water Development:
    Committee on Appropriations:
    House of Representatives:

    On November 21, 2006, the United States signed an agreement with five
    countries1 and the European Union to help build and operate the
    International Thermonuclear Experimental Reactor (ITER) in Cadarache,
    France, to demonstrate the feasibility of fusion energy. The construction,
    operation, and decommissioning of ITER is expected to cost about $14
    billion. Fusion occurs when the nuclei of two light atoms--typically
    hydrogen isotopes--collide and fuse together when heated at high
    temperatures and placed under tremendous pressure. This reaction releases
    a large amount of energy that some day, it is hoped, may be captured to
    produce electricity. Over the last 50 years, scientists around the world
    have made progress in understanding how to create the conditions for
    fusion, but there are many outstanding scientific and technical issues
    that must still be resolved before fusion can be used as an energy source.
    As a result, the United States, along with the six parties to the
    agreement, identified ITER as the critical experiment that could finally
    produce more power from fusion reactions than is needed to operate the
    device--the first step toward producing electricity from fusion energy.
    ITER's objectives are to resolve fundamental physics issues in using
    fusion as an energy source and to develop and test the technology needed
    for a future fusion power plant. Construction of ITER is scheduled to
    begin in 2008 and be completed in 2016, followed by 20 years of
    experiments and eventual decommissioning. The ITER Organization was
    established to manage the construction, operation, and decommissioning of
    this facility. If ITER meets its objectives, as the last critical step
    toward fusion energy, the United States and other countries will need to
    design and test different fusion power plants to capture the energy and
    produce electricity.

    1These countries include the People's Republic of China, Japan, India, the
    Republic of South Korea, and the Russian Federation.

    The Department of Energy (DOE) identified ITER as the number one priority
    for new research facilities because fusion power holds the promise of
    reducing concerns over imported oil, rising gasoline prices, and global
    warming. With decreasing fossil fuel resources and increasing awareness
    that the use of fossil fuels is harming the environment, fusion is a
    potentially new source of energy for meeting future energy needs. Fusion
    offers many potential benefits, including no emissions of greenhouse
    gases, an abundant source of fuel, no risk of the type of severe accidents
    that could occur with existing nuclear power plants, no severe
    consequences of a terrorist attack, and no long-lived radioactive waste.
    In addition, U.S. participation in ITER allows the United States to share
    the cost of building this complex and expensive fusion device while
    leveraging the scientific and technological expertise of the other ITER
    parties.

    The United States is pursuing two paths to fusion energy--magnetic and
    inertial. Magnetic fusion relies on magnetic forces to confine
    electrically charged atoms, known as plasma, and sustain a fusion
    reaction. ITER will be a magnetic fusion device known as a "tokamak."2
    While a tokamak has been the most successful magnetic fusion device, there
    is still uncertainty that it will produce fusion energy or lead to a
    commercially viable fusion energy device. To reduce the risk of investing
    in only one device, DOE's Office of Fusion Energy Sciences (OFES), which
    is responsible for managing the U.S. fusion energy program, also funds
    scientific research on alternative types of magnetic devices, primarily at
    U.S. universities. Universities, such as Princeton University and the
    University of Washington, are currently testing 10 other magnetic devices
    with different
    shapes and magnetic currents that may lead to a simpler, less costly, or
    faster path to fusion energy.

    2The term "tokamak" comes from a Russian acronym for a fusion device that
    was developed in the former Soviet Union during the 1950s and 1960s.

    In contrast, inertial fusion relies on powerful lasers to repeatedly
    strike small pellets of fuel, yielding bursts of energy. The National
    Nuclear Security Administration (NNSA), a separately organized agency
    within DOE, is leading efforts in inertial fusion because it can be used
    for defense needs, such as validating the integrity and reliability of the
    U.S. nuclear weapons stockpile. NNSA is building a facility--the National
    Ignition Facility (NIF)--at the Lawrence Livermore National Laboratory
    that is hoped could be used to demonstrate the feasibility of inertial
    fusion. Since the science applications of inertial fusion for defense and
    energy needs are similar, the results of NIF experiments could validate
    inertial fusion as an alternative path to fusion energy. Other facilities,
    such as the Naval Research Laboratory, are testing technologies needed to
    produce energy from inertial fusion.

    In the conference report accompanying the fiscal year 2006 energy and
    water development appropriation,3 the conferees directed GAO to review
    OFES's fusion energy program, the activities of major U.S. fusion energy
    research facilities that are contributing to ITER, and NNSA fusion energy
    initiatives. As agreed with the committees of jurisdiction, we (1)
    identified U.S. contributions to ITER and the challenges, if any, in
    managing this international fusion program and (2) assessed DOE's
    management of alternative fusion research activities, including NNSA
    initiatives.

    To address these objectives, we collected and analyzed documentation from
    DOE, NNSA, the ITER Organization, the National Academy of Sciences, DOE's
    national laboratories, and universities involved in fusion science. To
    identify U.S. contributions to ITER and the challenges of managing this
    international project, we analyzed budget documents, including OFES's
    5-year budget plan, and interviewed officials from OFES, the Department of
    State, and the U.S. ITER Project Office at the Oak Ridge National
    Laboratory in Oak Ridge, Tennessee. We also analyzed documents and met
    with officials from the three major U.S. magnetic fusion research
    facilities--located at General Atomics in San Diego, California; the
    Massachusetts Institute of Technology in Cambridge, Massachusetts; and the
    Princeton Plasma Physics Lab in Princeton, New Jersey--and received a tour
    of these facilities to understand how fusion devices are built and
    operated. Furthermore, we met with officials from the ITER Organization in
    Cadarache, France, and toured the ITER construction site. To assess DOE's
    management of alternative fusion research activities, we interviewed
    scientists from universities conducting research in alternative paths to
    fusion funded by OFES and officials from the National Academy of Sciences,
    and we analyzed reports from DOE's fusion energy advisory committee that
    focused on funding and research priorities for the fusion program. Lastly,
    to determine the status of inertial fusion and NNSA fusion initiatives, we
    analyzed budget documents, briefings, and reports on inertial fusion and
    met with officials from NNSA's Office of Defense Programs; NIF at the
    Lawrence Livermore National Laboratory in Livermore, California; the
    Laboratory for Laser Energetics at the University of Rochester in
    Rochester, New York; Sandia National Laboratory in Albuquerque, New
    Mexico; and the Naval Research Laboratory in Washington, D.C. We conducted
    our work from December 2006 to September 2007 in accordance with generally
    accepted government auditing standards.

    3H.R. Rep. No. 109-275, p. 155 (Nov. 7, 2005).

    Results in Brief

    DOE plans to spend $1.12 billion over 9 years to help build ITER, but this
    is only a preliminary estimate and may not reflect the full costs of U.S.
    participation. The management challenges that the ITER Organization faces
    to build ITER on time and on budget may also affect U.S. costs. With
    respect to the U.S. contribution to build ITER, the largest portion, or
    about 44 percent, will be used to purchase U.S.-manufactured components
    and parts for ITER; the remaining portion will be used to provide cash to
    the ITER Organization for equipment installation and associated
    contingencies, to pay for U.S. scientists and engineers sent to the ITER
    Organization, and to support ITER-related research and development at
    national laboratories. However, DOE has not been able to assess the full
    costs to the United States of building ITER because the ITER Organization
    has not completed the project design for the reactor. According to DOE's
    project management guidance, DOE cannot develop and validate a definitive
    cost and schedule estimate for a project until the design is complete.
    Moreover, the $1.12 billion for ITER construction does not include an
    additional $1.2 billion the United States is expected to contribute to
    operate and decommission the facility. With respect to management
    challenges, the ITER Organization faces five key management challenges
    that may affect U.S. costs. Many of these challenges stem from the
    difficulty of coordinating international efforts: six countries and the
    European Union are designing and building components for ITER and, as
    members of the ITER Organization, must reach consensus before making
    critical management decisions. The key challenges include (1) developing
    quality assurance standards to test the reliability and integrity of the
    components made in different countries; (2) assembling, with a high level
    of precision, components and parts built in different countries; (3)
    finding a new vendor if a country fails to build a component on time or
    does not meet quality assurance standards; (4) developing a contingency
    fund that adequately addresses cost overruns and schedule delays; and (5)
    developing procedures that describe which countries will be responsible
    for paying for cost overruns.

    GAO has identified several challenges DOE faces in managing alternative
    fusion research activities, including coordinating inertial fusion
    research activities within DOE, setting funding priorities to advance both
    ITER- and tokamak-related research and different magnetic fusion energy
    approaches, and planning for hiring and retaining fusion scientists:

               o Coordination. Within DOE, NNSA and OFES do not effectively
               coordinate research activities to leverage scientific and
               technological advances for developing inertial fusion energy. NNSA
               provides OFES with limited access to one of its inertial fusion
               facilities to conduct inertial fusion experiments, and NNSA- and
               OFES-funded scientists share scientific information. However, NNSA
               and OFES do not have a coordinated research plan that identifies
               key scientific and technological questions or the cost, time
               frames, and detailed research and development tasks needed by each
               agency to solve those scientific and technological issues to
               further advance inertial fusion energy. In addition, DOE has not
               given NNSA and OFES clear roles in the development of inertial
               fusion energy. NNSA's program is focused on defense needs while
               OFES is exploring broad scientific issues indirectly related to
               inertial fusion energy. Without a coordinated research plan,
               progress in advancing inertial fusion may be delayed.

               o Funding priorities. Alternative magnetic fusion research
               competes for funding with ITER- and tokamak-related research.
               Since the U.S. commitment to ITER, DOE has focused more of its
               resources on ITER- and tokamak-related research. As a result,
               funding for alternative, potentially more innovative, magnetic
               fusion research activities has declined--from $26 million in
               fiscal year 2002 to $20 million in fiscal year 2007. Moreover, as
               funding for tokamak-related research has increased, the share of
               funding for these innovative research activities decreased from 19
               percent of the fusion research budget in fiscal year 2002 to 13
               percent in fiscal year 2007. University scientists involved in
               fusion research told us that this decline in funding has led to a
               decline in research opportunities for innovative concepts, and
               these concepts could lead to a simpler, less costly, or faster
               path to fusion energy. In addition, the decline in funding also
               has reduced opportunities to attract students to the fusion
               sciences and train them to fulfill future workforce needs. DOE
               officials responded that they determine the appropriate level of
               funding based on research priorities identified by DOE's fusion
               energy advisory committee4 and the current level of funding is
               sufficient to sustain the best-performing innovative magnetic
               devices. However, the last independent assessment of the balance
               of funding between tokamak-related research and alternative
               innovative concepts was in 1999 before the United States joined
               ITER and it became a priority.

               o Human capital. DOE has not developed a human capital strategy to
               address future workforce challenges. About one-third of the U.S.
               fusion energy workforce is retiring in the next 10 years and only
               a small percentage of doctoral candidates in physics are entering
               the fusion research field to meet future workforce needs. Without
               a strategy in place, DOE may face a shortage of scientists with
               critical skills and expertise at a time when demand for their
               skills will grow.

               To advance U.S. efforts to develop alternative fusion energy
               sources and to address OFES's human capital challenges, we
               recommend, among other things, that the Secretary of Energy direct
               OFES to (1) charge DOE's fusion energy advisory committee with
               independently assessing whether current funding levels between
               ITER- and tokamak-related research and innovative magnetic fusion
               research strike the right balance to meet research objectives and
               advance both areas of research, and (2) develop a strategy to
               hire, train, and retain personnel with specialized skills to meet
               future workforce needs. We also are recommending that the
               Secretary of Energy direct DOE and NNSA to develop a research plan
               to coordinate U.S. inertial fusion research activities and
               identify roles and responsibilities for each program, detailed
               research and development tasks, budget needs, and time frames for
               advancing inertial fusion energy.

               We provided DOE with a draft copy of this report for its review
               and comment. In its written comments, DOE neither agreed nor
               disagreed with our recommendations, but questioned several of our
               findings, including whether the number of PhDs will be sufficient
               to meet future workforce needs, the declining share of funding
               available for innovative magnetic fusion research activities, and
               the lack of a coordinated research plan. We believe that our
               analyses and facts as reported are correct. Specifically, data
               from DOE's fusion energy advisory committee show that not enough
               doctoral candidates in plasma physics and fusion science are
               entering the fusion research field to meet future workforce needs
               and funding for innovative magnetic fusion research activities has
               declined in the last 6 fiscal years. In addition, DOE still does
               not have a coordinated research plan to help advance inertial
               fusion energy research. DOE also provided technical comments,
               which we incorporated, as appropriate.

    			  Background

               Fusion is the energy source that powers the sun and stars and is a
               major source of energy for the hydrogen bomb. For more than 50
               years, the United States has been trying to control this energy
               source to produce electricity. Fusion occurs when the nuclei of
               two light atoms collide and fuse together with sufficient energy
               to overcome their natural repulsive forces. Scientists are
               currently using deuterium and tritium--hydrogen isotopes--for this
               reaction. When the nuclei of the two atoms collide, the collision
               produces helium and a large quantity of energy (see fig. 1).

               Figure 1: The Fusion Reaction

               For the fusion reaction to take place, the atoms must be heated to
               very high temperatures--about 100 million degrees centigrade, or
               10 times the temperature of the surface of the sun--and placed
               under tremendous pressure. In a hydrogen bomb, high temperatures
               are obtained by exploding a uranium or plutonium fission bomb to
               force the deuterium and tritium together in a violent manner. To
               achieve controlled fusion, the United States is pursuing two
               paths--magnetic and inertial. Magnetic fusion involves heating
               deuterium and tritium to about 100 million degrees centigrade by
               using an external source of electromagnetic energy. The deuterium
               and tritium nuclei fuse together to make helium in a very hot and
               highly charged gas-like condition called a plasma. Strong magnetic
               fields are then used to confine the plasma. Current magnetic
               devices have not been able to sustain this fusion reaction for
               more than a few seconds. For magnetic fusion to produce
               electricity, a device would need to sustain the reaction for long
               periods of time. In contrast, inertial fusion relies on intense
               lasers or particle beams to heat and compress a small, frozen
               pellet of deuterium and tritium--a few millimeters in size--that
               would yield a burst of energy. The lasers or particle beams would
               continuously heat and compress the pellets, which would simulate,
               on a very small scale, the actions of a hydrogen bomb. The goal
               for both approaches is to generate more energy than is needed to
               begin and sustain the reaction.

               ITER is an experiment to study fusion reactions in conditions
               similar to those expected in a future electricity-generating power
               plant. The goal is to be the first fusion device in the world to
               produce net power--that is, produce more power than it consumes.
               The objective is to produce 10 times more power than is needed to
               operate the device. In contrast, current nuclear power plants
               produce between 30 and 40 times more power than is needed to
               operate the plants. ITER also will test a number of key
               technologies, including the heating, control, and remote
               maintenance systems that will be needed for a fusion power
               station. If ITER is successful, it will lead to power plant design
               and testing.

               According to DOE, ITER was first proposed at the U.S.-U.S.S.R.
               Geneva summit in November 1985, when President Reagan and Soviet
               Premier Gorbachev recognized that joint activities were needed to
               diffuse the tension of the arms race during the Cold War and begin
               the Soviet Union's economic integration into the world economy.
               The goal was to share scientific and technical information in a
               program in which both sides had reached a comparable level of
               knowledge and that offered future commercial gains from developing
               fusion technology. Following this summit, the United States, the
               Soviet Union, Japan, and several European countries drafted a
               proposal to implement ITER.

               The United States temporarily withdrew from ITER in 1999 when
               Congress raised concerns that the technical basis for ITER was not
               sound, the cost was too high, and the facility was too large. In
               response to the U.S. withdrawal, the countries participating in
               ITER reduced the size of the facility and the cost of building
               ITER to about $5 billion, or one-half the cost of the original
               design. A number of scientific advances also increased U.S.
               confidence that the new ITER design would meet its scientific and
               technological goals. In January 2003, President Bush announced
               that the United States would rejoin ITER. This decision was based
               on a number of studies--from DOE's advisory committee on fusion
               energy, the National Academy of Sciences, and other groups of
               experts--that concluded the U.S. fusion program was technically
               and scientifically ready to participate in ITER and recommended
               that the United States rejoin it. In 2003, the People's Republic
               of China and the Republic of Korea also joined; and in December
               2005, India became the seventh and most recent party to join. In
               November 2006, all six countries and the European Union signed the
               ITER agreement. Figure 2 shows the countries participating in
               ITER.

    4The Fusion Energy Sciences Advisory Committee is chartered pursuant to
    the Federal Advisory Committee Act, Pub. L. No. 92-463, 86 Stat. 770
    (1972). The committee provides independent advice on issues related to
    planning, implementing, and managing the fusion energy program. DOE relies
    on this advice to establish scientific and technological as well as
    funding priorities. Committee members are drawn from universities,
    national laboratories, and private firms involved in fusion research.

    Figure 2: Countries Participating in ITER

    NNSA maintains the United States' inertial fusion facilities. NIF, which
    is scheduled for completion in 2009, will be the world's largest laser
    facility and will be used to test inertial fusion. It is designed to
    achieve the first controlled thermonuclear burn, which will release fusion
    energy.5 To achieve the temperature and pressure needed for heating and
    compressing the fuel to release this fusion energy, NIF has 192 laser
    beams that will converge and strike frozen deuterium and tritium pellets.
    No other facility has been able to achieve a controlled thermonuclear burn
    because it did not have enough energy to heat and compress these targets.
    For example, NIF is expected to produce 50 times more energy than the
    OMEGA laser--the world's most powerful laser facility currently operating.
    The OMEGA laser, at the University of Rochester, is NNSA's main inertial
    fusion facility until NIF is completed. Lastly, the Z-machine, located at
    Sandia National Laboratory, is an alternative approach to reaching
    conditions of extreme temperature and pressure to validate sophisticated
    computational models of nuclear weapon performance. Rather than using
    powerful lasers, the Z-machine uses an electrical current to create a
    powerful magnetic field that compresses and implodes the target. The
    Z-machine releases the equivalent of 80 times the world's electrical power
    output for a few billionths of a second, but only a moderate amount of
    energy is actually used because it relies on generators and amplifiers to
    store and magnify the energy from the electrical grid. NNSA spent about
    $60 million to refurbish this machine from July 2006 to May 2007 to
    increase the power output.

    5NIF is 705,000 square feet, the size of three football fields side by
    side, and houses a complex optical system that produces the laser beams.
    NIF construction began in May 1997 and it has a total project cost of $2.3
    billion. An additional $1.3 billion are needed to assemble, install, and
    test the laser system.

    The United States Will Contribute $1.12 Billion Over 9 Years to Help Build ITER,
    but Management Challenges May Affect Timing and Cost of Construction

    DOE plans to spend $1.12 billion over 9 years to help build ITER, but this
    estimate neither reflects an independently validated cost based on a
    completed reactor design, nor the costs to operate and decommission the
    facility. The ITER Organization also faces five key management challenges
    to build ITER on time and on budget that may affect U.S. costs.

    DOE Does Not Yet Have a Definitive and Independently Validated Cost Estimate for
    the U.S. Contribution to ITER, as DOE Guidance Directs

    Based on DOE's fiscal year 2008 congressional budget request, DOE plans to
    spend $1.12 billion over 9 years--from fiscal years 2006 to 2014--to help
    build ITER, as figure 3 shows. Of the seven parties contributing to ITER,
    the United States and five other countries--the People's Republic of
    China, Japan, India, the Republic of South Korea, and the Russian
    Federation--are each providing 9.1 percent of the total construction cost.
    The European Union is the largest contributor--45.4 percent--because it is
    building the reactor on a member country's soil and it agreed to pay for
    the infrastructure costs. DOE's preliminary estimate of the U.S.
    contribution includes the following:

               o $487.14 million to purchase U.S.-manufactured components and
               parts for ITER, such as superconducting cable for the magnets that
               sustain the fusion reaction and tiles for the inner wall of the
               reactor that can withstand the heat and pressure of the fusion
               reaction;

               o $203.24 million in cash to the ITER Organization to pay for
               scientists, engineers, and support personnel working for the ITER
               Organization; the assembly and installation of the components in
               France to build the reactor; quality assurance testing of U.S.
               supplied components; and contingencies;

               o $194.68 million in contingency funds to address potential
               schedule delays or increases in costs for manufacturing
               components;

               o $112.28 million for the U.S. ITER Project Office at Oak Ridge
               National Laboratory to manage the procurement, testing, assembly,
               and quality assurance of U.S.-manufactured components;

               o $102.57 million to fund research and development activities and
               complete the design work of U.S. components and parts at national
               laboratories, universities, and private industry; and

               o $22.09 million to pay the salaries of U.S. scientists and
               engineers working at the ITER Organization.

               Figure 3: U.S. Contributions to ITER for Construction

               The $1.12 billion is still a preliminary cost estimate and may not
               reflect the full costs of U.S. contributions to ITER. DOE has not
               yet developed a definitive cost and schedule estimate, as DOE
               project management guidance directs. This guidance establishes
               protocols for planning and executing large construction projects
               and directs DOE to reach a number of critical decisions before
               construction begins.6 Two of these critical decisions are (1)
               formally approving the project's definitive cost and schedule
               estimates as accurate and complete and (2) reaching agreement that
               the project's final design is sufficiently complete so that
               resources can be committed toward procurement and construction.
               The cost and schedule estimates also are subject to independent
               reviews, usually by DOE's Office of Engineering and Construction
               Management, to ensure they are accurate and complete. Even though
               DOE does not have a definitive cost estimate, in fiscal years 2006
               and 2007, DOE spent $79.3 million to establish the ITER Project
               Office and fund research and development activities to design U.S.
               components. Without a definitive cost estimate, the U.S. Congress
               has expressed concern that DOE may use funding from the domestic
               fusion research program to cover any shortfalls in funding for the
               ITER project.

    6DOE Order 413.3A, Program and Project Management for the Acquisition of
    Capital Assets, July 28, 2006.

               DOE has not yet reached these critical decisions because of delays
               by the countries participating in ITER in selecting a construction
               site for the reactor and in completing the reactor design. In
               December 2004, DOE reported to Congress that DOE would have a
               definitive cost and schedule estimate by March 2006. DOE's new
               goal is to have this estimate by the end of fiscal year 2008 or
               early fiscal year 2009. DOE officials told us that DOE cannot
               complete this estimate until the ITER Organization updates the
               design for the reactor, scheduled for November 2007. DOE must then
               wait for the ITER Organization to develop the design
               specifications, quality assurance procedures and tests, and
               schedule of delivery for the components and parts of the reactor
               before it can begin manufacturing. The ITER Organization will
               issue the design specifications from the end of 2007 through 2012,
               starting with basic infrastructure and components that require a
               longer time to build. In fiscal year 2008, DOE plans to begin
               procuring materials needed for the superconducting magnets, the
               tiles for the inside of the reactor, and pipes for the water
               cooling system. Even though DOE will not yet have an independently
               validated cost and schedule estimate before it begins to purchase
               these materials, DOE project management guidance provides an
               exception when materials take a long time to manufacture and may
               delay the construction schedule.

    			  The United States Will Incur Additional Costs Because ITER Is
    			  Only the First Step Toward Developing a Fusion Energy Power Plant

               The $1.12 billion preliminary estimate does not cover the full
               costs of the ITER project. DOE estimates that it will cost the
               U.S. another $1.2 billion to help operate and run experiments on
               ITER for 20 years after construction is completed and then
               decommission the facility by removing radioactive materials and
               debris. Furthermore, ITER is only the first step in developing a
               fusion power plant, and DOE expects to build or help build
               additional facilities on the path to fusion energy.

               Following ITER's construction, DOE may participate in designing
               and contributing funds to build another fusion facility, known as
               the International Fusion Materials Irradiation Facility (IFMIF).
               This facility would be designed to develop and test
               radiation-resistant materials that could survive the extreme
               conditions inside a fusion reactor. Fusion reactions continuously
               produce neutrons, which cause materials to become radioactive and
               damage them over time. The IFMIF would produce neutrons, and one
               goal of this facility would be to place materials inside the test
               chamber to determine which would best be suited for a future
               fusion reactor. If DOE participates in IFMIF, DOE's fusion energy
               advisory committee estimated that the U.S. contribution to IFMIF
               would be about $150 million over 7 years.

               Another facility also may be needed to test technologies that
               would convert fusion power into practical energy, such as
               electricity. Neutrons from a fusion reaction will release energy
               if they collide with atoms of another material, causing the
               substance to heat. A prime candidate for this material for future
               fusion power plants is the liquid metal lithium. Lithium that is
               heated by colliding neutrons could transfer the heat to water,
               producing steam. The steam, in turn, would drive a steam turbine
               and generator, producing electricity. The purpose of a new
               facility would be to test different materials and systems for
               collecting neutrons, converting fusion energy into heat, and
               producing tritium--one of the fuels for fusion reactions. DOE's
               fusion energy advisory committee estimates that the construction
               of this facility would cost around $1.5 billion. After testing
               materials and technologies and assessing the scientific results of
               ITER and other magnetic fusion devices, DOE would then be ready to
               design a demonstration power plant that would produce electricity.

    			  The ITER Organization Faces Management Challenges that May Limit Its
    			  Ability to Build ITER on Time and on Budget

               The ITER Organization faces several management challenges that may
               limit its ability to build ITER on time and on budget and may
               affect U.S. costs. Many of these challenges stem from the
               difficulty of coordinating the efforts of six countries and the
               European Union that are designing and building components for ITER
               and, as members of the ITER Organization, must reach consensus
               before making critical management decisions. The key management
               challenges include (1) developing quality assurance standards to
               test the reliability and integrity of the components made in
               different countries; (2) assembling, with a high level of
               precision, components and parts built in different countries; (3)
               finding a new vendor if a country fails to build a component on
               time or does not meet quality assurance standards; (4) developing
               a contingency fund that adequately addresses cost overruns and
               schedule delays; and (5) developing procedures that describe which
               countries will be responsible for paying for cost overruns.

               First, the ITER Organization has not yet developed quality
               assurance standards for manufactured parts and components. Quality
               assurance standards establish the tests each manufacturing company
               must pass before the ITER Organization can certify that a part or
               an entire component meets performance requirements, such as being
               able to withstand tremendous pressure and heat inside the reactor.
               According to DOE officials, quality assurance testing is critical
               because a failure of a poorly manufactured component or part
               during scientific experiments could shut down the reactor for a
               significant time, increase costs because of required repairs, or
               skew scientific results. The countries participating in ITER
               cannot begin manufacturing components until these quality
               assurance standards are in place. Figure 4 demonstrates the scale
               and complexity of the ITER reactor.

               Figure 4: Section View of the Proposed Design for the ITER Reactor

               Second, the ITER Organization faces the challenge of assembling
               more than 10,000 parts and components manufactured by different
               countries. For example, the ITER Organization is responsible for
               installing the tiles that line the inside of the reactor, but the
               tiles are being manufactured by all seven parties. These tiles
               must be manufactured and installed with great precision. According
               to ITER Organization officials, a millimeter difference between
               the tiles could significantly affect scientific results. However,
               countries participating in ITER construction follow two different
               building codes.7 ITER Organization officials told us they have not
               yet selected which building code countries must follow. There is a
               risk that countries unfamiliar with the required building code
               could take longer to manufacture a part under those standards or
               manufacture a part that will not fit properly with other
               manufactured parts for the same component.

               Third, the ITER Organization assumes the responsibility of finding
               a suitable vendor in another country if a country fails to build a
               component on time or does not meet quality assurance standards.
               According to ITER Organization officials, the ITER Organization
               would have to negotiate the terms of manufacturing an item under
               an expedited schedule, and the country that failed to build the
               part on time would have to provide the ITER Organization with the
               funds needed to manufacture the item. Another vendor may not be
               able to produce the part in an expedited manner and the
               construction schedule may slip. In addition, there is no clear
               guidance on how to properly compensate a vendor in another country
               for all manufacturing costs, such as start-up costs, materials,
               and labor. Any disagreement between the new vendor, the country
               paying for the manufactured part, and the ITER Organization on
               proper compensation also could delay construction and increase the
               total project cost.

               Fourth, the ITER Organization's contingency fund does not
               adequately address potential cost overruns and schedule delays.
               The ITER Organization's contingency fund is about 10 percent of
               the total cost, or about $712 million based on current estimates.
               If there are cost overruns, the ITER Organization has a
               contingency fund to pay for additional costs associated with
               procuring manufactured components that it is responsible for
               purchasing, installation of parts, research and development
               activities related to designing components, and hiring more staff.
               According to DOE officials, the ITER Organization did not
               determine this amount through a risk-based assessment. Rather, the
               contingency fund was created after India joined in 2005 as the
               most recent party to ITER. Since the project cost was already
               fixed, the countries participating in ITER decided to use the
               additional funds from India's assessment to create a contingency
               fund. According to DOE officials, some of the countries
               participating in ITER did not want to create a contingency fund
               because it was not standard practice in their project management.
               Moreover, according to DOE officials, a 10 percent contingency may
               not be adequate for a project of this cost and complexity. In
               contrast, these officials cited the Spallation Neutron Source at
               Oak Ridge National Laboratory, which produces short but intense
               pulses of neutrons that can be used to develop new materials, such
               as plastics. DOE completed the construction of this facility in
               2006. The facility had a total project cost of $1.4 billion and
               required the coordination of six DOE national laboratories. Based
               on total cost and complexity, DOE had a contingency fund of about
               20 percent of total costs. According to DOE officials, ITER is
               more technologically complex and involves greater risk because of
               the large number of manufacturers from different countries.

    7The two building codes are Regles de Conception et Construction -
    Mecanique Rapide and the codes from the American Society of Mechanical
    Engineers.

               Finally, the ITER Organization does not have procedures that
               identify who is responsible for paying for potential cost overruns
               that exceed available contingency funds and how costs should be
               shared. Construction could be further delayed if there is no
               consensus before construction begins on how to share the costs for
               cost overruns.

    			  Lack of Coordination, Competing Funding Priorities, and Human Capital
    			  Challenges May Hamper Progress in Alternative Fusion Research

               Within DOE, NNSA and OFES do not have a coordinated research
               program for inertial fusion energy. They do not have a research
               plan that identifies key scientific and technological issues that
               must be addressed to advance inertial fusion energy and how their
               research activities would meet those goals. Without a coordination
               research plan and clear responsibility for developing inertial
               fusion energy, DOE may not see progress in developing inertial
               fusion energy as a promising alternative to magnetic fusion. In
               addition, alternative magnetic fusion research competes for
               funding with ITER- and tokamak-related research. Since the U.S.
               commitment to ITER, funding for alternative innovative magnetic
               devices has declined over the last 6 fiscal years while funding
               for tokamak-related research has increased. According to
               university scientists involved in fusion research, this decrease
               in funding has led to a decline in research opportunities for
               innovative devices. Finally, while the demand for scientists and
               engineers to run experiments at ITER and NIF is growing, OFES does
               not have a human capital strategy to address expected future
               workforce shortages; these shortages are likely to grow as a large
               part of the fusion workforce retires over the next 10 years.

    			  DOE and NNSA Do Not Have a Coordinated Research Program for Inertial
    			  Fusion Energy

               DOE has three separately funded inertial fusion research programs:
               NNSA's inertial fusion research activities related to the nuclear
               weapons program, a High Average Power Laser Program (HAPL) to
               develop technology needed for energy for which funding is directed
               by a congressional conference committee, and OFES's inertial
               fusion research activities aimed at exploring the basic science
               for energy applications. Experiments in each of these programs
               help advance inertial fusion energy, but these experiments are not
               coordinated and each program has a separate mission and different
               scientific and technological objectives. NNSA provides OFES with
               limited access to one of its inertial fusion facilities to conduct
               inertial fusion experiments, and NNSA- and OFES- funded scientists
               share information from the results of inertial fusion experiments.
               However, there is no research plan that identifies key scientific
               and technological questions that need to be addressed to achieve
               inertial fusion energy or the cost, time frames, and detailed
               research and development tasks needed by each agency to solve
               those scientific and technological issues to further advance
               inertial fusion energy. In addition, DOE has not assigned to
               either NNSA or OFES clear roles in developing inertial fusion
               energy. NNSA is focused on stockpile stewardship, but it maintains
               the major inertial fusion facilities. OFES is responsible for
               developing paths to fusion energy, but it is focused on ITER and
               magnetic fusion. A lack of a coordinated research plan and clear
               responsibility among these programs for developing inertial fusion
               energy may delay the progress of inertial fusion energy as a
               promising alternative to magnetic fusion.

               NNSA operates the three major inertial fusion facilities in the
               United States--the National Ignition Facility (NIF) at Lawrence
               Livermore National Laboratory, the OMEGA Laser at the University
               of Rochester, and the Z-machine at Sandia National Laboratory.
               Figure 5 shows the Z-machine in operation. In fiscal year 2006,
               NNSA spent about $544 million for NIF construction, upgrades, and
               operations for the other two facilities, and to conduct inertial
               fusion research. NNSA uses these facilities primarily to
               investigate technical issues related to stockpile stewardship by
               testing the reliability and integrity of nuclear weapons and
               simulating the conditions of a thermonuclear explosion without
               detonating them.8

               Figure 5: The Z-machine Creating an X-ray Pulse to Test Materials
               in Conditions of Extreme Temperature and Pressure

               OFES's inertial fusion research activities are focused on energy
               applications. In fiscal year 2006, OFES spent $15.5 million, or
               5.5 percent of its $280.7 million budget, on these research
               activities. While OFES officials told us that inertial fusion is
               an attractive path to fusion energy and the only alternative to
               magnetic fusion, the office has limited funding for inertial
               fusion research because its priority is to support ITER and
               magnetic fusion research activities. Consequently, OFES relies
               heavily on NNSA's inertial fusion research activities and
               facilities. NNSA experiments at NIF, which will begin in 2010,
               will demonstrate the feasibility of inertial fusion energy because
               a controlled thermonuclear burn is the first step in using
               inertial fusion as a potential energy source. In addition, OFES
               funds inertial fusion energy experiments using the OMEGA laser,
               located at the University of Rochester. NNSA grants access to the
               OMEGA laser to scientists conducting nondefense work and expects
               to complete a $98.5 million upgrade to the OMEGA laser early in
               2008. This upgrade will add short-pulse, high-power lasers, which
               can, among other things, test ways to lower the total laser energy
               required to still compress and heat the target for fusion energy.
               This approach could reduce the cost of producing fusion energy.
               However, the university limits access to this facility to about 4
               weeks a year, or about 10 percent of the total operating time,
               because the priority for this facility remains stockpile
               stewardship. In addition, those 4 weeks are not reserved for
               inertial fusion energy experiments. Scientists from different
               areas of science, including astrophysics, materials science,
               biology, and chemistry, can request the use of the facility and
               compete for time on the laser. University of Rochester officials
               told us that they may be able to increase access to this facility
               for inertial fusion experiments, but OFES would have to provide
               funding. NNSA pays for the facility's operation, but OFES would
               have to fund the experiment, including the targets, which cost
               $10,000 to $15,000 each; personnel costs; and specialized
               equipment to measure the results of the experiment. NNSA also is
               planning to provide access to NIF for nondefense experiments, but
               it has not yet determined how much operating time to free up.
               According to officials at NIF, NNSA plans to free up 15 percent of
               its operating time to external users, including OFES, but its
               primary mission is for stockpile stewardship and access to the
               facility for nondefense research, such as inertial fusion energy
               experiments, will depend on NNSA first meeting its scientific
               goals.

    8NNSA also uses the facilities to investigate a number of other technical
    issues such as determining fundamental properties of nuclear materials at
    temperatures and pressures needed for nuclear weapons, estimating the
    impact of a new engineering feature, or verifying the performance of
    weapon design changes.

               While NIF and other NNSA facilities can demonstrate the
               fundamental science of inertial fusion, they are not designed to
               produce fusion energy efficiently and to test whether inertial
               fusion energy can be commercially viable. In addition to
               understanding the conditions necessary to heat and compress a
               frozen pellet of fuel to release fusion energy, DOE would have to
               overcome a number of technical issues before inertial fusion
               energy can be commercially viable. These issues include (1)
               designing the pellet of fuel, which consists of frozen layers of
               deuterium and tritium, to release the most amount of energy when
               it is struck by a laser; (2) developing a system that can keep the
               pellets of fuel cryogenically frozen and inject five of them every
               second with great accuracy into the target chamber; (3) designing
               a laser that can compress and heat five frozen pellets of fuel
               every second to release fusion energy; (4) testing materials
               inside the chamber wall that could withstand these repetitive
               explosions while also harvesting the neutrons needed to produce
               electricity; and (5) clearing the inside of the reactor of debris
               after each shot. According to officials from the Naval Research
               Laboratory, the lasers need to strike five frozen pellets of fuel
               a second to release a sufficient amount of fusion energy for
               electricity production.

               Since neither NNSA nor OFES were funding research to investigate
               these technical issues, beginning in 1999, congressional
               conference committees directed NNSA to allocate funding for HAPL
               to develop the technologies needed for inertial fusion energy.
               According to NNSA officials, NNSA does not request funding for
               this program in its congressional budget requests because the
               program exceeds NNSA's mission goals of developing a laser system
               to test new weapons designs and the reliability of nuclear
               weapons. NNSA officials told us that their current facilities,
               such as NIF, OMEGA, and the Z-machine, are sufficient to meet
               their needs. NIF will be able to strike a target once every 4
               hours and OMEGA once every 2 hours--far short of the 5 targets a
               second needed for fusion energy, but adequate for the stockpile
               stewardship mission.

               Congressional conference committees have directed funds for
               inertial fusion research:

               o Conference committees have directed about $25 million a year to
               two competing lasers systems that could be used for fusion power
               plants at the Naval Research Laboratory and Lawrence Livermore
               National Laboratory and for experiments to design the targets for
               inertial fusion energy at General Atomics.

               o Conference committees have directed $4 million in fiscal years
               2004 and 2005 to explore the Z-machine's ability to produce fusion
               energy for a potential power plant, as an alternative to the laser
               systems. In fiscal year 2006, Sandia National Laboratory used $2.6
               million of its internal research funding to continue this
               research. However, this research did not continue in fiscal year
               2007, and there are no plans to resume the research in fiscal year
               2008 because NNSA has not provided funding for this project.

               As another alternative to both the laser systems and the
               Z-machine, OFES is funding experiments using heavy ion beams to
               produce fusion energy at the Lawrence Berkeley National
               Laboratory. Heavy ion beams are made by a particle accelerator--a
               device that uses electrical fields to propel electrically charged
               particles at high speeds. The heavy ions, which are heavier than
               carbon atoms, collide with the targets and cause the compression
               and heat needed to release fusion energy.

               If NIF's controlled fusion experiments succeed, there is still
               uncertainty about the future of inertial fusion energy. NNSA
               officials told us that they are not responsible for funding the
               construction of additional inertial fusion facilities needed to
               demonstrate inertial fusion energy. OFES officials told us that
               they do not have the funding to build a $2 billion to $3 billion
               inertial fusion facility. In fiscal year 2008, OFES and NNSA plan
               to establish a joint program to explore high-energy density
               physics, which is aimed at understanding the behavior of matter
               under extreme pressure. OFES and NNSA plan to combine their
               funding in this area to fund basic research and share experimental
               results. While high-energy density physics explores a number of
               fundamental scientific issues related to inertial fusion energy,
               it does not address all of the scientific issues that would
               advance inertial fusion energy.

    			  Decreases in Funding for Innovative Magnetic Fusion Devices May
    			  Delay Progress Toward a Fusion Energy Device

               Although a tokamak has been the most successful magnetic fusion
               device, it is still uncertain whether the device will lead to a
               commercially viable fusion energy device. To reduce the risk of
               investing in only one device, OFES funds scientific research on
               alternative types of magnetic devices, in addition to inertial
               fusion research activities. However, a decrease in research
               funding for these alternatives may limit DOE's ability to find a
               simpler, less costly, or faster path to fusion energy.

               Research on alternative types of magnetic devices is critical to
               the fusion energy program, according to officials from the
               National Academy of Sciences. In 2004, the National Academy of
               Sciences reported that many outstanding scientific and technical
               issues had to be resolved before an economically attractive fusion
               power plant could be designed. These innovative research
               experiments could address many issues that ITER will not be able
               to address in a cost-effective manner and lead to a simpler, less
               costly, or faster path to fusion energy. Moreover, because these
               innovative and cutting-edge research activities are primarily
               located at U.S. universities, this program attracts students to
               fusion sciences and serves as an important recruitment and
               training tool for scientists and engineers.

               Sustained funding is critical to these research activities,
               according to DOE's fusion energy advisory committee. Specifically,
               the ability to investigate critical scientific and engineering
               issues requires sufficient overall funding to build and operate
               advanced-stage experiments without eliminating the opportunity for
               new ideas and innovations resulting from smaller, more focused
               experiments. However, alternative magnetic fusion research
               competes for funding with ITER- and tokamak-related research.
               Since the U.S. commitment to ITER, DOE has focused more of its
               resources on ITER- and tokamak-related research. DOE officials
               told us that given limited resources, their priority is to fund
               ITER- and tokamak-related research. According to DOE officials,
               OFES determines the appropriate level of funding between
               tokamak-related research and innovative concepts based on
               scientific and technological priorities identified by DOE's fusion
               energy advisory committee. The level of funding is, among other
               things, tied to the complexity of the experiment and the operating
               costs of the device. Based on these assessments, DOE officials
               told us they believe the current level of funding for innovative
               magnetic devices is sufficient to sustain the best-performing
               devices.

               However, in fiscal year 2006, OFES spent about $21 million to fund
               25 small-scale experiments at 11 universities, 4 national
               laboratories, and 2 private companies to test 7 types of magnetic
               fusion devices with different shapes and magnetic currents. This
               level of funding represents a decline over the past 6 fiscal
               years--from $26 million in fiscal year 2002 to $20 million in
               fiscal year 2007. University scientists involved in innovative
               fusion research told us that this decrease in funding was not
               consistent with a 1999 DOE fusion energy science advisory
               committee study that recommended OFES increase funding for
               innovative magnetic research activities. OFES relies on this
               advisory committee to establish priorities for the fusion program
               and to provide a basis for the allocation of funding.

               However, since that report, the share of funding for innovative
               research activities has decreased even as funding for fusion
               research has increased. The share of funding has dropped from 19
               percent of the fusion research budget in fiscal year 2002 to 13
               percent in fiscal year 2007. In addition, while OFES's 5-year
               budget plan shows an increase in funding for fusion research
               activities in fiscal years 2008 through 2011, most of this funding
               will be used for ITER- and tokamak-related research activities at
               the major facilities. DOE officials also told us there are planned
               increases in funding for innovative devices, but only to maintain
               the same level of research. According to university scientists, a
               number of innovative approaches are ready to advance to the next
               stage of development that would test the feasibility of producing
               fusion energy or conduct more sophisticated experiments, but DOE
               has no plans to advance any of these approaches because it may
               require an increase in funding to conduct more sophisticated
               experiments. DOE's fusion energy advisory committee has not
               assessed the appropriate level of funding between ITER- and
               tokamak-related activities and innovative concepts since 1999,
               before the U.S. joined ITER and it became a priority.

               Scientists from a number of universities told us that this decline
               in funding has led to a decline in research opportunities for
               innovative concepts. For example, university scientists told us
               that in the last 3 years, they reduced the number of experiments
               they performed on their devices and they could not upgrade the
               devices to validate theories and computer simulations. In
               addition, the decrease in funding reduced opportunities to attract
               students to the fusion sciences and train them to fulfill future
               workforce needs.

    			  DOE Does Not Have a Plan to Address Future Workforce Shortages

               According to studies by DOE's fusion energy advisory committee and
               the National Academy of Sciences, the single greatest challenge
               the fusion program faces may be a rapidly aging workforce. About
               one-third of the U.S. fusion energy workforce is retiring in the
               next 10 years. In 2004, DOE's fusion energy advisory committee
               found that between 2008 and 2014, DOE would have to fill about 250
               permanent positions as scientists and technicians retire--an
               average hiring rate of 42 PhDs per year. However, this figure
               exceeds the current total PhD production rate in fusion-related
               fields. In fiscal year 2006, 33 PhDs were awarded to students in
               plasma physics and fusion science. OFES estimates that 33 and 36
               PhDs will be awarded in fiscal years 2007 and 2008 respectively.
               Furthermore, it may be difficult to retain these new PhDs in
               fusion-related fields. DOE's fusion energy advisory committee
               found that about 50 percent of PhDs in plasma science and
               engineering took positions outside their fields. Moreover, DOE
               would need to hire more PhDs to increase the number of scientists
               and engineers needed for ITER and to maintain a strong domestic
               program. The average hiring rate of 42 PhDs per year would replace
               retiring personnel, but would not increase the fusion workforce.

               OFES has taken some steps to address these challenges by
               recruiting and training fusion scientists and engineers. OFES
               established a program that identifies talented faculty members at
               universities early in their careers in plasma physics and funds
               their research activities. In 2004, OFES also established Fusion
               Science Centers at universities to conduct magnetic and inertial
               fusion research activities and stimulate the involvement and
               participation of students. Moreover, OFES has a partnership with
               the National Science Foundation, an independent federal agency
               that supports basic scientific research in many fields, including
               physics and engineering, to share their resources and fund
               research into fundamental issues in plasma science and
               engineering. OFES officials told us that they are also hiring PhDs
               in related scientific fields, such as materials science, to
               leverage their expertise in solving different types of scientific
               and technological problems encountered during fusion energy
               research and to reduce any shortfalls in hiring plasma science and
               engineering PhDs.

               Despite these initiatives, OFES still has not developed a plan to
               address the future shortage of fusion scientists and engineers and
               increase the number of PhDs working in fusion science. It has not
               implemented the recommendation from DOE's advisory committee
               report to develop a 5- to 10-year hiring plan with strategies to
               increase hiring and training of the most qualified staff. OFES
               also has not assessed whether its recruitment and outreach efforts
               are sufficient to meet future workforce needs. In 2004, OFES
               reported that its outreach and recruitment programs were
               attracting more graduate and postdoctoral students to fusion
               energy, but the report did not assess whether it was a sufficient
               number to sustain fusion research as a large number of scientists
               begin to retire and whether or how long those students remain in
               fusion-related research.

    			  Conclusions

               Given the size of the U.S. contribution to ITER, it is important
               to assess the full costs of participation in this scientific
               endeavor. DOE made a commitment to provide manufactured components
               and parts to ITER without a definitive cost and schedule estimate
               and a complete project design. As a result, DOE's preliminary
               $1.12 billion estimate may be subject to significant change as
               ITER's design is completed. Moreover, there is a risk that several
               management challenges facing the ITER Organization, such as
               developing quality assurance standards for manufactured components
               and assessing contingencies for cost or schedule overruns, could
               result in delays in ITER's construction, which would further
               increase costs for the United States.

               DOE could better manage alternative fusion research activities.
               DOE is not effectively coordinating OFES's and NNSA's inertial
               fusion activities to advance inertial fusion energy. Since OFES
               relies on NNSA and the HAPL Program to advance inertial fusion as
               a potential energy source, it is important that OFES coordinate
               the research activities of these three programs to explore
               inertial fusion energy applications. The lack of a research plan
               and clear mission responsibility between OFES and NNSA on which
               office has the lead in advancing inertial fusion energy research
               may delay progress in developing inertial fusion as an energy
               source in the shortest time possible. NNSA also has not determined
               how much time will be available at NIF for scientists conducting
               inertial fusion energy experiments. NNSA may significantly limit
               access to NIF if there are delays in meeting its stockpile
               stewardship objectives. Since NIF will be critical in resolving
               fundamental scientific issues, access issues could further delay
               progress for inertial fusion energy research.

               In addition, the future of alternative magnetic fusion research
               activities, which may lead to a simpler, less costly, or faster
               path to fusion energy, is uncertain. Funding for these research
               activities has steadily declined even though the fusion research
               budget has increased. A decreasing share of funding for innovative
               concepts may delay progress in resolving fundamental scientific
               issues or designing a reactor more quickly. For this reason, DOE
               needs to ensure there is a proper balance of funding between
               tokamak-related research and alternative innovative concepts to
               support U.S. obligations to ITER while continuing to explore
               different paths to fusion energy. Finally, OFES has not developed
               a strategy to hire, train, and retain the most talented staff.
               This effort is critical to meeting the growing demand for
               scientists and engineers with knowledge about fusion, especially
               as the United States participates in ITER, the NIF is completed,
               and interest increases in fusion energy as a long-term energy
               source.

    			  Recommendations for Executive Action

               To advance U.S. efforts to develop alternative fusion energy
               sources, we recommend that the Secretary of Energy direct

               o OFES and NNSA to develop a coordinated research plan to
               coordinate U.S. inertial fusion research activities and identify
               roles and responsibilities for each program as well as detailed
               research and development tasks, budget needs, and time frames for
               advancing inertial fusion research;

               o NNSA to guarantee access to NIF, once it becomes operational, to
               scientists conducting inertial fusion energy experiments, and work
               with DOE to determine how to share the costs, operational time,
               and results of NIF to explore inertial fusion as a viable energy
               source; and

               o OFES to charge DOE's fusion energy advisory committee with
               independently assessing whether current funding levels between
               ITER- and tokamak-related research and innovative magnetic fusion
               research strike the right balance to meet research objectives and
               advance both areas of research, and, if the current share of
               funding is not adequate, to recommend appropriate changes.

               To address OFES's human capital challenges, we recommend that the
               Secretary of Energy direct OFES to develop a strategy to hire,
               train, and retain personnel with specialized skills to meet future
               workforce needs.

    			  Agency Comments and Our Evaluation

               We provided DOE with a draft copy of this report for its review
               and comment. DOE provided written comments, which are reprinted in
               appendix I. In its written comments, DOE neither agreed nor
               disagreed with our recommendations, but questioned several of our
               findings. First, DOE believes that enough PhDs are being produced
               to meet future workforce needs and it points to anecdotal data
               from universities that U.S. participation in ITER is attracting
               students to fusion sciences. However, data from DOE's fusion
               energy advisory committee show that not enough doctoral candidates
               in plasma physics and fusion science are entering the fusion
               research field to meet future workforce needs. DOE would have to
               hire an average of 42 PhDs a year to fill about 250 permanent
               positions as scientists and technicians retire, but awarded 33
               PhDs in fiscal year 2006 and plans to award 33 and 36 PhDs
               respectively in fiscal years 2007 and 2008. Moreover, as we noted
               in our report, OFES has not assessed whether its recruitment and
               outreach efforts are sufficient to meet future workforce needs.
               Anecdotal evidence about student interest in fusion sciences is
               not a substitute for objective data on recruitment and retention
               rates.

               Second, DOE questioned our finding that that the share of funding
               for alternative, potentially more innovative, magnetic fusion
               research activities has declined in the last 6 fiscal years. DOE
               argued that the share of funding for non-tokamak research has not
               declined, but rather remained flat, and alternative fusion
               research activities include more than innovative magnetic
               research. We agree that alternative fusion research activities
               include more than innovative magnetic research. However, with
               respect to funding levels, our analysis of DOE's budget using
               DOE's definition of innovative magnetic fusion research shows a
               clear result. Funding for innovative magnetic fusion research
               activities has declined and this decline may delay progress in
               finding a simpler, less costly, or faster path to fusion energy.
               In its budget documents, DOE describes these research activities
               as cutting edge and the main objective of these activities is to
               explore innovative and better ways to achieve fusion energy. In
               addition, DOE has stated in its budget documents that these
               activities have been effective in attracting students to the
               fusion workforce.

               Third, DOE questions our finding that it does not have a
               coordinated research plan to advance inertial fusion energy. DOE
               noted that, in 2003, its advisory committee developed a plan that
               identified critical milestones, research and development tasks,
               and budget needs to build an inertial fusion demonstration power
               plant within 35 years. However, DOE decided not to implement this
               plan because fundamental scientific issues had not yet been
               resolved and there was no agreement between OFES and NNSA on which
               agency had the responsibility of developing inertial fusion as an
               energy source. When DOE rejected its advisory committee's plan, it
               did not develop an alternative. A plan that identifies key
               scientific and technological questions as well as the cost, time
               frames, and detailed research and development tasks would help
               OFES and NNSA better coordinate three separately funded inertial
               fusion research programs that have different scientific and
               technological objectives. Our recommendation does not involve
               increasing funding for inertial fusion research activities, but
               rather better managing the existing research activities. In
               addition, a plan would help OFES and NNSA determine which agency
               has the lead in advancing inertial fusion energy research. DOE
               also noted that OFES and NNSA plan to establish a joint program in
               fiscal year 2008 that will address fundamental scientific issues
               related to inertial fusion energy. As we recognized in our report,
               OFES's and NNSA's joint program in high-energy density physics may
               explore a number of fundamental scientific issues related to
               inertial fusion energy, but it will not address all of the
               scientific issues that would advance inertial fusion energy. A
               coordinated research plan would help identify gaps in scientific
               knowledge.

               Finally, DOE questioned our statement that the joint program would
               not address "most" of the scientific issues that would advance
               inertial fusion energy. We agree with DOE that, as currently
               designed, the joint program may address many of the scientific
               issues related to inertial fusion energy and we made the
               appropriate change to the report. However, the joint program has
               not yet been established and as a result, it is too early to tell
               if all or most of the scientific issues will be addressed.

               DOE requested that we reprint their enclosure with technical
               comments. The technical comments repeated the major points
               discussed in the general comments. As a result, we addressed the
               technical comments in our response or made changes to the report,
               as appropriate.

               We are sending copies of this report to the Secretary of Energy
               and interested congressional committees. We will also make copies
               available to others upon request. In addition, the report will be
               available at no charge on the GAO Web site at http://www.gao.gov.

               If you or your staff have any questions about this report, please
               contact me at (202) 512-3841 or aloisee@gao.gov. Contact points
               for our Offices of Congressional Relations and Public Affairs may
               be found on the last page of this report. GAO staff who made major
               contributions to this report are listed in appendix II.

               Gene Aloise
    			  Director, Natural Resources and Environment

    			  Appendix I: Comments from the Department of Energy

    Department of Energy:
    Washington, DC 20585:

    October 10, 2007:

    Mr. Gene Aloise:
    Director, Natural Resources and Environment:
    U.S. Government Accountability Office:
    441 G Street NW:
    Washington, DC 20548:

    Dear Mr. Aloise:

    We have reviewed the draft Government Accountability Office (GAO)
    report entitled "Fusion Energy, Definitive Cost Estimates for U.S.
    Contributions to an International Experimental Reactor and Better
    Coordinated DOE Research Are Needed" (GAO-08-30). We have coordinated
    these comments with NNSA, and the general comments below, as well as
    the page- specific comments on the report that are enclosed, represent
    a coordinated DOE response.

    * We recognize the concern raised about the preliminary nature of the
    $1.2 billion cost estimate for the U.S. contribution to ITER project.
    Based on the ITER International Organization's projected progress, we
    believe we will have a baseline cost and schedule for the U.S. ITER
    project by late FY 08 to early FY 09. That said, however, we believe
    that the risks of this big international cooperative project are
    balanced by the financial and scientific benefits of sharing the
    project among the seven international partners.

    * In the DOE report released in November, 2003, Facilities for the
    Future of Science: A Twenty-Year Outlook, the Office of Science
    identified ITER as the highest priority facility. The other elements of
    the Fusion Energy Sciences program support the ITER project to the
    maximum extent possible to insure its success. This is consistent with
    recommendations that the Fusion Energy Sciences Advisory Committee made
    in 2005 on the priorities for the program.

    * The report makes statements about human capital challenges in the
    area of fusion sciences. As stated more fully in the attached comments,
    we believe that the annual Ph.D. production in this area is sufficient,
    and is supplemented by students in other science and engineering
    disciplines who have expressed an interest in working specifically on
    ITER-related research.

    * The report gives the erroneous impression that alternative magnetic
    fusion approaches have been disproportionately decreased in support
    over the past five years, as ITER- related research has increased. This
    error comes from considering only a subset of the research activities,
    self-defined by their advocates as the most innovative alternate
    research activities. Using the objective designations of the alternate
    magnetic approaches as discussed in the 2004 National Academies study
    of the program, the share of funding in non-tokamak experimental
    research has remained essentially flat at approximately 37% of the OFES
    funding.

    * The report makes a fundamental assumption that an explicit program to
    develop inertial fusion as an energy source exists but is not
    coordinated. This is not agreed to by the Department, and no such
    program presently exists. The joint program on HEDLP will address
    underlying scientific issues that will be relevant to future
    considerations of inertial fusion energy. The first step in motivating
    a program to develop inertial fusion as an energy source is the
    demonstration of ignition on NIF under the NNSA defense programs.

    * We disagree with the conclusion that this joint program "will not
    address most of the scientific issues that would advance inertial
    fusion energy". The joint program in HEDLP and the large NNSA program
    in inertial confinement fusion will encompass most of the science
    issues related to IFE target physics, which are the most compelling
    scientific issues underpinning the potential application of inertial
    fusion to energy at this stage of the research.

    * OFES and NNSA acknowledge the report's recommendation, "to develop a
    research plan to coordinate fusion research activities to advance
    inertial fusion energy", but reject the claim that no such plan exists.
    A detailed plan was in fact developed by FESAC in 2003, and presented
    to DOE. It was determined that it was not appropriate to allocate the
    much larger level of funding called for in this plan while underlying
    scientific issues have yet to be resolved.

    Additional page-specific comments and corrections on the draft report
    are enclosed for your consideration. The Department requests that its
    full comments including the enclosure be included in the GAO's final
    report.

    Sincerely,

    Signed by:

    Raymond J. Fonck:

    Associate Director of the Office of Science for Fusion Energy
    Sciences:

    Enclosure:

    [End of section]

               Appendix II: GAO Contact and Staff Acknowledgments

               GAO Contact

               Gene Aloise at (202) 512-3841 or aloisee@gao.gov

    			  Staff Acknowledgments

               In addition to the contact named above, Christopher Banks, Leland
               Cogliani, Omari Norman, Keith Rhodes, Carol Herrnstadt Shulman,
               and Ned Woodward made significant contributions to this report.

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    To view the full product, including the scope
    and methodology, click on [23]GAO-08-30 .

    For more information, contact Gene Aloise at (202) 512-3841 or
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    Highlights of [24]GAO-08-30 , a report to congressional committees

    October 2007

    FUSION ENERGY

    Definitive Cost Estimates for U.S. Contributions to an International
    Experimental Reactor and Better Coordinated DOE Research Are Needed

    The United States is pursuing two paths to fusion energy--magnetic and
    inertial. On November 21, 2006, the United States signed an agreement with
    five countries and the European Union to build and operate the
    International Thermonuclear Experimental Reactor (ITER) in Cadarache,
    France, to demonstrate the feasibility of magnetic fusion energy. The
    United States also built and operates facilities to pursue inertial fusion
    energy research. This report discusses (1) U.S. contributions to ITER and
    the challenges, if any, in managing this international fusion program and
    (2) the Department of Energy's (DOE) management of alternative fusion
    research activities, including National Nuclear Security Administration
    (NNSA) initiatives. In performing this work, GAO analyzed budget
    documents, briefings, and reports that focused on research and funding
    priorities for the fusion program. GAO also met with officials from DOE,
    NNSA, and the ITER Organization in France.

    [25]What GAO Recommends

    GAO recommends, among other things, that (1) DOE and NNSA develop a
    research plan to coordinate fusion research activities to advance inertial
    fusion and (2) DOE develop a strategy to hire, train, and retain staff
    with the specialized skills needed to accomplish its mission. DOE neither
    agreed nor disagreed with our recommendations, but questioned several of
    our findings.

    Over 9 years, DOE estimates it will spend $1.12 billion to help build
    ITER, but this is only a preliminary estimate and may not fully reflect
    the costs of U.S. participation. This preliminary estimate has not been
    independently validated, as DOE guidance directs, because the reactor
    design is not complete. Moreover, the $1.12 billion for ITER construction
    does not include an additional $1.2 billion the United States is expected
    to contribute to operate and decommission the facility. In addition, the
    ITER Organization, which manages the construction and operation of ITER,
    faces a number of management challenges to build ITER on time and on
    budget that also may affect U.S. costs. For example, the ITER Organization
    must develop quality assurance standards, test the reliability and
    integrity of components built in different countries, and assemble them
    with a high level of precision. Many of these challenges stem from the
    difficulty of coordinating international efforts and the need for
    consensus before making critical management decisions.

    GAO has identified several challenges DOE faces in managing alternative
    fusion research activities. First, NNSA and the Office of Fusion Energy
    Sciences (OFES), which manage the inertial fusion program within DOE, have
    not effectively coordinated their research activities to develop inertial
    fusion as an energy source. For example, they do not have a coordinated
    research plan that identifies key scientific and technological issues that
    must be addressed to advance inertial fusion energy and how their research
    activities would meet those goals. Second, DOE may find it difficult to
    manage competing funding priorities to advance both ITER-related research
    and alternative magnetic fusion approaches. DOE officials told GAO they
    are focusing limited resources on ITER-related research activities. As a
    result, as funding for ITER-related research has increased, the share of
    funding for the most innovative alternative magnetic fusion research
    activities decreased from 19 percent of the fusion research budget in
    fiscal year 2002 to 13 percent in fiscal year 2007. According to DOE
    officials, this level of funding is sufficient to meet research
    objectives. However, university scientists involved in fusion research
    told us that this decrease in funding has led to a decline in research
    opportunities for innovative concepts, which could lead to a simpler, less
    costly, or faster path to fusion energy, and reduced opportunities to
    attract students to the fusion sciences and train them to fulfill future
    workforce needs. Finally, while the demand for scientists and engineers to
    run experiments at ITER and inertial fusion facilities is growing, OFES
    does not have a human capital strategy to address expected future
    workforce shortages. These shortages are likely to grow as a large part of
    the fusion workforce retires over the next 10 years.

    References

    Visible links
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      20. mailto:fraudnet@gao.gov
      21. mailto:JarmonG@gao.gov
      22. mailto:BeckerS@gao.gov
      23. http://www.gao.gov/cgi-bin/getrpt?GAO-08-30
      24. http://www.gao.gov/cgi-bin/getrpt?GAO-08-30
    *** End of document. ***