NOTES TO THE FINANCIAL STATEMENTS 120

Note 15. Environmental and Disposal Liabilities

Environmental and Disposal Liabilities as of September 30, 2021, and 2020

(In billions of dollars) 2021 2020

Department of Energy................................................................................................515.6 ................................ 512.3 .......................

Department of Defense................................................................................................82.0 ................................ 75.0 .....................

All other entities ................................................................................................................................ 15.7 15.4 ...............................

Total environmental and disposal liabilities ................................................................ 613.3 ................................ 602.7 ......................

After World War II, the U.S. developed a massive industrial complex to research, produce, and test nuclear weapons

and commercial nuclear power reactors. The nuclear complex was comprised of nuclear reactors, chemical-processing

buildings, metal machining plants, laboratories, and maintenance facilities.

At all sites where these activities took place, some environmental contamination occurred. This contamination was

caused by the production, storage, and use of radioactive materials and hazardous chemicals, which resulted in contamination

of soil, surface water, or groundwater. The environmental legacy of nuclear weapons production also includes thousands of

contaminated buildings and large volumes of waste and special nuclear materials requiring treatment, stabilization, and

disposal.

Estimated cleanup costs at sites for which there are no current feasible remediation approaches are excluded from the

estimates, although applicable stewardship and monitoring costs for these sites are included. DOE has not been required

through regulation to establish remediation activities for these sites.

Estimating DOE’s environmental cleanup liability requires making assumptions about future activities and is inherently

uncertain. The future course of DOE’s environmental cleanup and disposal will depend on a number of fundamental technical

and policy choices, many of which have not been made. Some contaminated sites and facilities could be restored to a

condition suitable for any desired use or could be restored to a point where they pose no near-term health risks to the

surrounding communities. Achieving the former condition of the sites and facilities would have a higher cost which may or

may not warrant the cost or be legally required. The environmental and disposal liability estimates include contingency

estimates intended to account for the uncertainties associated with the technical cleanup scope of the program. Congressional

appropriations at lower-than anticipated levels or lack of Congressional approval, unplanned delays in project completions

including potential delays due to COVID-19, unforeseen technical issues, obtaining regulatory approval, among other things,

could cause increases in life-cycle costs.

DOE’s environmental and disposal liabilities also include the estimated cleanup and post-closure responsibilities,

including surveillance and monitoring activities, soil and groundwater remediation, and disposition of excess material for

sites. DOE is responsible for the post-closure activities at many of the closure sites as well as other sites. The costs for these

post-closure activities are estimated for a period of 75 years after the Balance Sheet date, i.e., through 2096 in FY 2021 and

through 2095 in FY 2020. While some post-cleanup monitoring and other long-term stewardship activities post-2096 are

included in the liability, there are others DOE expects to continue beyond 2096 for which the costs cannot reasonably be

estimated.

A portion of DOE’s environmental liability at various field sites includes anticipated costs for facilities managed by

DOE’s ongoing program operations, which will ultimately require stabilization, deactivation, and decommissioning. The

estimates are largely based upon a cost-estimating model. Site specific estimates are used in lieu of the cost-estimating

model, when available. Cost estimates for ongoing program facilities are updated each year. For facilities newly

contaminated since FY 1997, cleanup costs allocated to the periods benefiting from the operations of the facilities. Facilities’

cleanup costs allocated to future periods and not included in the environmental and disposal liabilities amounted to $1.1

billion and $0.9 billion for fiscal years ending September 30, 2021, and 2020, respectively.

DOD has cleanup requirements for DERP for active installations, Base Realignment Closure installations, and Formerly

Used Defense Sites. DOD has additional cleanup requirements for active installations not covered by DERP, weapon systems

programs, and chemical weapons disposal programs. The weapons system program consists of chemical weapons disposal,
121 NOTES TO THE FINANCIAL STATEMENTS

nuclear powered aircraft carriers, nuclear powered submarines, and other nuclear ships. All cleanup efforts are performed in

coordination with regulatory entities, other responsible parties, and current property owners, as applicable.

DOD follows the Superfund Amendments and Reauthorization Act, CERCLA, RCRA or other applicable federal or

state laws to clean up contamination. The CERCLA and RCRA require DOD to clean up contamination in coordination with

regulatory entities, current owners of property damaged by DOD, and third parties that have a partial responsibility for the

environmental restoration. Failure to comply with agreements and legal mandates puts the DOD at risk of incurring fines and

penalties.

DOD uses engineering estimates and independently validated models to estimate environmental costs. The engineering

estimates are based upon extensive data obtained during the remedial investigation/feasibility phase of the environmental

project.

For general PP&E placed into service after September 30, 1997, DOD expenses associated environmental costs

systematically over the life of the asset using two methods: physical capacity for operating landfills and life expectancy in

years for all other assets. DOD expenses the full cost to clean up contamination for stewardship PP&E and certain other

general PP&E at the time the asset is placed into service. DOD has expensed cleanup costs for general PP&E placed into

service before October 1, 1997, except for costs intended to be recovered through user charges. As costs are recovered DOD

expenses cleanup costs associated with the asset life that has passed since the general PP&E was placed into service. DOD

systematically recognizes the remaining cost over the remaining life of the asset. The unrecognized portion of the estimated

total cleanup costs associated with disposal of general PP&E was $4.9 billion and $4.3 billion for fiscal years ending

September 30, 2021, and 2020, respectively.

DOD is responsible for environmental restoration and corrective action for buried chemical munitions and agents;

however, a reasonable estimate is indeterminable because the extent of the buried chemical munitions and agents is unknown.

DOD has ongoing studies for the Formerly Utilized Sites Remedial Action Program and will update its estimate as additional

information is identified. DOD has the potential to incur costs for restoration initiatives in conjunction with returning

overseas DOD facilities to host nations. DOD continues its efforts to reasonably estimate required restoration costs.

Environmental liabilities are subject to changes in laws and regulations, agreements with regulatory entities, and

advances in technology. DOD is unaware of pending changes affecting its estimated cleanup costs. DOD revised estimates

resulting from previously unknown contaminants, reestimation based on different assumptions, and other changes in project

scope.

Please refer to the financial statements of the main contributing entities, DOD and DOE, for additional information

regarding environmental and disposal liabilities, including cleanup costs.