a

GAO

United States General Accounting Office

Report to Congressional Committees

July 2004 URANIUM 

ENRICHMENT

Decontamination and 

Decommissioning 

Fund Is Insufficient to 

Cover Cleanup Costs

GAO-04-692
www.gao.gov/cgi-bin/getrpt?GAO-04-692. 

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Robin Nazarro 

at (202) 512-3841 or nazarror@gao.gov. 

Highlights of GAO-04-692, a report to 

congressional committees 

July 2004

URANIUM ENRICHMENT 

Decontamination and Decommissioning 

Fund Is Insufficient to Cover Cleanup 

Costs 

The Department of Energy (DOE) has taken steps to reduce cleanup costs 

by taking actions that address recommendations made by the National 

Academy of Sciences and by pursuing an accelerated, risk-based cleanup 

strategy at the plants. In some cases, however, DOE has only partially 

addressed the Academy’s recommendations. For example, one 

recommendation suggested that DOE develop three plans—namely, 

headquarters level, plant-complex level, and site level—that address and 

integrate the decontamination and decommissioning of the facilities. Only 

one plant has developed a plan, however. Additionally, DOE is pursuing an 

accelerated, risk-based cleanup strategy at the plants that it believes will 

reduce cleanup costs. According to DOE officials, an accelerated, risk-based 

strategy will accelerate time frames for cleanup, and establish “realistic 

cleanup criteria” in DOE’s regulatory cleanup agreements. 

Despite DOE efforts to reduce costs, we found that based on current 

projected costs and revenues, the Fund will be insufficient to cover the 

cleanup activities at the three plants. Specifically, our Baseline model 

demonstrated that by 2044, the most likely time frame for completing 

cleanup of the plants, costs will have exceeded revenues by $3.5 billion to 

$5.7 billion (in 2004 dollars). Importantly, we also found that the Fund 

would be insufficient irrespective of which model we used, including models 

that estimated the final decommissioning at the plants under (1) accelerated 

time frames, (2) deferred time frames, or (3) baseline time frames, and with 

additional revenues from federal government contributions as authorized 

under current law. Because the Paducah and Portsmouth plants are now 

estimated to cease operations by 2010 and 2006, respectively, extending the 

Fund by an additional 3 years would give DOE an opportunity to develop 

plans, including more precise cost estimates, for the cleanup of these plants 

and to better determine if further Fund extensions will be necessary. 

Cleanup Costs Outweigh Fund Revenues 

Uranium and thorium

reimbursements +

Cleanup activities:

• Decontamination

and decommissioning

• Remedial actions

• Waste management

• Surveillance and

maintenance =

Appropriations + Utility assessments + Interest earned =

Fund revenue

Fund costs

Source: GAO.

Decontaminating and 

decommissioning the nation’s 

uranium enrichment plants, which 

are contaminated with hazardous 

materials, will cost billions of 

dollars and could span decades. In 

1992, the Energy Policy Act created 

the Uranium Enrichment 

Decontamination and 

Decommissioning Fund (Fund) to 

pay for the plants’ cleanup and to 

reimburse licensees of active 

uranium and thorium processing 

sites for part of their cleanup costs. 

This report discusses (1) what DOE 

has done to reduce the cleanup 

costs authorized by the Fund, and 

(2) the extent to which the Fund is 

sufficient to cover authorized 

activities. 

GAO recommends that the 

Congress consider reauthorizing 

the Fund for an additional 3 years 

and require DOE to reassess the 

Fund’s sufficiency before it expires 

to determine if further extensions 

will be necessary. GAO also 

recommends that DOE develop 

plans for the Paducah and 

Portsmouth plants that identify the 

most probable time frames and 

costs for completing the cleanup. 

DOE generally agreed with our 

recommendations, but stated its 

reluctance to develop plans for the 

plants now. GAO believes that 

without these plans, DOE will be 

unable to develop a more precise 

cost estimate or reassess the 

Fund’s sufficiency. 
Page i GAO-04-692 Uranium Enrichment

Contents

Letter 1

Results in Brief 3

Background 6

DOE Has Taken Several Actions to Reduce Cleanup Costs 13

Based on Current Projected Costs and Revenues, the Fund Will Not 

Be Sufficient to Complete Cleanup at the Three Plants 18

Conclusions 21

Matters for Congressional Consideration 22

Recommendations for Executive Action 22

Agency Comments and Our Evaluation 22

Scope and Methodology 23

Appendixes

Appendix I: Fund Modeling Methodology, Assumptions, and Results 27

Modeling Methodology 27

Baseline Model Data, Assumptions, and Uncertainties 28

Alternative Models 30

Results 32

Appendix II: DOE Actions Taken That Addressed the National Academy of 

Sciences’ Cost Reduction Recommendations 41

Appendix III: Comments from the Department of Energy 47

Appendix IV: GAO Contacts and Staff Acknowledgments 48

GAO Contacts 48

Staff Acknowledgments 48

Tables Table 1: Status of the Academy’s Major Recommendations 14

Table 2: Comparison of Models 40

Table 3: Recommendations, Status, and Explanation of the Actions 

Taken by DOE 42

Figures Figure 1: Location of the Three Uranium Enrichment Plants 7

Figure 2: The Decontamination and Decommissioning Process 11

Figure 3: Total Fund Expenditures, Fiscal Years 1994-2003 12

Figure 4: Baseline Model Results 33

Figure 5: Accelerated Model Results 34

Figure 6: Deferred Model Results 35

Figure 7: Revenue Added Model Results 36

Figure 8: Revenue Added Plus Interest Model Results 37
Contents

Page ii GAO-04-692 Uranium Enrichment

Figure 9: Present Value of Fund Balance for Baseline, Accelerated, 

and Deferred Models 38

Figure 10: Present Value of Fund Balance for Baseline, Revenue 

Added, and Revenue Added Plus Interest Models 39

Abbreviations

CERCLA Comprehensive Environmental Response, Compensation and 

Liability Act of 1980, as amended

D&D decontamination and decommissioning 

DOE Department of Energy

RCRA Resource Conservation and Recovery Act of 1976, as amended

USEC United States Enrichment Corporation

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-04-692 Uranium Enrichment

United States General Accounting Office

Washington, D.C. 20548

A

July 2, 2004 Letr

Congressional Committees

Decontaminating and decommissioning the Department of Energy’s three 

uranium enrichment plants—located near Oak Ridge, Tennessee; Paducah, 

Kentucky; and Portsmouth, Ohio—will cost billions of dollars and could 

span several decades. These plants, which encompass more than 30 million 

square feet of floor space, miles of interconnecting pipes, and thousands of 

acres of land, are contaminated with radioactive and hazardous materials. 

The Department of Energy’s (DOE) Office of Environmental Management 

is responsible for cleanup of the three plants. Cleanup activities include 

assessing, treating, and disposing of the contamination found at the plants 

and the decontamination and decommissioning (D&D) of inactive facilities. 

DOE conducts its cleanup activities under the requirements of several 

federal environmental laws and compliance agreements with relevant 

regulatory authorities, including the Environmental Protection Agency and 

state regulatory agencies. While DOE estimates that all cleanup work at the 

Oak Ridge plant will be complete by 2008, the Paducah and Portsmouth 

plants may continue operations for the next several years,1

 and DOE has 

not determined when the final decontamination and decommissioning of 

these two plants will begin. 

1

In 2001, enrichment operations were ceased at the Portsmouth plant, but the plant was 

placed on cold standby—a status that maintains the plant in a usable condition.
Page 2 GAO-04-692 Uranium Enrichment

In 1992, the Energy Policy Act, as amended,2 established the Uranium 

Enrichment Decontamination and Decommissioning Fund (Fund) to pay 

for the cleanup of the three plants. The Fund also covers the 

reimbursement of a portion of the cleanup costs to licensees of active 

uranium and thorium3

 processing sites that previously sold these materials 

to the federal government. The Congress authorized annual contributions 

to the Fund for 15 years (ending in 2007), to be made by government 

appropriations and payments from domestic utility companies that utilized 

the enriched uranium produced by these plants for nuclear power 

generation. The Congress specified that any unused balances in the Fund 

be invested in Treasury securities and any interest earned be made 

available to pay for activities covered under the Fund. In creating the Fund, 

the Congress also required the National Academy of Sciences (Academy) to 

undertake a study to assess the opportunities for cost reduction in carrying 

out the D&D work at the three plants. In response, the Academy issued a 

report in 1996 that included 13 major recommendations to reduce D&D 

costs at the three plants.4

As directed by Public Law 107-222, we conducted a review of the 

sufficiency of the Fund. This report discusses (1) what actions DOE has 

taken to reduce the cleanup costs the Fund is authorized to support, and 

(2) the extent to which the Fund is sufficient to cover authorized activities.

To determine what actions DOE has taken to reduce the cleanup costs the 

Fund is authorized to support, we reviewed the National Academy of 

Sciences’ report that identified major cost reduction recommendations for 

the nation’s three uranium enrichment plants. We met with Academy 

officials to gain further information about the study, and with DOE and its 

contractor officials at each of the plants to determine the extent to which 

DOE has taken actions to address the recommendations. While we were 

able to obtain information on actions taken to date, DOE could not 

determine whether the actions were taken as a result of the Academy’s 

recommendations. DOE was also generally unable to provide information 

2

All further references to the Energy Policy Act refer to the Energy Policy Act, as amended.

3

Thorium is a naturally occurring, slightly radioactive metal that can be used as a nuclear 

fuel.

4

National Academy of Sciences, Affordable Cleanup? Opportunities for Cost Reduction in 

the Decontamination and Decommissioning of the Nation’s Uranium Enrichment 

Facilities (Washington, D.C., 1996).
Page 3 GAO-04-692 Uranium Enrichment

regarding the cost savings, if any, achieved by implementing these actions. 

To determine other steps DOE has taken to reduce cleanup costs, we 

visited all three plants and interviewed DOE and contractor officials from 

DOE headquarters, the Oak Ridge Operations Office, the Lexington Office, 

and the site offices at each of the three plants. Additionally, we obtained 

and analyzed documentation regarding DOE’s accelerated cleanup strategy 

at the Oak Ridge and Paducah plants, as well as each of the three plants’ 

draft risk-based end state vision documents, to better understand DOE’s 

proposed options for consideration. We also interviewed regulatory 

authorities responsible for overseeing cleanup activities at the plants, 

including officials at the Environmental Protection Agency and state 

regulatory agencies in Kentucky, Ohio, and Tennessee. 

To assess the sufficiency of the Fund to pay for the total projected costs of 

the Fund’s authorized activities, we interviewed DOE and contractor 

officials responsible for the Fund’s financial data and obtained DOE’s 

current estimates for uranium and thorium reimbursement costs, the 

cleanup costs at the three plants, and the current and likely revenue 

projections. We assessed the reliability of this data and determined that the 

data were sufficient for the purposes of our report. We used the data to 

develop a number of simulation models that factored in the cost and 

revenue projections on an annual basis and uncertainties surrounding 

inflation rates, interest rates, costs, revenues, and the timing of the final 

D&D work at the Paducah and Portsmouth plants. See appendix I for a 

detailed description of our modeling methodology, assumptions, and 

results. We interviewed DOE and contractor officials from DOE 

Headquarters, the Oak Ridge Operations Office, the Lexington Office, and 

the site offices at each of the three plants, as well as officials from the 

federal and state regulatory offices party to the plants’ cleanup agreements. 

We also toured the Oak Ridge plant to identify the major uncertainties that 

could impact future cleanup costs at the plants. Our scope and 

methodology are presented at the end of this report. We performed our 

work between September 2003 and March 2004 in accordance with 

generally accepted government auditing standards. 

Results in Brief DOE has attempted to reduce cleanup costs by taking actions consistent 

with recommendations made by the National Academy of Sciences 

(Academy) and by pursuing an accelerated, risk-based cleanup strategy at 

the three plants. DOE has adopted measures that address many of the 

Academy’s recommendations, such as conducting focused technology 

demonstrations to improve the decontamination and decommissioning 
Page 4 GAO-04-692 Uranium Enrichment

process. However, in some cases, DOE has only partially addressed the 

Academy’s recommendations. For example, one recommendation 

suggested that DOE develop three plans—namely, headquarters level, 

plant-complex level, and site level—that address and integrate the 

decontamination and decommissioning of the facilities, among other 

cleanup activities at the sites. DOE has not developed a headquarters-level 

or plant complex-level plan that addresses and integrates the 

decontamination and decommissioning of all three plants. Oak Ridge is the 

only plant with an agreed-upon decontamination and decommissioning 

plan. Additionally, DOE is pursuing an accelerated, risk-based cleanup 

strategy at the plants that it believes will reduce cleanup costs. According 

to DOE officials, an accelerated, risk-based strategy will accelerate time 

frames for cleanup at the Oak Ridge and Paducah plants, and establish 

“realistic cleanup criteria” in their regulatory cleanup agreements. By 

implementing cleanup actions more quickly and ensuring that its cleanup 

efforts are both cost effective and environmentally sound, DOE hopes it 

can avoid unnecessary costs while reducing risks posed to human health 

and the environment. However, some state and federal regulators have 

suggested that if DOE proposes changes to current cleanup agreements, 

renegotiating those agreements could delay cleanup and, therefore, 

potentially increase costs.

Despite DOE efforts to reduce costs, we found that based on current 

projected costs and revenues, the Fund will be insufficient to cover the 

activities authorized under the Fund. We determined that while the Fund is 

sufficient to cover reimbursements to uranium and thorium licensees, the 

Fund is insufficient to cover the complete cleanup at the three plants. 

Specifically, our Baseline model demonstrated that by 2044, the most likely 

time frame for completing all cleanup activities at the plants, cleanup costs 

will have exceeded revenues by $3.5 billion to $5.7 billion (in 2004 dollars). 

Importantly, we found that the Fund would be insufficient irrespective of 

what estimates were used, including models that estimated the final 

decommissioning at the plants under (1) accelerated time frames, (2) 

deferred time frames, or (3) baseline time frames, and with additional 

revenues from government contributions as authorized under current law. 

Further, until DOE has more specific information about such factors as the 

dates for beginning and completing the decommissioning work at the 

Paducah and Portsmouth plants, it is not possible to more precisely 

determine the total resources needed to cover the Fund’s authorized 

activities. Because the Paducah and Portsmouth plants are now estimated 

to cease operations by 2010 and 2006, respectively, DOE should be able to 

develop plans, including more precise cost estimates, for the 
Page 5 GAO-04-692 Uranium Enrichment

decontamination and decommissioning of these plants. Extending the 

Fund by an additional 3 years would give DOE an opportunity to develop 

these plans and a better estimate of the costs to clean up the plants. With 

this information, DOE could better determine if further extensions to the 

Fund will be necessary. 

In order to better ensure that the Fund will be sufficient to cover the 

projected costs for the authorized activities, we are recommending that the 

Congress consider reauthorizing the Fund for an additional 3 years to 2010, 

and require DOE to reassess the sufficiency of the Fund before the 

expiration date to determine if additional extensions will be necessary. To 

further reduce the uncertainty surrounding the sufficiency of the Fund, we 

are also recommending that the Secretary of Energy develop 

decontamination and decommissioning plans that would identify the most 

likely time frames for completing the final work at the Paducah and 

Portsmouth plants.

DOE generally agreed that our report accurately presents the current status 

of the Fund and concurred with our recommendations that the Congress 

consider reauthorizing the Fund for 3 additional years and require DOE to 

reassess the sufficiency of the Fund before it expires in 2010 to determine if 

additional extensions will be necessary. DOE also stated that it would 

develop decontamination and decommissioning plans for the remainder of 

the facilities at Paducah and Portsmouth “at the appropriate time,” but did 

not specify a date. We believe that unless DOE develops decontamination 

and decommissioning plans that include the most probable time frames 

and costs for completing final work at Paducah and Portsmouth, DOE will 

not be able to develop a more precise estimate of the total funds necessary 

to cover the authorized cleanup activities or assess the Fund’s sufficiency 

and determine if further extensions are necessary. 
Page 6 GAO-04-692 Uranium Enrichment

Background The federal government has enriched uranium for use by commercial 

nuclear power plants and for defense-related purposes for more than 40 

years at three plants located near Oak Ridge, Tennessee; Paducah, 

Kentucky; and Portsmouth, Ohio (see fig. 1). These uranium enrichment 

plants are largely obsolete, however, due to the emergence of newer, more 

efficient technologies and the globalization of the uranium enrichment 

market. DOE now faces the task of decontaminating, decommissioning, 

and undertaking other remedial actions5

 at these large and complex plants 

that are contaminated with hazardous industrial, chemical, nuclear, or 

radiological materials.

5

Remedial actions refer to environmental cleanup activities directed at eliminating or 

reducing contaminate sources and contaminated soil and groundwater. 
Page 7 GAO-04-692 Uranium Enrichment

Figure 1: Location of the Three Uranium Enrichment Plants

Paducah

Portsmouth

Oak Ridge

Source: DOE.
Page 8 GAO-04-692 Uranium Enrichment

In 1991, at the request of the House Subcommittee on Energy and Power, 

GAO analyzed the adequacy of a $500 million annual deposit into a fund to 

pay for the cost of cleanup at DOE’s three uranium enrichment plants.6

 We 

reported that a $500 million deposit indexed to an inflation rate would 

likely be adequate, assuming that deposits would be made annually into the 

fund as long as cleanup costs were expected to be incurred, which at the 

time of the study was until 2040. Additionally, in a related report we 

concluded that the decommissioning costs at the plants should be paid by 

the beneficiaries of the services provided—in this case, DOE’s commercial 

and governmental customers.7

In 1992, the Congress passed the Energy Policy Act, which established the 

Uranium Enrichment Decontamination and Decommissioning Fund (Fund) 

to pay for the costs of decontaminating and decommissioning the nation’s 

three uranium enrichment plants. The Energy Policy Act also authorized 

the Fund to pay remedial action costs associated with the operation of the 

plants to the extent funds are available and to reimburse uranium and 

thorium licensees for the portion of their cleanup costs associated with the 

sale of these materials to the federal government. The Energy Policy Act 

authorized the collection of revenues for 15 years to pay for authorized 

cleanup costs. The revenues are derived from: (1) an assessment on 

domestic utilities of up to $150 million annually, based on a ratio of their 

purchases of enriched uranium to the total purchases from DOE, including 

those for defense; and (2) federal government appropriations for the 

difference between the authorized funding under the Energy Policy Act and 

the assessment on utilities.8

 In addition, the Energy Policy Act provided 

that balances in the Fund be invested in Treasury securities and any 

interest earned be made available to pay for activities covered under the 

Fund.

DOE’s Office of Environmental Management is responsible for 

management of the Fund and cleanup activities at the three plants, which, 

6

U.S. General Accounting Office, Uranium Enrichment: Analysis of Decontamination and 

Decommissioning Scenarios, GAO/RCED-92-77BR (Washington, D.C.: Nov. 15, 1991). 

7

U.S. General Accounting Office, Comments on Proposed Legislation to Restructure DOE’s 

Uranium Enrichment Program, GAO/T-RCED-92-14 (Washington, D.C.: Oct. 29, 1991).

8

The following revenue amounts are authorized: $480 million for fiscal years 1992-1998; 

$488.3 million for fiscal years 1999-2001; and $518.2 million for fiscal years 2002-2007. Both 

domestic utility assessments and government appropriations are to be adjusted annually for 

increases in the Consumer Price Index.
Page 9 GAO-04-692 Uranium Enrichment

through fiscal year 2003, were mostly carried out by its contractor, Bechtel 

Jacobs. The department’s Oak Ridge Operations Office in Oak Ridge, 

Tennessee, had historically provided the day-to-day management of the 

Fund and oversight of the cleanup activities at all three uranium 

enrichment plants. However, in October 2003, DOE established a new 

office in Lexington, Kentucky, to directly manage the cleanup activities at 

the Paducah and Portsmouth plants. The Oak Ridge Operations Office 

continues to manage the Fund and the cleanup activities at the Oak Ridge 

plant. 

Currently, the Fund is used to pay for the following activities:

• Reimbursements to uranium and thorium licensees. The Energy 

Policy Act provides that the Fund be used to reimburse licensees of 

active uranium and thorium processing sites for the portion of their 

decontamination and decommissioning activities, reclamation efforts, 

and other cleanup costs attributable to the uranium and thorium 

materials they sold to the federal government.9

9

The Energy Policy Act authorizes reimbursements to uranium licensees not to exceed $350 

million and reimbursements to the thorium licensee not to exceed $365 million for the 

portion of their cleanup costs associated with the sale of these materials to the federal 

government. The remaining unused authorized amounts are adjusted annually based upon 

the Consumer Price Index. 
Page 10 GAO-04-692 Uranium Enrichment

• Cleanup activities at the three uranium enrichment plants.

10 Cleanup 

activities at the plants include remedial actions, such as assessing and 

treating groundwater or soil contamination; waste management 

activities, such as disposing of contaminated materials; the surveillance 

and maintenance of the plants, such as providing security and making 

general repairs to keep the plants in a safe condition; the 

decontamination and decommissioning (D&D) of inactive facilities by 

either cleaning up the facilities so they could be reused or demolishing 

them; and other activities, such as litigation costs at the three plants and

funding to support site-specific advisory boards.11 See figure 2 for an 

example of the D&D process, including before, during, and after D&D 

work is complete at a facility. 

10Cleanup activities are conducted under the requirements of the Resource Conservation 

and Recovery Act of 1976, as amended (RCRA); the Comprehensive Environmental 

Response, Compensation, and Liability Act of 1980, as amended (CERCLA); and compliance 

agreements with regulatory authorities, which include the Environmental Protection 

Agency and state regulatory agencies in Kentucky, Ohio, and Tennessee. 

11There are additional activities being carried out at the uranium enrichment plants that are 

not currently paid for by the Fund. For example, the costs to dispose of each plant’s 

depleted uranium hexafluoride (a byproduct of the uranium enrichment process) are 

currently paid for by a separate appropriation within DOE’s budget. Some of these activities 

could be paid for by Fund resources in the future.
Page 11 GAO-04-692 Uranium Enrichment

Figure 2: The Decontamination and Decommissioning Process

From fiscal year 1994, when the Fund began incurring costs, through fiscal 

year 2003, a total of $3.2 billion (in 2004 dollars) from the Fund has been 

spent on the uranium and thorium reimbursement program and cleanup 

activities—remedial actions, waste management, surveillance and 

maintenance, decontaminating and decommissioning, and other 

activities—at the three uranium enrichment plants (see fig. 3).

After D&D. Building rubble awaiting disposal.

Before D&D. Fluorine storage facility at the Oak Ridge plant. Fluorine 

gas is a key component in the uranium enrichment process.

During D&D. Taking fluorine gas measurements prior to removal.

During D&D. Facility demolition nearing completion.

Source: DOE.
Page 12 GAO-04-692 Uranium Enrichment

Figure 3: Total Fund Expenditures, Fiscal Years 1994-2003

Note: Total Fund expenditures for fiscal years 1994 through 2003 were $3.2 billion, adjusted to fiscal 

year 2004 dollars.

The Oak Ridge uranium enrichment plant, known as the East Tennessee 

Technology Park, is located on 1,500 acres of land just outside of Oak 

Ridge, Tennessee. It is the oldest of the three plants and has not produced 

enriched uranium since 1985. According to DOE officials, while most of the 

remedial actions and D&D work remain, the majority of the key regulatory 

decision documents are in place and the agency is now positioned to begin 

implementing the cleanup work. DOE currently plans to complete all 

cleanup at the plant and close the site by the end of fiscal year 2008. 

The Paducah plant, located on about 3,500 acres of land west of Paducah, 

Kentucky, continues to enrich uranium for commercial nuclear power 

plants under a lease to a private company, the United States Enrichment 

Corporation (USEC). According to USEC’s director of communications, for 

planning purposes USEC assumes that the plant will continue operations 

until about 2010. Because the plant is still operating, DOE has initiated a 

limited amount of D&D. However, it is currently undertaking studies and 

implementing a series of remedial actions while the plant is in operation, 

and estimates that it will complete these actions by 2019. DOE has not yet 

Uranium and thorium reimbursements

($447 million)

Surveillance and maintenance ($500 million)

Remedial actions ($1.3 billion)

Decontamination and decommissioning

($591 million)

Waste management ($210 million)

Source: GAO analysis of DOE data.

40%

16%

19%

7%

14%

4%

Other ($117 million)
Page 13 GAO-04-692 Uranium Enrichment

determined when it will begin D&D of the facilities currently in use (final 

D&D).

The Portsmouth plant, a 3,700-acre site located north of Portsmouth, Ohio, 

ceased enriching uranium in May 2001, due to reductions in the commercial 

market for enriched uranium. Later that year, the plant was placed on cold 

standby, so that production at the facility could be restarted in the event of 

a significant disruption in the nation’s supply of enriched uranium.12 

Current plans call for maintaining the plant in cold standby until September 

2006, though a recent DOE Inspector General’s report found that DOE has 

not established a well-defined endpoint for the cold standby program and 

extensions to the program may be possible.13 While D&D of the facilities 

currently on cold standby (final D&D) has not yet been initiated, DOE has 

been working on remedial actions at several contaminated areas. DOE has 

not yet determined when final D&D will begin at the Portsmouth plant.

DOE Has Taken 

Several Actions to 

Reduce Cleanup Costs

DOE has taken several steps to reduce cleanup costs by taking actions 

consistent with the National Academy of Sciences’ (Academy) cost 

reduction recommendations and by pursuing an accelerated, risk-based 

cleanup strategy at the uranium enrichment plants. DOE has adopted 

measures that address most of the Academy’s major cost 

recommendations, such as conducting focused technology demonstrations 

to improve the decontamination and decommissioning process. DOE is 

also pursuing an accelerated cleanup strategy at the Oak Ridge and 

Paducah plants to accelerate the time frames for conducting cleanup, 

which it expects will reduce operational costs. In addition, DOE is 

revisiting each plant’s envisioned end state—the anticipated land use after 

the completion of cleanup efforts—to determine if cleanup at each of the 

plants is based on a technical risk assessment appropriate for the sites’ 

future land use. According to DOE, this risk-based end state approach 

focuses DOE’s environmental cleanup efforts in a way that is both cost 

effective and protective of human health and the environment. However, 

state and federal regulators have voiced concerns that if cleanup 

12USEC was responsible for uranium enrichment before operations ceased and was awarded 

the contract to maintain the plant in cold standby condition.

13U.S. Department of Energy, Office of Inspector General, Cold Standby Program at the 

Portsmouth Gaseous Diffusion Plant (Washington, D.C., December 2003).
Page 14 GAO-04-692 Uranium Enrichment

agreements must be renegotiated, the cleanup could be delayed and result 

in increased costs.

DOE Has Taken Actions 

That Address the National 

Academy of Sciences’ Cost 

Reduction 

Recommendations

DOE has taken actions consistent with most of the 13 major cost reduction 

recommendations made by the Academy in its 1996 report on opportunities 

for D&D cost reductions at the three plants.14 These recommendations 

suggested a variety of cost reduction measures, including developing 

specific technologies and suggestions for planning, management, and 

regulatory coordination. Table 1 shows the focus and status of the 

Academy’s recommendations.

Table 1: Status of the Academy’s Major Recommendations

Source: GAO analysis of DOE information.

As table 1 shows, DOE took actions that address 6, or almost half, of the 

Academy’s 13 recommendations. For example, the Academy recommended 

that DOE convert depleted uranium hexafluoride—a byproduct of the 

uranium enrichment process—to a more stable chemical form for storage 

or disposal. DOE recently awarded a contract to construct and operate 

conversion facilities at both Paducah and Portsmouth. In March 2004, DOE 

14National Academy of Sciences, Affordable Cleanup? Opportunities for Cost Reduction in 

the Decontamination and Decommissioning of the Nation’s Uranium Enrichment 

Facilities (Washington, D.C., 1996).

Focus of 

recommendations

Number of 

recommendations

Status of recommendations

Addressed

Partially 

addressed

Not 

applicable

Management, including 

contract management, 

development of D&D 

strategic plans, and security 5 1 4 0

Development of D&D 

technologies 4 2 1 1

Regulatory coordination and 

stakeholder involvement 2 1 1 0

Recycling/waste disposal 2 2 0 0

Total 13 6 6 1
Page 15 GAO-04-692 Uranium Enrichment

began shipping the cylinders of depleted uranium hexafluoride stored at 

Oak Ridge to Portsmouth for conversion. 

For another 6 recommendations, DOE took actions that partially 

implemented the recommendations—either initially taking actions that 

implemented the recommendation and then later modifying its approach, 

or taking actions that addressed only a portion of the recommendation or 

only one of the three plants. For example, the Academy recommended that 

DOE develop three plans—namely, headquarters level, plant-complex level, 

and site level—that address and integrate the D&D of the facilities, 

environmental remediation activities, and the management of depleted 

uranium hexafluoride. DOE has not developed a headquarters-level or 

plant complex-level D&D plan that addresses and integrates D&D of all 

three plants with other DOE activities. Oak Ridge is the only plant with an 

agreed-upon D&D plan that incorporates D&D, other cleanup activities, 

and the management of depleted uranium hexafluoride. The Paducah plant 

currently has a plan that lays out DOE’s approach for a portion of its 

cleanup, but the plan does not address final D&D. DOE does not have a 

D&D plan for the Portsmouth plant. However, the DOE site manager said 

the agency is currently working to develop a Portsmouth strategic plan that 

will address final D&D, other cleanup activities, and management of 

depleted uranium hexafluoride.

DOE officials told us they have achieved cost savings as a result of the 

actions they have taken that address the Academy’s recommendations. 

However, in most cases they were not able to quantify the cost savings 

achieved because the actions taken were either improvements to processes 

or procedures already in place or because they have not quantitatively 

evaluated the savings. For example, the Academy recommended that DOE 

consider the technical and management approaches successfully used for 

the D&D of the Capenhurst uranium enrichment plant in the United 

Kingdom. According to DOE officials, they considered the technical and 

management approaches used at both the Capenhurst plant and other U.S. 

D&D projects before beginning D&D efforts at Oak Ridge and have, in 

several cases, contracted with experienced environmental management 

contractors (who have participated in decommissioning activities at these 

sites) to take advantage of their expertise and knowledge. However, DOE 

has not quantitatively evaluated the financial savings from these efforts. 
Page 16 GAO-04-692 Uranium Enrichment

In one instance, DOE has not taken action to implement the Academy’s 

recommendation because the recommendation made by the Academy is no 

longer applicable. The Academy recommended that DOE establish a 

modest research program to develop methods to decontaminate diffusion 

barrier material15 effectively. According to DOE officials, such research is 

no longer needed because the material is placed into an on-site disposal 

facility, eliminating the need for decontamination. DOE has constructed an 

on-site disposal facility at Oak Ridge, and similar facilities are being 

considered for both Paducah and Portsmouth. Appendix II provides 

additional details on the Academy’s recommendations and the actions that 

DOE has taken to address them. 

15Diffusion barrier material is the material used to separate and enrich uranium during the 

enrichment process.
Page 17 GAO-04-692 Uranium Enrichment

DOE Is Pursuing an 

Accelerated, Risk-Based 

Cleanup Strategy at the 

Plants to Reduce Costs 

DOE is pursuing an accelerated cleanup strategy at the Oak Ridge and 

Paducah plants. Adopted after a 2002 review of DOE’s environmental 

management program found that only about one-third of the program’s 

budget went to actual cleanup work, this accelerated cleanup strategy is 

intended to reduce the time needed to complete the cleanup of sites.16 

DOE says that by implementing cleanup actions more quickly, it can reduce 

the amount it spends on maintenance, fixed costs, and other activities 

required to support safety and security. At the Oak Ridge plant, DOE plans 

to accelerate the plant’s cleanup and closure time frame from 2016 to 2008. 

DOE estimates that this acceleration in cleanup and closure could achieve 

cost savings of $465 million.17 DOE has also proposed an accelerated 

cleanup plan for the Paducah plant. This plan, submitted to state and 

federal regulatory authorities for approval in November 2003 and approved 

in April 2004, establishes (1) a series of prioritized response actions, (2) 

ongoing site characterizations to support future response action decisions, 

and (3) decontamination and decommissioning of the currently operating 

gaseous diffusion plant once it ceases operations.18 DOE’s plan reduces the 

time frame for completing the prioritized response actions from 2030 to 

2019 and could, according to DOE estimates, save about $288 million. DOE 

is continuing negotiations with state and federal regulatory authorities in 

hopes of further reducing the time frame for completion of the prioritized 

response actions. However, as we reported in April 2004, the total scope of 

the cleanup at Paducah is unclear. Furthermore, DOE has not yet 

determined when D&D of the plant facilities currently in use will begin. 

DOE is also revisiting each plant’s envisioned end state to determine if 

cleanup at each plant is based on a technical risk assessment appropriate 

for the sites’ future land use. The 2002 environmental management review 

found that the current cleanup approach and, in some cases, 

interpretations of DOE’s policy orders and requirements, as well as laws, 

16Department of Energy, A Review of the Environmental Management Program

(Washington, D.C., Feb. 4, 2002).

17DOE estimates that accelerating the cleanup at the Oak Ridge plant will reduce the overall 

cleanup cost by $866,176,000. However, this amount includes other activities not covered by 

the Fund. The savings to the Fund is an estimated $465,072,000. 

18As we reported in our April 2004 report, DOE has had and continues to have difficulty in 

reaching stakeholder agreement on its cleanup plans. U.S. General Accounting Office, 

Nuclear Waste Cleanup: DOE Has Made Some Progress in Cleaning Up the Paducah Site, 

but Challenges Remain, GAO-04-457 (Washington, D.C.: April 2004).
Page 18 GAO-04-692 Uranium Enrichment

regulations, and cleanup agreements, were too conservative and created 

obstacles to achieving the timely cleanup of the plants. As a result, DOE 

required each of its environmental management sites, including the three 

plants, to develop a risk-based “vision” to identify acceptable risk levels 

consistent with the site’s future land use, including an analysis that 

identified the differences between the current end state and one that is 

based on a risk assessment. Each of the uranium enrichment plants has 

developed a draft risk-based end state vision that is currently under review 

by DOE headquarters, state and federal regulatory officials, and local 

stakeholders. Once these visions are approved, the plants will re-evaluate 

their strategic approaches and cleanup activities to determine if 

renegotiating cleanup agreements is appropriate. According to DOE 

officials, if it is determined that changes are necessary, any changes would 

be made in accordance with all applicable requirements and procedures, 

including public involvement and regulatory approval. However, state and 

federal regulators with whom we spoke are concerned that if the plants are 

required to renegotiate cleanup agreements as a result of proposed 

changes, the cleanup process could be delayed, in turn resulting in 

increased costs. For instance, federal and state regulatory officials at Oak 

Ridge are concerned that, given the amount of work remaining and the 

short time frame for the plant’s closure, DOE might be unable to meet its 

projected 2008 closure date if respective parties have to renegotiate already 

agreed-upon cleanup standards.

Based on Current 

Projected Costs and 

Revenues, the Fund 

Will Not Be Sufficient 

to Complete Cleanup at 

the Three Plants

Despite DOE efforts to reduce costs, we found that based on current 

projected costs and revenues, the Fund will be insufficient to cover 

authorized activities. We determined that the Fund will be sufficient to 

cover the reimbursements to the uranium and thorium licensees. However, 

our Baseline model demonstrated that by 2044, the most likely time frame 

for completion of cleanup at the three plants, cleanup costs will have 

exceeded revenues by $3.5 billion to $5.7 billion (in 2004 dollars). 

Importantly, we found that the Fund would be insufficient irrespective of 

which estimates we used, including models that estimated the final cleanup 

work at the plants under (1) accelerated time frames, (2) deferred time 

frames, or (3) baseline time frames, and with additional contributions to 

the Fund equaling the difference between the amounts that have been 

appropriated to date and the total amount authorized under the Energy 

Policy Act. Given the numerous uncertainties surrounding the cleanup 

work at the nation’s three uranium enrichment plants, it is not possible to 

more precisely determine the total resources needed to cover the Fund’s 

authorized activities until DOE has better information about such factors 
Page 19 GAO-04-692 Uranium Enrichment

as the dates for beginning and completing the decommissioning work at the 

Paducah and Portsmouth plants.

Our Baseline model demonstrated that by the time all cleanup at the plants 

is completed, costs will have exceeded revenues by $3.5 billion to $5.7 

billion (in 2004 dollars). The Baseline model was developed using cost 

estimates that assumed cleanup, including the decontamination and 

decommissioning of all facilities (final D&D), would occur by 2044. This 

time frame was developed in consultation with DOE officials about what 

the most likely cleanup time frames would be. It is important to note, 

however, that DOE has not yet made a decision about when the final D&D 

will occur at the Paducah and Portsmouth plants. 

Because DOE has not determined when final D&D will begin at the 

Paducah and Portsmouth plants, we also developed two alternative 

models—Accelerated and Deferred—to assess whether the timing of the 

final D&D work at these plants would have a significant impact on the total 

costs. Total cleanup time was reduced by 20 years in the Accelerated model 

and increased by 8 years in the Deferred model. The timing of D&D can 

affect total cleanup costs because, among other things, each plant must pay 

significant annual security and maintenance costs that will be incurred as 

long as DOE maintains facilities on the sites. For example, at the Paducah 

plant, the safeguarding and security costs after the plant is shut down are 

projected to be more than $26 million annually (in 2004 dollars). 

We found that irrespective of what model we used—Accelerated or 

Deferred—the Fund will be insufficient to cover the projected cleanup 

costs at the uranium enrichment plants. In present value, the Fund 

deficiency would range from a high of $3.8 billion in the Accelerated model 

to a low of $0.63 billion in the Deferred model.19 Thus, while accelerating or 

deferring the cleanup at the Paducah and Portsmouth plants could affect 

overall costs, the Fund would still be insufficient to cover the total cleanup 

19Because of the difference in completion dates, the comparison of the Fund balance in 

constant 2004 dollars would not be meaningful. To make the comparison of the various 

models possible, we estimated the present value of the Fund’s balance in 2004 dollars. 

Because present value analysis reflects time value of money—that costs are worth more if 

they are incurred sooner and worth less if they occur in the future, the present value under 

the deferral model declines more than the other options. However, in reality the net effect 

would depend on many other factors. If, for example, deferral of D&D would add 

substantially to such costs as safeguarding and security or costs associated with increased 

health risks then the reduction due to adjusting for time value of money could be more than 

offset by increases in other costs. 
Page 20 GAO-04-692 Uranium Enrichment

costs irrespective of the time frames of final D&D at the Paducah and 

Portsmouth plants.

Because federal contributions to the Fund have been less than the 

authorized amount, we also developed two models to assess the affect of 

additional contributions from government appropriations.20 First, we 

developed a model—Revenue Added—that continued government 

contributions to the Fund until they equaled the total amount authorized 

under the Energy Policy Act. Building on this model, we developed an 

additional Revenue Added Plus Interest model that calculated and added to 

the Fund the interest that would have been earned if all authorized 

government contributions had been made. We found that under both 

models, despite additional revenues, the Fund would still be insufficient to 

cover all cleanup costs. In present value, the Fund deficiency would range 

from a high of $2.6 billion in the Revenue Added model to a low of $0.09 

billion in the Revenue Added Plus Interest model. Even if the full amount of 

funds authorized by law were appropriated, and interest accrued on this 

additional amount, cleanup costs would still exceed revenues.

While our analysis was able to capture several uncertainties surrounding 

the Fund—including interest rates, inflation rates, cost and revenue 

variances, and the timing of final D&D—there are additional uncertainties 

we were unable to capture, including uncertainties due to possible changes 

in the scope of the cleanup; whether the Fund will be required to pay for 

additional activities, such as long-term groundwater monitoring once the 

plants are closed; as well as potential litigation costs the Fund would have 

to support. Significant changes in the scope of the cleanup work could 

impact the costs of cleanup activities at the plants. For example, a recent 

risk analysis exercise completed by DOE for the Paducah plant indicated 

that such changes could increase cleanup costs by more than $3 billion and 

extend the time frame for cleanup to more than 30 years past the original 

scheduled end date of 2019.21 Additionally, uncertainties surrounding waste 

disposal at the Paducah and Portsmouth plants could significantly impact 

cleanup costs. Current DOE cost estimates assume that on-site disposal 

facilities will be built, which would minimize waste transportation costs. 

20According to DOE’s records, at the start of fiscal year 2004, the government’s actual 

contributions to the Fund were $707 million less than the amount authorized under the 

Energy Policy Act.

21This end date does not include final D&D of the plant, but only includes the major remedial 

actions currently planned at the site.
Page 21 GAO-04-692 Uranium Enrichment

These facilities have yet to be constructed at the plants or agreed upon by 

regulatory authorities. However, if DOE is not able to build these on-site 

facilities, waste disposal costs could increase substantially. For example, at 

the Portsmouth plant, contractor officials estimated that if they have to 

ship all of the waste off site, disposal would cost at least $515 million (in 

2002 dollars) more than the projected cost of disposing of the waste in an 

on-site facility. 

Further, there may be additional activities the Fund is required to support 

that are not currently included in DOE’s cost projections. For example, 

after each site has completed all of the necessary cleanup work, there will 

be long-term stewardship costs at the plants, such as continual 

groundwater monitoring. Currently, DOE officials assume these long-term 

stewardship costs will be covered by a separate funding source. Similarly, 

the costs to store and dispose of each plant’s depleted uranium 

hexafluoride are currently covered by a separate appropriation. However, 

DOE officials acknowledge that if another funding source is not available 

for these costs, they may be required to use resources from the Fund.

Finally, litigation costs supported by the Fund are another source of 

uncertainty. Future litigation costs could vary depending on the extent to 

which lawsuits are pursued and whether the actions are decided in favor of 

the federal government. Various legal claims related to domestic utility 

company assessments have been made against the Fund. All of the actions 

decided to date have been in favor of the federal government. However, 

additional claims may be filed. Additionally, there have been litigation costs 

associated with lawsuits against DOE by workers and adjoining 

landowners at the Paducah and Portsmouth plants, often concerning 

allegations of property or human health damages. 

Conclusions Based on DOE’s current estimates, and the most likely time frame for 

completing cleanup, costs will exceed revenues in the Fund by $3.5 billion 

to $5.7 billion (in 2004 dollars). However, DOE has yet to make a number of 

decisions that will impact the costs of cleanup, including when 

decontamination and decommissioning at the Paducah and Portsmouth 

plants will occur. Until DOE resolves some of these uncertainties and has 

more specific information, it is impossible to more precisely determine the 

total funds necessary to cover the authorized cleanup activities. While the 

precise amount of additional revenue needed cannot be determined, our 

analysis shows that additional contributions to the Fund beyond its current 

2007 expiration date will be necessary to cover the costs of authorized 
Page 22 GAO-04-692 Uranium Enrichment

activities irrespective of when DOE decides to undertake D&D of the 

Paducah and Portsmouth plants. Because the Paducah and Portsmouth 

plants are now estimated to cease operations by 2010 and 2006, 

respectively, DOE should be able to develop plans, including more precise 

cost estimates, for D&D of these plants. Extending the Fund by an 

additional 3 years would give DOE an opportunity to develop these plans 

and a better estimate of the costs to clean up the plants. With this 

information, DOE could better determine if further extensions to the Fund 

will be necessary. 

Matters for 

Congressional 

Consideration 

In order to better ensure that the Fund will be sufficient to cover the 

projected costs for authorized activities, the Congress should consider

• reauthorizing the Fund for an additional three years to 2010, and 

• requiring DOE to reassess the sufficiency of the Fund before the 

expiration date to determine if extensions beyond 2010 will be 

necessary.

Recommendations for 

Executive Action

To help reduce uncertainty regarding the sufficiency of the Fund, we are 

recommending that the Secretary of Energy take the following two actions: 

• develop a decontamination and decommissioning plan for the Paducah 

plant that would identify the most probable time frames and costs for 

completing final D&D, and

• develop a decontamination and decommissioning plan for the 

Portsmouth plant that would identify the most probable time frames and 

costs for completing final D&D.

Agency Comments and 

Our Evaluation

We provided a draft of this report to DOE for review and comment. DOE 

generally agreed that our report accurately presents the current status of 

the Fund and concurred with the report’s matters for congressional 

consideration. DOE also stated that it would develop decontamination and 

decommissioning plans for the remainder of the facilities at Paducah and 

Portsmouth “at the appropriate time,” but did not indicate when would be 

an “appropriate time.” We recognize that the decontamination and 
Page 23 GAO-04-692 Uranium Enrichment

decommissioning of the Paducah and Portsmouth plants may not occur for 

years and that any plans developed by DOE would have to be periodically 

updated. However, many of the uncertainties that currently exist and could 

have significant impact on the costs of DOE efforts will not be resolved 

until DOE develops D&D plans for the Paducah and Portsmouth plants that 

identify the most probable time frames and costs for completing final D&D. 

We recommended that the Congress consider extending the Fund for 3 

years, in part, to provide DOE with an opportunity to develop these plans. 

Until DOE does so, it will not be able to develop a more precise estimate of 

the total funds necessary to cover the authorized cleanup activities or to 

reassess the sufficiency of the Fund and determine if further extensions are 

necessary. 

DOE also provided technical comments that we incorporated, as 

appropriate. DOE’s written comments on our report are included in 

appendix III.

Scope and 

Methodology

To determine what actions DOE has taken to reduce the cleanup costs the 

Fund is authorized to support, we reviewed the National Academy of 

Sciences’ 1996 report that identified 13 major cost reduction 

recommendations for the nation’s three uranium enrichment plants.22 We 

met with Academy officials to gain further information about the study and 

with DOE and its contractor officials at each of the plants to determine the 

extent to which DOE has taken actions to address the recommendations. 

While we were able to obtain information on actions taken to date, DOE 

could not determine whether the actions were taken as a result of the 

Academy’s recommendations. DOE was also generally unable to provide 

information regarding the cost savings, if any, achieved by implementing 

these actions. To determine other steps DOE has taken to reduce cleanup 

costs, we visited all three plants and interviewed DOE and contractor 

officials from DOE headquarters, the Oak Ridge Operations Office, the 

Lexington Office, and the site offices at each of the three plants. 

Additionally, we obtained and analyzed documentation regarding DOE’s 

accelerated cleanup strategy at the Oak Ridge and Paducah plants, 

including the plants’ planning documents and other DOE management 

reports. We also obtained and reviewed each of the three plants’ draft risk22National Academy of Sciences, Affordable Cleanup? Opportunities for Cost Reduction in 

the Decontamination and Decommissioning of the Nation’s Uranium Enrichment 

Facilities (Washington, D.C., 1996).
Page 24 GAO-04-692 Uranium Enrichment

based end state vision documents, to understand DOE’s proposed options 

for consideration. Additionally, we attended a public meeting in Paducah, 

where DOE presented a draft risk-based end state vision to the community, 

to better understand the proposal. We also interviewed regulatory 

authorities responsible for overseeing cleanup activities at the plants, 

including officials at the Environmental Protection Agency’s Region IV and 

Region V, the Commonwealth of Kentucky’s Department for Environmental 

Protection, the Tennessee Department of Environment and Conservation, 

and the Ohio Environmental Protection Agency. 

To assess the sufficiency of the Fund to pay for the total projected costs of 

the Fund’s authorized activities, we interviewed DOE and contractor 

officials responsible for the Fund’s financial data and obtained DOE’s 

current estimates for uranium and thorium reimbursement costs, the 

cleanup costs at the three plants, and the current and likely revenue 

projections. We used these data to develop a number of simulation models 

that factored in the cost and revenue projections on an annual basis and 

uncertainties surrounding inflation rates, interest rates, costs, revenues, 

and the timing of the final D&D work at the Paducah and Portsmouth 

plants. See appendix I for a detailed description of our modeling 

methodology, assumptions, and results. We interviewed DOE and 

contractor officials from DOE Headquarters, the Oak Ridge Operations 

Office, the Lexington Office, and the site offices at each of the three plants, 

as well as officials from the federal and state regulatory offices party to the 

plants’ cleanup agreements. We also toured the Oak Ridge plant to identify 

the major uncertainties that could impact future cleanup costs at the 

plants. 

In addition, we assessed the reliability of the data used to develop our 

simulation models. We obtained, from key DOE and contractor database 

officials, responses to a series of data reliability questions covering issues 

such as data entry access, quality control procedures, and the accuracy and 

completeness of the data. Follow-up questions were added whenever 

necessary. We also interviewed DOE and contractor officials and reviewed 

relevant documentation to determine how cost estimates for future 

cleanup, including the final D&D work, were developed at each of the 

plants. We obtained historical cost estimates for several D&D projects 

completed at the Oak Ridge plant and compared them with updated or 

actual costs. We also interviewed and obtained relevant work papers from 

KPMG, a private accounting firm hired by the DOE Inspector General’s 

Office to conduct annual financial audits of the Fund, to understand and 

incorporate their audit findings. KPMG’s annual financial audits have 
Page 25 GAO-04-692 Uranium Enrichment

concluded that the cost and revenue data related to the Fund appear to be 

complete and accurate, that internal controls are operating effectively, and 

that Fund managers have complied with all significant provisions of laws, 

regulations, and compliance agreements. Based on our own work, in 

conjunction with that of KPMG, we determined that the financial data 

provided were sufficiently reliable for the purposes of our report.

We are sending copies of this report to the Secretary of Energy. We will also 

make copies available to others upon request. In addition, the report will be 

available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions on this report, please call me at 

(202) 512-3841. Other staff contributing to this report are listed in appendix 

IV.

Robin M. Nazzaro

Director, Natural Resources and Environment
Page 26 GAO-04-692 Uranium Enrichment

List of Congressional Committees

The Honorable Pete V. Domenici 

Chairman

The Honorable Jeff Bingaman

Ranking Minority Member 

Committee on Energy and Natural Resources 

United States Senate

The Honorable Joe Barton

Chairman

The Honorable John D. Dingell

Ranking Minority Member

Committee on Energy and Commerce

House of Representatives
Page 27 GAO-04-692 Uranium Enrichment

Appendix I

Fund Modeling Methodology, Assumptions, Apendxies

and Results ApendxiI

This appendix describes the methodology, assumptions, and results of the 

models we developed to evaluate the sufficiency of the Uranium 

Enrichment Decontamination and Decommissioning Fund (Fund). 

Specifically, this appendix contains information on the following:

• the simulation technique and the Baseline model we developed to 

estimate the balance of the Fund by the time all cleanup activities are 

scheduled to be completed;

• the data sources, assumptions, and uncertainties we used for the 

Baseline model;

• the additional models—Accelerated, Deferred, Revenue Added, and 

Revenue Added Plus Interest—that we developed to analyze the effects 

of additional uncertainties associated with decontamination and 

decommissioning time frames and revenues to the Fund;

• our simulation results for individual models as well as a comparison of 

results from the alternative models.

Modeling Methodology To conduct our analysis, we first developed an Excel spreadsheet 

simulation model that annually tracked all estimated contributions to and 

payments from the Fund starting in fiscal year 2004 and extending out until 

all cleanup activities are scheduled to be completed. We also estimated the 

interest that could be earned by unused balances of the Fund each year, 

and included these earnings in the annual Fund balance.1

 Our analysis 

began with the Fund balance at the end of fiscal year 2003 and continued 

until all cleanup work at the three uranium enrichment plants was 

projected to be completed. The completion date for the Baseline model and 

Revenue models was set at fiscal year 2044—the most likely date for the 

completion of all cleanup activities at the three plants. However, for the 

Accelerated and Deferred models, the completion dates were set at fiscal 

year 2024 and fiscal year 2052, respectively. 

Building on the Excel spreadsheet model, we used a commercially 

available forecasting and risk analysis software program called Crystal Ball 

to model the uncertainties associated with cost and economic assumptions 

1

The Energy Policy Act provided that balances in the Fund be invested in Treasury securities 

and any interest earned be made available to pay for activities covered under the Fund.
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 28 GAO-04-692 Uranium Enrichment

used in the model. Using the Crystal Ball program in concert with the Excel 

model, we were able to expand our capability to explore a wide range of 

possible values, instead of one single value, for such variables as interest 

rates, inflation rates, and cleanup costs. The Crystal Ball program uses a 

process called Monte Carlo simulation. That is, it repeatedly and randomly 

selects values for interest rates, inflation rates, and costs from distribution 

ranges that we prespecified for these variables. Using these values for the 

appropriate cells in the spreadsheet model, Crystal Ball then makes the 

calculations and forecasts the results. Repeating the same process, Crystal 

Ball can calculate the results based on hundreds or thousands of such 

trials. Our simulation results were based on 1,500 different trials. The 

Crystal Ball program produces the entire range of forecasts for the given 

model and shows the confidence level for, or the likelihood associated 

with, any specific forecast. 

Baseline Model Data, 

Assumptions, and 

Uncertainties

The Department of Energy (DOE) and its contractor was our primary 

source for all the cost data used to develop our Baseline model. For Fund 

revenues, we generally assumed the Fund would receive contributions as 

authorized by current legislation. DOE also provided us with the time 

frames for completing the cleanup work at each of the plants and, when 

possible, contingency estimates for the costs. Since DOE’s cost data were 

provided in different dollar values, we converted all cost data to 2004 

dollars using either the inflation rates used by DOE or the Consumer Price 

Index. More specific sources of data and assumptions to the modeling 

work were as follows:

Revenues to the Fund. To construct the Baseline model, we assumed 

contributions to the Fund would come from three sources: federal 

government appropriations, payments from domestic utility companies, 

and interest earned on investments of Fund balances. We assumed that 

government contributions would continue from fiscal years 2004 through 

2007, as authorized by the Energy Policy Act. However, for the federal 

government contributions in fiscal years 2004 and 2005, we used actual 

appropriations and the President’s budget request, respectively; for the 

remaining years, we assumed contributions would be at the level 

authorized in the current legislation. For payments from domestic utility 

companies, we assumed the assessment would remain unchanged at the 

fiscal year 2004 level, and assumed payments would continue through 

fiscal year 2007, as authorized by the Energy Policy Act. Additionally, as 

required by law, the Fund can accrue interest income from investing the 

unused balance of the fund in government securities. Therefore, we 
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 29 GAO-04-692 Uranium Enrichment

estimated the investment earnings of the Fund annually and included it in 

the available Fund balances. To calculate investment earnings, we used a 

range of different interest rates based on the Fund’s previous earnings. We 

assumed that the real interest rate earned on the Fund investment has a 

triangular distribution, with minimum and maximum values based on 

historical performance of the Fund’s investments since 1994. Similarly, we 

used the performance of the Consumer Price Index since 1994 to develop a 

triangular distribution for price indices to adjust the data where necessary.

Costs of the Fund. DOE, in conjunction with its contractor officials 

responsible for conducting the cleanup work at the three uranium 

enrichment plants, provided cost estimates for all anticipated activities that 

will be paid for from the Fund starting in fiscal year 2004, and that will 

carry forward until all cleanup activities have been completed at each of 

the three plants. Cost estimates included (1) reimbursements to uranium 

and thorium licensees and (2) costs to complete the cleanup at the three 

uranium enrichment plants. 

1. Reimbursements to uranium and thorium licensees. The Energy 

Policy Act authorized reimbursements to uranium licensees not to 

exceed $350 million and reimbursements to the thorium licensee not to 

exceed $365 million for the portion of their cleanup costs associated 

with the sale of these materials to the federal government. The 

remaining unused authorized amounts are adjusted annually based 

upon the Consumer Price Index. We assumed that the annual 

reimbursement amount will be fixed at the fiscal year 2004 level and 

will carry forward until the total amount authorized by law has been 

allocated. Based on the current balance of the Fund, anticipated 

revenues, and the total available reimbursement amount remaining, we 

determined that the Fund would be sufficient to cover the 

reimbursements to the uranium and thorium licensees.2

 

2. Cleanup costs at the three uranium enrichment plants. Cleanup costs 

for decontamination and decommissioning (D&D) work were kept 

separate from all other cleanup cost activities, which include remedial 

actions, waste management, surveillance and maintenance, and other 

(including all other activities the Fund supports such as litigation fees 

2

At the end of fiscal year 2003, the Fund balance was $3.4 billion, whereas the total 

remaining balance for reimbursements was about $400 million—a total of $214 million had 

been paid to uranium licensees and $171 million had been paid to the thorium licensee.
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 30 GAO-04-692 Uranium Enrichment

and funds to support site-specific advisory boards). Cleanup costs were 

broken out annually and by each plant. Due to the different 

uncertainties surrounding these costs, D&D costs were then further 

segregated for process buildings (the large buildings where uranium is 

enriched) and all other remaining D&D costs. The Baseline model costs 

for the cleanup activities at the three plants were developed under the 

assumption that the final D&D (all D&D and other required cleanup 

actions at the plants once the facilities cease operations) would occur 

between 2004 and 2008 at the Oak Ridge plant; between 2018 and 2032 

at the Paducah plant; and between 2010 and 2044 at the Portsmouth 

plant. These are the most likely time frames for completing the final 

D&D work, based on discussions with DOE and contractor officials.

Cost Uncertainties. To capture uncertainties inherent in the data, we used 

the Crystal Ball program in concert with the Baseline model we developed. 

With the Crystal Ball program, we could assign a range of values, rather 

than a single value, to each cell of the spreadsheet model. We developed the 

range of values for each cost category based on extensive discussions with 

DOE and its contractor staff who provided the cost estimates. After 

considering their recommendations and input, we assumed that all cleanup 

costs at the three uranium enrichment plants, with the exception of D&D of 

the process buildings at the Paducah and Portsmouth plants, could 

increase by a uniform probability of up to 20 percent.3

 Given the 

considerable uncertainty associated with costs for D&D of the process 

buildings and the experience to date at the Oak Ridge plant, we assumed, 

based on the values provided by DOE, the costs for this work at Paducah 

and Portsmouth could increase by a uniform probability of up to 85 

percent.4

 

Alternative Models Because not all uncertainties could be incorporated into one model, we 

developed several alternative models to our Baseline model. Specifically, 

3

Uniform probability of up to 20 percent indicates costs could increase by any factor 

between 0 and 20 percent, with all values having equal likelihood of occurring.

4

We found that the cost to D&D the major process buildings at the Oak Ridge plant is now 

estimated to be about 85 percent higher than the cost estimate that was developed in 2000. 

The Paducah and Portsmouth plants’ process buildings cost estimates were also developed 

in 2000, and were largely based on the same assumptions used to develop the Oak Ridge 

cost estimate. In general, officials with whom we spoke agreed that based on the experience 

at Oak Ridge, costs could increase in a similar fashion at Paducah and Portsmouth. 
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 31 GAO-04-692 Uranium Enrichment

since DOE has not determined when final decontamination and 

decommissioning of the Paducah and Portsmouth plants will begin, we 

developed two alternative models—Accelerated and Deferred—to show 

the effects of different timing assumptions on the sufficiency of the Fund. 

Further, because federal contributions to the Fund have been less than the 

authorized amount, we developed two additional models—Revenue Added 

and Revenue Added Plus Interest—to include additional contributions to 

the Fund based on revenues from federal government appropriations. 

These alternative models were built using the same data, assumptions, and 

uncertainties that were used for the Baseline model, except for specific 

changes discussed below.

Accelerated and Deferred 

Models 

Because DOE has not determined when the final decommissioning and 

decontamination work for the Paducah and Portsmouth uranium plants 

will begin and when it will be completed, DOE, in conjunction with its 

contractor officials, developed two additional cost series for the Paducah 

and Portsmouth plants that varied in the start and completion dates for the 

final D&D work, which we then incorporated into our Accelerated and 

Deferred models. The completion of all D&D activities in the Accelerated 

model was reduced by 20 years from 2044 to 2024, and increased by 8 years 

in the Deferred model to 2052. 

The Accelerated cost series was developed under the assumption that final 

D&D could be completed faster than under the Baseline model, given 

unconstrained funding. For the Accelerated approach, Paducah’s final D&D 

work would begin in 2010 and end by 2024; Portsmouth’s final D&D work 

would begin in 2007 and be completed by 2024. These time frames were 

determined in consultation with DOE and contractor officials. They 

represent the soonest the D&D work would most likely start, according to 

DOE and its contractor officials, and represent the earliest likely time 

frame that the total D&D and other associated cleanup work could be 

completed. 

The Deferred cost series was developed under the assumption that given 

current funding constraints, it may not be realistic for two major D&D 

projects to be carried out concurrently. Thus, Deferred time frames were 

determined by DOE, assuming that all work would be completed at the 

Portsmouth plant first and then initiated at the Paducah plant. For the 

Deferred model, Portsmouth’s final D&D work was estimated to be 

completed from 2010 to 2037 and Paducah’s from 2038 to 2052. 
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 32 GAO-04-692 Uranium Enrichment

Revenue Added Models According to DOE’s records, by the start of fiscal year 2004, when our 

analysis begins, the government’s actual contributions to the Fund were 

$707 million less than authorized under the Energy Policy Act. To capture 

the effect of the government meeting its total authorized annual 

contributions on the balance of the Fund, we developed two additional 

models—a Revenue Added and a Revenue Added Plus Interest model. For 

the Revenue Added model, we assumed that government contributions to 

the Fund would continue annually at the authorized level until the total 

government contributions as authorized by law had been met, which would 

occur in fiscal year 2009. For the Revenue Added Plus Interest model, we 

built on the Revenue Added model to include the effect of forgone interest 

that the Fund could have earned if the government had contributed the full 

authorized amount. In other words, we continued government payments 

into the Fund until the total amount authorized (regardless of amounts 

actually appropriated), as well as interest on the unpaid portion of the 

authorized amount, is paid to the Fund. We assumed these additional 

payments would be made to the Fund in the same amounts as the 2004 

annual authorized amount, which extended payments through fiscal year 

2010. 

Results The balance of the Fund at the projected completion of all cleanup work 

indicated whether the Fund will be sufficient to cover all costs identified by 

DOE. We estimated the Fund balance in current (year of completion) 

dollars and constant 2004 dollars. However, to compare the results of 

various models with different completion dates, we also estimated the 

present value of the Fund’s balance in 2004. For each model, the Crystal 

Ball program produced not only a range of possible values, but also the 

probability associated with that value, as well as the expected mean for the 

range. Figures 4 through 8 provide an overall illustration of the results 

produced by the models in constant 2004 dollars. In the figures, each bar 

shows the value by which costs could exceed revenues in billions of 2004 

dollars. The height of each bar is the probability that the costs would 

exceed the revenues by that exact amount. Even though the probability of 

one specific amount is low, there is a 100 percent probability that the actual 

amount will fall somewhere within the range (e.g. for the Baseline model, 

minus $3.5 billion to minus $5.7 billion). As shown in figures 4 through 8, 

regardless of the model we used, the revenue going into the Fund will not 

be sufficient to cover all of the projected cleanup costs at the uranium 

enrichment plants. 
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 33 GAO-04-692 Uranium Enrichment

Figure 4: Baseline Model Results

Note: The values on the horizontal axis of the figure are to provide a scale and do not correspond 

exactly to the ranges of the Fund balance, which are provided in table 2. 

Mean = -4.8

.000

.007

.013

.020

.026

-5.8 -5.2 -4.6 -4.1 -3.5

Probability

Source: GAO analysis of DOE data.

Billions of 2004 dollars
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 34 GAO-04-692 Uranium Enrichment

Figure 5: Accelerated Model Results

Note: The values on the horizontal axis of the figure are to provide a scale and do not correspond 

exactly to the ranges of the Fund balance, which are provided in table 2. 
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 35 GAO-04-692 Uranium Enrichment

Figure 6: Deferred Model Results

Note: The values on the horizontal axis of the figure are to provide a scale and do not correspond 

exactly to the ranges of the Fund balance, which are provided in table 2. 

Mean = -5.2

Probability

.000

.006

.013

.019

.025

-6.3 -5.7 -5.2 -4.7 -4.0

Billions of 2004 dollars

Source: GAO analysis of DOE data.
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 36 GAO-04-692 Uranium Enrichment

Figure 7: Revenue Added Model Results

Note: The values on the horizontal axis of the figure are to provide a scale and do not correspond 

exactly to the ranges of the Fund balance, which are provided in table 2. 

Mean = -3.6 Probability

.000

.006

.013

.019

.025

-4.8 -4.1 -3.4 -2.7 -2.0

Source: GAO analysis of DOE data.

Billions of 2004 dollars
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 37 GAO-04-692 Uranium Enrichment

Figure 8: Revenue Added Plus Interest Model Results

Note: The values on the horizontal axis of the figure are to provide a scale and do not correspond 

exactly to the ranges of the Fund balance, which are provided in table 2. 

The figures show the results for the individual models in constant 2004 

dollars in the year DOE projected that all cleanup work will be completed. 

Because of the difference in the completion dates, the comparison of the 

Fund balances across the different models will not be meaningful. To make 

the comparison of the balances possible, we also estimated the present 

value of the Fund in 2004 dollars. Figure 9 shows in present value how the 

Fund balance of the Baseline model compares with the Accelerated and 

Deferred models; Figure 10 shows in present value how the Fund balance 

of the Baseline model compares with the two Revenue Added models. 

Mean = -2.7

Probability

Source: GAO analysis of DOE data.

.000

.008

.015

.023

.030

-4.5 -3.5 -2.5 -1.5 -.5

Billions of 2004 dollars
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 38 GAO-04-692 Uranium Enrichment

Figure 9: Present Value of Fund Balance for Baseline, Accelerated, and Deferred Models

Notes: In order to compare the results of various models with different completion dates, we estimated 

the present value of the Fund’s balance in 2004 dollars, as represented here. 

The values on the horizontal axis of the figure are to provide a scale and do not correspond exactly to 

the ranges of the Fund balance, which are provided in table 2. 

Probability

Source: GAO analysis of DOE data.

Deferred model

Accelerated model

Baseline model

.000

.014

.028

.041

.055

-4 -3.1 -2.3 -1.4 -.5

Billions of 2004 dollars
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 39 GAO-04-692 Uranium Enrichment

Figure 10: Present Value of Fund Balance for Baseline, Revenue Added, and Revenue Added Plus Interest Models 

Notes: In order to compare the results of various models with different completion dates, we estimated 

the present value of the Fund’s balance in 2004 dollars, as represented here.

The values on the horizontal axis of the figure are to provide a scale and do not correspond exactly to 

the ranges of the Fund balance, which are provided in table 2. 

The specific values for which the Fund could be insufficient under the 

various models are shown in table 2. Though the Deferred model showed 

the greatest insufficiency in the year the cleanup work is projected to be 

completed, once the timing of expenditures is considered as in the present 

value analysis, the deficiency of the Deferred alternative was not 

significantly different from other models. On the other hand, the deficiency 

of the Fund, as measured in present value mean, was the lowest in the 

Revenue Added Plus Interest model. In this model, cleanup costs would 

exceed revenues by $0.09 billion to $2.3 billion.

Probability

Revenue Added Plus Interest model

Revenue Added model 

Baseline model

Source: GAO analysis of DOE data.

.000

.009

.018

.027

.036

-3 -2.3 -1.5 -.8 0

Billions of 2004 dollars
Appendix I

Fund Modeling Methodology, Assumptions, 

and Results

Page 40 GAO-04-692 Uranium Enrichment

Table 2: Comparison of Models

Source: GAO analysis of DOE data.

a

Because of the difference in completion dates, the comparison of the Fund balance in constant 2004 

dollars would not be meaningful. To make the comparison of the various models possible, we 

estimated the present value of the Fund’s balance in 2004 dollars. Because present value analysis 

reflects time value of money—that costs are worth more if they are incurred sooner and worth less if 

they occur in the future, the present value under the deferral model declines more than the other 

options. However, in reality the net effect would depend on many other factors. If, for example, deferral 

would add substantially to such costs as safeguarding and security or costs associated with increased 

health risks then the reduction due to adjusting for time value of money could be more than offset by 

increases in other costs. 

Dollars in billions

Baseline model Accelerated model Deferred model 

Revenue Added 

model 

Revenue Added 

Plus Interest 

model

Completion date 

(fiscal year) 2044 2024 2052 2044 2044

Fund balance at completion of all cleanup: range (mean)

Constant

2004 dollars 

-$5.7 to -$3.5

(-$4.8)

-$5.2 to -$4.0

(-$4.6)

-$6.2 to -$4.0

 (-$5.2)

-$4.7 to -$1.8

 (-$3.6)

-$4.2 to -$.43

 (-$2.7)

Current

dollars

-18.5 to -7.6

 (-12.5)

-9.8 to -5.7 

(-7.6)

-26.4 to -8.8

(-16.7)

-15.1 to -4.3

(-9.3)

-13.3 to -1.0

(-7.1)

Present value

 2004 dollarsa

-3.1 to -.77 

(-1.7)

-3.8 to -1.8

(-2.7)

-3.1 to -.63

(-1.5)

-2.6 to -.39 

(-1.3)

-2.3 to -.09

(-1.0)
Page 41 GAO-04-692 Uranium Enrichment

Appendix II

DOE Actions Taken That Addressed the 

National Academy of Sciences’ Cost 

Reduction Recommendations ApendxiI

This appendix describes the actions taken by DOE that address the 

National Academy of Sciences’ (Academy) cost reduction 

recommendations. The Energy Policy Act directed the Academy to conduct 

a study and to provide recommendations for reducing the decontamination 

and decommissioning costs at the three uranium enrichment plants. In 

1996, after convening a committee of academic and technical experts to 

carry out the study, the Academy released a report highlighting 13 major 

recommendations entitled Affordable Cleanup? Opportunities for Cost 

Reduction in the Decontamination and Decommissioning of the Nation’s 

Uranium Enrichment Facilities. The recommendations address a variety 

of cost reduction approaches, including developing specific technologies 

and suggestions for planning, management, and regulatory coordination. 

While we were able to obtain information on actions DOE has taken that 

are consistent with the recommendations, DOE could not determine 

whether any actions to date were taken directly in response to the 

Academy’s recommendations. Table 3 shows each of the Academy’s major 

recommendations, the status of the recommendation, and an explanation 

of the actions taken by DOE that addressed the recommendation.
Appendix II

DOE Actions Taken That Addressed the 

National Academy of Sciences’ Cost 

Reduction Recommendations 

Page 42 GAO-04-692 Uranium Enrichment

Table 3: Recommendations, Status, and Explanation of the Actions Taken by DOE

Recommendation Status Action taken

Focus of recommendation: management

Rather than constructing a new administration building, 

existing facilities should be used to house the 

management and professional D&D staff.

Addressed At the Oak Ridge plant, all DOE and contractor staff are 

housed in existing facilities. At the Paducah and 

Portsmouth plants, DOE plans to use existing structures to 

house staff when D&D efforts begin. 

DOE should develop three plans—namely, 

headquarters level, plant-complex level, and site level—

that address and integrate D&D of the facilities, 

environmental remediation activities, and the 

management of the depleted uranium hexafluoride.

Partially 

addressed

DOE has not developed a headquarters-level D&D plan 

that addresses and integrates D&D of all three plants with 

other DOE activities. While DOE’s strategic plan discusses 

overall environmental management strategies and 

objectives, the plan does not specifically address D&D of 

the three plants as described by the Academy’s 

recommendation. DOE also has not developed a complexlevel D&D plan for the three plants. Oak Ridge is the only 

plant with an agreed-upon D&D plan that incorporates 

D&D, other cleanup activities, and the management of 

depleted uranium hexafluoride (a byproduct of the uranium 

enrichment process). The Paducah plant currently has a 

plan that lays out DOE’s approach for a portion of its 

cleanup, but the plan does not include details for final D&D. 

DOE does not have a D&D plan for the Portsmouth plant. 

However, the DOE site manager said the agency is 

currently working to develop a Portsmouth strategic plan 

that will address final D&D, other cleanup activities, and 

management of depleted uranium hexafluoride. 

An independent contractor should be selected through 

open competition and should be assigned total 

responsibility and accountability for all aspects of the 

assigned D&D work.

Partially 

addressed

In 1997, DOE awarded a contract to Bechtel Jacobs for 

cleanup work at the Oak Ridge, Paducah, and Portsmouth 

plants. Bechtel Jacobs was responsible for the planning 

and execution of remedial action, D&D, and waste 

management at the three plants (with the exception of 

three of the Oak Ridge plant’s process buildings). In 

September 2003, DOE awarded a new contract to Bechtel 

Jacobs for completing the cleanup work at the Oak Ridge 

plant. Although the contract awarded in 1997 included all 

aspects of the cleanup at the Paducah and Portsmouth 

plants, DOE is currently in the process of bidding for two 

separate contracts at each plant—one for remedial actions 

and one for infrastructure and site maintenance—because 

of new federal contract initiatives. 
Appendix II

DOE Actions Taken That Addressed the 

National Academy of Sciences’ Cost 

Reduction Recommendations 

Page 43 GAO-04-692 Uranium Enrichment

A prioritized cost- and risk-reduction approach should 

be used as the basis for developing the D&D plan. This 

approach should be used to accomplish D&D activities 

prior to the completion of the entire plan. 

Partially 

addressed

In the 1990s, DOE developed a risk-based prioritization 

system to rank projects on the basis of overall risk 

reduction. DOE has now transitioned to a prioritization 

approach that maximizes the use of available resources 

while addressing near-term concerns first. The current 

prioritization criteria used by DOE, in order of importance, 

consist of the following: (1) imminent human health or 

safety risks, (2) compliance with existing enforceable 

regulatory agreements, (3) actions required to mitigate 

risks under current land use, and (4) activities that are on 

the critical path for efficient completion of the 

Environmental Management Program. While DOE has 

used this approach in developing the Oak Ridge plant’s 

D&D plan, D&D plans, including the approach DOE will 

take, have not yet been developed for the Paducah and 

Portsmouth plants. 

To reduce costs without compromising information 

security for the gaseous diffusion technology, DOE 

should try to define physical security requirements that 

allow uncleared workers under adequate supervision to 

conduct D&D operations. In addition, DOE should 

conduct an in-depth evaluation of the safeguards and 

security requirements during D&D to determine how 

their impact on D&D costs could be reduced.

Partially 

addressed

DOE is evaluating steps to allow access, under adequate 

supervision, to workers conducting D&D at the Oak Ridge 

plant who do not have clearances. For example, DOE 

recently approved a new security plan for the large process 

buildings at Oak Ridge. According to DOE officials, by 

taking actions such as reducing the number of times 

security forces search employees and constructing a 

perimeter fence around the outskirts of buildings to 

eliminate the need for searches each time employees enter 

or exit a building, they will not need to increase the security 

staff. Without these changes, DOE would have had to 

significantly increase the security staff on-site to handle the 

increased D&D activity. Additionally, the Oak Ridge plant 

has a sitewide safeguards and security plan that outlines 

security requirements across the site during D&D. 

According to DOE, this plan is continually updated to 

reduce security requirements as projects are completed, in 

order to reduce costs. The Paducah and Portsmouth plants 

do not have D&D plans that specify the security 

requirements that will be necessary during D&D 

operations. However, the DOE site manager said that at 

the Portsmouth plant, officials are actively looking at ways 

to reduce their security requirements as a part of an effort 

to develop a strategic plan for D&D of the site. 

(Continued From Previous Page)

Recommendation Status Action taken
Appendix II

DOE Actions Taken That Addressed the 

National Academy of Sciences’ Cost 

Reduction Recommendations 

Page 44 GAO-04-692 Uranium Enrichment

Focus of recommendation: development of D&D technologies

The high-assay decontamination facility should be 

eliminated; the low-assay decontamination facility 

should be simplified to focus primarily on aqueous 

decontamination and should be housed in existing 

buildings.

Addressed Development of high-assay and low-assay 

decontamination facilities (facilities to disassemble and 

decontaminate equipment contaminated with enriched 

uranium) is no longer part of DOE’s plans for D&D. DOE 

abandoned the construction of these facilities after an 

evaluation revealed how costly the process would be and 

instead has opted to dispose of the material into on-site 

landfills, which do not require aqueous decontamination. At 

Oak Ridge, this process is already under way. DOE officials 

assume a similar approach will be taken at the Paducah 

and Portsmouth plants when D&D is initiated at these 

plants. If DOE plans change or it is unable to obtain 

approval for on-site disposal cells at these sites, DOE may 

need to re-evaluate its approach. 

A few highly focused D&D demonstrations should be 

undertaken to verify the cost and effectiveness of 

specific technologies, including the following two: 

1. Optimization of aqueous decontamination to 

remove radioactive surface contamination from 

materials and process equipment, with special 

attention to Tc-99; and 

2. Support of current DOE robotics programs, with 

highly focused demonstrations to verify potential 

cost savings and safety benefits.

Addressed DOE has hosted several demonstrations and workshops to 

assess the effectiveness of specific D&D technologies. For 

example, DOE’s contractor recently held a workshop to 

evaluate dismantlement technologies for removing specific 

buildings at the Oak Ridge plant. 

1. According to DOE officials, there is no longer a need 

to utilize aqueous decontamination technology. 

The current waste acceptance criteria allow DOE 

to dispose of the materials into an on-site 

disposal facility whole, without first 

decontaminating the material. 

2. DOE has evaluated different types of robotics for use 

at the Oak Ridge plant and the agency is currently 

using a quasi-robotics program. For example, a worker 

can sit in the cab of a robotic device and extend a 

mechanical arm to cut or sheer piping, cables, or wire, 

precluding the need to manually cut the materials.

The technical and management approaches used 

successfully for D&D of the United Kingdom’s 

Capenhurst gaseous diffusion plant and for recently 

completed D&D projects with U.S. power reactors 

should be carefully considered by DOE to reduce costs 

for D&D of the U.S. plants.

Partially 

addressed

According to DOE officials, DOE has considered the 

technical and management approaches used at both the 

Capenhurst plant and other U.S. D&D projects, such as at 

the Hanford, Washington, site, to learn from their 

experiences and reduce costs. Specifically, at the Oak 

Ridge plant, DOE selected contractors who participated in 

D&D activities at other sites. For example, DOE awarded a 

contract to D&D several large process buildings at the Oak 

Ridge plant to British Nuclear Fuels Limited, based, in part, 

on its experience at the Capenhurst plant. DOE has not yet 

initiated final D&D at the Paducah and Portsmouth plants. 

However, the site manager for both of these plants 

acknowledged that it will be important to identify lessons 

learned from DOE’s experiences at Oak Ridge and adopt 

best practices once D&D begins at the plants.

(Continued From Previous Page)

Recommendation Status Action taken
Appendix II

DOE Actions Taken That Addressed the 

National Academy of Sciences’ Cost 

Reduction Recommendations 

Page 45 GAO-04-692 Uranium Enrichment

A modest research program should be established to 

develop methods to decontaminate diffusion barrier 

material effectively.

Not applicable DOE is currently not pursuing methods to decontaminate 

diffusion barrier material (the material used to separate 

and enrich uranium during the enrichment process). 

According to DOE officials, it is not necessary to 

decontaminate this material at the Oak Ridge plant 

because the material is placed directly into an on-site 

disposal cell, eliminating the need for decontamination. 

DOE assumes a similar approach will be taken at the 

Paducah and Portsmouth plants. 

Focus of recommendation: regulatory and stakeholder involvement

A stakeholder involvement program should be pursued 

to obtain timely and substantive public participation and 

input to ensure that social values are reflected in policy 

decisions.

Addressed DOE has generally sought stakeholder involvement at each 

of the plants. DOE established Site Specific Advisory 

Boards at the Oak Ridge and Paducah plants that are 

staffed by local stakeholders. The boards’ charters include 

providing input on cleanup policies and strategies and 

reviewing work plans and activities. While the Portsmouth 

plant does not have a Site Specific Advisory Board, DOE is 

currently working with the community to establish a 

stakeholder group to address DOE’s new risk-based end 

state policy. DOE officials told us that they also regularly 

hold public meetings to present cleanup project plans and 

progress reports to Oak Ridge, Paducah, and Portsmouth 

city government organizations. Additionally, DOE has 

established information centers open to the public in or 

near all three communities. The centers provide 

information on each of the plant’s respective cleanup 

activities, in addition to general information about its 

activities at other sites. The Portsmouth information center 

is located within the secure perimeter of the site, however, 

making public access somewhat less convenient than at 

the other two centers. 

DOE should seek coordination of all regulatory aspects 

of D&D with the appropriate state and federal agencies 

early in planning to provide consistency during D&D 

planning and execution.

Partially 

addressed

DOE coordinates all of its cleanup planning activities 

through specific agreements with relevant state and federal 

regulatory officials. While mechanisms are in place to 

coordinate the regulatory aspects of its work, early 

coordination and planning between DOE and its regulatory 

entities have not always taken place. For example, at the 

Paducah plant, regulators have recently expressed 

concern that DOE has excluded them from the planning 

process for both the overall cleanup approach and specific 

projects. 

(Continued From Previous Page)

Recommendation Status Action taken
Appendix II

DOE Actions Taken That Addressed the 

National Academy of Sciences’ Cost 

Reduction Recommendations 

Page 46 GAO-04-692 Uranium Enrichment

Source: GAO analysis of DOE information.

Focus of recommendation: recycling/waste disposal

DOE should develop an integrated, optimized waste 

management plan that encompasses material reuse, 

recycling, packaging, transport, and waste disposal. 

Consistent with cost reduction and public health and 

environmental protection, materials should be cleaned 

to free-release standards and released to the 

commercial sector for recycling. Material that cannot be 

cleaned to free-release standards should be 

considered for recycling within DOE or Department of 

Defense complexes in applications where slightly 

contaminated materials are acceptable, such as for 

shield blocks or waste containers.

Addressed In 1997, DOE established the National Center of 

Excellence for Metals Recycle as a DOE complexwide 

resource for pursuing recycling and reuse alternatives for 

scrap equipment and surplus materials. The center has 

reported a reuse savings for the three plant sites of 

approximately $28 million since its establishment. 

However, in 2000, DOE suspended the release of scrap 

metals, such as nickel, copper, and aluminum, for recycling 

because of public concern that radioactive contamination 

might remain on or in the scrap metal. As a result, the 

plants are currently stockpiling or disposing of potentially 

valuable metals. For example, about 15,500 tons of scrap 

nickel—a valuable industrial commodity—salvaged from 

the Oak Ridge and Paducah plants have been stockpiled 

and are awaiting disposition. If recycled, DOE could earn 

between $42 million to $108 million, while disposal of the 

Oak Ridge plant’s nickel stocks alone are estimated to cost 

DOE about $10 million in transportation and disposal 

costs. DOE is currently reassessing its recycling policies to 

determine if scrap metals can be safely recycled.

The committee recommends that, if consistent with the 

prioritized cost- and risk-reduction process, the 

depleted uranium hexafluoride should be converted to 

the more stable chemical form, uranium oxide, for 

storage or disposal.

Addressed DOE recently awarded a contract to construct and operate 

depleted uranium hexafluoride conversion facilities at the 

Paducah and Portsmouth plants. DOE has begun shipping 

the depleted uranium hexafluoride cylinders currently 

stored at the Oak Ridge plant to Portsmouth for conversion.

(Continued From Previous Page)

Recommendation Status Action taken
Page 47 GAO-04-692 Uranium Enrichment

Appendix III

Comments from the Department of Energy ApendxiI
Page 48 GAO-04-692 Uranium Enrichment

Appendix IV

GAO Contacts and Staff Acknowledgments ApendxiIV

GAO Contacts Robin M. Nazzaro, (202) 512-3841

Sherry L. McDonald, (202) 512-8302

Staff 

Acknowledgments

In addition to the individuals named above, John W. Delicath, Jason 

Holsclaw, Alyssa M. Hundrup, Mehrzad Nadji, Judy Pagano, Michael 

Sagalow, and Barbara Timmerman also made key contributions to this 

report. 

(360381)
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