**\[DNFSB LETTERHEAD\]**

June 26, 2007

To the Congress of the United States:

In Section 3183 of the National Defense Authorization Act for Fiscal
Year 2003, Congress directed the Defense Nuclear Facilities Safety Board
(Board) to conduct a study of the adequacy of plutonium storage at the
Savannah River Site (SRS). In response to the proposals made in the
Board\'s study, *Plutonium Storage at the Department of Energy\'s
Savannah River Site*, dated December 1, 2003, the Board and the
Secretary of Energy are required under Section 3183(d) of the National
Defense Authorization Act for Fiscal Year 2003 to submit annual reports
on the actions taken by the Secretary to address the Board\'s proposals.
This is the Board\'s fourth annual report on the Department of Energy\'s
(DOE) actions to address the Board\'s proposals from this study.

In this study, the Board made proposals concerning the suitability of
facilities planned for storing plutonium at the SRS, the remote
monitoring and retrieval of plutonium, and the DOE plutonium disposition
program.

**PROPOSALS CONCERNING THE SUITABILITY OF FACILITIES**

DOE originally planned for extended storage of plutonium at SRS in two
facilities---the K-Area Materials Storage (KAMS) facility and Building
235-F (235-F). Both were 50-year-old facilities that did not meet modern
safety standards. The Board proposed safety upgrades to ensure the
safety, reliability, and functionality of these facilities for plutonium
storage.

***Status of DOE Actions.*** As noted in the previous Board reports, DOE
decided to (1) consolidate the excess plutonium currently at SRS into
the KAMS facility and (2) not use 235-F for extended storage. The Board
agreed with this decision, which obviates the need for safety upgrades
to 235-F. Subsequently, DOE reconfigured the KAMS facility such that SRS
can now consolidate all of the DOE\'s excess plutonium into this
facility.

The Board considered the KAMS facility to be a robust structure that
could be made suitable for extended storage by establishing an
appropriate fire protection system and eliminating unnecessary
combustibles. The combustible materials of concern have been removed.
DOE is in the process of adding a fire detection system for the storage
areas in the KAMS facility and expects to complete installation in early
October 2007. The addition of this fire detection system permits
plutonium to be stored safely in the KAMS facility until dispositioned
by DOE. DOE further plans to add a limited fire suppression system in a
small analytical room in the KAMS facility and expects to provide
funding for completion of this fire suppression system in fiscal year
2009.

**PROPOSAL CONCERNING REMOTE MONITORING AND RETRIEVAL**

At the time of the Board\'s initial 2003 storage study, DOE\'s plans for
handling, moving, and shipping a damaged, potentially contaminated
container from the KAMS facility for further disposition had not been
defined and validated. The Board proposed that DOE develop and implement
validated procedures for the handling and intrasite shipment of
plutonium containers, including damaged containers. As reported in the
Board\'s first annual report on this subject, DOE has completed all
necessary actions concerning this proposal.

**PROPOSALS CONCERNING THE PLUTONIUM DISPOSITION PROGRAM**

The Board proposed that DOE expedite the development of a complete,
well-considered plan for the final disposition of all excess plutonium
to preclude unnecessary extended storage of plutonium at SRS. The Board
also proposed that DOE conduct a new study of available options for the
storage of plutonium at SRS but DOE subsequently decided to consolidate
the SRS plutonium material into the KAMS facility. The Board supported
this decision and, consequently, agreed the proposed study was no longer
needed.

***Status of DOE Actions.*** Several previous National Environmental
Policy Act (NEPA) decisions have laid the groundwork for plutonium
disposition at SRS:

-   *Interim Management of Nuclear Materials (IMNM) Final Environmental
    Impact Statement* (DOE/EIS-0220, October 1995)

-   *Storage and Disposition of Weapons- Usable Fissile Materials Final
    Programmatic Environmental Impact Statement* (DOE/EIS-0229, December
    1996)

-   *Surplus Plutonium Disposition Final Environmental Impact Statement*
    (DOE/EIS-0283, November 1999)

Based on the approved Records of Decision for these environmental impact
statements, DOE previously chose to pursue plutonium disposition via the
Mixed-Oxide Fuel Fabrication Facility (MFFF) and a plutonium
immobilization facility. As planned, this approach also envisioned some
additional plutonium disposition via the H-Canyon Facility at SRS.
Although DOE cancelled its plans for the original plutonium
immobilization facility, the overall plan remains largely the same.
Namely, surplus weapon-useable plutonium is to be dispositioned via (1)
the Pit Disassembly and Conversion Facility (PDCF) and MFFF, (2) a new
plutonium disposition facility, and (3) the H-Canyon Facility.

DOE continues to pursue this so-called three-pronged
approach---PDCF/MFFF, a new plutonium disposition facility, and the
H-Canyon Facility. On August 17, 2006, the Deputy Secretary of Energy
approved Critical Decision 1-A, the selection of a preferred
alternative, for the Plutonium Disposition Project. The preferred
alternative was a plutonium vitrification process to be installed in the
K-Reactor Facility at SRS. On March 28, 2007, DOE issued a Notice of
Intent to Prepare a Supplemental Environmental Impact Statement for
Surplus Plutonium Disposition at the Savannah River Site (72 Federal
Register 14,543, March 28, 2007). This supplemental environmental impact
statement will evaluate the environmental impacts of several options,
including the plutonium vitrification process as currently defined by
the three-pronged approach. DOE plans to issue a draft supplemental
environmental impact statement by January 2008.

Because of Congressional inquiries regarding the plutonium disposition
plan, DOE commissioned a panel of experts to review the plan. The panel
completed its review and issued a report, *Business Case, DOE\'s
Proposed Baseline Approach for Disposing of Surplus Plutonium*, in April
2007. This report concludes that the three-pronged approach will meet
United States national security and nonproliferation objectives, reduce
security costs, and support DOE\'s efforts to consolidate nuclear
materials in the DOE complex.

Progress in plutonium consolidation and disposition has been and
continues to be slow. To date, surplus plutonium remains stored at
Hanford, Lawrence Livermore National Laboratory, and Los Alamos National
Laboratory. In its planning documents, DOE states that future progress
is subject to appropriate NEPA review and the availability of funding.

**CONCLUSION**

For excess plutonium currently at SRS, the KAMS facility will provide
adequate extended storage when the fire detection system upgrades
proposed by the Board are completed by DOE.

For excess plutonium located at other sites, DOE has not made progress
in consolidating this plutonium at SRS because it lacks an agreed-upon
disposition pathway for excess plutonium out of the State of South
Carolina. As such, each site continues to maintain its excess plutonium
inventory.

The DOE planned disposition that utilizes MFFF, plutonium vitrification
and H-Canyon Facility is reasonable. The Board believes consolidation of
excess plutonium into a single, robust facility suitable for extended
retrievable storage is logical from a *safety* perspective. DOE should
aggressively pursue consolidation of its excess plutonium.

The Board believes that the initial purpose of the report requested by
Congress has been satisfied. The addition of the fire detection system
permits plutonium to be stored safely in the KAMS facility until
dispositioned by DOE. Remaining modifications to the KAMS facility are
planned and straightforward. The Board will follow these modifications,
as well as DOE\'s effort to execute its plutonium disposition strategy.

Respectfully submitted,

***A. J. Eggenberger***

***Chairman***

***John E. Mansfield***

***Member***

***Joseph F. Bader***

***Member***

***Larry W. Brown***

***Member***

***Peter S. Winokur***

***Member***