Note from Kevin:
Holgate's presentation was part of a much longer, day-long program including discussion of such subjects as DOE's Nuclear Cities Initiative, and several other subjects re: Pu disposition in Russia.

All comments below were Holgate's, save for those within (parentheses), which are my notes or explanations. I typed this transcript from my own audio tape recording.

---Kevin Kamps, NIRS, ph. (202)

Laura Holgate:

We have provided you with some prose backup material on the plutonium disposition activity. I just wanted to share just one graphic with the group here. It gives you a sense both of what we're doing and where we're doing it. By way of introduction, as you've heard so far and will continue to hear, there's been discussion about the people and the facilities that are involved in manufacturing nuclear weapons. You've heard discussion or will shortly hear discussion about protecting the material that exists in Russia. What the plutonium disposition mission has been focusing on is transforming that plutonium that comes out of weapons dismantlement activities or that was manufactured with the design of being used in weapons, transforming it in a way that makes it less attractive and less usable for nuclear weapons. I don't want to make the gross assertion that it's definitively unusable for nuclear weapons. We know that plutonium lasts for a long time and you can do a lot of things with it in various forms of purity. But we've taken as our standard what we call the spent fuel standard, which means that our goal is to transform the pure metallic plutonium that comes out of the weapons program in Russia into a form that is as unattractive and unavailable as the plutonium that is in spent fuel pools throughout the US and the world, in fact the reactor- grade plutonium encased in radioactive spent fuel. In this regard we've been working with the Russians on a diplomatic front since probably the early parts of this Administration. But on a technical front we really began cooperating with the Russians in 1997 with some small technical projects run out of my office to help the Russians make some of the technological choices that face them in exactly how they are going to undertake that transformation of plutonium.

(Inaudible question from Advisory Board re: whether Russians are not already locked into a particular course)

They are, but they have choices just like we had choices that we needed to make about specific technologies. They have to make those choices too based on the technology. For example, transforming the plutonium from a metal form to an oxide powder form. Everyone knows you have to do that on the way to doing almost anything else you do with this as far as the disposition technology itself. But do you use aqueous solution or do you use a dry solution? Do you use a continuous aqueous approach or do you use a batch approach? These are technical decisions that need to be investigated that we've made in the US program 2 to 3 years ago. The Russians have yet to make those decisions. What we are trying to do is provide the funding and the cooperation with US laboratory scientists to help them understand those technological questions and to begin to formulate answers.

(Inaudible question from Advisory Board re: if there is a preferred method of disposition)

On questions like that we really don't. There's not a strong proliferation issue between the various technologies. We don't know enough about the costs at this point to know if there are strong cost differences. There are some preferences, for example the French and the Germans are also involved in similar cooperation. Obviously they'd like to drive the Russians toward the proprietary French technology that then they could license and get royalties from. Since we don't have a commercial dog in the plutonium disposition fight on the US side we are a lot more neutral when it comes to these decisions, and many of them we believe are the Russian sovereign decision to make about their program.

Now as for the overall technologies, the questions, you are absolutely right everyone pretty much knows the choices are either immobilize the material in some sort of a form mixed with high level waste or irradiate the material as mixed oxide fuel for nuclear reactors. Those are clearly the two, the ultimate two paths but how you get from the form of plutonium today in both countries to ultimately those outputs, there's a lot of technical paths you could follow and they need to make choices

(Question from Board re: do the Russians welcome our advice?)

They welcome our cooperation. I'm not sure they welcome our advice in the sense of driving them toward a particular choice but we also haven't offered it in a very strong degree. One of the key things that we are doing as part of our cooperation -- I'll come in a minute to discussing some of the working groups we are starting -- to get a better handle on what the cost of industrial scale facilities would be. And since the West, and right now we are the ones who are primarily at the table, is going to be picking up the lion's share of the bill on that, as technologies begin to have cost implications, there we will have a dog in that fight. We'll have very strong preferences and will be pursuing those preferences in our negotiations with the Russians over exactly how we support their technologies.

This initiation of technical cooperation that began in '97 was codified in 1998 with a science and technology agreement that essentially set out the basis for these, provided us the tax protection, the intellectual property rights protection, all the basic kinds of clauses that go along with US-Russian cooperation. That '98 agreement also set up something called a joint steering committee that's chaired on the US side by Undersecretary Moniz and on the Russian side by Valentin Ivanov and includes working group chairs, joint chairs from the US and Russian sides in seven different working groups.

Five of those working groups are technology working groups They focus on conversion from metal to oxide on three different reactor types: the fast reactors; thermal reactors; and high temperature gas reactors. And there's a fifth technology working group on immobilization. Then there's two additional working groups, one focusing on regulatory issues that's co-chaired by GON [GAN?], the Russian counterpart to NRC. Then there's a seventh working group as I've mentioned on costs, trying to really understand what the assumptions are that underlie the various statements that get made.

Right now nobody has a very good estimate of what the ultimate cost of plutonium disposition would be in Russia, even how you might cost a particular scenario. Everyone has their back pocket guesses. But you can't really unpack them and compare them at this point. We all know it's probably going to be between a billion and two billion dollars ultimately in Russia. By comparison on the US program it'll cost us 4 billion dollars to dispose of our plutonium. 1 or 2 billion sounds like a lot of money -- it's not necessarily a bad deal compared to what it'll cost us here to do the parallel effort.

Well, the initial effort, I hadn't planned to go into a lot of detail about the bilateral agreement that we are in the process of negotiating but I can certainly do that if that's of interest to this group. The technology cooperation we have underway now is not sensitive to whether 34 tons or 50 tons or 100 tons. It's basically putting together a clear pathway for plutonium disposition.

We have underway as a third piece of this sort of diplomatic structure for plutonium disposition that began with our science and technology agreement. Then we had a Presidential Summit Statement in September of '98 that kicked off the negotiation of a bilateral agreement. That bilateral agreement talks about 34 tons on both sides of weapons-grade material, which is carefully explained as a first step. This is what we can do now. It's not enough. But it's all the weapons-grade material the US has declared excess. Future dismantlement, future changes in Russian understanding, whether you're talking about START III, START IV, other kinds of arms control that may be coming about in the future, the agreement clearly allows for additional amounts of plutonium to be brought under the agreement and to be disposed of in the facilities and with the same kind of transparency and monitoring kinds of provisions that are on that. And so we are trying to take a step by step approach on the quantity.

The chart that you have in front of you gives you a sense of the diversity of the Russian institutes where we're working and some of the types of projects that we have underway.

Again clustered into the five technology areas that I just described as our working groups we stay in good touch with our colleagues in the other programs that you've been hearing about to make sure that we are not working at cross purposes and know what each other is doing.

But I'll point out that our main goal here is to help the Russians make decisions, not to employ scientists. The fact that we are employing scientists is a benefit, but it's not our main purpose in the cooperation. One of the exciting things that came out of our work and one of the major progresses in our scientific knowledge and cooperation has been the creation of a Russian road map that characterizes how they get from here to the actual design and construction and operation of facilities. The Russians have made it clear that they intend out of the 34 tons that is currently under negotiation they will be irradiating about 33 tons of that as MOX and they've identified a ton of material that they'd like to immobilize.

So what we're looking at essentially is creating a mixed oxide fuel manufacturing infrastructure in Russia that has probably two major facilities when it comes to industrial scale: a conversion facility that takes metal and transforms it to oxide powder; and then a MOX fuel fabrication facility that takes plutonium powder and mixes it with uranium powder, creates the fuel pellets, puts the fuel pellets into fuel assemblies, and then ultimately those assemblies would be irradiated in existing Russian reactors.

There are 8 reactors currently at least technically potentially available: 7 thermal reactors, VVER 1000's, the most modern of the Russian reactors, not a problem from the types of challenges that Chernobyl or some of the other RBMK reactors had; the eighth reactor is an existing fast reactor. It's currently being operated in a breeder form, but one of our projects is to transform it from a breeder to a burner, removing the blankets, storing them, committing the Russians to not reprocess, and so the high quality plutonium in those blankets stays in blanket form as opposed to separated form.

(Inaudible question from Board)

The VVER 1000. It's a pressurized water reactor as I recall. Now one of the technical questions that we are investigating in the context of our science and technology work is which of those 7 reactors are actually worth upgrading. Some of them are fairly old. There's 4 very modern ones that are obvious candidates, but some of the other 3, as they get older and as they become one offs at particular sites, become potentially less attractive from a cost perspective.

The current expectation is that if you use European MOX experience, it's fairly straight forward to load those VVER 1000 reactors at about one-third core without disrupting the reactor operations, particularly requiring significant amounts of changes in the core itself. If you do that, it gets you to about one and three-quarters tons of plutonium annually

We are certain that the breeder reactors, the fast reactors, can also handle about a third of a ton a year. That puts, conservatively, the Russian reactor capacity at around 2 metric tons per year. We're looking at a variety of ways, again a part of our reactor technology work under this area, is to identify ways to expand that reactor capacity. The US program by contrast will have the reactor capacity to destroy 4 metric tons of plutonium per year. We'd certainly like to get the Russians up to a rate of plutonium destruction that is similar to ours. There's not a lot of ways to do that. They are politically challenging, they're expensive, and they're not technically straight forward, but we're looking at them in this context.

One way is to go beyond a one-third core in these reactors. The breeder, the fast reactor, is probably the best candidate for that, and if you can go to a full core in that reactor then you're probably looking at 1.3 tons of disposition a year. So it's a very efficient way to get another ton of disposition going. You might also be able to go beyond the one-third core in the thermal reactors, which again could be a fairly efficient way of handling that. You can think about reactor capacity elsewhere in the world. Ukraine: they have exactly the same kind of reactors as we're looking at in Russia, so the questions we answer in Russia should be fairly straightforward to implement in Ukraine. The Swiss have said they're potentially interested.

Other reactors: there's tens of reactors in Europe that are already licensed for mixed oxide fuel and currently have experience in burning them. Japan is another approach. And Canada has also indicated its potential interest in irradiating Russian mixed oxide fuel, and we have a test going on in Canada to identify the suitability of CANDU reactors for that type of activity.

The Russians would add to that list the construction of a new fast reactor, the BN-800, that's not something the US will pay for, but may be something that other countries may be interested in paying for, or if Russia pays for it itself that reactor would certainly be an efficient candidate for expanding the Russian disposition rate. So these are some of the big technical questions but they also have cost and political components as well. I will take any questions you have at this point on details.

(Inaudible question from Board re: How about the budget?)

I'm sorry, I should have done that right off the bat. We've been working at about thirty million dollars a year in support of the science and technology work. As we move from pure R and D to demonstration facilities, design, construction, obviously you'll see that start to ramp up. And you'll see us starting to work with different entities in Russia. The chart I passed out is mainly Russian institutes, the counterparts to our national labs. Just like in the US domestic program, the laboratory role is going down and the industrial role is going up. We'll need to make that same transition on the Russian side.

(Inaudible question from Board re: DOE site visits to Russian facilities)

My people do. I will say that access has been a challenge, just as it has for some of the other programs of getting the right people not just in the gates of the facilities, but in the doors of a particular building that we're interested in upgrading. The Russians have not always been as forthcoming as we would like.

(Inaudible question)

That's correct.

(Inaudible question about size of DOE MD staff)

As far as federal staff goes. I have about 6 or 7 people on my own staff and I don't know off the top of my head but I could give you a number of the laboratory back up to that. We've expanded recently in this area. Now again because we're looking at R and D projects, the auditing here is fairly straightforward. Because just as you've heard elsewhere, we pay for deliverables. The deliverables tend to be in the form of paper reports. So those are transmitted electronically or worked in person and we don't pay for it till we're happy with the quality and the level of effort that's gone into it. So once we get something that we're happy with, we've already agreed with the Russians what it's worth. So at that point the Russians are paid.

I guess in the Fall of '98, right after the Presidential Summit Statement, Senator Domenici identified a $200 Million pot of money for the Russian plutonium disposition. The Administration did not request it, mainly because we knew we didn't need it that year, but essentially it's been earnest money. But having that on the table, adding to it an additional $200 Million out of the expanded threat reduction initiative from '01 to '04, has really made a difference in the bilateral negotiations with Russia.

We started that seriously about this time last year. We are literally one issue away from resolution of that. I expect to sign it this spring. I think a bigger challenge will be finding time on either Putin and Gore or Putin and Clinton or whoever the new prime minister is. I mean it needs to be signed at that level. Getting those guys together I think is going to be our biggest challenge once we nail down this final issue. But once we sign that agreement then we can start using some of Senator Domenici's $200 million earnest money to start doing some of the hardware effort associated with this. So we're in kind of an odd situation financially. On one hand, the Russians need to have a clear commitment from the West -- and I don't just mean the United States, I mean the G-8 -- that ultimately we're going to find a way to support this 1 to 2 billion dollar effort in Russia. We are knocking on doors. It's going to be on the G-8 Summit agenda for Okinawa. There is going to be a big effort on the part of the US government to get European and Japanese support to try to increase significantly the very small levels of support that we have now for this program.

But the thing that's challenging about it is that we don't need the money now. We need it 3, 4, 10 years from now, and we need these governments to be prepared to make commitments that they're going to support the Russian effort over that kind of a time frame. Those of you with Congressional life experience understand how difficult that is to try to say at any given time that a certain amount of money will be available a decade or more into the future. So that's one of the real challenges we face with this because the Russians have made it clear they are not going forward in a serious way until we have some serious commitments on financial support from the West.

(Question from Advisory Board: What about plutonium stockpiling in China? Have you been able to follow that situation? (not exact question, a paraphrase from memory, not audible on audio tape))

Sir I can't say that I have at all, other than I would assert it's a bad thing. If there were any openings to bring them into a disposition program that might be interesting to do. But I would say that between the Russian program and the US program I feel like I have my hands full right now.

(Question from Advisory Board: What about environmental concerns regarding plutonium disposition in terms of the building of more nuclear plants? (not exact question, a paraphrase from memory, not audible on audio tape))

The Russians that we speak to in the Ministry of Atomic Energy are the ones that we're dealing with, so we don't have a lot of pressure from other voices within Russia. Clearly the Ministry of Atomic Energy officials see nuclear as part of Russia's long term energy future They believe these reactors will be operated for a significant time into the future, whether with MOX fuel or without. They would love to have a new BN-800 built, not because of the environmental concerns that may exist with old reactors, but because of the energy capacity and the technological leap forward that they believe that would represent.

We believe that because of the interaction or in the involvement of the Russian regulatory entity that we will be able to upgrade the reactors -- at least the 4 most modern VVER reactors -- effectively. Understanding what upgrades might be required to obtain regulatory approval for some of the older reactors may start to be some of the cost trade-offs that you make in the program. Given infinite resources, infinity is possible. We won't have infinite resources here, we may have to make some tough choices about trade-offs of disposition rates versus costs.

(Question from Advisory Board: Can you address the US plutonium disposition program? (not exact question, a paraphrase from memory, not audible on audio tape))

You bet. I have a few charts that characterize the disposition pathways for the US program. I didn't bring enough copies for the whole team here, but I can make these available. But just briefly, our material is a little bit different of character from the Russian material in the sense that we have primarily, they have almost exclusively weapons-grade material. Our 52 tons that this characterizes that we have identified as excess is a mix of weapons-grade and non-weapons-grade.

Furthermore, it's a mix of forms that the Russians derisively call "ash and trash" from time to time (chuckle), certainly not pure, plus very pure material that comes straight out of the pits. So we've developed a disposition approach that is tied to the type of material that we have. For the material that is pure and clean metal and tips, that material is all going to the mixed oxide fuel fabrication and irradiation approach. For the less pure material, it is going to be immobilized, mixed with ceramic initially to create pucks, and then to have those pucks stacked inside of the waste canisters that are produced for vitrified high level waste at the Defense Waste Processing Facility at Savannah River. I'm assuming many of you are familiar with that. They're about this tall and about this big around, really heavy, essentially you have the same effect as the mixed oxide fuel, as being big, heavy and radioactive. Very difficult to separate the plutonium, even though the plutonium is not isotopically changed as it is in the reactor at that point.

So we're pursuing what we call the hybrid strategy. I'm very proud on the domestic side. We've concluded our Record of Decision, which draws our NEPA process to a close on that. It was a 6 or 7 year process. We had over 100 public meetings. Multiple kinds of activities on that. So that really is a milestone.

(INAUDIBLE QUESTION)

That's right. Majority MOX fuel, that's correct. Mainly because most of their material Vitrification is not cheap, let me say. On the US program it'll be very expensive. It has less to do with cost effectiveness than with Russian preferences. I have a former boss who used to call it the Russian "flea market mentality" - "if it costs something, it must be worth something". And the US and Russians have very different mentalities when it comes to plutonium. As far as we're concerned, particularly the stuff that's in bizarre forms, but even the pits material -- it's worse than trash. It costs a lot to guard. It's dangerous to work with. It's very expensive to put away in a form that makes it proliferation resistant. If we could snap our fingers and have it disappear safely from the face of the Earth, we would.

The Russians see it distinctly differently. For them, it's better than gold. If we weren't here talking to them about plutonium disposition, they'd be storing this stuff in metal form, the most proliferation-possible form, for decades, waiting for those fancy new breeder reactors that Adamov is so fond of, which they would then use to make yet more plutonium. And then they want to export those breeder reactors to other countries in the world where it would make yet more plutonium, in areas that we have proliferation concern. The question is kind of "Compared to what?" MOX is not cheap; immobilization is not cheap. Compared to what the alternatives might be, they are both reasonably cost effective ways to achieve the non-proliferation goal.

(Inaudible question from the Board re: funding a new Russian reactor project? "Have you talked, has anyone talked, to the World Bank?")

We have not. We are looking at one design in particular -- the high temperature gas reactor that General Atomics has pioneered. That has a lot of appeal from a non-proliferation perspective. We are right now just barely funding it, at about five million a year. We are asking for other Europeans to contribute. But I take your point very much to heart, because this year we really need to get some serious resources on that project if it's going to go anywhere.

(Inaudible question, again re: World Bank)

Certainly. I will take that advice very much to heart. If you have anyone in particular you think would be a good target for that at the World Bank I would love

(Inaudible comment, someone's name at the World Bank - a high level executive?)

(Laugh) I'm not sure that he would see me, sir.

We are in the midst of a fund-raising effort for the gas reactor, so that's very timely

(Inaudible question)

Yes. The gas reactor. Creating a gas reactor would be completely out of the 1 to 2 billion dollar effort. A gas reactor, that could be another billion or so to build, if not more.

(Comment from Board: "A billion here, a billion there. Pretty soon it adds up to real money.")

That's what they tell me, sir.

(Inaudible question from Board, along the lines: I suppose that the Russian preference for their disposition doesn't have anything to do with the fact that plutonium metal is worth more to them than gold)

There is not a market for plutonium metal, and we have tried very hard in the government to make sure that that is not the case. There are no legitimate purchasers out there for plutonium metal.

(Inaudible question re: What about illegitimate purchasers?)

[Laughter] Well that's part of the point obviously on our side is to take it to a formCertainly the official Russians that we talk to are not going to tell us anything other than that they see that as

(Inaudible question re: What about your point, that the Russians see it as more valuable than gold?)

Like Rumplestiltskin --- make more and more and more of it.

(Inaudible question from Board)

What we're looking at is design and construction of facilities to begin operation in the 2007-2008 time frame. And then the disposition rate of the US material will depend on the disposition capacity for the Russian material. Right now, we expect that if you focus exclusively on reactors within Russia, using conservative assumptions, you're looking at two tons a year. The Bilateral Agreement we're working on covers 34 tons, so you're looking at 17 years of operation. One of our missions that the Bilateral Agreement sets us on is, within a year after signing that Bilateral Agreement, we are to jointly with Russia develop a Multilateral Agreement that looks not only at funding, but also at expansion plans of how do you get close to 4 tons a year. If we do that smart and right and quick, then neither of us ever operate at the 2 ton a year reactor capacity. We move immediately to design and construct facilities and to create reactor capacity at 4 tons a year. And that's the US, that's our plan on the domestic side.

(Inaudible question from Board)

Because of the chart that you see right there which makes it clear that the 34 tons of weapons-grade is all the US has declared excess. If that's what you have excess, then that's what we have excess (say the Russians). This initial step, they (the Russians) have made crystal clear, is going to be reciprocal. Our goal and hope is that once you get the facilities built, once you get them operating, that it will become clear to the Russians that they can put more plutonium through those facilities, and that we get out of this sort of lock step

(Inaudible question from Board re: quantity of plutonium in Russia. Isn't it 3 to 5 times as much as in US?)

Well, we don't know exactly how much they have. There's some unclassified analysis that suggests that even if you have equal levels of warheads, that they still need more plutonium to maintain those warheads than we do just because of design issues. So we don't know exactly what parity is when it comes to quantities. We've said that we've created 100 tons of plutonium over the life time of the US program. You can see about half of it here has been declared excess. The unclassified estimates of Russian plutonium are about 150 tons. So, it's not 3 to 5 times more in terms of total production, but we certainly expect that they could do without more than 34 tons. But it was just clear that we weren't going to get that now, and we decided it was better to get started, at least get the first 34 tons underway, and then continue to work on them in the context perhaps of START III or some of these other areas where we have to deal with these asymmetries. As Rose (Goetmoeller) mentioned earlier, four Russian weapons production facilities to our one. We have tactical asymmetries. There's a lot of things that we need as a government to figure out with Russia, how do we get them to reduce more than we do, and this is in that same category.

(Inaudible question from Board)

Well, their production is going to be capped here very shortly. So their total amount produced is going to stay in that 150 amount. Somewhere in there, there's existing weapons, there's dismantled weapons, there's fresh plutonium. The balances among those will change over time, but pretty much they're going to have that same 150 tons of total plutonium.

(Inaudible question re: are there options to accelerate rate of Russian disposition?)

No technical options. More reactors, but not by a factor of 5 even. I'm sorry to have taken more time than I was allotted. I appreciate your attention. Obviously My staff and I are available to go into more detail

(end)

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