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Energy Department issues scathing evaluation of nuclear project

WASHINGTON – The Energy Department has delivered a blunt assessment of the work done by one of the world’s biggest companies in the nuclear business: “Unsatisfactory.”

For a decade, CB&I Areva MOX Services has been under contract with the Energy Department’s National Nuclear Security Administration to design, build and operate a facility near the Savannah River in Aiken, S.C.

Yet the project – designed to convert weapons-grade plutonium and uranium into a mixed oxide fuel for commercial nuclear power plants – has been running far beyond budget and way behind schedule. Estimates now put the price tag at $17 billion.

On Dec. 5, the National Nuclear Security Administration completed a scathing evaluation that branded several of the company’s claims about the state of the project “misleading” and “inaccurate.” The agency said CB&I Areva’s claims that the project is 70 percent complete “are patently false.” A separate September 2016 Energy Department report said construction was only 28 percent complete.

“The contractor was unable to balance project technical baseline requirements with other elements of project performance, such as cost and schedule,” NNSA said in the December assessment. “The contractor lacked the fiduciary will to plan and execute work to fully benefit the project and taxpayer.”

CB&I Areva is a venture created as a combination of Chicago Iron & Steel and the French nuclear giant Areva. The company did not return calls for comment.

The latest evaluations take place against a larger political canvass. The origin of the project lies in the post-Cold War period, when the United States and Russia each agreed to rid themselves of 34 tons of weapons grade material.

Yet many nuclear experts say the technology the United States planned to use – known as mixed oxide or MOX – is costly and does not eliminate the risk of weapons proliferation.

President Barack Obama tried to kill the Savannah River plant. In the president’s proposed 2017 budget, the administration said it would “pursue a dilute and dispose approach as a faster, less-expensive path to meeting the U.S. commitment to dispose of excess weapons grade plutonium.” It proposed cutting spending to from $345 million to $275 million to begin winding it down.

One of the project’s sharpest critics Tom Clements, director of the public interest group Savannah River Site Watch, obtained the December NNSA assessment through a Freedom of Information Act request. He called the evaluation “devastating.”

“I have never seen an asessment like that. It all but calls them liars,” he said.

The Savannah River project, however, has an important ally in Congress: Sen. Lindsey Graham, R-S.C., who has defended this method of converting nuclear weapons fuel. In addition, hundreds of jobs in his state depend on the project moving forward. For a time, Graham held up the confirmation vote on Ernest Moniz as energy secretary over the Obama administratin’s intentions for the Savannah River MOX project.

In a hearing March 9, 2016, he grilled then-secretary Moniz over the project. He too lamented the soaring costs. “I don’t know how we fix this but somebody needs to be fired,” he said.

The next month Graham and his fellow South Carolina senator Tim Scott, R, said that the Obama administration was failing to live up to its international obligations to Russia to destroy up to 34 metric tons of its military plutonium stockpile by converting it into MOX.

On Oct. 3, Putin withdrew from the agreement.

But the Obama administration continued to say the MOX plant at Savannah River wasn’t practical. What started as a $620 million project in 1999 with a 2006 starting date has become a $17 billion project still decades away from a start state. By some estimates, it would require a $1 billion a year appropriation, which the Obama administration said was unlikely at best.

The letter Clements obtained gives a glimpse into what’s going awry. Some of the items listed as completed aren’t. Clements says that sources in the plant have told him that the air conditioning system might need to be ripped out. According to the assessment, the contractors said the duct work was 28 percent complete; the NNSA said only 3 percent was. Contractors said the fire dampers were 38 percent complete; the NNSA said only 17 percent were.

The assessment said that while the contractor boasted of “zero order non-compliance,” in fact the NNSA found evidence of non-compliance.

Overall, the NNSA awarded nothing from the $2.7 million available for a bonus payment to the contractors. It said, “there continued to be a lack of transparency and openness in external communications with key project stakeholders by the contractor including continued release of misleading and inaccurate project information.”