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4/17/96

CONTACT: Stanford University News Service (415) 723-2558 COMMENT: Geoffrey Rothwell, Economics (415) 725-3456
e-mail: rothwell@leland.stanford.edu

Economist studies nuclear safety in Russia

STANFORD -- At hundreds of sites throughout Russia, plutonium is stored in tens of thousands of containers that are each about the size of a tuna-fish can. Just five of those containers hold enough plutonium to make an atomic bomb that could destroy San Francisco.

Fear that this material might show up on the black market or in terrorist hands is a key reason that President Clinton and the heads of other major industrialized countries are headed to Moscow for a G-7 summit April 19-21 to discuss nuclear safety.

Stanford's Geoffrey Rothwell, one of the few economists studying nuclear-related safety issues, says Western and Russian leaders face a serious problem as they search for ways to dispose of this lethal material: sophisticated economic analysis is not being applied to the decision-making process.

The relative costs and benefits of various methods for disposal are crucial to the ultimate decision about which path to take, but "unfortunately, many of the analyses that have been done, both in Russia and the U.S., have not incorporated the latest economic principles," said Rothwell, a senior research associate at Stanford's Center for Economic Policy Research and lecturer in Stanford's Public Policy Program and in economics.

Russian officials understand basic economic principles but have yet to learn the concepts of finance and how to evaluate an uncertain stream of costs and benefits over a 25- to 30-year period, Rothwell contends, adding that the same can be said of many Western engineers.

In mid-March, Rothwell participated in an international conference on military conversion of plutonium at Lake Como, Italy, sponsored by the International Atomic Energy Agency. Russian representatives attending the Como meeting used it as a sounding board for the upcoming G-7 meeting, Rothwell said, floating ideas on plutonium disposal to assess international reaction.

"Two major topics at the G-7 summit will be how to decommission Russia's nuclear weapons, including how to dispose of its excess weapons-grade plutonium, and the safety of its nuclear power plants," he said.

Russia has a stockpile of about 30 tons of plutonium generated by nuclear power plants and about 100 tons of plutonium tied up in nuclear warheads. Unlike the United States, which has a comparable stockpile of weapons-grade plutonium, Russia has not announced how much it considers excess. But experts estimate that its figure will be similar to the 38 tons that the United States has declared as nonessential.

According to Rothwell, "from a Western perspective, the immediate issue is collecting this plutonium and consolidating it in a central facility with upgraded inventory control and physical security." Estimates of the cost of such a consolidation range from $100 million to $300 million.

Three basic approaches for permanent disposal are being considered. One is to poison the plutonium by mixing it with spent fuel from reactors, immobilize the mixture in glass and then bury it. The second option is to mix small amounts of plutonium oxide with uranium oxide, creating what is known as mixed oxide (MOX) fuel, and burn this in existing Russian nuclear power plants. The third option is to complete some of the partially constructed Russian "fast" reactors designed specifically to use plutonium fuel and burn up the material in them.

"The Russians look at plutonium as a precious metal," Rothwell said. "They see vitrification as throwing money away. To them it makes as much sense as if someone asked the U.S. government to take all the gold in Fort Knox and bury it in a number of places around the country so that prospectors could find it. They would much rather burn their plutonium to generate electricity."

Building a factory to make MOX fuel would cost about $1 billion in the West, probably about $300 million in Russia. At the Lake Como meeting, Rothwell said, Russian representatives said that they would be willing to spend $25 million to study how best to burn MOX fuel in their reactors, but expressed doubt that such a system would be as effective as burning plutonium in reactors specifically designed for the purpose.

The Russian technologists who work for the Ministry of Atomic Energy (Minatom), which has a workforce of about a million people to support, appear to favor the fast reactor option, which is clearly the most expensive of those under discussion, Rothwell said. But fast breeders do burn up plutonium much faster than ordinary reactors using MOX fuel. Also, completion of the country's three or four partially completed fast reactors would enable Russia to retire a number of older reactors that are considered unsafe by Western standards.

Those unsafe reactors also will be a topic for Clinton and the other leaders at the upcoming meeting. In a 1992 summit, the G-7 nations agreed on a plan to upgrade the most risky Russian reactors, train new plant operators and help Russia establish laws and agencies to oversee nuclear safety. But the effort has not made as much progress as some analysts would like.

Currently, there are 15 "RBMK" reactors of the type involved in the 1986 Chernobyl accident operating in Russia, Ukraine and Lithuania. Despite upgrades made since then, the RBMKs remain a major source of concern. They lack containment structures to protect the reactor and contain radioactive particles in case of an accident. Their instrumentation, controls, fire protection systems and emergency cooling systems are considered inadequate by Western standards. The earliest models of a second type of reactor, the "VVER," which are found throughout Russia and Eastern Europe, also are considered below acceptable safety levels.

One option to reduce the risk of radioactive releases to the environment from these plants is to build containment structures, at a cost of about $100 million per reactor. A less expensive system would be to outfit the reactor buildings with a negative pressure system that keeps the interior at a lower pressure than outside. This would contain radioactive particles within the building except in an explosion violent enough to blow a hole in the reactor. This costs about $25 million per unit. When combined with necessary upgrades in the controls and other systems, the cost of upgrading the reactors would be about $50 million apiece.

"It's an open question whether it makes sense to spend this much money on a reactor with about 15 years remaining in its operational life," Rothwell said. "One alternative would be to use the $50 million to buy a combined cycle gas plant. But the Russians don't like that option because they currently sell their natural gas to Western and Eastern Europe. Another option would be to build a plant making low-cost fluorescent light bulbs. "

As they begin to weigh their options on how to dispose of plutonium and upgrade their reactors, Russian officials will have difficulty assessing the tradeoffs because they lack economic expertise, Rothwell said.

For example, a recent study of the cost of upgrading existing reactors, done by a Russian group for the U.S. Agency for International Development, used a discount rate of 12 percent. The discount rate is the method economists use to calculate the present-day value of future costs and benefits. "Twelve percent might be appropriate for this year or the next, but it is too high for a project lasting 20 or 30 years," Rothwell said.

"Making decisions that don't properly account for uncertainty can lead to major problems in the future," he said. "[U.S.] options in regard to nuclear materials are better defined than those in Russia. So it is particularly important for the Russians to do the economic and financial analyses correctly."

-dfs-

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