ML033370176

Letter from Anne W. Cottingham to Administrative Judges Enclosing Excerpts from Post-Soviet Nuclear & Defense Monitor Articles

ML033370176
Person / Time
Site:	Catawba
Issue date:	11/24/2003
From:	Cottingham A Duke Energy Corp, Winston & Strawn, LLP
To:	Anthony Baratta, Elleman T, Austin Young Atomic Safety and Licensing Board Panel
Byrdsong A T
References
50-413-OLA, 50-414-OLA, ASLBP 03-815-03-OLA, RAS 7108
Download: ML033370176 (12)

Text

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November 24, 2003 OFFICE OF SECRETARY RULEMAKINGS AND Ann Marshall Young, Chairman Anthony J. Baratta ADJUDICCATIONS STAFF Administrative Judge Administrative Judge Atomic Safety and Licensing Board Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555-0001 Washington, D.C. 20555-0001 Thomas S. Elleman Administrative Judge 5207 Creedmoor Road # 101 Raleigh, N.C. 27612 Re: In the Matter of Duke Energy Corporation Catawba Nuclear Station, Units 1 and 2 Docket Nos. 50-413-OLA. 50-414-OLA

Dear Administrative Judges:

My November 21, 2003 letter to the Atomic Safety and Licensing Board responding to the November 20, 2003 Order in this proceeding indicated that one item on the enclosed document list was unavailable but would be provided to the Licensing Board under separate cover. A copy of that item is enclosed. It consists of excerpts from Post-Soviet Nuclear

& Defense Monitor articles published on January 20, 2003, May 20, 2003, June 9, 2003, August 6, 2003, and October 6, 2003. These excerpted pages are reprinted with permission from the publisher. Copies of this document are also being sent to the service list.

Ve truly yours, .

Anne W. Cottingham Counsel for Duke Energy Corporation Enclosure cc: Service List (v/Enclosure) via U.S. mail mp ay_ S' C-093 ME~C-AP

SERVICE LIST Ann Marshall Young, Chairman Anthony J. Baratta Administrative Judge Administrative Judge Atomic Safety and Licensing Board Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Washington, DC 20555-0001 (email: AMY~nrc.gov) (email: AJB5@nrc.gov)

Dr. Thomas S. Elleman Office of the Secretary Administrative Judge U.S. Nuclear Regulatory Commission 5207 Creedmoor Road, #101 Washington, DC 20555 Raleigh, NC 27612 Attn: Rulemakings and Adjudications Staff (e-mail: elleman~eos.ncsu.edu) (e-mail: HEARINGDOCKET~nrc.gov)

Office of Commission Appellate Adjudicatory File Adjudication Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Washington, DC 20555 Susan L. Uttal, Esq. Mary Olson Antonio Fernandez, Esq. Director, Southeast Office Kathleen A. Kannler, Esq. Nuclear Information and Resource Service Office of the General Counsel P.O. Box 7586 U.S. Nuclear Regulatory Commission Asheville, NC 28802 Washington, DC 20555 (e-mail: nirs.se~mindspring.com)

(e-mail: slu(nrc.gov)

(e-mail: axf2@nrc.gov)

(e-mail: kaklnrc.gov)

Diane Curran Harmon, Curran, Spielberg &

Eisenberg, LLP 1726 M Street, N.W.

Suite 600 Washington, DC 20036 (e-mail: dcurran~harmoncurran.com)

Reprinted with permission of the publisher V

RUSSIA AGREES TO U.S. PROPOSAL TO U.S. NRC Ready to Work With Russian Regulator USE FRENCH MOX FACILITY DESIGN Joint U.S.-Russian Pu Disposition Program Moves Forward One of the distinct advantages of the U.S.-Russian pro-gram, as has been pointed out previously (N'&MAMoni-The U.S.-Russian joint plutonium disposition program tor, Vol. 6 Nos. 19 & 20), is that using the design of the proposal offered by the U.S. side (NW&MMonitor, Vol. U.S. MOX facility in Russia will significantly reduce the 6 Nos. 19 & 20), centered on building a MOX Fabrication time required to bring the Russian facility on line, both by facility based on the Cogema-designed U.S. facility, has facilitating the engineering/design phase and by speeding been accepted by the Russian Atomic Energy Agency up obtainment of the necessary permits from the Russian (MINATOM). The proposed program, with some modifi- nuclear regulatory agency, GOZATOMNDAZOR(GAN).

cation as a result of suggestions by MINATOM officials, GAN has had a close working relationship with the U.S.

is based on the following previously reported components: Nuclear Regulatory Commission for years. There is also the added benefit that identifying the Russian facility as

- Construction of a MOX facility in Russia replicating being based on a licensed U.S. facility will inspire a higher the design of the U.S. facility, which is to be con- degree of public confidence and support From what the structed by the Duke, Cogema, Stone & Webster N&M Monitor has learned, Commission officials are consortium based on Cogema-developed technology; quite enthusiastic about working with GAN and sharing

- TVEL, the commercial unit of MINATOM involved information on the licensing application for the U.S.

in the fuel fabrication business, will be the overall facility.

manager of the MOX facility construction;

- The burning of Russian-fabricated fuel in foreign Russian MOX in Foreign Reactors Troublesome reactors will be pursued;

- Onlythe currently operating RussianVVER 1000 and Though a French government official, in an exclusive the BN-600 reactors will be utilized to burn the interview with NW&M Monitor (Vol. 6 Nos. 19 & 20),

fabricated MOX; and said that the French support the decision to allow use of

- The earlier proposed Russian Pit Disassembly and the Cogema technology for the Russian reactor, the same Conversion Facility will not be built; instead official expressed opposition to the possibility that Rus-MINATOM will be solely in charge of developing a sian MOX could be burned in foreign reactors on the process for weapons disassembly. grounds that the disarmament program should not be used to help Russia enter into the commercial MOX market.

The details of the program have yet to be laid out. A But it is well known that other countries, including meeting between U.S. and Russian officials to begin the Canada, are supportive ofsuch action. French officials did planning was to have occurred in the past week but was not return calls for comment on the final deal.

postponed.

Int'l Support, Program Governance Progresses One ticklish issue that needs to be resolved is how Cogema will be compensated for the use of their MOX- With the principal technical and engineering components fabrication technology for the Russian facility. Another of the overall U.S.-Russian program now in place, the issue of import is the burning of Russian fabricated MOX focus now turns to financial support and overall involve-fuel in European reactors in lieu of fuel currently supplied ment of the G-8 and potential other donor countries in the by the French and British. However, another concern, the implementation of the program. On the funding side, desire of some members ofthe G-8 to have Russiacontrib- according to government officials, the U.S. appropriations ute hard cash to support the program based on the value of for FY03 and FY04 will meet program needs, and the the Russian uranium enriched fuel that would be sold on prospect of support from the other G-8 countries has the world market as it is replaced by Russian fabricated grown much brighter.

MOX in the VVER 1000s and BN 600, has been re-solved-the value being determined to be inconsequential With regard to the role ofthe donors in the implementation (see relatedstory). of the program, the direction appears to be the creation of a less formal means than an international authority or commission. The path currently being pursued, according to what the NW&MMonitor has learned, though it has not January2O,2003 Post-Soviet Nucicar & Defense Monitor

• EXCHiANGEMfONiTOR PUBLcATiNo.% INc.. 13

ran'ATTfrAlln Reprinted with permission of the publisher V L AI VI'I

-G-8 Pu WORKING GROUP STEPS FORWARD operations phase and an increased Russian contribution for ON MANAGEMENT FRAMEWORK the project]. Some of its points, though-certainly the issue of should there be a Russian contribution and what The Multilateral Plutonium Disposition Group (MPDG), should it be-were discussed at some length."

made up of representatives of the G-8 countries, managed to make some headway toward finalization ofthe manage- Several officials stressed that there was a political commit-ment framework and financing for the Russian plutonium ment to securing the estimated $1 billion necessary for the disposition program at its May 6 meeting in Paris, a U.S. operating phase of the program, but they added that it official reported to NV&M Monitor, though no formal remained to be seen the extent to which the various sources agreement on either issue has been reached. While talks available for that funding would be utilized. "There are concerning the management structure appeared to be revenue sources that could be applied to operating progressing well, a substantive step forward has been made phase-certainly there are revenue streams [generated by to deal with the outstanding issue of financing for the the MOX fuel itself], there's also funding sources from the program, the official reported. "For the first time, there G-7 and also contributions from Russia.. .they all need to was a paper [on program financing] down that essentially be there in some way, shape or form, but what that form, puts down the dynamic.. that additional pledges and a how it takes place is yet to be decided," another U.S.

Russian contribution could be related," the official said. official said. "This is long-term, and the situation is "We didn't get beyond putting that out.. but the conversa- uncertain. Uranium markets are not something that can be tion previous to this has been that the [G-8] contributions predicted that far down the road, and it complicates things will be for construction, while the Russians are responsible a little bit. This issue is a little harder to get our arms for operation, and the Russians have said either there's around [than securing contributions for the capital phase]."

funding for everything or they may not want to partici-pate.... Getting off those absolutes takes a discussion, and Export Remains Potential Revenue Source the [financing] paper opens the door for that," he ex-nlained. "Informally, there appears to be some flexibility One revenue stream mentioned by several G-8 officials is on the Russians' part and on the partners' part on the the exportation of Russian MOX for burning in foreign project as a whole, looking at it as a 20-year project. At reactors. "Exporting does come up in financing concept this meeting we just began to get the dynamic out in the papers, as one of the potential revenue streams, but there's open so we can discuss it." (More on US. Negotiations a lot beneath that has to be worked out," the U.S. official With the G-8 in an Upcoming Interview with US. Ambas- said. "But I would not say there's stark opposition to the sador Michael Guhin. Guhin did not comment for this idea. When you put it in terms of exporting as a way story.) to.. .dispose of an additional two tons annually, then I believe that we will find some consensus [in favor of Financing Proposal Outlines A Russian Contribution export], even among those countries who feel they have the most to lose, or at least are the most worried about it.

With the G-8 nearing the goal of securing the $1 billion If you put it in terms of those two tons and you seek a necessary in contributions to finance the capital phase of compromise within that framework, I feel we're going to the Russian Pu program-officials report the total now to get there.. but I don't want to be too sanguine."

amount to $800 million, and talks are ongoing to secure the remaining portion-the issue of financing the opera- EBRD Most Likely Option As Fund Manager tions phase is beginning to be discussed more openly.

While the U.S. official was optimistic about the impact the "Part of the discussion [at the May 6 meeting], a very financing paper put forth at the meeting would have, other important part this time, was to see how we can begin to G-8 officials were more cautious, calling the paper itself structure now to do the construction project and then have "more 'food for thought' than something concrete," in the some sort of template to move into the operations phase,"

words of one G-8 official. "Nobody went through this in the U.S. official reported. "The framework proposed detail, we all took it away to look at," he said. "This is a relatively recently (N F&M Monitor, Vol. 7 Nos. 10&1 1),

long-term project, and this issue doesn't need to be solved we're getting very good feedback on it, though the G-8 right now. But the paper was presented, and the perception still wants to see it in a more detailed form," particularly that other countries may have been a little less firm than regarding the role of the fund manager, he said. The they have been is fair.... Still, I wouldn't say that it set out program's fund manager has not been finalized, but G-8 an obvious linkage [between G-8 contributions to the officials have made it clear that it will have to be an international body so as to satisfy the concern of donor 12 Post-Sovict Nuclear & Defense Monitor EHANGEAONtOR PUBLICA77ONS INC. May 20, 2003

Reprinted with permission of tiepublisher 1TIVT LYML VIAKLWL1114k%, _F_

RUSSIAN PU DISPOSITION PROGRAM that a second MOX fabrication facility would be COSTS ESTIMATED AT $2+ BILLION constructed and commissioned to manufacture the Analysis Takes In to Account vibropak fuel for the BN-600 ($2.676B); and Using U.S. MOX Facility Design

-Disposition in WER-1000s and in a hybrid core BN-The Russian plutonium disposition program encompassing 600, supplemented by partial export, in -which two fuel 34 metric tons of weapons grade material, as is now fabrication facilities are necessary, one primary facility accepted by both U.S. and Russian governments and that would produce pellet MOX for the four WER-preliminarily endorsed by the other G-8 countries, will cost lOOOs and for export and another srall-scale facility upwards of $2 billion to put in place according to a soon- that would produce vibropak fuel for the BN-600 to-be-released report, Scenarios andCosts in the Disposi- ($2.218B).

tion of Weapon-Grade Plutonium Withdrawn from Rus-sia's Nuclear Ailitary Programs, by the Joint U.S.- VVER-1000-Only Option Is Simplest, Cheapest Russian Working Group on Cost Analysis and Economics in Plutonium Disposition. The cost analysis takes into Irradiating the MOX fuel only in the seven WER-1000 account; reactors-'by far the least complicated of the options"

-was also found to be the least expensive, with an

- Replicating the U.S. mixed oxide fuel fabrication estimated cost of $2.13 billion. All ofthe MOX fuel would facility in Russia; be loaded by 2025, with fuel meeting the 'spent fuel

- Not obtaining any equipment from the defunct German standard' for disposition by 2027. According to the report, Hanau processing facility; the "chief advantage" of the option is that the fuel used by

- Locating the Russian MOX facility in Seversk, not theWER- lOO s is technologically similar to the fuel used Mayak as initially proposed; and by the pressurized waterreactors the U.S. will employ. The

- Reduced credit for the amount of uranium fuel dis- one concern with this approach being voiced by MINA-placed since it is no longer assumed that MOX fuel TOM is that it requires utilizing a large portion of Russia's would be irradiated to the same level as uranium fuel, WER-1 OOs, and further that there is no MOX operating "with the consequence that a greater quantity of MOX experience with these reactors.

fuel would be irradiated than the quantity of uranium fuel that it displaces." Using BN-600 Increases Program Complexity What is of particular note is that the cost of the four The tvo options that employ the BN-600 were found to be scenarios analyzed-all of which are based on feasible somewhat more feasible on an economic basis than options-vary by no more than a total of $500 million for expected, particularly the vibropak-fueled option, but the a program that is to span 22-25 years. Economics, there- inclusion of a second type of reactor was found to techni-fore, is not much of a driving factor. Further, none offer cally complicate the effort ifonly one fuel fabrication plant any great schedule advantage over another. was to be constructed. Using the same fabrication facility for both the VVER-IOOOs and the BN-600 was found to The four scenarios examined are: cost $2.82 billion and result in a $360 million reduction for displaced uranium fuel, for a total cost of $2.46 billion.

- Disposition in Russian VVER- I OQOs only, using seven Building a second fabrication facility devoted to producing ofthe reactors for irradiation of MOX fuel produced at vibropak-fuel for the BN-600 is estimated to cost slightly a single production facility ($2.131B); more, at $3.04 billion, which, coupled with the same $360

- Disposition in VVER-lOOOs and in the BN-600 fast million reduction for displaced uranium profits, would reactor, in which four VVER-OOOs would be em- result in a total program cost of$2.68 billion- the highest ployed in tandem with the BN-600, which would o fal l options, but, again, still feasible. Under each scenario operate with a full MOX core, to disposition MOX disposition is expected to be completed by 2024, one-year fuel manufactured in a single fabrication facility faster than under the VVER- 1000-only scenario, "but these

($2.460B); completion dates are in large part an artifact of the 15-year

- Disposition in VVER-l1000 reactors and in a vibropak service extension of the BN-600 until 2025," the analysis fueled BN-600, which would be essentially the same points out.

as the second scenario, with the important difference June 9, 2003 Post-Sovict Nuclear & Dcrcnsc Monitor LXCHANGEM4ONTOR E PBLCAroNS, INC.. 1

Cost Comparison: Five Scenarios I'

(I) Base case costs are in ycar-2001 U.S. dollars. Al other costs a in year-2003 dollars.

(2) Costs for partial xport are only costs incurred in Russia (denoted by italics), and do not include costs ad credits xtcrnal to Russia.

Timclines: 2001 Base Case and Current Scenarios r is e . oz=  ?.!4 0 0 s Vi rp0e 1

2. 0.030 0.030 0.030 . 0.030 0.030 3 0.072 0.030 0.091 0.091 0.091 4 0.096 0.030 0.139 0.139 0.139 5 0.211 0.075 0.209 0.163 0.163 6 0.165 0.030 0.297 0.342 0.342 7 0301 0.030 0.297 0.297 0.297 8 0301 0.030 0.297 0387 0.297 9 0.470 0.934 1.292 1.216 - 0.568 10 1.214 1.974 2.241 1.880 IA10 II 2.331 1.974 3.191 2.603 2.298 12 2.331 2.893 3.191 3.206 3.770 13 2.331 2.517 2.543 3.206 3.770 14 2.331 2.487 3.161 3.206 3.770 15 2.511 3.315 - 3.161 3.176 3.740 16 2.511 2.848 2-513 3.176 3.740

17. 2.481 2.848 3.161 3.176 3.740 18 3.021 3A96 3.161 3.176 3.740 19 3.021 2.848 2.513 3.176 3.740 20 3.021 2.848 3.161 2.950 1.850 21 1.804 3.496 2.136 1.217 0.267 22 1.804 2.848 1.217 1.217 0.267-23 1.804 0.422 Nx"W -_

24 1.804 _ eP £ 1 Ot Sp 25 1.804 lu4r.. g mg .'. ._ k __________

26 0.230 _ ,f0R.sR- i el.

TOTAL 38.00 38.00 38.00 38.00 38.00 Cost Estimates for the Disposition of Weapon-Grade Plutonium Withdralwt From Russia's Nuclear Mlilitary Programs,Joint U.S.-Russian Woriing Group on Cost Analysis and Econoniics in Plutonium Disposition, March 2001.

8 Post-Soviet Nuclear & Dfense Monitor EXCHANGEMfONrrOR PUBLICATIONS, NC. Jun 9 2003

Export Offers Little Schedule Advantage CANADA COMMITS $108 MILLION TO G-8 NONPROLIFERATION INITIATIVE Another notable conclusion of the report is that exporting $47 Million To Support Russian Pu Disposition Russian fabricated MOX to burn in foreign reactors-which has generated heated opposition from Canadian Prime Minister Jean Chretien informed Russian France (NW&M Monitor, Vol. 6 Nos. 19&20)-offers President Vladimir Putin during his visit to St. Petersburg little advantage in quickening the disposition timetable just prior to the G-8 Summit that Canada will provide $47 over the current proposed program. The cost of the.partial million (US) to support the Russian plutonium disposition export program is estimated to be $2.4 billion, less $183 program, out of a total of $108 million (US) the country million for the displaced uranium, for a total cost of $2.22 will contribute to aid nonproliferation and nucleardisarma-billion. This estimate, however, only takes into account ment efforts in Russia. The contribution, which was those costs incurred within Russia, and does not include included in the country's budget this year (though Canada any costs or credits outside the country. The working is not required to spend the money in FY 03), is the first group highlights those potential factors as "critical" but part of the $727 million (US) that Canada has pledged to says that they "cannot at this time be estimated." An put toward the effort over 10 years. Canadian officials in Annex to the report postulates that while there are addi- Ottawa further explained to NW&M Monitor that the tional costs that would be incurred through MOX export, amount donated to plutonium disposition, which comes out "there remains the potential for significant cost offsets and of a larger, unspecified portion of their total 10-year income ... that could in principle reduce substantially the donation that Canada has earmarked for fissile material overall costs of the Russian program." This is, of course, disposition, was currently the extent of the country's assuming that the revenues derived from such export sales planned contribution to the program, but that more money would be contributed by Russia to support the disposition could feasiblybeallotted depending on future assessments.

prograr While noting that "the economics of an export The remaining funds of the fissile materials disposition option ... are and will remain unavoidably case-specific" portion of the contribution are slated to go to projects such and are therefore impossible to determine without specific as improving physical protection of spent fuel storage cases to analyze, the group predicts that export "would still facilities, a Canadian official explained, but Canada could nonetheless produce likely revenues that would reduce the reassess its priorities and move more of the fissile material estimated net cost of the partial export scenario." funds to the Russian plutonium disposition program if it decided to, though that is not the consensus view at this More Analyses To Come time.

The group stresses in the report that the estimates produced The remaining $61 M (US) contribution of the coming therein are "necessarily preliminary" and "much still needs year is to be allocated in the following manner:

to be known" about the program, including technical details. The group says it plans to complete in the future - $23.3 million for a European Bank for Reconstruction cost and schedule assessments ofat a minimum three other and Development program to manage spent nuclear scenarios: fuel from Russian submarines;

- $2.9 million to the International Atomic Energy

- The possibility of adding gas-turbine, modular helium Agency to strengthen nuclear and radiological security reactors at a future time to the program, which could in the former Soviet Union; down the road accelerate the overall timeframes of the - $13.1 million to fund International Science and Tech-program; nology Center projects to employ former weapons

- A single disposition option, "to be developed in light scientists; and of the current analysis", an analysis that will focus - $21.8 million to support the construction of the chemi-

"more closely and in detail" on a specific scenario; and cal weapons destruction facility at Shchuch'ye.2

- A reappraisal of the possible costs of reduced electric-ity generation by Russian nuclear power plants in the disposition program, "in order to see how (and with OPPONENTS TO U.S.-RUSSIAN Pu what possible cost implications) Rosenergoatom's PROGRAM FAIL TO STIR HOUSE PANEL plans for more advanced fuel designs and advanced fuel loading cycles for Russian VVER-100 reactors The renewed campaign against the U.S.-Russian Pluto-might be impacted" by disposition. The study was nium Disposition program, kicked off a few weeks ago by requested by Rosenergoatom and is planned "for the fonnerNuclear Regulatory commissionerVictorGilinsky; immediate near term," according to the report." Henry Sokolski, executive directoroftheNonproliferation June 9, 2003 Post-Sovict Nuclear & Defense Monitor EXCIANGEAfOrrOR PUBLICATIONS. AC. 9

Reprintedivith permttission of the publisher ILMANImP M!V LItJ~ . V LAI U.S.-RUSSIA '98 Pu DISPOSITION PACT plutonium disposition program and NC. In a July22 press PROVIDING LIABILITY COVERAGE EXPIRES statement, Abraham reports that lie sent a letter to Russian No Real Progress on Resolving Statemate Atomic AgencyMinisterAlexandre Rumyantsev informing the Minister that though the Department will not be able to The 1998 U.S-Russian agreement on technical cooperation renew the NCI agreement, "we are eager to continue our for the plutonium disposition program, which included a cooperation in this area."T'he statementadds that Abraham liability protection provision but did not cover "inten- told the MINATOM Minister that projects already under-tional" incidents, expired July24, leaving in place the 2000 way could be allowed to continue.

pact. The later agreement intentionally does not include any liability protection language, only a commitment by No mention is made in the press statement that Abraham both sides to work on developing such provisions. A U.S. addressed liability protection underthe plutonium disposi-request from the State Department submitted to the Rus- tion program, but National Nuclear Security Administra-sian side prior to July 24 to extend the 1998 pact for three tion spokesman Bryan Wilkes emphasized the same holds months was rejected by Russia on the basis that it did not for the U.S.-Russian plutonium disposition program. He provide sufficient time to reach a compromise between reported that "work already begun under the agreement U.S. and Russian positions on liability protection (see would be allowed to continue despite the expiration."

relatedstory). The net result is that there is no longer any Wilkes identified the State Department as the key player liability protection for the U.S. and U.S. contractorwork on pushing for the liability language changes. "We just want the plutonium disposition program. The focus now is on to proceed with our programs, essentially, and we don't fulfilling the commitment made in the 2001 Pu disposition want to get bogged down in these legal issues, but...the pact to develop a liability protection agreement. Though it State Department is insisting on some legal changes,"

is unclear whether the lack of such an agreement has any Wilkes said. "We're just trying to do our nonproliferation immediate effect on the program, there could be conse- work." He was careful to add, however, that liability "is a quences if an agreement is not signed by this fall when serious issue...and we support entirely [the State Depart-construction work is scheduled to start in Russia on the ment's] effort."

mixed oxide fabrication facility. The stalemate over liability protection is also expected to endanger activities Result of Pact Lapse Not Clear covered under the Nuclear Cities Initiative, which expires next month (see relatedstory). The immediate effects of the 1998 liability protection provisions are unclear. State Department spokeswoman Dems Criticize Administration Tara Rigler said after the lapse that "industrial-scale disposition activities will not go forward under the Pluto-The lapse of the 1998 agreement and the lack of progress nium Management and Disposition agreement of 2000 on developing an acceptable liability protection pact until adequate liabilityprotections areagreed to."One U.S.

prompted House Democrats-lead by Congresswoman official told NIV&M Monitor that some activities that had Ellen Tauscher (Calif.) and including Ike Skelton (Mo.), begun under the 1998 agreement have ceased since its John Spratt (S.C.), Adam Schiff (Calif.), Chet Edwards expiration,though lie would not elaborate and insisted they (Texas) and Brad Sherman (Calif.)-to write President were minor. But Wilkes insists that work is continuing.

Bush, arguing "this impasse has placed prospects of future "Despite the expiration of the 1998 agreement, critical U.S.-Russian nonproliferation cooperation at great risk.... activities for the plutonium disposition program will I cannot understand why the administration would let key continue underthe 2000 agreement, which does not expire.

aspects of the program to get rid of so much weapons-grade Although the 2000 agreement does not address liability and plutonium lapse. Keeping fissile material out of the hands indemnification issues, our ongoing critical activities do of terrorists seems a critical step in the war on terrorism." not pose a risk in this area at this time," he said. According to Wilkes, no new projects could be started under the State Pushing for Liability Changes plutonium agreement now that it has lapsed,but everything that had already begun and "what was already in the With the lack of progress on the liability protection provi- pipeline that's been planned" would be allowed to con-sion, DOE officials and Secretary Spencer Abraham are tinue. "This does not have any impact in the short term. For taking pains to assure their counterparts in Russia that the all intents and purposes, nobody is really seeing any kind Administration remains strongly supportive of both the of a difference in terms of work," he said, reiterating NNS A's "intense" commitment to resolving the disagree-14 Post-Soviet Nuclear Defense Afonitor EXCIIANGENIONITOR PUBUCATIONS, INC. August 6, 2003

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- INSIDE HIGHLIGHTS -

The Senate-adopted Encrgy and WaterAppropriations Uranium Enrichment Report ...... ............. 9 bill includes the funding requested by the Administration for 'Advanced Concept" research into At the Weapons LabsIDOE Sites ..... ........... 10 t.

low-yield and earth-penetrating nuclear weapons. .. 2 U.S. President George NV. Bush is calling for all United tq-Nations member nations to pass a resolution "to criminalize the proliferation of ... weapons of mass U.S. Ambassador Michael Guhin, together with a group destruction ................................. 4 of legal experts, met ivith Russian officials this past week to get down to the nitty-gritty of how to resolve the In public statements over the last several days Iran has impasse over U.S. and Russian positions on liability indicated it may not comply with the recently adopted protection for the internationally supported Russian International Atomic Energy Agency resolution ...... 5 plutonium disposition program . ................ 18 The current Nuclear Nonproliferation Treaty regime is Fourteen kilograms of weapons-grade highly enriched not sufficient to thwart the spread of nuclear technology, uranium was successfully removed from the Institute for and therefore a new approach is necessary, Secretary of Nuclear Research in Pitesti, Romania this past month. 19 Energy Spencer Abraham declared ............... 6 The U.S. is actively soliciting Russia's participation in Sen. Richard Lugar (R-Ind.) has again stepped forward the U.S.-led Proliferation Security Initiative ....... 20 to propose a solution to the proliferation of nuclear weapons by offering for consideration a new TheNunn-LugarCooperativeThreatReduction program, as international accountability regime ............... 7 expected, will receive the $450.8 million requested by the Administration for Y 2004, as the FY04 Defense The U.S. Marine Corps Systems Command has awarded Appropriations bill, which funds CTR activities, was signed Northrop Grumman a $15 million, five-year contract to into law Oct. 1................................ 21 design, implement, and field the next generation chemical, biological, radiological and nuclear defense warning and Calendar ................................ 22 reporting system. .............................. 7 CONSTRUCTION OF RUSSIAN & U.S. MOX FABRICATION FACILITIES EXPECTED TO BE DELAYED A YEAR Procurement of Western Company Partner to Build Russian MOX Fabrication Facility Probably Not Affected The lack of a liability agreement to cover the Russian acceptable manner, is forcing a delay of the startup of plutonium disposition program, coupled with the current construction activities for the Russian MOX fabrication U.S. position that no new initiatives will be launched with facility until the spring/summer of FY 2005. And because Russia until Russian technical assistance to support Iran's the U.S. and Russian programs are statutorily required to nuclear program is either stopped or resolved in some (See STOPPAGE on pg. 17)

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(STOPPAGEfrom pg. 1) PRES. PUTIN AGREES WITH proceed along roughly parallel paths, startup of construc- BUSH ON IRAN CONCERNS tion activities of the U.S. MOX facility will be similarly Stresses that Russian Support of Iran delayed. Though DOE officials would notcommentonthe Reactor Will Not Result in Proliferation delay, a close examination of the proposed schedule and prior reported comments offered byNNSA officials on the Nuclearproliferation was a "top agenda item" during U.S.

need to have decision by late summer/early fall in order to President George W. Bush's summit with Russian Presi-start outdoor construction work all lead to only one dent Vladimir Putin at Camp David, as reported by U.S.

conclusion-construction startup will be postponed government officials, but no new agreements involving (NW&MMonitor, Vol. 7 No. 22). Iran or North Korea came out of the sessions. Putin expressed his support for the recent International Atomic The length of the delay for the Russian MOX facility is Energy Agency resolution on Iran's nuclear program (see due to the fact that the first phase of construction work can related story) in a statement issued after the meeting, only be carried out in the spring or summer months stressing that "Russia has no desire and no plans to because of the severe winter weather conditions at the contribute in any way to the creation of weapons of mass proposed site of the facility, in Seversk. The planned start destruction, either in Iran or in any other ... region in the date had been between May and June 2004, but that could world," and vowing Russia would "give a clear but only have occurred once liability protection terms had respectful signal to Iran" about expanding its cooperation been agreed to and the facility was licensed by Russian with the International Atomic Energy Agency. However, regulatory authority GOSATOMNADZOR. According to with regard to Russia's support for Iran's commercial Russian officials, licensing is estimated to take from eight nuclear program, he made it clear that he believes Russia months to one year, therefore, the licensing process would has adequately dealt with international fears that the spent have to be initiated either in September or no later than fuel from the Bushehr reactor that Russia is helping the early October of this year to allow for construction country build could be used to make weapons by demand-startup-basicallyjust pouring concrete-to start in May- ing that Iran guarantee the return of the spent fuel t July 2004. But with no expectation of resolving the Russia before any fresh fuel is delivered. This agreement, liability protection disagreement and the situation in Iran however, has yet to be signed, as Putin reported in a later not coming to a head until at least the end of October (see interview with the press from his residence (New York relatedstory),there is almost no chance of licensing being Times, 1016). During that interview, Putin had this to say:

initiated even by December, which in turns means no license until the end of August 2004 at the earliest-just We are not only hearing what our U.S. partners before winter conditions arrive at Seversk, preventing the are telling us, we are listening to what they have pouring of concrete. to say, and we are finding that some of their assertions are justified. For example, their profes-Will Startup Delay Affect Completion? sional observation that spent fuel can subse-quently be enriched and used as a component of It is possible, however, that the year delay in the MOX nuclear arms. ... That is why we have put the fabrication facility construction startup will not affect the question before our Iranian colleagues that spent overall schedule, given the availability of FY04/05 funds Russian nuclear fuel must be returned to Russia to accelerate some activities. The down time also provides ... We also believe .. ; that Iran has no justifica-both sides with the time to focus on various outstanding tion not to allow the overview of the IAEA over process issues, like licensing the Russian MOX facility, theirnuclear programs ... But this does not imply the Russian side approving the facility's design, and the that without agreeing upon the principles of our procurement of a Western company to partner with cooperation in this sphere we're going to suspend Russian company TVEL to construct the facility. In fact, all of our programs.

one reason that the procurement of the Western company will likely not be delayed is to have all parties ready to Strength of Relationship Stressed begin the first phase of construction work as soon as the spring thaw allows, in May 2005.. As reported by Bush and reaffirmed by Putin in a meetin with the press after the summit, and again during Putin's Oct. 5 interview, "the most important thing that came out of these meetings was a reaffirmation of our desire to October 6, 2003 Post-Soviet Nuclear& Defense Monitor EXCIIANGEMONTTOR PUBLICATIONS, INC. 17

work together to convince Iran to abandon her ambitions, International Materials Protection, Control and Coopera-as well as to work with other nations so that there is a tion program budget and transfer it to fund a program to

• common voice on this issue." Beyond the reaffirmation of install radiation detection equipment at the top 20 overseas the two leaders' affinity for one another, the summit seaports, for which the Administration did not request appears to have produced some substantive plans as well, funding in FY 2004. The House bill also would require as Putin in response to a reporter's question during a joint NNSA to submit along with its FY 2005 budget request press conference said that he was returning to Russia with for nonproliferation activities a program analysis "apply-

"a checklist ofdifferent issues" to confront. Bush reported ing a risk-based evaluation ofdifferent activities proposed that as a result of the meeting both leaders would be in the budget request," a provision not included in the "tasking different agencies and agencies' heads with Senate bill.x action plans that we'll be able to monitor."

The Departments of State and Energy both refused to U.S., RUSSIAN OFFICIALS STEP FORWARD comment on details of the plans, and the National Security TO RESOLVE LIABILITY STALEMATE Council had not returned a request for comment on the Sept. Meeting Beneficial, But No Substantive Progress action plans by the time this issue went to press, though the NSC did confirm that future nonproliferation efforts U.S. Ambassador Michael Guhin, together with a group of had been discussed. Putin provided some indication as to legal experts, met with Russian officials this past week to future areas of cooperation between the two countries in get down to the nitty-gritty of how to resolve the impasse response to reporters' questions following the summit. over U.S. and Russian positions on liability protection for "Russia and the United States intend to pursue close the internationally supported Russian plutonium disposi-cooperation for strengthening international regimes and tion program. But despite the proactive step, and a positive nonproliferationrmechanisms," he said.u view of the discussions voiced by U.S. officials, no real movement was made by either side from their entrenched positions. The U.S. continues to demand liability protec-U.S.'s RUSSIAN NONPROLIF EFFORT tion akin to that provided by the Cooperative Threat LIKELY TO BE FUNDED AT $421 M Reduction (CTR) umbrella agreement, while Russia is pushing for what is agreed to under the Multilateral The U.S. National Nuclear Security Administration would Nuclear Environmental Program (MNEPR) and objects to receive $421.1 million in funding for nonproliferation being held responsible for intentional acts (NW&M programs in Russia under the Senate version of the Energy Monitor, Vol. 7 No. 22). "The two sides keep pounding and Water Appropriations bill, passed Sept. 16 and now in the table, they keep using the same talking points back and conference with the House, just slightly less than the forth, and it's not very productive," one Administration

$425.2 million requested by the Administration and the official said.

$421.2 million proposed by the House (NW&MMonitor, Vol. 7 No. 21). But the Senate bill requires the use of However, another U.S. official said that though the

$46.9 million in prior-year balances, while the House meeting itselfyielded no substantive progress, it "initiated estimates the availability of $60 million in uncosted a dialogue, and that dialogue gives us some promise to balances. In line with House report language chastising the resolve the differences." The goal of the September Department for its failure to obligate and spend program meeting, he explained, was not to resolve the dispute, but funds, Senate report language points out that "carry-over rather "the focus was to figure out what those words [the rates [ofannual funding] of4O percent are not uncommon" Russian law complicating the country's agreement to for DOE in Russia, and, though the chamber acknowl- CTR-style liability provisions] say, what they allow, what edges that programs can be difficult to implement in the they do not allow, and what their concerns are with country, "strongly urges the Department to improve on exactly how the words will operate in practice." In his this level of performance." view, the meeting was a success. "Of course there's always a little table pounding, that goes with it. But there While both chambers see a problem with the effort's was less table pounding and more 'OK, you say that these management, Senate and House views on two are the words that you need, tell us how those words nonproliferation programs in Russia contrast starkly. The operate. Here's a provision, what triggers that. Now what House bill only provides $5 million, one-sixth of the $30 happens?"' the official explained. "It was that kind of million requested by the Administration, for the Acceler- dialogue, not aimed at saying 'OK, let's do this and solve ated Materials Disposition initiative, while the Senate bill the problem,' but rather 'We both say there is a problem would match the Administration's request for the program. ... now let's get down to the operative pieces of it and Further, the House proposes to take $28 million from the figure out what our honest concerns are on both sides."'

is Post-Soviet Nuclear & Defense Monitor EXCIHANGEMONITOR PUBLICATIONS, INC. October 6,2003

He reported that the U.S. officials "walked away with a conversion of a research reactor at the site to use low-better understanding of what [the Russians] thought, and enriched uranium instead of HEU. The fuel removal was they walked away with a better understanding ofwhat we funded under the U.S.-Russia-IAEA Tripartite Initiative to -

thought." A followup meeting has not been scheduled, facilitate .the return of both fresh and spent fuel frot though the official said he expected another meeting, Russian designed research reactors abroad.

through perhaps a less formal one, some time in the coming month. "Anothermeeting shouldn't necessarilybe The reactor in Pitesti is a U.S. designed 14-megawatt taken to mean that there's been great progress or there TRIGA reactor. The conversion is a three-year Technical hasn't been," the official said.m Cooperation project involving LAEA experts and the U.S.

Department of Energy, under the auspices of the Tripartite U.S.-RUSSIA NUCLEAR CITIES PACT Initiative. Conversion ofthe Romanian reactorhad already EXPIRES, BUT 69 PROJECTS EXTENDED begun, "but the Romanians ran out of money," one U.S.

official reported. According to DOE, it will be fully.

Though the Nuclear Cities Initiative agreement between converted over the next two and a half years, with the the U.S. and Russia was allowed to expire Sept. 22 due to spent HEU fuel returned to the U.S.

lack of agreement between Russia and the United States on liability protection, ongoing projects were approved to Part of a Broad Effort continue, as allowed under provisions of the initial pact.

The 69 projects approved were not identified by NNSA The Romania operation is part ofa largerU.S. initiative to officials. Paul Longsworth, Deputy Administrator of secure the weapons-usable HEU stored at some 80 re-Defense Nuclear Nonproliferation of the U.S. National search reactors around the world. The transfer was coordi-Nuclear Security Administration, and Igor Borvkov, First nated in a manner similar to the HEU take-back that was Deputy Minister of MINATOM, signed a protocol during conducted in Vinca, Yugoslavia last September (NW&M a meeting in Moscow in September invoking article 12 of Monitor, Vol. 6 No. 18). Following the Yugoslav opera-the 1998 NCI agreement, which allows for such extensions tion last summer, State Department officials compiled a ofprojects beyond the life ofthe agreement itself. Accord- list of 24 other overseas reactors that use weapons-grade ing to an Administration official, under the agreement on nuclear fuel and are considered vulnerable. "Romaniajust the continuing projects "all of the provisions, governing happened to work out; we're being opportunistic abou liability, taxation, access, and so forth, will be carried this. It's not that Romania was necessarily the next forward" as they are spelled out in the original agreement priority, but it was an opportunity that presented itselfand for the life of the continued projects. so we took it," a U.S. official explained.

Department of Energy Secretary Spencer Abraham did But Project Just a 'Drop in the Bucket' reveal that prior to the pact's expiration a new project had been started-a $9 million effort in the city Snezhinsk for While the Romania operation is being touted as a success-the development of a Positron Emission Center, a medical ful demonstration of international nonproliferation efforts, imaging center that will provide capability for cancer many are arguing that while the take-back efforts are diagnostics. This is one of the 69 projects.0 beneficial, they are still too few and too far between to be of any great help. Indeed, some U.S. officials expressed dissatisfaction with the length of time it took to organize U.S., RUSSIA, IAEA REMOVE this effort, given that it was more straight-forward then the UNSECURED HEU FROM ROMANIA Vinca affair. "We had a lot more political work to do in Yugoslavia at the time, because we did that fairly soon Fourteen kilograms of weapons-grade highly enriched after the Milosevic regime and had to find friends in high uranium (HEU)-which according to U.S. officials was places over there. That was not so necessary in Romania undersecured and vulnerable to terrorists-was success- because we already had them. This one was easier than the fully removed from the Institute for Nuclear Research in Vinca one," one official told NW&M Monitor. But he Pitesti, Romania this past month through a joint effort of insisted that it would be difficult to work any faster.

the U.S. Department of Energy (DOE), the Russian "Getting everybody on board ... working this through the Atomic Energy Agency (MINATOM), the International IAEA bureaucracy, working through our own bureau-Atomic Energy Agency (IAEA) and the Romanian cracy, getting licenses for the shipping casks, getting the government Critical to the completion of the transfer was Romanians to get all the fuel together and appropriatel-the U.S.'s willingness to shoulder the $4.4 million cost. packaged, all of this stuff takes time. It is very difficult to DOE paid $400,000 for the transfer itself, and an addi- do anything in a hurry with nuclear material. There are tional $4 million, funneled through the IAEA, for the political sensitivities, even though it was much easier in October 6 2003 Post-Soviet Nuclear & Defense Monitor - EXCHANGEMIONITOR PUBLICATIONS, INC.