Department of Energy: Clear Strategy on External Regulation Needed for
Worker and Nuclear Facility Safety (Testimony, 05/21/98,
GAO/T-RCED-98-205).

GAO discussed the progress being made by the Department of Energy (DOE)
toward the external regulation of both worker safety and nuclear
facility safety, focusing on DOE's: (1) position on external regulation;
and (2) strategy for conducting pilots on external regulation.

GAO noted that: (1) over the last 5 years, DOE leadership has often
stated its intention to have its facilities subject to external
regulation by independent agencies in matters of worker safety and
nuclear facility safety; (2) 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 the Nuclear Regulatory
Commission (NRC) and the Occupational Safety and Health Administration
(OSHA) to become its external regulators; (3) DOE's position, however,
has changed; (4) DOE is now evaluating the feasibility of external
regulation by conducting a pilot program at selected DOE sites over a
2-year period; (5) DOE's pilot program is a sharp departure from its
earlier strong position to immediately seek legislation enabling
external regulation by NRC and OSHA; (6) moreover, DOE's pilot program,
which is designed 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 the
practicality of external regulation; (7) the scope of the pilot program
remains in doubt because no high-risk, complex, or defense facilities
have been selected; (8) also, DOE's pilot program has been largely
limited to simulate regulation by NRC; and (9) no joint pilots with OSHA
have been completed or planned to study the jurisdictional overlap that
exists between the two agencies.

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

 REPORTNUM:  T-RCED-98-205
     TITLE:  Department of Energy: Clear Strategy on External Regulation 
             Needed for Worker and Nuclear Facility Safety
      DATE:  05/21/98
   SUBJECT:  Nuclear facility safety
             Occupational safety
             Working conditions
             Safety regulation
             Regulatory agencies
             Interagency relations
             Strategic planning
             Atomic energy defense activities
IDENTIFIER:  DOE Strategic Plan
             
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Cover
================================================================ COVER


Before the Subcommittee on Basic Research and the Subcommittee on
Energy an Environment, Committee on Science, House of Representatives

For Release
on Delivery
Expected at
10 a.m.  EDT
Thursday
May 21, 1998

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

Statement of Victor S.  Rezendes, Director,
Energy, Resources, and Science Issues,
Resources, Community, and Economic
Development Division

GAO/T-RCED-98-205

GAO/RCED-98-205T


(141206)


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

  DOE -
  MOX -
  NRC -
  OSHA -

============================================================ Chapter 0

Mr.  Chairman and Members of the Subcommittees: 

We are pleased to testify on the progress being made by the
Department of Energy (DOE) toward the external regulation of both
worker safety and nuclear facility safety.  It should be noted that
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.  This statement is based on our report to the full
committee.\1 The objectives of our review were to

  -- identify DOE's position on external regulation and

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

In summary we reported that over the last 5 years, DOE leadership has
often stated its intention to have its facilities subject to external
regulation by independent agencies in matters of worker safety and
nuclear facility safety.  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 NRC and OSHA to become
its external regulators.  DOE's position, however, has changed.  DOE
is now evaluating the feasibility of external regulation by
conducting a pilot program at selected DOE sites over a 2-year
period.  DOE's pilot program is a sharp departure from its earlier
strong position to immediately seek legislation enabling external
regulation by NRC and OSHA.  Moreover, DOE's pilot program, which is
designed 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 the practicality of
external regulation.  The scope of the pilot program remains in doubt
because no high-risk, complex, or defense facilities have been
selected.  Also, DOE's pilot program has been largely limited to
simulate regulation by NRC.  No joint pilots with OSHA have been
completed or planned to study the jurisdictional overlap that exists
between the two agencies. 


--------------------
\1 Department of Energy:  Clear Strategy on External Regulation
Needed for Worker and Nuclear Facility Safety (GAO/RCED-98-163, May
21, 1998). 


   BACKGROUND
---------------------------------------------------------- Chapter 0:1

We, along with others, have long-criticized DOE for weaknesses in its
self- regulation of the environment, safety and health at its own
facilities.  With few exceptions, worker and nuclear facility safety
has been self-regulated by DOE in the name of national security.  To
its credit, DOE's leadership has recognized the need for external
regulation.  In 1993, then-Secretary Hazel O'Leary announced that the
Department would seek external regulation for worker safety.  In
1994, legislation was proposed and hearings were held to externally
regulate nuclear safety.  Although no laws were enacted, in 1995 DOE
created an advisory committee, which concluded 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."

In 1996, a subsequent DOE working group concluded that external
regulation could improve safety, eliminate the inherent conflict of
interest from self-regulation, gain consistency with current domestic
and international safety management practices, and improve
credibility and public trust. 

The 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 figures are DOE's national laboratories, which
include 23 laboratories whose total budget is 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 POSITION ON EXTERNAL
   REGULATION IS UNCLEAR
---------------------------------------------------------- Chapter 0:2

Despite its public commitment in 1993 to seek immediate legislation
that would authorize NRC and OSHA to regulate its facilities, and a
renewed commitment in 1996, DOE has since decided to evaluate whether
external regulation is even warranted.  On November 21, 1997, the
Secretary of Energy and the Chairman of NRC signed a Memorandum of
Understanding to simulate NRC's regulation in a pilot program at 6 to
10 selected DOE sites over a 2-year period.  According to DOE, the
final report on this program would be used to determine whether NRC
regulation is warranted. 

DOE's new approach to external regulation is also 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 that included the goal to commit to
seeking independent and credible external regulation as soon as
possible.  DOE officials explained to us that Secretary Frederico
Peï¿½a's decision to conduct a pilot program in lieu of a phased
implementation does not represent a change in DOE's position on
external regulation.  Rather, they said, it reflects a more
business-like approach to external regulation. 

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,\2
NRC 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 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 the NRC as the
licensor.) 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.  DOE now plans to continue self-regulating while
studying several complex issues related to the new facility.  As a
result of this change, the Chairman of NRC commented publically that
she is uncertain about NRC's role as a regulator for the planned MOX
fuel facility.\3

Furthermore, although OSHA has collaborated with DOE for several
years on a proposal to transfer regulatory authority for worker
safety to OSHA, its officials are also uncertain about its role as a
future DOE regulator.  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.\4
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 officials discussed a meeting
held between the deputy secretaries of DOE and the Department of
Labor (to which OSHA reports) that documents 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. 


--------------------
\2 For example, NRC provided us with a list of 16 of DOE's activities
(including privatized DOE facilities or activities) in which they
have a role.  These roles range from providing advice on a problem
reactor at the Brookhaven National Laboratory in New York to the
potential for licensing the West Valley Demonstration Project in New
York. 

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

\4 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 in
these facilities. 


   DOE'S STRATEGY TO CONDUCT A
   PILOT PROGRAM IS LIMITED
---------------------------------------------------------- Chapter 0:3

Although DOE's pilot program 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. 
So far, the sites in the pilot program pose relatively simple and
limited worker safety and nuclear facility safety problems.  The
first two pilots underway are

  -- the Lawrence Berkeley National Laboratory, in California, and

  -- the Radiochemical Engineering Development Center, at 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.  Sites for
the remaining pilots have not been chosen. 

While the pilot program will produce useful information, none of the
first four sites contains a nuclear reactor, about which the public
usually has significant safety concerns.  Also, the pilot program
sites contain no 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 comprise 80 percent the Department's complex.  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, they have no plans to involve the largest national
laboratories or any nuclear defense facilities.  Moreover, by
excluding these national laboratories in its 2-year pilot program,
DOE cannot gain the practical experience needed when it is required
to report to the Congress by July 1, 1999, about how it intends to
arrange oversight of its national laboratories.\5

A major goal of the pilot program is to provide insights about costs
based on actual experiences, but to more accurately estimate the
expected cost of externally regulating DOE's facilities, the pilot
program sites need to be more representative of the whole complex. 
For example, on the basis of the pilot at Lawrence Berkeley, 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, does not represent the cost of regulating the vast majority
of DOE's nuclear facilities, nor will much of the information
obtained from the next two pilot sites be representative.  In 1995,
NRC estimated that it would need 1,100 to 1,600 more staff (and an
additional $150 million to $200 million per year) to regulate DOE. 
Moreover, DOE is not integrating OSHA with NRC in its pilot program;
instead, each regulatory agency is proceeding under a separate
strategy without the benefit of collaborating to understand
jurisdictional overlaps. 

Pilot sites were selected, in large 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 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, diversity of
hazard, geographic diversity, and the age and the condition of the
facility. 

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 pilot at the Oak Ridge site (OSHA had
previously conducted a pilot at the Argonne National Laboratory). 
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 is unclear.  In July, OSHA plans to
give its recommendations for the external regulation of DOE worker
safety to the Office of Management and Budget as part of its proposed
budget for fiscal year 2000.  OSHA officials have explained that
budget limitations have precluded its participation. 

Although DOE has previously endorsed OSHA as its external regulator
for worker safety, OSHA has 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 in the second
pilot at the Oak Ridge National Laboratory is not a joint effort. 
Neither NRC nor OSHA has plans to participate in any joint pilots in
the future. 

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 safety at
DOE 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
comprised of senior DOE managers and the Office of General Counsel
was created to resolve important policy issues.  DOE's various pilots
have been focused largely on working with NRC, and no plans have been
made to integrate that work with OSHA. 

Mr.  Chairman and members of the subcommittees, this concludes my
prepared remarks on DOE's move to external regulation of worker and
nuclear facility safety.  I would be pleased to respond to any
questions you or members of the subcommittees may have. 


--------------------
\5 National Defense Authorization Act for Fiscal Year 1998, sec. 
3154 (P.L.  105-85). 


*** End of document. ***