Nuclear Waste: DOE's Accelerated Cleanup Strategy Has Benefits but Faces
Uncertainties (Letter Report, 04/30/1999, GAO/RCED-99-129).
The Department of Energy (DOE) is responsible for the world's largest
environmental cleanup effort. Decades of nuclear weapons production has
left a legacy of radioactive, chemical, and other hazardous wastes at
sites across the country. This report provides information on the (1)
methodologies and assumptions used to develop DOE's Accelerated Cleanup:
Paths to Closure report and any associated limitations, (2)
uncertainties in the report that may affect its usefulness, and (3)
funding implications related to the cost of cleanup. GAO found that the
report is an improvement over earlier planning efforts. However,
limitations in the methodology and assumptions may affect the
reliability of the data; uncertainties in such areas as the level of
site cleanup and the sites' ability to meet cleanup schedules could
cause cost and schedule estimates to be revised; and uncertainties about
information in the report, particularly in the sites' cost and schedule
estimates, could affect the report's usefulness. For example, many field
offices based their cost estimates on assumed cleanup levels that have
yet to be agreed to by the U.S. Environmental Protection Agency and the
states. In addition, DOE faces several challenges to achieving its Paths
to Closure goals at the $5.75 billion annual funding level identified in
the report.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-99-129
TITLE: Nuclear Waste: DOE's Accelerated Cleanup Strategy Has
Benefits but Faces Uncertainties
DATE: 04/30/1999
SUBJECT: Nuclear waste disposal
Interagency relations
Strategic planning
Nuclear waste management
Life cycle costs
Statistical methods
Cost control
Environmental monitoring
Future budget projections
IDENTIFIER: DOE Environmental Management Program
DOE Paths to Closure Report
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GAO/RCED-99-129
United States General Accounting Office
GAO Report to the Chairman, Committee on the Budget, House of
Representatives
April 1999 NUCLEAR WASTE DOE's Accelerated Cleanup Strategy Has Benefits but
Faces Uncertainties
GAO/ RCED- 99- 129
GAO United States General Accounting Office
Washington, D. C. 20548 Resources, Community, and Economic Development
Division
B- 282300 April 30, 1999 The Honorable John R. Kasich Chairman, Committee on
the Budget House of Representatives
Dear Mr. Chairman: The U. S. Department of Energy (DOE) is responsible for
the world's largest environmental cleanup program. Decades of nuclear
weapons production has left a legacy of radioactive, chemical, and other
hazardous wastes to be cleaned up at sites across the United States. In
1989, DOE established the Environmental Management program to address the
cleanup of these wastes. Eleven of DOE's field offices throughout the
country manage this cleanup for the program. In the past, this cleanup has
been expensive and slow, and has been criticized as lacking in commitment
and accountability. In response to these criticisms, in 1996 DOE embarked on
a new strategy to accelerate the cleanup and reduce the costs at its 53
remaining contaminated sites. DOE laid out its strategy in a document called
Accelerating Cleanup: Paths to Closure, issued in June 1998. The Paths to
Closure report provides an overview of the cost, schedule, and scope of work
to be accomplished on 353 individual projects at these sites. DOE set a goal
of cleaning up 41 of the remaining 53 contaminated sites by 2006. DOE
estimates that the planned cleanup activities during this time will require
$57 billion. However, cleanup will not be finished at all sites by 2006, and
some cleaned- up sites will require long- term monitoring. Therefore, DOE
also estimates that the total cost for all cleanup activities, including the
long- term monitoring of the sites, will amount to $147 billion through
2070. 1 DOE plans to update the Paths to Closure report annually. 2 The next
Paths to Closure report, scheduled to be issued in June 1999, will be
updated based on project information submitted in April 1999, along with
information from DOE's fiscal year 2000 budget request.
Because the Paths to Closure report is based on data that also serve to form
DOE's annual budget request, you asked that we provide information on the
(1) methodologies and assumptions used to develop the Paths to Closure
report and any associated limitations, (2) uncertainties in the Paths to
Closure report that may affect its usefulness, and (3) funding
1 The estimate is in constant 1998 dollars. 2 Paths to Closure was first
issued as a discussion draft in June 1997. Comments received on this draft
were incorporated into a draft issued for public comment in February 1998.
The final document, issued in June 1998, incorporates stakeholder comments
from regulators, local citizen groups, and tribal nations.
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 1
B- 282300
implications related to the cost of cleanup. On February 19, 1999, we
briefed your staff on the results of our work and agreed to provide you with
this report summarizing our findings.
Results in Brief DOE's Paths to Closure report is an improvement over
earlier planning efforts. While it is an improvement, we identified
limitations in the
methodology and assumptions that may affect the reliability of the data;
uncertainties, in such areas as the level of site cleanup and the sites'
ability to meet cleanup schedules, that could cause cost and schedule
estimates to be revised; and challenges that DOE may face in achieving its
goals at the annual funding level targets.
To develop the Paths to Closure report, DOE's Office of Environmental
Management issued guidance in October 1997, requiring its field offices to
develop, by project, estimates of the cleanup work to be accomplished, the
schedule to be achieved, and total- or life cycle- costs to complete the
cleanup work. 3 The guidance also provided each field office with an
estimated annual funding allocation for cleanup activities through 2006. The
Paths to Closure report is an improvement over previous efforts because, for
the first time, DOE set goals for completing the cleanup at each site, used
project- specific data in estimating cleanup costs, and surfaced issues
needing resolution, such as where certain wastes will be disposed. However,
DOE headquarters did not specify a standard methodology to be used for
estimating cleanup costs, leaving field offices to select their own
approaches for developing their estimates. As a result, the data from some
of the sites may not be comparable or reliable. According to a recent report
by DOE's Office of the Inspector General, a number of the projects' cost
estimates they examined were not supported or complete. DOE has some
initiatives under way to improve data quality for the next Paths to Closure
update.
A number of uncertainties regarding the information in the 1998 Paths to
Closure report, particularly in the sites' cost and schedule estimates,
affect the report's usefulness. For example, many field offices based their
cost estimates on assumed cleanup levels that have not yet been agreed to by
the regulators involved- the U. S. Environmental Protection Agency and the
states. If the levels eventually agreed to are stricter than assumed, both
costs and schedules could increase. Cost and schedule estimates could
3 Sites' life cycle cost estimates were to include the sum of the cost
estimates of all the activities required to clean up the site, including the
costs for storage, treatment, and disposal of wastes; facility and other
infrastructure construction and decommissioning; and long- term surveillance
and monitoring activities through 2070.
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 2
B- 282300
also be revised as the cleanup technologies to be used are identified. Some
sites may also need to revise their estimates because of difficulties in
completing their cleanup work by their closure dates. Finally, Paths to
Closure contains only a limited discussion of activities that will be
required after a site closes, such as long- term surveillance and
maintenance. These costs are expected to be substantial at some sites, and
are not included in some sites' cost estimates, even though sites were
directed to do so.
DOE also faces a number of challenges to achieving its Paths to Closure
goals at the $5.75 billion annual funding level target identified in the
report. The sites' estimates of their funding needs for fiscal years 1999
through 2006 exceed the funding level target by more than $4 billion, or by
an average of about $500 million per year. DOE's Paths to Closure guidance
established cost reduction goals for each field office to help address this
funding gap, but most of the sites we contacted had not identified specific
strategies for achieving the cost reductions. In addition, as our past work
has shown, DOE's projects tend to take longer and cost more than
anticipated. Moreover, if some of the cleanup activities that were assumed
to be outside the scope of Paths to Closure are ultimately included in the
Environmental Management program, costs would grow. For example, Paths to
Closure notes that an additional $8.1 billion could be needed to address any
new waste generated after fiscal year 2000, a cost that was not included in
the report's $147 billion total cost for all cleanup.
Background DOE has a complex of 113 sites around the country that were
contaminated by nuclear weapons production and by research and testing
activities. In
1989, DOE established the Environmental Management program to address the
cleanup of the radioactive, chemical, and other hazardous wastes at these
sites. Eleven field offices throughout the country manage this effort. At
the end of fiscal year 1997, DOE had 53 of its 113 sites left to clean up.
DOE's cleanup program has received considerable criticism about its high
cost and slow progress.
In response to these criticisms, in 1996 DOE began to systematically define
the technical scope, schedule, and costs of cleaning up the radioactive,
chemical, and other hazardous wastes at its contaminated sites. DOE laid out
its new strategy in a document called Accelerating Cleanup: Paths to Closure
in June 1998. Through the Paths to Closure report, DOE hoped to challenge
its 53 remaining contaminated sites to develop more efficient ways to
conduct their cleanup work in order to accelerate site closure,
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 3
B- 282300
thereby reducing the overall costs of the program. In the Paths to Closure
report, DOE set a goal of cleaning up 41 of its 53 remaining contaminated
sites by 2006. 4
DOE included two estimates in the Paths to Closure report. One covers the
period through fiscal year 2006 and forecasts that $57 billion will be
required for cleanup activities during that time. The cost to clean up the
41 sites DOE hopes to complete by the end of fiscal year 2006 represents a
small fraction of this estimate- about $5 billion. For the remaining 12
sites that will complete their cleanup later (from 2007 through 2050),
approximately $46.3 billion was allocated for their cleanup activities
through 2006. 5 These 12 sites include DOE's largest and most difficult
cleanup sites. The second estimate includes all DOE planned cleanup actions
and site surveillance and monitoring costs though 2070 and amounts to $147
billion.
Paths to Closure Has Strengths, but Data Reliability Questions Remain
Paths to Closure was developed using information provided by DOE's field
offices that was based on guidance and DOE- wide assumptions provided from
headquarters. The Paths to Closure report is an improvement over previous
planning efforts because it sets goals for completing cleanup work at each
site. However, the guidance from headquarters to the field offices on
collecting cost and schedule information did not specify how to develop that
information. As a result, field offices used varying methodologies to
develop the information, raising concerns about the reliability of the data.
A February 1999 report by DOE's Office of the Inspector General found that a
number of the projects' cost estimates were not supported or complete. DOE
has some initiatives under way to address the data reliability issues for
the next Paths to Closure report.
To develop the Paths to Closure report, DOE's Office of Environmental
Management issued guidance in October 1997 requiring field offices to
develop, by project, estimates of the work to be accomplished, schedules to
be achieved, and total- or life cycle- costs to complete the cleanup work at
their sites. The guidance also provided each field office with an estimated
annual funding allocation. If a gap existed between a field office's
estimated funding needs and the estimated funding allocation in the
guidance, the field office was to identify ways to do work more
4 The Paths to Closure report shows the Rocky Flats and Fernald sites
closing after 2006. DOE indicated that it is committed to accelerating the
closure of these two sites to 2006 and 2005, respectively.
5 The remaining $5.7 billion of the $57 billion is identified as being
needed to fund headquarters and DOE- wide programs through fiscal year 2006.
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 4
B- 282300
efficiently to close that gap. For example, if a field office estimated
needing $1 million annually to fund its cleanup work, but was given an
estimated funding allocation of $750,000, the field office would need to
develop strategies to achieve its scope of work at the lower funding level.
The guidance also provided DOE- wide assumptions that the field offices were
to use in developing the cost and schedule estimates for their projects. For
example, field offices were to assume, among other things, that (1) DOE's
cleanup activities would be funded at $5.75 billion annually, with each
field office receiving a set amount; (2) the Waste Isolation Pilot Plant
would open in fiscal year 1998 to allow sites to dispose of certain
radioactive wastes; 6 (3) DOE's Environmental Management cleanup program
would accept no waste generated by other DOE programs after fiscal year
2000; and (4) DOE's Environmental Management cleanup program would encompass
only the facilities currently in its inventory and would not be responsible
for additional facilities from other DOE program areas. The guidance also
provided instructions for developing waste disposition maps, that is,
graphical representations of each site's conceptual approach to managing its
wastes through storage, treatment, and disposal. Sites made their own
assumptions about such matters as the standards the sites' cleanup would
eventually meet; where waste would be shipped, if removed from the site; and
what cleanup technologies would be used.
One of the strengths of the report is that, for the first time, DOE set
goals for closing sites and completing the cleanup work. Under Paths to
Closure, sites have organized their cleanup work into definable scopes of
work, or projects, and established site- by- site, project- by- project
projections of the technical scope, cost, and schedule required to complete
all of the cleanup work. The strategy has also helped to identify issues
that will need to be resolved before sites can close, such as technology
needs, and how and where waste will be disposed. Sites that we contacted
also said the Paths to Closure report was a useful tool to communicate the
sites' vision of their cleanup plans to stakeholder groups, such as
regulatory agencies and local citizens groups. Finally, improvements are
being planned for the 1999 Paths to Closure report. For example, sites are
to explain any differences in performance from their previous year's
estimates. In addition, DOE intends the annual Paths to Closure report to
provide a basis for its
6 The Waste Isolation Pilot Plant is a deep geologic repository for the
disposal of certain radioactive wastes. It is located in an underground salt
formation near Carlsbad, New Mexico.
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 5
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performance measure evaluations under the Government Performance and Results
Act. 7
DOE's guidance to field offices on the cost and schedule information they
were to supply did not provide a standard methodology for developing the
information. DOE officials told us the field offices did not use a
consistent set of methodologies for developing their estimates. They said
that some sites are more advanced in developing projects' cost estimates,
while other sites are at a lower level of sophistication. This raises a
concern about the reliability of the data for some of the sites. At one site
we contacted, for example, officials were unable to provide documentation
showing how their projects' cost estimates had been derived. They said they
had relied, in part, on their experience and professional judgment to define
the projects' costs and scope of work.
The reliability of the projects' cost estimates was also a point of concern
in a report issued in February 1999 by DOE's Inspector General's office. 8
The Inspector General found that the cost estimates for 7 out of the 28
projects examined had inadequate or no support. The Inspector General found
instances in which DOE either could not determine the method that was used
to create the estimate or the support that was provided differed materially
from the estimate in the Paths to Closure report. In addition, the Inspector
General found valid costs that had been excluded from some projects' cost
estimates- such as those for long- term surveillance and monitoring and
security- and costs that should not have been included, such as for waste
generated in the future that may not be the responsibility of the cleanup
program. These findings caused the Inspector General to conclude that there
were material weaknesses with the process DOE used to develop and validate
the cost estimates. The weaknesses were serious enough for the Inspector
General to issue a qualified opinion on DOE's financial statement for fiscal
year 1998.
DOE has begun to take steps to improve the quality of its data. The updated
guidance, issued in December 1998 for the 1999 Paths to Closure report,
requires field offices to provide more detailed information on projects'
costs. For example, the field offices are to explain differences between
last year's cost and schedule estimates and this year's. In addition, the
updated guidance requires more information on the potential cost impacts
7 The Government Performance and Results Act of 1993 requires federal
agencies to prepare annual performance plans identifying goals for their
program activities and measuring their success in meeting those goals.
8 The Inspector General has been examining DOE's financial statements for
fiscal years 1997 and 1998. This effort resulted in report DOE\ IG- FS- 99-
01 (Feb. 1999).
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 6
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of additional surplus facilities that may be transferred to the cleanup
program; on the costs for a range of possible levels of site cleanup, for
sites for which cleanup levels are uncertain; and on the long- term
surveillance and maintenance costs for cleaned- up sites. As well as
requiring more detailed information, the new guidance requires the field
offices to submit information to support not only the Paths to Closure
report but also a new DOE management data system called the Integrated
Planning, Accountability, and Budgeting System, which DOE expects to have in
operation by fall 1999. According to DOE, the primary goal of the new system
is to integrate formerly independent pieces of planning, accountability, and
budgeting functions into one system, thereby achieving better data
consistency. The Inspector General's report also noted that DOE is pursuing
strategies to improve its validation process for cost and schedule estimates
to improve data quality.
Cleanup Uncertainties Limit Paths to Closure Information
The Paths to Closure's cost and schedule estimates for the sites are likely
to be revised as more becomes known at some sites about the levels of
cleanup that must be reached and the technologies to be used. Many sites do
not have a final agreement with their regulators- such as the U. S.
Environmental Protection Agency and the states- on what cleanup standards
must be achieved. For example, a major environmental impact study is still
under way at the West Valley Demonstration Project in New York that will
provide a range of options to determine exactly what cleanup levels need to
be achieved there. Standards could range from no further cleanup to the
complete removal of contamination and the return of the site to its original
condition. In addition to the uncertainties about the cleanup standards,
technological advances are needed to address some cleanup problems and to
meet the Paths to Closure goals. For example, no technology exists for some
aspects of removing and treating the radioactive waste now in large tanks at
several major DOE facilities.
The cost and schedule information in the Paths to Closure could also be
affected by difficulties sites are experiencing in meeting their closure
dates. For example, the 1998 Paths to Closure lists the West Valley
Demonstration Project as closing in 2005. However, West Valley officials
told us their closure date will be delayed to between 2008 and 2015. West
Valley officials said the site's budget reduction for fiscal year 1999 had
an impact on their ability to complete the cleanup projects on schedule.
Officials also acknowledged that the site's environmental impact statement
has not been completed, which could affect the site's cost and schedule
estimates because it will determine which cleanup strategy
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 7
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options will be used. In addition to delays at West Valley, two sites for
which DOE has committed to accelerate cleanup activities face challenges in
meeting their new closure dates. The Rocky Flats Environmental Technology
Site in Colorado is trying to accelerate its closure from the baseline
estimate of 2010 to 2006 by expediting several cleanup projects. However, we
identified challenges that these projects face and that raised concerns
about whether the site's closure can be accelerated as planned. 9 For
example, Rocky Flats has had difficulty readying some of its radioactive
waste materials for removal from the site, decontamination and
decommissioning are costing more and taking longer than anticipated,
agreement has not been reached with the site's regulators on the use of
protective barriers over portions of the site, and several types of
radioactive materials and wastes have no sites willing or able to take them.
Similarly, the Fernald Environmental Management Project in Ohio faces
difficulty in trying to accelerate its closure from the baseline estimate of
2008 to 2005. Agreement has yet to be reached on the technology that will be
used for one of the projects that Fernald officials expect to occur by 2001.
If the technology selected differs from that currently assumed, the site's
cost and schedule estimates could be affected.
Paths to Closure's cost and schedule information could change as more is
known about the activities that will continue at sites after they are
considered closed, such as long- term surveillance and monitoring
activities. In some cases, these activities will continue many years after
sites have been cleaned up. The 1998 Paths to Closure report provided only a
limited discussion of these activities, and some sites' cost estimates did
not include them. The costs for these activities are expected to be
substantial at some sites. For example, we have reported that the total cost
of monitoring and maintaining the Rocky Flats site after it closes through
2040 could amount to nearly $1.5 billion, including adjustments for
inflation. In the Paths to Closure report, DOE acknowledges the need for
more comprehensive plans addressing its role at sites after the initial
cleanup has been achieved. A DOE official told us that the agency has
created a working group on long- term stewardship to address these issues.
In addition, DOE's guidance for the 1999 Paths to Closure report requires
field offices to provide more detailed information on the potential cost
impacts of long- term surveillance and maintenance after sites are
considered closed.
9 Our report on the closure of Rocky Flats will be issued soon.
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DOE Faces Significant Challenges in Achieving Paths to Closure Goals at Its
Annual Funding Level Target
DOE's Paths to Closure report assumes that cleanup work can be accomplished
with annual funding of $5.75 billion (in current dollars). However, DOE
faces significant challenges in achieving its Paths to Closure goals at this
funding level. First, a funding gap exists between the $5.75 billion funding
target and the sites' identified needs. DOE also has a history of project
delays and cost growth, and changes in assumptions could have an impact on
the Paths to Closure report's cost estimates.
According to our analysis of DOE's data for fiscal years 1999 through 2006,
the sites' estimates of their costs exceeded the $5.75 billion annual
funding target for each fiscal year. 10 As shown in figure 1, the biggest
gaps between sites' baseline estimates and the annual funding targets are in
fiscal years 2000, 2004, and 2005, with gaps of over $700 million (in
current dollars) occurring for each of those years. 11 The total gap in
funding for fiscal years 1999 through 2006 is $4.3 billion (in current
dollars), or an average of over $500 million per year. To close this funding
gap, DOE assumed that sites would develop strategies through fiscal year
2006 to accomplish the required cleanup work at a lower cost. However, most
of the sites we contacted did not have specific plans for meeting those
enhanced performance goals.
10 In Paths to Closure, DOE also acknowledges a funding gap exists between
the $5.75 billion annual funding target and the requirements to meet sites'
compliance agreements and other commitments. DOE estimates the gap between
the two at $3.9 billion (in constant 1998 dollars) between 1999 and 2006.
11 Sites' cost estimates include privatization costs. DOE's privatization
strategy relies on the use of competitively awarded fixed- price performance
contracts through which DOE purchases waste cleanup services from private
contractors. Although under privatization DOE does not pay until these
services are delivered, funds set aside each year to pay for these contracts
are part of DOE's annual budget request.
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 9
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Figure 1: Amount That the Projects' Cost Estimates Exceed the Annual $5.75
Billion Funding Target
Note: Data were obtained from the cost estimates DOE used in developing the
1998 Paths to Closure report. Amounts contain privatization estimates.
DOE's history of cost increases and delays in its cleanup projects will also
challenge the agency's ability to achieve the goals and milestones in Paths
to Closure. Our previous work has found cost overruns and delays in several
major DOE projects. 12 For example, in July 1997, we reported that DOE's Pit
9 project, involving the cleanup of an inactive waste disposal pit at the
Idaho National Engineering and Environmental Laboratory, was at least 26
months behind the original schedule and could potentially cost well over
twice its original estimate of $200 million. Similarly, in May 1998, we
reported that the Hanford Spent Fuel Storage project, involving the
retrieval and storage of deteriorating nuclear fuel rods currently stored in
water basins at DOE's Hanford Site in Washington State, was over 4 years
behind the original schedule and had almost doubled in cost to about $1.4
million.
12 Nuclear Waste: Department of Energy's Project to Clean Up Pit 9 at Idaho
Falls Is Experiencing Problems (GAO/ RCED- 97- 180, July 28, 1997); Nuclear
Waste: Management Problems at the Department of Energy's Hanford Spent Fuel
Storage Project (GAO/ T- RCED- 98- 119, May 12, 1998).
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 10
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Finally, DOE's ability to achieve the Paths to Closure goals could be
affected if the assumptions used to develop the report change. This could
add to field offices' funding needs. For example, DOE acknowledges in the
report that $8.1 billion could be added to the Paths to Closure life cycle
estimate if the responsibility for waste generated after fiscal year 2000 is
kept in the cleanup program instead of being transferred to other DOE
programs responsible for generating the waste. Similarly, Paths to Closure
identifies another $8.7 billion that could be added to the life cycle
estimate if the cleanup program is given the responsibility for additional
surplus facilities.
Agency Comments and Our Evaluation
We provided a copy of this report to DOE for its review and comment. DOE
raised concerns that our report understated the benefits of the Paths to
Closure strategy and focused too much on its limitations, which, it said,
are minor in comparison. Our report identifies a number of strengths and
benefits of the Paths to Closure document and acknowledges that it is an
improvement over prior planning efforts. However, part of our objective was
to provide information on the limitations and uncertainties that affect the
usefulness of the Path to Closure report. In our view, it is important for
readers of Paths to Closure to keep the limitations and uncertainties in
mind when using it for decision- making purposes. Nevertheless, we made
changes to our report and its title to better recognize the benefits of the
Paths to Closure strategy. The full text of DOE's comments and our response
is in appendix I.
Scope and Methodology
To identify concerns with the methodologies and assumptions used to develop
the Paths to Closure report, we (1) interviewed DOE officials with
responsibility for preparing the report and for the budget for the cleanup
program and (2) reviewed Paths to Closure documentation, including the 1998
national report and site- specific reports, the guidance for developing the
1998 report, and the current guidance for developing the June 1999 update.
To identify limitations on the usefulness of the Paths to Closure report, we
reviewed the document, contacted officials at 12 DOE cleanup sites, 13 and
reviewed the stakeholders' comments on the February 1998
13 These sites were the Hanford Site (Washington), Rocky Flats Environmental
Technology Site (Colorado), West Valley Demonstration Project (New York),
Portsmouth Gaseous Diffusion Plant (Ohio), Fernald Environmental Management
Project (Ohio), Miamisburg Environmental Management Project (Ohio),
Brookhaven National Laboratory (New York), Lawrence Livermore National
Laboratory (California), Columbus Environmental Management Project - King
Avenue (Ohio), Columbus Environmental Management Project - West Jefferson
(Ohio), Rulison (Colorado), and Weldon Spring Site (Missouri). In selecting
sites to contact, we obtained a mix of large sites (in terms of budget and
number of projects) and small sites, many of which are scheduled to be
closed by 2006.
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 11
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Paths to Closure draft. To obtain budgetary information, we obtained and
analyzed funding data from DOE's project baseline database. We conducted our
review from October 1998 through April 1999 in accordance with generally
accepted government auditing standards.
As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 14 days from
the date of this letter. At that time, we will make copies of this report
available to the Honorable Bill Richardson, Secretary of Energy, and the
Honorable Jacob Lew, Director, Office of Management and Budget. Copies will
be made available to others on request.
If you have any questions or need additional information, please contact me
on (202) 512- 3841. Major contributors to this report were Chris Abraham,
Dwayne Curry, Rachel Hesselink, Nancy Kintner- Meyer, Tom Perry, and Glen
Trochelman.
Sincerely yours, (Ms.) Gary L. Jones Associate Director, Energy,
Resources, and Science Issues
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 12
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Contents Letter 1 Appendix I Comments From the Department of Energy
16 Figure Figure 1: Amount That the Projects' Cost Estimates Exceed the
Annual $5.75 Billion Funding Target 10
Abbreviations
DOE Department of Energy
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 14
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 15
Appendix I Comments From the Department of Energy
Note: GAO comments supplementing those in the report text appear at the end
of this appendix.
See comment 1.
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 16
Appendix I Comments From the Department of Energy
See comment 2. See comment 3. See comment 4.
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 17
Appendix I Comments From the Department of Energy
See comment 5. See comment 6. See comment 7.
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 18
Appendix I Comments From the Department of Energy
GAO Comments The following are GAO's comments on the Department of Energy's
letter dated April 1, 1999.
1. DOE's comments provided a list of benefits of the Paths to Closure
strategy. We acknowledged in our report that Paths to Closure has strengths
and pointed out many of the same benefits that DOE listed in its comments.
For example, we noted that, under Paths to Closure, DOE has for the first
time set goals for completing the cleanup at each site and has surfaced
challenges that need to be addressed to achieve those goals. Part of our
objective was to provide information on the limitations and uncertainties in
the Paths to Closure report. In doing this, we pointed out limitations and
uncertainties of the report's information that are important for a reader to
keep in mind in using this document. In describing both the strengths and
limitations of the Paths to Closure report, we identified the underlying
issues that need to be considered when using Paths to Closure's information
for decision- making purposes. Nevertheless, we made changes to our report
to better recognize the benefits of the Paths to Closure strategy.
2. While DOE provided guidance on the cost and schedule information field
offices should submit, no standard methodology for estimating projects'
costs was specified. The guidance DOE cited in its letter says only, sites
should use “an appropriate activity based cost estimating
methodology.” As we pointed out in our report, some sites were less
experienced than others in preparing cost estimates, including developing
and using cost estimating techniques. We revised the report to clarify that
DOE headquarters did not specify a standard methodology that sites should
use for estimating cleanup costs.
3. The Inspector General's findings involving the seven projects caused the
Inspector General to conclude that there were material weaknesses with the
process DOE used to develop and validate the cost estimates. The weaknesses
cited by the Inspector General were serious enough for that office to issue
a qualified opinion on DOE's fiscal year 1998 financial statement. DOE
concurred with the report's recommendations and indicated that it was
actively working to improve the quality of the process for estimating
environmental liabilities. In light of that and our own review, we believe
that the reliability of the cost estimates in Paths to Closure is a
limitation that needed to be raised. In addition, DOE noted in Paths to
Closure that numerous stakeholders had raised concerns about the quality of
the data when commenting on the February 1998 Paths to Closure draft. DOE
said- and we pointed out in our report- that the
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 19
Appendix I Comments From the Department of Energy
agency is planning to take steps to improve the quality and consistency of
the data. We added information to our report to clarify aspects of the
Inspector General's findings and the activities that DOE is planning.
4. We agree that when cleanup standards are not known, cost estimates can
only be based on assumptions. However, as we stated in our report, these
assumptions are uncertainties that will likely result in the Paths to
Closure cost and schedule estimates being revised as more becomes known. In
addition, the majority of DOE's sites- 41 of 53- are scheduled to be closed
by 2006, not in 40 or 50 years as DOE states in its letter. Some sites- due
to finish their cleanup work in less than 7 years- are still negotiating
their cleanup levels. We cited the West Valley Demonstration Project, due to
close by 2005, as an example of one of the sites for which the level of
cleanup to be achieved is still being negotiated and could range from no
further cleanup to much stricter standards. Site estimates will likely be
revised as cleanup levels are agreed to. Therefore, we noted such situations
as an uncertainty in the Paths to Closure estimates and made no changes to
our report as a result of DOE's comment on this point.
5. As DOE points out, the $147 billion life cycle estimate includes an
estimated $4 billion in costs associated with activities that will be
required after a site has completed its cleanup work. In addition to this
amount, one site we contacted estimated its long- term costs at more than
$1.5 billion. These costs were not included in its Paths to Closure
estimate. In total, this represents more than $5.5 billion in long- term
costs for about 50 percent of DOE's sites, a figure that is likely to be
higher once estimates from all of the sites are included. While these costs
will be spread over a 20- to 30- year period, we believe that $5.5 billion
is a significant cost. We made no changes to our report as a result of DOE's
comments on this point.
6. As DOE acknowledges, it faces challenges in trying to meet the Paths to
Closure goals with a $5.75 billion annual funding target. In addition to the
challenges of closing the funding gap between the sites' needs and the
annual funding target described by DOE in Paths to Closure, we provided
information in our report on other challenges, such as overcoming the
tendencies toward delays and cost increases that major DOE projects have
historically experienced. Because these challenges have potential budget
implications, we pointed them out as limitations that a reader needs to keep
in mind in understanding the costs of the cleanup program. We made no
changes to our report as a result of DOE's comments on this point.
GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 20
Appendix I Comments From the Department of Energy
7. We were asked to focus on the limitations and uncertainties of the Paths
to Closure report that affect its usefulness. Although that was our focus,
we also reported on the strategy's strengths. We have changed the title of
our report to better express this message.
(141257) GAO/ RCED- 99- 129 DOE's Accelerated Cleanup Strategy Page 21
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