Nuclear Waste: Challenges and Savings Opportunities in DOE's	 
High-Level Waste Cleanup Program (17-JUL-03, GAO-03-930T).	 
                                                                 
The Department of Energy (DOE) oversees the treatment and	 
disposal of 94 million gallons of highly radioactive nuclear	 
waste from the nation's nuclear weapons program, currently at DOE
sites in Washington, Idaho, and South Carolina. In 2002, DOE	 
began an initiative to reduce the estimated $105-billion cost and
70-year time frame of this cleanup. GAO was asked to testify on  
the status of this initiative, the legal and technical challenges
DOE faces in implementation, and any further opportunities to	 
reduce costs or improve program management. GAO's testimony is	 
based on a report (GAO-03-593) released at the hearing. 	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-930T					        
    ACCNO:   A07535						        
  TITLE:     Nuclear Waste: Challenges and Savings Opportunities in   
DOE's High-Level Waste Cleanup Program				 
     DATE:   07/17/2003 
  SUBJECT:   Program evaluation 				 
	     Program management 				 
	     Nuclear waste disposal				 
	     Nuclear waste management				 
	     Cost control					 
	     Radioactive waste disposal 			 
	     Strategic planning 				 

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GAO-03-930T

Testimony Before the Subcommittee on Oversight and Investigations,
Committee on Energy and Commerce, House of Representatives

United States General Accounting Office

GAO For Release on Delivery Expected at 9: 30 a. m. EDT, Thursday, July
17, 2003 NUCLEAR WASTE

Challenges and Savings Opportunities in DOE's High- Level Waste Cleanup
Program

Statement of Robin M. Nazzaro, Director Natural Resources and Environment

GAO- 03- 930T

DOE*s initiative for reducing the costs and time required for cleanup of
high- level wastes is still evolving. DOE*s main strategy for treating
high- level waste continues to include separating and concentrating much
of the

radioactivity into a smaller volume for disposal in a geologic repository.
Under the initiative, DOE sites are evaluating other approaches, such as
disposing of more waste on site. DOE*s current savings estimate for these

approaches is $29 billion, but the estimate may not be reliable or
complete. For example, the savings estimate does not adequately reflect
uncertainties or take into account the timing of when savings will be
realized.

DOE faces significant legal and technical challenges to realize these
savings. A key legal challenge involves DOE*s process for deciding that
some waste with relatively low concentrations of radioactivity can be
treated and disposed of on- site. A recent court ruling invalidated this
process, putting the accelerated schedule and potential savings in
jeopardy. A key technical challenge is that DOE*s approach relies on
laboratory testing to confirm separation of the waste into high- level and
low- activity portions. At the Hanford Site in Washington State, DOE plans
to build a facility before conducting integrated testing of the waste
separation technology* an approach that failed on a prior major project.

DOE is exploring proposals, such as increasing the amount of high- level
waste in each disposal canister, that if successful could save billions of
dollars more than the current $29 billion estimate. However, considerable
evaluation remains to be done. DOE also has opportunities to improve

program management by fully addressing recurring weaknesses GAO has
identified in DOE*s management of cleanup projects, including the practice
of incorporating technology into projects before it is sufficiently
tested.

Waste Storage Tanks under Construction at DOE*s Hanford Site, September
1947

Many of the waste storage tanks, such as those above, were built in the
1940s to 1960s. These tanks, now underground, are used to store high-
level waste and have exceeded their design life of 10- 40 years. Some have
leaked waste into the soil.

The Department of Energy (DOE) oversees the treatment and disposal of 94
million gallons of highly radioactive nuclear waste from the nation*s
nuclear weapons program, currently at DOE sites in Washington, Idaho, and
South Carolina. In 2002, DOE began an initiative to reduce the estimated
$105- billion cost and 70- year time

frame of this cleanup. GAO was asked to testify on the status of this
initiative, the legal and technical challenges DOE faces in
implementation, and any further opportunities to reduce costs or improve
program management. GAO*s testimony is based on a

report (GAO- 03- 593) released at the hearing. GAO made recommendations in
the report on which this testimony is based. In commenting on the report,
DOE agreed to consider seeking clarification from the Congress about its
authority to

decide that waste with low concentrations of radioactivity could be
treated and disposed of on- site. DOE disagreed with the need to conduct
integrated testing of the Hanford waste separation technology and argued
that its

existing actions are sufficient to support decision making with rigorous
analysis, test new technology before incorporating it into projects, and
pursue concurrent design/ construction of complex facilities. GAO
disagrees

and continues to believe that its recommendations are warranted.

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 930T To view the full product,
click on the link above. For more information, contact Robin M. Nazzaro at
(202) 512- 3841 or nazzaror@ gao. gov.

Highlights of GAO- 03- 930T, a testimony before the Subcommittee on
Oversight and Investigations, Committee on Energy and Commerce, House of
Representatives July 17, 2003

NUCLEAR WASTE

Challenges and Savings Opportunities in DOE*s High- Level Waste Cleanup
Program

Page 1 GAO- 03- 930T High- Level Waste Cleanup

Mr. Chairman and Members of the Subcommittee: We are pleased to be here
today to discuss the Department of Energy*s (DOE) high- level waste
cleanup program. DOE has about 94 million gallons of highly radioactive
nuclear waste from the nation*s nuclear weapons program. This waste is
currently in temporary storage at DOE sites in Washington, South Carolina,
and Idaho. After investing more than 20 years and about $18 billion, DOE
acknowledged in February 2002 that the program to clean up its high- level
waste was far behind schedule, far over budget, and in need of major
change. In 2002, DOE began an initiative to reduce the program*s nearly
$105- billion estimated cost and 70- year

time frame to finish permanent disposal of this waste. Our testimony,
based on work included in the report being released by the Subcommittee
today, 1 discusses (1) the components of DOE*s high- level waste and the
process involved in preparing the waste for disposal, (2) the status of
DOE*s accelerated cleanup initiative for high- level waste, (3) legal and
technical challenges DOE faces in implementing the initiative, and (4)
further opportunities to reduce costs beyond those identified in DOE*s
current cost- savings proposal or to improve program management.

In summary, we found the following:  DOE*s high- level waste has many
components, ranging from radioactive isotopes and corrosive chemicals to
the water in which much of this material was initially discharged. The
radioactive components vary greatly; a small portion will remain
dangerously radioactive for millions of years, while the vast majority
will lose much of their radioactivity more quickly, so that more than 90
percent of the current radioactivity will be gone within 100 years. To
prepare the waste for permanent disposal, DOE plans to separate the waste
into two waste streams: one with high levels of radioactivity and the
other with lower concentrations of radioactivity. DOE expects that this
process will concentrate at least 90 percent of the radioactivity into a
volume that is significantly smaller than the current total volume of
waste. DOE plans to immobilize and bury the highly radioactive portion in
a permanent underground repository. The remaining waste will be
immobilized and disposed of at the location where it is currently stored
or at some other location.

1 U. S. General Accounting Office, Nuclear Waste: Challenges to Achieving
Potential Savings in DOE*s High- Level Waste Cleanup Program, GAO- 03- 593
(Washington, D. C.: June 17, 2003).

Page 2 GAO- 03- 930T High- Level Waste Cleanup

 DOE*s initiative to accelerate the cleanup is evolving, and while its
savings estimates are changing accordingly, we have ongoing concerns about
the reliability of those estimates. As of April 2003, DOE estimated it
could shorten the waste cleanup schedule by 20- 35 years and save up to
$29 billion. To help achieve these schedule and cost reductions, DOE has
identified alternative treatment and disposal strategies, such as
developing ways to permanently dispose of more of the radioactive waste at
current sites rather than moving it to the planned underground repository.
However, our assessment of DOE*s savings estimate indicates that it may
not be reliable. For example, the savings analysis does not take into
account all costs associated with alternative treatment strategies. Also,
the estimate of savings does not compare costs on the basis of *present
value,* where dollars to be saved in future years are discounted to a
common year to reflect the time value of money. At DOE*s Savannah River
Site in South Carolina, such an adjustment would lower the savings
estimate for accelerated waste processing by $2.6 billion* from $5.4
billion to $2.8 billion (in 2003 dollars).

 DOE faces significant legal and technical challenges to realize the
estimated savings. A key legal challenge involves DOE*s authority to apply
a designation other than high- level waste to some waste with relatively
low concentrations of radioactivity, so that this portion can be treated
less expensively than highly radioactive waste. A recent court ruling
invalidated this redesignation process, thus precluding DOE from
proceeding with this element of its accelerated initiative. If DOE cannot
meet its accelerated schedules, then potential savings are in jeopardy. A
key technical challenge is that DOE*s approach relies primarily on
laboratory testing to confirm that separating waste into high- level and
low- activity portions will be successful. At the Hanford Site in
Washington State, DOE is planning to construct full- scale facilities
before fully testing the technologies on an integrated basis* an approach
that has failed on another project in the past, resulting in significant
cost increases and schedule delays.

 DOE is exploring additional cost savings beyond those identified in its
current cost- saving proposals. The proposals that offer significant
potential are being developed by the Hanford and Savannah River sites.
These proposals call for increasing the amount of waste that can be
concentrated into the canisters destined for the permanent underground
repository. DOE*s data indicates that these proposals, if successful,
could save several billion dollars. Considerable evaluation of these
proposals remains to be done and cost- saving estimates have

Page 3 GAO- 03- 930T High- Level Waste Cleanup

not yet been fully developed, according to DOE officials. DOE also has
opportunities to improve its management of the cleanup program by
addressing management weaknesses that we and others have identified in the
past. Although DOE has taken steps to improve program

management, we have continuing concerns about management weaknesses in
several areas. These include making key decisions without rigorous
supporting analysis, incorporating technology into projects before it is
sufficiently tested, and pursuing a *fast- track* approach of launching
into facility construction before completing sufficient design work. It
does not appear that DOE*s current management efforts will fully address
these weaknesses.

Our report makes several recommendations to DOE that, if implemented, will
help to manage or reduce legal and technical risks to the program, avoid
costly delays, and strengthen overall program management. DOE agreed to
consider our recommendation to seek clarification from the Congress
regarding its authority to determine that some waste can be treated and
disposed of as other than high- level waste. However, regarding

our recommendations that the department conduct integrated pilot testing
of its waste separation processes at Hanford, and take steps to improve
the management of high- level waste projects, such as by conducting more
rigorous analyses to support key project decisions, DOE believes that its
current approach is adequate. We do not agree with DOE*s views and
continue to believe that all of our recommendations are warranted.

DOE has a vast complex of sites across the nation dedicated to the nuclear
weapons program. DOE largely ceased production of plutonium and enriched
uranium by 1992, but the waste remains at the sites. Most of the tanks in
which the waste is stored have already exceeded their design life. For
example, many of Hanford*s and Savannah River*s tanks were built in

the 1940s to 1960s and were designed to last 10- 40 years. Leaks from some
of these tanks were first detected at Hanford in 1956 and at Savannah
River in 1959. Given the age and deteriorating condition of some of the
tanks, there is concern that some of them will leak additional waste into
the soil, where it may migrate to the water table and, in the case of the
Hanford Site, to the Columbia River.

Responsibility for the high- level waste produced at DOE facilities is
governed primarily by federal laws, including the Atomic Energy Act of
1954. These laws established responsibility for the regulatory control of
radioactive materials including DOE*s high- level waste and assigned the
Nuclear Regulatory Commission (NRC) the function of licensing facilities
Background

Page 4 GAO- 03- 930T High- Level Waste Cleanup

that are expressly authorized for long- term storage of high- level
radioactive waste generated by DOE. In addition, the Nuclear Waste Policy
Act of 1982 defined high- level radioactive waste. Various other federal
laws, including the Resource Conservation and Recovery Act of 1976, guide
how DOE must carry out its cleanup program. The high- level waste cleanup
program is under the leadership of the Assistant Secretary for
Environmental Management. It involves consultation with a variety of
stakeholders, including the Environmental Protection Agency, state
environmental agencies where DOE sites are located, county and local
governmental agencies, citizen groups, advisory groups, and Native
American tribes.

The waste in the tanks at the Hanford and Savannah River sites and the
Idaho National Laboratory near Idaho Falls is a complex mixture of
radioactive and hazardous components. DOE*s process for preparing it for
disposal is designed to separate much of the radioactive material from
other waste components.

Nearly all the radioactivity in the waste originates from radionuclides
with half- lives 2 of about 30 years or less. The relatively short half-
lives of most of the radionuclides in the waste means that within 30
years, about 50 percent of the current radioactivity will have decayed
away, and within 100 years this figure will rise to more than 90 percent.
Figure 1 shows the

pattern of decay, using 2002 to 2102 as the 100- year period. Extending
the analysis beyond the 100- year period shown in the figure, in 300
years, 99.8 percent of the radioactivity will have decayed, leaving 0.2
percent of the current radioactivity remaining.

2 Each radioactive component, or radionuclide, in high- level waste loses
its radioactivity at a rate that differs for each component. This rate of
decay, which cannot be changed, is measured in *half- lives** that is, the
length of time required for half of the unstable atoms to decay and
release their radiation. DOE*s High- Level

Waste Is a Complex Mixture That Requires a Multi- Step Process to Prepare
for Disposal

Much of the Radioactivity Declines Relatively Quickly

Page 5 GAO- 03- 930T High- Level Waste Cleanup

Figure 1: Natural Decay of Radionuclides in DOE*s Untreated High- Level
Waste from 2002 to 2102

Note: Radioactivity is measured in a unit called a curie. One curie equals
37 billion atomic disintegrations per second.

Despite the relatively rapid decay of most of the current radioactivity,
some radionuclides have half- lives in the hundreds of thousands of years
and will remain dangerously radioactive for millions of years. Some of
these long- lived radionuclides are potentially very mobile in the
environment and therefore must remain permanently isolated. If these
highly mobile radionuclides leak out or are released into the environment,
they can contaminate the soil and water.

DOE plans to isolate the radioactive components and prepare the waste for
disposal through a multi- step treatment process. DOE expects this process
to concentrate at least 90 percent of the radioactivity into a much
smaller volume that can be permanently isolated for at least 10,000 years
in a geologic repository. The portion of the waste not sent to the
geologic repository will have relatively small amounts of radioactivity
and long- lived radionuclides. Based on current disposal standards used by
the NRC, if the radioactivity of this remaining waste is sufficiently low,
it can be disposed of on site near the surface of the ground, using less
Processing Can

Concentrate the Radioactivity into a Much Smaller Volume of Waste

Page 6 GAO- 03- 930T High- Level Waste Cleanup

complex and expensive techniques than those required for the highly
radioactive portion. DOE plans to dispose of this waste on site in vaults
or canisters, or at other designated disposal facilities. DOE has
successfully applied this process in a demonstration project at the West
Valley site in New York State. At West Valley, separation of the low-
activity portion from the high- level portion of the waste reduced by 90
percent the quantity of waste requiring permanent isolation and

disposal at a geologic repository. The high- level portion was stabilized
in a glass material (vitrified) and remains stored at the site pending
completion of the high- level waste geologic repository and resolution of
other issues

associated with disposal costs. 3 The remaining low- activity portion was
mixed with cement- forming materials, poured into drums where it
solidified into grout (a cement- like material), and remains stored on
site, awaiting shipment to an off- site disposal facility.

DOE*s new initiative, implemented in 2002, attempts to address the
schedule delays and increasing costs DOE has encountered in its efforts to
treat and dispose of high- level waste. This initiative is still evolving.
As of April 2003, DOE had identified several strategies to help reduce the
time needed to treat and dispose of the waste. Based on these strategies,
DOE

estimated that it could reduce the waste cleanup schedule by about 20 to
35 years at its high- level waste sites and save about $29 billion
compared to the existing program baseline. 4 While some degree of savings
is likely if the strategies are successfully implemented, the extent of
the savings is still uncertain.

3 At Savannah River, high- level sludge from the tanks has also been
stabilized in glass material and is currently stored on site pending
completion of the geologic repository. As of August 30, 2002, Savannah
River had produced 1, 331 canisters of this stabilized waste.

4 Unless otherwise noted, all dollar estimates are as reported by DOE and
are in current dollars. DOE*s Initiative for Accelerating Cleanup

Is Still Evolving, with the Extent of Savings Uncertain

Page 7 GAO- 03- 930T High- Level Waste Cleanup

Many of DOE*s proposals to speed cleanup and reduce environmental risk
involve ways to do one or more of the following:

 Deal with some tank waste as low- level or transuranic 5 waste, rather
than as high- level waste. Doing so would eliminate the need to vitrify
the waste for off- site disposal in the geologic repository for high-
level waste.

 Complete the waste treatment more quickly by using additional or
supplemental technologies. For example, DOE*s Hanford Site is considering
using up to four supplemental technologies, in addition to vitrification,
to process its low- activity waste. DOE believes these technologies are
needed to help it meet a schedule milestone date of 2028 agreed to with
regulators to complete waste processing. Without these technologies, DOE
believes waste treatment would not be completed before 2048.

 Segregate the waste more fully than initially planned and tailor waste
treatment to each of the waste types. By doing so, DOE plans to apply less
costly treatment methods to waste with lower concentrations of
radioactivity.

 Close waste storage tanks earlier than expected, thereby avoiding the
operating costs involved in maintaining the tanks and monitoring the
wastes.

Table 1 summarizes the estimated cost savings for each DOE site if
accelerated proposals for cleaning up high- level waste are successfully
implemented.

5 Low- level radioactive waste is defined as radioactive material that is
not high- level radioactive waste, spent nuclear fuel, transuranic waste,
or certain by- product material (the tailings or wastes produced by the
extraction or concentration or uranium or thorium from any ore processed
primarily for its source material content). 42 U. S. C. 10101( 16).
Transuranic wastes come primarily from reprocessing of spent nuclear fuel
and from fabrication of nuclear weapons. Transuranic waste is defined as
waste with radionuclides with atomic numbers greater than 92 (that is,
uranium) and having half- lives greater than 20 years in concentrations
greater than 100 nanocuries per gram. Initiative Centers on Ways

to Speed Disposal and Save Money

Page 8 GAO- 03- 930T High- Level Waste Cleanup

Table 1: DOE*s Estimated Cost Savings from Proposals to Accelerate Cleanup
of High- Level Waste

Amounts are in billions of current dollars, fiscal year 2003 to the end of
cleanup

Site Current baseline

lifecycle cost estimate

Accelerated lifecycle cost

estimate Estimated savings

from accelerated initiatives

Idaho National Laboratory $10.07 $ 3.10 $ 6.97 Hanford 56.19 41.67 14.52
Savannah River 18.82 11.49 7.33 Totals $85.08 $56.26 $28.82 Source: DOE.

Note: West Valley is not included in this table because high- level waste
cleanup at the site was essentially completed in September 2002.

Our review indicates that DOE*s current estimate of $29 billion may not
yet be reliable and that the actual amount to be saved if DOE successfully
implements the alternative waste treatment and disposal strategies may be
substantially different from what DOE is projecting. We have several

concerns about the reliability and completeness of the estimate. These
concerns include the accuracy of baseline cost estimates from which
savings are calculated, whether all appropriate costs are included in the
analysis, and whether the savings estimates properly reflect the timing of

the savings or uncertainties. DOE*s current lifecycle cost baseline is
used as the base cost from which potential savings associated with any
improvements are measured. However, in recent years, we and others have
raised concerns about the reliability of DOE*s baseline cost estimates. In
a 1999 report, we noted that DOE lacked a standard methodology for sites
to use in developing their lifecycle cost baseline, raising a concern
about the reliability of data used to develop these cost estimates. 6
DOE*s Office of Inspector General also raised a concern in a 1999 review
of DOE project estimates, noting that several project cost estimates
examined were not supported or complete. DOE acknowledged in its February
2002 review of the cleanup program

6 U. S. General Accounting Office, Nuclear Waste: DOE*s Accelerated
Cleanup Strategy Has Benefits but Faces Uncertainties, GAO/ RCED- 99- 129
(Washington, D. C.: Apr. 30, 1999). Savings Estimate May Not

Be Reliable Baseline Costs Are Not Fully Reliable

Page 9 GAO- 03- 930T High- Level Waste Cleanup

that baseline cost estimates do not provide a reliable picture of project
costs. 7 Some of DOE*s savings may be based on incomplete estimates of the
costs

for the accelerated proposals. According to Office of Management and
Budget (OMB) guidance on developing cost estimates, agencies should ensure
that all appropriate costs are addressed in the estimate. However, DOE has
not always done so. For example, the Idaho National

Laboratory*s estimated savings of up to $7 billion is based, in large
part, on eliminating the need to build a vitrification facility to treat
its waste. However, the waste may have to undergo an alternative treatment
method before it can be accepted at a geological repository, and the Idaho
National Laboratory is considering four different technologies for doing
so. Nevertheless, DOE*s current savings estimate reflects the potential
cost of only one of those technologies. DOE has not yet developed the
costs of using any of the other waste treatment approaches. DOE noted that
the accelerated lifecycle estimate could likely change depending on which
one of the technologies is selected and the associated costs of treating
the waste are developed.

According to OMB guidance, agencies should ensure that the timing of when
the savings will occur is accounted for, that uncertainties are recognized
and quantified where possible, and that nonbudgetary impacts, such as a
change in the level of risk to workers, are quantified, or at least
described. We found problems in all three areas.  Regarding the time
value of money, applying OMB guidance would

mean that estimates of savings in DOE*s accelerated plans should reflect a
comparison of its baseline cost estimate with the alternative, expressed
in a *present value,* where the dollars are discounted to a common year to
reflect the time value of money. Instead, DOE*s savings estimates
generally measure savings by comparing dollars in different years. For
example, the Savannah River Site estimates a savings of nearly $5. 4
billion by reducing by 8 years (from 2027 to 2019) the time required to
process its high- level waste. Adjusting the savings estimate to present
value in 2003 results in a savings of $2.8 billion in 2003 dollars. 7 U.
S. Department of Energy, A Review of the Environmental Management Program

(Washington, D. C.: Feb. 4, 2002). Estimates of Project Costs May

Be Incomplete Savings Estimates Do Not Reflect Timing, Uncertainty, or
Nonbudgetary Impacts

Page 10 GAO- 03- 930T High- Level Waste Cleanup  Regarding uncertainties,
in contrast to OMB guidance, the DOE savings estimates generally do not
consider uncertainties. For example, the

savings projected in the Idaho National Laboratory*s accelerated plan
reflect the proposal to no longer build the vitrification facility and an
associated reduction in operations costs. However, the savings do not
account for uncertainties such as whether alternatives to vitrification
will succeed and at what cost. Rather than reflecting uncertainties by
providing a range of savings, DOE*s savings estimate is a single point
estimate of $7 billion.

 Regarding nonbudgetary impacts, DOE*s savings estimates generally do not
fully assess the value of potential nonbudgetary impacts, such as a change
in the level of risk to workers or potential effects on the environment.
OMB guidelines recommend identification and, where possible,
quantification of other expected benefits and costs to society when
evaluating alternative plans. For example, the Idaho National Laboratory*s
accelerated plan does not assess potential increases in environmental
risk, if any, from disposing of the waste without stabilizing it into a
vitrified form. By not assessing these benefits and risks to workers and
the environment, DOE leaves unclear how important these risks and trade-
offs are to choosing an alternative treatment approach.

DOE faces significant legal and technical challenges in achieving the cost
and schedule reductions proposed in its new initiative. On the legal side,
DOE*s proposals depend heavily on the agency*s authority to apply a
designation other than *high- level waste* to the low- activity portion of
the waste stream, so that this low- activity portion does not have to be
disposed of more expensively as high- level waste. The portion of DOE*s

order setting out criteria for making such determinations has been
invalidated in a recent court ruling. On the technical side, DOE*s
proposals rest heavily on the successful application of waste separation
methods that are still under development and will not be fully tested
before being put in place. DOE*s track record in this regard has not been
strong; it has had to abandon past projects that were also based on
promising* but not fully tested* technologies. Either or both of these
challenges could limit the potential savings from DOE*s accelerated
cleanup initiative. Key Legal and

Technical Challenges Could Limit Potential Savings from DOE*s Accelerated
Cleanup Initiative

Page 11 GAO- 03- 930T High- Level Waste Cleanup DOE has traditionally
managed all of the wastes in its tanks as high- level waste because the
waste resulted primarily from the reprocessing of spent nuclear fuel and
contains significant amounts of radioactivity. However,

by separating the waste into high- level and low- activity portions and
managing the low- activity portion as something other than high- level
waste, DOE could use less costly and less complicated treatment
approaches. DOE has developed guidelines for deciding when waste in the
tanks should not be considered high- level waste. In 1999, under Order
435.1, DOE formalized its process for determining which waste is
incidental to reprocessing (* incidental waste*), not high level waste,
and therefore will not be sent to a geological repository for high- level
waste disposal. This process provides a basis for DOE to treat and dispose
of some portion of its wastes less expensively as low- level or
transuranic wastes.

DOE*s ability to define some waste as incidental to reprocessing, and to
then follow a different set of treatment and disposal requirements for
that waste, is central to its overall strategy for addressing its tank
waste. For example, DOE planned to use its incidental waste process to
manage about 90 percent of its 54 million gallons of tank waste at the
Hanford Site as low- level waste, rather than process it through a high-
level waste vitrification facility. Using that approach, most of the waste
would be eligible for treatment and disposal on site. Such an approach
would save billions compared to treating all of the waste as high- level
waste and sending it for disposal in a high- level waste geologic
repository.

A recent court ruling precludes DOE from reclassifying some of its waste
as other than high- level waste. In March 2002, the Natural Resources
Defense Council and others filed a lawsuit challenging DOE*s authority to
manage its wastes through its incidental waste process. 8 The plaintiffs
alleged that DOE arbitrarily established the incidental waste
determination process without proper regard for the law or properly
establishing a justification for this process. A primary concern of the
plaintiffs was that DOE would use its incidental waste process to
permanently leave intensely radioactive waste sediments in the tanks with
only minimal

8 Natural Resources Defense Council, Inc. v. Abraham, No. 01- CV- 413 (D.
Idaho, filed Mar. 5, 2002). The lawsuit was originally filed in January
2000 in the 9th Circuit Court of Appeals and was subsequently transferred
to the federal district court in Idaho. The other parties to the lawsuit
are the Snake River Alliance, the Confederated Tribes and Bands

of the Yakama Nation, and the Shoshone Bannock Tribes. In addition, the
states of Washington, Idaho, Oregon and South Carolina are participating
as amicus curiae.

DOE*s Accelerated Initiative Relies on a Process for Reclassifying Waste
That the Court Has Ruled Invalid

Page 12 GAO- 03- 930T High- Level Waste Cleanup treatment. The lawsuit
alleged that DOE*s incidental waste process improperly allows DOE to
reclassify high- level waste as incidental waste

that does not need to be treated in the same way as high- level waste.
According to the plaintiffs, the Nuclear Waste Policy Act defines all
waste originating from a given source* that is, from reprocessing of spent
nuclear fuel* as high- level waste and requires that such waste be managed
as high- level waste, yet DOE has chosen to differentiate its wastes

according to the level of radioactivity and manage them accordingly. In a
July 3, 2003 ruling on the lawsuit, the court agreed with the plaintiffs,
stating that the portion of DOE*s Order 435.1 setting out its incidental
waste determination process violates the Nuclear Waste Policy Act and thus
is invalid.

The court*s ruling could seriously hinder DOE*s efforts to implement its
accelerated treatment and disposal strategies. Under the ruling, DOE*s
incidental waste determinations cannot be implemented. Since the start of
the lawsuit, DOE had not implemented any of its approved incidental waste
determinations and had not yet decided whether to defer or proceed with
its pending incidental waste determinations* such as those for closing
tanks at the Savannah River Site and Idaho National Laboratory.

If DOE appeals the court ruling, a lengthy legal process could follow. A
lengthy legal process will also likely delay treatment plans for this
waste and delay closing tanks on an accelerated schedule. For example, the
Idaho National Laboratory planned to begin closing tanks in the spring of
2003, pending approval of an incidental waste determination that would
allow DOE to close the tanks by managing tank waste residuals as lowlevel
waste. 9 A DOE official at the Idaho National Laboratory told us that
while a delay of several months would not immediately threaten schedule
dates, a delay beyond 24 months would seriously affect the site*s ability
to

meet its accelerated 2012 date to close all of the tanks. If the court*s
ruling invalidating DOE*s incidental waste determination process is
upheld, DOE may need to find an alternative that would allow it to treat
waste with lower concentrations of radioactivity less expensively.
Searching for such an alternative could delay progress at all three of

DOE*s high- level waste sites that rely on incidental waste
determinations. If DOE cannot meet its accelerated schedules, then
potential savings are 9 Tank closure at the Idaho National Laboratory is
also pending completion of its National Environmental Policy Act process.

Page 13 GAO- 03- 930T High- Level Waste Cleanup in jeopardy. At this
point, the department does not appear to have a strategy to avoid the
potential effects of challenges to its incidental waste determination
authority, either from the current court ruling or future

challenges. At the time of our report, DOE officials told us that they
believed the department would prevail in the legal challenge. DOE believed
it would be premature to explore alternative strategies to overcome
potentially significant delays to the program that could result from a
protracted legal conflict or from an adverse decision. Such strategies
could range from exploring alternative approaches for establishing an
incidental waste regulation to asking that the Congress provide
legislative authority for DOE to implement an incidental waste policy.

Like the ability to determine that some waste is incidental to
reprocessing, the ability to separate the waste components is important to
meet waste cleanup schedule and cost goals. If the waste is not separated,
all of it* about 94 million gallons* may have to be treated as high- level
waste and disposed of in the geological repository. Doing so would require
a much larger repository than currently planned, and drive up disposal
costs by billions of dollars. Successful separation will substantially
reduce the volume of waste needing disposal at the planned repository, as
well as the time and cost required to prepare it for disposal, and allow
less expensive methods to be used in treating and disposing of the
remaining lowactivity waste. The waste separation process is complicated,
difficult, and unique in scope at each site. The waste differs among sites
not only in

volume but also in the way it has been generated, managed, and stored over
the years.

The challenge to successfully separate the waste is significant at the
Hanford Site, where DOE intends to build a facility for separating the
waste before fully testing the separation processes that will be used. The
planned laboratory testing includes a combination of pilot- scale testing
of major individual processes and use of operational data for certain of
those processes for which DOE officials said they had extensive
experience. However, integrated testing will not be performed until full-
scale facilities

are constructed. DOE plans to fully test the processes for the first time
during the operational tests of the newly constructed facilities.

This approach does not fully reflect DOE guidance, which calls for
ensuring that new or complex technology is mature before integrating it
into a project. Specifically, DOE*s Project Management Order 413.3
requires DOE to assess the risks associated with technology at various
Accelerated Initiative Also

Relies on Waste Separation Approaches That Will Not Be Fully Tested

Page 14 GAO- 03- 930T High- Level Waste Cleanup phases of a project*s
development. For projects with significant technical uncertainties that
could affect cost and schedule, corrective action plans

to address these uncertainties are required before the projects can
proceed. In addition, DOE*s supplementary project management guidance
suggests that technologies be developed to a reasonable level of maturity
before a project progresses to full implementation to reduce risks and
avoid cost increases and schedule delays. The guidance suggests that DOE
avoid the risk of designing facilities concurrently with technology
development.

The laboratories working to develop Hanford*s waste separation process
have identified several technical uncertainties, which they are working to
address. These uncertainties or critical technology risks include problems
with separating waste solids through an elaborate filtration system,
problems associated with mixing the waste during separation processes, and
various problems associated with the low- activity waste evaporator. Given
these and other uncertainties, Hanford*s construction

contractor and outside experts have seen Hanford*s approach as having high
technical risk and have proposed integrated testing during project
development. However, DOE and the construction contractor eventually
decided not to construct an integrated pilot facility and instead to
accept a higher- risk approach. DOE officials said they wanted to avoid
increasing project costs and schedule delays, which they believe will
result from building a testing facility. Instead, Hanford officials said
that they will continue to conduct pilot- scale tests of major separation
processes. DOE

officials said they believe this testing will provide assurance that the
separation processes will function in an integrated manner. After the
fullscale treatment facilities are constructed, DOE plans to fully test
and demonstrate the separation process during facility startup operations.

The consequences of not adhering to sound technology development
guidelines can be severe. At the Savannah River Site, for example, DOE
invested nearly $500 million over nearly 15 years to develop a waste
separation process, called in- tank precipitation, to treat Savannah
River*s high- level waste. While laboratory tests of this process were
viewed as successful, DOE did not adequately test the components until it
started full- scale operations. DOE followed this approach, in part,
because the technology was commercially available and considered *mature.*
However, when DOE started full- scale operations, major problems occurred.
Benzene, a dangerously flammable byproduct, was produced in large
quantities. Operations were stopped after DOE spent about

$500 million because experts could not explain how or why benzene was

Page 15 GAO- 03- 930T High- Level Waste Cleanup being produced and could
not determine how to economically reconfigure the facility to minimize it.
Consequences of this technology failure

included significant cost increases, schedule delays, a full- scale waste
separation process that did not work, and a less- than- optimum waste
treatment operation. Savannah River is now developing and implementing a
new separation technology at an additional cost of about $1.8 billion and
a delay of about 7 years. 10 Subsequent assessments of the problems that
developed at Savannah

River found that DOE (1) relied on laboratory- scale tests to demonstrate
separation processes, (2) believed that technical problems could be
resolved later during facility construction and startup, and (3) decided
to scale up the technology from lab tests to full- scale without the
benefit of using additional testing facilities to confirm that processes
would work at a larger scale. Officials at Hanford are following a similar
approach. Several experts with whom we talked cautioned that if separation
processes at Hanford do not work as planned, facilities will have to be
retrofitted, and potential cost increases and schedule delays would be
much greater than any associated with integrated process testing in a
pilot facility.

In addition to the potential cost savings identified in the accelerated
site cleanup plans, DOE continues to develop and evaluate other proposals
to reduce costs but is still assessing them. Although the potential cost
savings have not been fully developed, they could be in the range of
several billion dollars, if the proposals are successfully implemented. At
the Savannah River and Hanford sites, for example, DOE is identifying ways
to increase the amount of waste that can be placed in its high- level
waste canisters to reduce treatment and disposal costs. DOE also has a

number of initiatives under way to improve overall program management.
However, we are concerned that the initiatives may not be adequate. In our
examinations of problems that have plagued DOE*s project management over
the years, three contributing factors often emerged* making key project
decisions without rigorous analysis, incorporating new technology before
it has received sufficient testing, and using a *fast- track* approach
(concurrent design and construction) on complex projects.

10 U. S. General Accounting Office, Nuclear Waste: Process to Remove
Radioactive Waste From Savannah River Tanks Fails to Work, GAO/ RCED- 99-
69 (Washington, D. C.: Apr. 30, 1999). Opportunities Exist to

Explore Additional Cost Savings and to Strengthen Program Management

Page 16 GAO- 03- 930T High- Level Waste Cleanup Ensuring that these
weaknesses are addressed as part of its program management initiatives
would further improve the management of the

program and increase the chances for success. DOE is continuing to
identify other proposals for reducing costs under its accelerated cleanup
initiative. Among the proposals that DOE is considering, the ones that
appear to offer significant cost savings opportunities would increase the
amount of waste placed in each disposal canister. The amount of waste that
can be placed into a canister depends

on a complex set of factors, including the specific mix of radioactive
material combined with other chemicals in the waste, such as chromium and
sulfate, that affect the processing and quality of the immobilized

product. These factors affect the percentage of waste than can be placed
in each canister because they indicate the likelihood that radioactive
constituents could move out of the immobilizing glass medium and into the
environment. The greater the potential for the waste to become mobile, the
lower the allowable percentage of waste and the higher

the percentage of glass material that must be used. Savannah River
officials believe they can increase the amount of waste loaded in each
canister from 28 percent to about 35 percent, and for at least one waste
batch, to nearly 50 percent. In June 2003, Savannah River began to
implement this new process to increase the amount of waste in each
canister. If successful, Savannah River*s improved approach could reduce
the number of canisters needed by about 1,000 canisters and save about
$2.7 billion, based on preliminary estimates. Other efforts to increase
waste loading of the canisters are also under way that, if successful, may
permit further cost savings of about $1.7 billion. The Hanford Site is
also exploring ways to decrease the numbers of waste canisters that will
be needed by using waste forms other than the standard borosilicate glass.
This effort is in a very early stage of development and cost- savings
estimates have not been fully developed. DOE Is Considering

Additional Potential Opportunities to Reduce Costs

Page 17 GAO- 03- 930T High- Level Waste Cleanup In addition to site-
specific proposals for saving time and money, DOE is also undertaking
management improvements using teams to study

individual issues. Nine teams are currently in place, while other teams to
address issues such as improving the environmental review process to
better support decision making have not yet been formed. Each team has a
disciplined management process to follow, 11 and even after the teams*
work is completed, any implementation will take time. These efforts are in
the early stages, and therefore it is unclear if they will correct the
performance problems DOE and others have identified.

We are concerned that these management reforms may not go far enough in
addressing performance problems with the high- level waste program. Our
concerns stem from our review of initiatives under way in the

management teams, our discussions with DOE officials, and our past and
current work, as well as work by others inside and outside DOE. We have
identified three recurring weaknesses in DOE*s management of cleanup
projects that we believe need to be addressed as part of DOE*s overall
review. These weaknesses cut across the various issues that the teams are
working on and are often at the center of problems that have been
identified. Two of these weaknesses have been raised earlier in this
testimony* lack of rigor in the analysis supporting key decisions, and
incorporating technology into projects before it is sufficiently mature.
The final area of weakness involves using *fast- track* methods to begin
construction of complex facilities before sufficient planning and design
have taken place.

DOE*s project management guidance emphasizes the importance of rigorous
and current analysis to support decision making during the development of
DOE projects. Similarly, OMB guidance states that agencies should validate
earlier planning decisions with updated information before finalizing
decisions to construct facilities. This validation is particularly
important where early cost comparisons are susceptible to uncertainties
and change.

DOE does not always follow this guidance, yet no DOE management team
appears to be addressing this weakness. Proceeding without rigorous review
has been a recurring cause of many of the problems we have

11 Under DOE*s project management principles, for example, teams must
define project requirements, conduct preliminary risk assessments, and
prepare a risk mitigation plan prior to developing a baseline cost
estimate of proposed alternatives. DOE Has Opportunities to

Improve Management of the Program by Addressing Previously Identified
Weaknesses

Key Decisions Not Always Supported by Rigorous Current Analysis

Page 18 GAO- 03- 930T High- Level Waste Cleanup identified in past DOE
projects. For example, the decision at Hanford to construct a
vitrification plant to treat Hanford*s low- activity waste has not

been validated with updated information. Hanford*s primary analysis
justifying the cost of this approach was prepared in 1999 and was based on
technical performance data, disposal assumptions, and cost data developed
in the early to mid- 1990s* conditions that are no longer applicable.
Subsequent analyses have continued to rely on this data. However, since
that time conditions have changed, including the performance capabilities
of alternative technologies such as grout, the relative cost of different
technologies, and the amount of waste DOE intends to process through a
vitrification facility.

DOE officials disagree with our assessment of their analysis, stating that
a comprehensive analysis was conducted in the spring of 2003. However,
DOE*s high- level waste project team agreed that the DOE officials at
Hanford had not performed a current, rigorous analysis of low- activity
waste treatment options including the use of grout as an alternative to
vitrification, and the team encouraged the Hanford site to update its
analysis based on current waste treatment and disposal assumptions. DOE
officials at Hanford told us they do not plan to reassess the decision to
construct a low- activity vitrification facility because their compliance
agreement with the state of Washington calls for vitrification of this
waste. They also stated that vitrification is a technology needed for
destroying hazardous constituents in a portion of the waste. Our work on
Department of Defense acquisitions has documented a set of *best
practices* used by industry for integrating new technology into

major projects. We reported in July 1999 that the maturity of a technology
at the start of a project is an important determinant of success. 12 As
technology develops from preconceptual design through preliminary design
and testing, the maturity of the technology increases and the risks
associated with incorporating that technology into a project decrease.
Waiting until technology is well- developed and tested before integrating
it

into a project will greatly increase the chances of meeting cost,
schedule, and technical baselines. On the other hand, integrating
technology that is not fully mature into a project greatly increases the
risk of cost increases and schedule delays. According to industry experts,
correcting problems

12 U. S. General Accounting Office, Best Practices: Better Management of
Technology Development Can Improve Weapon System Outcomes, GAO/ NSIAD- 99-
162 (Washington, D. C.: July 30, 1999). New Technology Is

Incorporated before It Is Sufficiently Mature

Page 19 GAO- 03- 930T High- Level Waste Cleanup after a project has begun
can cost 10 times as much as resolving technology problems beforehand.

DOE*s project management guidance issued in October 2000 is consistent
with these best practices. The guidance discusses technology development
and sets out suggested steps to ensure that new technology is brought to a
sufficient level of maturity at each decision point in a project. For
example, during the conceptual design phase of a project, *proof of
concept* testing should be performed before approval to proceed to the
preliminary design phase. Furthermore, the guidance states that attempting
to concurrently develop the technology and design the facility for a
project poses ill- defined risks to the project.

Nevertheless, as we discussed earlier, DOE sites continue to integrate
immature technologies into their projects. For example, as discussed
earlier, DOE is constructing a facility at the Hanford Site to separate
high- level waste components, although integrated testing of the many
steps in the separations process has not occurred and will not occur until
after the facility is completed. DOE, trying to keep the project on
schedule and within budget, has decided the risks associated with this
approach are acceptable. However, there are many projects for which this
approach created schedule delays and unexpected costs. The continued
reliance on this approach in the face of so many past problems is a signal
of an area

that needs careful attention as DOE proceeds with its management reform
efforts. At present, no DOE management team is addressing this issue.
Finally, we have concerns about DOE*s practice of launching into
construction of complex, one- of- a- kind facilities well before their
final design is sufficiently developed, again in an effort to save time
and money. Both DOE guidance and external reviews stress the importance of

adequate upfront planning before beginning project construction. DOE*s
project management guidance identifies a series of well- defined steps
before construction begins and suggests that complex projects with
treatment processes that have never before been combined into a facility
do not lend themselves to being expedited. However, DOE guidance does not
explicitly prohibit a fast- track* or concurrent design and construction*
approach to complex, one- of- a- kind projects, and DOE often follows this
approach. For example, at the Hanford Site, DOE is concurrently designing
and constructing facilities for the largest, most complex environmental
cleanup job in the United States. Problems are already surfacing. Only 24
months after the contract was awarded, the project was 10 months behind
schedule dates, construction activities have outpaced design work causing
inefficient work sequencing, and DOE has Facility Construction Starts

before Design Is Sufficiently Developed

Page 20 GAO- 03- 930T High- Level Waste Cleanup withheld performance fee
from the design/ construction contractor because of these problems.

DOE experienced similar problems in concurrent design and construction
activities on other waste treatment facilities. Both the spent nuclear
fuel project at Hanford and the waste separations facility at the Savannah
River

Site encountered schedule delays and cost increases in part because the
concurrent approach led to mistakes and rework, and required extra time
and money to address the problems. 13 In its 2001 follow- up report on DOE
project management, the National Research Council noted that inadequate
pre- construction planning and definition of project scope led to cost and

schedule overruns on DOE*s cleanup projects. 14 The Council reported that
research studies suggest that inadequate project definition accounts for
50 percent of the cost increases for environmental remediation projects.
Again, no DOE team is specifically examining the *fast- track* approach,
yet it frequently contributed to past problems and DOE continues to use
this approach.

DOE*s efforts to improve its high- level waste cleanup program and to rein
in the uncontrolled growth in project costs and schedules are important
and necessary. The accelerated cleanup initiative represents at least the
hope of treating and disposing of the waste in a more economical and
timely way, although the actual savings are unknown at this time.
Furthermore, specific components of this initiative face key legal and
technical challenges. Much of the potential for success rested on DOE*s
ability to dispose of large quantities of waste with relatively low
concentrations of radioactivity on site by applying its incidental waste
process. Recently, a court ruled that the portion of DOE*s order setting
out its incidental waste determination process violates the Nuclear Waste
Policy Act and is invalid. Thus, DOE is precluded from implementing this
element of its accelerated initiative. Success in accelerating cleanup
also rests on DOE*s ability to obtain successful technical performance
from its

13 For a discussion of the problems associated with the fast track design/
build approach on these projects, see U. S. General Accounting Office,
Nuclear Waste: DOE*s Hanford Spent Nuclear Fuel Storage Project* Cost,
Schedule, and Management Issues,

GAO/ RCED- 99- 267 (Washington, D. C.: Sept. 20, 1999) and Nuclear Waste:
Process to Remove Radioactive Waste From Savannah River Tanks Fails to
Work, GAO- RCED- 99- 69 (Washington, D. C.: Apr. 30, 1999).

14 National Research Council, Progress in Improving Project Management at
the Department of Energy (Washington, D. C.: Nov. 2001). Conclusions

Page 21 GAO- 03- 930T High- Level Waste Cleanup as- yet unproven waste
separation processes. Any technical problems with these processes will
likely result in costly delays. At DOE*s Hanford Site, we believe the
potential for such problems warrants reconsidering the

need for more thorough testing of the processes, before completing
construction of the full- scale waste separation facility.

DOE*s accelerated cleanup initiative should mark the beginning, not the
end, of DOE*s efforts to identify other opportunities to improve the
program by accomplishing the work more quickly, more effectively, or at
less cost. As DOE continues to pursue other management improvements,

it should reassess certain aspects of its current management approach,
including the quality of the analysis underlying key decisions, the
adequacy of its approach to incorporating new technologies into projects,
and the merits of a fast- track approach to designing and building complex
nuclear facilities. Although the challenges are great, the opportunities
for

program improvements are even greater. Therefore, DOE must continue its
efforts to clean up its high- level waste while demonstrating tangible,
measurable program improvements.

In the report being released today, we made several recommendations to
help DOE manage or reduce the legal and technical risks faced by the
program as well as to strengthen DOE*s overall program management. DOE
agreed to consider seeking clarification from Congress regarding its
authority to define some waste as incidental to reprocessing, if the legal

challenge to its authority significantly affected DOE*s ability to achieve
savings under the accelerated initiative. Regarding our recommendations to
conduct integrated pilot- scale testing of the separations facility at
Hanford before construction is completed, and to make other management
improvements to address the weaknesses I just discussed, DOE*s position is
that it has already taken appropriate steps to manage the technology risks
and strengthen its management practices. We disagree and believe that
implementing all of our recommendations would help reduce the risk of
costly delays and improve overall management of DOE*s entire highlevel
waste program. - - - - -

Thank you, Mr. Chairman and Members of the Subcommittee. That concludes my
testimony. I would be pleased to respond to any questions that you may
have.

Page 22 GAO- 03- 930T High- Level Waste Cleanup Contacts and
Acknowledgements

For further information on this testimony, please contact Ms. Robin
Nazzaro at (202) 512- 3841. Individuals making key contributions to this
testimony included Carole Blackwell, Robert Crystal, Doreen Feldman, Chris
Hatscher, George Hinman, Gary Jones, Nancy Kintner- Meyer, Avani Locke,
Mehrzad Nadji, Cynthia Norris, Tom Perry, Stan Stenersen, and Bill Swick.

(360365)

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