Friday, November 6, 1998

CONTACT: Steven Dolley
Nuclear Control Institute


Washington-- Nine arms-control and safe-energy organizations today released the following letter, warning the Department of Energy that the present plan to dispose of warhead plutonium in Russian nuclear power reactors could result in prohibitive costs and unacceptable delays. The letter calls on the head of DOE's Office of Fissile Material Disposition to modify an ongoing economic study to include an assessment of the potential costs and delays in relying on Russia's beleaguered nuclear power program to dispose of surplus military plutonium.


November 4, 1998

Laura Holgate
Office of Fissile Materials Disposition
U.S. Department of Energy
1000 Independence Ave. SW
Washington, DC 20585

Dear Ms. Holgate:

We are writing in regard to your office's ongoing study of the costs of plutonium disposition in Russia. When some of us met with you on September 14, Howard Canter deferred all questions we raised about the total cost of the Russian MOX disposition program---the reactor phase as well as the MOX fabrication phase---pending completion of the study sometime this winter.

We are concerned that Russia, given the perilous state of its economy, will not even be able to pay for its current budget expenditures, much less an ambitious MOX program. As reported in the Financial Times, "The weakness of the federal government is illustrated by the alarming state of the public finances. This week, Mr. Zadornov predicted that federal budget revenues in the fourth quarter would cover only half of the planned expenditures of Rbs130bn ($7.6bn), which equals 12 per cent of gross domestic product. The government would be forced to print up to Rbs20bn to cover this shortfall, he said, even assuming further international loans were forthcoming." [Financial Times, October 22, 1998, p. 13]

Russia is not likely to shoulder much, if any, of the costs of plutonium disposition. Russian Minister of Atomic Energy Yevgeny Adamov said in July that Russia would prefer to reserve its surplus weapons plutonium for use in future fast-breeder reactors. If the United States wants Russia to use MOX fuel in existing VVER-1000 reactors, Adamov insisted, the United States would have to pay for the entire program. [Nucleonics Week, July 30, 1998, p. 12]

If the current emphasis on the MOX option persists, the U.S. government may face the dilemma of having to subsidize Russia's nuclear-power program or risking indefinite postponement of plutonium disposition in Russia and the United States as well. Congress has made clear that disposition should not proceed faster in the United States than in Russia.

The 1996 Joint US-Russian Government study estimated a total life cycle cost of $45 billion (including $1.1 billion for completion of three unfinished VVER-1000s) for Russia to upgrade and operate its VVER-1000 reactors to irradiate 50 tons of warhead plutonium MOX fuel. Of this enormous sum, all but $3 billion is supposed to be borne by Russian electric ratepayers, but this assumption is ludicrous. Virtually no one in Russia pays their electric bills in cash; some pay by barter; most do not pay at all.

MOX disposition advocates insist that the cost of operating Russian VVER-1000 reactors is not a legitimate cost of the plutonium disposition program because the reactors will be operated regardless of whether or not warhead plutonium MOX fuel is used. However, Russia may prove economically unable to sustain operation of its VVER-1000s. ["Money Shortfalls Cut Fuel Margins and Russian Plants Cut Outputs," Nucleonics Week, October 15, 1998, p.7] Alternately, Russia might choose to convert some of its nuclear stations to burn relatively inexpensive natural gas. If the MOX disposition program proceeds and the Russian government proves unable or unwilling to underwrite the cost of operating its VVER-1000s, is the U.S. government prepared to foot the bill to ensure continued disposition of warhead-plutonium MOX fuel in Russian reactors? The cost of such a liability should be calculated and included in the Department's study.

Every Russian VVER-1000 that is to irradiate MOX as part of the plutonium disposition program must be upgraded to Western safety standards. If such upgrades were not done and an accident occurred, the United States would bear responsibility, if not liability. A recent European Community study estimated that it would cost $120 to $180 million per unit to upgrade VVER-1000 reactors to Western safety standards. [Panel of High-Level Advisors on Nuclear Safety in Central and Eastern Europe and in the New Independent States, A Strategic View for the Future of the European Union's Phare and Tacis Programmes, October 1998, Section 2.1.3] These costs should be included in DOE's analysis.

Consistent with the Administration's "dual-track" approach, your study should also estimate the cost of an immobilization alternative for Russia. Minatom's resistance to the immobilization approach is well known, but impending economic collapse could force reconsideration, particularly if the U.S. government makes clear it will not risk the astronomical costs of MOX disposition but will pay for immobilization. DOE's technical summary report shows that the immobilization approach is likely to be considerably less expensive than the MOX alternative for the United States. The ongoing economic study should assess the likelihood that immobilization would be much cheaper than MOX in Russia, as well.

We therefore request that you direct that the economic assessment of MOX disposition in Russia be modified to include the following:

(1) an estimate of the subsidy that Russia would require to irradiate warhead plutonium in LWR MOX, rather than storing it for use in future fast reactors.

(2) an independent assessment of the life cycle cost of operating Russian VVER-1000 reactors to irradiate warhead plutonium pursuant to the Clinton-Yeltsin agreement.

(3) an estimate of how much of that cost the Russian government is prepared to underwrite to make up for the shortfall of payments from Russian electricity ratepayers.

(4) an estimate of how much of the total life cycle cost the U.S. government will be liable for, should the Russian government be unable or unwilling to cover the cost.

(5) the consequences for the plutonium disposition programs in the United States and Russia if MOX disposition in reactors cannot proceed in Russia for lack of funds.

(6) the comparative cost of immobilization of warhead plutonium in Russia, including an assessment of costs for this option likely to be borne by the United States compared with those likely to be borne by the United States for the MOX alternative.

Thank you for your attention to this important matter. We would like to discuss our proposal with you, and will telephone you soon to request another meeting.


Paul Leventhal, Nuclear Control Institute

Christopher Paine, Natural Resources Defense Council

Damon Moglen, Greenpeace International

Todd Perry, Union of Concerned Scientists

Lisa Ledwidge, Physicians for Social Responsibility

Linda Pentz, Safe Energy Communication Council

Susan Gordon, Alliance for Nuclear Accountability

Michael Mariotte, Nuclear Information and Resource Service

Don Moniak, Serious Texans Against Nuclear Dumping


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