117 NOTES TO THE FINANCIAL STATEMENTS

Note 14. Environmental and Disposal Liabilities

Environmental and Disposal Liabilities as of September 30, 2020, and 2019

(In billions of dollars) 2020 2019

Department of Energy........................................................................................ 512.3 505.3

Department of Defense...................................................................................... 75.0 76.1

All other entities ................................................................................................ 15.4 14.0

Total environmental and disposal liabilities ....................................................... 602.7 595.4

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 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 2095 in FY 2020 and

through 2094 in FY 2019. While some post-cleanup monitoring and other long-term stewardship activities post-2095 are

included in the liability, there are others DOE expects to continue beyond 2095 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 FY 1997, cleanup costs allocated to future periods and not included in environmental and disposal

liabilities amounted to $0.9 billion for both FYs 2020 and 2019. Please refer to the financial statements of DOE for additional

information regarding DOE’s environmental and disposal liabilities.

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).
NOTES TO THE FINANCIAL STATEMENTS 118

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 for both FYs 2020 and 2019.

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 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. DOD continues its efforts to

reasonably estimate required restoration costs.

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

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

resulting from previously unknown contaminants, re-estimation based on different assumptions, and other changes in project

scope.

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

liabilities, including cleanup costs.