ML20046D339
| ML20046D339 | |
| Person / Time | |
|---|---|
| Issue date: | 07/14/1992 |
| From: | Taylot J NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| To: | |
| Shared Package | |
| ML20046D338 | List: |
| References | |
| SECY-92-244, NUDOCS 9308180080 | |
| Download: ML20046D339 (39) | |
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POLICY ISSUE (Notation Vote)
July 14, 1992 SECY-92-244 far:
The Commissioners From:
James M. Taylor Executive Director for Operations
Subject:
UPDATE ON DISPOSITION OF THE WEAPONS GRADE NUCLEAR MATERIAL FROM DECOMMISSIONED NUCLEAR WEAPONS (U)
Purpose:
To advise the Commissioners of additional staff j
analysis and provide a recommendation on an 1
l issue with potential national policy implica-I tions concerning the disposition of large quantities of weapons grade special nuclear material (SNM) resulting from dismantlement of nuclear weapons.
Background:
Prompted by United States and Russian announce-ments of their intentions'to dismantle part of their existing nuclear warhead inventories, the staff prepared an information paper for the Commission, dated February 25, 1992, concerning the disposition of the excess SNM reclaimed from the disarmament program (SECY-92-064,
" Disposition of the Weapons Grade Nuclear Material From Decommissioned Nuclear Weapons").
Contact:
Philip Ting, NMSS 504-3379 NATIONAL SECURITY INFORNATION Classified By SSD Proaram
( ) Declassify on Unauthorised disclosure subject (date or event) to Administrative and Criminal KX) Originating Agency *.
<e ipfttien quired eX. \\/WL af canctions.
Derivative Classifier.
El,ijabeg Q. Ted Eyck Deputy ' Director Division of Safeguards &
Transportation, NMSS 01 0 930521 92-244 PDR
]
_______J
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The Commissioners 2
SECY-92-064 provided in~ formation on:
(1) interagency discussions in the disarmament context, (2) technologies and facilities available for conversion of SNM metals to light water reactor (LWR) fuel, (3) the Nuclear Regulatory Commission's readiness to respond to the national initiative to dismantle existing nuclear weapons, and (4) possible alternatives in national policy formulation.
Also, the staff presented three options for Commission consideration and recommended a moderate option of staff actively monitoring the pertinent activities taking place'in other Federal agencies and interacting with them as appropriate.
A memorandum dated April 1, 1992, from Samuel Chilk to James-Taylor (COMKR-92-001) stated that, as further internal and external discussions clarify the. issues and options, the i
Commission has requested that SECY-92-064 be reviewed and resubmitted as a' notation vote so that the Commission can act on more specific recommendations.
Accordingly, this paper provides an update of the subject issue, as well as further staff analysis of possible options and'a more specific recommendation.
Summarv:
A U.S.-Russian cooperative effort is underway to address the issue of disposition of large quantities of weapons grade SNM reclaimed from dismantled nuclear warheads.- Under.the. auspices of the Nuclear Weapons Safe and Secure Dismantlement (SSD) initiative, an interagency working group has considered various aspects of the disposition-issue and analyzed different options for use as the basis for formulating a national policy.
i.
The Commissioners 3
Several options are addressed for ultimate disposition of high enriched uranium (HEU).
The options for plutonium (Pu) are not discussed in detail.
In order to develop a joint action plan to deal with the disposition issue, experts from U.S.
and Russia have already met twice this year in Moscow to exchange technical information and discuss approaches to the resolution of the issue.
At the conclusion of the second U.S.-
Russian meeting it was agreed that further technical information would be exchanged and that both countries will seek to explore commercial sales opportunities for the disposition of excess Russian HEU in the U.S.
and elsewhere.
A national policy to recycle the Russian or U.S.
weapons grade nuclear material would impact the NRC if NRC licensed facilities are involved.
However, the staff has the capacity to readily respond to the national initiative if called for.
Accordingly, it is recommended that the staff continue to actively monitor interagency activities in this area and periodically provide the Commission with updated information for consideration in initiating appropriate regulatory programs to support the national policy.
Discussion:
1.
Possibilities for the Processina of Material from Dismantled Weacons After the dramatic announcements by the U.S. and Russia to dismantle a significant percentage of their existing inventories of nuclear warheads, a grave concern now shared among the world-wide community is the question of how quickly, safely, and securely can disposition of the large quantities of reclaimed SNM in the form of HEU and Pu be accomplished, especially as it relates to the Russian dismantlement.
4 I
The Commissioners 4
r Addressing these concerns is a national priority for the U.S. government and for many other governments.
In general, the preferred process for the excess Russian SNM reclaimed from the dismantled warheads would be the transfer of the material from the military to the civilian sector.
This material would then be converted to a form unsuitable for further weapons use.
(Technical processes involved in prospective conversion of weapons grade SNM to commercial i
use or disposition as waste were discussed.in SECY-92-064.)
Since the disarmament announcements were made, the U.S. agencies (Department of State (DOS),
Arms Control and Disarmament Agency, and Department of Energy (DOE)) have been addressing this issue as part of the U.S.
support-to-Russia activities unde Nunn-Lugar Act.{ the SSD initiative under the However, it is quite possible that Russia may expect the U.S. to pursue a similar track for the disposition of U.S.
material.
In the context of the combined U.S. and Russian dismantlement activities, the primary possibilities under consideration for the processing of material are:
(1)
Under a U.S.-Russian arrangement, the U.S. would process, in the U.S., the SNM from the decommissioned Russian and U.S.
nuclear weapons into LWR fuel (2)
The U.S. would pursue the option to recycle only U.S. SNM, and Russia would either pursue similar activities with its material or place unprocessed material in storage.
l (3)
All the SNM generated from decommissioned nuclear weapons in both countries would be put into long-term secure' storage and not processed.
1The Safe and Secure Dismantlement initiative and the current status of dismantlement bilateral discussions are described in Enclosure 1.
]
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The Commissioners 5
i i
The primary possibilities for the facilities involved in the processing are:
(1)
Conversion of all U.S. and Russian SNM would be performed at facilities within the DOE complex.
(2)
Conversion of all U.S. and Russian SNM wouldbeperformedatDOpfacilitiesand NRC licensed facilities.
(3)
Conversion of all U.S. and Russian SNM would be performed at NRC licensed facilities.
(4)
Conversion of Russian SNM would be performed at the U.S. built and operated facilities in Russia, and conversion of U.S.
SNM at DOE or NRC licensed facilities, or some combination.
From the possibilities listed above, it is clear that some would impact the NRC; these impacts are discussed in Section 3 below.
2.
Issues Under Consideration Near-term issues addressed by the SSD Disposition Subgroup are:
(1) whether materials from dismantled weapons should remain in Russia or be brought out as soon as possible, (2) the arrangements for ownership and financial responsibility, and the associated effects on world market price, and (3) whether the materials should be monitored under International Atomic Energy Agency (IAEA) safeguards _or under some other international ~
arrangements.
Pros _and cons concerning these issues have been outlinedbytheSSD{ispositionSubgroupintwo draft option papers.
Copies of these papers 2 Commercial nuclear facilities available - for conversion of weapons grade SNM include NFS-Erwin and B&W-Lynchburg.
3The draft option papers are being revised.- The final versions will not include the detailed discussions of the options.
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The Commissioners 6
are provided in Enclosures 2 and 3.
(Enclosure 2,
" Enriched Uranium Options," and Enclosure 3,
" options for the Disposition of Russian Plutonium from Dismantled Weapons.")
These option papers, as revised, will be used as a basis for formulating a national policy on the disposition of SNH recovered from the dismantled Russian warheads.
Several options have been addressed for ultimate disposition of HEU.
In the case of Pu, the long-term options are not discussed in detail.
(The paper merely notes that decisions about U.S. preferences for the long-term do not need to be made at this time; that the options would include long-term storage, geologic disposal, and burning Pu in reactors; and that it is unclear which of these options is the most economical in the long-term.)
In each of the two papers, options for the issues are discussed along with advantages and disadvantages.
However, neither paper presents specific recommendations.
The HEU paper discusses the following issues and options:
Issue (1) - Location of the facility for conversion of HEU into LEU.
Options:
(a) Russia (b) U.S.
(c) Acceptable third country B
Issue (2) - While the HEU is in Russia, whether international monitoring is required.
Options:
(a) no nonitoring (b) monitoring Issue (3) - Who assures financial responsibility for the ownership, control, and marketing of the blended Russian HEU?
Options: (a)
U.S. purchases Russia's excess HEU.
The Commissioners 7
(b)
An international financial institution (IFI) uses former Soviet Union fissile material as collateral for~ loan placements.
(c)
U.S. private sector firm assumes responsibility for financing purchases of Russian HEU.
(d)
Inter-government consortium of.
U.S., Japan, and two European countries finance purchases of Russian HEU.
(e)
Russia retains title to HEU, blends demestically and markets LEU.
Each option is discussed in detail in'the dra#t HEU paper (Enclosure 2) with pros and cons, but no single option for any of the three issues stands out with overall' advantages.
The ultimate decision will undoubtedly have to t
consider other related U.S.,
national, and international issues; e.g., national budgetary r
4 and importation constrgints, domestic regulatory requirements, and international political forces.
The Pu paper addresses the following issues and options concerning near-term and long-term disposition:
Near-Term Disoosition Issue (1) - Location of storage.
Options:
(a) In the U.S.
done particular_ aspect of interest is the financial implications of the Department of Commerce's anti-dumping ruling.
This ruling applies to natural uranium'and LEU but might be extended to HEU imported.to replace LEU.
Dus example'is the physical protection requirements associated with the transportation of HEU.
The Commissioners 8
(b) In a " safe" third country, probably France.
(c) In Russia.
Issue (2) - Type of controls.
Options:
(a) Place excess Russian Pu under Russian voluntary safeguards agreement with the IAEA.
t (b) Formulate a new agreement under which Russia would make a commit-ment against military or nuclear explosive use and agree to continuous inspector presence.
(c) Place excess Russian Pu under international custody.
Lono-Term Disposition Issue (1) - Transport Russian Pu to the U.S.
Options:
(a) Long-term storage.
(b) Geologic disposal.
(c) Burning Pu in reactors.
Issue (2) - Pu remains in Russia.
Options:
(a) Long-term storage (b) Burning Pu in existing Russian reactors.
(c) Burning Pu in new dedicated reactors.
(d) Dispose of the Pu as waste.
The.near-term options for-disposition of Pu are discussed in~ detail in Enclosure 3.
However, similar to the HEU paper, no near-term options stand out with distinct advantages.
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l The Commissioners 9
The long-term options for disposition of Pu are only briefly discussed.
The Pu paper does state that decisions about U.S. preferences for the long-term need not be made at this time.
- Also, if the Russian Pu was brought to the U.S., the ultimate disposition of the Russian Pu would presumably depend upon decisions regarding the disposition of U.S.
Pu.
3.
Imnact on the NRC and Our Licensees Any significant impact on the NRC and our licensees would become reality only if the processing and recycling of the Russian or U.S.
material involve NRC licensed facilities, or if l
the Russian or U.S. material is recycled at some I
designated DOE facilities and those facilities are required by Congress to be subject to NRC licensing.
The readiness of the NRC, in terms of applicable regulations, guidance, and licensing review criteria, to respond to the national initiative for disposition of SNM reclaimed from the dis-mantled warheads was addressed in SECY 92-064.
This status has not changed since SECY 92-064 was prepared.
In summary, NRC's current safety and safeguards regulations cover the types of operations needed to convert weapons grade material to LWR fuel.
However, the existing Category I fuel facility licensees will have to obtain license amendments for this activity.
Also, new safeguards rulemaking and a comprehen-sive environmental impact statement for the conversion operation and the use of the con-verted HEU and Pu as LWR fuel would be required.
For NRC licensees, the two Category I facili-ties, Babcock and Wilcox (B&W-Lynchburg) and Nuclear Fuel Services, Inc., (NFS-Erwin), are likely sites for recycling the material if it is required by national policy.
The staff under-stands that representatives from the Office of Management and Budget have recently visited B&W-Lynchburg and met with the facility management to discuss the possibility of using the B&W-Lynchburg facility for such purposes.
In
e The Commissioners 10 addition, we understand that NFS-Erwin is currently participating in a task force in Russia dealing with this matter.
Cost estimates for the project were also explored, but no conclusive results were obtained.
The staff's preliminary analysis shows that with some modifications to the facilities; e.g.,
new storage vaults and additional process equipment, B&W-Lynchburg and NFS-Erwin would be suitable i
facilities and available to start the project within 12 months notice.
Incidentally, NFS-Erwin may be more prepared than B&W-Lynchburg for the project since, after February 1994, its existing naval contract expires.
If conversion of the material is performed.at the U.S. commercial facilities, transport of the material would have to be addressed.
At the present time, there are no commercial carriers licepsed to transport Category I quantities of HEU Recognizing the importance and urgency of a timely resolution of the issue of disposition of both U.S. and Russian weapons grade SNM by the Executive Branch, the staff has been monitoring the activities taking place in the involved Federal agencies to ensure that the development of any national policy that would potentially affect the NRC will be known to the Commission well in advance.
In this regard, the Commission has requested the views of the Executive Branch (letters to Secretary of State Baker and Secretary of Energy Watkins) and indicated that the Commission would like to be involved in identifying and developing the policy options under consideration.
Rulemaking is currently underway to upgrade the NRC's 6
regulations for transport of Category I material.
These new rules would be comparable to measures used by DOE.
This will j
reduce reliance on DOE's Safe Secure Trailer (SST)-program for secure shipments of Category I material if a commercial carrier is available and approved.
The Commissioners 11 In anticipation of the NRC's involvement in the regulatory aspect of a national endeavor concerning the disposition of material from dismantled weapons, the Office of Nuclear Material Safety and Safeguards (NMSS) has assigned two FTE per year in the area of safeguards for FY93-97 to address the disposition of nuclear weapons grade material and uranium enrichment with the assumption that one of the following will occur:
(1) The LES's Claiborne Enrichment Center will be constructed; or (2) The NRC will be required to license or advise on the licensability of an Atomic Vapor Laser Isotope Separation (AVLIS) facility; or (3) Material from dismantled nuclear weapons will be converted into reactor fuel at current NRC-licensed facilities.
The resources budgeted in this area are-interchangeable; that is, they will be used to fund whichever of the above occurs.
In the area of safety, NMSS' program did not include resources during the formulation process of the FY94 budget; i.e.,
FY93-97, to cover activities which may involve disposition of weapons grade nuclear material.
However, during this process, significant resources were planned for a licensability review of AVLIS in the safeguards area.
Therefore, in case of an immediate need to respond to a national policy requirement for NRC involvement in disposition of material reclaimed from dismantlement of nuclear weapons, resources allocated to AVLIS could be redirected.
However, resources for safety are unbudgeted and possibly would require shifting of other programmatic activities.
In summary, if called upon by the President or the Congress, the NRC will be expected to readily respond to the national requirement for participating in the disposition of SNM
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The Commissioners 12 recovered from the dismantled warheads.
However, there is not enough information available at this time for the staff to develop a specific action plan and associated resource requirements.
Recommendation:
In view of the current national level effort to develop a U.S.
policy for the subject issue and other international activities in this area, it is recommended that:
(1) staff continue to actively monitor interagency activities related to the disposition issue and work with the other Federal agencies as appropriate; (2) staff periodically provide the Commission with updated information; and (3) as decisions concerning the various options are made, the staff identify for Commission consideration any changes in regulations and guidance that may be necessary to support the U.S. government's efforts for the disposition of material from dismantled weapons.
Coordination:
The Offices of the General Counsel and International Programs have reviewed this paper and have no objections.
NOTE:
Provided as enclosure 4 is information recently received concerning a protocol between NFS-Erwin and the Russian Academy of Sciences and MINATOM.
This describes a commercial venture which would 1
M The Commissioners 13 involve the conversion'of HEU to LEU and the subsequent sale on the world market.
Copies of this information have been forwarded to the pertinent SSD subcommittee and the Department of Energy.
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[S
.es M. T lor F ecutive irector for Operations
Enclosures:
- 1. The SSD Initiative 2.
Enriched Uranium Options 3.
Options for the Disposition of Russian Plutonium from Dismantled Weapons 4.
Facsimile from C. R. Johnson to H.
L. Thompson, dated July 7, 1992,Re gg ggg regarding protocol between NFS and of the'(051Of thiSIX:PGT Russian organizations f
Commissioners' comments or consent should be provided directly to the Office of the Secretary by COB Thursday, July 30, 1992.
Commission Staff Office comments, if any, should be submitted to the Commissioners NLT Thursday, July 23, 1992, with an infor-mation copy to the Office of the Secretary.
If the paper is of such a nature that it requires additional review and comuent, the Commissioners and the Secretariat should be apprised of when comments may be expected.
DISTRIBUTION:
Commissioners OGC IP OPP EDO SECY
?
The Safe and Secure Dismantlement (SSD) Initiative As a result of a meeting between President Bush and President Yeltsin in January 1992 at Camp David and a subsequent meeting between Secretary of State Baker and President Yeltsin in February 1992 in. Moscow, a U.S.-Russia Cooperative effort, the SSD program, was initiated.
The SSD program is a U.S.-Russia cooperative effort to seek solutions to and assure the safe and secure dismantling of the Russian nuclear warheads and the adequate protection of the SNM recovered from the Russian dismantlement program.
The SSD Initiative includes seven technical subgroups.
Each consists of experts from both countries.
The seven subgroups are:
1.
Dismantlement Subgroup 2.
Disposition Subgroup 3.
Containers Subgroup 4.
Railcar Subgroup 5.
Storage Subgroup 6.
Material Control and Accounting and Physical Protection Subgroup 7.
Accident Response Subgroup On March 12-13, 1992, lead by General W. Burns of the Department of State, seven U.S. teams were assembled and met with their Russian counterparts in Moscow to exchange technical information and to plan for future cooperative activities.
The NRC is involved in the technical area of the material control and accounting and physical protection subgroup.
Upon return from the Moscow trip, the SSD Steering Group, Chaired by General J. Gordon, Special Assistant to the President and Senior Director for Defense Policy and Arms Control, requested that two option papers, one on HEU and one on Pu, be developed by the SSD Disposition Subgroup.
On June 2 through 4, 1992, as a followup to the initial discussions on March 12-13, 1992, the U.S.-Russian Disposition Subgroup met and reached agreement to continue discussions on a government-to-government basis regarding i
disposition of excess Russian HEU and Pu reclaimed from decommissioning of nuclear weapons.
It was agreed that further technical information would be exchanged and that both countries will seek to explore commercial sales ENCLOSURE 1
I N ENRICHED URANIUM OPTIONS - REV. 9 I
1992 This paper follows from Secretary Baker's February 17, proposes that "The U.S.
proposal to Russian president Yeltsin:
discussions between U.S. and Russian technical experts commence promptly on the disposition of excess Russian highly enriched J
in ways that are consistent uranium (HEU) and plutonium (pU) j tive of with the stated nonproliferation and disarmament ob ec l
both each country and which would be economically beneficial toto th f
government-to-government agreement on the uses of excessincluding controls t i
governments.
l j
Russian weapons HEU and pU,placed on the use of such material by non-g i
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(
and third countries."
There is general agreement that:
l l
For security and non-proliferation reasons, material derived from Soviet weapons should be converted to LEU at the earliest feasible point.
j Careful consideration should be given to the economic impact of the disposition of this material for the U.S. and Russia.
The funding associated with all U.S. Governmentactions existing budgetary laws, including the Budget Enforcement Act of 1990.
The first There are three issues that need resolution.
decision is where the HEU should be converted into LEU.Se The third issue on how best to ensure that it is not diverted.is who assumes fina the blended Russian HEU.
This paper deals only with MEU in Russia, recognizing that Russia may be subject to agreement between Russia, U others.
for Where should interim stormoe/blendine facility Issue A:
HEU be located?
Option 1:
In Russia Option 2:
In U.S.
Option 3:
In safe 3rd country
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i ANALYSIS:
\\
The HEU will be generated from the dismantled weapons over From a practical a period estimated to be 10-15 years.some interim storage capability inside Russia w standpoint, need to be maintained, because of the time it will take to a blending facility of suitable size to process 2-5 years).
Assuming the Russians construct efficiently the HEU (est.
upgrade their Mate'risis Controls and Physical Protectionp However, risk of diversion is highest considered manageable.
for shipment of material within and among the States and Republics of the former Soviet Union, principally due to subnational terrorism.
additional safeguards and If HEU is shipped into the U.S.,
physical protection requirements might need to be implemented, The particularly at NRC-licensed facilities that process HEU.
logistical support required to ship HEU in large quantities In addition, the U.S.
have not been defined.at this time.
currently has insufficient blending capability to handle such large quantities (approx. 500 MT) of HEU.
COSyS All Ootions The cost estimate for constructing a blending facility is about $200 million and for an interm storage facility $50 Nunn-Lugar funds can legally be used for these million.
a decision would have to be made on the relative priority of this project compared to other needs for Nunn-Lugar purposes:
funds.
Construction of interim storaam/blandino f acility Option Alt in Russia.
Pros:
Minimizes costs and risks of international transportation of HEU.
Low US budget impact.
Cons:
Even with stringent international controls, Russia could reuse HEU for weapons purposes.
Potential for diversion to subn'ational groups or third parties.
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b
I
. Construction of Interim stormae/blendino facility Option A2r outside of Russi.a.
Pros:
that HEU could be reused for Russian Eliminates ris t weapons.
i Minimizes risk of use in weapons by third parties or subnational groups.
DOE believes shipment of HEU from Russia to U.S.
using transport as soon as possible under U.S.
physical protection preferable from a national t
security and nonproliferation standpoint.
Cons:
Diversion risk associated with international transport of.HEU.
i Could involve U.S. budget impact.
interim storace/blandina facility Option A3r construction of in a safe-third country.
a Pros:
Eliminates' risk of HEU reuse in Russian weapons.
Minimizes risk of subnetional diversion in Russia.
Cons:
Diversion risk associated with international transport.
Could run counter to U.S. nonproliferation objective of discouraging the spread of HEU.
What Live of annitorina
=1 tem should be used fog
_ Issue B; nummiel protection maainst divernian in Option 1:
IAEA Monitoring System.
Monitoring under new Bilateral or Multilateral r
Option 2:
Agreement.
ANALYSIS
'The HEU will require some< kind of monitoring during the 2-5 years).
period of construction of blending facility (est.
I 9
Place arcess Russian ned under Russian voluntary Option Bir TARA safcouards marenrrnt with the I
Russia is As a nuclear weapon state (NWS) party to the NPT, obliged to place its nuclear materials under safeguards not Under the terms of the offer, Russia provides a but However, Russia the Agency.
list of facilities eligible for safeguards.
may at any time remove facilities or materials from.theelig If Russia included an HEU storage including for weapons use.
it is assumed that the IAEA facility on its eligible list, would choose to safeguard that facility, although the IAEA Routine practice for would be under no obligation to do so.
safeguarding an HEU storage facility would involve monthly or However, a permanent inspector bi-tonthly inspector visits.
presence would not be inconsistent with this option.
Pros:
Requires least change and would be most easily palatable to Russians.
Provides political barrier to Russia's re-use of plutonium in weapons.
Cons:
No legal dbligation not to re-use material in weapons.
If inspector presence on site is not continuous, the risks of " insider" diversion scenarios are magnified New mor -- nt under which Russia would make_a and anree Ontion B2:
_ccamitment maainst military or nuclear erolosive use inspector crasance to continuous Under this option, inspections could be carried out by the or some other multinational body.
U.S.,
the IAEA, Pros:
Russia could not legally reuse the HEU in weapons.
Continuous inspector presence at storage facility provides added protection against insider diversion scenarios.
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f Cons:
l If applied reciprocally to U.S., this option would be l
more difficult for the U.S. to accept than would t
option A.
f rather If the verification system were bilateral, l
the pressure for reciprocal U.S. steps than IAEA, could be' greater.
for Who should have renoonsibility f
Issue Cr financina/marketino of uzd?
l Taking into account the nonproliferation and the national 1
and the security considerations assessed under Issues A and B, t
criteria set forth below which have been developed for-l evaluating possible options for financing and/or marketing of the Russian HEU, the interagency working group narrow l
I From the-major options which merit further' consideration.
l non-proliferation / national security standpoint Options C1 are considered to be essentially the same, and, therefore the choice of a preferred financing / marketing option through C4 from among these-four'can be made independently of the issues of the preferred location for the blending' facility andOption C5 is the preferred international-monitoring. approach.
i least desirable from the non-proliferation and national l
security standpoint since there is little opportunity for OM3 budget estimates are international control of the HEU.
)
presented in Tab A.
Definition of Options.
I tiate with_
_ DOE would begin to nego
~
l Option 1 the Russians for the purchase of l
their excess'HEU.
An international-financial Option 2 institution (IFI) uses former Soviet Union-fissile material as collateral for_ loan placements.-
Private sector firm assumes-Option 3 responsibility for financing,;
2 purchase, storage and marketing of Russian HEU.
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Inter-governmental consortium of Option 4 U.S., Japan, and two European countries finance purchase of HEU.
Russia retains title to HEU, Option.5 blends domestically, markets LEU product through commercial channels.
Criteria for evaluating options In addition to non-proliferation and other security factors, the following criteria are taken into account:
Financial benefits to Russia, U.S. budgetary impact, U.S. cong economic impact, interests.
Discussion of Options DOE would -initiate necotiations with the Russians Option C1!
for the ourchase of their arcess blanded wrii.
The initial goal would be to reach an agreement in Later a contract to principle (but not sign a contract). purchase the Russian HEU w or by DOE.
uranium enrichment corporation (UEC)
Pros:
The UEC would be able to provide a substantial total compensation payment to the Russians (up-to $2.1 including large advanced payments.
billion),
By purchasing the EEU, the UEC would not have to
~
DOE compete against this inventory in the market. believ 4
47 million SWU sales, $4 billion in revenues, $1and the closure billion in net cash flow, the existing plants with the loss of 2000 DOE contractor jobs associated with the operation of DOE's enrichment plants.
During 1992, the Congress has been considering 1
legislation to restructure the DOE uranium enrichment program by creating a U.S. Government Corporation to produce and market enrichment services.
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2 s.
DOE believes the enrichment market is competitive and will remain so-under this option.
A DOE believes that the UEC or DOE can use the for as a means of sales commitments ($12 billion)
DOE securing financing from non-USG sources.
believes that funding from these sources would avoid any imps,ct on the U.S. budget.
Gives maximum protection to DOE's existing marketing Would reduce arrangements and price structure.
prices less than the' other options since DO lieu of production and thereby minimize enriched uranium supplies in the world markets.
Cons:
OMB believes that this option could be seen by other attempt to corner the world countries as a U.S.It could be perceived as inconsistent with the free market approach taken in uranium market.
other araas.
None of the congressional bills mandate that the In ths Corporation purchase the Russia uranium. absenc commit the Directors of the Corporation.
OMB believes that in the Senate bill creating a U.S.an additional Government Enrichment Corporation,- 1.5 billion of con i
d OMB for the purchase of Russian enriched uranium.f authority would be required in the pending House bills.
OMB also believes that under the Budget Enforcement Act these additional contracting authorities would Without such additional require budget offsets. authorities, OMB believes the Corporat play the role oatlined in this option.
Should legislation not be enacted, there is no guarantee that DOE's customers would be willing to OMB believes that in the make advance payments.
it is not absence.of firm offers for prepayments, possible for the U.S. to offer to buy the uranium h
without an appropriation and subsequent impact on t e
- budget, i
n
.s b
pption C2.
An international financini institution (IFI) uses fissile material as collateral for lumo sum igrmer Soviet Union InhBa uses the An international financial institution (IFI) fissilb material owned by Russia as collateral for providing Russia would retain title to the uranium, loan to Russia.
irrespective of whether the material is being stored or processed within their borders or in another sovereignThe cap issuing bonds, which would be secured by enrichment contracts country.
The loan to Russia signed by Russia with Western customers. agreed upon by the IFI and would be for a dedicated purpose, the Russian Government.
Enrichers are selected through periodic sealed bid auctions IFI bonds are paid off by as a means of determining price.
proceeds from enrichment contracts.
Pros:
Has the potential to raise substantial lump sum orad impact than Options C1 and C4, budget Provides a mechanism for participation by key West European governments and Japan.
Cons:
Issuing bonds based on commodity contracts would constitute an entirely new undertaking on the part of IFIs.
Could be difficult to gain approval by the Board of Governors, given that various members would have different views.
DOE believes there would be some significant negative impact on the stability of DOE's business and its The amount will depend on the competitivesness.
disposition of the enriched uranium which is unknown at this time.
DOE believes Russia would have difficulty securing needed enrichment contracts to make this a viable option.
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t the uranium firm takes ownershio of Option c3t Private sector securina the needed for assumes responsibility and market and thereby process
- store, fingpcino to be able to purchase.
the material.
for the material as well as for other costs incurred The firm would need to secure firm contracts fromBecause of worldwide customer's of LEU to secure the financing.(both the Russian firm.
the inherent riskiness of this investment it stability factor and the future of worldwide nuclear involved to provide financing in order to spread the risk.
Pros:
budget.
It would have a minimal impact on the U.S.
It would maximize Russian opportunities for private sector investments in this sector of its economy.
It provides best opportunity for a free trade environment in the marketing of uranium enrichment services.
It would eliminate any perception that the U.S.
Government was using an arms control pretext in order to serve their own enrichment interests.
Provides U.S. maximum control over HEU and therefor maximum leverage to achieve our nonproliferation and security objectives.
Cons:
Payment to Russia would be significantly lower than or C4 because a private firm would Option C1, C2,have to pay market interest rates to raise the capital for paying the Russians.
DOE believes that a private firm may have difficulty obtaining contracts with utilities as it would be a new entry in market; DOE further believes this would mean that a private firm will be less likely than the UEC under Option C1 to be able to raise non-USG financing.
Decisions by private sector will be driven by need to A private purchaser may be realize profits.
unwilling to meet the timetable or scope of purchase contemplated by the USG or Russian Government.
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Japan, and inter-cover tental Conaortium of U.S.,
two WecLEuropean Countries Finance Purchase of HEU1 Qption c4t i
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An intergovernmental consortium could be configured a onFor purpose of participants.
h of l
various lines and have a range ofsthis analysis, there are four g which has 25 percent ownership.
The material shared among members.
conlortium could siso finance the blending facility; d by the alternatively, the blending facility could be finance International Finance Corporation under a joint venture i
a domestic entity - e.g.,
a U.S. public enrichmentA governmental consortium could arrangement.
of Japanese utilities.
behalf of e.g., groni, corporation; e.g.,
COGEMA:
Pros:
Would provide a mechanism for allied participation.
impact Would involve potentially lower U.S. budget than Option C1.
i Cnns:
Could still involve a U.S. budget impact.
Could become an enrichment cartel with increased costs for consumers.
Would take' years to negotiate.
bleMs domestically.
Russia retain 3.Litle to nad.
pation C5: markets LEU oroduct throuqagonnaercial channels.
This option is, in effect, what results if.none of the It requires no other options succeeds or.is selected.
A key uncertainty in specific action on the part of the USG. tinue its present this option is whether Russia would conpractice of placing i
or whether Russia would flood the market with LEU.
Pros:
No U.S. budgetary impact.
't No Congressional _ action required.
If Russia decides to. sell large quantities of LEU in a short time frame, could produce a significant_ drop-i in the world market price for enriched uranium which would benefit electricity customers.
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Cons:
Since there is no international financialthis option provides t involvement, little or no additional leverage to extract commitments from Russia relevant to our non-proliferation and security objectives (i.e.commi safeguards on HEU in the interim).
large quantities of LEU in.
If Russia decides to sell a short time frame, could produce a significant drop in the world market price of enriched uranium which and other would damage DOE (or its successor UEC) uranium enrichers.
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..t FINAL OPTIONS FOR THE DISPOSITION OF RUSSIAN PLUTONIUM FROM DISMANTLED WEAPONS I.
ISSUES FOR DECISION Regardless of its long-term disposition, excess Russian a
- Hence, plutonium will have to be stored in the near-term.
there are two issues facing the U.S.
in defining its near-term preferences: 1) whether it is in the U.S.
interest for excess if Russian plutonium to be permanently removed from Russia; 2) plutonium is to remain in Russia, what types of controls do we wish to see placed on that material.
j II.
BACKGROUND Russian officials have said they expect about 50 tonnes of Pu from dismantled weapons will be excess to their weapons Approximately another 50-100 tonnes of Pu will remain program.
in the weapons program under current arms control agreements.
U.S. arms control objectives could result in additional weapons Pu being dcclared excess by the Russians.
About 25 tonnes of separated Pu now exists in the Russian civil program; additional Pu is being produced in both the military and civil l
This programs but it is not clear how long this will continue.
paper addresses only Pu from dismantled weapons which will be l
declared excess to the weapons program.
1 Russia has commi6ted itself not to reuse excess Pu for Russia's intention is to place excess Pu in military purposes.
storage for the foreseeable future.
Beyond this, there appears to be no agreement within the Russian government about long-term plans.
Some officials from the Ministry of Atomic j
Power have expressed an interest in using Fu as fuel in the Russian nuclear fuel cycle.
A facility!for fabricating Pu into fuel is under construction, but thero are substantial domestic obstacles to its completion.
Russia has no plans to export' this plutonium.
At present and for the foreseeable future, there is no commercial market for plutonium.
Any country assuming
~
responsibility for this plutonium would incur substantial 1
financial costs.
1 III.
NEAR-TERM OPTIONS 1
The central U.S. objective in the near-term is to ensure that excess. Russian Pu is not re-used in nuclear weapons, J
either by the Russians or a proliferant state.
The options addressed below seek to accomplish this objective either byIt remcving Pu from Russia, or by placing it under controls is technically possible to denature the Pu by mixing it with i
reactor grade Pu or,with fission products, steps which would j
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' 4}h?Y significantly increase the cost and time to reconvert the Pu to weapons but would not prevent it.
However, these steps would also increase the cost and time of converting the Pu into reactor fuel, a long-term option some in Russia would like to Hence, denaturing of Pu or mixing it with waste in preserve.
the near-term is not considered realistic because of likely Russian opposition.
In the longer term, plutonium must either be buried, used in reactors, or stored indefinitely.
It is unclear which of If it these options is the most economical in the long-term.
is used in reactors, the spent fuel must either be buried or stored.
(Long-term options are discussed in more detail at the end of this paper.)
While there is no requirement to decide now about long-term disposition of Russian plutonium, decisions about near-term issues should bear in mind the following:
-- If Russian Pu is moved to the U.S.,
decisions about eventual burial, burning or storage may be linked to decisions about the long-term disposition of U.S. Pu, a
subject of some political controversy.
-- Those who favor the near-term option of moving Pu to an l
acceptable third country believe this makes sense only if there is an intention to burn the Pu in that country's reactors.
There are sharp disagreements among U.S.G.
agencies about whether a third-country burn option is consistent with U.S. nonproliferation and national security interests; U.S. policy is not to oppose Pu use in Japan and EURATOM.
-- If Russian Pu remains in Russia, U.S. influence over the long-term choice among burial, burning and storage will likely be quite limited.
ISSUE ONE!
LOCATION OF STORAGE Option 1.
Move the clutonium to the U.S.
for storage This would have to be accomplished by DOE and DoD as military Pu.
While any effort to move Pu to the U.S. would face significant public acceptance problems, the problems are even greater with civilian Pu, due to NRC licensing and NEpA requirements.
Public acceptance problems could be mitigated somewhat by the fact that this effort would help curb the Russian nuclear threat.
The cost of this option over the next ten years could be
~
about 1.6 billion dollars (note:
all cost estimates in this paper are very rough).
It is assumed that the U.S. government would bear the entire cost although some international cost sharing might-be achieved.
Funding would be from the defense budget.
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(this includes only fuel and operating costs; the opportunity cost of diverting ships and personnel from other missions is higher);
$160 million for transport and storage containers and vehicles;
$30-60 million for a modified storage facility; and an annual cost of $30-50 million for storage.
If plutonium remains in storage for more than five years, the annual storage costs will continue.
If it is removed from storage for geologic disposal or for use in reactors, there will be additional costs.
Pros:
Eliminates risk that pu could be used in Russian weapons (once it is removed from Russia).
Minimizes risk of use in third party weapons or by subnational groups.
DOE has facilities that could be modified to store about 50 Mt of additional Pu.
l l
Cons:
Some do not regard this option as realistic due to expected Russian opposition and budget impact for the l
U.S. share of costs for transport, handling, storage, and likely need to provide Russia with financial l
t incentive to' release Pu to U.S.
i public and Congressional acceptance problems.
Diversion risk associated with transport of pu.
Ootion 2.
Move the clutonium to a " safe" third country, prgbably France.
I Proponents of this option believe that the only scenario under which it might be in the U.S.
interest t> support moving l
third country would be if that country intended Russian Pu to a to burn the Russian Pu in its civilian power reactors.
(Others note that the near-term option of moving Pu to a third country is also compatible with longer-term options of burial or storage.)
France appears to be the only country with a major program for civil plutonium use who might be willing to accept Russicn Pu and whom the U.S. would daem an acceptable but the recipient.
(Japan is another potential candidate, l
Japanese have indicated that it would probably not bo politically feasible for them to accept plutonium from Russian l
weapons, although they have indicated an interest in supporting, perhaps financially, an appropriate solution, j
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Also, Japan has sufficient Pu to meet its domestic needs.
Finally, some in the U.S.G. would oppose transfer to Japan on nonproliferation grounds, since Japan is not a nuclear weapon state.)
It is estimated that if France built a new Pu fuel fabrication facility and committed 13 additional reactors to burning Pu from dismantled Russian weapons, France could burn up 50 tons of Russian Pu over 10 years at a cost penalty estimated to be $700 million.
(The cost penalty is the cost of using plutonium fuel versus uranium fuel.)
In addition to the $700 million cost penalty, the following costs are assumed to be the same as option one:
providing a financial incentive to Russia (one billion dollars); procuring containers and vehicles for transport and storage of Pu ($160 million); and arranging for international transport ($10 million).
It is assumed that France would share some of the costs with the U.S.,
thus lowering the U.S. budget impact relative to option one.
Other contributions.to the cost might be found (e.g., Japan, UK, etc.).
U.S. funding would be from the defense budget.
- Pros, i
Eliminates risk that Pu could be re-used in Russian weapons (once it is removed from Russia).
Minimizes risk of subnational theft or sabotage or diversion to a. third country.
This is quickest way to achieve burn-up of Russian Pu.
Some believe that burn-up provides best long-term protection against diversion to weapons.
cons:
Highest total cost over ten years.
l Potentially large U.S. budget impact since U.S. would
'3 probably need to subsidize a portion of the cost for this option to make it acceptable to France and Russia..
May not be politically feasible.
Some Russian-officials have indicated Russia.does not want.to export Pu, Unclear whether France would accept i
Russian Pu.
Some belie've that a U.S. subsidy for civil plutonium use in France would undermine U.S. nonproliferation 3
objective of discouraging civil plutonium use elsewhere.
Risk of diversion :ssociated with international transport.,
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Oction 3.
Storace in Russia The costs associated with this option are: $50-150 million to construct a long-term storage facility (the lower figure is a U.S. estimate for Pu storage only; the higher figure is a Russian estimate for both Pu and HEU storage); and costs associated with international monitoring (which are discussed below).
It is assumed that the U.S. would pay for the storage facility using Nunn-Lugar funds.
U.S. could be asked to pay some or all of the costs of operating a storage facility in Russia.
It is assumed that these costs would be roughly comparable to the cost of operating a storage facility in the U.S.
($30-50 million per year).
Pros:
Some believe this is the only politically viable option in the near-term.
Avoids financial costs and diversion risks associated with international Pu transport.
Lower U.S. budget impact than other options.
+
C2ni:
Even assuming stringent international controls, Russia could later decide to abrogate controls and re-use Pu in weapons.,
If continued economic and political decay undermines the loyalty of those responsible for physical protection of the plutonium, there is a risk of pu diversion for use in third party weapons.
Ootion 4.
Storace in Russia - No U.S.
Suonort This option is essentially "do nothing" so far as the U.S.-
is concerned.
Russia would store and dispose of its Pu as it.
saw fit and could afford to do.
Eras:
No dict cost to the U.S.
t Cons:
Nould not entail any international controls.
Would no, preclude re-use in Russian or other warheads.
proliferation risks could prove costly in the long.run.
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_ ISSUE TWO; WHAT TYPES OF CONTROLS?_
Under the Alma Ata agreement, Russia agreed to verification of the dismantling of nuclear warheads and pledged not to reuse However, Russia has the nuclear material for nuclear weapons.
made no commitment to the subsequent verification of nuclear material.
Storage of Pu in Russia without any form of international control would be undesirable.
The U.S.,
the CIS, and other states as well as some in Russia itself, will place a.high value on verifying that the plutonium removed from dismantled recycled or diverted into weapons. ' Finally it weapons is not should be stressed that international controls could apply regardless of whether pu remains in storage, is used in reactors, or is buried as waste.
In discussing options for international controls, it is assumed that the U.S..would prefer controls to apply only to Russian pu, not to U.S. Pu.
A major consideration in evaluating the various options is whether and to what extent the U.S. might come under similar pressure to take comparable In considering steps and whether we would be willing to do so.
this issue, it should be borne in mind that even if the U.S.
did agree to reciprocal controls on U.S. excess material it is uncertain what those controls might be.
Russian Pu under Russian voluntary Option A:
Place excess safeonards aareement with the IAEA As a nuclear weapon state (NWS) party to the NPT, Russia is not obliged to place its nuclear materials under safeguards, i
but like other NWS, has made a so called " voluntary offer" with Under the terms of the offer, Russia provides a the Agency.
list of facilities eligible-for safeguards.
However, Russia may at any time remove facilites or materials from the eligible list and reintroduce them into the military sphere, including If Russia included a Pu storage facility on for weapons use.
its eligible list, it is assumed that the.IAEA would choose to safeguard that facility, although the IAEA would be under no obligation to do so.
Routine practice for safeguarding of Pu storage facilities involves monthly or bi-monthly inspector visits.
However, a permanent inspector presence would-not be inconsistent with this option.
Under this option, it is assumed that all excess-Russian.Pu would be placed in a single storage facility that would be declared eligible for safeguards.
The annual cost of safeguarding that storage facility would depend upon whether inspector presence is intermittent or continuous.
Regardless, the annual cost would be no more than 2-3 million dollars.
Initial start-up costs would probably be less than one million dollars.
If this option were funded from the regular IAEA t
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. the U.S. would pay twenty-five percent of the total a
- budget, costs.
'If funded outside the regular budget, the U.S. might l
bear the full cost.
l Pros:
l Requires least change and would be most easily palatable to Russians.
~
Would be least onerous of verification options for U.S. to accept, if we are pressed to do the same, i
since we already have a voluntary safeguards-offer and have the option of withdrawing the material when naeded for national security reasons.
Provides political barrier to Russia's re-use of plutonium in weapons.
Cons:
No legal obligation not to re-use material in weapons.-
the If inspector presence on site is not continuous, risks of " insider" diversion scenarios are magnified.
Ontion B; New acreement under which Russia would make a commitment aaninst military or nuclear erolosive use and moree to continuous inspector oresence Under this optio'n, inspections could be carried out by the some other body, or.a combination.
As with.
IAEA, the U.S.,
it is assumed that all excess Russian Pu would be option one, placed in a single storage facility.
However, Pu removed from that storage facility for peaceful use would remain subject:to safeguards.
.As-long as Pu remains in storage, the overall costs of this
.l option are. essentially the same as maintaining a continuous presence under option one. 'However, if this were done under a-bilateral arrangement the U.S. may have to assume the full cost Moreover, if Pu is removed from storage for 4
of verification.
peaceful use there would be additional costs associated with safeguarding that material.
These additional costs would
-l likely be less than one million dollars per year.
l Pros.:
l Russia could not legally reuse-the Pu in weapons.
Continuous inspector presence at storage facility provides added protection against-insider diversion scenarios.
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I Cane:
If applied reciprocally to U.S.,
this option would be more difficult for the U.S. to accept than would option A.
If the verification system were bilateral, rather than IAEA, the pressure for reciprocal U.S.
steps could be greater.
Dotion C.
Place Excess Russian Pu under international custody Under Article XII A.5 of the IAEA statute, the Agency has the right to require the deposit with the Agency of any excess of special fissionable materials over what is needed for specified peaceful purposes ~in order to prevent stockpiling of those materials.
Deposited materials must be returned promptly t
Under this 1
to the parties concerned for peaceful purposes.
but it scheme, Russia would continue to own its excess Pu, would be placed under IAEA custody and returned to Russia only The when released by the IAEA for a specific peaceful purpose.
Pu would be safeguarded while under IAEA custody.
An alternative would be to provide for custody by-some international body other than the IAEA.
The financial costs of this option are essentially the same-q as option B.
pros:
Would add further political barriers to military use.
Would' enhance confidence building measures and-would give international community-greater oversight over Russian Pu.
i Cons:
l Would encounter Russian opposition.-
l U.S. may be pressed to give reciprocal rig' hts to Russia.
J Ootion D.
U.S.
consent richts This option would include the same verification' arrangements as-option B,'but would additionally require Russia to obtain U.S. consent for:L1);any export of' plutonium-Erom a safeguarded storage facility; and'2) safeguards and security arrangements for any-proposed domestic use of plutonium to be removed from a safeguarded storage facility.-
The financial
-costs are as discussed above.
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Pros:
provides added assurance that safeguarded plutonium i
will not subsequently be used in a manner inconsistent with U.S. nonproliferation and national security interests.
Cons:
Would encounter Russian opposition.
U.S. may be pressed to give reciprocal rights to Russia.
E LONG-TERM OPTIONS Decisions about U.S.
preferences for the long-term need not be made at this time.
However, the following is a brief-description of the various possibilities.
If the Russian Pu were removed to the U.S., the ultimate disposition of this Pu would presumably depend upon' decisions about the disposition of U.S. Pu.
Options would include long-term storage, geologic disposal, and burning Fu in reactors.
It is unclear which of these options is the most economical in the long-term.
If the Pu is moved to a third country these same options are all theoretically possible.
If the Pu remains i'n Russia, in the long-term the Russians may decide to:
a) keep it in storage for the indefinite future.
This option is the same as the near-term storage option.
b) use it in some or all existing Russian reactors.
This would be undesirable on economic grounds (Pu is far more costly as a fuel than uranium).
Also the greater the number of reactors involved,_the greater the security risk, since widespread-use of Pu increases the risk of theft and sabotage.
It would also require safety modifications of existing reactors to be used.
c) use in new dedicated reactors designed to optimize the consumption of Pu.
This has the advantage of eliminating large quantitiiss of Pu'but would entail substantial costs ($3-5 billion) for 3 such reactors.-
Assuming a-small _ number of reactors. at one site, this option poses fewer security risks than widespread use in existing reactors.
d) dispose of the Pu as waste.
This would minimize security risks.but would likely encounter public I
acceptance problems and would preclude possible future I
peaceful use.
The cost and time to develop an acceptable repository for disposal are expected to be large.
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Estimated Cost for pu Disposition, 1993-2002 TABLE OF COSTS, 1993-2002 (in millions of dollars)
Annual Cost, Total 1993 1994 - 2002 10-year cost
- E Total US Total M
Total Option 1 170 170 155 155 1575 1575 Option 2 50 215 45 205 465 2070 Option 3 50 50 20 40 230 410 Option 4 0
25 0
20 0
205
- Note:
Option 2 entails no cost beyond 10 years; for Options 1,
3, and 4 annual storage costs continue indefinitely.
In obtaining the above figures:
c
- 1. Purchase price for pu, $1 billion, is spread evenly over ten years (Options 1 and 2).
for containers and handling vehicles, $160 million, is 2.
Cost divided into $25 million the first year, $15 million each remaining year (Options 1 and 2).
- 3. Cost for transport, $10 million, is spread evonly over ten years (includes only fuel and operating costs, does not count i
opportunity cost of assigning ships and sailors to new mission; the same. transport cost is used in Options 1 and 2).
- 4. Apportioning costs in Option 2.
Receiving country pays the full cost to expand and operate the storage facility.-
U.S.
pays 25 percent of other costs.
Other countries share the remaining 75 percent.
Included in Option 2 cost is the estimated $700 :ost penalty associated with pu fuel.
I
- 5. Under all options, full cost to upgrade;or to build a.new l
storage facility falls in the first year.. Upgrading is assumed to cost $45 million.in Option 1; $20 million in Option 2 (which i
entails a smaller storage facility);.$50 million in Option 3 (paid by U.S.); and $25 million in Option 4 (paid by Russia).
i
3-.
- 6. Annual operating cost for storage facility is assumed to be
$40 million in Options 1 and 3 and $20 million in options 2 and Operating costs begin the second year and remain constant.
4.
The U.S. pays full operating cost in Option 1, half the cost in Option 3, and none of the cost in Options 2 and 4.
Figures are rounded to nearest $5 million, so slight 7.
mismatch occurs in some totals.
- 8. U.S.. funding for Options 1, 2, or 3.
It is assumed that funds for the first year could be money made available under the Nunn-Lugar bill.
In subsequent years, funds could come out of the defense budget under a. arrangement similar to that in the Nunn-Lugar legislation, k
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