Department of Energy: Clear Strategy on External Regulation Needed for
Worker and Nuclear Facility Safety (Letter Report, 05/21/1998,
GAO/RCED-98-163).

With few exceptions, independent contractors do not inspect or license
the Energy Department's (DOE) vast complex of research and nuclear
facilities. Instead, DOE relies on its own staff to ensure the safety of
these facilities. GAO has long criticized DOE for weaknesses in
self-regulation. DOE's position on the external regulation of safety is
unclear. Five years ago, DOE's leadership made a commitment to the
external regulation of worker safety. DOE announced that it would phase
out self regulation over a 10-year period, starting with legislation by
1998 to authorize external regulation. In late 1997, however, DOE
launched a two-year pilot program to simulate regulation by the Nuclear
Regulatory Commission (NRC) at six to 10 of DOE's nuclear sites. At the
end of this pilot, DOE and NRC will jointly decide if external
regulation is warranted. DOE's decision to conduct pilots represents a
shift from its earlier strong endorsement of external regulation of all
its facilities. DOE's uncertain position has both NRC and the
Occupational Safety and Health Administration concerned about the
agency's commitment to external regulation. Although DOE's pilot will
provide useful insights, the information collected will not reflect the
size and complexity of DOE's vast nuclear complex and thus will not
yield the data needed to address many critical issues on external
regulation. GAO summarized this report in testimony before Congress;
see: Department of Energy: Clear Strategy on External Regulation Needed
for Worker and Nuclear Facility Safety, by Victor S. Rezendes, Director
of Energy, Resources, and Science Issues, before the Subcommittee on
Basic Research and the Subcommittee on Energy and Environment, House
Committee on Science. GAO/T-RCED-98-205, May 21 (eight pages).

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-98-163
     TITLE:  Department of Energy: Clear Strategy on External
	     Regulation Needed for Worker and Nuclear Facility Safety
      DATE:  05/21/1998
   SUBJECT:  Nuclear facility safety
	     Occupational safety
	     Working conditions
	     Safety regulation
	     Interagency relations
	     Regulatory agencies
	     Atomic energy defense activities

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GAO/RCED-98-163

Cover
================================================================ COVER

Report to the Committee on Science, House of Representatives

May 1998

DEPARTMENT OF ENERGY - CLEAR
STRATEGY ON EXTERNAL REGULATION
NEEDED FOR WORKER AND NUCLEAR
FACILITY SAFETY

GAO/RCED-98-163

Department of Energy

(141183)

Abbreviations
=============================================================== ABBREV

  AEC - Atomic Energy Commission
  DNFSB - Defense Nuclear Facilities SafetyBoard
  DOE - Department of Energy
  EPA - Environmental Protection Agency
  GAO - General Accounting Office
  MOX - mixed-oxide
  MOU - memorandum of understanding
  NRC - Nuclear Regulatory Commission
  NAPA - National Academy of Public Administration
  OSHA - Occupational Safety and Health Administration
  RCRA - Resource Conservation and RecoveryAct

Letter
=============================================================== LETTER

B-279745

May 21, 1998

The Honorable F.  James Sensenbrenner, Jr.
Chairman
The Honorable George E.  Brown, Jr.
Ranking Minority Member
Committee on Science
House of Representatives

With few exceptions, the Department of Energy's (DOE) vast complex of
research and nuclear facilities is not inspected or licensed by
independent regulators to help ensure safe operations.  Instead,
since 1946 DOE and its predecessors have relied on their own staff to
help ensure the safety of these facilities.  We have long criticized
DOE for weaknesses in its self-regulation of the environment, safety,
and health at its own facilities.

DOE's leadership recognized the need for external safety regulation
in 1993, when then-Secretary Hazel O'Leary announced that the
Department would seek external regulation for worker safety.  In
1994, legislation was proposed to externally regulate nuclear safety
at DOE's facilities, and hearings were held.  Although no legislation
was enacted, DOE responded by creating advisory groups to help
formulate its policies and implement plans to eliminate
self-regulation in all of its facilities--for both worker safety and
nuclear facility safety.  DOE is now conducting a pilot program with
the Nuclear Regulatory Commission (NRC) and the Occupational Safety
and Health Administration (OSHA) to simulate external regulation at
selected facilities.\1

Concerned about the progress being made by DOE and cognizant that the
decision to subject DOE to external regulation will need to be made
by the Congress, you asked us to

  -- identify DOE's position on external regulation and

  -- evaluate DOE's strategy for conducting pilots on external
     regulation.

As agreed with your offices, we concentrated our attention on issues
related to worker safety and nuclear facility safety.  We also
focused on DOE's laboratories, for which the Department is currently
evaluating issues related to external regulation.  We did not review
activities related to external regulation for environmental
hazards--as opposed to safety--because DOE is already regulated by
the Environmental Protection Agency (EPA).

--------------------
\1 NRC and OSHA both have safety-related regulatory responsibilities
in nuclear and nonnuclear facilities; for simplicity, we refer to
worker safety as OSHA- related and nuclear safety as NRC-related.

   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

DOE's position on the external regulation of safety is unclear.  Five
years ago, DOE's leadership made a commitment to subject worker
safety in its multibillion-dollar nuclear research and defense
network to external regulation.  To achieve this goal, DOE endorsed
recommendations to phase out its self-regulation practices over a
10-year period, starting with legislation by 1998 to authorize
external regulation.  In late 1997, however, DOE embarked on a 2-year
pilot program to simulate regulation by NRC at 6 to 10 of DOE's
nuclear sites.  At the end of this pilot, DOE and NRC will jointly
decide if external regulation by NRC is warranted.  DOE's decision to
conduct pilots represents a shift from its former strong endorsement
to externally regulate all of its facilities.  DOE's uncertain
position has both NRC and OSHA concerned about the Department's
commitment to external regulation.

Although DOE's pilot will provide useful insights, the information
collected will not represent the size and the complexity of DOE's
vast nuclear complex and thus will not yield the practical data
needed to address many critical issues on external regulation.  For
example, NRC estimates that it could regulate the Lawrence Berkeley
National Laboratory in California--the site of DOE's first pilot--for
about one-fifth of one staff person per year.  This estimate,
however, does not represent the cost of regulating the vast majority
of DOE's nuclear facilities, nor will much of the information
obtained from the other two pilot sites be representative.  The three
sites in the pilot program contain no nuclear reactors, weapons
plants, or heavily contaminated facilities, even though these kinds
of facilities were the reason for seeking external regulation in the
first place and defense and environmental cleanup sites constitute 80
percent the Department's complex.  Moreover, DOE is not integrating
OSHA with NRC in its pilots; instead, each regulatory agency is
proceeding under a separate strategy without the benefit of
collaborating to better understand jurisdictional overlaps.

   BACKGROUND
------------------------------------------------------------ Letter :2

DOE is the only federal agency whose facilities are essentially
exempt from regulation by NRC for nuclear safety and by OSHA for
worker protection.  These exemptions originated from concerns about
national security that characterized DOE's historic role in nuclear
weapons production.  When the Atomic Energy Act was passed in 1946,
the federal government, through its wartime Manhattan Project, was
the primary source of nuclear science.  That monopoly was maintained
by the U.S.  Atomic Energy Commission (AEC), which took over the
wartime laboratories and built new ones to develop both nuclear
weapons and nuclear power.

Until a 1984 lawsuit, DOE and its predecessors paid little attention
to the environmental consequences of their activities, thereby
creating a legacy of radioactivity and toxic pollution that will take
billions of dollars and decades to remedy.\2 However, under
environmental protection statutes, EPA and the states now regulate
most aspects of the release, the management, and the cleanup of
hazardous and radiological materials at DOE's facilities.  The major
statutory exceptions are the management of radiological releases to
water under the Clean Water Act and certain radiological waste under
the Resource Conservation and Recovery Act (RCRA).

Safety at nuclear facilities was also self-regulated by DOE in the
name of national security.  To address this situation, DOE created an
advisory committee on external regulation, which concluded that
"criticism of DOE safety has been widespread, during the last decade,
as the consequence of the Department's unsuccessful safety and
environmental management practices .  .  .  ." The committee found
that secrecy had been used as a shield to deflect public scrutiny.
In sum, the committee stated that, "Widespread environmental
contamination at DOE facilities and the immense costs associated with
their cleanup provide clear evidence that self-regulation has
failed."\3

A subsequent DOE task force, which was formed to find ways to
implement external regulation, has cited the following benefits of
externally regulating DOE's facilities:

  -- improve safety,

  -- eliminate the inherent conflict of interest from
     self-regulation,

  -- gain consistency with current domestic and international safety
     management practices, and

  -- gain credibility and public trust.

This task force also noted that "external regulation is an essential
element of completing the move from DOE's historic, self-regulated
status, which has been variable, costly, and inconsistent, to a
stable, efficient, and predictable safety environment."\4

The DOE facilities that would be subject to external regulation are
substantial.  DOE maintains 3,500 nuclear facilities at 34 individual
sites in 13 states, covering, in all, more than 85 million square
feet of building space.  Eighty percent of these facilities are
funded by DOE's defense and environmental management programs.
Included in these numbers are DOE's national laboratories--23
laboratories that have a budget of about $7.5 billion.  DOE's
facilities that are currently self-regulated reflect a complex array
of activities, from research reactors, fuel storage, and weapons
dismantlement to accelerators and fusion experiments.  DOE's current
regulatory scheme for these facilities focuses on the following:

  -- Nuclear facility safety:  To help ensure that facilities are
     designed, built, and operated so radioactive and hazardous
     materials are managed safely, DOE regulates nuclear facility
     safety under its own system of directives.  DOE has also
     promulgated, through notice and comment, several nuclear safety
     regulations.  NRC regulates the safety of a limited number of
     DOE's facilities for which it is specifically authorized.  For
     example, it regulates DOE-owned sites in Colorado for uranium
     mill tailings, certifies DOE-owned plants in Ohio and Kentucky
     for gaseous diffusion,\5 and will license any future high-level
     waste repository.  Although the Defense Nuclear Facilities
     Safety Board (DNFSB), an independent group that oversees DOE's
     defense facilities, has no regulatory authority, DOE must
     respond to its recommendations.

  -- Worker safety:  To help ensure the health and safety of workers
     by requiring proper working conditions and addressing worker
     safety complaints, DOE regulates worker safety under the Atomic
     Energy Act (through an exemption in the Occupational Safety and
     Health Act for federal agencies that exercise statutory
     authority to regulate occupational health and safety under the
     Energy Policy Act of 1992).  OSHA has specific authority to
     inspect DOE's gaseous diffusion plants.

  -- Environmental protection:  To help ensure public health and a
     sound environment by controlling the releases, the management,
     and the cleanup of radiological and hazardous materials, EPA and
     the states regulate environmental protection under a variety of
     statutes.

OSHA and NRC are the most likely external regulators for worker
safety and nuclear facility safety.  OSHA is responsible for helping
to ensure the safety of most American workers, including those in
federal agencies, by inspecting their facilities for compliance with
its rules and regulations.  NRC regulates the safety of federal and
private nuclear facilities by licensing and inspecting them and, if
warranted, imposing sanctions for noncompliance.  Because the
responsibilities of these regulators overlap in nuclear facilities,
especially with respect to the radiological protection of workers,
OSHA and NRC have developed agreements addressing these specific
responsibilities where each has a regulatory role.

--------------------
\2 Legal Environmental Assistance Foundation v.  Hodel, 586 F.  Supp.
1163 (E.D.  Tenn.  1984) made DOE subject to the provisions of the
Resource Conservation and Recovery Act.

\3 Final Report, Improving Regulation of Safety at DOE Nuclear
Facilities, Advisory Committee on External Regulation of Department
of Energy Nuclear Safety (Dec.  22, 1995).

\4 Report of Department of Energy Working Group on External
Regulation, DOE (Dec.  1996), p.1-1.

\5 These plants are leased to the United States Enrichment
Corporation.

   DOE DOES NOT HAVE A CLEAR
   POSITION ON EXTERNAL REGULATION
------------------------------------------------------------ Letter :3

Although DOE's leadership had frequently stated, over the last 5
years, its intention to have its facilities subject to external
regulation by independent agencies in matters of worker safety and
nuclear facility safety, DOE's position has changed.  In 1996, DOE
endorsed recommendations to phase out its self-regulation over a
10-year period and announced it would seek immediate legislation to
authorize OSHA and NRC to become its external regulators.  In
mid-1997, DOE announced that it will instead evaluate the feasibility
of external regulation at selected DOE sites over a 2-year trial
period.  At the conclusion of this trial period, DOE and NRC will
"jointly determine" if independent regulation by NRC is needed.  For
worker safety, DOE has already simulated regulation with OSHA at one
site and has another simulation planned.  DOE has no plans to conduct
more simulations with OSHA, and plans to formally seek OSHA as its
external regulator are unclear.  As a result, NRC and OSHA officials
have raised concerns about DOE's current commitment to external
regulation.

      DOE'S COMMITMENT TO EXTERNAL
      REGULATION BEGAN IN 1993
---------------------------------------------------------- Letter :3.1

DOE leadership pledged to seek external regulation in 1993, when
then-Secretary O'Leary announced her plans to subject worker safety
in DOE's facilities to outside regulation by OSHA.  Since then,
several key events have influenced DOE's position on external
regulation:

  -- In 1994, legislation was proposed to require all of DOE's new
     nuclear facilities be licensed by NRC; existing facilities would
     be regulated on a case-by-case basis as determined by a federal
     commission.

  -- In 1995, in response to this proposal, DOE created an advisory
     committee to make recommendations on the external regulation of
     nuclear facility safety; the advisory committee's December 1995
     report recommended that essentially all aspects of safety at
     DOE's facilities should be externally regulated for the same
     reasons industry and all other federal facilities
     are.\6

  -- In 1996, DOE leadership endorsed the committee's recommendation
     and established a working group of senior executives to develop
     an implementation plan.  The group recommended that DOE continue
     its efforts to transfer the authority to regulate worker safety
     to OSHA and the authority to regulate nuclear facility safety to
     NRC.  The group also recommended phasing these transfers over a
     10-year period, with the first milestone--to enact the
     legislative changes needed--to be met before the end of 1998.
     The group also recommended that the DNFSB continue oversight of
     DOE's defense facilities but eventually merge with NRC.\7

  -- In 1996, DOE and OSHA conducted a pilot on worker safety issues
     at DOE's Argonne National Laboratory in Illinois to simulate
     OSHA's enforcement and to assess practical steps for the
     transition to external regulation.  The independent National
     Academy of Public Administration (NAPA), which was commissioned
     by DOE and OSHA to examine regulatory issues (including results
     from the Argonne pilot), issued a report that recommended
     legislative and administrative changes to help ensure OSHA's
     full regulation of all DOE facilities.\8

  -- In late 1996, DOE endorsed the working group's report and
     announced that it would submit legislation on external
     regulation to "fulfill a commitment made in the [DOE's]
     strategic plan." DOE did not, however, submit legislation.

  -- In 1997, NRC endorsed acquiring authority to regulate DOE's
     nuclear facilities.  NRC had been studying the feasibility of
     assuming responsibility for DOE's nuclear facilities as part of
     its internal strategic planning initiative.  In anticipation of
     eventually becoming the regulator of DOE, NRC had also been
     providing advice and technical assistance on a wide variety of
     DOE's nuclear projects.

--------------------
\6 The advisory committee believed that the regulation of the
specialized area of nuclear explosive safety and, at least initially,
safeguards and security, should remain DOE's function.

\7 Report of Department of Energy Working Group on External
Regulation, DOE (Dec.  19, 1996).

\8 Ensuring Worker Safety and Health Across the DOE Complex, report
by a Panel of the National Academy of Public Administration for the
Occupational Safety and Health Administration and the Department of
Energy, Jan.  1997.

      DOE'S DECISION TO CONDUCT
      PILOTS IN LIEU OF A PHASED
      IMPLEMENTATION IS A SHARP
      DEPARTURE FROM ITS POLICY ON
      EXTERNAL REGULATION
---------------------------------------------------------- Letter :3.2

Despite its public commitment to seek immediate legislation that
would authorize NRC and OSHA to regulate it, DOE has decided to
evaluate further whether external regulation is warranted.  On
November 21, 1997, the Secretary of Energy and the Chairman of the
NRC signed an agreement to simulate NRC regulation in a pilot program
at 6 to 10 selected DOE sites over a 2-year period.  One major
purpose of this pilot is to determine the "value added" by external
regulation.  According to DOE, the final report on the pilot would be
used to determine whether regulation by NRC is warranted.

DOE's more cautious approach to external regulation is reflected in
its 1997 strategic plan, which states that DOE will work with NRC and
OSHA during 1998 to "evaluate the costs and benefits of independent
external regulation of safety and health." This initiative contrasts
with DOE's 1994 strategic plan, which included the goal to "commit to
seek independent and credible external regulation as soon as
possible...." DOE officials explained to us that Secretary Federico
Peï¿½a's decision to conduct a pilot in lieu of a phased implementation
does not represent a change in DOE's position on external regulation.
Rather, it reflects a "more business-like" approach to external
regulation.  But DOE's current pilot program will clearly not meet
the 1996 working group's goal to have legislation authorizing NRC's
regulation in place by the end of 1998.

Uncertainty in DOE's position on external regulation is affecting
interactions with both NRC and OSHA, DOE's most likely external
regulators.  While NRC has been actively working with DOE in
anticipation that it will be DOE's nuclear regulator in the future,\9
it has expressed public uncertainty over its future role in at least
one important area.  Previously, DOE had announced that it would
develop legislation to allow NRC to license its planned facility for
making mixed-oxide (MOX) fuel, which is part of DOE's proposal to
dispose of surplus plutonium by burning some of it in commercial
nuclear reactors.  A fuel fabrication facility would be needed to
develop the fuel, and DOE had been working closely with NRC on the
assumption that the Department would develop legislation for NRC to
regulate the facility.  (DOE's proposal for the facility includes NRC
as the licenser.) Although DOE had planned to submit its proposal to
the Congress by April 1998, to allow NRC to regulate any MOX fuel
fabrication facility starting in 1999, the Department's position has
recently changed.  It now plans to continue self-regulating until
several complex issues related to the facility can be further
studied.  As a result of this change, NRC's Chairman publicly
commented that NRC is uncertain about its role as a regulator for the
planned MOX fuel facility.\10

Despite having collaborated for several years on a proposal to
transfer authority for worker safety to OSHA, its officials are also
uncertain about its role as a future regulator of DOE.  In 1996, OSHA
conducted a simulated worker safety inspection of DOE's Argonne
National Laboratory in Illinois and found no serious health or safety
problems in its 6-month pilot at that laboratory.  OSHA has also had
specific authority to inspect DOE's gaseous diffusion plants in
Kentucky and Ohio, both of which DOE owns but leases to the United
States Enrichment Corporation.\11 OSHA has an internal team working
with DOE on a plan to eventually transfer authority on worker safety
to OSHA.  However, in a January 12, 1998, internal memorandum, OSHA
staff discussed a meeting held between the Deputy Secretaries of DOE
and the Department of Labor (to which OSHA reports) to document DOE's
changing position on external regulation.  A senior OSHA official
noted that DOE had slowed the process by which DOE would transfer
authority on worker safety to OSHA and concluded that "DOE may no
longer support external regulation." Furthermore, OSHA noted that DOE
also desires to conduct more worker safety pilots at selected DOE
facilities.

--------------------
\9 For example, NRC provided us with a list of 16 DOE activities
(including ones at privatized DOE facilities) in which it has a role.
These roles range from providing advice on a problem reactor at the
Brookhaven National Laboratory in New York to potentially licensing
the West Valley Demonstration Project in New York.

\10 DOE Briefing on MOX Fuel Fabrication Facility Licensing, NRC
Public Meeting, Apr.  3, 1998.

\11 DOE formerly operated and self-regulated these large
chemical-processing plants, which enrich uranium to produce fuel for
nuclear power plants.  Under the Energy Policy Act of 1992, the
Congress explicitly charged OSHA and NRC with regulatory authority
over these facilities.

   DOE'S STRATEGY TO CONDUCT
   PILOTS IS LIMITED
------------------------------------------------------------ Letter :4

DOE's pilot program to simulate external regulation at selected
facilities will not provide managers with much of the information
they will need to make well-informed judgments about the value and
practicality of external regulation.  The scope of the pilots remains
in doubt because no complex or defense facilities have been selected.
Also, DOE's pilots have been largely limited to simulating NRC's
regulation.  Only one additional pilot simulating OSHA's regulation
is planned, and no joint pilots have been completed or planned to
study the jurisdictional overlap that exists between the two
agencies.

      NUCLEAR SAFETY PILOT SITES
      ARE NOT REPRESENTATIVE OF
      THE DOE COMPLEX
---------------------------------------------------------- Letter :4.1

The sites that DOE has chosen for its pilots will not provide
accurate information on the range of complex issues that characterize
DOE's vast nuclear facilities.  So far, the sites chosen for the
pilot program pose relatively simple and limited problems related to
worker safety and nuclear facility safety.  The first two pilots
under way are at the Lawrence Berkeley National Laboratory in
California and the Radiochemical Engineering Development Center, at
the site of the Oak Ridge National Laboratory in Tennessee.  A third
pilot is scheduled for the Receiving Basin for Offsite Fuel at the
Savannah River site in South Carolina.  The fourth pilot is scheduled
for the Pacific Northwest National Laboratory in Washington.  DOE has
not decided the sites for the remaining two to six pilots.

The specific objectives for all of DOE's pilots are to

  -- determine the "value added" by NRC's regulatory oversight;

  -- test regulatory approaches;

  -- determine the status of DOE's facilities with respect to meeting
     NRC's existing requirements;

  -- determine the costs to DOE and NRC of converting to NRC's
     regulation;

  -- evaluate alternative regulatory relationships between NRC, DOE,
     and contractors;

  -- identify the issues and the potential solutions associated with
     a transition to NRC's oversight;

  -- identify legislative and regulatory changes necessary to provide
     for NRC's oversight; and

  -- evaluate how stakeholders should be involved.

The work plan for each pilot project contains additional specific
objectives and defines the scope of that project in detail.  Each
pilot project will also include participation by NRC, the states, and
the contractors who manage and operate the sites for DOE.  Public
meetings were held before the start of each pilot to allow interested
parties to ask questions and raise issues.

While the pilot projects will produce useful information, none of the
first three sites contain a nuclear reactor, about which the public
usually has significant safety concerns.  Nor will DOE be conducting
pilots at any of its three largest national laboratories--Lawrence
Livermore, Los Alamos, and Sandia, which account for about a third of
all laboratory activities and operate significant defense and
nondefense nuclear facilities.  While DOE officials have told us that
future sites for pilot projects will be more complex, there are no
plans to involve the largest national laboratories or any nuclear
defense facilities.  Moreover, by excluding its largest national
laboratories in its 2-year pilot program, DOE will lack the practical
experience needed when it is required to report to the Congress by
July 1, 1999, about how it intends to arrange its oversight,
including any recommendations for "new external oversight practices
that should be implemented."\12

The importance of knowing the expected cost of externally regulating
DOE's facilities illustrates the need to choose pilot sites that are
more representative of the DOE complex.  For example, on the basis of
the Lawrence Berkeley pilot, NRC estimated it could regulate that
laboratory at a cost of one-fifth of a staff person per year
(regulatory oversight would include preparing for inspections,
conducting inspections, writing reports, processing license
amendments, and preparing paperwork associated with an average of two
enforcement actions per year).  This estimate, however, is not likely
to be representative of what would be expected in the majority of
DOE's facilities.  In 1995, NRC estimated that it would need 1,100 to
1,600 more staff (and an additional $150 to $200 million per year) to
regulate DOE.  A major goal of the pilot program is to provide
insight about costs based on actual experiences.

Pilot sites were selected, in part, because the contractor was
willing to participate.  For example, officials at the Lawrence
Berkeley National Laboratory, which is operated by the University of
California, were willing participants because they were very
confident that their nuclear facility would be judged favorably
during the simulated inspection.  Other criteria for selecting pilot
sites included similarity to current NRC-licensed facilities, hazard
diversity, geographic diversity, and the age and the condition of the
facility.

--------------------
\12 National Defense Authorization Act for Fiscal Year 1998, sec.
3154 (P.L.  105-85).

      ONLY ONE WORKER SAFETY PILOT
      IS PLANNED WITH OSHA
---------------------------------------------------------- Letter :4.2

Although OSHA and DOE officials have discussed the desirability of
pursuing a series of pilots on worker safety, there are no plans for
future pilots after the planned effort at the Oak Ridge site.\13
According to OSHA officials, the lack of a budget to conduct pilots
limits their willingness to participate--especially since DOE's
commitment to external regulation may have changed.  They felt that
additional pilots made sense only if there was some reasonable
expectation that external regulation would be approved in the
foreseeable future.  OSHA is also planning to give its
recommendations for external regulation of DOE worker safety to the
Office of Management and Budget in July 1998 as part of its proposed
budget for fiscal year 2000.

--------------------
\13 Previously, OSHA had conducted a pilot at the Argonne National
Laboratory.

      PILOT PROJECTS FOR WORKER
      SAFETY AND NUCLEAR FACILITY
      SAFETY ARE NOT INTEGRATED
---------------------------------------------------------- Letter :4.3

Although DOE had previously endorsed OSHA as its external regulator
for worker safety, OSHA has had no part in pilot programs with NRC.
DOE, NRC, and OSHA officials acknowledge that their overlapping
jurisdictions raise many significant issues for protecting workers
from radiation.  These problems have surfaced at the gaseous
diffusion plants, which OSHA and NRC have been regulating for several
years.  OSHA did not participate in NRC's first pilot at the Lawrence
Berkeley National Laboratory and its participation at the second
pilot site--the Oak Ridge National Laboratory--is not part of a joint
effort.  Neither NRC nor OSHA has plans to participate in any joint
pilots in the future.  OSHA officials have explained that budget
limitations have precluded the agency's participation.

Each of the three participating agencies--DOE, NRC, and OSHA--has
created a variety of separate internal working groups and steering
committees on issues relating to the external regulation of DOE's
facilities.  Moveover, all three agencies are proceeding on different
tracks and timetables toward external regulation, without the benefit
of a single structure to integrate all three agencies' positions and
strategies.  For example, DOE created a small task force of
headquarters individuals to coordinate the pilot program and work
with NRC to develop reports; a separate working group of DOE program
and field office representatives was created to help prepare the
assessments for these reports; and finally, a steering committee
composed of senior DOE managers and the Office of General Counsel was
created to resolve important policy issues.  DOE's various pilot
projects have been focused largely on working with NRC, and no plans
have been made to integrate that work with OSHA.

   CONCLUSIONS
------------------------------------------------------------ Letter :5

DOE does not have a clear strategy for external regulation.  Its
decision to conduct pilots at small nuclear facilities is
inconsistent with the past position to move forward immediately with
external regulation.  Simulated regulation is an appropriate
implementation step only if pilot sites reflect the range of
facilities and activities in the DOE complex, and if the purpose of
the pilots is to learn how best to structure a regulatory framework
for implementation.  While the pilots will yield useful data, it is
unclear how this approach will achieve the implementation of external
regulation, especially in light of DOE's original plan to have
legislation enacted by the end of 1998 and to report to the Congress
by 1999 on how the Department plans to conduct external oversight of
its national laboratories.  In addition, the Department's strategy
for making OSHA its regulator for worker safety is unclear.  OSHA is
not participating with NRC in the pilot program and has, along with
NRC in one instance, expressed uncertainty about DOE's commitment to
external regulation.

   RECOMMENDATIONS TO THE
   DEPARTMENT OF ENERGY
------------------------------------------------------------ Letter :6

Given DOE's wavering position on external regulation and the
limitations in its pilots, we recommend that the Secretary of Energy

  -- clarify the Department's position on the external regulation of
     worker safety and nuclear facility safety at DOE's facilities
     and

  -- develop a strategy to implement the external regulation of
     worker safety and nuclear facility safety that is consistent
     with the Department's position.  This strategy should include
     specific goals, objectives, and milestones and show how the
     information from the pilot projects, and other techniques, will
     meet the strategy's goals and objectives.

   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

We provided a draft of this report to DOE for review and comment.
DOE disagreed with our conclusion that its position on external
regulation is unclear.  DOE referenced the memorandum of
understanding (MOU) it signed with NRC, which states that they have
"agreed to pursue NRC regulation of DOE nuclear facilities on a pilot
program basis." DOE also stated that it is taking a "deliberate
approach" on external regulation, for the purposes of estimating cost
savings and resource requirements as well as testing regulatory
frameworks.  We believe our report accurately supports our conclusion
that DOE's position is unclear.  DOE's strategy to conduct pilots in
lieu of proceeding directly to external regulation is a departure
from the policy it had announced in December 1996--that it intended
to submit legislation authorizing NRC as its external regulator for
nuclear safety.  Furthermore, unlike DOE's 1994 strategic plan, the
1997 version no longer contains a goal to seek legislation
authorizing external regulation.  Moreover, DOE's pilot program is a
more cautious approach to external regulation.  For example, the MOU
contains as its purpose the goal to "support a joint recommendation
by DOE and NRC to Congress on whether [emphasis added] NRC be given
statutory authority to regulate nuclear safety at DOE nuclear
facilities."

Defending its exclusion of defense nuclear facilities in the pilot
program, DOE said that its next pilots "would fully explore all
issues important to transition to external regulation by NRC." DOE
further commented that oversight of these facilities is currently
being performed by the Defense Nuclear Facilities Safety Board
(DNFSB).  Defense nuclear facilities are a significant part of the
DOE nuclear complex and would have to be included if DOE desired to
"fully explore" all the issues that are relevant to external
regulation.  The DNFSB has made significant contributions toward
improving safety at DOE's defense facilities, but it is not a
regulatory body, as it neither licenses facilities nor imposes
sanctions for noncompliance with DOE's own regulations.

DOE also said that OSHA officials "recognized DOE's commitment to
continue the pursuit of external regulation with them." However, our
discussions with OSHA officials support our position that the future
of OSHA's regulation at DOE's defense nuclear facilities remains
unclear.  According to the OSHA officials we spoke with, the pilot
that OSHA has agreed to conduct at DOE's Oak Ridge site is not a
joint effort to determine jurisdictional overlaps with NRC.  OSHA's
lack of a budget to conduct pilots, together with the view that DOE's
position has changed, limits the willingness of OSHA officials to
participate in future pilots.

While DOE did not comment on our recommendations, it provided
clarifying and technical comments, which we have incorporated as
appropriate.  Appendix II includes the full text of DOE's comments
and our response.

---------------------------------------------------------- Letter :7.1

As arranged with your offices, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until 15 days after the date of this letter.  At that time, we will
send copies to the Secretary of Energy; the Chairman, Nuclear
Regulatory Commission; the Administrator, Occupational Safety and
Health Administration; and the Director, Office of Management and
Budget.  We will make copies available to other interested parties on
request.

Our review was performed from December 1997 through April 1998 in
accordance with generally accepted government auditing standards.
See appendix I for a description of our scope and methodology.

If you or your staff have any questions about this report, please
call me on (202) 512-3841.  Major contributors to this report are
listed in appendix III.

Victor S.  Rezendes
Director, Energy, Resources,
 and Science Issues

SCOPE AND METHODOLOGY
=========================================================== Appendix I

To understand the status of the Department of Energy's (DOE) external
regulation activities, we examined past reports by various committees
and working groups established to examine issues related to external
regulation.  These included the final report by the Advisory
Committee on External Regulation of Department of Energy Nuclear
Safety, the Report of the Department of Energy Working Group on
External Regulation, and a report by a panel of the National Academy
of Public Administration.  To improve our understanding of the
matters discussed in these reports, we interviewed their authors and
the staff involved in each study and also obtained and reviewed the
documents and the studies discussed in these reports.

To evaluate DOE's current external regulation strategy, we
interviewed DOE, contractor, and laboratory officials at the Lawrence
Berkeley National Laboratory, the Stanford Linear Accelerator Center,
the Los Alamos National Laboratory, the Sandia National Laboratory,
and Lawrence Livermore National Laboratory.  At each location, we
interviewed both DOE site office officials as well as cognizant field
office officials.  We also asked staff how they were preparing for
external regulation and determined the extent of their own studies on
related matters.

We interviewed key officials associated with DOE's external
regulation pilot, including members of DOE's Steering Committee, Task
Force, and Working Group.  We also interviewed officials of the
Nuclear Regulatory Commission (NRC) and the Occupational Safety and
Health Administration (OSHA).  To understand NRC and OSHA experiences
at the gaseous diffusion plants, we interviewed officials from the
United States Enrichment Corporation.  We also participated in a
conference, sponsored by the National Academy of Public
Administration (NAPA), at which external regulation of safety issues
was discussed by officials from federal agencies.  We also
interviewed officials from the Defense Nuclear Facilities Safety
Board.

(See figure in printed edition.)Appendix II
COMMENTS FROM THE DEPARTMENT OF
ENERGY
=========================================================== Appendix I

report.
We have indicated
page number changes
only for those
comments that we
discuss in detail.

(See figure in printed edition.)

(See figure in printed edition.)

(See figure in printed edition.)

(See figure in printed edition.)

(See figure in printed edition.)

(See figure in printed edition.)

The following are GAO's comments on the Department of Energy's letter
dated May 1, 1998.

1.  We believe our report accurately supports our conclusion that
DOE's position on external regulation of worker safety and nuclear
facility safety is unclear.  As stated in our report, DOE strongly
endorsed external regulation by announcing, in December 1996, its
intention to submit legislation authorizing NRC as its external
regulator for nuclear facility safety--a position supported in DOE's
1994 Strategic Plan.  As we discussed in our report, DOE's 1997
Strategic Plan omitted a goal to seek legislation authorizing
external regulation.  Moreover, DOE's pilot represents a more
cautious approach to external regulation.  The purpose of the pilot,
according to the memorandum of understanding signed by DOE and NRC,
effective November 21, 1997, is to "support a joint recommendation by
DOE and NRC to Congress on whether [emphasis added] NRC be given
statutory authority to regulate nuclear safety at DOE nuclear
facilities." Also, DOE's comment letter acknowledges the shift in its
position when it recommended the following language for our report:
"Despite the public commitment of then-Energy Secretary Hazel O'Leary
in late 1996 to seek legislation that would transfer oversight of
nuclear safety to NRC, DOE has decided to evaluate external
regulation through a pilot program." (See DOE's comment number 15.)

In its comments, DOE acknowledges that defense nuclear facilities are
excluded from the pilot, yet DOE states that its next pilots "would
fully explore all issues important to transition to external
regulation by NRC." As we reported, these facilities are a
significant part of DOE's nuclear complex and need to be included if
DOE desires to "fully explore" all the issues that are relevant to
the external regulation of worker safety and nuclear facility safety.

Regarding the external regulation of defense nuclear facilities,
which include some of DOE's largest laboratories (these laboratories
also operate substantial nondefense nuclear facilities), we
acknowledge that significant contributions have been made by the
Defense Nuclear Facilities Safety Board (DNFSB) toward improving the
safety at DOE defense facilities.  The DNFSB, however, is not a
regulatory body.  It does not license facilities nor can it impose
sanctions for noncompliance with DOE's own regulations.

2.  Our discussions with OSHA officials support our position that the
future of OSHA regulation at DOE's facilities remains unclear.  The
pilot that OSHA has agreed to conduct at DOE's Oak Ridge site is not,
according to OSHA officials we spoke with, a joint effort to
determine jurisdictional overlaps with the NRC.  Also, OSHA's lack of
a budget to conduct pilots, together with the view that DOE's
position has changed, limits the willingness of OSHA officials to
participate in future pilots.

3.  We have made changes to the report as appropriate in response to
DOE's comments.

4.  We agree that the NAPA report discusses jurisdictional overlap
issues, but as we discuss in our report, the Oak Ridge pilot will
not, according to OSHA officials we interviewed, address
jurisdictional overlap issues.  Furthermore, the NAPA report
referenced by DOE in its comments recommended that DOE initiate
action to give OSHA authority over DOE's nuclear defense facilities.
We are not aware of any DOE action to implement this recommendation.

5.  We believe our wording accurately reflects the conditions
discussed.

6.  The DOE Working Group stated in its December 19, 1996, report
that with respect to worker protection, DOE efforts to transfer
authority to OSHA "should continue." (page vi) This more precise
wording was added to our report.

7.  Then-Secretary of Energy Hazel O'Leary endorsed the Working
Group's recommendation, which included the continuation of DOE's
efforts to transfer authority to OSHA.  We have removed the reference
to OSHA's regulation.

8.  We believe our wording accurately reflects the conditions
discussed.  Our information came directly from laboratory officials
who are personally involved in the pilot program.

MAJOR CONTRIBUTORS TO THIS REPORT
==================================================== Appendix Appendix

Gary Boss, Project Director
Michael E.  Gilbert, Project Manager
William Lanouette, Senior Evaluator
Duane Fitzgerald, Technical Advisor
Jackie Goff, Senior Attorney
*** End of document ***