Fusion Research: Costs of Ending DOE's Participation in the International Thermonuclear Experimental Reactor Project Appear Reasonable

Published by the Government Accountability Office on 1999-04-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

      United States
GAO   General Accou.nting Office
      Wasbhg$on, D.C. 20548

      Resources, Conununi~,   and
      Economic Development    Division


      April 30,1999

      The Honorable F. James Sensenbrenner, Jr.

      The Honorable George E. Brown, Jr.
      Ranking Minority Member
      Committee on Science
      House of Representatives

      Subject: Fusion Research: Costs of Ending DOE’s Particination in the International
               Thermonuclear Exnerimental Reactor Project ADD= Reasonable

      The International Thermonuclear Experimental Reactor (II’ER) project is an
      Wernational collaborative project undertaken jointly by the countries with the world’s
      leading programs for fusion research These countries include the United States: Japan;
      the Russian Federation; and Euratom, a European consortium of nations. The purpose
      of the ITER project is to demonstrate the feasibitity of building a fusion reactor to
      generate energy for peaceful purposes. The United States has formally participated in
      the ITER project since 1992 and funds a variety of other activities related to fusion
      research The Department of Energy (DOE) manages the U.S. involvement in the lTER
      project. Concerned that the engineering design chosen for the fusion reactor is too
      expensive and that ins&icient progress has beenmade in construction commitments
      and site selection for I%IR, congressional conferees directed DOE to end the U.S. role in
      the lTER project. The conferees provided DOE $12.2 million in fiscal year 1999 funding
      to close out its ITER activities. DOE was directed to use these funds to complete the
      remaining technology research and development and to conduct an orderly closeout of
      U.S. participation. You asked us to determine if DOE’s expenses to close out its
      participation h-t the ITER project were reasonable.

      In summary, we found that DOE’s plans for an orderly closeout of its ITER activities
      appear reasonable. In addition to the $12.2 million appropriation, DOE also plans to
      spend $7.1 milhon of tical year 1998 funds, bringing the total closeout costs to

                                                          GAO/RCED-99-140R ITER Closeout Costs
$19.3 million.’ DOE told us they have a high level of confidence that no additional
funds will be needed to dose out all remaining TIER-related activities.


Today’s nuclear reactors rely on the splitting, or “fission,” of heavy elements to
release heat that creates steam to drive electric generators. The-opposite is fusion,
when the nuclei of light elements, such as hydrogen are forced together under high
temperature and pressure. If fusion can be sustained, this process could release
Iarge amounts of energy in the forms of heat and radiation. The resulting heat might
be used to produce steam for generating electricity. ITRR is an experimental fusion
reactor based on a particular design concept called the ‘%okarnal~”The ITER project
arose from the recognition by the countries conducting fusion research that
collaboration might result in significant savings by sharing costs and providing an
opportunity to learn from the scientific and technical expertise of all the world’s
leading experts in nuclear fusion. From discussions that began in 1985,a
collaboration of four participants-the United States, Japan, the former Soviet Union,
and the European Community-was established under the auspices of the
International Atomic Energy Agency- Work on conceptual design activities began in
 1988. In 1992, the four parties signed an agreement, which established the start of
the formal engineering design activities, which were scheduled to last for 6 years
until the agreement expired on July Z&1998. Since 1992,the United States has spent
about $350 million on the ITER project.

Concerned that the reactor design chosen by the countries participating in the ITER
project would be too expensive to build-about $11 billion according to some
estimates-the congressional conference committee expressed concern about the
value of continued U.S. participation in the project In the conference report on
appropriations for energy and water development for fiscal year 1999,the
congressional conferees noted that the ITER agreement had expired iu 1998 and
directed that DOE not sign an extension of that agreement without the written
consent of the authorizing and appropriations committees of the Rouse and the
f&ate.* Although the conference committee expressed its support for international
collaboration in fusion energy, it provided DOE with funds to perform an “orderly
completion of research and development of components” in fiscal year 1999. The
conference committee also noted that it expected DOE to “meet its commitment to
the de&very and testmg of the central solenoid model car which is an important
design component of the experimental reactor. The congressional conferees
included $12.2 million to close out ITER-related activities in fiscal year 1999.

‘DOE is using fiscal year 1998 mcosted obligations, which represent the portion of its budget authority that DOE
has obligated for goods and services but for which it has not yet incusred costs. As DOE’s contractors receive
goods and services, they liquidate or ‘cost” the obligations. However, not all the obligations are costed during a
given year, and these uncosted obligations can acmulate from one liscal yeaz to the na

’ HR. Rept No. 105-749, at 100 (1998).

2                                                                 GAO/RCED-99-140R ITER Closeout Costs

DOE’s Closeout Expenditures                  Appear Reasonable

The funds DOE has spent and plans to spend to close out its ITER-related activities
appear reasonable. Closeout activities include (1) completing technology R&D
commitments; (2) implementing the transition of the design eng,ineers and physicists
from the Rome Team into non-lTER work or, where required, paying severance
charges; (3) completing project management activities; (4) returning personnel in
the Joint Central Team to their home institutions and implementing their transition
to non-ITER activities; (5) and closing down the Joint Work Site in San Diego,
California. DOE of&ials told us that they are confident that noadditional funds will
be needed beyond those the Congress has already provided to close out ah ITER-
related activities. Table 1 mmmarizes DOE’s estimates of the costs for these

Table 1: DOE’s Estimates of Costs to Close Out ITER-Related Activities, Fiscal Year 7999

Dollars in millions

                                         Estimated portion of                                     Estimated total ’
                                      fiscal year 1998 funds                                    funds needed in
                                       needed for fiscal year             Fiscal year 1999       fiscal year 1999
                                               1999 ctoseout          funds provided for              for closeout
    Account categow*                                activities         closeout activities                activities
    Home Team
    Technology Research                                    $1.7                       $8.8                   $10.5
    and Development
    Design                        t                         2.3                           01                   2.3
    Project Management                                        .l                         .3 1                   .4
    Joint Central Team
    Secondees”                    1                         2.7 1                      1.9                    4.6
’ Joint Work Site                 I                          .3 1                      1 .o                   1.3
  Joint Fund                                                   01                        2                     .2
    Total                         I                        $7.1 1                   $122                    $19.3 _
7he Home Teamcategory consists of activities performed by U.S. personnel from DOE’s laboratories. educational
institutions, and private companies who work at their home institutions. The Joint Central Team category consists
of activities involving U.S. personnel who work at the U.S. and overseas Joint Work Sites under the direction of the
ITER Director with other ITER stafi from participating countries.

%condees are the U.S. personnel assigned to the U.S. and overseas Joint Work Sites.

Source: GAO% analysis of DOE’s data

Of the $19.3 miNion that DOE estimates it needs to close out all its ITER-related
activities, about half ($10.5 million) is for the Technology Research and
Development account, which has two key activities. The largest activity entails
completing the centi solenoid model coil and shipping it to Japan for instaUation in
the test facility. This commitment is expected to require $7.9 milkon from that
account. The coil has been completed and was shipped to Japan in February 1999.
Completing and testing the divertor cassette--the other major R&D component to be
used in the Japanese testfacili~-is     estimated to require an additional $.9 million.
This cassette will be used in conjunction with the heat transfer plates (which are

3                                                                  GAO/BCED-99-140R MYEB Closeout Costs

being supplied by other participants in the DYERproject) to contain the hot plasma
generated during a fusion reaction. DOE officials said they were confident that the
estimate to close out this second activity would be adequate and that an additional
$1.7 million would be required to close out ail the other R&D activities.

The next iargest cost estimate is $4.6 million from the Secondees account to return
U.S. scientists and engineers from the Joint Work Sites. As of the end of March 1999,
all of these personnel have returned to the United States. Part of the Design account
estimate of $2.3 million includes the cost to transition 1aborator.yand university
personnel from their ITER-related activities into U.S. domestic fusion program
activities to the extent possible. DOE estimates& will need $1.3 million to close its
Joint Work Site in San Diego, California, and is confident that no additional funds
will be needed to complete this task.

To complete R&D activities and to close out U.S. participation in the TI’ER project,
DOE officials anticipate they will need $7.1 million of fiscal year 1998 funds in
addition to the $12.2 million provided for fiscal year 1999. They will draw these
additional funds from the uncosted obligations that had accrued at the end of fiscal
year 1998. According to DOE officials, the cognizant congressional committees are
aware of their plans to use uncosted obligations for funding fiscal year 1999 ITER-
related activities. DOE officials told us that an additional $1 million in uncosted
f&al year 1998 obligations for the ITER project will not be needed for closeout
costs,‘although additional requirements, such as unanticipated claims Corn vendors
or additional expenses to pay for employees’career transitions, may arise. However,
DOE officials told us that they expect much of the $1 million in remaining uncosted
fiscal year 1998 funds to remain unused by the end of fiscal year 1999, the final year
of DOE-funded TIER-related activities.

Agency Comments

We provided a draft of this report to DOE for review and comment. DOE expressed
concern about our characterization of the ITER project as having technical
problems. We accept DOE’s explanation that the end of U.S. participation stemmed
from the insuf&ient progress that bad been made in construction commitments and
site selection for TI’ER, rather than technic4 problems, and have changed our report
accordingly. DOE also provided a number of clari&ations that we have
incorporated in our report. Enclosure I includes the full text of DOE’s comments.

We conducted our review from December 1998 through April 1999 in accordance .
with generally accepted government auditing standards. To determine how DOE
was using its appropriated funds to close out ITER-related-activities, we interviewed
of6cials responsible for the ITER project and examined relevant documents that
they provided.

4                                               GAO/RCED-99-14OR ITEX Closeout Costs

As arranged with your offices, unless you publicly announce its contents earlier, we
plan no further distribution of this report until 16 days after the date of this letter. At
that time, we wiIl send copies to the Biu Richardson, Secretary of Energy and Jacob
J. Lew, Director, Office: of Management and Budget. We wiu make copies available
to other interested parties on request. IXyou or your staff have any questions about
this report, please call me at (202) 5123841. This report was prepared by Gary R.
Boss and Tom Kin&am.

                                                 GAO/RCED-99-140B IT’ER Closeout Costs
Enclosure I

                     Comments     From the Dewrtment              of Energy

                                          Department          of Energy
                                                Washington,   DC 20585
                                            .       April 16, 1999

        Ms. ‘SusanKladiva
        AssociateDirector, Energy, Resources
        and ScienceIssues
        Resources,Community and
         Economic DevelopmentDivision
        U. S. GeneralAccounting Office
        Washington, DC 205’48

       . Dear Ms. Kladiva:            ’         ’

        The Department of Energy appreciatesthe opportunity to review and commenton the General .
        Accounting Office (GAO) draft report entitled: “Fusion Research:Costs of Ending DOE’s
        Participation in the International ThermonuclearExperimentalReactorProject Ate Reasonable.”
                                                                                                    . .
        In the opening paragrapha referenceis made to Congressionalconcernthat, “...ITER is too
        expensiveand beset with technical problems...:”We believethe phrase“technicalproblems”is
        prisleadingb&causemost readerswould assumethat this includesscientific and engineering
        problems. From the House Appropriations CommitteeReport for Fiscal Year 1999,the principal
        Congressionalconcerns,in addition to cost, are that insufficientprogresshasbeenmadeby the
        ITER Parties to commit to construction and to establisha site for ITER. Our suggestionis to
        mention these latter concernsand not use the phrase“technicalproblems.”In fact, with regard to
        IT’ER technical progress,numerousreviews of ITER by scientistsand engineers,who come from
        around the world and who are not directly involved with ITER, have concludedthat.ITER would
        be able to meet its mission. Also, these reviews typically concludethat basedupon resultsfrom
        the extensiveTIER R&D program and from world-wide plasmaphysicsexperiments,there is high
        confidencethat the remainingscientific and engineeringissues,which are typical of any high
        technology project, will be resolved satisfactorily.

         Minor editorial changesand suggestionsfor enhancedclarity of the report are provided in the.
         attachment. The Departmenthopes that these commentswill be helpful in preparationof the final

  6                                                           GAOILZCED-99-140RITEB CloseoutCosts
Enclosure I

      Ifyou have’anyquestions,’
                             please’contactBonnie La&y on (301) 903-2158.

                                            .   Sincerely,

                                                Martha A. Krebs
                                                Office of Science


      JuanitaMcDufiie, Audit Liaison Team

                                                    GAOLRCED-99-140R ITER Closeout Costs
Enclosure I


       Editorial commentsand suggestedcommentsare,pro\;idedbelow:

      . 1. Page 1. secondDtiaph      third line: Change“in” to “of’ to provide consistentusagewith that
            on page 4.

       2. Page 3. Table 1: The following commentsare provided to clarify Table 1:

            a. Under the main categoriesof Home Teamand Joint Central Team, indent the subi

            b. Footnote 1, referenceto the Home Teamcategory,should read, “The Home Team
               categoryconsistsof activities performedby U.S. personnelfrom DOE’s laboratories,
               educationalinstitutions,and private companiesworking at their home institutions.”

            c. Footnote 1, referenceto the Joint CentralTeam category, should read, “The Joint Central
               Team categoryconsistsof activitiesinvolving U.S. personnelworking at the ITER Joint
               Work Sitesunder the direction of the ITER Director with other ITER stafl?from
               participatingcountries.”                                                                   .
            d. Footnote 2, changethe word “personnel”to “Joint Central Team personnel.”

            e. Footnote 3, reviseto, “Secondeesare the U.S. personnel-assignedto the Joint Work

        3. Page 4. secondDaragraDhsecondline: For clarity change“overseasposts”to “the Joint
           Work Sites.”

        4. Page 4. next to last sentence:For emphasisin discussingthe $1 million in uncosted
           obligations,change“uncostedobligations”to “uncostedFiscal Year 1998 obligations”and for
           clarity change“new vendor claims”to “unanticipatedvendor claims.”

        5. Page:                  For emphasis,change“uncostedfunds”to “uncostedFiscal‘Year 1998
           funds.” Also, sincethe previousdiscussionsbetweenDOE and GAO, we have used someof
           these Fiscalyear 1998funds for transition activitiescited in the previous sentenceof the
           report. To reflect this more current status,we suggestchangingthe word “most” to “much.”


  8                                                       GAO/RCED-99-140R ITER Closeout Costs
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