Despite concessions from the Department of Energy, South Carolina has no intention of dropping its lawsuit against the DOE for failing to build a nuclear waste disposal plant. The delay is also scuppering a deal the US made to treat Russia’s plutonium.

Approved by Congress as far back as 1998, the Savannah River Site’s Mixed Oxide Fuel (MOX) Fabrication Facility is designed to turn weapons-grade plutonium into power plant reactor fuel. Moscow and Washington signed a deal in 2000 under which each country would dispose of 34 tons of plutonium.

Since then, everything has gone wrong for the MOX deal. The project’s cost was initially estimated at $1.7 billion, but by 2013 it had risen to $7.7. In addition, approximately $5 billion, three times the original estimate, has already been spent since construction began in 2007. South Carolina Senator Lindsey Graham and contractors working on the project say it is currently 70 percent complete.

However, the MOX facility was never favored by the Obama administration. When the US president came to power, he ordered the closure of the proposed facility to make way for an alternative plant in New Mexico, which would use a cheaper processing method known as dilution and disposal. The DOE also maintains that the MOX site in South Carolina is only 40 percent complete and would cost $1 billion a year to operate.

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“We are in a situation where the MOX approach has extreme uncertainties,” Energy Secretary Ernest Moniz told a Senate Appropriations Subcommittee last month. Moniz said previously that the Russian contract could be moved to the New Mexico facility.

The stakes were raised after a clause in the contract between the state and the federal government was activated at the beginning of the year, when the government failed to remove one ton of plutonium from South Carolina as stipulated. The fine for the delay is $1 million per day, with a cap of $100 million.

South Carolina is now lodging a lawsuit to recover the money from the federal budget and make sure that MOX is completed.

The DOE has attempted to compromise by offering to remove 6 tons of plutonium unrelated to the Russian deal, but South Carolina Governor Nikki Haley says the state will not abandon its legal claim, as “the DOE has not lived up to promises made in the past.”

‘Not what we agreed on,’ says Putin

While South Carolina squeezes from one side, Washington is also facing mounting pressure from Russia on the other.

On Thursday, Vladimir Putin voiced Moscow’s growing frustration, both with the delay and the US’ decision to turn to dilution and disposal.

“We signed an agreement that the plutonium will be processed in a certain way, for which facilities would be purpose built,” the Russian President said during a media session. “We have met our commitments, and constructed the necessary facilities. The US has not.”

A high-level source in the US administration meanwhile told RIA news agency that neither the US nor Russia has started disposing of plutonium in accordance with the agreement. The source also said that the new approach to disposal is in full compliance with the US obligations under the agreement.

For Russia, however, the use of a cheaper processing method constitutes a breach of contract because it carries a potential for reversal, as explained by the Russian president.

“With the dilution and disposal method, the nuclear fuel retains its breakout potential, so it can be extracted, processed and weaponized again. That is not what we agreed on,” said Putin, who personally oversaw the signing of the original deal during his first term as Russian president.

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Rosatom, the state-owned Russian nuclear holding, says the MOX deal with the US clearly says that the repossession of plutonium must be done in a reactor.

“The only way to irreversibly turn plutonium into a material not usable in a nuclear weapon is by changing its isotope composition. Any chemical method is reversible,” Rosatom spokesman Vladimir Troyanov told RT.

“Russian experts consider the American proposal not in line with the goal of the deal because under it the process must be irreversible. Moreover, the deal wording included ‘resulting from a reactor transformation.’”

Russia has gone to great lengths to uphold its end of the bargain, including by building an MOX fuel facility in the city of Zheleznogorsk in eastern Siberia. It has also invested in BN-600 and BN-800 fast neutron reactors, which will use MOX fuel made of weapons-grade plutonium and ensure it is unusable for nuclear weapons.

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Washington officials have been maintaining their best poker faces so far.

“The U.S. has not violated this agreement, and any suggestions to the contrary are inaccurate. We remain fully committed to meeting our obligations under the agreement,” said State Department spokesperson Jennifer Bavisotto on Friday.

“Accommodating a new US method would not require renegotiation of the agreement. We will not speculate on Russian intentions behind the reported remarks,” she added.

Senator Graham seems to doubt Russia’s willingness to share the Obama administration’s point of view.

“So we are going to change the entire program. Then we are going to go to the Russians and say if they are OK with it? Is that the plan?” he asked during appropriations hearings in Congress. “That’s a lousy plan. That is absolutely the dumbest freaking plan I could think of.”