109 NOTES TO THE FINANCIAL STATEMENTS

Note 13. Environmental and Disposal Liabilities 

Environmental and Disposal Liabilities as of September 30, 2019, and 2018 

(In billions of dollars) 2019 2018

Department of Energy ........................................................................................ 505.3 494.0

Department of Defense ...................................................................................... 76.1 70.4

All other entities ................................................................................................ 14.0 12.9

 Total environmental and disposal liabilities ....................................................... 595.4 577.3

During World War II and the Cold War, DOE (or predecessor entities) developed a massive industrial complex to 

research, produce, and test nuclear weapons. This included 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, and 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 sites and facilities could be restored to a condition suitable for 

any desirable 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 but these costs may be warranted in some 

cases or may 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, unforeseen 

technical issues, 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 2094 in fiscal year 2019 

and through 2093 in fiscal year 2018. While some post-cleanup monitoring and other long-term stewardship activities post2094 are included in the liability, there are others DOE expects to continue beyond 2094 for which the costs cannot 

reasonably be estimated. 

A portion of DOE’s environmental and disposal liabilities 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 estimate is 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 fiscal year 1997, cleanup costs allocated to future periods and not included in environmental and 

disposal liabilities amounted to $0.9 billion for both fiscal years 2019 and 2018. 

The predominant change in DOE's environmental liabilities estimates in fiscal year 2019 resulted from inflation 

adjustments to reflect constant dollars for the current year; improved and updated estimates for the same scope of work, 

including changes resulting from deferral or acceleration of work; revisions in technical approach or scope, including 

additional contamination; updated estimates of projected waste volumes; legal and regulatory changes; and cleanup activities 

performed. In fiscal year 2019, the Mixed Oxide project was terminated. DOE transitioned to using the dilute and dispose 

approach for plutonium disposition which, in turn, lowered the related costs. 
NOTES TO THE FINANCIAL STATEMENTS 110

Please refer to the financial statements of DOE for detailed information regarding DOE’s environmental and disposal 

liabilities, including cleanup costs. 

DOD must restore active installations, installations affected by base realignment and closure, and other areas formerly 

used as DOD sites. DOD also bears responsibility for disposal of chemical weapons and environmental costs associated with 

the disposal of weapons systems (primarily nuclear powered aircraft carriers and submarines). 

DOD follows the Superfund Amendments and Reauthorization Act, CERCLA, RCRA and 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 at the time the asset is 

placed into service. DOD has expensed the costs for cleanup associated with general PP&E placed into service before 

October 1, 1997, except for costs intended to be recovered through user charges; for those costs, DOD has expensed cleanup 

costs associated with that portion of the asset life that has passed since it 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 $4.3 billion and $4.8 billion as of September 30, 2019 and 2018, 

respectively. 

DOD is unable to estimate and report a liability for environmental restoration and corrective action for buried chemical 

munitions and agents, because the extent of the buried chemical munitions and agents is unknown at this time. DOD is also 

unable to provide a complete estimate for the Formerly Utilized Sites Remedial Action Program. DOD has ongoing studies 

and will update its estimate as additional liabilities are identified. DOD has the potential to incur costs for restoration 

initiatives in conjunction with returning overseas DOD facilities to host nations. However, DOD is unable to provide a 

reasonable estimate at this time because the extent of required restoration is unknown. 

Please refer to the financial statements of DOD for further information regarding DOD’s environmental and disposal 

liabilities, including cleanup costs.