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Strategic Objective: Responsible Stewardship of Natural Resources and
the Environment.

Issue: The nation's natural resources and the systems associated 
with their use are under unprecedented stress, generating intense 
debate and posing daunting challenges to policymakers at all levels of 
government. In part, this is the consequence of the country's growing 
population and economy, but other stress factors exist as well, such as 
the globalization of the world's economy and political tensions. Most 
glaringly, the tragic events of September 11 revealed the nation's 
vulnerability to hostile acts, mandating heightened protection of its 
critical natural resources, including the air we breathe, the water we 
drink, the food we consume, and the energy supplies that keep the 
economy going.

Even before the tragic events of September 11, however, part of the 
country faced an energy crisis. The chaos in California's electricity 
market underscored the difficulties of crafting energy policies and 
regulatory approaches that adequately protect against price volatility 
and supply disruptions. Without the application of prudence and 
foresight in crafting the nation's strategic energy plan, similar 
crises could affect other areas of the country in the electricity, 
natural gas, heating oil, and gasoline markets. The challenge is 
further complicated by the global nature of many energy markets, and 
growing doubts about the long-term sustainability of policies that 
demand increased production from the existing energy mix. Furthermore, 
strategies must now incorporate greater attention to the means of 
protecting a massive energy infrastructure that encompasses 5,000 power 
plants, 204,000 miles of high voltage transmission lines, and nearly 3 
million miles of oil and gas pipelines. Finally, energy strategies must 
consider the environmental consequences of energy choices, as 
illustrated by issues surrounding the potential reemergence of the 
nuclear power industry. While increased nuclear power capacity would 
provide needed electricity, vexing questions would remain about where 
and how to store the byproduct radioactive waste in an environmentally 
sound manner as well as how to secure the plants and waste sites 
against possible future attacks.

The country's lands and waters are more than ever under increasing 
stress. This is evidenced by rapidly dwindling open spaces, declining 
biodiversity, depleted aquifers, and collapsing fisheries; the 
unintended consequences of economic growth and the need to sustain the 
lifestyle of a growing population. Reconciling and balancing the 
demands of often competing objectives; economic growth for today versus 
natural resource protection for the future; is a major challenge facing 
the American public and their elected leaders. The difficulties 
experienced in trying to reach agreement on whether, and how, the 
Arctic National Wildlife Refuge in Alaska should be used for oil and 
gas drilling is a prime example of this challenge. In this case, the 
issue pertains to the use of federal lands, which constitute about 30 
percent of the country's total land surface, but similar controversies 
exist over privately held lands affected by federal law and 
regulations. The use of the nation's waters present equally sobering 
challenges, as pollutants and over fishing rapidly deplete coral reefs 
and offshore fisheries, while competition over rights to fresh water 
supplies grows among various interests, such as ranchers, communities, 
utilities, and recreational users. Conflicts over water are especially 
pronounced in arid areas of the West that have experienced a high 
population growth in recent years.

Food safety lies at the forefront of concerns about the country's 
agricultural resources, an urgent matter given the potential for 
agricultural bioterrorism. Besides this troubling matter, a whole range 
of other food safety issues, while less ominous, nevertheless pose 
serious questions. These include questions about the adequacy of the 
government's recent devolution of food inspection authority, and its 
new "farm-to-table" food safety approach. Foreign concerns are 
increasing, meanwhile, about the safety of U.S. genetically modified 
crops and foods, an important development given the significant role 
that food exports play in the health of the U.S. agricultural economy. 
The Congress also faces other important issues as it debates the future 
direction of U.S. farm policy. Questions over the role of agriculture 
in land conservation, wildlife habitat protection, and energy 
production efforts are likely to figure prominently in the 
deliberations.

The increasing globalization of natural resource issues also affects 
pollution control matters, as seen in the federal government's 
discussions with other governments about global warming and what should 
be done about it. Such discussions add a new layer of complexity to the 
already difficult question of how to sustain economic growth when the 
engines of that growth; factories, cars and trucks, fertilizers, 
electricity generating plants; can adversely affect air and water 
quality. Another factor in attaining federal air and water quality 
goals is that land use practices, often resulting in "urban sprawl," 
are controlled mainly by local governments and private owners. 
Moreover, the federal government relies upon state and local 
governments for inspection and enforcement actions.

Finally, significant challenges remain in cleaning up the country's 
hazardous and radioactive waste sites. Today, an estimated 60 million 
Americans live within 4 miles of a hazardous site, and radioactive 
waste from weapons production still needs to be cleaned up at 
Department of Energy sites in 13 states. These sites' continued 
existence poses not only potential health and safety problems, but 
fiscal and economic problems as well. Delayed cleanup results in higher 
price tags for eventual cleanup, and in stunted economic development in 
the affected communities. Also, the terrorist attacks of September 11 
underlined the need for steps to ensure the security of hazardous and 
radioactive materials during storage, transportation, and disposal.

Performance Goals: To support efforts by the Congress and the 
federal government to address these issues, GAO will:

* assess the nation's ability to ensure reliable and environmentally 
sound energy for current and future generations;

* assess federal strategies for managing land and water resources in 
sustainable fashion for multiple uses;

* assess federal programs' ability to ensure a plentiful and safe food 
supply, provide economic security for farmers, and minimize 
agricultural environmental damage;

* assess federal pollution prevention and control strategies; and

* assess efforts to reduce the threats posed by hazardous and nuclear 
wastes.

Natural Resources and Environment:
Assess the Nation's Ability to Ensure Reliable and Environmentally 
Sound Energy for Current and Future Generations.

Key Efforts:

* Assess tradeoffs among alternative energy choices, principally 1. 
efforts to increase the supply of energy from all energy sources; 
fossil (oil, gas, and coal), nuclear, and renewable (wind, solar, 
biomass, photovoltaics, and geothermal) and 2. actions to reduce 
demand by using energy more efficiently; consider the effects of 
emerging energy technologies and research and development partnerships 
between the federal government and the private sector,

* Examine and assess energy security plans and efforts to 1. protect the
nation's energy infrastructure from terrorism and other sources of 
disruption; 2. reduce U.S. and consumer vulnerabilities to price 
spikes, severe weather and supply disruptions; and 3. determine the 
impact of energy company mergers, consolidations, and federal 
incentives (including tax credits) on the prices of energy and 
consumers,

* Assess whether aging pipelines and transmission lines have the capacity 
to meet the demand for reliable, safe energy delivery,

* Review the interrelationships among energy and other natural resource 
issues, such as the environmental effects of burning fossil fuels, and 
their implications for federal energy policies and programs,

* Determine the implications of embracing energy competition and free 
markets as alternative means to restructure electricity markets and 
evaluate changing regulatory approaches to ensure that these 
restructured markets function properly,

* Analyze the adequacy of the Department of Energy's (DOE), the Federal 
Energy Regulatory Commission's (FERC), and the Nuclear Regulatory 
Commission's (NRC) organization, human capital, and management 
processes for supporting efficient and effective operations.

Significance:

The nation's energy system is under stress. In energy markets; such as 
natural gas, electricity, home heating oil, and gasoline; demand and 
supply relationships periodically change significantly, resulting in 
volatile prices. Most recently, the threat of terrorism and its 
potential to disrupt the energy system has brought a heightened sense 
of urgency to the task of ensuring the security and reliability of that 
system. Periodic declines in energy supplies and price volatility 
burden consumers and adversely affect economic activity. At the same 
time the country's energy choices affect the environment and, in some 
cases, threaten supplies for future generations. As such, there is 
growing acceptance that the United States, if it is to resolve these 
stresses on its energy system, cannot sustain an exclusive reliance on 
increased production from the existing energy mix to meet ever rising 
levels of consumption. To meet these challenges, the nation may need to 
consider a more unified and innovative energy strategy that reevaluates 
the current policy and identifies the available alternatives.

The preferred energy sources and the methods used to acquire them 
present formidable challenges in forming a national energy policy, 
because it is important to strike a delicate balance between energy, 
environmental, and economic needs. Over time, it will also be important 
to assess worldwide energy practices, explore new research 
opportunities, and consider new and alternative energy choices that are 
more sustainable. The nation and consumers can jointly benefit from 
emphasizing an energy system in which energy consumption works in 
tandem with environmental preservation and other societal goals. 
Because energy remains a vital component to the health of the U.S. 
economy and way of life, the decade ahead requires critical policy and 
investment choices to create an energy system that meets the public's 
changing needs. In addition, new approaches are needed to protect the 
nation's energy system and ensure its physical and economic stability.

Potential Outcomes that Could Result when GAO's Work Is Used:

Congressional consideration of the full range of realistic projections 
of supply options with information on the benefits and costs to 
alternative actions,

Congressional consideration of innovative alternatives to the 
escalating production and consumption of greater amounts of energy,

More informed congressional funding decisions resulting in effective 
research spending, more efficient energy use, and budgetary savings,

Enhanced oversight of the nation's energy security against terrorism 
and other threats in areas such as the Strategic Petroleum Reserve, the 
country's energy grid, and other infrastructure,

Greater congressional awareness of how energy market concentration 
affects the consumer market and of the effectiveness of federal 
incentives,

Improved federal and private market structures to encourage necessary 
enhancements and modernization of U.S. energy infrastructure,

A more informed debate on alternative energy paths, including a better 
understanding of related environmental effects,

Improved congressional understanding of transitional issues in 
restructuring the electricity market, market design and monitoring, and 
lessons learned,

Market structures and rules that are fair, appropriate, and not subject 
to abuses,

Improvements in DOE's, FERC's, and NRC's organization, human capital, 
and management processes.

Natural Resources and Environment:
Assess Federal Strategies for Managing Land and Water Resources in a 
Sustainable Fashion for Multiple Uses.

Key Efforts:

* Evaluate federal land management agencies' progress in coordinating 
activities, addressing resource issues, and protecting critical 
environmental and natural resource systems from misuse, negligence, or 
intentional acts,

* Review federal land management agencies' efforts to develop and 
implement a strategy to reduce wildfires on federal lands,

* Assess federal land management agencies' operational needs and their 
multibillion-dollar backlog of deferred maintenance at national parks, 
forests, and other facilities,

* Analyze federal efforts to obtain a fair market value for minerals and 
other resources extracted from federal lands, while balancing 
consumption and conservation needs,

* Assess federal efforts to manage the nation's rivers, oceans, and 
marine environments in a way that balances resource protection with 
consumption and conservation needs,

* Evaluate the federal government's efforts to clarify its relationship 
with, and meet its responsibilities to, Native Americans and Alaskan 
Natives,

* Analyze federal agencies' efforts to protect threatened and endangered 
species on federal and nonfederal lands and in bodies of water,

* Analyze the adequacy of the land and water resource agencies' organization, 
human capital, and management processes for supporting the agencies' 
operations.

Significance:

Federal policies over land and water resources have for many years been 
the subject of sometimes bitter conflict. While most land in the United 
States is privately owned, the resources owned and managed by the 
federal government are vast; over 650 million acres of land, or 30 
percent of the nation's total land surface; over 700 million acres of 
mineral estate that underlie both federal and other surface ownerships; 
about 1.75 billion acres of the Outer Continental Shelf; and fisheries 
extending up to 200 miles offshore. In 2000, the estimated market value 
of production occurring on public lands was nearly $14 billion, and the 
direct and indirect economic effect of all commercial activities 
amounted to nearly $30 billion. Federal laws also affect activities on 
some private lands by protecting wetlands or critical habitat of 
threatened or endangered species.

The inherent conflict over federal land use policies has been, firstly, 
over which of the current competing needs and uses for resources on 
federal lands should be addressed and, secondly, over whether to use 
resources today or to preserve and sustain them for future generations. 
Achieving a balance among these forces remains a constant struggle. 
Amidst this conflict, the nation's land and water resources are showing 
increasing signs of stress; more catastrophic wildfires, shrinking 
water aquifers, an accelerating rate of extinction of plants and 
wildlife, destruction of wildlife habitat, and the collapse of many 
fisheries. Moreover, the September 11 terrorist attacks heightened the 
need to protect critical natural resource systems not only from natural 
disasters or negligence, but also from acts to intentionally damage 
those resources or use them in assaults against the nation's security. 
In this context of competing demands and security considerations, 
policymakers will need solid information to make rational policy 
choices and ensure that federal taxpayers benefit from the uses made of 
natural resources. How the nation addresses these challenges today will 
profoundly affect the viability of its natural resources, and the well-
being of the public, for generations to come.

Potential Outcomes that Could Result when GAO's Work Is Used:

More efficient and effective land management to better protect federal 
lands, their resources, and the surrounding environment,

Enhanced congressional understanding of options for setting charges for 
the use of federal resources to facilitate a move toward greater self-
sufficiency by the parks, forests, and other entities, and to ensure a 
fair return for the use of public resources,

Informed decisions on how to balance production, revenue generation, 
and conservation of natural resources,

Clearer understanding of the government-to-government relationship 
between the federal government and Indian tribes and of ways to improve 
programs promoting Indian self-determination and self-sufficiency,

An improved understanding of the social, political, and financial 
issues associated with species protection efforts to inform the debate 
on reauthorizing the Endangered Species Act,

Informed congressional oversight of the natural resources agencies' 
organization, human capital, and management processes.

Natural Resources and Environment:
Assess Federal Programs' Ability to Ensure a Plentiful and Safe Food 
Supply, Provide Economic Security for Farmers, and Minimize 
Agricultural Environmental Damage.

Key Efforts:

Evaluate federal programs' ability to ensure a safe and wholesome food 
supply across the full spectrum of food production from the farm to the 
table, including guarding against terrorism,

Assess the capability of the current food safety system to ensure the 
safety, quality, and the long-term environmental soundness of new 
emerging food products developed from scientific and technical 
advances, such as genetically modified foods and functional foods,

Evaluate the effectiveness and budgetary consequences of federal 
programs designed to ensure a plentiful and affordable food supply and 
to aid farmers in times of declining global crop prices or domestic 
production,

Evaluate the outcomes and costs of federal programs designed to 
minimize the adverse land use and environmental effects of agricultural 
practices,

Evaluate USDA's ability to mitigate the threats to crops and livestock 
from purposeful attacks and from invasive pests and diseases,

Analyze the adequacy of USDA's organization, human capital, and 
management processes for supporting efficient and effective operations.

Significance:

Federal food safety oversight and the Department of Agriculture's 
(USDA) farm assistance programs play a critical role in ensuring a 
safe, abundant, and affordable food supply. Although the U.S. food 
supply is generally considered safe, foodborne illnesses continue to 
threaten the nation's health and tax its medical system. Experts 
estimate that foodborne pathogens cause 76 million cases of 
gastrointestinal illnesses, 325,000 hospitalizations, and 5,000 deaths 
annually. Furthermore, illnesses from just the five principal foodborne 
pathogens cost about $7 billion in medical expenses and productivity 
losses each year. While the federal government distributes over $1 
billion annually to its various agencies to reduce the health and 
economic consequences of foodborne illnesses, some regulatory agencies 
have begun making the transition to new science-based regulatory 
strategies, which place increasing responsibility on industry for 
identifying and controlling risks in the production processes. Although 
better than the existing archaic process of preventing foodborne 
illnesses, these science-based strategies address only a segment of the 
food production and distribution continuum and their implementation is 
inconsistent across the food supply. In addition, scientific and 
technical advances in the production of food, such as the development 
of genetically modified foods, place additional responsibilities on the 
federal food safety agencies. Furthermore, recent events have 
heightened the awareness that threats to the food supply are a 
component of terrorism and present new challenges to an already 
burdened system. Consequently, a new "farm-to-table" approach for food 
safety; one that starts with growers and extends to retailers; is 
needed to ensure that the full spectrum of food production is 
safeguarded.

In fiscal year 2001, USDA spent about $26 billion on a variety of farm 
assistance, land conservation, and environmental programs. Some argue 
that support to farmers is particularly necessary now in light of lower 
agricultural commodity prices and declining net farm income. Others 
question the effect, relevance, and costs of these programs, given that 
most farm assistance;  because of the dramatic consolidation of the 
farm sector; goes increasingly to large corporate entities. As the next 
farm bill is formulated and implemented, these and other issues; such 
as placing greater emphasis on land conservation, exploring energy 
production-related uses of agricultural land, and reducing 
agriculture's impact on water quality; will need to be evaluated.

Potential Outcomes that Could Result when GAO's Work Is Used:

Enhanced effectiveness of federal food safety programs in addressing 
safety issues arising from a global food marketplace, changing 
regulatory approaches, and the threat of terrorism,

Improvements in federal food safety agencies' actions to evaluate and 
regulate the safety of new technologies, such as genetically modified 
foods and functional foods,

More agreement within the Congress on the "facts" relevant to 
congressional efforts to provide a cost-effective safety net to farmers 
(farm loan, support, and insurance programs), and to ensure American 
farmers and food industries a growing share of global food markets,

More effective conservation and agricultural programs designed to 
enhance the environment,

Enhanced efforts to address threats to agricultural productivity,

Improved USDA organization, human capital, budgetary, and management 
processes.

Natural Resources and Environment:
Assess Federal Pollution Prevention and Control Strategies.

Key Efforts:

* Examine current and alternative strategies to reduce air pollution,

* Assess current and alternative approaches for improving the quality of 
the nation's surface waters,

* Examine strategies for ensuring safe drinking water for all Americans, 
including protection from security threats and breaches,

* Assess approaches for controlling the harmful effects of pesticides and 
toxic substances,

* Examine the implications of global and transboundary environmental 
threats, including climate change,

* Analyze the adequacy of pollution control agencies' organization, human 
capital, and management processes for supporting efficient and 
effective operations.

Significance:

Among quality-of-life issues, environmental protection has long been 
valued by Americans. During the last three decades, the nation has 
worked hard to limit the quantities of pollutants that degrade the 
nation's air, surface and ground waters, and land. The Environmental 
Protection Agency (EPA) has estimated that pollution control 
expenditures by all sectors from 1972 through 2000 totaled 
approximately $2 trillion. Such efforts have yielded impressive 
results; for example, aggregate emissions of the six principal air 
pollutants have declined by 29 percent since 1970, and virtually all 
discharges to the nation's waters from point sources are now 
controlled. However, serious problems remain. Urban areas housing 
millions of Americans still fail to meet air quality standards, 
particularly during summertime high-ozone periods; and acid rain 
continues to degrade forests, lakes, and streams, with attendant 
effects on many wildlife species. An estimated 20,000 impaired water 
bodies must be restored to acceptable quality standards, which will 
require addressing heretofore little-regulated nonpoint pollution 
sources such as agricultural, suburban, and urban runoff. Drinking 
water systems will be hard-pressed to meet more stringent standards and 
address heightened security concerns. Many federal facilities do not 
fully comply with a number of environmental standards.

Several factors add complexity to the resolution of these issues, 
including:

* decision-making systems that do not effectively integrate attainment of 
environmental goals with land use, transportation, and energy supply 
choices;

* economic and technological changes that affect the mix of pollutants 
emitted as well as the ability, and cost, to monitor and control 
emissions;

* escalating concerns about environmental justice; for example, the 
environmental and health effects on low-income, minority, or other 
special populations; with significant implications for actions such as 
licensing major pollution sources and waste disposal facilities;

* the looming demand for billions of dollars in federal assistance over 
the next decade to replace, rehabilitate, and expand facilities, such 
as sewage treatment plants, necessary for meeting drinking water and 
surface water quality standards; and

* the transboundary nature of many pollutants with global effects that 
require international solutions.

In addition, there is interest in alternatives to traditional 
regulatory programs, such as those that employ pollutant trading or 
other market-based mechanisms, or place greater control in the hands of 
state or local authorities.

During the next few years, the Congress will be called upon to address 
these challenges as it considers reauthorization of major pollution 
control statutes, including the Clean Air, Clean Water, and Safe 
Drinking Water Acts.

Potential Outcomes that Could Result when GAO's Work Is Used:

Congressional use of information, analyses, and recommendations in 
reauthorizing key statutes, including the Clean Air, Clean Water, and 
Safe Drinking Water Acts,

More efficient administration of existing statutes, including 
alternative regulatory approaches for controlling pollution,

More informed congressional decisions on funding for facilities to 
control pollutants in drinking water and in wastewater discharges,

Enhancement of pollution control agencies' organization, human capital, 
and management processes.

Natural Resources and Environment:
Assess Efforts to Reduce the Threats Posed by Hazardous and Nuclear 
Wastes.

Key Efforts:

* Assess federal and private sector progress in identifying, 
transporting, cleaning up, and disposing of nuclear, ordnance, and 
hazardous waste in a safe and cost-effective manner,

* Assess federal, state, and private sector progress and performance in 
finding and developing environmentally acceptable sites on which to 
build essential waste disposal facilities,

* Assess the federal government's role and financial liability for long-
term stewardship of waste cleanup sites and storage and disposal 
facilities,

* Analyze the adequacy of waste cleanup agencies' organization, human 
capital, and management processes for supporting efficient and 
effective operations.

Significance:

Hazardous and nuclear wastes can cause serious environmental damage 
lasting decades or even centuries. The problems associated with the 
containment and cleanup of these wastes pose major financial and 
management challenges to the United States that will continue well into 
the 21ST century. Past practices have allowed health-threatening 
substances to seep into the land and water at thousands of federally 
and privately owned sites. Such seepages threaten public health and 
quality of life nationwide. The federal government spends almost $10 
billion annually to address health and environmental threats from 
Superfund and other private hazardous waste sites, remove and dispose 
of nuclear wastes from federal nuclear weapons facilities, and clean up 
hazardous waste at active and formerly used defense facilities. Such 
activities could ultimately cost the federal government over $300 
billion and the private sector hundreds of billions more.

Sound management practices are needed to prioritize and hasten 
cleanups, control costs, and develop innovative technologies. Cleanup 
and disposal decisions must also take into account governance issues; 
such as the rights of states and local communities to control land uses 
within their borders; and also fiscal issues; such as the need to 
assess the economic tradeoffs between completely cleaning up a 
contaminated property for reuse or simply restricting future access 
without complete cleanup. Moreover, terrorist activities have resulted 
in states and localities facing a new urgency to protect their citizens 
from dangers associated with the transport and storage of hazardous and 
nuclear wastes. The Congress also faces important policy choices, such 
as determining whether to proceed with the proposed disposal facility 
at Yucca Mountain, Nevada, for wastes from the nation's commercial 
nuclear reactors. Because many believe that the absence of such a 
facility will preclude construction of new plants, this decision has 
important implications for the future of nuclear power. Globally, other 
countries face similar concerns and decisions, and Russia has proposed 
to store nuclear wastes from other countries. Whether deliberating 
policy options, reauthorizing key statutes, or annually appropriating 
funds to the various federal cleanup activities, the Congress needs 
accurate information on the scope of the problem, the effectiveness of 
existing programs and activities, and the pros and cons of potential 
alternatives.

Potential Outcomes that Could Result when GAO's Work Is Used:

An informed debate on the issues associated with waste policy, site 
identification and characterization, cleanup priorities, 
transportation, resource level and allocation, technology development, 
standard setting, and long-term federal roles,

More effective and efficient management of cleanup activities by 
responsible federal agencies, including the Department of Defense, DOE, 
and EPA.