 |
 |
 |
 |
 |
 |
 |
 |
 |
5/21/12 |
 |
||||||||
|
 |
Home / Projects / WMD Expertise Redirection Project |
|
||||||||
|
|||||||||||
|
RANSAC Workshop New Perspectives on the Future of the Russian Nuclear Weapons Complex December 19, 2000, 10:00am-4:00pm Carnegie Endowment for International Peace Choate Room 1779 Massachusetts Avenue, NW Washington, DC 20036 Report by J. Raphael Della Ratta Status of Nuclear Cities Job Creation Plans Presentation by: Sharon Weiner, Princeton University Oleg Bukharin, Princeton University Job Creation Efforts by the Closed Cities The administrations of the Russian closed cities have invested tens of million of dollars and have succeeded in creating thousands of jobs within the cities, Weiner reported. The funding for job creation programs is derived from local tax collections, tax exemptions for local businesses, as well as federal subsidies provided to the cities. Subsidy programs had been established for all the cities of the Russian weapons complex; however, they exist now only for the cities of Sarov and Snezhinsk. Weiner explained that there were a number of incidents where Russian corporations abused the exemptions, and this has led to the cutback. These corporations would establish a minimal presence in the city and receive large tax breaks. A portion of the tax savings was then provided to the closed city. In 2000-2001 there will be a one-time federal subsidy of roughly $80 million to offset the loss of those exemptions for all 10 closed cities. Sarov is to receive the largest fraction; Zheleznogorsk expects to receive approximately $15-17 million in subsidies. Some question remains over how long the federal subsidies will continue for the two cities, and it is not clear what the future of the tax exemptions is. Meeting participant Rose Gottemoeller commented during Weiner's presentation that the director of the Snezhinsk Center for Systems Research and Development (CSRD) stated to her during a recent meeting that Snezhinsk expects to lose its tax-exempt status. Weiner went on to report on the individual efforts being made by the cities to create jobs and businesses in the cities. Participant Matt Bunn then commented that these plans tend more to be "wish lists," than actual business plans. Weiner then listed the business development-related accomplishments by the Russians in some of the closed cities. In Sarov:
Job creation activities of some of the other closed cities include:
Further, it is not clear which cities should receive the focus of attention, Bukharin stated. U.S. national security dictates a focus on nonproliferation and arms control-oriented activities, such as protecting critical materials and technical expertise, assisting excess workers, and (from an arms control perspective) downsizing the production ability. To a lesser extent, maintaining social stability within each city is equally crucial to preventing proliferation in any city. While many cities face common problems, the appropriate mix of assistance efforts can vary with each city. Minatom's Downsizing Efforts Looking beyond European and U.S. efforts to downsize the Russian complex, Bukharin outlined the efforts Minatom has made to downsize its weapons complex. These efforts include:
The Minatom effort has had some success stories, including the establishment of the BASF tape manufacturing plant in Zheleznogorsk. Under this deal, German manufacturing equipment was obtained under a barter exchange for Russian uranium enrichment services. Hundreds of jobs were created under this project, increased tax revenue was provided to the city; and it resulted in the permanent conversion of the EkhZ facility to a non-weapons mission. This project generates $30 million in revenue each year. However, there has been some trouble with access to the facility, and there have been allegations of criminal involvement at the site. Shutting down the Avangard and "Start" warhead assembly/disassembly plants in Sarov and Zarechny, respectively, will require roughly $200-$250 million though 2005. Bukharin explained that 9,000-12,000 workers will become unemployed through this closure. Under this estimate, the $200-$250 million would be about evenly split between facility decommissioning activities and job creation for the plants' workforce. One possible way to deal with the closure of these sites is a "step-by-step" approach, wherein decommissioning of facilities is carried out section-by-section, in exchange for an agreed-upon level of U.S. assistance. While the initial focus must be on the Avangard facility, demonstrated results there could facilitate similar work at other sites. According to Department of Energy (DoE) Nuclear Cities Initiative (NCI) Director Bill Desmond, a "step-by-step approach is the only option." There has been discussion of additional "carve-outs" of the Avangard facility for commercial use. The European Nuclear Cities Initiative Presentation by: Raphael Della Ratta, RANSAC In September and December of 1999, the Italian Ministry of Foreign Affairs (MFA) hosted meetings on the nature of the threat posed by the expertise resident within the Russian nuclear cities, and possible European contributions to reducing that threat. In early 2000 the Italian Foreign Ministry put forth a proposal for the creation of the European Nuclear Cities Initiative (ENCI). This program would complement the U.S.-Russia NCI, and would focus on environmental cleanup and energy technology development. The priorities for the ENCI are:
As envisioned the ENCI would start out with $50 million in funding, in the form of $10 million per year over five years. Based on this, Italy's MFA was directed by the European Community Committee on Nonproliferation (CONOP) to develop a list of concrete proposals for ENCI activities. This effort has been completed, and has resulted in a white paper listing potential projects in Sarov and Snezhinsk. These include projects in:
The Russian Nuclear Complex Conversion Consortium Presentation by: Raphael Della Ratta, RANSAC The Russian Nuclear Complex Conversion Consortium, a network of nongovernmental organizations and private industry formed by RANSAC in July 2000, was established to develop significant projects that could accelerate the downsizing of the Russian weapons complex, and assist with the non-weapons employment of Russian weapons scientists. To that end, the consortium has as its emphasis the following three priorities:
Downsizing the Workforce Through Retirement Incentives Presentation by: Frank von Hippel, Princeton University The Magnitude of the Opportunity Von Hippel's presentation focused on a proposal that would rapidly reduce the number of non-weapons jobs that would need to be created in the closed cities, by providing early retirement incentives for the aging nuclear weapons workforce. There has not been much hiring during the past decade and younger workers have an easier time finding jobs outside the nuclear facilities than older workers. Roughly 20 percent of the personnel in the nuclear-weapon laboratories and assembly/disassembly facilities are over 50 and at least 5 percent are over 60. Standard retirement age is 60 for men and 55 for women.1 Nevertheless, many workers are staying on past retirement age because of the low benefits paid by Russia's national pension program. Therefore, a significant fraction of the down-sizing of Russia's nuclear workforce could be accomplished through retirements. Von Hippel estimated that 13 percent of the current 60,000-67,000 defense program personnel in the nuclear cities could be of retirement age at present and about 20% will be at least 55 years of age by 2005. Some older workers have unique knowledge and experience and would likely be asked to stay on the job to train younger workers. However, if three out of four weapons-workers who will be 55 years and older by 2005 could be induced to stop working in the nuclear facilities, and the nuclear facilities would agree to reduce their work forces on a one-for-one basis, the retirement process could reduce the nuclear-weapons workforce by about 15 percent or 10,000 workers. Job creation requirements would be correspondingly reduced by about 30 percent. In 1999 Radi Il'kaev, Director of VNIIEF in Sarov spotlighted the opportunity for just such a program when he shared with Los Alamos National Laboratory officials Jim Toevs and Sig Hecker his proposed down-sizing plan for VNIIEF. The current workforce is about 18,000-strong, of which about 16,000 do weapons work. Il'kaev proposed to downsize this defense workforce by an additional 4,000 by creating 2,000 additional non-weapons jobs and inducing 2,000 workers to retire. The Cost of the Opportunity VNIIEF's Il'kaev stated that the necessary inducement for the 2,000 retirements would be pension supplements of $500 a year, von Hippel continued. This number is so low that it requires explanation. The average wage in the nuclear facilities in Sarov during 1999 and the first quarter of 2000 were in the range of $90-100/month, or only a little over $1000 per year.2 The workers are able to survive because many take second jobs outside the nuclear facilities3 and because the costs of rent, heat and electricity in Russia are all heavily subsidized-when they are paid at all. In Sarov, the cost of $500 pension supplements for 2,000 persons would be only $1 million per year.4 A Notional Incentive Program What if the retirement-incentive program proposed by Il'kaev were extended to the entire nuclear-weapons workforce in the nuclear cities? For purposes of a "back-of-the-envelope" calculation, von Hippel assumed that the incentive supplied is a pension supplement of $625/yr for ten years.5 He assumed also that the 6,000 workers agree to retire in 2001 and 1000 per year each year thereafter through 2005, when a total of 10,000 would be retired. Then the cumulative cost per retiree would be $6,250-about more than half of Minatom's estimate of the average cost of creating a new job in the nuclear cities. The total 20-year cost of the program would be about $60 million. The annual cost would peak at about $6 million per year.6 The pension supplements could be passed through the ISTC, which has the ability to deposit funds directly into individual checking accounts. Since the ISTC is a multinational organization, with the U.S. supplying 40 percent of the government funding in 1999,7 some cost sharing with other contributing countries might be possible. Russia's very substantial contribution would be the continued provision of apartments, health services and subsidized heat and electricity to the retirees. It would probably increase the confidence of the retirees that their annuities would not be subject to the vagaries of the U.S. budget-making process if funding covering the full ten years of each annuity were deposited with the ISTC at the time a worker made his or her retirement commitment, von Hippel added. Such up front funding could take into account the expected interest that the ISTC could earn on the deposits prior to their expenditure. Some of this interest would be required, however, to adjust the stipends for the inflation of the dollar.8 Assuring that Retirement Results in Workforce Downsizing If the U.S., perhaps joined by other countries, were to mount a program to assist the retirement of older Russian nuclear workers, they would need some assurance that the program was actually contributing to down-sizing and that the retirees were no longer reporting for work. They would also likely require that the pensioners receiving the annuity had worked at the facilities for a considerable length of time---probably at least 10 years. In some cases, confidence in workforce downsizing could be enhanced by reductions in the floor areas inside the security fences of the nuclear facilities. This could be done by relocation of the security fences. The Nuclear Cities Initiative financed such relocation at the Avangard warhead assembly/disassembly facility in Sarov in mid-2000. The NCI also committed to help create jobs in the four buildings that were de-militarized in this way. A complementary approach would be to find a mutually acceptable way to verify the approximate size of the nuclear-facility workforces. This might be done by the city government and would be subject to an audit by an internationally respected Moscow-based auditing firm. Finally, the retirees could agree to random checks by a Russian auditor that they were not working at the nuclear facility. These checks could be facilitated if they had managed to obtain work outside the nuclear facilities. To increase the fraction in the population of retirees employed in this way, an additional supplement could be offered to those willing to do public-service work, for example, in schools or hospitals. It was assumed in the cost estimate for the program made above that---as an incentive for doing such work---an additional supplement of $250 per year would be provided to about half of the retirees. The Need for Additional Analysis and Russian Feedback If there is Congressional interest in this idea, it will need further exploration with representatives from the nuclear cities and Minatom prior to formal negotiations, Von Hippel concluded. Most likely the Russian reaction would be negative if the retirement incentives is seen as an alternative rather than as an essential complement to U.S. conversion assistance programs. He believes that the nuclear cities do not want to become impoverished retirement communities. Non-Commercial Employment Opportunities Presentation by: Ken Luongo, RANSAC The Analytical Centers for Non-proliferation One of the more successful initiatives to provide alternative work for Russian weapons scientists has been the establishment of four non-proliferation centers in 1998 and 1999. These centers provide analysis and evaluation of non-proliferation policy and technology issues confronting Russia, Luongo reported. These centers include:
It is not clear that the Russian centers will be able to support these kinds of numbers, but the Snezhinsk center claims that they currently have 15-17 full-time employees (FTEs) working on current projects. At Sarov, the number is 25 FTEs. U.S. foundations and the Department of Energy fund the projects they are working on. The foundations put in $280,000 for all four centers and DoE provided $439,000 for Sarov and Snezhinsk. In the closed cities, the hope is that each of these centers can become the hub of a regional non-proliferation center. This could help to create a significant number of additional non-proliferation-related jobs. The creation of the centers is also intended to be catalytic and assist in the creation of additional projects by allowing the specialists to understand that that there are alternative activities that are fruitful and necessary to solve real-world problems. Another major benefit of the centers is that they allow experts from the closed cities to interact with the international non-governmental community. This interaction allows for the review and distribution of their products. For example, all of their final products will be publicly available and Princeton's Center for Energy and Environmental Studies and RANSAC has put in place a peer review process to provide feedback on key products. CEES and RANSAC are also actively encouraging the centers to publish their results. These centers also will provide independent input and a unique analytical capability on arms control to the Russian government, Luongo stressed, something that Minatom has lacked until now. In fact Minatom has already asked the center at Sarov to perform some additional analysis for them. At this point the four centers have completed many of their initial projects, which were first proposed in 1999, and new project ideas have been proposed for follow-on work. Current DoE funded projects at the Sarov Analytical Center for Nonproliferation include:
The Foundation funded projects include a piece of all of the above and:
There are three projects currently underway at the Snezhinsk Center. The first two are funded by U.S. foundations; the last one is primarily DoE-funded:
At the October 2000 Non-Governmental Organization Forum coordinated by RANSAC held in Moscow, Forum participants proposed more than a dozen possible collaborative projects for the non-proliferation centers. A list of these proposals was compiled by RANSAC and disseminated it to the centers for input. The Snezhinsk, Sarov, and Obninsk centers have expressed interest in several of these proposals. Collaboration on Energy Efficiency One promising new area of growth is the development of projects in the energy efficiency sector. It is important to realize the huge problem of energy misuse in Russia. The country currently wastes approximately 40 percent of the energy that it produces. This inefficient energy consumption burdens its economy and cuts its manufacturing competitiveness. Energy conservation in the closed cities, like the rest of the country, is very poor and a financial drain on already under-funded budgets. In fact, the application of energy saving practices in these closed cities could save up to one-third of the current budget of the city administrations. This savings would free up funds that could be used for investment and job creation activities. In addition, efficiency work itself will create jobs in these cities. Numerous successful energy efficiency centers have been created in Russia and Eastern Europe. Organizations such as the Center for Energy Efficiency (CENEf) in Moscow can serve as a model for the establishment of centers within the closed cities. Energy efficiency centers established by Battelle in Poland, Ukraine, the Czech Republic, Bulgaria, and CENEf in Russia have as a goal to be a self-sustaining operation in three years. These centers focus mainly on policy reforms to promote energy efficiency, technology transfer, and dissemination of energy efficiency information to the public. Some technology demonstrations are conducted by these centers as well. The European Nuclear Cities Initiative is interested in the establishment of one or two energy efficiency centers in the closed cities. A major opportunity exists in identifying leaks in Russia's enormous network of gas pipelines. These leaks are a major source of greenhouse gas emissions and result in the loss of profit through the leaky transportation system. Some Russian proposals have been made in this area but it is not clear that much financing of these projects is being sponsored by the U.S. Non-Nuclear Energy Development To date only 2 percent of ISTC's $346 million funding has been used for research applications in non-nuclear energy technologies like fuel cells, hydrogen technologies, and compressed natural gas technologies. Also, the Nuclear Cities Initiative and the Initiatives for Proliferation Prevention fund only limited activities in this field. There is a need for the development of viable fuel cell technologies. The closed cities could take advantage of their technical expertise and manufacturing capability to develop and improve on fuel cells and other non-nuclear energy technologies. Russia brings technical capability and the possibility of manufacturing cost savings, and some studies indicate that Russian hand-built fuel cell components cost less than those purchased in the U.S. There is a growing market for fuel cells in Russia, especially with Gazprom being interested in leasing large, stationary industrial fuel cell units. At a November 2000 meeting RANSAC convened on fuel cells and energy efficiency, a number of project proposals were made that could be carried out in the cities, including:
In addition, the ENCI may receive some financial support for energy efficiency centers from the Italian government at Sarov and Snezhinsk. The establishment of energy efficiency centers could therefore achieve multiple goals:
Over the last 10 years, a number of environmental management projects in Russia have been funded, primarily through the ISTC, but the majority of cleanup projects have been focused on the Russian Navy's Northern and Pacific Fleets. In particular, these projects have revolved around sub dismantlement under the Cooperative Threat Reduction program, including manufacture of spent fuel storage and transport casks, and low-level radioactive waste remediation in the Russian Far East. However, Russia's three weapons materials processing sites (Mayak, Krasnoyarsk-26, and Tomsk-7) should become a larger focus of cleanup attention and activities. According to a Hanford study, 98 percent of the curies released into the global environment are found in the regions surrounding these three sites. These sites provide a number of opportunities for the development and on-site testing of new environmental technologies from which the U.S. could benefit. The opportunities for alternative employment in this area are potentially large. While in the post cold war period, different labs added from 200-600 people in the non-proliferation field, in environmental cleanup the job increases were much greater. For example, at Savanah River alone, the weapons work force dropped by almost 9,500 workers from 1994-1999. While the environmental work force increased by about 2,500 workers. The U.S. has made a small effort to develop the most appropriate Russian environmental remediation technology under a small program, the Joint Coordinating Commission on Environmental Management (JCCEM). Of its 14 projects in FY01, there are six projects that either directly or closely involve the closed cities. These projects cover the following areas:
Russian institutes can also contribute to the development of technologies and databases on global climate change analysis. For example, they could create technologies for emissions monitoring and verification that could be useful in developing Russia's ability to participate in potential future carbon trading regimes. The High-Level Waste (HLW) Tank Retrieval and Closure Demonstration Center in Zheleznogorsk is an example of how technologies developed in Russia could have benefits for the U.S. cleanup effort. At Zheleznogorsk's Mining and Chemical Combine, scientists have developed a pump and a series of chemical techniques that can immobilize radioactive sludge stored in the Zheleznogorsk HLW tanks, similar to those used at Hanford, Oak Ridge, Savannah River, and the Idaho National Environmental and Engineering Laboratory. The Russian-developed technology pumps the sludge out of the tank and chemically converts it into an environmentally safer storage form. This technique has been used to retrieve the waste and decontaminate several tanks at Zheleznogorsk. There is an effort underway to create a Demonstration Center that would demonstrate the technologies and help qualify remediation equipment and processes to international standards. If this technology could be successfully applied in the U.S. to the Hanford cleanup effort, it could cut the cost of cleanup at Hanford by 10 percent, or about $1.7 billion. And Russia could also be a beneficiary of the further development and application of this cleanup technology. Of course, any improvements in Russia's environmental cleanup technologies could also applicable to their own cleanup needs. There are other opportunities beyond the waste tank project if the U.S. wanted to pursue them, Luongo stressed. Given the extent of radioactive contamination and cleanup needs, one or two radioactive technology centers in Russia could be established to focus on development of new cleanup technologies. These technologies could be driven by the needs of the U.S. clean-up effort. But it is critical to realize that, when it comes to environmental management in Russia, success must be measured in small incremental steps. Security concerns at the three weapons sites have prevented access and the implementation of more extensive projects in the past. But the financing for past projects has been quite small as well. Nor can environmental contamination problems be solved in a short period of time. The goal should be to support a number of small projects applicable to U.S. cleanup needs for new environmental technologies. These projects, if successful, could be built upon and expanded over time as trust between the sides grows, and site access improves. DOE's Science and Technology office within the Office of Environmental Management could provide some funding for these additional collaborative activities. Their Science and Technology budget has been roughly $250 million per year in recent years ($230 million in FY2000; $257 million for FY2001). Business Development Under the NCI and other programs there is a significant focus on business training and education, Luongo reminded, but pointed out that there is a new and unique opportunity in this area. The Moscow Institute of Physics and Technology (MIPT) in July 2000 received a $915,000 grant specifically to establish a Business Management Training School. Part of the concept for the proposal to fund this school was to use it to train managers from the closed cities. The planned shutdown and conversion of the Production Association "Start" in Zarechny (Penza-19) presents a real opportunity to begin to utilize the MIPT school to train "Start" managers before the shut down and conversion process begins. This is a unique opportunity to start a conversion process where all parties are moving from the same base of knowledge and understanding. The "Start" conversion would further benefit if this school were to serve as a "Conversion Laboratory," with Start managers working on conversion plans specifically designed for Zarechny, which would be complete at roughly the same time that "Start" plans to close. The training of "Start" managers at the MIPT School should include the development of a conversion plan specifically for "Start." This would 1) make good use of the time leading up to conversion in 2003, and 2) provide a good educational experience for the "Start" trainees. While this training is occurring, U.S. professors, businesses, U.S. national lab representatives, etc. should be brought over to the school for interaction with the trainees. Minatom Director for Atomic Industry Conversion Alexander Antonov has expressed interest in using the MIPT School to provide entrepreneurial training to "Start" managers. Under this project, approximately 20 "Start" candidates would be selected by MIPT for a two-year training course. As yet, this opportunity is not being funded. Creation of Russian Consulting Groups Lastly, while the NCI program has not been supportive of contract research by individual scientists in the closed cities, funding such research could be beneficial. As an essential first step, the benefits of research by Russian weapons scientists needs to be recast or redefined so that it is clear that completed research adds value. To that end, Russian scientists ought to be encouraged to organize themselves into consulting-type groups. These groups or units would be based upon scientists' expertise and what kind of services they can provide. As consulting firms, these groups would be able to seek out and receive grants and contracts for work from the U.S., Europe, as well as businesses, as subcontractors. The organization of these groups could be facilitated by the NCI International Development Centers---they can advertise the units' capabilities and help iron out legal obstacles to doing work. Open Discussion The following issues and questions were raised during the afternoon portion of the meeting:
1. RFNC-VNIIEF Quarterly Information Bulletin, Issue 1, 1999, p. 23. About 40 percent of men dying in Sarov are of working age. "During the first six months of 1999 ... the number of deaths was 454 (5.3 deaths per 1000 residents)... Of the total number of the deceased men comprise 51.4% (among them 40.9% were capable of working), and women comprise 48.6% (12.9% were able to work)... The analysis of death reasons shows that the majority of deaths were caused by blood circulation system diseases (52.3%) and oncologic diseases (21.3%). The portion of externally caused deaths (various injuries, poisoning, murders and suicides) is 15.2%." (RFNC-VNIIEF Quarterly Information Bulletin, Issue 1, 1999, p. 23.) "In the first quarter of 2000…the number of deaths was 266…Of the total number of the deceased men comprised 156, among them 63 men were of working age, and women comprised 110 including 8 women of working age" (RFNC-VNIIEF Quarterly Information Bulletin, Issue 3, 2000). For comparison, in the US in 1996, 35% of the deaths were due to cardiovascular disease, 26% due to cancer, and 11% from accidents, suicide and murder (Statistical Abstracts of the US, 1998). 2. 2269 rubles/month during 1999, RFNC-VNIIEF Quarterly Information Bulletin, Issue 2, 2000, p. 32; and 2810 rubles/month in the first quarter of 2000,RFNC-VNIIEF Quarterly Information Bulletin, Issue 3, 2000, p. 22. I assume an average conversion rate of 25 rubles per dollar during this period. 3. Valentin Tikhonov, Russia's Missile and Nuclear Complexes, chapter 5, "Making Money on the Side." 4. This assumes that no supplements go to already retired workers. This might create equity issues in the nuclear cities. How to deal with these issues and who would be responsible for doing so should be the subject of a supplementary analysis. About 20 percent of the population of Sarov or 17,000 individuals are of pensionable age (presumably mostly women, given Russian life expectancies), RFNC-VNIIEF Quarterly Information Bulletin, Issue 1, 1999, p. 23. It is not clear how many of them were nuclear workers or how many of those might have proliferation-sensitive knowledge. 5. $500 per year plus a $250/yr supplement if the retiree takes a job in the public-service sector (see below). For purposes of this calculation, half of the workforce is assumed to receive the additional supplement. 6. Some retirees would die before ten years. 7. ISTC Annual Report, 1999, http://www.istc.ru/istc/website.nsf/html/99/english/report.htm. The US contribution was $13.2 million in 1999. 8. A real interest rate of 3 percent would reduce the up-front cost of an inflation-adjusted annuity by about 14 percent. |
|
|
|
© 2007 Partnership for Global Security. All rights reserved. Privacy Statement.