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Nuclear News - 08/24/00
RANSAC Nuclear News, 24 August 2000


A.  Plutonium Disposition

    1. US Nuke Regulator Issues Review Plan For MOX Fuel Plant,Reuters (08/23/00)
B. Cooperative threat Reduction (CTR)
    1. Pentagon's Soviet Investment Program Poorly Managed, AuditSays, Tony Capaccio, Defense Week (08/21/00)
C. Highly Enriched Uranium (HEU)
    1. USEC's Finances Still Under Federal Scrutiny, JonathanRiskind, Columbus Dispatch (08/20/00)
D. Russian Military
    1. Defense Spending To Jump By Some 50 Billion Rubles Next Year,RFE/RL (08/22/00)
    2. Russia's Insecurity Complex, Andrew Kuchins, WashingtonPost (08/21/00)
E. Nuclear Power
    1. News Briefing [Nuclear Power Station], Uranium Institute(08/22/00)
    2. Radioactive Uranium Goes On Sale On The Internet, ChrisReese, Reuters (08/21/00)
F. Nuclear Waste
    1. Norwegian Group in Talks to Raise Kursk's Nuclear Reactors,Agence France Presse (08/24/00)
    2. Kursk - The Top of an Iceberg, Nils Bøhmer, Bellona(08/22/00)



A. Plutonium Disposition

1.
US Nuke Regulator Issues Review Plan For MOX Fuel Plant
        Reuters
        August 23, 2000
        (for personal use only)

WASHINGTON - The U.S. Nuclear Regulatory Commission yesterday announceda final plan for how it would review an expected application for buildinga mixed oxide fuel fabrication facility to convert weapons-grade plutoniuminto fuel for commercial nuclear reactors.

The Department of Energy has already announced plans to construct aMOX fabrication facility at its Savannah River site in South Carolina througha contract with Duke Cogema Stone and Webster, known as DCS.

DOE's plan calls for DCS to build and operate the facility as part ofa government initiative to dispose of surplus weapons grade plutonium byconverting it into civilian use as a fuel for commercial reactors.

The nation's nuclear plants currently use uranium as fuel. MOX fuelwould create a combination of uranium and plutonium.

NRC said it was responsible for reviewing potential owners of plutoniumfacilities, like the MOX plant for South Carolina.

In order to obtain the proper permission, the prospective companieswill be reviewed for the following information:

* General information about the applicant and plant site;

* Applicant's financial qualifications to construct and operate thefacility;

* Provisions for protection from radiation exposure, chemical exposure,fires and other emergencies;

* Plans to protect against theft or loss of nuclear material;

* Administrative and management procedures.

NRC had published a draft plan in February and received and consideredover 300 comments before announcing its final plan.
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B. Cooperative Threat Reduction (CTR)

1.
Pentagon's Soviet Investment Program Poorly Managed, Audit Says
        Tony Capaccio
        Defense Week
        August 21, 2000
        (for personal use only)

A six-year-old Defense Department program to privatize former Sovietdefense companies is poorly managed, lacking even the most basic businessplan for setting goals and measuring progress, according to the PentagonInspector General.

The Defense Enterprise Fund (DEF) was set up in 1994 to invest $66.7million in the state-run defense companies of Russia, Belarus, Kazakhstanand the Ukraine. The portfolio of investments has lost half its value andthe Fund isnít clear what went wrong, said the Inspector General in anAug. 15 report. The report gives a snapshot of the difficulty in helpingthe former USSR-already a tottering economy-to dismantle its Cold War militarymachine and shift defense firms into a free market economy. The Pentagonenvisions the grant program as either making money and operating on itsown by 2004 or going out of business. At this point, the jury is out onwhat will happen.

"Itís unfortunate that the program wasnít more intensively managed,given the fact that the investment situation in the former Soviet Unionwas clearly high-risk throughout the 1990s," Assistant Inspector Generalfor Auditing Robert Lieberman told Bloomberg News.

Those risks increased dramatically in August 1998 when a liquidity crisiscaused by high interest rates meant to attract Western currency squeezedworking capital financing throughout the Russian economy.

The Fundís investments-in 12 companies and state enterprises, some ofwhich had made satellite tracking devices or were involved in nuclear weaponstesting-were managed by the Pentagon until February 1998 when a privateinvestment firm, Global Partners Ventures, was hired to manage the portfolio.This company was replaced in October 1999 by Siguler Guff & Co. ofNew York City, which is paid $2 million a year to manage day-to-day operationsand provide the Pentagon with ongoing status reports on investments.

The Enterprise Fund is a venture of the Pentagonís Defense Threat ReductionAgency, or DTRA, which is charged with working with Russia to reduce itsarsenal. The Fundís program office had overall responsibility for the investments.

"The program office needed to improve oversight and planning for theFund," said the audit. "The program office did not develop measurable performancegoals to evaluate the success of the investments," the audit said.

"The program office could not effectively monitor the status of individualinvestments or the overall status of the fund without properly evaluatingthe performance of the fund against measurable performance goals," it added.

Those investments have since dropped to a value of $31 million in largepart because of major problems with the Russian economy. They could golower, however, "if DEF management is not more aggressive," it said. ThePentagon, for example, failed to take aggressive action to determine whythe value of a $6 million grant to one Russian firm, RAMEC, has dwindledto $1 million.

RAMEC received the grant to assist in its transition from making militaryelectronics to personal computer products. A January 1998 Ernst & Youngreport concluded RAMECís "financial statements did not include all transactionsor balances as appropriate for accounts receivable, cost of sales, fixedassets, inventories, salaries and sales," said the IG. Nonetheless, "asof April 2000, the program office had not taken action regarding the situation,"it said.

The audit mostly blames DTRA for the lack of skilled management. TheDTRA didnít develop measurable performance goals to evaluate the successof fund investments or ensure the usefulness of semi-annual progress reviewsand visits to Siguler Guff and investment sites in the Former Soviet Union,the audit said. The agency acknowledged that it needed to improve its managementof the enterprise fund, said Deputy Director Air Force Maj. Gen. RobertBongiovi in written comments contained in the report.

"Even though performance goals were established, DTRA will work withindustry to establish additional measurable goals" by December, Bongioviwrote. Still, the audit judged the DEF and Siguler Guff against an unrealisticset of expectations, said Robert Odle, a Washington D.C. attorney representingboth parties.

"This isnít a government program, itís an investment fund operatingin the post-August 1998 Russian economy," Odle said. "You donít measureit like you do a government program."

Siguler Guff has agreed to stay on as fund manager for at least fiveyears, even if the overall program runs out of money because it believesthere is potential for the investment portfolio to rebound in value, Odlesaid.

"There are a lot of people who have pulled out and left (Russia) sinceSeptember 1998," said Odle. "The Defense Enterprise Fund is still there.It still has potential."

Capaccio is Pentagon correspondent for Bloomberg News, where this storyfirst appeared.
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C. Highly Enriched Uranium (HEU)

1.
USEC's Finances Still Under Federal Scrutiny
        Jonathan Riskind
        Columbus Dispatch
        August 20, 2000
        (for personal use only)

WASHINGTON -- The Nuclear Regulatory Commission is continuing a probeinto USEC's financial condition, commission spokeswoman Mindy Landau saidlast week.

Critics say the privatized federal corporation's sagging finances inrecent months and its decision to shut down the Portsmouth Gaseous DiffusionPlant next year threaten a requirement that USEC be a "reliable and economicaldomestic source of enrichment services.''

USEC foes say that if the regulatory commission determines USEC no longeris such a source, it might pull USEC's certification. They have sent lettersin recent days to Richard Meserve, regulatory commission chairman, assertingthat such a move could be needed.

The commission report was to be released by early summer, but commissionstaff members still are "working feverishly on it. We are hopeful it willbe ready soon,'' Landau said.

She said she didn't expect the report to recommend what actions shouldbe taken. "If there are recommendations or conclusions . . . they willhave to be made by Congress,'' Landau said.

The plant in Piketon, Ohio, and a sister facility in Kentucky producecommercial-grade enriched uranium used to fuel nuclear-power plants. USEC,known as the United States Enrichment Corp. until it was privatized in1998, is the country's sole domestic source of enriched uranium.

The planned Piketon closure, along with a decision to drop developmentof new technology called AVLIS, "raises concerns about whether USEC willbe a reliable economic source of domestic enrichment services in the foreseeablefuture,'' say Rep. Ted Strickland and Michigan
Rep. John Dingell, the House Commerce Committee's top Democrat.

"A single gaseous-diffusion plant and no credible plan for succeedingtechnology is not what Congress intended for the privatized corporationwhen it passed these laws,'' Strickland, D-Lucasville, and Dingell wrotein a letter last week to commission Chairman Meserve.

However, Elizabeth Stuckle, USEC's spokeswoman, said: "Of course we'rea reliable source. The cost-cutting efforts we've made lately, the layoffsand the pending closure of the plant, all are efforts to make us more efficientand remain successful as a business.''

USEC is pursuing several technologies for producing enriched uranium,she added.

"To assure a long-term domestic source of uranium enrichment USEC mustsucceed as a business and therefore must make at times tough business decisions,''Stuckle said. "We encourage political leaders and the community to joinwith us in pushing Congress to rapidly appropriate cleanup funding to providejobs for the Portsmouth workers.''

Last week, Rep. Tom Bliley, chairman of the House Commerce Committee,also wrote a letter to Meserve, stating that he was concerned that thecommission staff had finished a draft report but had it rejected by commissioners.

Bliley wrote that commission staff members have said that William H.Timbers, USEC chief executive officer, raised objections to the draft report'sfindings. Bliley has demanded that the regulatory commission hand overby the end of this week "all records relating to NRC's financial reviewof USEC, or any certification or licensing issue related to USEC sinceJan. 1, 2000.''

But USEC's Stuckle said Timbers did not voice objections about a regulatorycommission draft report. Indeed, she said, to the best of her knowledge,Timbers did not see such a report. "I don't know where that came from,''she said.
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D. Russian Military

1.
Defense Spending To Jump By Some 50 Billion Rubles Next Year
        RFE/RL
        August 22, 2000
        (for personal use only)

Deputy Prime Minister and Finance Minister Aleksei Kudrin told reporterson 18 August that under the draft 2001 budget submitted to the government,2.0632 trillion rubles ($74 billion at today's exchange rate) has beenearmarked for national defense. This amounts to 2.66 percent of next year'sprojected GDP, compared with 2.39 percent in this year's budget. "Kommersant-Daily"noted on 19 August that taking into account that the government is expectingan annual inflation rate of 12 percent next year, the increase from 2.39percent of GDP to 2.66 percent is "not that impressive." On the other hand,it argued that the amount is not insignificant either when one recallsthat the State Duma always raises the government's figure for defense spendingwhen it considers the budget. According to the newspaper, despite the increase,the 2001 budget's defense spending levels are not sufficient to cover thearmy's weapons development program.
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2.
Russia's Insecurity Complex
        Andrew Kuchins
        Washington Post
        August 21, 2000
        (for personal use only)

The fate of the Russian nuclear submarine Kursk is a tragic metaphorfor Russia's rapid descent in the past decade from global superpower status.

The Kursk was engaged in exercises simulating conflict with NATO forcesa decade after the peaceful conclusion of the Cold War. The Soviet Union'sdevelopment of an ocean-going nuclear submarine force was an importantpart of the mammoth efforts of the Kremlin to achieve military parity withthe United States.

Today these forces, along with the rest of the Russian nuclear weaponscomplex, no longer present the threat of Armageddon that was feared fordecades. Rather, they are feared because of questions about Russia's abilityto safely and reliably control the weapons and materials.

The choices Russia makes in the next few years about its military forceswill have a large impact on international security. With a gross nationalproduct about the size of Switzerland's and an annual military budget ofsome $5 billion, Russia faces hard decisions about allocating resourcesin the most effective manner to improve national security.

This was the topic of a Russian National Security Council meeting onAug. 11 that sought to address major differences among the top brass inMoscow. The minister of defense, Igor Sergeyev, supports funding for Russiannuclear forces as the top priority, while the chief of the Russian generalstaff, Anatoly Kvashnin, wants to see more support devoted to Russian conventionalforces.

Both can bring compelling arguments to bear. Given the dramatic deteriorationof Russia's conventional capabilities, its nuclear forces remain the primarycurrency to support Moscow's status as an international great power. Butnuclear weapons hardly are effective or even usable weapons in the kindsof conflicts Russia is mostly likely to find itself in for the next decadeor two. They didn't help in Afghanistan, and they aren't helping in Chechnya.

Even in the best-case scenario of prolonged Russian economic growth,Russia will be forced to make major changes in its force structure becauseof severe financial constraints. Making these hard choices could be thelogical conclusion of the demilitarization initiated by Mikhail Gorbachevin the late 1980s, and they also can have a revolutionary impact on internationalsecurity, as did his "new political thinking," which led to the end ofthe Cold War.

The rapid aging of strategic nuclear forces means that Russia needsto reduce its arsenal of nuclear warheads dramatically, to no more than1,000 in the coming decade. This can be done either bilaterally with theUnited States in the traditional arms control format, or it can be doneunilaterally. Proceeding unilaterally would put considerable pressure onthe United States to reciprocate at least in part. It also would providea stimulus to arms reduction after nearly a decade of no progress and wouldhelp revive global nuclear nonproliferation efforts, which have suffereda series of blows in recent years.

Russian conventional forces also will need to downsize and at the sametime be made more flexible for possible deployment in regional action inthe Eurasian periphery. These forces should be structured not so much forconflicts with major powers such as NATO or China but rather to addressthe new agenda of post-Cold War security threats resulting from weak statesand civil conflicts, drug trafficking, terrorism and information warfare.

Threats such as these are aided and abetted by globalization, but theycannot be effectively addressed by unilateral action. They require greatercooperation on the part of Russia with the West and its neighbors. Increasingrecognition of this fact would contribute greatly not only to Russia'ssecurity but to international security in general.

Of course, all this may sound like an effort to make lemonade out oflemons. Given the societal trauma Russia continues to experience coupledwith the series of humiliations (Chechnya, NATO expansion, Kosovo) thatthis still-proud military elite has experienced, there remains a good dealof danger and uncertainty. Apocalyptic scenarios for Russia were nearlyconventional wisdom for many in the '90s, and there remain far darker alternativesthan the one outlined above.

Paradoxically, however, despite its current weakness--symbolized bythe Kursk--the Russian Federation has the power to make some fundamentalchoices about its security policy that can have a revolutionary impacton international relations. It is the human condition to want to make radicalchanges only in response to crisis. Thus, despite the United States' unprecedentedprosperity and its position of strength, it seems far less likely thanRussia to want to initiate fundamental change in security policy.

Russia, meanwhile, must learn the lesson taught by the Kursk tragedy:that the military complex inherited by the Russian Federation is inadequateto meet the new security challenges of Moscow, and further pretensionsto maintain it will reduce Russian security as well as pose grave dangersto the rest of the world.

The writer directs the Russian and Eurasian Program at the CarnegieEndowment for International Peace.
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E. Nuclear Power

1.
News Briefing [Nuclear Power Station]
        Uranium Institute
        August 22, 2000
        (for personal use only)

[NB00.34-3] Russia: Commissioning works at Rostov-1 are nearing completionand there is a 'real possibility' that the project will be finished inSeptember, officials said. Construction of the 950 MWe VVER-1000 began20 years ago, but was suspended in 1990 following the Chernobyl accidentin 1986. Commissioning Rostov-1 will be seen as a major boost for the 'renaissance'of nuclear power development in Russia. Minatom says that a further fourreactors are now in an advanced state of construction: Rostov-2, Kalinin-3,-5 and Kursk-5. (NucNet News, 276/00, 17 August; see also News Briefing00.10-9)
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2.
Radioactive Uranium Goes On Sale On The Internet
        Chris Reese
        Reuters
        August 21, 2000
        (for personal use only)

NEW YORK, (Reuters) - Add radioactive uranium to the list of items youcan buy and sell with the click of a computer mouse, and it might seemlike a nuclear bomb-maker's dream come true.

"An (Internet) auction for uranium seems far out, but it's really quitestraightforward. It's like any other commodity," said Becky Battle, directorof marketing for New York Nuclear Corp. which owns and operates the uraniumtrading web site UraniumOnLine.com.

Through the New York-based web site, nuclear power plants now can purchaseuranium fuel needed to make electricity through an Internet auction process.

But Battle and others in the uranium production industry are quick tocaution that it would be nearly impossible for terrorists to acquire thematerial online.

"There is no additional risk at all as a result of online trading,"said Charles Scorer, chief executive officer of Nufcor International Ltd,a London-based uranium production and trading company.

Nufcor, equally owned by South African mining giant AngloGold Ltd. andSouth African banking to insurance group FirstRand , bought 120,000 poundsof uranium oxide via UraniumOnLine.com's first Internet auction in July.

"Any physical movement of uranium must be from a licensed producer toa licensed trader or buyer," Scorer said, adding that the internationalcommunity of uranium traders is relatively small and any new bidders wouldquickly be recognized as such.

Also, auctions on UraniumOnLine.com are private, and participants mustbe invited by New York Nuclear Corp.

The uranium is used as nuclear fuel in about 430 power plants worldwideto supply about 20 percent of the planet's electricity needs, Battle said.

"The general public may have a difficult time separating what they thinkof as defensive (weapons grade) uranium and commercial uranium," Battlesaid, "But the content (of nuclear fuel) is very very much different frombomb grade. We are talking apples and oranges here."

Bomb-grade uranium must go through a much more extensive and complexrefining and enhancement process than uranium used for nuclear fuel. Theprocess requires sophisticated and generally unavailable enhancement technologyclosely monitored by government agencies, industry sources said.

The online auction is seen as a step forward because it should allowfor a more open-market, free trade of uranium by giving utilities and producersa more transparent uranium price and allowing the application of financialderivatives, such as futures contracts and hedging.

"With the deregulation of the electricity industry, the fuel procurementprocess will be more open," Nufcor's Scorer said.

"It's more efficient than the traditional system."

Traditionally, most power plant operators buy uranium under long-termcontracts with producers, with the price per pound kept secret.

"Naturally and organically, the market will become more liquid (withtime), and people will use more of these online services as (they) develop,"Scorer said.

At an online auction on Friday, the third one held on UraniumOnLine.com,an undisclosed buyer picked up 56,320 kilograms (124,160 pounds) of uraniumfor $23.05 per kilogram ($10.46 per pound).

This compares with a current average market price reached through traditionaltrading of $23.28 a kilo ($10.56 per pound), Battle said.

Friday's round attracted a "handful" of active bidders and "at leasttwo dozen" more observers who are studying the mechanics of the processfor possible future participation, she said.
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F. Nuclear Waste

1.
Norwegian Group in Talks to Raise Kursk's Nuclear Reactors
        Agence France Presse
        August 24, 2000
        (for personal use only)

OSLO, Aug 24, 2000 -- (Agence France Presse) A Norwegian engineeringgroup is in talks with Russian authorities over the possibility of raisingthe section of the sunken submarine Kursk that contains its nuclear reactors,the firm said Thursday.

Global Tool Management is assessing the feasibility of separating therear section of the flooded vessel which houses the two reactors with remote-controlledcutters, and then raising it onto a barge, said Harald Ramfjord, one ofthe company's directors.

"We think it would be fruitless to try to float the entire submarineto the surface, as it is damaged and full of water," Ramfjord said.

"Several attempts in the past to raise entire submarines have shownthat they break apart, and trying to repair the ship at the site wouldbe extremely costly for the Russians," he added.

The Russian submarine sank to the bottom of the Barents Sea on August12 after a catastrophic accident, claiming the lives of all 118 crew membersaboard.

The company has built a model of the Kursk, measuring 18 meters (59feet) in diameter, made of steel, aluminum and titanium, in order to betteranalyze the possibility of salvaging the reactors.

"If the reactors are dry and are not leaking radioactivity, we couldraise them to the surface using a crane on a barge," Ramfjord said. "Inthe opposite scenario, if the reactors are leaking, we could encase themin cement and transport them out to sea, dropping them at a depth of 2,000meters."

"The information we are receiving from Russia is rather disconcerting,"he lamented, saying an effort to raise the reactors would require specificand complete knowledge of the submarine's condition.
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2.
Kursk - The Top of an Iceberg
        Nils Bøhmer
        Bellona
        August 22, 2000
        (for personal use only)

The Kursk submarine, with its two nuclear reactors is now laying atthe sea bottom at 108 meters in the Barents Sea. Since this is in the middleof one of the world richest fishing areas much attention have been givento the possible environmental impact of the nuclear reactors on board.But Kursk is only a small part of the environmental threat to the ArcticOceans.

The Bellona Foundation has the last decade investigated the potentialsources for radioactive contamination of the Arctic Oceans. Our findingsso far shows that there are numerous potential sources, but that the ArcticOceans are still one of the cleanest at the Northern hemisphere. We havealso found that intermediate solutions for securing the nuclear waste canbe found.

The Northern fleet has some 40 nuclear submarines in active service;each of them has two reactors. In addition there are 110 laid up nuclearsubmarines, in the Northern fleet. In these laid up submarines there are135 nuclear reactors with spent nuclear fuel in 72 submarines. The fuelis left in the laid up submarine because the on-shore storages are filledup, and there are economical and technical problems to reprocess the spentnuclear fuel to the reprocessing facilities in Mayak in South Ural.

These submarines are laid up at the different naval bases at the KolaPeninsula and in Severodvinsk close to Archangels. They receive minimalattention and maintainance, due to the financial situation in the Russiannavy. According to a report from the Russian Atomic Ministry, 30 of thesesubmarines faces the risk of sinking.

In addition to the laid up submarines, there are onshore storages forspent nuclear fuel and radioactive waste at the naval bases. The largeststorage for naval spent nuclear fuel is located in the Andreeva Bay some45 km east of the Norwegian border. The storage contains spent fuel fromapproximately 90 naval reactors. The storage was put in operation in themid-80'ies and was a temporary solution. The storage is still in operation,and need repairs badly. At the Gremikha naval base east on the Kola Peninsulathere is one storage with spent fuel, in addition to several reactor coresfrom liquid metal cooled submarine reactors.

In total there are spent nuclear fuel from the equivalent of about 235military naval reactors either stored in laid up submarines, or in on shorestorages. The storage conditions are very unsatisfactory, and the situationhas been worse in the latest years due to lack of maintaining.

Bellona Foundation recommends that a new intermediate storage facilityfor spent nuclear fuel and radioactive waste is build at the Kola Peninsulato prevent radioactive contamination of the Arctic Oceans.

The building of such a facility will require a substantial internationaleconomical assistance. But preventing a pollution of the Arctic will havea greater cost, and Bellona Foundation urges the European Union, The UnitedStates and Norway to join force with Russia, not only when it comes tosecuring the Kursk, but also for the whole nuclear challenge we face atthe Kola Peninsula.
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