U.S. GOVERNMENT PRINTING OFFICE

64–031CC WASHINGTON : 2000

LEGISLATION TO IMPROVE SAFETY AND SECURITY

IN THE DEPARTMENT OF ENERGY

HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY AND POWER

OF THE

COMMITTEE ON COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

MARCH 22, 2000

Serial No. 106–126

Printed for the use of the Committee on Commerce

(

2

COMMITTEE ON COMMERCE

TOM BLILEY, Virginia, Chairman

W.J. ‘‘BILLY’’ TAUZIN, Louisiana

MICHAEL G. OXLEY, Ohio

MICHAEL BILIRAKIS, Florida

JOE BARTON, Texas

FRED UPTON, Michigan

CLIFF STEARNS, Florida

PAUL E. GILLMOR, Ohio

Vice Chairman

JAMES C. GREENWOOD, Pennsylvania

CHRISTOPHER COX, California

NATHAN DEAL, Georgia

STEVE LARGENT, Oklahoma

RICHARD BURR, North Carolina

BRIAN P. BILBRAY, California

ED WHITFIELD, Kentucky

GREG GANSKE, Iowa

CHARLIE NORWOOD, Georgia

TOM A. COBURN, Oklahoma

RICK LAZIO, New York

BARBARA CUBIN, Wyoming

JAMES E. ROGAN, California

JOHN SHIMKUS, Illinois

JOHN D. DINGELL, Michigan

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RALPH M. HALL, Texas

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, Jr., New Jersey

SHERROD BROWN, Ohio

BART GORDON, Tennessee

PETER DEUTSCH, Florida

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

RON KLINK, Pennsylvania

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

TOM SAWYER, Ohio

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

KAREN MCCARTHY, Missouri

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

THOMAS M. BARRETT, Wisconsin

BILL LUTHER, Minnesota

LOIS CAPPS, California

JAMES E. DERDERIAN, Chief of Staff

JAMES D. BARNETTE, General Counsel

REID P.F. STUNTZ, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON ENERGY AND POWER

JOE BARTON, Texas, Chairman

MICHAEL BILIRAKIS, Florida

CLIFF STEARNS, Florida

Vice Chairman

STEVE LARGENT, Oklahoma

RICHARD BURR, North Carolina

ED WHITFIELD, Kentucky

CHARLIE NORWOOD, Georgia

TOM A. COBURN, Oklahoma

JAMES E. ROGAN, California

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

ED BRYANT, Tennessee

ROBERT L. EHRLICH, Jr., Maryland

TOM BLILEY, Virginia,

(Ex Officio)

RICK BOUCHER, Virginia

KAREN MCCARTHY, Missouri

TOM SAWYER, Ohio

EDWARD J. MARKEY, Massachusetts

RALPH M. HALL, Texas

FRANK PALLONE, Jr., New Jersey

SHERROD BROWN, Ohio

BART GORDON, Tennessee

BOBBY L. RUSH, Illinois

ALBERT R. WYNN, Maryland

TED STRICKLAND, Ohio

PETER DEUTSCH, Florida

RON KLINK, Pennsylvania

JOHN D. DINGELL, Michigan,

(Ex Officio)

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C O N T E N T S

Page

Testimony of:

Adelman, David E., Project Attorney, Nuclear Program, Natural Resources Defense Council ............................................................................... 69

Conway, Hon. John T., Chairman, Defense Nuclear Facilities Safety

Board .............................................................................................................. 24

Eldredge, Maureen, Program Director, Alliance for Nuclear Accountability ............................................................................................................. 58

Jones, Gary L., Associate Director, Energy, Resources, and Science

Issues, General Accounting Office ............................................................... 45

Mande, Hon. Jerold R., Deputy Assistant Secretary for Labor, Occupational Safety and Health Administration ................................................... 18

Meserve, Hon. Richard A., Chairman; accompanied by Hon. Greta Joy

Dicus, Commissioner; Hon. Nils J. Diaz, Commissioner; Hon. Edward

McGaffigan, Jr., Commissioner; Hon. Jeffrey S. Merrifield, Commissioner, Nuclear Regulatory Commission ..................................................... 16

Shank, Charles V., Director, Lawrence Berkeley National Laboratory ....... 51

Sullivan, Mary Anne, General Counsel, U.S. Department of Energy .......... 6

Van Ness, Robert L., Assistant Vice President for Laboratory Administration, University of California ....................................................................... 55

Material submitted for the record by:

Miller, Richard, Policy Analyst, Paper, Allied-Industrial, Chemical & Energy Workers Union, prepared statement of .............................................. 162

(III)

(1)

LEGISLATION TO IMPROVE SAFETY AND

SECURITY IN THE DEPARTMENT OF ENERGY

WEDNESDAY, MARCH 22, 2000

HOUSE OF REPRESENTATIVES, COMMITTEE ON COMMERCE, SUBCOMMITTEE ON ENERGY AND POWER, Washington, DC.

The subcommittee met, pursuant to notice, at 10:30 a.m., in room

2322, Rayburn House Office Building, Hon. Joe Barton, (chairman)

presiding.

Members present: Representatives Barton, Bilirakis, Stearns,

Largent, Whitfield, Rogan, Shimkus, Wilson, Bryant, Ehrlich,

McCarthy, Sawyer, Boucher, Wynn, and Strickland.

Staff present: Kevin Cook, science advisor; Elizabeth Brennan,

legislative clerk; Tom DiLenge, majority counsel; and Edith

Holleman, minority counsel.

Mr. BARTON. The Subcommittee of Energy and Power of the

Commerce Committee, hearing on legislation to improve the safety

and security of the Department of Energy will come to order.

The purpose of today’s hearing is to consider legislation to improve safety and security in the Department of Energy. The three

bills before us would provide a financial incentive for the Department of Energy’s nonprofit contractors to take safety more seriously; would strengthen the Department’s internal oversight of security, and would bring about external regulation of nuclear safety

and worker safety.

I introduced the first of these three bills, H.R. 3833, to address

what I view as an obvious inequity in how safety rules are enforced

in the Department. Under the Price-Anderson provisions of the

Atomic Energy Act, the Department can assess civil penalties

against its contractors that violate DOE rules, regulations, and orders on nuclear safety. However, the Atomic Energy Act contains

an explicit provision that exempts the Department’s nonprofit contractors from paying any such fines when they commit a nuclear

safety violation. If civil penalties are an effective tool to improve

the safety and performance of the for-profit contractors, the same

tool should be applied to the nonprofits as well. This particular

problem was discussed in some detail at an Oversight and Investigations hearing last June on Department of Energy Worker Safety.

The second bill is H.R. 3906, which was introduced last week by

Chairman Bliley. I join the Chairman and several of my colleagues

from the committee in cosponsoring H.R. 3906. This bill will establish, in statute, an independent office to oversee security throughVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 E:\HEARINGS\64031 pfrm07 PsN: 64031
2

out the entire Department of Energy complex. This is the same office that Secretary Richardson has already instituted at DOE headquarters, and it would function the same way that it does today.

The only change—and it is an important change—made by the

bill is to establish a direct reporting line from the Independent Security Oversight Office to the Congress, so that the Congress has

timely, uncensored information on security problems in the field.

Security oversight has been the topic of numerous hearings, most

recently the one held just last week in cooperation with the Oversight and Investigations Subcommittee of this committee.

The third bill, H.R. 3907, was introduced last week by Chairman

Bliley and several of our colleagues on the committee, and also on

the Science Committee. H.R. 3907 would put an end to the Department trying to regulate itself when it comes to safety manners.

Effective October 1, 2001, the Nuclear Regulatory Commission

would assume regulatory and enforcement responsibility for nuclear safety throughout the Department of Energy complex, and

OSHA will do the same for worker safety. The existing Defense Nuclear Facility Safety Board would be abolished and its staff resources made available to the Nuclear Regulatory Commission. I

recognize that this is an ambitious undertaking, and an ambitious

schedule, but the alternative of continuing to let the Department

regulate itself is, in my opinion, much worse.

These bills are meant to address some of the most obvious safety

and security problems in the Department of Energy. I consider

these changes to be long overdue in the DOE complex.

The Department keeps offering us reassurances that their safety

and security problems are always in the past and are now under

control. That particular line holds true until the next headline.

Just last week, for example, several workers at the Los Alamos

Laboratory were exposed to plutonium.

In the face of that kind of accident, it’s hard to argue that the

Department of Energy is doing a fine job on safety and should continue to be left to its own devices in terms of regulating its safety

programs.

I want to issue two challenges today: The first is to my fellow

members on this subcommittee from both sides of the aisle. Mr.

Upton, the subcommittee chairman of the Oversight and Investigations Subcommittee, pointed out at last week’s joint hearing on

safety and security that the Commerce Committee knows better

than any other committee in the Congress, the extent of the Department’s problems in these areas. The committee’s concerns with

the Department of Energy’s safety and security systems go back

years, even decades, and have been the subject of numerous hearings.

It is time that we take our extensive base of accumulated knowledge about the Department’s safety and security problems and do

something constructive to solve the problems. This has always been

an area of bipartisan concern for the members of this committee,

and I intend to keep it that way. I’m more than happy to work with

all members of the subcommittee to address particular concerns to

improve the bills that are before us. None of us want to read any

more headlines about safety and security fiascos in the DepartVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 E:\HEARINGS\64031 pfrm07 PsN: 64031
3

ment, knowing that we, this subcommittee, holds the power to reduce those risks and to prevent future problems.

Second, I want to challenge our witnesses who are here today to

help us improve the legislation. The three bills before are only

starting points for discussion.

No doubt, there is substantial room for improvement in all three

bills. I would expect that there will be significant changes to these

bills before we take them to markup, but I do intend to go to markup and hope that we can go to markup before the House breaks

for the Easter recess. That’s not that far away in terms of legislative days. Please take advantage of today’s hearing and work with

us on the committee on both sides of the aisle over the next several

weeks to make these bills better than they are today. We’re serious

about solving the problems, but we do want to do it right.

I want to welcome our witnesses today, and I look forward to

hearing their thoughts on these bills. I’d like to point out, before

I recognize Mr. Boucher for an opening statement, and then Mr.

Sawyer and Mr. Rogan, that there are several bills on the floor

today that originated in this subcommittee.

We have a nuclear waste bill, and we have an energy policy bill

that came out of the Foreign Relations Committee, and members

on this subcommittee are going to want to be involved in those bills

on the floor, so we’re going to have to have a tag-team system for

us that want to hear the witnesses before us, and also want to participate in the floor debate. I don’t want our witnesses to feel

unloved, if we’re shuttling back and forth several times.

With that, I would welcome our ranking member, the Honorable

Rick Boucher of Virginia, for his opening statement.

Mr. BOUCHER. Thank you very much, Mr. Chairman. This morning we examine legislation which addresses the historical concerns

of this committee regarding security and safety accountability at

the Department of Energy.

The committee has taken steps over more than a decade to address this concern. This committee was responsible for the establishment of an Independent Oversight Office for Security at DOE,

and was responsible for the creation of the Defense Facilities Nuclear Safety Board in lieu of external regulation.

Over the years, the committee has revealed in hearings, the most

recent of which was conducted last year, the accountability problems caused by permitting the non-profit weapons laboratories to

be exempt from fines and penalties for their safety violations.

I’m pleased that some of the legislation we’re considering this

morning addresses that concern. The fact that all of the agencies

before us today essentially want to leave everything as it is, should

not prevent us from looking more closely at legislative changes.

However, Mr. Chairman, I think we also need to be careful not

to propose significant increases in agency responsibilities without

providing those agencies with the necessary resources to accomplish the missions that we set forth in the legislative changes.

I look forward to hearing from these witnesses as we continue

our review of these matters.

Mr. BARTON. I thank the gentleman and compliment him on the

brevity of his opening statement. That is definitely an improvement

over Congressman Hall.

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Mr. BOUCHER. Good.

Mr. BARTON. It took him 5 minutes just to say hello. The gentleman from California, Mr. Rogan, do you wish to give an opening

statement?

Mr. ROGAN. Mr. Chairman, you will compliment me also. I thank

you for calling this hearing, and I expect that it will be very informative, and I don’t have any further opening statement.

Mr. BARTON. The gentleman from Ohio, Mr. Sawyer, for an opening statement.

Mr. SAWYER. Thank you, Mr. Chairman, thank you for your leadership in calling this hearing, and in the measures that you have

brought before us for our consideration.

Last August, the Department of Energy revealed that the Portsmouth gaseous diffusion plant in Piketon, Ohio, received plutonium-laced uranium for about 25 years, from the 1950’s to the

1970’s.

The employees at the plant were unaware that they were exposed to highly radioactive plutonium. It’s a familiar scenario. It’s

an experience that’s not isolated to Ohio.

The well-publicized problems in Paducah, Kentucky, Portsmouth’s sister plant, are almost identical in its experience.

Plutonium first emerged as a clear threat to public health and

safety in Piketon in 1993 when contaminated sediment was discovered in Little Beaver Creek, just off the plant’s grounds.

In 1996, the Ohio EPA again found plutonium contamination in

a three-acre plot on the east side of the plant grounds. It’s unfortunate that the early findings in 1993 and again in 1996 did not receive a much stronger reaction from DOE, responsible as it is for

internal oversight.

I particularly want to call attention to the work that our colleague and friend on this committee undertook in the work that

Ted Strickland did in fighting for workers at the Portsmouth site,

in finding Federal money for health screening and cleanup efforts.

I also very much appreciate Secretary Richardson’s efforts to put

the cleanup on a high-order agenda.

It took media pressure in the summer of 1999 to launch investigations, apologize to workers, and pledge compensation, 6 years

after the contamination was found.

Congress missed the mark last year, I believe, by focusing too

narrowly on the control of weapons information, as important as

that may have been, failing to take into account an even larger national security threat, the possibility of an environmental disaster

in America’s back yard.

I believe Congress should consider all facets of public interest,

environmental, health and safety, as well as security when considering DOE restructuring proposals.

And it is for that reason that I agree with the premise, Mr.

Chairman, of the three bills being considered. We should make contractors liable. We should strengthen internal oversight, and we

should expand external safety and environmental oversight as well.

I agree with you that there are some details of these proposals

that need our careful attention, but I think we’re on the right track

with these reforms, and I look forward to our witnesses’ comments

5

on how we can improve and strengthen accountability and oversight.

Again, Mr. Chairman, thank you.

Mr. BARTON. I thank the gentleman for that statement. Seeing

no other members present to give an opening statement in person,

the Chair would ask unanimous consent that all members not

present have the requisite number of days to enter their openings

statement in the record at the appropriate point. Is there an objection to such a unanimous consent request?

[No response.]

Mr. BARTON. Hearing none, so ordered.

[Additional statement submitted for the record follows:]

PREPARED STATEMENT OF HON. TOM BLILEY, CHAIRMAN, COMMITTEE ON COMMERCE

Thank you, Mr. Chairman. Today marks a very important step for this Committee. We have held countless hearings in past years on safety and security failures in the Department of Energy. Our Members have worked hard behind the

scenes to improve the oversight of these important matters within the Department,

and we have worked with other Committees to improve related legislation moving

through the Congress.

Those efforts, while useful, have been mere ‘‘Band-Aids’’ that help to stop the

bleeding at DOE but do not really cure the underlying problems. As retired Senator

Rudman observed last year, the unique culture in the Department of Energy is extremely resistant to change. The three bills before the Subcommittee today make

a giant stride toward changing that culture and getting at the root causes of some

of these safety and security failures.

H.R. 3833 will correct a perverse system in which the non-profit DOE contractors

do not pay any fines when they commit nuclear safety violations. H.R. 3906 will codify in law that same system of independent security oversight that Secretary Richardson has already put in place in DOE, and will provide for direct reporting to the

Congress. And H.R. 3907 will bring to an end DOE’s attempt to regulate itself. Instead, the Nuclear Regulatory Commission and the Occupational Safety and Health

Administration will become responsible for safety regulation of the DOE complex.

All three of these bills are meant to provide DOE and its contractors with the right

set of incentives to take safety and security more seriously.

No doubt the DOE bureaucracy will resist these changes. Correcting failures is

always difficult, and is always resisted by those invested in preserving the status

quo. But the Nation cannot afford to keep relying in blind faith on the failed promises of DOE that things will get better. Taxpayers are going to have to spend hundreds of billions to clean up environmental contamination throughout the DOE complex and to compensate the workers harmed by DOE’s careless safety practices.

Americans now have worry that slipshod security measures may have allowed a foreign power to steal valuable nuclear weapons designs. It is time to bring about a

fundamental change in the culture at DOE. We must ensure that these failures are

never repeated in the future.

I commend Chairman Barton for his aggressive action on these bills, and I hope

he can bring them to Subcommittee markup in the very near future.

Mr. BARTON. We want to welcome our first panel. Your statements are in the record in their entirety. We’re going to start with

the General Counsel at the Department of Energy. Then we will

recognize the Chairman of the Nuclear Regulatory Commission,

Mr. Meserve, and then we will recognize Mr. Conway—no, actually,

Mr. Mande is more to the right, so we’ll recognize him and then

Mr. Conway.

The subcommittee also wants to express its condolences to Commissioner McGaffigan on the passing of your wife. We understand

that that was a very traumatic event, and I personally have a great

degree of sympathy for you since I have a brother who has liver

cancer that’s been diagnosed as incurable. So you have our prayers

on that.

6

Ms. Sullivan, we’re going to recognize you for 7 minutes. We do

thank you for getting your testimony in on time, barely, but you

did get it in on time. And so that’s a good way to start this hearing.

Ms. Sullivan?

STATEMENTS OF MARY ANNE SULLIVAN, GENERAL COUNSEL,

U.S. DEPARTMENT OF ENERGY; HON. RICHARD A. MESERVE,

CHAIRMAN; ACCOMPANIED BY HON. GRETA JOY DICUS,

COMMISSIONER; HON. NILS J. DIAZ, COMMISSIONER; HON.

EDWARD McGAFFIGAN, JR., COMMISSIONER; HON. JEFFREY

S. MERRIFIELD, COMMISSIONER,NUCLEAR REGULATORY

COMMISSION; HON. JEROLD R. MANDE, DEPUTY ASSISTANT

SECRETARY FOR LABOR, OCCUPATIONAL SAFETY AND

HEALTH ADMINISTRATION; AND HON. JOHN T. CONWAY,

CHAIRMAN, DEFENSE NUCLEAR FACILITIES SAFETY BOARD

Ms. SULLIVAN. Thank you, Mr. Chairman and members of the

committee for the opportunity to discuss with you, H.R. 3907, concerning external safety regulation; H.R. 3383, concerning civil penalties for DOE nonprofit contractors; and H.R. 3906, concerning internal security oversight at the Department.

I’d like to begin with external regulation. During the 1990’s, the

Department engaged in a systematic evaluation of the advisability

of external safety regulation. The culmination of this effort was a

joint pilot program by the Department and the NRC to determine

the cost and benefits associated with NRC regulation.

Unlike previous studies, the joint pilot program involved realtime simulation of external regulation. The findings of the joint

pilot program were quite informative, and led to the decision by the

Secretary not to seek external regulation by NRC.

Secretary Richardson pointed to three key elements in concluding that DOE should not proceed with NRC regulation: The potential difficulties in implementation, the potential costs, and the

absence of a clear benefit to safety.

Implementation of NRC regulation would involve a number of

difficult, unresolved issues. I’ll offer just a few examples:

NRC regulations and standards were developed for commercial

facilities. They were not developed with DOE’s complex and diverse

activities in mind.

Application of NRC regulations to DOE activities would require

a substantial effort to accommodate the unique hazards, operations, and security considerations at DOE.

NRC does not have experience in regulating certain kinds of activities at DOE, such as accelerators. In addition, the pilot program

did not even consider defense nuclear facilities for which there is

no corresponding activity in the commercial sector.

The joint pilot program could not reach consensus on whether

the licensee for a DOE activity should be the Department, its contractor or both. On balance, DOE believed it was essential for it to

be the licensee, because DOE is ultimately responsible for the facilities. NRC could not accept this fundamental proposition.

Many DOE facilities are old. They have physical layouts and

equipment that cannot be readily changed. Backfit and other legacy

issues could be an especially difficult and costly problem for facilities with relatively short remaining lives.

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The Commission has specific requirements relating to the schedule for deactivation and decommissioning. These are intended to

ensure that licensees complete their license responsibilities while

they still have a secure financial base. This rationale carries considerably less weight when applied to a Federal agency. More compelling funding priorities typically account for delay in D&D activities, and external regulation doesn’t solve the funding problem.

Turning to the cost impacts, the joint pilot program did not attempt to estimate incremental costs of external regulation DOEwide; rather, it focused only on the costs of NRC regulation of the

particular pilots that were analyzed.

Even so, some of the Department’s estimates were substantially

higher than NRC’s. The variation resulted from uncertainty in the

range of regulatory approaches that the NRC might actually use

for the many DOE activities that have no current counterpart in

the NRC regulatory regime.

The essential learning was that virtually every DOE activity

would have to be separately reviewed to determine the regulatory

regime, and the associated costs cannot be predicted with any certainty.

We do know from our experience with NRC’s certification of the

gaseous diffusion plants, the license transfer for Ft. St. Vrain, and

the licensing of the Idaho Spent Fuel Facility, that initial cost estimates tend to be considerably lower than actual costs.

The final, but, it seems to me, critical point is that the joint pilot

program did not demonstrate that NRC regulation would result in

more protection of workers, members of the public, or the environment.

This is because of the tremendous strides, certainly not yet complete, that the Department has made to improve safety. This improvement results from, among other things, from the creation of

the Office of Enforcement and Investigation, adoption of integrated

safety management requirements in DOE contracts, and independent oversight by the Defense Nuclear Facilities Safety Board.

In light of the numerous unresolved issues associated with transition to NRC, and the increasing success of initiatives to improve

safety at DOE, the Department cannot support H.R. 3907.

We believe that the substantial resources that would be required

to prepare for a shift to NRC regulation would be better spent on

cleanup and on ensuring compliance with existing safety requirements.

Let me turn now to the issue of civil penalties for DOE nonprofit

contractors: DOE supports subjecting its nonprofit contractors to

civil penalties, limited to the amount of fee the nonprofits receive

under their contracts.

H.R. 3383 would subject nonprofits to civil penalties, but it

doesn’t limit the amount of the penalties to the fee provided for in

the contract. The risk with that approach is that the nonprofits

may be unwilling to contract with the Department because of fears

of putting their endowments at risk.

Alternatively, they may insist on fee increases, disproportionate

to the additional risk the civil penalties represent. These higher

fees would divert funds away from fundamental DOE research.

8

Accordingly, the Department would like to work with the committee on a provision to limit the penalties for nonprofits to the

amount of fee.

Finally, on the issue of internal security oversight, H.R. 3906

would require the Secretary to maintain an Office of Independent

Security Oversight, specify that Office’s jurisdiction, and impose

certain specific reporting requirements on both the Secretary and

the Director of the Office.

Among the Secretary’s responses to concerns over security last

year, was the creation of just such an office, as the Chairman recognized. This new office had its origin in the Office of Oversight,

reporting to the Assistant Secretary for Environment, Safety, and

Health.

The new office provides independent analysis of the performance

of safeguards and security functions across the Department, but

does so directly under the Secretary.

Since it was created, the office has successfully applied the full

range of its appraisal skills to the Department, and as the Director

testified last week, it will continue to do so with regard to the

NNSA.

The Department’s threshold concern about H.R. 3906 is that it

proposes to rigidly define the structure of an office that already exists. The office was created as a timely response to significant security concerns.

The Department of Energy Organization Act gives the Secretary

broad reorganization powers to respond to such circumstances. The

Secretary wisely exercised those powers by restructuring and refocusing an existing office, giving it substantially new and important functions, and requiring it to report to him.

When the Congress institutionalizes the structure and mission of

an organization like that, it deprives the Department and future

Secretaries of the ability to adapt to changing circumstances in the

future.

This concern is aggravated by other provisions of the bill. Section

1 would mandate that the Director is not subject to supervision by

anyone other than the Secretary. This undermines the Secretary’s

authority to decide internal reporting matters.

Section 2 would require the Secretary and the Director to report

to the Congress, areas where they have differences of opinion.

These required revelations would impair the Secretary’s ability to

receive frank and candid advice from his subordinates.

In addition, they improperly subject to Congressional refereeing,

any of the Secretary’s management decisions with which the Director might disagree.

In short, we are concerned that H.R. 3906 would, through legislative mandate, threaten the success of a positive management response to real problems.

Mr. BARTON. Ms. Sullivan, you’re 2 minutes over your 7 minutes.

Is that it?

Ms. SULLIVAN. I’m concluded. Thank you very much for the opportunity to address these important matters.

[The prepared statement of Mary Anne Sullivan follows:]

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PREPARED STATEMENT OF MARY ANNE SULLIVAN, GENERAL COUNSEL, U.S.

DEPARTMENT OF ENERGY

Thank you, Mr. Chairman and members of the Committee, for the opportunity to

discuss: H.R. 3907, concerning external safety regulation of the Department of Energy (DOE) by the Nuclear Regulatory Commission (NRC) and by the Occupational

Safety and Health Administration (OSHA); H.R. 3383, concerning civil penalties for

safety violations by non-profit DOE contractors; and H.R. 3906, concerning internal

security oversight within the Department.

EXTERNAL REGULATION

I will begin with the issue of external safety regulation of the Department. During

the 1990’s, the Department engaged in a thorough and systematic evaluation of the

advisability of external safety regulation of the Department. Options considered included broadening the scope of oversight through the existing Defense Nuclear Safety Board, and transferring responsibility to the Commission. The culmination of this

effort was a joint pilot program by the Department and the Commission to determine the costs and benefits that would be associated with the transition to external

regulation under the Commission. Unlike previous studies and analyses of the issue

of external safety regulation, the joint pilot program involved real-time simulation

of external regulation activities. Specifically, representatives of the Department and

the Commission worked together closely to determine what could be expected if the

Commission assumed regulatory responsibility for Lawrence Berkeley National Laboratory (LBNL), the Receiving Basin for Offsite Fuel (RBOF) at Savannah River,

and the Radiochemical Engineering Development Center (REDC) at Oak Ridge National Laboratory.

In addition to the joint pilot program, the Department has actual experience with

NRC licensing of facilities involving commercial nuclear materials which are subject

to NRC licensing under the Energy Reorganization Act. DOE applied for and was

granted a transfer of the NRC materials license for the Fort St. Vrain Independent

Spent Fuel Storage Installation. DOE has also received a license for the dry storage

of core debris from the Three Mile Island Unit Two (TMI-2) reactor at the Independent Spent Fuel Storage Installation at Idaho. The Department also has experience with the Commission in the certification of the gaseous diffusion plants

(GDPs).

The findings of the joint pilot program were quite informative and led to the decision by the Department not to seek a greater level of external safety regulation of

the Department than currently exists. In his February 19, 1999, letters to Congress,

Secretary of Energy, Bill Richardson, characterized the insights gleaned from the

joint pilot program as follows:

These pilots have highlighted a number of significant, unresolved issues including: ascertaining whether DOE or its contractors should most appropriately

hold a license; the difficulties in assessing facility design under NRC standards

in some older facilities because we lack original construction plans; the extent

to which older facilities can be ‘‘retrofitted’’ or upgraded to meet NRC standards; applicable standards for safeguards and security; deactivation and decommissioning; and cost. Our analysis to date also indicates that many of the potential benefits that we expected to see from external regulation have not been

demonstrated, and appear to be outweighed by associated costs and difficulties

raised in the pilot projects.

I will elaborate on (1) the potential difficulties in implementing external safety

regulation, (2) the potential costs of external safety regulation, and (3) the expected

benefits for safety.

Implementation Issues

Implementation of external safety regulation would involve the following unresolved issues:

• There are no ‘‘standard’’ DOE facilities. Most DOE activities would have to be separately reviewed to determine the individual elements of work that have no obvious counterpart in the NRC regulatory regime. Thus the full complement of

requirements to effect external regulation of each of these activities cannot be

predicted with certainty.

• NRC regulations and standards were developed for commercial facilities, many of

which have a high degree of similarity to one another. They were not developed

with the complex and diverse activities that are found in the DOE complex in

mind. Application of NRC regulations and standards to DOE activities would

require substantial effort to accommodate the unique hazards, operations, and

security considerations associated with the DOE complex. NRC members of the

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joint pilot program team suggested that existing NRC regulations and standards could be made to fit through exemptions or through the flexibility of a

‘‘risk-informed, performance-based’’ approach to licensing. However, securing an

exemption can require considerable time and effort and ‘‘risk-informed, performance-based’’ licensing is still a work in progress. In many cases, the Commission

might need to adopt new regulations and standards for DOE activities or go

through an administrative process to adopt existing DOE standards.

• The Commission does not have experience in regulating certain DOE activities.

For example, accelerators do not typically involve source, special nuclear, or byproduct materials and thus do not come within the Commission’s jurisdiction.

In fact, commercial accelerators have long been regulated by State authorities.

Similarly, many of the kinds of research activities involving source and by-product materisals that occur at Lawrence Berkeley National Laboratory are regulated by States under Agreement State authority when these research activities

take place at non-federal facilities such as educational and commercial laboratories. It should also be noted that the joint pilot program did not consider external regulation of DOE defense nuclear facilities. These defense facilities conduct many unique activities for which there is no corresponding activity in the

commercial sector and thus for which the Commission has no experience.

• NRC requirements, especially those relating to material control and accountability

(MC&A), reflect safeguard and security considerations for commercial activities.

The safeguard and security considerations for DOE activities are somewhat different. These differences do not relate to safety concerns.

• The joint pilot program identified numerous impacts that would arise from regulation by the Commission of some activities at a DOE site but not other activities

at the same site. These impacts would relate primarily to the treatment of collocated workers and of shared-site resources. At many DOE sites, it might not

be possible for the Commission to regulate DOE non-defense activities without

also regulating DOE defense nuclear facilities.

• The joint pilot program could not reach consensus on whether the licensee for a

DOE activity should be the Department, its contractor, or both. A strong argument can be made that the Department should be the licensee because it is responsible for the safety of its activities and provides the funding to the contractor. On the other hand, the contractor is the entity responsible for actually

operating the facility, and thus for implementing license requirements. On balance, the Department concluded it should be the licensee in all such cases.

• Many DOE facilities were constructed many years ago and possess physical layouts and equipment that cannot be readily changed. If the Commission were to

assume regulatory responsibility for these facilities, it would be necessary to

deal with backfit and other legacy issues that do not relate specifically to safety,

but rather to technical compliance with existing NRC requirements. This would

be an especially difficult and potentially very costly problem for facilities with

a relatively short remaining life.

• The Commission has many requirements relating to the schedule on which certain

activities must be undertaken. In many cases, especially with respect to deactivation and decommissioning, these schedule requirements are intended to ensure that the licensee (often a private entity) completes its responsibilities

under the license while it still has a secure financial base. That same rationale

carries considerably less weight when applied to an agency of the federal government. NRC was offered that to impose these same requirements on DOE

unilaterally was not likely, but it could not guarantee immediate relief without

a legislative fix..

Cost Impacts

At the outset, it should be emphasized that the joint pilot program did not attempt estimate incremental costs of external regulation, DOE-wide. Rather, it focused on estimating the costs that would be associated with the assumption by the

NRC of regulation of LBNL, RBOF, and REDC. The estimated costs can be summarized as follows:

• With respect to LBNL, the estimated costs to the Department were $700,000 of

transition costs and $500,000 of annual costs. The estimated costs to the Commission were $430,000 of transition costs (primarily to support a rulemaking on

the regulation of accelerators) and $30,000 of annual costs.

• With respect to RBOF, the estimated costs to the Department were $6 to $13.5

million of transition costs and $1.5 to $3.2 million of annual costs. The estimated costs to the Commission were $678,000 of transition costs and $347,000

of annual costs.

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• With respect to REDC, the estimated costs to the Department were $900,000 to

$5 million of transition costs and $1.1 million of annual costs. The estimated

costs to the Commission were $1.1 million of transition costs and $347,000 of

annual costs.

Some of the Department’s estimates are substantially higher than the lower limit

estimates provided by NRC staff. The variation in estimates results from uncertainty in the range of approaches that the NRC staff would actually use in resolving

specific issues, based on the NRC staff practices that have been used in recent

years. For example, the REDC regulatory pilot indicated two possible outcomes for

regulating materials (such as americium-252) central to the operation of REDC. One

outcome could be that the Commission would be willing and able to reach a conclusion that DOE contractor’s practices provided equivalence with NRC’s safety requirements, and that minimal costs impacts could be obtained through a combination of waivers, adoption of DOE safety requirements, and risk-informed, performance based regulation. The other outcome could be that intervenors, or the NRC

staff, would cause the Commission to promulgate new sets of requirements, and

then demand compliance with the newly promulgated and prescriptive requirements. It may well be that the lower range of cost impacts would be obtained for

all types of DOE activities, but it would be a mistake to believe that such an outcome is guaranteed.

There are many DOE activities that have no direct counterpart in the NRC regulatory regime, and therefore, the cost impacts would depend on whether analogs to

present regulatory practices were possible and practical, or whether new approaches

would have to be developed. The joint pilot program has shown that, in some cases,

it is possible to use analogs, to assume that a broad regulation (such as 10 CFR

Part 70) is applicable, and to separate the components of that regulation into elements of a fact-based cost estimate. However, the Department believes that virtually every element of each DOE activity would have to be separately reviewed.

to determine whether it could be regulated under the existing NRC regulatory regime or whether the Commission would have to modify existing requirements or develop new requirements. Where there is no direct counterpart in the NRC regulatory regime, the costs associated with NRC regulation of the work cannot be predicted in advance with any certainty.

Any attempt to extrapolate the estimated costs to the DOE complex as a whole

must take into account that the estimates developed as part of the joint pilot program assumed favorable regulatory treatment of many issues by the Commission

and that LBNL, RBOF, and REDC represent relatively simple facilities from the

viewpoint of regulation by the Commission. In addition, experience with the license

transfer for Fort St Vrain, the licensing of the spent fuel facility in Idaho, and the

certification of the GDPs indicates that initial estimates of the costs associated with

regulation by the Commission tend to be considerably lower than the actual costs.

In the case of the Fort St. Vrain ISFSI, the Department applied for and was

granted a transfer of the NRC materials license. This facility is perhaps the best

possible and most straight forward application of NRC regulations to a DOE activity. The facility was built and operated under NRC regulation and the regulations

were drafted with this specific type of facility and activity in mind: dry storage of

commercial spent nuclear fuel. However, it took 3 years to effect the license transfer. This was primarily a result of the Department’s needing to provide additional

documentation about its management making minor modifications to strictly adhere

to specific details of NRC requirements and NRC staff’s unfamiliarity with the Department’s management approach and safety requirements. Another significant cost

involved with the transfer was the cost of creating and instituting a quality assurance program that would meet NRC standards because the Department’s approach

to obtaining a high level of quality is entirely different than that of the Commission.

The Department has also licensed the Independent Spent Fuel Storage Installation at Idaho for the dry storage of TMI-2 core debris. A significant difference existed in the seismic design standards between the Department and the Commission

for low to moderate risk facilities such as this one. The Department’s Idaho Operations Office applied for and was granted an exemption to the NRC seismic requirements. Had the Department not been granted this regulatory exemption, it was estimated that the facility would have cost as much as an additional $7 million to build.

To meet milestones for completing construction and moving fuel into the dry storage

facility contained in existing legal agreements with the State of Idaho, the Department found it necessary (and accordingly notified the Commission in writing) to proceed at risk by releasing construction of facility equipment prior to design approval

by the Commission. Although the Commission did eventually approve the design

and no milestones were missed, the implications of this event to future licensing activities are apparent: there is no reason to doubt the Commission’s ability and willVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00015 Fmt 6633 Sfmt 6621 E:\HEARINGS\64031 pfrm07 PsN: 64031
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ingness to grant appropriate exemptions, but there is a risk that needed and appropriate exemptions would not be immediately forthcoming.

In the case of the GDPs, the transition costs were estimated initially to be ap- proximately $60 million. Thus far, the actual transition costs have exceeded $300

million. Concurrently, the transition period increased from an estimate of 2 years

to 3 1/2 years. It should be noted that the initial cost estimate was based on DOE’s

general knowledge of NRC fuel facility requirements (10 CFR 70) as well as initial

interaction with NRC staff. The Commission, however, had limited standards to regulate the GDPs due to the unique nature of the facilities and operations. An extensive rulemaking process was needed to develop new regulatory standards.

Improvements in Safety

The joint pilot program did not demonstrate that external safety regulation could

be expected to result in more protection of workers, members of the public, or the

environment. This results from: (1) DOE’s emphasis on the identification and implementation of appropriate nuclear safety requirements; (2) creation of the Office of

Enforcement and Investigations and increased use of field offices to enforce nuclear

safety; (3) contract reform, including the adoption of integrated safety management

requirements in DOE contracts; (4) continued independent oversight of nuclear safety matters by the Office of Environment, Safety and Health as well as the Defense

Nuclear Facilities Safety Board and action on formal plans to address nuclear safety

issues, and (5) public participation in decisions concerning the safety of DOE nuclear activities.

• The Department has improved the quality of the safety requirements applicable

to its nuclear activities in several ways. It streamlined the nuclear safety orders and

related documents in the DOE directives system to reduce unnecessary and redundant requirements. At the same time, where appropriate, the Department adopted

certain requirements as regulations through the rulemaking process, including: (1)

procedural requirements for DOE nuclear activities, including procedures for investigating possible violations of nuclear safety requirements and assessing civil penalties where such violations occur; (2) radiological protection requirements for workers and other persons involved in the conduct of DOE nuclear activities; (3) quality

assurance requirements; (4) requirements on workplace substance abuse programs

at DOE sites; and (5) whistleblower protection requirements. The Department currently is completing additional regulatory requirements on safety management and

on radiological protection of the public and the environment. In addition, the Department engaged in a comprehensive exercise to ensure that the requirements used

in connection with a particular activity are sufficient to assure adequate protection

of workers, members of the public and the environment in a manner commensurate

with the type and complexity of the activity and the associated hazards.

• The Department established the Office of Enforcement and Investigations,

which reports to the Assistant Secretary for Environment, Safety and Health, to investigate possible violations of the nuclear safety requirements and, where appropriate, to impose civil penalties and other remedies and corrective actions. DOE

field office and program personnel assist in investigations and enforcement and provide regular oversight of contractor activities.

• The Department has undertaken an extensive reform of its contracting process

to improve the management of work and safety throughout the DOE complex. Specifically, it has revised the Department of Energy Acquisition Regulation (DEAR) to

include provisions on performance-based contracting, competition, award fees, property management, record-keeping, insurance, litigation, claims, accountability provisions, and the conditional fee policy. The most significant contract reform affecting

nuclear safety is the adoption of DEAR clauses that mandate: (1) the use of integrated safety management systems and (2) the identification of laws, regulations,

and DOE directives to be applied to activities under DOE contracts.

• The DEAR clause on the Integration of Environment, Safety and Health into

Work Planning and Execution establishes a standard prescribed contract clause on

how contractors must perform work in a manner that ensures adequate protection

for employees, the public, and the environment. It provides for: (1) defining the

scope of work; (2) identifying and analyzing hazards associated with the work; (3)

developing and implementing hazard controls; (4) performing work within controls;

and (5) providing feedback on adequacy of controls and continuing to improve safety

management. The clause establishes the principles that: (1) line managers must be

given responsibility and held accountable for implementing health and safety requirements; (2) clear lines of authority and responsibility must be established; (3)

workers and managers must have competence to assess and deal with the hazards;

(4) resources must be effectively allocated; (5) hazards must be evaluated and an

agreed-upon set of standards and requirements must be established before work is

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performed; (6) administrative and engineering controls must be tailored to the work

and associated hazards; and (7) conditions and authorization authorities must be

agreed upon. The clause specifically requires each contractor to submit a safety

management system description for approval by the Department that explains how

the contractor will implement the system to establish performance objectives, measures and commitments; integrate work planning, hazards assessment, hazard controls, budget and resource planning and continuous improvement. • The DEAR clause on Laws, Regulations and DOE Directives is an integral part

of the safety management system. This clause requires clear identification of requirements, including nuclear safety requirements, to be implemented in connection

with nuclear activities under a contract. In general, the clause requires a contractor

either to incorporate all applicable requirements in DOE Orders and regulations or

to use a tailoring process to develop a set of environment, health and safety requirements that is commensurate with the complexities and hazards associated with the

work to be performed under the contract. • Since its creation in 1988, the Defense Nuclear Facilities Safety Board has provided independent oversight of DOE defense nuclear facilities and made many valuable recommendations on nuclear safety issues. Implementing these recommendations has been and continues to be an impetus for enhancing safety throughout the

DOE complex. Indeed, DOE has never rejected a Defense Board recommendation. • The Department has adopted and implemented a Public Participation Policy to

foster improvements in nuclear safety by ensuring decisions benefit from the perspective of those interested in and affected by DOE activities, such as workers and

those who live in communities where DOE activities take place. In furtherance of

this policy, the Department has established citizens advisory boards (CABs) at all

its major sites to establish open, ongoing, two-way communication, both formal and

informal, between the Department and its stakeholders. This process provides a diverse collection of opinions, perspectives, and values and enables each party to learn

about and better understand each other’s views and positions. As a result of such

communication, the Department can make better, more informed decisions.

Through these initiatives, the Department has substantially improved its ability

to provide a safe and healthy workplace, protect the communities near our facilities,

and preserve the environment. We now have a strong safety structure under which:

work and hazards are evaluated; appropriate safety requirements are identified and

imposed on our contractors; integrated safety management operates to make compliance with these requirements an integral part of how work is performed; safety performance is an important part of determining contract fees; the Office of Enforcement investigates possible violations of safety requirements and imposes civil penalties where appropriate; and the Defense Board and our Independent Oversight Office verify how well the structure is working and make recommendations for improvements.

H.R. 3907

In light of the numerous unresolved issues associated with a transition to external

safety regulation, the potential costs of such a transition, and the ongoing success

of the initiatives to improve safety throughout the DOE complex, the Department

cannot support legislation to mandate external safety regulation by NRC of the Department. The substantial funds that would be required to prepare DOE facilities

for a shift to external regulation would be better spent on achieving the Department’s cleanup and mission goals. The manpower that would be required to implement a transition to external regulation would be better used in overseeing compliance with the Department’s existing safety requirements.

With respect to H.R. 3907, I note that the bill does not address in a meaningful

manner the implementation issues identified by the joint pilot program and does not

provide funding for the increased costs to both the Department and the Commission.

In addition, the bill would abolish the Defense Board and extend external safety

regulation to DOE defense nuclear facilities without any examination of the potential effects of such action on the Department’s national security missions.

CIVIL PENALTIES FOR NONPROFIT DOE CONTRACTORS

In its Report to Congress on the Price-Anderson Act (DOE Price-Anderson Report),

the Department indicated that it supported continuation of the Congressional decision in the 1988 Price-Anderson Act Amendments not to apply civil penalties to nonprofit contractors. This decision reflected the belief of the Department that major

universities and other nonprofits would be unwilling to put their educational endowments at risk for contract-related expenses such as civil penalties and that the increase in fees they would insist upon to protect against even the slim possibility of

such a result would outweigh the benefit of being able to assess penalties.

14

The Department also indicated that all nonprofit contractors, nonprofit subcontractors and nonprofit suppliers should be treated the same with respect to the

applicability of civil penalties. Accordingly, it suggested eliminating the statutory

exemption for specific named contractors and their subcontractors and suppliers and

replacing it with a generic exemption to cover all nonprofit contractors, nonprofit

subcontractors and nonprofit suppliers. This change would eliminate the need to

identify particular entities by name in the statute and also eliminate the distinction

between ‘‘educational’’ nonprofits and other nonprofit entities. As part of such a

change, the exemption of for-profit subcontractors and suppliers to nonprofit contractors exempt by statute would be eliminated.

Subsequent to the submission of the DOE Price-Anderson Report to Congress, several DOE nonprofit contractors indicated they could accept civil penalties if the

amount of the civil penalties were limited to the amount of the fee they received

under their contracts with the Department. Recently, S. 2162 has been introduced

in the Senate to extend the Price-Anderson Act. This Senate bill contains a provision that would make a nonprofit DOE contractor subject to civil penalties up to

the amount of the fee provided for in its contract with the Department. The Department supports this approach.

H.R. 3383

H.R. 3383 would likewise make nonprofit DOE contractors subject to civil penalties, but it contains no provision that would tie the amount of a civil penalty imposed on a nonprofit DOE contractor to the fee provided for in its contract with the

Department. The Department supports subjecting non-profit contractors to civil penalties up to the amount of the fee, but would need to consider further the implications of allowing for such penalties to exceed the amount of fee provided for in the

contract.

INTERNAL SECURITY OVERSIGHT

Now I will turn to H.R. 3906, which proposes to specify for DOE the internal

mechanisms and authorities to independently assess the effectiveness of its policy

and site performance in the areas of safeguards and security and cyber security.

This bill would require the Secretary of Energy to maintain an ‘‘Office of Independent Security Oversight,’’ specify that Office’s jurisdiction, and impose peculiar

statutory reporting requirements on both the Secretary and the Directory of the Office.

First, to put my comments in context, I would like to describe the creation and

functions of the Department’s existing Office of Independent Oversight and Performance Assurance. In response to numerous concerns over security last year, Secretary

Richardson announced his Security Reform Package on May 11, 1999, a significant

feature of which was the creation of the Office of Independent Oversight and Performance Assurance reporting directly to the Secretary.

This new office had its origin in the Office of Oversight under the Assistant Secretary for Environment, Safety and Health, which had been responsible for the performance of safety and security reviews. The new Office provides independent analysis of the performance of safeguards and security and other critical functions from

across the Department, but does so directly under the Secretary.

Since it was created in May, the Office of Independent Oversight has been headed

by Mr. Glenn S. Podonsky. The office is staffed by highly qualified and experienced

personnel, many of whom are recognized as national experts in their individual security disciplines. The personnel are trained inspectors, skilled at determining, on

a practical level, the adequacy of protection programs. The Office successfully has

applied the full range of its appraisal skills to the Department, and as Mr. Podonsky

testified before the House Commerce Committee on March 14, 2000, it will continue

to do so with regard to the NNSA.

My threshold objection to HR 3906 is that it proposes rigidly to define the structure of an office which already exists within the Department. The office was created

by Secretary Richardson pursuant to his management authorities under the Department of Energy Organization Act as a timely response to significant security concerns facing the Department. The Department of Energy Organization Act gives the

Secretary broad reassignment powers and appropriate reorganization ability to respond to changing circumstances. The Secretary wisely exercised those powers to respond to the Departmental security concerns by restructuring and refocusing an existing office, giving it substantially new and important functions, and requiring it

to report directly to him.

When the Congress institutionalizes the structure and missions of an organization

like the existing Office of Independent Oversight, which was created by the SecVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00018 Fmt 6633 Sfmt 6621 E:\HEARINGS\64031 pfrm07 PsN: 64031
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retary to address a particular concern at a particular time, it deprives the Department and future Secretaries of the ability to adapt to changing circumstances and

to craft appropriate future responses, as the Secretary did in the case of the existing

Office of Independent Oversight and Performance Assurance. The result is a significant erosion of the Secretary’s management authority. Rather than acknowledging

the appropriateness of the Secretary’s action in creating the Office, HR 3906 potentially would hamstring the Department in the future by institutionalizing an existing function rather than permitting the Secretary to retain needed flexibility to respond appropriately to changing circumstances.

This threshold concern is aggravated by other specific provisions of the bill. The

provision in Section 1(a) that would mandate that the Director report directly to the

Secretary and is not subject to supervision by any other office within DOE is further

evidence of the bill’s objectionable erosion of the Secretary’s internal management

authority. The Secretary must retain the authority to decide the internal reporting

chain.

Section 2 contains additional objectionable features. Section 2(8) would require

that the Office of Independent Security Oversight to transmit to the Congress and

the Secretary annual reports, that include a description of any significant security

policy decision with which the Office Director is in disagreement. Section 2(b) would

also require the Secretary to transmit to the Congress a report which includes an

identification of each significant problem, deficiency, or recommendation in the Office’s annual report with which the Secretary is in disagreement, and an explanation

of the reasons for any failure on the part of DOE to complete corrective actions.

Read together these two subsections would require the Secretary and the Director

to report to the Congress areas where they have a difference of opinion. These required revelations to the Congress by Departmental subordinates impairs the Secretary’s ability to receive frank and candid advice from his subordinates. In addition, these peculiar reporting requirements also improperly subject to Congressional

refereeing any of the Secretary’s management decisions with which the Director

might disagree. Disagreements regarding execution of the law are proper subjects

of decisions by the President and his immediate subordinates, not by elements of

the legislative branch. On a practical level, these concurrent reporting requirements

would potentially undermine the kind of positive working relationship between the

Secretary and the Director that has enabled the office to function so effectively since

its creation.

Section 2(d) contains a similar requirement for special reports. The Director would

be required to report immediately to the Secretary and the Congress whenever the

Director becomes aware of particularly serious or flagrant problems or deficiencies.

The Secretary then, within seven days after receiving such a report, would be required to report to the Congress on the corrective actions taken to address such

problems. This concurrent reporting requirement would again inappropriately insinuate the Congress into the executive decisionmaking process and execution of

laws. Concurrent reporting requirements may breach the separation of powers by

disrupting the chain of command within the executive branch. Here they would impede the Secretary in exercising his responsibility to supervise and control departmental subordinates. Moreover, this provision would infringe the Secretary’s authority, as the President’s immediate subordinate and as the head of an executive agency, to determine the executive branch’s views that are presented to Congress.

Finally, I have similar concerns about sections 2(e) and 2(f), which inappropriately

would prohibit the Secretary from altering, modifying, or otherwise changing the

substance of certain reports to the Congress or testimony by his subordinate Office

Director. The Congress must determine what laws the President and Cabinet officers are to enforce, but the Congress may not impair the President’s ability—

through the Secretary—to determine the nature of official communications to the

Congress. Nor the Congress should dictate how the Executive Branch is to execute

the law. Efforts such as those contained in this bill which seek to determine the

precise organizational structure of an executive branch department and the chain

of command with respect to internal management decisions serious threaten the

Secretary’s ability to effectively and efficiently fulfill his responsibilities to execute

the law.

Mr. BARTON. Thank you. We’re going to recognize the Chairman

of the NRC, Mr. Meserve. I’m going to run and vote. Congresswoman Wilson is going to take the Chair, and I will rush back.

We’re going to try to continue the hearing without having to suspend for the vote.

You are recognized for 7 minutes.

16

STATEMENT OF HON. RICHARD A. MESERVE

Mr. MESERVE. Good morning. It is a pleasure to appear before

you today to discuss the proposal for external regulation of facilities owned or operated by the Department of Energy and in particular to explain the Commission’s views in the recently introduced bill, H.R. 3907, External Regulation of the Department of

Energy Act.

I am joined by my fellow Commissioners Greta Dicus, Nils Diaz,

Edward McGaffigan, Jr., and Jeffrey Merrifield.

As the Commission has previously testified, the Commission believes that the NRC could be the sole regulator of DOE’s nuclear

and radiological safety if the Congress determined that such regulation was in the best interests of the nation. The Commission also

testified that we believe that a majority of the technical, policy and

regulatory issues identified during the NRC-DOE pilot program at

three DOE facilities can be adequately resolved in the existing

NRC regulatory framework.

We see a path to resolving the issues and we continue to stand

by our previous testimony.

Today we are testifying on a significantly different approach than

that discussed in our previous testimony. H.R. 3907 would require

the NRC to assume regulatory jurisdiction over the entirety of

DOE’s activities, both defense and nondefense at one time. The

Commission strongly prefers a multiphased approach.

Our concern is that a one-phase approach could divert significant

agency resources from important ongoing regulatory initiatives relating to current NRC licensees. These initiatives, which include license renewal, license transfers, a new reactor oversight process, a

more effective license amendment process, and dry cask storage for

spent nuclear fuel, have been urged by Congress and require significant agency resources to bring to fruition. NRC previously testified that it could initially regulate the relatively less complex, less

costly facilities of DOE’s Office of Energy Research, now the Office

of Science, and the Office of Nuclear Energy, which is now the Office of Nuclear Energy, Science and Technology and that, subject

to receiving adequate resources, the NRC could then gradually

phase in the more complex, more costly facilities of DOE’s Office

of Environmental Management and the National Nuclear Security

Administration over a period of years.

Assuming responsibility for all DOE nuclear facilities at one time

could overwhelm the agency and place at risk the critical regulatory initiatives currently underway, thus the Commission does

not believe that the approach described in H.R. 3907 is feasible,

even if significant resources were made available. Indeed, we would

have a very hard time estimating the necessary NRC resources

without further study.

Let me give you an example of the cost associated with a very

complex facility. The NRC now provides regulatory advice to the

DOE concerning DOE’s Hanford Tank Waste Remediation Systems

Project. This effort includes a resident inspector who is onsite fulltime and requires significant involvement both by our Headquarters Staff and our Center for Nuclear Waste Regulatory Analyses in Texas.

17

There is no prospect for an NRC regulatory role until at least

2015 under DOE’s current program, yet NRC’s current assistance

is costing about $2.4 million each year. The Hanford Project is extraordinarily complex. Nonetheless there are many complex DOE/

EM and NNSA facilities presenting many challenges both from a

technical and a programmatic perspective.

The immediate assumption of authority over potentially hundreds of such complex DOE/EM and NNSA facilities would likely

overwhelm our staff and put at risk the progress we have made in

regulatory initiatives affecting our current licensees.

Accordingly the Commission respectfully urges the committee to

consider the phased approach to external regulation of DOE advocated in 1996 by DOE’s own Working Group on External Regulation. We would see an overall gain in public health and safety only

if NRC regulation of DOE were undertaken in a manner that does

not risk diverting the Commission’s attention from NRC’s primary

mission of ensuring the safety and security of civilian nuclear facilities.

As I stated at the outset, we believe that a majority of the technical, policy and regulatory issues identified during the NRC-DOE

pilot program can be adequately resolved within the existing NRC

regulatory framework. Others will require clarification in statute.

We would be pleased to work with the committee on these provisions.

In conclusion, we appreciate the confidence that this subcommittee has demonstrated in NRC by introducing H.R. 3907. We

support the bill in spirit but strongly believe that a phased approach focusing on the less complex and less costly DOE facilities

should be the first step. We stand ready to work with the committee to identify an appropriately phased approach. Thank you.

[The prepared statement of Hon. Richard A. Meserve follows:]

PREPARED STATEMENT OF RICHARD A. MESERVE, CHAIRMAN, U.S. NUCLEAR

REGULATORY COMMISSION

Mr. Chairman and Members of the Subcommittee: It is a pleasure to appear before you today to discuss the proposal for external regulation of facilities owned or

operated by the Department of Energy, and in particular to explain the Commission’s views on the recently introduced bill, H.R. 3907, ‘‘External Regulation of the

Department of Energy Act.’’ As the Commission previously testified before the

House Science Committee’s Subcommittee on Energy and Environment on July 22,

1999, and before the House Commerce Committee’s Subcommittee on Energy and

Power on May 20, 1998, the Commission believes that NRC could be the sole external regulator of DOE nuclear and radiological safety, if the Congress determined

that such regulation was in the best interests of the Nation. The Commission also

testified that we believe that a majority of the technical, policy, and regulatory

issues identified during the NRC/DOE pilot program at three DOE facilities can be

adequately resolved within the existing NRC regulatory framework. We see a path

to resolving the remaining issues and we continue to stand by our previous testimony.

Today we are testifying on a significantly different approach than that discussed

in previous Commission testimony. H.R. 3907 would require the NRC to assume

regulatory jurisdiction over the entirety of DOE’s activities—both defense and nondefense—at one time. The Commission strongly prefers a multi-phased approach, as

former Chairman Dicus testified to the House Science Committee in July of last

year. Exactly such a multi-phased approach was contemplated by the House Science

Committee last fall in Section 15 of H.R. 1656.

Our concern is that a one-phase approach could divert significant agency resources from important ongoing regulatory initiatives relating to current NRC licensees. These initiatives, in areas such as license renewal, license transfers, a new

18

reactor oversight process, a more effective license amendment process, and dry cask

storage for spent nuclear fuel, have been urged by Congress and require significant

agency resources to bring to fruition. NRC previously testified that it could initially

regulate the relatively less complex, less costly facilities of DOE’s Office of Energy

Research, now the Office of Science (SC), and Office of Nuclear Energy, now the Office of Nuclear Energy, Science, and Technology (NE)—and that, subject to receiving

adequate resources, it could then gradually phase in the more complex, more costly

facilities of DOE’s Office of Environmental Management (EM) and the National Nuclear Security Administration (NNSA) over a period of several years. Assuming responsibility for all DOE nuclear facilities at one time could overwhelm the agency

and place at risk the critical regulatory initiatives currently underway. Thus, the

Commission does not believe that the approach described in H.R. 3907 is feasible,

even if significant resources were made available. Indeed, aside from the SC and

NE facilities, at this point we would have a very hard time estimating the necessary

NRC resources without further study.

Let me give you an example of the cost associated with a very complex facility.

The NRC now provides regulatory advice to the DOE concerning DOE’s Hanford

Tank Waste Remediation Systems project. This effort includes a resident inspector,

who is on site full time, and significant involvement both by our Headquarters staff

and our Center for Nuclear Waste Regulatory Analyses in Texas. There is no prospect for an NRC regulatory role until at least 2015 under DOE’s current program,

yet NRC’s current assistance is costing about $2.4 million each year. The Hanford

project is extraordinarily complex. Nonetheless, there are many complex DOE EM

and NNSA facilities presenting many challenges, both from a technical and programmatic perspective. Without a transition period and phased approach, we would

have great difficulty estimating the likely NRC resources required. The immediate

assumption of authority over potentially hundreds of such complex DOE EM and

NNSA facilities would likely overwhelm our staff and put at risk the progress we

have made in regulatory initiatives affecting our current licensees.

The Commission respectfully urges the Committee to consider the phased approach to external regulation of DOE advocated in 1996 by DOE’s Working Group

on External Regulation. We would see an overall gain in public health and safety

only if NRC regulation of DOE were undertaken in a manner that does not risk diverting the Commission’s attention from the NRC’s primary mission of ensuring the

safety and security of civilian nuclear facilities.

Another issue which is not addressed in the bill is NRC’s authority to regulate

safeguards—that is, physical protection and material control and accounting. We believe that these matters are so integrally linked to safety issues that it is important

for the effectiveness of NRC’s regulatory oversight that safeguards authority be explicitly included.

As I stated at the outset, we believe that a majority of the technical, policy, and

regulatory issues identified during the NRC/DOE pilot program can be adequately

resolved within the existing NRC regulatory framework. Others will require clarification in statute. We would be pleased to work with the Committee on these provisions.

In conclusion, we appreciate the confidence that this Committee has demonstrated

in NRC by introducing H.R. 3907. We support the bill in spirit, but strongly believe

that a phased approach focusing on the less complex and less costly DOE SC and

NE facilities should be the first step. We stand ready to work with the Committee

to identify an appropriately phased approach.

Thank you Mr. Chairman. We would be pleased to answer any questions that you

and Members of the Subcommittee may have.

Mrs. WILSON [presiding]. Thank you. I understand the other

Commissioners are here for answering of questions and so we will

turn to the Honorable Jerold Mande, Deputy Assistant Secretary

for Labor Occupational Safety and Health Administration—can you

fit that on a business card?

Mr. MANDE. No. It’s tough. It’s hard to read then.

Mrs. WILSON. Thank you.

STATEMENT OF HON. JEROLD R. MANDE

Mr. MANDE. Madam Chairman, members of the subcommittee,

thank you for the opportunity to testify this morning on the important issue of external regulation of worker health and safety for

19

private sector employees at work sites owned or operated by the

Department of Energy.

This issue is of great interest and importance to OSHA in keeping with our mission to assure that every working man and woman

in the Nation is provided with safe and healthful working conditions. We appreciate your keen interest in this matter.

OSHA has undertaken a number of cooperative projects with

DOE to better understand the effect of external regulation on worker safety. OSHA has completed two recent major pilot projects at

DOE sites. In the summer of 1998 OSHA conducted a large scale

pilot at Oak Ridge, Tennessee, and in January 1999 OSHA conducted a pilot project at the Lawrence Berkeley National Laboratory in California as part of an ongoing NRC pilot project at the

Berkeley site.

OSHA had three objectives for the pilot projects—one, to better

assess the nature and severity of the site hazards as well as assess

the adequacy of OSHA’s standards, training and staff expertise to

address them; two, to assess the potential impacts of external regulation on the agencies involved and approximate what would occur

on an actual OSHA visit under external regulatory authority; and

three, to provide a forum for OSHA and NRC to evaluate regulatory interface issues at the DOE sites.

At both sites OSHA conducted simulated inspections that included opening and closing conferences with employers and employees, physical walk-throughs of the work sites to identify hazards

and the preparation and simulation of citations and proposed penalties. OSHA prepared simulated citations and proposed penalties

for the University of California, the site contractor and for DOE,

the facility owner, even though OSHA does not currently have legislative authority to enforce penalties against state or Federal entities. It has been OSHA’s experience however that worker safety

and health are best protected when OSHA has the ability to fine

both the facility owner, who controls the work site, and the contractors working at the site.

So what did OSHA learn from its pilot activities? Our overall

conclusion is that there are a number of legislative policy,

logistical, and resource issues that must be addressed for external

regulation to be accomplished in an orderly manner. However,

OSHA believes none of the problems and issues is insurmountable

and with careful and coordinated planning within the Administration and with Congress external regulation of DOE sites for occupational safety and health is in our opinion an achievable objective.

The pilot projects demonstrated clearly to OSHA that external

regulation would have a significant impact on DOE’s current operating practices. Today DOE identifies hazards, often only takes appropriate interim measures and then attempts to obtain funding to

address the hazard’s permanence. When the funding does not materialize, it results in a growing backlog of unabated hazards.

The OSHA-simulated inspections identified 75 violations at Oak

Ridge and 62 at Berkeley. This number of violations is slightly

higher than average. Injury and illness rates were also above the

national average at these sites. OSHA’s review of the site safety

and health programs revealed that DOE and its contractors have

implemented generally good worker safety and health programs, alVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00023 Fmt 6633 Sfmt 6602 E:\HEARINGS\64031 pfrm07 PsN: 64031
20

though the pilots did not find the level of employee involvement in

safety and health issues that OSHA would expect to find in an excellent safety and health program.

Madam Chairman, you have asked for comments on three bills—

H.R. 3383, H.R. 3906, and H.R. 3907. We have no comment on H.R.

3383 and 3906, because neither bill appears to impact OSHA’s program.

H.R. 3907, on the other hand, would significantly impact OSHA.

It would transfer to OSHA from DOE regulatory and enforcement

responsibilities relating to matters covered by the Occupational

Safety and Health Act with regard to all facilities owned or operated by DOE. OSHA and NRC would be required to enter into a

Memorandum of Understanding that would govern the exercise of

our respective authorities over nuclear safety and occupational

health and safety at DOE owned or operated facilities and transmit

that memorandum to Congress by January 1, 2001. The overall effective date for the transfer of authority to OSHA from DOE would

be October 1, 2001.

OSHA believes that external regulation proposals should be evaluated based on their likely impact on worker safety. As I have presented in my testimony, we have been working with DOE and NRC

through pilot projects and other activities to gain a better understanding about the implications of external regulation on worker

safety and on OSHA’s existing programs and resources.

At this time in light of the numerous unresolved issues associated with the transition to external safety regulation, we are not

yet prepared to take a position on H.R. 3907.

In closing, Madam Chairman, it is our view that OSHA regulation of occupational safety and health at DOE sites should be authorized only if such action would lead to better protection for

workers. A number of studies and advisory groups have in fact concluded that employees would benefit from external regulation of occupational safety and health.

The recent pilot projects have reinforced our position that external regulation is an achievable objective, but OSHA is not seeking

the additional responsibility for enforcement at DOE sites. The

agency has for several years undertaken a variety of cooperative

projects and activities with DOE to prepare for external regulation.

We must reiterate our caution, however, that if the transition is to

be successful, it must be conducted in an orderly way with reasonable timeframes to avoid unnecessary disruption to OSHA’s other

important ongoing programs and resource requirements, a need to

be carefully assessed. Thank you.

[The prepared statement of Hon. Jerold R. Mande follows:]

PREPARED STATEMENT OF JEROLD R. MANDE, DEPUTY ASSISTANT SECRETARY OF

LABOR FOR OCCUPATIONAL SAFETY AND HEALTH

Mr. Chairman, Members of the Subcommittee: Thank you for the opportunity to

testify this morning on the important issue of external regulation of worker safety

and health for private-sector employees at facilities owned or operated by the Department of Energy. This issue is of great interest and importance to the Occupational Safety and Health Administration in view of the Department of Labor’s mission to assure that every working man and woman in the Nation is provided with

safe and healthful working conditions. We therefore appreciate your keen interest

in this matter.

21

OSHA has undertaken a number of cooperative projects with DOE to better understand the effect of external regulation on worker safety. Before I discuss those

with you, however, I want to briefly describe OSHA’s legislative authority at DOE

facilities, and to summarize some of major events and reports on external regulation.

OSHA Jurisdiction at DOE Sites

Section 4(b)(1) of the Occupational Safety and Health Act of 1970 (OSH Act) removes from OSHA’s coverage working conditions for which another Federal agency

(or State agency acting under the Atomic Energy Act) has prescribed or enforced

safety and health regulation. This exemption is designed to prevent the duplication

of Federal effort. The section 4(b)(1) exemption currently applies to DOE.

Most of the workers at DOE sites are employees of private-sector companies with

which DOE contracts or subcontracts. These private employers are exempt from

OSHA enforcement, because DOE has chosen to prescribe its own safety and health

requirements. This was also the case with DOE’s predecessor agencies, the Atomic

Energy Commission and the Energy Research and Development Administration.

In any discussion of external regulation, OSHA is particularly concerned to ensure

that the level of protection we would provide is equal to or greater than that now

provided under DOE coverage. DOE has adopted most of OSHA’s regulations as the

foundation for its own regulatory programs, so many of the substantive safety and

health requirements for DOE contractors are the same as they would be under

OSHA. However, in addition to adopting OSHA regulations, DOE has developed

some occupational safety and health regulations of its own, such as more up-to-date

radiation and chemical exposure standards, as well as firearm and explosives safety

standards. If OSHA were to assume authority at DOE facilities, we would need to

adopt similar requirements so that employee protection would not be diminished. It

is important to understand that even if OSHA becomes the external regulator of

worker safety and health at DOE sites, that does not make OSHA the manager of

safety and health at the DOE sites. Under the OSH Act, the primary compliance

responsibility still rests with the contractors and subcontractors, and, to some extent, with DOE as the site owner, to provide safe and healthful workplaces and to

comply with OSHA’s regulations and standards.

Background on External Regulation

OSHA’s interaction with DOE has increased since the early 1990s, when OSHA

was engaged in a number of so-called ‘‘Tiger Team’’ reviews of DOE sites. In 1995,

the DOE Advisory Committee on External Regulation of Department of Energy Nuclear Safety issued its report entitled ‘‘Improving Regulation of Safety at DOE Nuclear Facilities.’’ The report concluded that, although DOE could regulate its own

operations, it was not viewed by the public as credible, and therefore recommended

the creation of a system of external regulation. Specifically, the Advisory Committee

noted that OSHA should regulate all worker protection issues at DOE nuclear facilities, except when that regulation would significantly interfere with maintaining facility safety (e.g., if a nuclear chain reaction was possible.) In such cases, the Advisory Committee recommended that the designated nuclear facility safety agency,

such as the Nuclear Regulatory Commission (NRC) or the Defense Nuclear Facilities

Safety Board, should regulate worker safety and health issues under the Atomic Energy Act (AEA).

A subsequent DOE working group reviewed the Advisory Committee’s recommendations and concurred with their findings on a number of issues, including

those regarding OSHA. Another report, issued in 1997 by the National Academy of

Public Administration, also concluded that OSHA should have jurisdiction for occupational safety and health, and made recommendations on a host of policy and implementation issues that would need to be addressed to effect this transfer.

The Department of Labor and OSHA have previously stated that external regulation, if authorized, needs to be done in an orderly way with reasonable time frames.

Transition must be implemented without disruption to OSHA’s ongoing programs,

and the resource requirements to address this responsibility need to be assessed.

OSHA/DOE Pilot Projects

OSHA has completed three major pilot projects at DOE sites. In 1996, we completed a pilot project at Argonne National Laboratory. More recently, in 1998, OSHA

conducted a large scale pilot at Oak Ridge, Tennessee, which included both the Oak

Ridge National Laboratory and the East Tennessee Technology Park, formerly

known as the K-25 site.

In January, 1999, OSHA conducted a pilot project at the Lawrence Berkeley National Laboratory in California. The OSHA activities under the Berkeley pilot

project were incorporated into an ongoing N RC pilot project that had been underVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00025 Fmt 6633 Sfmt 6621 E:\HEARINGS\64031 pfrm07 PsN: 64031
22

way at the Berkeley site for approximately one year. Representatives of Cal-OSHA,

the OSHA-approved California state occupational safety and health program, also

participated in the Berkeley pilot project.

OSHA had three objectives for the recent pilot projects:

1. to gain first hand information about both sites, in order to better assess the nature and severity of the hazards, as well as assess the adequacy of OSHA’s

standards, training, and staff expertise to address them;

2. to assess the potential impacts of external regulation on the agencies involved

and approximate what would occur on an actual OSHA visit under external regulatory authority; and

3. to provide a forum for OSHA and NRC to evaluate regulatory interface issues

at DOE sites, since both agencies have a potential role in radiation safety at

the sites.

OSHA inspected only 16 individual facilities at Oak Ridge and Berkeley. The two

pilot sites were far too large for OSHA to attempt wall-to-wall inspections of all the

individual buildings and facilities at the two sites. Thus, we selected a representative mix of operations to inspect.

At both Oak Ridge and Berkeley, OSHA conducted simulated inspections to study

the potential impacts of external regulation. These simulated inspections, like actual

OSHA inspections, included:

• opening and closing conferences with employers and employees,

• physical walk-throughs of the work sites to identify hazards, and

• the preparation of simulated citations and penalties.

OSHA also conducted post-inspection informal conferences with DOE contractor

employers and workers to discuss cited hazards, simulated citations and penalties,

abatement methods and time frames, and other items regarding the inspection.

OSHA prepared simulated citations and proposed penalties for the University of

California, the site contractor, even though OSHA does not currently have legislative authority to enforce penalties against State governments and their subdivisions.

OSHA also prepared simulated citations and proposed penalties for DOE, the facility owner, even though OSHA does not currently have legislative authority to enforce penalties against federal agencies such as DOE. I would note, Mr. Chairman,

that it has been OSHA’s experience that worker’s safety and health are best protected when OSHA has the ability to fine both the facility owner who controls the

worksite and contractors working at the site.

OSHA also evaluated the safety and health programs at the two sites. A site’s

safety and health program is a good measure of management’s commitment and employees’ involvement in safety and health matters at the site. These evaluations

were designed to determine whether DOE contractors have effective systems in

place to identify and control hazards, record safety and health problems, and train

employees.

So, what did OSHA learn from its participation in these pilot activities? Our overall conclusion from both the Oak Ridge and Berkeley pilots is that there are a number of legislative policy, logistical, and resource issues that must be addressed for

external regulation to be accomplished in an orderly manner. However, none of the

problems or issues is viewed as insurmountable; and with careful and coordinated

planning within the Administration and with Congress, external regulation of DOE

sites for occupational safety and health is an achievable objective.

The pilot projects demonstrated clearly to OSHA that external regulation would

have a significant impact on DOE’s current operating practices due to the existence

of legacy hazards. Legacy hazards are site hazards that have been self-identified by

DOE, but not corrected because of budget constraints. Limitations on available

budgetary resources lead DOE to prioritize its treatment of identified hazards based

on their potential severity and likelihood of occurrence. When DOE first identifies

hazards, it may not be able to correct them right away. Rather, it will prioritize the

hazards, take appropriate interim measures, and then attempt to obtain full funding

to fully address the hazards permanently. Until DOE eliminates such hazards, they

are known as ‘‘legacy hazards.’’

Any move toward external regulation must include a careful assessment of these

legacy hazards, and a plan for abating them. The cost of correcting legacy hazards

is likely to be significant, but it is important to recognize that these hazards need

to be addressed independent of external regulation and thus should not be considered a cost of external regulation by OSHA.

The pilot projects also highlighted the fact that OSHA and DOE evaluate the seriousness of safety and health hazards differently. OSHA found a number of hazards

that DOE would consider a low priority, but which OSHA would classify as serious.

OSHA places greater weight on the severity of a possible injury or illness in assessVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00026 Fmt 6633 Sfmt 6621 E:\HEARINGS\64031 pfrm07 PsN: 64031
23

ing its seriousness. For example, OSHA considers an electrocution hazard as serious

even if there is a very small chance it would occur. In assessing the same hazard,

however, DOE factors in an estimate of the probability that an event would occur,

assigning lower priority to hazards that it believes are less likely to occur.

The OSHA-simulated inspections identified 75 violations at Oak Ridge and 62 at

Berkeley. This number of violations is slightly higher than average for an OSHA

inspection. OSHA classified many of the violations as serious.

OSHA also evaluated the adequacy of its own standards. The majority of hazards

found at DOE sites are addressed by existing OSHA standards and requirements.

A principal exception is the OSHA standard for ionizing radiation, which needs to

be upgraded. Another area where OSHA may need to work on a new standard for

DOE sites is Firearms and Explosives, which are not specifically addressed by current OSHA regulations.

OSHA’s review of the sites’ safety and health programs revealed that DOE and

its contractors have implemented generally good worker safety and health programs. However, both pilot sites could be improved. For example, based on OSHA’s

abbreviated analysis, we do not believe either site would be eligible for participation

in OSHA’s Voluntary Protection Program. VPP participants are a select group of facilities that have designed and implemented outstanding health and safety programs.

Key to an excellent safety and health program is employee participation. The pilots did not find the level of employee involvement in safety and health issues at

these research-related facilities that OSHA would expect to find in an excellent safety and health program. Workers were engaged to a degree, but in general, occupational safety and health is not as integral a part of the site work as OSHA would

require under VPP.

Other areas OSHA identified as needing improvement include: record keeping discrepancies and the increased integration of subcontractors into the safety and health

program at Oak Ridge, and the need for a stronger, more visible industrial hygiene

program at Berkeley. Injury and illness rates at Oak Ridge and Berkeley were also

above the national average.

Funding for Pilot Projects and Other Activities

As you know Mr. Chairman, in Fiscal Year 1999, Congress provided for DOE to

transfer $1 million to OSHA to conduct pilot programs and other activities at DOE

facilities. OSHA spent a small portion of these funds to undertake the pilot project

at Berkeley in January, 1999. In the absence of additional pilot projects for the remainder of the fiscal year, however, OSHA and DOE mutually agreed to utilize the

remaining funds to undertake other activities that would assist us in preparing for

external regulation.

OSHA used the funds for three projects: development of training materials for

OSHA compliance officers; a study of background information on ionizing radiation;

and a comparison of OSHA’s Voluntary Protection Program (VPP) to that implemented by DOE. We are working with a contractor to develop materials that will

prepare our compliance staff to effectively deal with issues they will confront if we

assume responsibility for DOE sites. For example, we would like to enhance the

skills and knowledge of the agency’s industrial hygienists regarding radiation.

In addition, OSHA has funded a study of ionizing radiation that the agency could

use to update our radiation safety and health standard. OSHA’s ionizing radiation

standard is out of date and needs to be revised. As an interim measure, OSHA has

proposed that any plan for external regulation needs to include legislation that

would allow OSHA to implement the current DOE or NRC rule at DOE sites as an

interim final standard while OSHA proceeds with rulemaking on a final standard.

This would ensure that workers at DOE sites under OSHA coverage would not be

subject to less stringent radiation regulations under external regulation by OSHA,

until the agency is able to produce a final rule.

OSHA also funded an analysis of the DOE VPP program. The analysis is expected

to highlight the unique aspects of the DOE program and provide OSHA a basis for

developing a policy on the possible acceptance of DOE VPP sites into the OSHA

VPP program under external regulation.

Congress also provided for DOE to transfer $1 million in Fiscal Year 2000 funds

to OSHA. We are currently discussing its use with DOE. OSHA has proposed to use

the funds for full-time positions in the field and the National Office to deal with

enforcement and related issues at non-Atomic Energy Act DOE sites for which

OSHA currently has jurisdiction, and to evaluate privatized facilities for potential

OSHA regulation.

On July 13, 1999, Assistant Secretary Jeffress sent a letter to Dr. Michaels at

DOE clarifying OSHA’s position on safety and health jurisdiction at DOE-owned

24

sites that are not regulated under the Atomic Energy Act. OSHA has agreed with

DOE that we have jurisdiction for safety and health enforcement at these facilities.

DOE estimates that more than 9,000 Federal and contract employees at dozens of

sites are covered.

Legislation

Mr. Chairman, you have asked for comments on three bills: H.R. 3383, which

would eliminate the exemption from civil penalties for nuclear safety violations by

non-profit DOE contractors; H.R. 3906, which seeks to strengthen internal security

oversight within the Department; and H.R. 3907, which would establish external

safety regulation over DOE facilities. We have no comment on H.R. 3906, because

it does not appear to impact OSHA’s program. Based on our preliminary review, we

also have no comment on H.R. 3383, since it applies to enforcement under the Atomic Energy Act. OSHA conducts its enforcement activity under the authority of the

Occupational Safety and Health Act of 1970.

H.R. 3907, on the other hand, would significantly impact OSHA. It would transfer

to OSHA from DOE regulatory and enforcement responsibilities relating to matters

covered by the Occupational Health and Safety Act of 1970 with regard to all facilities owned or operated by DOE. OSHA would share these responsibilities with NRC

for workplace hazards that include radiological components. OSHA and NRC would

be required to enter into a memorandum of understanding that would govern the

exercise of our respective authorities over nuclear safety and occupational health

and safety at DOE owned or operated facilities, and transmit the memorandum to

Congress by January 1, 2001. The overall effective date for the transfer of authority

to OSHA from DOE would be October 1, 2001.

OSHA has not taken a position regarding the desirability of external regulation.

Rather, the agency has engaged in pilot projects and other activities to gain a better

understanding about the implications of external regulation on OSHA’s program

and resources. At this time, in light of the numerous unresolved issues associated

with a transition to external safety regulation, the potential costs of such a transition to OSHA, and the short amount of time we have had to examine H.R. 3907,

we are not yet prepared to take a position on the bill.

One issue that requires careful review by all parties involved is resources. In the

past OSHA has produced resource estimates for the assumption of safety and health

jurisdiction for the DOE complex. These estimates need to be updated and refined

based on current information indicating exactly what sites would be transferred.

The coverage of defense-related activities on these sites also needs to be examined,

in light of the broad scope of H.R. 3907. Beyond resource issues, there are security

issues and other matters that need to be addressed.

Finally, we note that H.R. 3907 refers to section 211 of the Energy Reorganization

Act of 1974. On March 14, 2000, the Department of Labor and the Nuclear Regulatory Commission jointly transmitted proposed legislation to the Congress recommending that the worker protections in section 211 be strengthened. A copy of that

transmittal is attached to this testimony.

Conclusion

In closing, Mr. Chairman, it is our view that OSHA’s regulation of occupational

safety and health at DOE sites should be authorized only if such action would lead

to better protection for workers. A number of studies and advisory groups have in

fact concluded that employees would benefit from external regulation of occupational

safety and health.

The recent pilot projects have reinforced our position that external regulation is

achievable. While OSHA is not seeking the additional responsibility for enforcement

at DOE sites, the agency has for several years undertaken a variety of cooperative

projects and activities with DOE to prepare for external regulation, including the

recent pilot projects. We must reiterate our caution, however, that if the transition

is to be successful, it must be conducted in an orderly way, with reasonable time

frames to avoid unnecessary disruption to OSHA’s other important ongoing programs, and resource requirements need to be assessed.

Thank you.

Mrs. WILSON. Thank you—and the Honorable John T. Conway,

the Chairman of the Defense Nuclear Facilities Safety Board.

STATEMENT OF HON. JOHN T. CONWAY

Mr. CONWAY. Mrs. Wilson and Chairman Barton and other members of your committee, my pleasure in being with you here this

25

morning is somewhat tempered with the fact that one of the bills

you propose to make into law would do away with the organization

I represent. So, I would call your attention to the fact that, I and

other members of the board that are here with me today, the submission that we are making with regard to the bill and with regard

to other matters that this committee is taking into consideration is

the unanimous position of the board. I am a spokesperson for the

board and the other members are here with me—Dr. Eggenberger,

who is the Vice Chairman, Mr. Joe DiNunno, and Mrs. Jessie HillRoberson are here with me. One other member of our board is on

travel previously arranged prior to the notice to appear here with

you.

Mr. Chairman, as I mentioned in my opening statement, my

pleasure with being with you here this morning is somewhat tempered by the fact that your bill would do away with my

organization——

Mr. BARTON. There is good news and bad news.

Mr. CONWAY. Let me say this. In 1998, November 1998, on the

request of the Congress, our board submitted to the Congress a

very detailed report on the matter that is now before your committee, and that has to do with the so-called ‘‘regulation’’ of DOE’s

defense nuclear facilities.

You mentioned earlier in your opening remarks that you will be

considering modifications, changes to the bill as it is now proposed.

I would direct your attention to the report that the board submitted to the Congress, and copies of which have been made available to your committee. I would suggest that it will be helpful, I

believe, to your staff and to the members as you consider what, I

think, is a very important matter before you.

The statement that I presented to your committee this morning

is pretty much of a summary of the detailed report that was submitted to the Congress in November 1998. I would ask that the

summary, which has been made available to the committee, and

the detailed report be accepted as part of the record.

The analysis and what we have submitted in writing to your

committee yesterday, in effect, reviews and summarizes the duties

of the board and the improvements that have taken place within

the DOE in the 10 years that our board has been in existence. We

put in our report what we understand both DOE has estimated and

what NRC has estimated the costs would be to have full regulation

of DOE by NRC. As Chairman Meserve also mentioned this morning to you, I would suggest you take costs into consideration and

that you, hopefully, would work with other Members of the Congress and particularly Appropriations committees in recognizing

what the full costs will be both from the point of view of OSHA

and/or the NRC to whatever extent you decide regulation is appropriate.

As I pointed out in our submission yesterday, we have put together—we, the members of the board, have put together what we

believe to be an elite group of technical experts. Twenty-six percent

of our technical staff have Ph.D. degrees in technical fields and of

our technical staff, an additional 67 percent have a Master’s Degree. We have put together what we consider to be a very elite

group.

26

I and our staff—I feel that we are somewhat like the Marine

Corps. We have an elite group. Periodically there are discussions

or recommendations to put the Marines into the Department of the

Army, and for the last 4 or 5 years we have heard various suggestions of taking our staff and putting them into the NRC. So, as I

say, we feel a little somewhat like the Marine Corps, and we believe we are doing an excellent job.

Improvements can still be made. In the testimony by the Department of Energy, they acknowledge the improvements that they believe have been credited to our board. In any event, our final position has not changed since our report in 1998. We do not believe

that the argument has been sufficiently made, taking into consideration the various costs and the potential effect on our national security, but at least we’ll let our report stand for itself and in view

of the short time available to the members here today, I will make

myself available obviously to respond to questions. Thank you, sir.

[The prepared statement of Hon. John T. Conway follows:]

PREPARED STATEMENT OF JOHN T. CONWAY, CHAIRMAN, A.J. EGGENBERGER, VICE

CHAIRMAN, JOSEPH J. DINUNNO, MEMBER, JOHN E. MANSFIELD, MEMBER, AND

JESSIE HILL ROBERSON, MEMBER, DEFENSE NUCLEAR FACILITIES SAFETY BOARD

Good morning, Mr. Chairman and Members of the Subcommittee. My name is

John Conway. I am Chairman of the Defense Nuclear Facilities Safety Board.

In your letter inviting me to testify today, several legislative proposals that may

impact the Department of Energy’s (DOE) current mode of operation were referenced. As an independent Executive Branch establishment, the Board provides advice and recommendations to the President and Secretary of Energy regarding public health and safety issues at DOE defense nuclear facilities. Therefore, I will focus

my testimony today on legislative proposal HR 3907 to establish external regulation

of DOE defense nuclear facilities.

BOARD OVERSIGHT AUTHORITY

For those who may be unfamiliar with the statute establishing the Defense Nuclear Facilities Safety Board (Board) in 1988, a few words about its nuclear safety

duties and responsibilities are in order.

Broadly speaking, the Board reviews operations, practices, and occurrences at

DOE’s defense nuclear facilities and makes recommendations to the Secretary of Energy as necessary to protect public health and safety. Upon receipt of the Recommendation, the Secretary must accept or reject it, in whole or in part, and then

must prepare an implementation plan for those portions which are accepted. The

public has a statutory right to comment upon Board recommendations and upon

DOE’s responses and implementation plans.

To date, the Board has issued 41 sets of recommendations, containing 194 individual specific health and safety sub-recommendations. The Secretary has accepted

the first 40 sets of the Board’s safety recommendations thus far, with the exception

of two sub-recommendations which currently are under reevaluation by the Board.

The latest Board recommendation delivered to the Secretary of Energy on March 8,

2000, is under active consideration by DOE. The Board recommendations detailed

in Annual Reports to Congress range from such topics as the need to identify and

implement adequate health and safety standards at all DOE sites, major safety improvements needed in the management of high-level waste tanks at the Hanford

Site in the State of Washington, to classified safety management issues at the

Pantex Nuclear Weapons Plant, Texas.

If, as a result of its reviews, the Board determines that an imminent or severe

threat to public health or safety exists, the Board is required to transmit its Recommendations directly to the President, as well as to the Secretaries of Energy and

Defense. The Board also assesses safety management and personnel effectiveness

both within DOE and the various operation and management (O&M) contractor organizations.

The Board has assembled a small technical staff with extensive backgrounds in

science and engineering disciplines such as nuclear-chemical processing, conduct of

operations, general nuclear safety analysis, conventional and nuclear explosive technology and safety, nuclear weapons safety, storage of nuclear materials and nuclear

27

criticality safety, and waste management. As an indication of the Board’s technical

talent, 26 percent of the technical staff hold degrees at the Ph.D. level and an additional 67 percent have masters degrees. All technical staff members except interns,

possess practical nuclear experience gained from duty in the U.S. Navy’s nuclear

propulsion program, the nuclear weapons field, or the civilian reactor industry.

The Board’s enabling statute requires the Board to review and evaluate the content and implementation of health and safety standards, including DOE’s Orders,

Rules, and other safety requirements, relating to the design, construction, operation,

and decommissioning of DOE’s defense nuclear facilities. The Board must then recommend to the Secretary of Energy any specific measures, such as changes in the

content and implementation of those standards, that the Board believes should be

adopted to ensure that the public health and safety are adequately protected. The

Board is also required to review the design of new defense nuclear facilities before

construction begins, as well as modifications to older facilities, and to recommend

changes necessary to protect health and safety. Board review and advisory responsibilities continue throughout the construction, testing, and operation of new facilities. In 1991, Congress specified that the Board’s jurisdiction also includes safety

oversight of the assembly, disassembly, and testing of nuclear weapons.

Under the Atomic Energy Act, the Board is authorized to conduct investigations,

issue subpoenas, hold public hearings, gather information, conduct studies, establish

reporting requirements for DOE, and take other actions in furtherance of its review

of health and safety issues at defense nuclear facilities. These powers of the Board

and its staff all relate to the accomplishment of the Board’s mandate to identify

safety problems and recommend corrective actions, and then to ensure that DOE

corrects those problems at defense nuclear facilities. The Secretary of Energy and

contractors at defense nuclear facilities are required by statute to cooperate fully

with the Board.

The following excerpt from a report of the Senate Armed Services Committee

summarizes the rationale for creating an oversight Board:

The committee does not believe that a safety board is a panacea for all DOE

safety problems, or that it can in any way absolve the Secretary or the Department’s contractors of their fundamental safety responsibilities. In fact, many

witnesses testified that DOE’s shortcomings largely reside within the Department’s line management, and that there can be no substitute for capable and

committed line management. What the Board can do is provide critical expertise, technical vigor, and a sense of vigilance within the Department at all levels . . . Above all, the Board must have a primary mission to identify the nature

and consequences of any significant potential threats to public health and safety, to elevate such issues to the highest levels of authority, and to inform the

public.

For the past 10 years, this Board has been dedicated to fulfilling the above stated

mission.

IMPROVEMENTS IN DOE HEALTH AND SAFETY POSTURE

Interpreting the Board’s statutory authority, the Court of Appeals for the District

of Columbia stated that the Board is an agency with action forcing powers.

The Board does considerably more than merely offer advice. It conducts investigations, which ‘‘has long been recognized as an incident to legislative power’’

delegated to agencies by Congress. It has at its disposal the full panoply of investigative powers commonly held by other agencies of government. The Board

formally evaluates the Energy Department’s standards relating to defense nuclear facilities, and forces public decisions about health and safety.

Each year the Board reports to Congress on its activities and DOE’s progress in

improving safety at defense nuclear facilities. In our Tenth Annual Report to Congress issued in February 2000, the Board noted significant progress by the DOE in

upgrading its safety management program and practices at defense nuclear facilities. The record of Board accomplishments in assisting DOE in its safety practices

attests to the efficiency of the Board’s structure as legislated in 1988. Using its action forcing powers, the Board has been able to help reorient DOE’s safety program

and to set it on a course that:

• Places more reliance on standards that define good practices and less reliance

upon expert-based safety management;

• Makes work planning and safety planning an integrated process;

• Treats public, worker, and environmental protection as an integrated process;

• Treats radioactive and nonradioactive hazards in an integrated fashion in establishing controls; and

• Tailors safety measures to the hazards involved.

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In accordance with its statutory mandate, the Board has focused on enhanced

safety management of defense nuclear activities. DOE has recognized the benefits

of such enhancements for all of its hazardous activities and is extending the enhancement principles and functions complex-wide. This is being done without the

potentially litigious and confrontational processes that frequently characterize adjudicatory proceedings under regulatory regimes.

EXTERNAL REGULATION OF DOE AND H.R. 3907

While many reports have been written about external regulation, pilots conducted

at non-defense facilities, and opinions offered on this subject, I must emphasize that

the Board is the only external, independent organization that has actually conducted full-time technical oversight of public and worker health and safety at DOE

defense nuclear facilities. Consequently, the Board frequently has been called upon

by both the legislative and executive branches to share its collective knowledge

gained from 10 years of oversight experience in DOE’s defense nuclear facilities. In

fact, the National Defense Authorization Act for Fiscal Year 1998 directed the Board

to prepare a written report making recommendations to the Congress and answering specific questions on the pros and cons of external regulation of DOE defense

nuclear facilities as compared to the Board’s current independent oversight authority. We have copies of the report with us today and ask that the report be made

part of the hearing record.

As stated in the report, the Board found no creditable arguments, either on the

grounds of improved safety or cost effectiveness, to subject the defense nuclear facilities to additional external regulation. On the other hand, the Board did advise

of the potential for external regulation of nuclear safety adversely impacting our Nation’s national security program. There is nothing that has developed since our 1998

report to cause the Board to modify its earlier findings.

THE NEED FOR ADDITIONAL REGULATION?

What advantages might accrue from imposing additional regulation on DOE? One

of the previously-used arguments favoring an external regulator asserts that such

a scheme will prevent DOE from repeating the environmental, safety, and health

problems that occurred as a result of early defense nuclear production programs

during the Cold War era. In fact, many of DOE’s present environmental remediation

projects resulted from activities that predated the Federal Facilities Compliance Act

and regulation under a comprehensive body of environmental laws vigorously enforced by Federal and State agencies.

We believe that an adequate system of checks and balances, both internal to DOE

operations and external to DOE, has been implemented during the past 15 years

which will effectively prevent the recurrence of past environmental abuses. The Department of Energy today is required to comply with rules and regulations issued

by State and Federal Environmental Protection Agencies and others including the

Occupational Health and Safety Administration, the Bureau of Mines, and the Department of Transportation.

Justification for additional regulation is also based on two suppositions, both of

which we believe to be fatally flawed:

1. That it will enhance DOE credibility with the public, and

2. That it will improve safety.

ENHANCE DOE CREDIBILITY?

We suggest the public’s trust in DOE will not increase by setting up another Federal government agency here in Washington, D.C. to regulate its activities, whether

the agency be the Defense Nuclear Facilities Safety Board or the U.S. Nuclear Regulatory Commission (NRC) or some combination of the two operating in a formal regulatory manner. Rather than by having more external regulation imposed upon it,

DOE’s credibility will improve by performing its responsibilities in an efficient and

creditable manner. We believe DOE has made notable progress in upgrading its

safety management programs and in cooperation and openness, particularly in the

formation and utilization of local citizen advisory boards. Trust and credibility are

developed at the local levels, not by layering government agencies.

One must keep in mind that the actual work carried out by the Government in

its nuclear weapons activities is done by contractor employees, not by federal employees of the DOE. It is DOE’s responsibility to assure that the work is done safely,

efficiently and with full compliance with the environmental laws of the Nation and

its States. In effect, for all intents and purposes and from a practical point of view,

the DOE ‘‘regulates’’ the individual contractors doing the work. DOE has the authorVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00032 Fmt 6633 Sfmt 6621 E:\HEARINGS\64031 pfrm07 PsN: 64031
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ity and power to force a site, a facility or particular job to be curtailed or be shut

down.

Do we need to add additional government employees of another government agency such as the NRC to assure that DOE government employees are properly enforcing government laws, safety rules and regulations on contractor management and

workers? If so, at what additional cost?

THE COST OF EXTERNAL REGULATION

In 1995, the Advisory Committee on External Regulation of DOE Nuclear Safety

issued a report (generally referred to as the Ahearne Report) acknowledging that

regulation would require additional startup costs, but asserted that savings will result from having fewer DOE employees assigned to environmental safety and health

issues. In that report, the NRC advised that if it is to assume regulatory responsibility for DOE, the Commission would need an additional 1,100 to 1,600 full-time

employees and an increase of $150 million to $200 million per year in its budget.

How much of that addition in personnel and dollars cost would DOE save? I know

of no organization, in government or in private industry, that reduces personnel or

response costs when additional regulatory authorities are imposed on it. The opposite occurs. The Ahearne Report did not set forth how savings will accrue from its

recommendation, nor did it specify what safety improvements will occur and how.

While there have been many external regulation scenarios studied during the past

six years, the subject of cost to effect an external regulation scheme keeps surfacing

as a significant issue. For example, the December 1996 Report of the Department

of Energy Working Group on External Regulation contains an estimated cost of the

following external regulation proposal:

All DOE nuclear facilities would transition into full regulation by the Nuclear

Regulatory Commission in a little over 10 years. In years 1-5, all Nuclear Energy and Energy Research nuclear facilities and selected Defense Program and

Environmental Management nuclear facilities would become regulated by the

Nuclear Regulatory Commission. This transition would begin immediately after

enabling legislation is passed. Except for the selected facilities regulated by the

Commission, Defense Program and Environmental Management nuclear facilities would continue to be regulated by the Department with oversight by the

Defense Nuclear Facilities Safety Board in this first phase. In years 6-10, all

Environmental Management nuclear facilities would become regulated by the

Commission and the Board would maintain oversight only of Defense Program

facilities. After 10 years, all DOE facilities would be regulated by the Commission. Remaining Board staff would merge into the NRC.

DOE’s estimated costs to implement this external regulation plan are shown in

the following table.

Table 1—DOE’s Costs to Implement External Regulation

[Data as of December 1996—In billions of dollars]

Cost to Implement Best

Case

Upper

Case

Cost during the first 5 years .......................................................................................................................... $1.4 $1.8

Cost for year 6 thru 10 ................................................................................................................................... $1.3 $2.5

Cost beyond 10 years ...................................................................................................................................... $1.2 $3.1

Total Cost .................................................................................................................................................... $3.9 $7.4

Both of the DOE cost scenarios offered above reflect the magnitude of the effort

and associated resources needed to implement NRC external regulation over all

DOE nuclear facilities. The economic reality of a multi-billion dollar venture for this

type of external regulation must be considered in any valid cost/benefit study. We

believe that in an era of shrinking dollars to perform DOE’s major missions—weapons maintenance/ stewardship and cleanup—it would not be prudent to transfer

safety-related responsibilities into a more costly regulatory structure for questionable fringe benefits.

SAFETY MANAGEMENT STATUS TODAY

Under its enabling statute, 42 U.S.C. § 2286 et seq., the Board has been providing

independent oversight of all nuclear activities impacting public and worker health

and safety within DOE’s defense nuclear facilities (i.e., nuclear weapons) complex

since October 1989. While this oversight is not regulation per se, the Board has

30

been holding DOE nuclear safety to exacting standards under the authority of the

Atomic Energy Act through the advisory and formal recommendation process governed by statute.

Through a combination of Board actions and the Department’s own upgrade initiatives, the DOE has structured and is administering a much more effective safety

management program than the historical program so frequently cited as cause for

added external regulation. Board recommendations that have contributed to this

outcome include:

• Recommendation 90-2, Design, Construction, Operation and Decommissioning

Standards at Certain Priority DOE Facilities. This recommendation caused

DOE to critically evaluate its set of safety-related standards and embark upon

an aggressive program to improve those standards, bringing them into close

alignment with the applicable industry requirements. Thus far, DOE has issued

a comprehensive set of Policy Statements, Rules, Orders, Guides, and Technical

Standards defining expectations, generally applicable safety requirements and

acceptable safety practices. • Recommendation 93-3, Improving DOE Technical Capability in Defense Nuclear

Facilities Programs. This recommendation addressed the technical competence

of DOE in critical safety positions. DOE’s implementation plan in this case created the first ever DOE-wide technical qualification program. DOE has established qualification requirements for key personnel, and acquired new ‘‘Excepted Service’’ hiring authority from Congress to recruit exceptional individuals outside the regular civil service framework. DOE has formed a Federal Capability Review Panel, reporting to the Deputy Secretary, for stimulating recruitment of highly competent individuals and championing technical excellence

in the staff throughout the Department. • Recommendation 95-2, Safety Management. This recommendation encouraged

DOE to build on the successes gained in the other two efforts and develop safety

management programs for its defense nuclear facilities that integrated public

protection, worker safety, and environmental protection into the work process.

An implementation plan set forth by the Department in 1996 has been steadily

and effectively pursued. All contractors performing high hazard nuclear activities for the Department are required by regulations and contract terms to establish and operate to such a safety management system. The system is marked

by:

• Site-wide nuclear safety requirements, mutually agreed upon by DOE and

contractor(s) as applicable to the work performed. • The establishment by the contractors of manuals of practices reflecting the

requirements established. • Safety planning as an integral part of work planning. • Safety and hazards analysis with safety measures tailored to the hazards of

the operations involved. • Qualification and training of personnel commensurate to safety responsibilities assigned. • Assessments and feedback for improvements performed. • Recommendation 98-1, Integrated Safety Management. This recommendation is directed at closing the loop on these safety programs by strengthening DOE’s ability to find and resolve safety problems through its independent oversight function. A formal process has been established with clear lines of responsibility defined for addressing safety issues identified by DOE’s Office of Independent

Oversight. The status of corrective actions is periodically reviewed by the Chief

Operating Officer and responsible Program Secretarial Offices. • Departmental initiatives to upgrade safety management have included the following:

• The issuance of Policy 450.5, Line Environment, Safety and Health Oversight,

making self-assessments by the line organizations a mainline safety responsibility and Policy 450.4, Safety Management System Policy, a complex-wide

commitment to the functions and principles of Integrated Safety Management. • Issuance of DOE N411.1-1A Safety Management Functions, Responsibilities,

Authorities Manual (FRAM), addressing management’s expectations of staff

assigned safety responsibilities.

• The establishment of a Secretarial level Safety Council headed by the Deputy

Secretary with membership of three Secretarial Officers (EM, DP and

Science) to support the Deputy Secretary in establishing safety policies and

resolving inter-program safety-related issues and to develop performance

standards to be used to hold federal personnel accountable for effective and

timely implementation of ISM.

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• The establishment of the Field Management Council to ensure consistent implementation of DOE policy in ES&H, safeguards and security, and business

management. • The establishment of a Safety Management Integration Team (SMIT), reporting to the Deputy Secretary, for coordinating and driving the implementation

of Integrated Safety Management throughout the complex. • The reorganization and augmentation of the enforcement functions of both

the independent EH Secretarial Office and the Contracting Officers. • Independent management assessments. • The revision of Department of Energy Acquisition Regulations (DEAR) to require every contractor for a major acquisition involving nuclear materials to

describe and commit to Integrated Safety Management (ISM) in performing

the work. Further, the fee awards for that work are to be tied to safety performance.

The Board acknowledges that even with these upgrades to the DOE regulatory

structure for safety management, DOE contractors have experienced some recent

mishaps that have placed workers at risk. The commercial industry is not accident

free, either. On the whole, however, the Department’s safety record, complex-wide,

compares well with other hazardous industries.

OVERSIGHT OF THE NATIONAL NUCLEAR SECURITY ADMINISTRATION

The suggestion has also been made that the new, semi autonomous National Nuclear Security Administration (NNSA) may insulate the DOE defense nuclear facilities from scrutiny by environmental, safety, and health officials at DOE and elsewhere. As to the Defense Nuclear Facilities Safety Board, let me assure you that

after a careful review of the NNSA’s enabling legislation and legislative history, the

Board’s power and authority have neither been repealed nor displaced by the NNSA.

Moreover, discussions between the Board and NNSA officials fully support the continued statutory jurisdiction of the Board.

It has also been suggested that the existing environmental, safety and health

oversight office within DOE no longer has oversight over NNSA activities. In September of 1998, the Board issued Recommendation 98-1, concerning the effectiveness of the Department of Energy process to address and resolve the safety issues

identified by its internal, independent oversight organization at the DOE’s defense

nuclear facilities. Specifically, the recommendation identification of specific weaknesses in addressing oversight functions and recommended that the Department

make improvements to identify roles and responsibilities, issue/dispute resolution,

senior management involvement, content of corrective action plans, tracking reporting, and verification approaches.

The central safety issue identified by the recommendation was that the Department needed a clearer, comprehensive, and systematic process to address and resolve environment, safety and health issues identified by the DOE’s internal Office

of Oversight. To implement this recommendation, the Secretary of Energy committed to take the following actions:

• Establish a consistent, disciplined process and clear roles, responsibilities, and authorities for developing and implementing responses to identified safety issues.

• Establish clear directions on the process for elevating identified safety issues to

higher authority for resolution, up to the Office of the Secretary if necessary.

• Establish effective tracking and reporting of corrective action progress.

The Secretary’s commitments under this Implementation Plan and all others remain in full force and effect. Again, let me emphasize that neither the Secretary’s

commitment to implement internal oversight findings nor the Board’s continuing

oversight of the DOE’s defense nuclear facilities have been repealed or displaced by

the legislation creating NNSA. We are still very much in business.

IMPACT OF REGULATION ON NATIONAL SECURITY

The most serious problem with any external nuclear regulation of DOE’s defense

program would be a potential for adverse effects on national security.

To regulate, with or without licensing or permitting authority, is to control, direct,

or govern, coupled with the authority to enforce or penalize for violation. Regulatory

control by an external agency of the nuclear health and safety aspects of DOE’s performance of its defense mission could permit the regulator to shut down vital facilities, thereby diminishing the declared primacy of national security by relieving DOE

of a significant portion of its responsibility for the nuclear weapons program.

In establishing the form and authority of the Board, Congress deliberated on the

matter of oversight versus regulation. While wishing to ensure better environmental, health, and safety protection than historically provided in weapons producVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00035 Fmt 6633 Sfmt 6621 E:\HEARINGS\64031 pfrm07 PsN: 64031
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tion, Congress elected the non-regulatory option. National security was an important consideration. Although there are those who are opposed to the nuclear weapons program and are concerned about proliferation, Congress and the Administration still consider our nuclear weapons program as essential to the national security

of this Country and our allies. It is essential that its deterrent objective not be put

into question.

This was ably and successfully explained by government lawyers in the case of

the Natural Resources Defense Council versus the Secretary of Energy, in the Federal District Court for the District of Columbia (NRDC v. Pen ̃

a, 972 F. Supp. 9

(D.D.C. 1997)). Together with emphasizing the critical importance of the nuclear

weapons program to national security, the court cited ‘‘credibility’’ as an important

ingredient of national security, stating that the existence of the nuclear deterrent

had to be believable and that credibility ‘‘depends in large part on the effective and

successful’’ conduct of the weapons program. The court stressed that even a brief

disruption of the program would create a vulnerability and that ‘‘any such vulnerability—and any future reduction in the credibility of our nuclear deterrent for even

a brief period of time—would be unacceptable... Any doubt over the credibility of

our nuclear deterrent would create unacceptable risks in the event of a future crisis . . .’’ The court also contended that any delay in the conduct of DOE’s weapons

program ‘‘could have serious national security implications.’’

Delay is a commonly encountered consequence of the regulatory process. The

Atomic Energy Act and the Administrative Procedure Act require a nuclear regulatory agency to adhere to a formalized process that can result in adversarial hearings, administrative reviews, and an opportunity for judicial appeals such that private and special interest intervener are accommodated. Licensing arenas are often

battlegrounds over legal processes rather than substantive nuclear health and safety issues, and often result in extensive delays.

Note that the Board is not a regulatory body. It cannot control, direct, or govern

any function, or interfere with the paramount national security mission. In creating

the Board, Congress specifically chose not to establish another regulatory agency.

The choice of oversight rather than regulation reflected a careful balancing by Congress of national security interests with the various methods for promoting improvements in safety at DOE facilities. This is fully consistent with preserving the semiautonomous nature of NNSA by preserving the responsibilities of the Secretary of

Energy under the Atomic Energy Act

The usual enforcement powers of regulators, e.g., denial of license and fines, are

not appropriate for DOE defense activities. Denial of licenses would stop critical national security activities, and fining DOE would merely transfer appropriations

away from the safety activities the public is concerned about, thereby making operations potentially more risky and cleanup activities further delayed.

Regulating agencies in general were intentionally chartered to have no stake in

the success of the regulated enterprise. In fact, they can and do use the threat of

shutting down the enterprise to enforce their goals. But the nuclear weapons program is an inherently governmental function. The notion that in contentious adversarial proceedings an external regulator could decide whether DOE may have a license or certificate to build or operate a nuclear weapons facility gives the regulator

a ready tool to overrule the President and Congress on an issue of national security.

CONCLUSION

As a direct result of DOE’s improved self regulation, coupled with the Board’s

independent external oversight, DOE’s safety and environmental protection programs at defense nuclear facilities during the past decade have been marked by considerable improvement, increased effectiveness, and minimal disruption to national

security missions. The priority that may have been accorded to mission objectives

in the past has given way to a DOE management philosophy that stresses doing

work safely while competently.

Sections 2 and 3 of H.R., 3907 would deprive the Department of Energy of its enforcement authority with respect to nuclear safety which would be assumed by a

regulator, the Nuclear Regulatory Commission, an agency with no responsibility for

the security mission. Regulation by itself cannot assure safety is a maxim long

known by those experienced in hazardous occupations. No outside authority or organization can be an effective substitute for a competent and dedicated internal safety

organization.

Based on available information and the individual experiences of Board Members,

we conclude that Congress made the correct decision in 1988 when it adopted the

recommendation of the Senate Committee on Armed Services for national security

reasons to maintain responsibility for nuclear safety of DOE defense activities with

33

the Secretary of Energy and to establish the Defense Nuclear Facilities Safety

Board as an independent advisory agency and not as a regulator.

Mr. BARTON. Thank you. Thank you, Mr. Conway.

The Chair will now recognize—Mr. Mande, did you get to give

your testimony?

Mr. MANDE. Yes, I did.

Mr. BARTON. And Mr. Meserve, you got to give your testimony?

Mr. MESERVE. Yes.

Mr. BARTON. Okay. The Chair recognizes himself now for questions.

My first question is to Mr. Mande. Am I saying that right, by the

way?

Mr. MANDE. The ‘‘e’’ is actually silent; it is Mr. Mande.

Mr. BARTON. Mande.

Mr. MANDE. Thank you.

Mr. BARTON. Well, that is even easier for me. One syllable words

are much easier than two.

I want to thank you for your constructive testimony. While my

friends at DOE and the policy board talk about the insurmountable

problems, you are pretty straightforward that you think you could

do it, and I want to appreciate your positiveness.

Could you elaborate a little bit on the experience that OSHA has

had with the pilot projects where you believe that you could have

significant gains in terms of protecting worker safety if we had external regulation of DOE?

Mr. MANDE. Certainly, Mr. Chairman. As you know, we have

done three pilots over 5 years, two of them recently.

In those pilots we were not able to do the full wall-to-wall inspection of the site that we normally do because of the site size, but

we were able to look at a considerable part of these sites and look

at the activities that were taking place.

One concern that we identified is that today when DOE identifies

a problem, it does what it can under its existing resources to see

that that problem has some type of interim fix, but often the final

fix to the problem must be put off until DOE is able to seek and

get additional funds. If those funds are not forthcoming, which has

happened in many instances, the hazards become backlogged and

abatement does not occur.

Under OSHA rules, when there is a hazard and workers’ health

and safety is put at danger that hazard needs to be addressed and

fixed within a very short timeframe so that workers are protected.

That is one of the major examples of what would be different between how we work and how DOE works and it would improve

worker safety.

Mr. BARTON. Good. Chairman Meserve, you were not quite as

positive in your testimony, but you did think it could be done if we

took a phased approach. Could you elaborate a little bit on that

and how soon you think the NRC could implement some of the external regulation at certain DOE facilities?

Mr. MESERVE. The NRC does feel that it is prepared to undertake this task if the Congress were to indicate that we should do

it. We certainly have the competence and capability in our organization to be of assistance in this way.

34

The problem, as I indicated in my testimony, is that we have a

lot on our plate now in dealing with our civilian nuclear licensees.

These are very important initiatives that we need to continue to

maintain the momentum of our activities. So this would be the

problem with if, at one time, we were to undertake the entirety of

regulation of DOE.

DOE has an immense operation and it would be an immense

burden on the NRC to undertake a regulatory role all at one time,

so we have suggested a phased-in approach. What I would think

might be a sensible way to proceed would be if the NRC were initially to gradually undertake the regulation of the Office of Science

and NE part of DOE, which is what had originally been envisioned

for us.

It might take 5 years to bring that part of system fully up to

speed—and then after 5 years we might take on some of the environmental management part of DOE and then after, perhaps at the

end of a second 5-year period, start to look at the defense facilities.

This is something I think that would require a lot of effort and

planning——

Mr. BARTON. If I heard you right, you want to phase it in over

a 10-year period?

Mr. MESERVE. That is correct, sir.

Mr. BARTON. You don’t think your people are a little bit more

open-minded than that, that they could not grasp things, all these

high-powered educated, gung-ho, patriotic people on your staff? It

would take them 10 years?

Mr. MESERVE. Well, let me say——

Mr. BARTON. Even Congressmen can learn faster than that.

Mr. MESERVE. As I am sure you are aware, DOE has an immense

enterprise, and it is a very complicated enterprise.

Mr. BARTON. That is one of the problems at DOE.

Mr. MESERVE. And it is a problem for us in doing it quickly.

Let me just say by way of example that we did undertake the

regulatory responsibility over the gaseous diffusion plants. Congress at that time basically allowed roughly a 5-year period for us

to develop our capacity and regulatory system to be able to deal

with those plants, to work with the licensee, the certificate-holder

in that case, and develop the trained, capable people to be able to

do the job. That went smoothly but it was because it was a lot of

work and planning was undertaken to enable that to go smoothly.

Our problem is that that was just one of the DOE facilities and

having to undertake possibly the large number of other facilities all

at one time would pose an enormous challenge to us.

Mr. BARTON. Well, I believe you are more challenge-acceptive

than you give your agency credit for, but I appreciate your testimony.

Mr. MESERVE. I appreciate the compliment.

Mr. BARTON. I want to ask one final question to Ms. Sullivan before we recognize Mr. Whitfield. On H.R. 3906, which would have

the Security Office report, in addition to the Secretary of Energy,

directly also report to the Congress, your agency, your Department

opposes that, and as far as staff can tell, the only reason that you

oppose it appears to be because it also does report directly to the

Congress.

35

Is that right?

Ms. SULLIVAN. I think our fundamental concern about that provision is that under basic separation of powers notions, the President

and his immediate subordinates, the members of the Cabinet, determine what communications should be made to the Congress and

this provision is in tension with that.

On a practical level it creates a potentially adversarial relationship between the Director of the Office and the Secretary and the

success of that Office has been that the Director believes that he

has the full confidence and the direct ear of the Secretary to bring

problems to his attention when they are identified.

Mr. BARTON. But if we showed you in law all the instances where

there is a dual reporting, would that alleviate the Department’s

concern?

Ms. SULLIVAN. I am sure there are many instances of——

Mr. BARTON. Because we have numerous——

Ms. SULLIVAN. [continuing] of dual reporting. It is the notion of

dual——

Mr. BARTON. It is the same office——

Ms. SULLIVAN. [continuing] reporting focus on differences of

view——

Mr. BARTON. We are taking what you did and putting it in law

and the only addition that we really substantively have is that we

require a dual report to the Congress. That—I cannot believe that

Secretary Richardson has a problem with that.

Ms. SULLIVAN. The fundamental concern is that the Department

of Energy Organization Act gave the Secretary ample authority to

respond promptly without legislative action to an immediate need

to have improved oversight of security.

Mr. BARTON. And so if a future Secretary wanted to bury the

Safety Office somewhere back down in the bureaucracy like it used

to be, that is okay with the Clinton Administration?

Ms. SULLIVAN. I think the concern is that, if a changed circumstance required some change that we can’t now presently foresee because we do not know what the circumstance is, that by having a legislative mandate that locks one particular form in place

that makes sense now, we would lack the flexibility to respond to

a new and different circumstance.

Mr. BARTON. So you object to the Congress wanting to place an

emphasis on safety and being given timely reports? That is your

objection. You want to keep us in the dark.

Ms. SULLIVAN. No.

Mr. BARTON. Keep the Secretary in the light but keep the Congress in the dark, so that is why you are objecting to the bill.

Ms. SULLIVAN. I think the Congress has ample authority to obtain information directly from anybody it wants. What we are concerned about is locking into place a system that is——

Mr. BARTON. With an emphasis on safety.

Ms. SULLIVAN. [continuing] working. The Office of Oversight focuses on security. In fact, their safety functions have been left in

the Office of Environment, Safety and Health. The system is working well now and it is working well because the Secretary was able

to create a system that he thinks he needs to meet the circumstances that exist now, and we believe it would be desirable to

36

leave him that flexibility in the future to respond to changed circumstances.

Mr. BARTON. All right. Well, thank you for that.

Mr. Whitfield, and then we will go to Mr. Sawyer.

Mr. WHITFIELD. Thank you, Mr. Chairman. Ms. Sullivan, first of

all, I apologize to all of you for coming in late. I missed most of

your testimony.

What is the position of the Department of Energy? Do they have

an official position on H.R. 3907 at this time?

Ms. SULLIVAN. Our position on H.R. 3907 is that we do not support NRC regulation of DOE facilities. The OSHA portion of it, our

concern is the same concern that Mr. Mande identified, of ensuring

an orderly transition.

We believe that orderly transition is already underway. There

are a number of DOE facilities that are already subject to OSHA

jurisdiction, and we are adopting OSHA standards wherever they

apply to the hazards we have at our facilities, and we are working

closely with OSHA already.

Mr. WHITFIELD. And why does the Department oppose the transfer of jurisdiction to NRC?

Ms. SULLIVAN. After an exhaustive study through a joint pilot

program, we identified a number of difficult implementation problems. The costs were far out of proportion to the benefits we could

identify, and we are concerned that the phased approach that

Chairman Meserve referenced, the costs of transitioning to the

NRC for the simple facilities would take away from the focus on

improving safety at our more difficult facilities.

Mr. WHITFIELD. Okay, so cost is one issue that you’re concerned

about.

Ms. SULLIVAN. Cost is certainly an issue.

Mr. WHITFIELD. You know, the Washington Post has been writing a series of articles almost nonstop about the Paducah gaseous

diffusion plant. And it’s occupied a lot of our time, those of us who

represent Paducah. And Ted Strickland represents Portsmouth,

Ohio, the gaseous diffusion plant there.

And in Paducah alone, the Department of Energy, through its

subcontractors, has spent over $400 million on environment cleanup. The environmental aspects of that site are so horrendous, that

the impression is that very little, if anything, has been accomplished there.

And it’s difficult for me to understand how you can spend $400

million and accomplish almost nothing from an objective standpoint

on cleaning up all of the problems there, but still defend self-regulation in that area.

Ms. SULLIVAN. Gaseous diffusion plants are under NRC regulation now. We spent $300 million moving two facilities to NRC regulation.

Mr. WHITFIELD. The production is under NRC regulation, but I’m

talking about the site.

Ms. SULLIVAN. The legacy problems are clearly problems that

need to be addressed. I think the Secretary, through his request for

supplemental appropriations, has indicated the importance he

places on addressing the newly discovered environmental problems.

37

I’m not sure that we would agree that nothing has been accomplished to date. We’ve been working closely with EPA and with the

Kentucky Environment Department on the cleanup of those sites.

We are accelerating some of those activities in light of some of

the newly discovered problems.

Mr. WHITFIELD. I will say that Secretary Richardson has been responsive. DOE, over a number of years, was responsible for the

production, as well as the offsite environmental issues until it was

privatized a few years ago.

Not only in Paducah—I mean, you could talk about Savannah

River, Hanford, and a lot of other sites around the country, all of

which face some of these same issues.

At Paducah alone, we have over 50,000 drums of contaminated

material just sitting out there. We have Drum Mountain. We have

water levels that are contaminated. We have worker health problems there.

And the sense is that—and I’m not saying Secretary Richardson,

necessarily, or this Administration, because he has just come into

office, but in the past, the Department has not been particularly

effective through its subcontractors, at taking care of this issue.

Now, I recognize that it’s going to cost a lot of money, but I think

we have to seriously consider other alternatives in dealing with

this issue.

Ms. SULLIVAN. Mr. Whitfield, on the environmental issues, the

Department has been subject to external regulation for in excess of

10 years. And the problems you’re identifying indicate that external regulation doesn’t solve the very serious problems the Department has to deal with.

We are making progress, but simply changing the jurisdiction of

the regulator doesn’t solve the problem. It take money, it takes

technology, it takes sustained attention, which we are attempting

to devote to the problems now.

Mr. BARTON. The gentleman’s time has expired. If you want to

make a concluding statement——

Mr. WHITFIELD. That’s okay, Mr. Chairman, I’ll let Mr. Sawyer

go ahead.

Mr. BARTON. The gentleman from Ohio is recognized for 5 minutes.

Mr. SAWYER. Thank you very much, Mr. Chairman. It must be

a shocking transition to go from jury duty on the one hand, to be

sitting here as a witness on the other, and I hope not to add to the

difficulty of that transition.

Let me go back, though. I think it’s probably fair to say that everybody agrees that the DOE facilities are old, they are extraordinary in their hazards, and that there are operational and security considerations that pose some difficulty.

But if for a moment we recognize and accept the bifurcation of

time periods in terms of when DOE was responsible and now in

places like Paducah and Portsmouth, in forward-looking oversight

and regulation, that the NRC has successfully applied its regulations and standards to the operations of the U.S. Enrichment Corporation.

Can you tell me why this works at those two places, but wouldn’t

work anywhere else?

38

Ms. SULLIVAN. If we had all the money in the world, I think we

would all agree that any regulatory system would work. Our concern is devoting the very substantial management and financial resources that would be required to develop a whole new regulatory

system for NRC, because they don’t have regulations in place that

apply to the kind of facilities we have.

So they either have to adopt our standards through a long administrative process, or create a whole new set of standards. NRC,

when it took over regulation of the gaseous diffusion plants, observed that it felt that they had generally been operated safely.

So, our concern is devoting enormous resources and not getting

a substantial improvement in safety by simply changing who’s regulating.

Mr. SAWYER. Do you have a sense that the phased-in approach

suggested by the NRC has promise for the future, or is your discomfort unabated?

Ms. SULLIVAN. My principal concern about the phased-in approach is that the costs associated with phasing in NRC regulation

at very simple facilities, the ones that the NRC is prepared to take

on now, would divert resources from the more complex, more hazardous facilities that DOE would remain responsible for during the

transition phase.

We have tried over the last decade to focus our attention on a

risk-informed basis to address the most serious risks first. If, instead, we devote all our attention to the easy ones—the facilities

that NRC is proposing to take on first don’t present safety hazards

today.

Mr. SAWYER. Mr. Meserve, can you comment on that?

Mr. MESERVE. Well, let me say that as Ms. Sullivan has indicated, there is an enormous range of activities that DOE undertakes. Some are simple, some are complicated.

We have some experience in regulating DOE facilities in that we

have been involved in regulating spent fuel storage, for example,

various involvements with uranium mill tailings and the like.

We’ve been an advisor to DOE in some very difficult problems

they’ve had at Hanford with regard to their tanks.

We have a different view than the DOE has of the costs associated with the pilot program. There was a report that we had prepared on the lessons to be learned from the pilot program, and I

would like to submit it for the record.

Mr. SAWYER. Would that include a detailed description of how

you get from here to there in terms of a 10-year phase-in?

Mr. MESERVE. No, sir. We had a pilot program where we looked

at cooperating with DOE at a time when DOE was anxious to have

external regulation. The Advisory Committee had told DOE that

they should have external regulation.

It was a pilot program involving three facilities. And we——

Mr. SAWYER. Well, let me ask you, is each facility so unique that

each requires its own plan, or what do we learn from the pilot experience?

Mr. MESERVE. The pilot experience on the facilities we examined

was that the issues associated with them were manageable, that

they could be resolved.

39

There are some differences in views as to what appropriately are

costs associated with the dual regulation and what are costs that

would have been required in the DOE system to bring the plants

up to snuff with DOE orders, let alone NRC requirements.

But basically the conclusion of the pilot program was, that for

the facilities we examined, that this was a doable task.

Mr. SAWYER. Thank you, Mr. Chairman. I see my time has expired.

Mr. BARTON. Thank you, Congressman Sawyer. Congresswoman

Wilson?

Mrs. WILSON. Thank you, Mr. Chairman. Mr. Conway, I don’t

know whether you’ve answered this question, but I wanted to ask

it to you anyway. Can you compare or give us some kind of sense

of the health and safety record of the nuclear reactors and the nuclear programs in the Department of Energy, compared to other

scientific and nuclear operations in either government or industry?

Mr. CONWAY. Well, if you talk about the nuclear reactors under

the Department of Energy, you’d have to take into consideration,

the more than 100 Naval ones. The nuclear Navy has a dual hat.

The head of the Navy Nuclear Program also holds a position in

DOE, and they have had an excellent record, obviously.

Then if you take into consideration, the reactors that have been

operated up at Hanford and also at Savannah River, they were for

production, producing plutonium. And the purpose is not to produce

electricity, although at one of them, up at Hanford, there was one

dual purpose reactor that did produce electricity that went into the

Bonneville Grid.

But when you look at them from a safety point of view, there

have been problems, as the commercial industry has had, but we

have had no deaths whatsoever in the nuclear reactors operated by

the DOE.

Under the old AEC, we had one reactor experiment up at Idaho

Falls in which three individuals were killed, one of whom had been

a sailor assigned to a military reactor, not a nuclear Navy one; it

was an Army reactor program.

But I think when you study the history of the reactor program

in the United States, it has been an excellent, excellent safety program, notwithstanding Three Mile Island, in which no one was injured, including the workers. No injured worker at Three Mile Island, even though it was a meltdown.

So I think this country has an excellent record under the DOE,

and also under its predecessors, including the Atomic Energy Commission.

Mrs. WILSON. Thank you. I have a question for you, and it’s really based on—without any disrespect to your peers, you kind of have

a unique perspective on this, now being with the NRCC, but previously having spent a great deal of time looking at the Department of Energy and particularly at the nuclear weapons complex.

I wonder, from your perspective, your unique perspective——

Mr. BARTON. I think you meant NRC, not NRCC. NRCC is the

campaign committee, and I don’t think he’s on that.

Mrs. WILSON. Did I say NRCC? I’m sorry. I apologize.

Mr. BARTON. Let’s correct the record. She meant NRC. There’s a

big difference.

40

Mrs. WILSON. I didn’t want to judge you by the company you

keep.

From your perspective, what improvements in safety or health do

you think would result or savings in costs, even, not for the early

change in regulation of things that are very similar to what the

NRC does now, but for some of the more unique Department of Energy operations? What’s the advantage here?

Mr. MCGAFFIGAN. I think the fundamental advantage comes

from the openness of our process, and the credibility I think it

would bring with the public.

I think that Mr. Conway——

Mrs. WILSON. I’m not talking about public credibility. I’m talking

about health, safety, and cost. What’s the advantage to making this

huge organizational shift?

Mr. MCGAFFIGAN. The facilities, as they are operated today, are

generally okay, but they continue to have problems. People electrocute themselves at Los Alamos and things like that. That happened

just before I came to the Commission.

I think things are tolerated in the DOE system that would not

be tolerated in an NRC system or an OSHA system. DOE has a

tendency to postpone things.

When the gaseous diffusion plants were certified—you heard the

DOE General Counsel say that it cost $300 million. We sharply disagree with that. But there was a large amount of money spent,

most of it to get the plants to where DOE said they should have

been under the DOE order system.

So the question is, do you want external oversight of DOE. DOE

was in favor of external regulation 4 years ago. Tom Grumbly used

to see a tremendous benefit in having the DOE facilities treated as

if they were private sector facilities and held to the same sort of

standards as private sector facilities.

Now, that will cost money, and we can’t do it all immediately in

terms of the complex defense facilities. We can’t do that any time

soon, and we’d have to have a transition.

At the end, I think you’d have a system that would have greater

credibility because the rules would be enforced as they existed and

as the public understood them. It wouldn’t be orders. It wouldn’t

be contract provisions; there would be rules on the books, arrived

at by this long process that the General Counsel talked about, and

then enforced by a capable staff, working directly with the contractors.

One of the issues I think you’ll hear from Chuck Shank about

later, the licensee, for the most part, would have to be the contractor. DOE would have to step back and allow the contractor to

be the licensee. It could simply have contract clauses telling the

contractor that they had to stay in NRC’s good graces. I think you’d

have a much more professional DOE complex if that were the case.

Mrs. WILSON. Thank you. One last question, if I may, to Mr.

Mande.

Does OSHA currently oversee your inspector, have jurisdiction

over any special access programs?

Mr. MANDE. By special access?

Mrs. WILSON. I mean, highly classified programs.

41

Mr. MANDE. Let me check. I’ll have to get back to you on that.

But I think one of the issues we looked at at Oak Ridge, for example, was trying to inspect in a classified environment.

[The following was received for the record:]

Yes, we have done inspections of sites that required Q-security clearance, which

is equivalent to top-security clearance. However, we have not inspected any special

access programs, which are established for safeguarding information over and above

what would be required for a Q-claerance area.

Mr. MANDE. In the pilot, it worked fine. But because in the pilot,

DOE knew the inspections were coming, all the arrangements

could be made ahead of time.

One of the concerns that we have, one of the issues that needs

to be worked out is that OSHA’s effectiveness depends on unannounced inspections.

Mr. CONWAY. Mr. Chairman, if I may, possibly before Mr.

Mande’s time, when Admiral Watkins headed up DOE, he entered

into a memorandum of understanding with OSHA. And myself and

the other Board members and our staff interfaced with them, particularly at Rocky Flats.

Now, that, compared with many other facilities, is what we

would call a ‘‘dirty,’’ facility, with buildings highly radioactive.

There are some rooms you cannot go in whatsoever.

And when we were out at Rocky Flats, I remember very clearly

working with the OSHA people who were out there, under this

memorandum agreement. They were very worried. They did not

know the nuclear area, and they indicated to the Board members

and my staff that they were not very keen about going into some

of those places, and I don’t blame them. They had not been trained

in that area.

And subsequently, another Board member and myself, Joe

DiNunno, we visited with OSHA representatives here in Washington to talk about it.

They would tell us they were having a difficult time doing the

commercial work that they were responsible for, because they did

not have sufficient staff and not enough money from the appropriations.

Mr. BARTON. Congresswoman Wilson’s question, I think, is more

about security of classified information.

Mr. CONWAY. And this involved also——

Mr. BARTON. As opposed to the dirtiness or the radioactivity.

Mr. CONWAY. But also they did not get into any of the classified

work out at Rocky Flats or elsewhere, to the best of my knowledge.

Mr. BARTON. But, Mr. Mande, before we go to Mr. Wynn, you

don’t have any doubt that there are staff people in your organization that can pass a security background check by the FBI; do you?

Mr. MANDE. No, many of us have done that.

Mr. BARTON. You can handle classified material, if you are vetted

properly?

Mr. MANDE. Yes.

Mr. BARTON. Congressman Wynn for 5 minutes.

Mr. WYNN. Thank you, Mr. Chairman. I apologize that I did not

get the opportunity to hear the testimony, and I may be asking

questions that you’ve covered. If so, please indulge me because I

just have a couple.

42

It’s my understanding that there has been a dramatic drop in the

number of security inspections. This was reported in the GAO

study.

I guess my first question is, is that, in fact, an accurate description of what has happened, and if so, why?

Ms. SULLIVAN. I don’t believe that that is accurate. If you’re referring to security clearances or inspections of facilities——

Mr. WYNN. Oversight inspections. So I presume that encompasses both.

Ms. SULLIVAN. In fact, the Office of Oversight has been extremely

active since it was reformulated by the Secretary last year.

I’m not aware of any drop in its inspection activities.

Mr. WYNN. So you say that the GAO report would be incorrect?

Ms. SULLIVAN. I’m unfamiliar with the particular GAO report

you’re referring to. I’d want to look at it and see if we’re thinking

about different things.

Mr. WYNN. Security oversight inspections is what’s referred to in

our notes here. Beyond that, I’m sorry I cannot say more. It kind

of caught my aware.

Ms. SULLIVAN. I’m unaware of any drop. The information that I

have——

Mr. WYNN. Office of Independent Oversight——

Ms. SULLIVAN. Has been very active. It has been focused primarily on the weapons labs over the last several months since the

security concerns of last year.

Mr. WYNN. Prior to that, though, had there been a dropoff, if we

go, say, over a 5-year period?

Ms. SULLIVAN. I don’t know the answer to that. The Office of

Oversight previously had both safety—environment, safety, and security issues all within its jurisdiction.

And so it may have focused in recent years more on the safety

side than on the security side. As reformulated, it’s now focusing

exclusively on the security side.

Mr. WYNN. And this reformulation occurred when?

Ms. SULLIVAN. Last year.

Mr. WYNN. Just when the problems occurred?

Ms. SULLIVAN. That’s correct.

Mr. WYNN. Okay. I understand that the officers in the security

staff have been reduced significantly; is that correct?

Ms. SULLIVAN. Not that I’m aware of.

Mr. WYNN. All right, I will——

Ms. SULLIVAN. In the Office of Independent Oversight? I’ll be

happy to check and get back to you.

[The following was received for the record:]

During the mid to late 1990s, the number of Headquarters personnel that focused

on independent oversight of safeguards and security was gradually reduced from approximately 32 to 17 during various cost reduction efforts. When the Secretary established the Office of Independent Oversight and Performance Assurance (OA) in

May 1999 as an independent office focusing solely on safeguards and security and

emergency management, DOE recognized that the number of staff needed to be increased. To ensure that OA would have the capability to perform its mission effectively, the DOE took appropriate action to add staff. At the time it was formed, OA

had 17 safeguards and security professionals, including cyber security. OA currently

has 42 Federal personnel assigned, 22 performing independent oversight functions

in nuclear material safeguards and security. The remaining personnel perform indeVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00046 Fmt 6633 Sfmt 6621 E:\HEARINGS\64031 pfrm07 PsN: 64031
43

pendent oversight in the areas of cyber security and emergency management and

make up the OA management and administrative support staff.

Mr. WYNN. Yes, would you check.

Ms. SULLIVAN. But I would be very surprised.

Mr. WYNN. I guess, generally speaking, there is a concern about

the degree of oversight and whether or not this office has basically

been buried with conflicting missions, which lead to inadequate

oversight.

And that is certainly the suggestion, and if that’s not the case,

I would like, you know, kind of a full explanation of what, in fact,

did happen with respect to this office.

Because that’s the subject of one the bills, 3906, which I understand you oppose; is that correct?

Ms. SULLIVAN. We are opposed to it because we believe the office

that the bill provides for exists, has been created by the Secretary

in response to the recent security concerns.

And we don’t favor a legislative mandate for that, because we

think the function is already there and working well.

Mr. WYNN. What about the mandate to report to Congress, the

results of oversight inspections?

Ms. SULLIVAN. Our concern about that is that it has the potential

to establish an adversarial relationship between the Director of the

Office and the Secretary by requiring the Director to identify points

of disagreement he has with respect to the Secretary’s management

of the Department, and we don’t believe that’s a desirable reporting

format.

Mr. WYNN. I’m concerned by that response, I have to tell you. If

there are, in fact, problems with the management that this office,

which is supposed to be independent, uncovers, it seems appropriate that they would report that to Congress.

That doesn’t necessarily have to be adversarial, but I obviously

see how it could be. But the bottom line is, Congress has a right

to have information about potential problems in this area.

So if we’re not going to have independent oversight, then we

ought not have the office. I think we ought to have the office and

so I think we ought to have the right to get the results of that office’s findings.

Ms. SULLIVAN. Certainly the Congress has the right to ask the

Director of that office to come and report to the Congress at any

time. In fact, Mr. Podonsky, the current Director of that office, has

been before this committee, I believe, as recently as last week.

I think he believes the strength of the office as it’s presently formatted, is that the has direct access to the Secretary and that he

can bring to the Secretary, the one who by law is responsible for

the management of the Department most directly, the problems

that he thinks need to be addressed. And he has been doing that

and had very favorable supportive response from the Secretary.

Mr. WYNN. Thank you. Mr. Chairman, I don’t have any further

questions.

Mr. BARTON. Thank you. We plan to try to keep the hearing

going. Mr. Ehrlich?

Mr. EHRLICH. I will pass, but with one caveat. I just want to

adopt the concerns expressed by my colleague from Maryland.

44

Mr. BARTON. The gentlelady from Missouri, Congresswoman

McCarthy?

Ms. MCCARTHY. Thank you very much, Mr. Chairman. My major

DOE contractor, Allied Signal, wants to move faster to address

safety concerns and to achieve adequate oversight.

How does the legislation we’re discussing today improve upon the

process? Anyone?

Mr. MESERVE. Well, I can comment from the perspective of the

NRC on this. Let me say that this is not a task that we have asked

for, but if Congress were to ask us to undertake it, we would do

so.

I think that as Mr. McGaffigan indicated in response to an earlier question, one of the benefits which I think caused DOE’s own

advisory committee to recommend that the NRC undertake an

independent regulatory role in the Department is that it enable a

focused examination of safety issues that would be undertaken

independently of the other pressures that exist for operations. NRC

offers basically a structured, capable system to monitor the safety

of operations and assure that they continue.

I would anticipate that, if the NRC were to undertake the responsibility at these sites, there would also be an open process that

we would follow, just as we do at all of our civilian nuclear sites,

so that the public would be fully involved, the stakeholders would

be fully involved. Hopefully out of that would come increasing confidence that the operations were safe, that decisions were being

made appropriately and that would end up basically enhancing the

credibility of the entire activity.

Mr. BARTON. If the gentlelady would suspend, we have two votes

on the floor instead of one, so unfortunately we are going to have

to recess the hearing.

I would like to get the first round of questioning done and be

able to release this panel, so if there are members here that have

one final question.

Ms. SULLIVAN. Could I just add in response to Congresswoman

McCarthy’s question, that is not a nuclear facility at Kansas City.

NRC would not regulate that facility. We are already applying

OSHA standards to much of the work that goes on at Kansas City.

Ms. MCCARTHY. So this bill will not affect them at all?

Ms. SULLIVAN. It would not change much at all at Kansas City.

Ms. MCCARTHY. Would not change much. Okay. We’ll talk.

Thanks.

Ms. SULLIVAN. Thank you.

Mr. BARTON. Is that all your questions? Does Mr. Ehrlich or Mrs.

Wilson or Mr. Sawyer have a final question for this panel?

[No response.]

Mr. BARTON. Okay. We are going to release you. There will be

written questions in addition to the oral questions that you have

been given.

The subcommittee plans to aggressively pursue changes to the

legislation so that we can go to markup within the next month, so

have your staffs be available for input on that.

Thank you for your participation. This panel is released.

We are going to take a very brief recess. We are going to reconvene as soon as these series of votes are over with our second

45

panel. My guess is that is going to be approximately at 12:15, so

I would encourage all the panel members on the second panel to

be available, because when I do return I am going to reconvene

with the panel members that are here, so we are in recess until

approximately 12:15.

[Brief recess.]

Mr. BARTON. The subcommittee will come to order.

We have a motion on the floor right now by Congressman Gibbons of Nevada on the point of order on the nuclear waste legislation. There will be a vote in about 20 minutes, so we want to start

this panel and hopefully get most of your testimony before we have

to go vote.

We want to welcome Mrs. Jones, Associate Director, The Energy,

Resources, and Science Issues in the GAO. We have Dr. Charles

Shank, who is the Director of Lawrence Berkeley National Laboratory. We have Mr. Robert Van Ness, who is the Assistant Vice

President for Laboratory Administration at the University of California. We have Ms. Maureen Eldredge, who is the Program Director for the Alliance for Nuclear Accountability. We have Dr. David

Adelman, who is the Project Attorney for the Nuclear Program in

the Natural Resources Defense Council. I don’t see Mr. Miller.

Mr. COOK. Mr. Chairman, Mr. Miller is over on the Senate side.

Mr. BARTON. Ah—but he is on his way. He is a policy analyst for

the PACE International Union, so we are going to start with Mrs.

Jones.

Your testimony is in the record. We will recognize you for 7 minutes to summarize it and then we will just go right down the line,

then we will have questions.

STATEMENTS OF GARY L. JONES, ASSOCIATE DIRECTOR, ENERGY, RESOURCES, AND SCIENCE ISSUES, GENERAL ACCOUNTING OFFICE; CHARLES V. SHANK, DIRECTOR, LAWRENCE BERKELEY NATIONAL LABORATORY; ROBERT L. VAN

NESS, ASSISTANT VICE PRESIDENT FOR LABORATORY ADMINISTRATION, UNIVERSITY OF CALIFORNIA; MAUREEN

ELDREDGE, PROGRAM DIRECTOR, ALLIANCE FOR NUCLEAR

ACCOUNTABILITY; AND DAVID E. ADELMAN, PROJECT ATTORNEY, NUCLEAR PROGRAM, NATURAL RESOURCES DEFENSE COUNCIL

Ms. JONES. Thank you, Mr. Chairman. We are pleased to be here

today to provide our views on three bills designed to improve worker and nuclear facility safety as well as enhance security for the

Department of Energy.

H.R. 3383 would amend the Atomic Energy Act by eliminating

the exemption that allows nonprofit contractors to avoid paying

civil penalties for violations of nuclear safety rules. DOE argues

that the exemption for nonprofit contractors should be continued.

We disagree. DOE said that nonprofit contractors would be unwilling to put their assets at risk to pay civil penalties. However, nearly all of these contractors now have the opportunity to earn a fee,

which they generally use to fund research that they want to do.

The fee could also be used to pay civil penalties.

DOE also said that contract provisions are better mechanisms

than civil penalties for holding nonprofit contractors accountable.

46

However, DOE has not taken full advantage of existing contracting

mechanisms.

For example, the University of California received 96 percent of its $6.4 million available fee for managing Lawrence Livermore in

fiscal year 1998, even though it had significant nuclear safety deficiencies resulting in enforcement actions. This bill directly addresses our suggestion to the Congress that it eliminate both the statutory and administrative exemptions from paying civil penalties for

violating nuclear safety rules.

H.R. 3906 legislatively establishes an office independent of line

management that oversees security at DOE facilities and that reports directly to the Secretary. This office exists now and currently

reports to the Secretary. Then why do we need legislation?

The simple answer is so that the office and structure will be permanent and not dependent on the importance future Secretaries

place on security. This has been a problem in the past. For example, the office was several layers down in the Environment, Safety

and Health organization prior to May 1999 and at one time was in

Defense programs.

I also wanted to clarify a point about our report on safety in the

discussion between Mr. Wynn and Ms. Sullivan on the last panel.

Our report noted that over a 5-year period prior to May 1999, there

were at least 3 years for one facility where the oversight office did

not do an oversight investigation. Since May 1999 with the changes

the Secretary initiated they have been doing more regular inspections.

Legislatively establishing that office insulates it from organizational change and programmatic conflicts and, along with the annual report to the Congress, helps to ensure prompt corrective action is taken.

H.R. 3907 would eliminate self-regulation of health and safety

activities at DOE by authorizing NRC to regulate and enforce nuclear safety and OSHA to regulate and enforce occupational health

and safety for all DOE facilities. This bill provides a sound basis

for continuing the process of moving DOE in the direction of external regulation.

We, along with others, have reported on DOE’s weaknesses in its

self-regulation of environment, safety and health at its facilities.

The results of the pilot program as well as the extensive interactions between DOE, NRC, and OSHA over the years showed that

external regulation offers benefits and that external regulators

have the flexibility to adjust to unique DOE facility conditions.

However, the timeframe allowed in the bill for transition to full

external regulation may not be achievable. NRC and OSHA have

experience with some DOE facilities and have studied others

through the pilots. External regulation of these facilities, which includes small, less complex facilities and nondefense research laboratories, could be on a faster track. However, defense facilities

were not included as part of the pilot and they are far more complex than the facilities studied. Therefore, more time would be

needed to study issues such as the need to maintain security, regulatory costs, resource and skill needs, and transition methods.

Mr. Chairman, while all three bills have the potential to improve

some aspects of health, safety, and security at DOE facilities, legisVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00050 Fmt 6633 Sfmt 6602 E:\HEARINGS\64031 pfrm07 PsN: 64031
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1See Department of Energy: DOE’s Nuclear Safety Enforcement Program Should Be Strengthened, GAO/RCED-99-146, Jun. 10, 1999). Nuclear Security: Improvements Needed in DOE’s Safeguards and Security Oversight, (GAO/RCED-00-62, Feb. 24, 2000). Department of Energy: Uncertain Future for External Regulation of Worker and Nuclear Facility Safety, (GAO/T-RCED-99-

255, Jul. 22, 1999). Department of Energy: Clear Strategy on External Regulation Needed for

Worker and Nuclear Facility Safety, (GAO/T-RCED-98-163, May 21, 1998).

lation could only take change so far. In the final analysis it will require a long-term commitment by DOE, and quite frankly, DOE

has not demonstrated the will nor has the culture in place to make

lasting changes. DOE needs to focus on aspects of its culture that

are barriers to effectively carrying out its missions in a safe, environmentally sound, and secure way.

Over the years our work has noted such things as a complicated

organizational structure, poor accountability, weak oversight of

contractors, lack of technically skilled staff, and resistance to

change. Without focusing on these issues, DOE will not be able to

break out of the culture or mindset that permeates it. Therefore,

even with the changes brought about by these legislative proposals,

problems inherent in DOE may continue.

Mr. Chairman, we look forward to working with you as you move

to mark up these bills.

[The prepared statement of Gary L. Jones follows:]

PREPARED STATEMENT OF GARY L. JONES, ASSOCIATE DIRECTOR, ENERGY, RESOURCES, AND SCIENCE ISSUES, RESOURCES, COMMUNITY, AND ECONOMIC DEVELOPMENT DIVISION, U.S. GENERAL ACCOUNTING OFFICE

Mr. Chairman and Members of the Subcommittee: We are pleased to be here

today to provide our views on three bills designed to improve worker and nuclear

facility safety and health as well as to enhance security for the Department of Energy (DOE). Our testimony is based on our past work on safety, health, and security

issues on a wide variety of DOE programs and activities.1 Let me summarize our

views on the three bills:

• H.R. 3383 would amend the Atomic Energy Act by eliminating the exemption that

currently allows certain nonprofit contractors to avoid paying civil penalties if

they violate DOE’s nuclear safety rules. Last year, we reported and testified on

a number of problems with DOE’s enforcement of its nuclear safety regulations.

We suggested that the Congress consider eliminating both the statutory and administrative exemptions from paying civil penalties for violations of nuclear

safety rules. This bill directly addresses our concerns.

• H.R. 3906 would legislatively establish an office of independent security oversight

within DOE that reports directly to the Secretary. We believe that legislatively

establishing an office, independent from line management, that oversees safeguards and security across the Department and reports to the Secretary would

insulate it from organizational change and programmatic conflicts. Since May

1999, DOE’s security oversight office has reported to the Secretary. However,

prior to May 1999, it was several layers down in the organization and, as a result, oversight findings were not always raised to top management. The legislation would also require an annual report to the Congress from that office on

the status of its findings. Requiring an annual report would make the office’s

findings more visible and help to ensure prompt corrective actions are taken.

• H.R. 3907 would eliminate self-regulation of health and safety activities at DOE

by authorizing the Nuclear Regulatory Commission (NRC) to regulate and enforce nuclear safety and the Occupational Safety and Health Administration

(OSHA) to regulate and enforce occupational health and safety for all DOE facilities. This bill provides a sound basis for continuing the process of moving

DOE in the direction of external regulation. However, the time frame allowed

in the bill for the transition to full external regulation may not be achievable.

NRC and OSHA have experience with some DOE facilities—smaller, less complex facilities and nondefense research laboratories. The transition to NRC and

OSHA regulation of these facilities could be achieved relatively quickly. However, issues associated with regulating larger defense facilities are more comVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00051 Fmt 6633 Sfmt 6621 E:\HEARINGS\64031 pfrm07 PsN: 64031
48

plex, such as the need for experience with unique activities at weapons facilities, and would take longer to evaluate and may require special consideration.

Mr. Chairman, while all three bills have the potential to improve some aspects

of health, safety, and security at DOE facilities, legislation can only take change so

far. In the final analysis, it will require a long-term commitment by DOE, and quite

frankly, DOE has not demonstrated the will nor does it have the culture in place

to make lasting changes. DOE needs to focus on aspects of its culture that are barriers to effectively carrying out its missions in a safe, environmentally sound, and

secure way. Over the years, our work has noted culture barriers such as a complicated, dysfunctional organizational structure; an unclear chain of command; poor

accountability for program management; weak oversight of contractors; lack of technically skilled staff; and resistance to change.

DOE has made changes and has activities under way that address some of these

issues. However, it must continue to look at human capital issues, such as hiring

and training to improve the skills of its employees, the performance measures and

incentives systems for contractors and federal employees to ensure that they reward

the correct behaviors, and clear definition of roles and responsibilities to eliminate

duplication and inefficiencies. Without identifying and focusing on the barriers to

change, DOE will not be able to break out of the culture or mindset that permeates

it. Therefore, even with the changes brought about by these legislative proposals,

problems inherent in DOE may continue.

Background

Since its creation in 1977, DOE has conducted technically complex and hazardous

activities at its facilities across the country. These activities include developing, producing, maintaining, storing, and dismantling nuclear weapons; managing nuclear

fuel storage and disposal sites; operating nuclear reactors; performing research and

development to enhance energy efficiency and to develop innovative nuclear, renewable, and other energy sources; and cleaning up environmental contamination from

its past weapons production. Besides being potentially dangerous, some of these activities are highly classified and require sophisticated security measures. However,

in conducting these activities, DOE has a long history of safety, managerial and security problems.

DOE is essentially exempt from regulation by NRC for nuclear safety and by

OSHA for worker protection. These exemptions originated from concerns about national security that characterized DOE’s historical role in nuclear weapons production. The facilities that this legislation would subject to external regulation are substantial. DOE maintains 3,500 nuclear facilities at 34 sites in 13 states, covering,

in all, more than 85 million square feet of building space.

Civil Penalties for Nonprofit Contractors

H.R. 3383 would amend the Atomic Energy Act by eliminating the exemption that

allows certain contractors to avoid paying civil penalties if they violate DOE’s nuclear safety rules. The Congress first authorized civil monetary penalties for violations of nuclear safety rules in 1988. This gave DOE the authority to impose civil

monetary penalties on its contractors, and on their subcontractors and suppliers, for

violating enforceable nuclear safety rules. However, for certain contractors, the Congress provided an exemption from having to pay the monetary penalties, primarily

because the contractors operating DOE laboratories at the time received no fees in

addition to their reimbursable costs and, therefore, had no contract-generated funds

available to pay any penalties assessed. There was concern that these contractors

might leave the research field rather than put the assets of their organizations at

risk if they were subject to paying the monetary penalties. If DOE identifies violations of nuclear safety rules at any of the seven contractors and laboratories specifically named in the law, or their subcontractors and suppliers, DOE cannot collect

the civil monetary penalty.

The exemption from civil penalties has been extended to institutions that, like

other contractors in the business of handling nuclear materials, receive financial

protection or indemnification from the damages to people and property that may be

harmed in a nuclear accident. The Secretary also was given the authority to determine whether other contractors that are nonprofit educational institutions should

receive a similar exemption. In 1993, DOE specified by rule that all nonprofit educational institutions would receive an automatic exemption from paying the penalties.

In a March 1999 report to the Congress concerning the reauthorization of the

Price Anderson Act, DOE argued that the exemption for named contractors and nonVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00052 Fmt 6633 Sfmt 6621 E:\HEARINGS\64031 pfrm07 PsN: 64031
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2The Price Anderson Act established a source of funds to compensate personal injury and

property damage from a nuclear accident and limits liability of private industry for such accidents.

profit educational institutions should be continued.2 Our analysis of DOE’s reasoning, however, raised several questions about the merits of continuing the exemption:

• DOE argued that universities and other nonprofit contractors working at DOE facilities would be unwilling to put their assets at risk for contract-related expenses such as civil penalties. However, nearly all of the contractors that manage and operate DOE facilities now have the opportunity to earn a fee. This fee,

which is in addition to reimbursed costs, is used by the nonprofit contractors

to cover certain nonreimbursable contract costs and to conduct other laboratory

research. The fee could also be used to pay civil penalties if they were imposed

on the contractor. • DOE said that contract provisions are a better mechanism than civil penalties for

holding nonprofit contractors accountable for safe nuclear practices. However,

DOE has not taken full advantage of the existing contracting mechanisms to

emphasize nuclear safety. For example, at the Lawrence Livermore National

Laboratory in California, DOE’s main contractor—the University of California—

received 96 percent of its $6.4 million available performance fee in fiscal year

1998, even though it had significant nuclear safety deficiencies resulting in enforcement actions. At best, only about 4 percent of its performance fee for 1999

was at risk if it did not perform satisfactorily in the health and safety area. • DOE said that its current approach of exempting nonprofit institutions is consistent with NRC’s treatment of nonprofit organizations because DOE issues notices of violation to nonprofit contractors without collecting penalties but can

apply financial incentives or disincentives through the contract. However, NRC

can and does impose monetary penalties for violations of safety requirements,

without regard to the profit-making status of the organization. NRC sets lower

penalty amounts for nonprofit organizations than for-profit organizations. The

Secretary could do the same, but does not currently take this approach. Furthermore, both NRC and other regulatory agencies have assessed and collected

penalties or additional administrative costs from some of the same organizations that DOE exempts from payment. For example, the state of California assessed and collected $88,000 in ‘‘administrative costs’’ from the University of

California for violating state environmental laws at the Lawrence Livermore

and Lawrence Berkeley National Laboratories.

Our June 1999 report on DOE’s nuclear safety enforcement program recommended that the Secretary of Energy eliminate the administrative exemption

from paying civil penalties for violations of nuclear safety rules that DOE granted

to nonprofit educational institutions. The Department did not implement the recommendation, instead commenting that the issue of exemption from civil penalties

was ultimately one for the Congress to decide. We also suggested that the Congress

consider eliminating both the statutory and administrative exemptions from paying

civil penalties for violating nuclear safety rules. H.R. 3383 directly addresses our

recommendation.

Independent Security Oversight

H.R. 3906 would legislatively establish an independent security oversight office

within DOE that reports directly to the Secretary of Energy. We believe that legislatively establishing an office, independent from line management, that oversees safeguards and security across the Department would insulate it from organizational

change and programmatic conflicts. It would also provide the office with the visibility in the organization and the authority it needs to ensure that security problems it identifies are corrected. Since May 1999, DOE’s independent security office

has reported to the Secretary. However, the director of the independent security

oversight office has not always reported to the Secretary. Prior to May 1999, the

independent security oversight office reported to the Office of Oversight, which in

turn reported to the Assistant Secretary for Environment, Safety, and Health, who

reported to the Secretary. At one time, the oversight office was organizationally

placed in Defense Programs, a line-management program office. As a result of these

organizational placements, oversight findings and recommendations were not always

raised to top DOE management and were sometimes ignored by the contractors operating DOE’s facilities.

The bill also proposes, among other things, that the independent security oversight office conduct evaluations every 18 months and conduct follow-up reviews to

ensure that corrective actions for security problems are effective. These provisions

50

3See Improving Regulation of Safety at DOE Nuclear Facilities, Advisory Committee on External Regulation of Department of Energy Nuclear Safety (Dec. 22, 1995).

of the bill focus on several issues discussed in our February 2000 report on security

oversight. For example, our report disclosed that during the mid-1990s, as many as

3 years elapsed between the independent security oversight office’s inspections at

DOE’s nuclear weapons laboratories. In addition, we recommended that the oversight office work with the laboratories in developing corrective actions to ensure

that security problems identified during its inspections were properly corrected. In

recent months, the independent security oversight office has taken actions on these

issues. However, in the past, the emphasis on security within DOE has varied greatly, and recent improvements may not be permanent fixes. Required periodic evaluations, follow-up reviews, and the annual report to the Congress on the status of security at DOE facilities, as would be required under H.R. 3906, would help to prevent future backsliding.

External Regulation of DOE Facilities

H.R. 3907 would authorize NRC to regulate and enforce nuclear safety and OSHA

to regulate and enforce occupational health and safety at DOE facilities. The bill

would require that such regulation be effective by October 1, 2001. By placing DOE

facilities under NRC and OSHA jurisdiction, the bill would continue the process of

moving DOE in the direction of external regulation.

The process of eliminating self-regulation began in 1984 when DOE facilities first

came under federal environmental laws that are carried out and enforced by the Environmental Protection Agency and the states. In addition, NRC has worked with

DOE to license, certify, and consult on many different DOE facilities. For example,

NRC granted a license to DOE for operating the TMI-2 Independent Spent Fuel Debris Facility at the Department’s Idaho National Engineering and Environmental

Laboratory. It is also conducting prelicensing consultations with DOE in other

areas, including the high-level waste repository at Yucca Mountain, Nevada, and a

proposed facility for making mixed-oxide fuel. NRC and OSHA have also conducted

simulated inspections at DOE facilities during recent pilot projects. Aside from these

individual cases, the vast majority of DOE’s facilities are not regulated for health

and safety by independent regulators.

We, along with others, have often reported on weaknesses in DOE’s self-regulation of the environmental, safety, and health responsibilities at its facilities. These

weaknesses prompted then-Secretary of Energy Hazel O’Leary to seek external regulation for worker safety in 1993. In 1994, legislation was proposed and hearings

were held on external regulation of DOE nuclear safety. In 1995, DOE created an

advisory committee that concluded, ‘‘Widespread environmental contamination at

DOE facilities and the immense costs associated with their cleanup provide clear

evidence that self-regulation has failed.’’ 3 In 1996, a subsequent DOE working

group of senior managers concluded that external regulation could improve safety,

eliminate the inherent conflict of interest from self-regulation, gain consistency with

current domestic and international safety management practices, and improve credibility and public trust. The advisers recommended that safety and health at DOE

facilities be externally regulated.

In 1997, then-Secretary Frederico Pen ̃a took a more cautious approach to external

regulation by launching a pilot program with NRC and OSHA. The pilot program

was limited to DOE’s nondefense facilities. The purpose of the pilot program was

to test regulatory approaches and gain insight about the costs of external regulation

based on actual experience. The pilot program began in January 1998 at the Lawrence Berkeley National Laboratory in California and was completed in June 1998.

(OSHA completed an earlier pilot at the Argonne National Laboratory in Illinois in

1996.) The other NRC pilot program facilities were at Oak Ridge in Tennessee and

Savannah River in South Carolina. The results of the pilot program, as well as the

extensive interactions between DOE, NRC, and OSHA over the years, show that external regulation offers many potential benefits, and that external regulators have

the flexibility to adjust to the unique conditions at DOE facilities.

The current Secretary believes external regulation is not worth pursuing, contending that costs would likely outweigh the value of external regulation. His position contrasts sharply with DOE’s previous positions promoting external regulation.

His position also conflicts with the Department’s own pilot program results and is

inconsistent with conclusions reached by NRC and OSHA. The results of the pilot

program and the extensive practical experience gained with NRC and OSHA show

that external regulation for the class of facilities studied improves safety and accountability and is not likely to be prohibitively expensive.

51

While the pilot program revealed no major barriers to regulating the class of DOE

facilities studied, none of the pilot sites contained defense facilities. The pilot did

not include DOE’s three largest laboratories—Lawrence Livermore, Los Alamos, and

Sandia—which operate significant defense facilities. DOE’s defense facilities are far

more complex than the pilot sites and would likely require more time to study

issues such as the need to maintain security, regulatory costs, resource and skill

needs, and transition methods. For the much simpler pilot sites, nearly a year was

spent planning, conducting and reporting on the pilot results. DOE’s Working Group

on External Regulation recommended several years of experience be gained before

bringing in defense sites under outside regulatory control. Also, complicating any

transition to outside regulatory control is the examination of the role of the Defense

Nuclear Facilities Safety Board, which currently oversees nuclear safety at DOE’s

facilities.

Given these complexities, we believe the October 1, 2001, start up schedule contained in H.R. 3907 for full implementation of external regulation may not be

achievable for DOE’s defense facilities. Transitioning to NRC and OSHA regulation

of classes of DOE facilities in which experience has already been gained, such as

nondefense research laboratories, seems more workable. Then, phasing in NRC and

OSHA regulation of DOE defense facilities could occur over a longer period of time.

Mr. Chairman, as I discussed initially, all three bills have the potential to improve some aspect of health, safety, and security at DOE facilities. However, legislation can only take change so far. In the final analysis, it will require a long-term

commitment by DOE. This concludes my testimony. We would be happy to respond

to any questions that you or Members of the Subcommittee may have.

Mr. BARTON. Thank you, Mrs. Jones. We now would like to hear

from you, Dr. Shank, for 7 minutes. Your statement is in the record

in its entirety.

STATEMENT OF CHARLES V. SHANK

Mr. SHANK. Mr. Chairman and members of the subcommittee, it

is my pleasure to be here today to give my perspective on the three

bills dealing with environment, health, safety in the Department of

Energy complex.

Our laboratory is located in the hills above the University of

California at Berkeley campus. We are often, because of our name

of Lawrence, confused with our larger sister to the south. I have

more than one bus with visitors arrive looking out, seeing the San

Francisco Bay and asking could we see the Bay from Livermore?

We are not the Livermore Laboratory. We are a much simpler

laboratory. We have a budget of about $415 million and our primary mission responsibility is fundamental science with supporting

missions in the environment and energy efficiency.

The regulatory framework for national laboratories is an important part of their scientific productivity and important for the employees and important for our ability to protect the environment.

Providing a safe and healthy environment is a critical responsibility for me as a Lab Director of a national laboratory.

I am going to confine my remarks today on the H.R. 3907, which

would provide for external regulation of nuclear safety and occupational health safety at DOE laboratories. I would like to talk about

our experience with both the Nuclear Regulatory Commission and

the Occupational Health and Safety Commission pilots and then

give you some of my more general views about the proposed legislation.

As you know, we are located right next to the Berkeley campus

and for many years it has mystified me as to why identical activities carried on at the campus in the laboratory are regulated by different entities with different standards. As a consequence, when

52

NRC proposed a pilot project for external regulation of DOE facilities I quickly volunteered our institution.

My dream is for a world where work is regulated with uniform

standards independent of the entity that performs the work. Scientists could be trained with a single set of expectations for environment, health and safety considerations throughout the country.

Our NRC pilot took place in October 1997 and in January 1998

with two planning visits and two 1-week simulated regulation visits. The results of the pilot were encouraging. NRC found that

there were no significant safety findings to report. The laboratory

had an adequate plan to protect the health and safety for the public, employees and the environment. The NRC indicated that they

would be willing to issue our laboratory a broad scope license for

operation and that they could carry out their responsibility for our

site with approximately .1 FTE or approximately one person month

per year.

There are, however, serious concerns.

First, would external regulation be layered on top of DOE, current DOE orders? We fear a world of overlapping and redundant

responsibilities that would make it difficult for us to do our work.

Who would hold the license? The DOE report on our pilot indicates that additional people would have to be hired if DOE held the

license. Direct connection between the contractor and the regulatory agencies I think would be essential for us to be able to do

this properly.

And then who would be responsible for legacy issues? We at

Berkeley have a large facility, the Bevatron, which needs to undergo a cleanup, and funds have not been allotted for that cleanup,

and in the process of changing regulations it is very important for

us that issues and legacy issues be very carefully considered.

Finally, who would regulate x-ray units, accelerators, and other

naturally occurring radioactive materials? These would be new responsibilities that would somehow have to be added to the NRC capability. Based on our experience with NRC and the private sector

of ES&H staff, we volunteered for a similar pilot with OSHA.

That effort took place in December 1998 and January 1999. It

again involved two planning conference calls, an 8-day visit, and all

hands meeting with the laboratory staff and our local labor unions.

The visiting team included NRC, DOE, OSHA and Cal OSHA, and

the California Department of Health Services and the EPA. They

reviewed all of our facilities.

The overall conclusion was that the OSHA regulatory framework

could be applied to the Berkeley Lab and that the laboratory’s integrated safety management program is consistent with OSHA’s voluntary protection program, and I would like to say a very positive

word about the Department of Energy moving to integrated safety

management, because I think it has made us more effective in

managing our responsibilities for environmental health and safety

in our laboratories.

As the result of these pilot studies, I believe that external regulation of the Berkeley Lab is not only possible but also desirable—

however, with a very important caveat, that this be done with very

clear lines of authority and priority given to risk-aware implementation. This would mean that the contractors would deal directly

53

with regulatory agencies and that much of the DOE ES&H infrastructure would be reassigned to DOE’s core mission.

Let me be very clear about this. A layered, redundant oversight

subjecting the laboratories to regulatory oversight by both DOE,

NRC and OSHA would result in a more expensive, confusing and

I believe less effective environmental health and safety program.

Finally, I would like to make a point that needs to be made here.

The results of the pilot at our laboratory should not be used to generalize this approach to work performed at all DOE facilities. Our

laboratory is probably the simplest and easiest of the DOE facilities

on which one could do a pilot, and it may well be that external regulation may not be desirable on broader sites because of the specialized expertise necessary for managing the risks and the unique

facilities and security considerations. Thank you.

[The prepared statement of Charles V. Shank follows:]

PREPARED STATEMENT OF CHARLES V. SHANK, DIRECTOR, LAWRENCE BERKELEY

NATIONAL LABORATORY

Mr. Chairman and Members of the Subcommittee: It is my pleasure to be here

today to provide my perspective on three bills dealing with the environment, health

and safety of the Department of Energy complex.

Just to reacquaint you, Berkeley Lab is the oldest of the DOE national laboratories, founded in 1931 and located next door to the University of California, Berkeley campus. Today we operate on a budget of approximately $415 million performing

research for the Department of Energy (DOE), other Federal agencies and the private sector. Before becoming Director of the Lawrence Berkeley National Laboratory

in 1989, I spent 20 years at the AT&T Bell Laboratories, ultimately directing the

Electronics Research Laboratory in Holmdel, New Jersey. In addition, I now serve

as Professor in three Departments at the University of California at Berkeley, in

Physics, Chemistry and Electrical Engineering and Computing Sciences.

The regulatory framework for the national laboratories is important for their scientific productivity, the safety of our employees, and the protection of the environment. Providing a safe and healthy environment is a critical management responsibility of the Laboratory Directors.

The first bill, H.R. 3383, would eliminate the exemption for non-profit contractors

from paying fines and penalties levied under the Price-Anderson Act. As the University of California official responsible for managing my laboratory, I take compliance

with the Price-Anderson Act very seriously. I am proud of the fact that we have an

outstanding record of operating safely and of demonstrating the utmost concern for

the environment.

The University operates the Lawrence Berkeley National Laboratory, along with

the Livermore and Los Alamos laboratories, as a public service without the desire

for financial gain, and has instituted numerous mechanisms to insure compliance

with Price-Anderson and all Federal and state statutes. The fees paid to the University for their management activities are derived from support for the laboratories’

scientific programs. Therefore, any additional fees that might be paid as fines and

penalties would be additional ‘‘taxes’’ on our research programs, while not increasing our outstanding level of compliance.

The second piece of legislation, H.R. 3906, would establish a new Office of Independent Security Oversight within the Department, along with additional procedures for safeguards and security evaluations. I want to point out that Lawrence

Berkeley National Laboratory performs no classified research on its site and has no

ability to store classified information on site. We do, however, operate DOE’s largest

civilian supercomputing facility, along with managing DOE’s Internet operation, so

we do take seriously cyber security and other security measures appropriate for our

site.

My concern with the measures proposed in H.R. 3906 is that it imposes yet another new layer of bureaucratic management and oversight. A successful security

program requires line management accountability and employee support. This bill

will apply yet another burden on the scientific programs performed at the laboratories.

Finally, let me turn to H.R. 3907, which would provide for external regulation of

nuclear safety and occupational health and safety at DOE facilities. I would like

54

first to talk about our experience with external regulation pilot studies with both

the Nuclear Regulatory Commission (NRC) and the Occupational Health and Safety

Commission (OSHA), and then turn to some more general comments about the legislation.

As you may know, Berkeley Lab is located adjacent to the University of California, Berkeley campus, and we share many faculty and students. For many years,

it has mystified me that identical activities carried out on the campus and at the

laboratory are regulated by different entities, and with different standards. As a

consequence, when NRC proposed a pilot project for external regulation of DOE facilities, I quickly volunteered our institution. My dream is for a world where similar

work is regulated with uniform standards independent of the entity that performs

the work. Scientists could then be trained with a single set of expectations for environment, health and safety considerations throughout the country.

The NRC pilot took place between October 1997 and January 1998, with two planning visits to the laboratory, two one-week simulated regulation visits, and a public

meeting to seek community input and comments. The results of the pilot were encouraging. NRC found that there were no significant safety findings to report, and

that the laboratory had an adequate program to protect the health and safety of employees, the public and the environment. The NRC indicated that they would be

willing at that time to issue the laboratory a broad scope license for their operation,

and indicated that they could carry out their responsibility for our site with 0.1

FTE, or approximately one person-month per year.

There are, however, a number of serious concerns. Would external regulation be

layered on top of current DOE orders? We fear a world of overlapping and redundant responsibilities that would make it difficult for us to do our work. Who will

hold the NRC license? The DOE report on our pilot indicates that additional people

would have to be hired if DOE held the license. Who will be responsible for legacy

issues? We at Berkeley Lab have old facilities for which clean-up funds have not

been allotted. Who will regulate x-ray units, accelerators and naturally occurring radioactive materials?

Based on our experience with the NRC pilot, and the private sector experience

of our ES&H staff, we volunteered to conduct a similar pilot with OSHA. This effort

took place between December, 1998 and January 1999. It involved two planning conference calls, one eight-day site visit, an all-hands meeting with laboratory staff and

meetings with our local labor unions. The visiting team included representatives

from NRC, DOE, OSHA, Cal-OSHA, the California Department of Health Services

and the EPA. They reviewed all our facilities and programs applying the concept

of simulated regulation and inspection, with comprehensive safety and health inspections and simulated citations for alleged violations.

The overall conclusion was that the OSHA regulatory framework could be applied

to Berkeley Lab, and that the laboratory’s Integrated Safety Management program

is consistent with OSHA’s Voluntary Protection Program. OSHA did identify 63 simulated citations, for a total simulated penalty of $57,700 or an average of $916.00

per violation. They also had a number of issues that would need further attention,

but none of them could be considered significant enough to prevent their efficient

regulation of the site.

As a result of these pilot studies, I believe that external regulation of Berkeley

Lab is not only possible but also desirable, with the caveat that this is done with

clear lines of authority and priority is given to efficient, risk-aware implementation.

This would mean that contractors would deal directly with regulatory agencies, and

that much of the existing DOE ES&H infrastructure would be reassigned to the Department’s core mission. Let me be perfectly clear on this point: a layered, redundant oversight, subjecting the laboratories to regulatory oversight by both the DOE

and NRC and OSHA, would result in a more expensive and confusing ES&H climate.

Finally, I am very concerned that the results of these pilots not be used to generalize this approach to all the work performed at DOE facilities. In some cases, such

as at weapons laboratories and production facilities, external regulation may not be

desirable owing to the specialized expertise necessary for managing risks in unique

facilities and security concerns.

Mr. BARTON. Thank you, Dr. Shank. We would now like to hear

from Mr. Van Ness on behalf of the University of California.

STATEMENT OF ROBERT L. VAN NESS

Mr. VAN NESS. Mr. Chairman, I appreciate the opportunity to

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55

ing the exemption of nonprofit institutions from civil fines and penalties for Price-Anderson Act violations.

I have submitted a written statement to the subcommittee that

addresses this, but I would like to spend a few moments on some

key points covered in that statement.

When I appeared before the Subcommittee on Oversight and Investigations last June, I outlined the measures the University had

taken to implement nuclear safety programs at the DOE laboratories and the reasons the University is motivated to protect worker and public safety regardless of whether there is a financial penalty for failing to do so. All these things remain true.

Nevertheless, during the hearings last June the University

agreed that the existence of the Annual Performance Management

Fee, a revenue source that did not exist at the time that the statutory exemption was placed in the Price-Anderson Act, made it possible to remove the exemption if it were replaced by a suitably tailored provision that recognized the fiduciary responsibilities of nonprofit institutions such as the University.

Our understanding of the discussion at the June hearing was

that the committee was willing to limit any civil penalties for nuclear safety rule violations to the availability of annual fee to be

used for that purpose. Now our reading of the proposed legislation

is that there would be no limit placed on the potential financial

penalties.

We stand by our commitment of last summer, to be financially

accountable consistent with nonprofit purposes, but we urge that

legislation that reflects the financial needs of nonprofit contractors

be set forward.

There is similar legislation before the Senate that does establish

a ceiling on the amount of financial risk for nuclear safety violations. That would be preferable to the legislation being considered

by the committee, but the Senate language is critically flawed in

that it fails to recognize that nonprofit contractors have significant

existing unreimbursed costs in addition to those penalties that are

currently being considered.

This flaw would be remedied by the addition of the words ‘‘the

available annual’’ to the phrase ‘‘performance fee’’—such language

would assure that the sum of unreimbursed costs from all sources

is limited to the nonprofit contractors’ annual performance fee.

The primary reason we seek the limitation for nonprofit contractors is to meet our fiduciary responsibilities to the state of California, its citizens, our students and donors. It is also important to

recognize that performance fee paid to the University or any other

DOE contractor in reality diminishes the scientific effort funded.

DOE programs are provided appropriations that are distributed to

fund effort at the national laboratories. Fee is an element of overhead costs that is charged to the local program at a laboratory to

recover general and administrative costs of the laboratory.

It is for this reason and not to avoid accountability that the University has sought to minimize the nature and amount of federally

mandated unreimbursed costs.

The Congress is faced with balancing of interests. How do you

maximize the scientific effort obtained with any appropriation

while encouraging good stewardship on the contractors who operate

56

the national laboratories? There is no perfect answer. The University’s own solution today is a mix of idealism and pragmatism. The

University takes a fee that it believes is prudent to assure that it

can meet its fiduciary obligations and then returns the unexpended

balance to fund research at or for DOE laboratories.

We acknowledge the need to be accountable for worker and public safety. In spite of our commitment to safety, we have yet to

reach perfection. As you mentioned in your opening remarks, this

past Thursday we had a plutonium exposure incident at Los Alamos involving eight employees. Four of the eight required treatment. All eight have returned to work. The DOE is conducting an

investigation and the University and the Laboratory are cooperating fully. We will ensure full support to the exposed employees

as well as prompt implementation of all corrective actions.

Congress has a difficult task in balancing the interests of funding

science and holding cost-type contractors accountable as financial

accountability is a driver in the amount of fee. The University

strongly encourages the committee to consider a penalty amount

ceiling as recommended in this testimony as a means of making it

possible for nonprofit entities to continue to be operators of these

important national research facilities.

I thank you for your attention to this matter and I look forward

to answering any questions.

[The prepared statement of Robert L. Van Ness follows:]

PREPARED STATEMENT OF ROBERT L. VAN NESS, ASSISTANT VICE PRESIDENT FOR

LABORATORY ADMINISTRATION, UNIVERSITY OF CALIFORNIA

Mr. Chairman and Members of the Committee, I am Robert L. Van Ness, Assistant Vice President for Laboratory Administration for the University of California

(UC). The University operates three Department of Energy (DOE) laboratories—the

Los Alamos National Laboratory (LANL), the Lawrence Livermore National Laboratory (LLNL), and the Lawrence Berkeley National Laboratory (LBNL). My responsibilities include administering the performance-based management aspects of our

contracts with the Department of Energy and conducting oversight of the administrative and operational activities of the laboratories. I want to thank the Committee

for the opportunity to appear and to testify on an issue similar to the testimony I

provided before the Subcommittee on Oversight and Investigations last June. I have

included a copy of this previous testimony for the record.

The University is indemnified against public liability under the Price-Anderson

Amendments Act (PAAA), and, as such, is subject to DOE nuclear safety regulations

at the three laboratories. The University is also one of the entities currently exempt

from the civil fines and penalties under Section 234A (d) of the Act. My testimony

will address the proposed legislation (H.R. 3383) that would eliminate that exemption.

The University has historically opposed assumption of risk in the operation of federally-funded research and development centers (FFRDCs), including non-reimbursement of fines and penalties. Non-profit governmental entities such as UC do

not have the statutory authority nor financial resources necessary to assume substantial risk for operating FFRDCs. Indeed, Congress originally included the Price

Anderson exemption for non-profits in recognition that the federal government

would lose access to important non-profit partners in the management of the national laboratories without some risk allowance. As federal procurement policy related to FFRDCs evolved in the past 15 years, more costs associated with the maintenance and operation of these facilities have become unallowable costs. Accordingly,

the Department of Energy recognized the need to address this issue through the introduction of an annual performance-based management fee to federal contractors.

The UC contract to manage the three national laboratories was re-negotiated in

1992 and included an annual performance management fee. The introduction of the

fee structure addressed the risk issues and enabled the University to continue the

public service of managing three national laboratories.

57

During the Subcommittee on Oversight and Investigations hearings last June, the

University agreed that the performance management fee, an annual revenue source

that did not exist at the time the statutory exemption was adopted, provided a

mechanism by which the exemption for non-profits could be modified. The availability of a management fee provides an annual revenue source from which financial

penalties can be exacted for specified misconduct. At the hearing UC also urged the

Committee to limit penalty provisions to the availability of the annual performance

management fee. Expanding a liability provision, such as that proposed in the current legislation, beyond the availability of annual fee once again subjects a non-profit to more risk than its officeholders (e.g., the UC Regents) would find permissible.

Absent such a limitation the University would be unable to meet its fiduciary obligations to those that support its non-DOE laboratory operations—the California

state taxpayers, students, and donors.

We recommend the Committee consider similar legislative language currently

being considered by the Senate in S. 2162:

SEC. 8. CIVIL PENALTIES.

(a) REPEAL OF AUTOMATIC REMISSION—Section 234A b.(2) of the Atomic Energy of 1954 (42 U.S.C. 2282a(b)(2)) is amended by striking the last sentence.

(b) LIMITATION FOR NONPROFIT INSTITUTIONS—Section 234A of the

Atomic Energy Act of 1954 (42 U.S.C. 2282a) is further amended by striking

subsection d. and inserting the following:

‘d. Notwithstanding subsection a., no contractor, subcontractor, or supplier considered to be nonprofit under the Internal Revenue Code of 1954 shall be subject to a civil penalty under this section in excess of the amount of any performance fee paid by the Secretary to such contractor, subcontractor, or supplier

under the contract under which the violation or violations; occur.’

While the Senate language places a ceiling on the amount of penalties, it does not

provide absolute assurance that sufficient funds are on hand from annual contract

revenues to pay the penalties because non-profits are exposed to numerous other

types of unreimbursed costs. Consequently, we recommend modifying the language

to limit penalties to the amount of any available annual performance fee. Like all

DOE cost-type contractors, the University is subject to federal reimbursement limitations for a variety of costs including: environmental and security penalties; accounting deficiencies; defense costs in certain actions brought by state and local governments and federal agencies; defense costs in certain employee grievances; certain

liabilities to third parties; property and other losses under certain conditions; community relationships, and certain employee compensation expenses. Federal policies

in many of these areas encourage better practices by contractors, but losses are not

totally controllable by the prompt actions of contractors. For example, federal agencies have interpreted the Major Fraud Act to preclude 100% federal reimbursement

to government contractors even in cases where the contractor is completely exonerated.

It is also important to recognize that any annual performance fee paid to the University or any other DOE contractor, comes at the expense of funding for the primary scientific mission of the laboratory. The performance management fee is an

element of overhead cost that is charged to the local research programs at a laboratory to recover general and administrative costs of the laboratory. Since the mission

of the national laboratories is the conduct of their federally-funded research programs, the University has sought to minimize the nature and amount of federally

mandated unreimbursable costs associated with FFRDC operations.

We believe Congress is faced with balancing mutually important interests. How

do you maximize the scientific effort obtained with any appropriation while encouraging good stewardship from the contractors who operate the national laboratories?

There is no perfect answer. The University’s own solution to date is a mix of idealism and pragmatism. The University receives an annual fee that it believes is prudent to protect the non-profit institution against risk and meet its fiduciary obligations, then returns the unexpended balance to fund research at or for the UCDOE

laboratories.

Last June I testified about the important non-financial factors that motivate the

University and the safety of our nuclear operations as well as the existing contract

tools already available to DOE to ensure contractor compliance and performance improvement. Our approach to the amount and use of fee reflects our commitment to

the core motivations of the institution—to expand the base of human knowledge, to

confer knowledge from one generation to the next, to make our country secure

through the application of ideas and science. We are prepared to continue our record

of outstanding service to the nation and make alterations in the rules surrounding

that service so long as we can meet our core objectives and our fiduciary obligations.

58

We remain committed to the safety of our workers and the public, notwithstanding

the occasional setback. In that last regard I am obliged to tell the Committee of an

incident last week in which eight workers were exposed to small levels of air-borne

plutonium-238 at Los Alamos National Laboratory. Four of the eight employees required treatment. All eight have returned to work. We are working very closely with

DOE and others to take immediate and effective corrective action. We will ensure

full support to the exposed employees.

In summary, we embrace the need to be accountable for worker and public safety.

We applaud the interest of this Committee in balancing the interests of science with

the needs of employees and the general public to be safe from nuclear and environmental hazards. We recognize the difficulty you face in achieving a satisfactory level

of accountability from non-profit contractors and understand the intent behind the

proposed legislation. The University strongly encourages the Committee to consider

a penalty ceiling, as recommended in this testimony, as a means of ensuring that

non-profit entities can continue to be partners with the federal government in the

operation of FFRDCs. Thank you for the opportunity to appear before you.

Mr. BARTON. Thank you, Mr. Van Ness. We would now like to

hear from Ms. Eldredge for 7 minutes. Your statement is in the

record in its entirety.

STATEMENT OF MAUREEN ELDREDGE

Ms. ELDREDGE. Chairman Barton, members of the committee,

thank you for allowing me to testify.

Before I get into the details of my testimony, I just have to give

you the very, very short summary, which is in the past week and

a half there has been no less than five articles on nuclear safety

problems and disasters at DOE sites, and yet the General Counsel

sits here and says they have made tremendous strides in safety.

They have not, and the shortest version of my testimony that I can

give you is we could have OSHA now and we should do it. We have

some concerns about the other things, but there are pieces that we

could move forward with right now.

The Alliance for Nuclear Accountability is a network of 32 organizations. We have a long history of working at DOE nuclear weapons sites doing watchdog and oversight, and we have concluded

along with numerous external panels and independent advisory

committees that DOE cannot regulate itself and we are very

pleased that this committee is taking steps to address this problem

and hope that we can move forward with at least part of it this

year.

I want to touch briefly on some problems that came up in legislation last year that made the problem worse. That is the passage

of Title 32 of the Defense Authorization Act which set up the National Nuclear Security Administration. I will just highlight two

problems with that.

One is the problem of sovereign immunity. I know that the Attorney Generals have been before you at another hearing talking

about that so I will not spend too much time on it, but there is

some language in that Act that creates some ambiguity about

whether the waivers of sovereign immunity that exist now at the

DOE weapons sites still apply to the NNSA sites, and we urge you

to address that.

Additionally, there is a problem with Price-Anderson Act enforcement of the nuclear safety rules with regards to the NNSA facilities. There is a consequence of the Act that now the Assistant Secretary of Environment, Safety and Health cannot issue notices of

violation or fines directly to the offending NNSA facility. They have

59

to go through the Administrator of the NNSA, so essentially the

line program that has committed the violation has to fine itself.

This is sort of self-regulation and it needs to stop, and we urge you

to pass legislation that will both clarify the sovereign immunity

issue and ensure that the Office of Environment, Safety and Health

has authority over all aspects of DOE including the new National

Nuclear Security Administration.

NNSA is not the sole source of the problem however. There have

been and there remain serious problems within the weapons complex. Last week five workers at the Los Alamos Lab, as was mentioned, were exposed to plutonium. Rocky Flats workers and managements were reported to have been violating safety procedures

that prevent criticalities. There have been explosions at the Y-12

plant in Oak Ridge. The list goes on and on.

The frequency and severity of some of these accidents astounds

me. After 50 years of nuclear weapons work DOE still doesn’t seem

to realize that it is handling some of the most deadly material

known to man.

The case for external regulation has been built over 50 years and

it cannot be stated more bluntly: DOE cannot regulate itself.

We hope the committee will not fall prey to partisan disputes—

I am disappointed that none of the minority is here—and can overcome political roadblocks to this much-needed reform.

Mr. BARTON. I’ll let them know your testimony, I promise.

Ms. ELDREDGE. Thank you.

With regards to H.R. 3907 we greatly support the concept of

moving to external regulation and we strongly support OSHA as

the regulator, but we do have some concerns about the Nuclear

Regulatory Commission as a regulator which I will touch on later.

OSHA can be brought in to regulate protection for all workers

with the caveat that it needs sufficient resources, both funding and

personnel, and time to do the job right, and it is close to criminal

that there is little enforcement system for worker safety rules at

DOE that are not part of the Price-Anderson Act Nuclear Safety

Rule Enforcement Program but are equally vital. This includes the

new beryllium rule, which is a nice rule but it doesn’t have any enforcement procedures attached to it.

For regulation of facility safety we are concerned about NRC as

the regulator and concerned about shifting the responsibility from

one dubious entity to another. The 1995 Advisory Committee, the

independent committee that looked at external regulation, also had

difficulties reaching conclusions on who should be the regulator for

nuclear facility safety.

NRC has shown a remarkable ability to push the nuclear industry interests at the expense of public health. For example, they

have licensed uranium mines in New Mexico even while acknowledging that the results of these mining operations would be contamination of the sole drinking water supply for 15,000 people,

mostly Native Americans, and currently they are shifting to a riskinformed regulatory approach which 60 percent of its own staff believe will reduce the margins of safety at nuclear plants so we have

some concerns there.

For our network of 32 organizations, NRC is not the white hat

that will come riding in and save the day. However, this should not

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1 Advisory Committee on External Regulation. Improving Regulation of Safety at DOE Nuclear

Facilities, December 1995.

stop us from moving forward with phasing in external regulation

at DOE and looking at pilot projects for who would be a good regulator and exploring some changes to NRC to make that a better

regulator.

Some specific recommendations for this year: Institute OSHA

regulation for all worker safety requirements. It is simple, there is

precedent and it makes sense. I do not see hardly see why there

is anything more to say about it.

We also recommend amending the Atomic Energy Act to harmonize it with other environmental statutes. This in particular refers to citizen suit provisions. They have been the provisions that

have provided access for citizens and the states to make their regulators accountable and we recommend that we look at setting up

citizen suit provisions for both NRC and for DOE.

At DOE, the problem is even worse. There are no citizen suit

provisions with regard to the orders, and even within DOE they

said they needed 11 rules to have a good Price-Anderson Act enforcement program. They have only put out two of them to date.

Finally, administrative changes that could be made right away

and wouldn’t even require legislation, and that is requiring DOE

to meet OSHA reporting standards. They have the data. They have

it on data base, but they will not put it out for the public to access.

They could do it easily and they should.

In conclusion, we urge you to move forward with this effort at

external regulations, whichever pieces that you can. Fundamentally, DOE as a self-regulating entity cannot persist without seriously compromising safety and health. After 50 years of environment and safety disasters, it is time to bring DOE into the future.

Thank you.

[The prepared statement of Maureen Eldredge follows:]

PREPARED STATEMENT OF MAUREEN ELDREDGE, PROGRAM DIRECTOR, ALLIANCE FOR

NUCLEAR ACCOUNTABILITY

Chairman Barton, Representative Boucher, and members of the Committee, the

Alliance for Nuclear Accountability appreciates the opportunity to once again testify

on badly needed efforts to improve the environment and safety culture at the Department of Energy (DOE).

The Alliance for Nuclear Accountability is a national network of 32 organizations

working on nuclear weapons complex issues. For over a decade we have decried the

shoddy environmental and safety practices at DOE. This disregard for environmental rules resulted in the widespread contamination around the complex. We

have pressed for DOE to be subject to the same environmental laws and requirements as the rest of us, and we concluded that neither DOE nor any other agency

could be an effective regulator of itself. The federally appointed Advisory Committee

on External Regulation of DOE Nuclear Safety, also concluded that, ‘‘Every major

aspect of safety at DOE nuclear facilities—facility safety, worker protection, public

and environmental protection—should be externally regulated . . .’’ 1

We are very pleased that the committee is taking steps to address this problem.

We hope that if the entire legislative package is not possible all at once, that at

least some crucial elements will be addressed in legislation this year. We need to

move towards a more sane regulatory structure for DOE, and take steps now to

start the process.

PROBLEMS WITH THE NATIONAL NUCLEAR SECURITY AGENCY

The passage of Title 32 of the Defense Authorization Act for Fiscal Year 2000,

which set up the National Nuclear Security Administration (NNSA), was a disaster

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2Section 3213 (a) STATUS OF ADMINISTRATION PERSONNEL. ‘‘Each officer or employee

of the Administration, in carrying out any function of the Administration’’

(2) shall not be responsible to, or subject to the authority, direction, or control of, any other

officer, employee, or agent of the Department of Energy.

(b) STATUS OF CONTRACTOR PERSONNEL. ‘‘Each officer or employee of a contractor of

the Administration, in carrying out any function of the Administration, shall not be responsible

to, or subject to the authority, direction, or control of, any officer, employee, or agent of the Department of Energy who is not an employee of the Administration, except for the Secretary of

Energy consistent with section 202(c)(3) of the Department of Energy Organization Act.

for environment, safety, and health programs. Rather than move us towards better

regulatory oversight of DOE’s nuclear weapons program, it shifted, either through

intent or ambiguous legislative language, to a situation that more closely resembles

the bad old days of the Atomic Energy Commission, than a modern and environmentally sound approach to operations.

I would like to highlight two major problems with the NNSA structure. These are

the ambiguity regarding DOE’s waiver of sovereign immunity and the oversight role

of the office of Environment, Safety, and Health (EH) in the new Administration.

Sovereign Immunity

The federal government faces an enormous liability in the cleanup of the nuclear

weapons complex. DOE estimates that it has contaminated over 600 billion gallons

of groundwater and over 33 million cubic meters of soil. This contamination came

from decades of abuse, in which there was no external regulation, and DOE and its

predecessor agencies claimed that they had ‘‘sovereign immunity’’ from compliance

with environmental laws enforced by States. In 1992 Congress passed the Federal

Facilities Compliance Act, which originated in this committee, to clarify that DOE

was, in fact, required to comply with State enforcement and regulations.

Sections 3261 of S. 1059 includes qualifying language which casts doubt on the

applicability of the current waivers of sovereign immunity with respect to the

NNSA. It states:

The Administer shall ensure that the Administration complies with all applicable environmental, safety, and health statues and substantive requirements.

(emphasis added)

This qualifying language has raised concerns in State Attorney General’s offices

across the country with regards to the sovereign immunity issues, and we concur

with their analysis. We urge the Congress to amend the NNSA legislation to clarify

that State regulatory authority over NNSA remains intact, and that the waivers of

sovereign immunity in place before the creation of the NNSA also apply to it. Relying on a record of legislative intent it not sufficient.

Price-Anderson Act Enforcement

In addition to the sovereign immunity problem, there is serious concern with regards to the application of EH requirements to the new Administration. A consequence of the NNSA legislation was to effectively pull the teeth of the already

weak efforts at regulation of safety and health issues from within DOE. The Assistant Secretary of the Office of Environment, Safety, and Health can no longer directly issue notices of violations and impose fines under the Price-Anderson Act for

nuclear safety rule violations, to NNSA facilities. The Assistant Secretary must develop a recommendation to submit to the Administrator of the NNSA, who then decides upon imposing fines. This situation arises out of language in Title 32, which

prevents non-NNSA personnel from directing NNSA personnel.2 This is self-regulation at its worse, as even the limited independent enforcement authority within

DOE is eliminated. The line program, the very program that has committed the violation, will be asked to fine itself. Only continual pressure from the outside, including media and public interest groups, will ensure enforcement. Nuclear safety enforcement by continual scandal is not effective. This is a massive step backwards

and must be corrected.

In addition, several of the labs have already indicated that they no longer feel

they must comply with EH rules and requirements, despite DOE’s ‘‘duel-hatting’’ of

the Assistant Secretary for EH. We believe it was the intent of the drafters of this

legislation to ensure the autonomy of the NNSA. However, we strongly oppose the

idea of recreating a new office of EH within the NNSA, which would be at a lower

status and report to the Administrator instead of to the Secretary of Energy. There

is already a problem with DOE being self-regulated, subsuming the EH functions

within the NNSA would further compound this problem. There is one clear solution—the Office of Environment, Safety, and Health should have authority over all

parts of DOE, including the NNSA.

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3Katy Human. Reports: Flats Broke Safety Rules. Boulder Daily Camera, March 20, 2000. 4Dr. David Michaels, Assistant Secretary for Environment, Safety, and Health. DOE News

Release, February 24, 2000.

The solutions to the EH problems that have been offered to date are not enough.

Exhortations in the legislation to ‘‘ensure that all operations and activities of the

Administration are consistent with the principles of protecting the environment and

safeguarding the safety and health of the public and of the workforce (Section

3211(c))’’, provide no guarantee of compliance with regulations and orders. Legislating Secretarial authority to delegate is not sufficient. Such an action still leaves

the crucial environment, safety, and health compliance of the entire agency up to

the decision of one person, who may or may not be in place for very long. These

issues are too important to leave in such an uncertain state, dependent on the will

of one person.

We urge you to pass amending legislation that clarifies that the Office of Environment, Safety, and Health’s has full authority over the NNSA with regards to environment, safety, and health oversight and enforcement, and that the Price-Anderson

Act enforcement program is fully enforceable by EH on NNSA facilities.

PROBLEMS EXIST THROUGHOUT THE DEPARTMENT

Even before the NNSA came into being there were, and there remain, serious

problems in the weapons complex which result in injuries to workers and contamination of the environment, seemingly beyond the ability of DOE to correct. Since

I last testified on this subject, the list of accidents and violations has continued

unabated. Just last week five workers at the Los Alamos lab in New Mexico were

exposed to airborne, particulate plutonium, a known carcinogen. On Monday the

Boulder, Colorado, newspaper reported that Rocky Flats workers and managers violated safety procedures, which increased the risk of nuclear explosions

(criticalities).3 On March 8th, DOE levied $110,000 in fines against Westinghouse

Savannah River for recurring violations of safety procedures on equipment design,

construction, and installation. In December of 1999, there was an explosion at the

Y-12 plant at Oak Ridge, which injured 11 workers. Not only did DOE find that

there were ‘‘failures at every level of...(the) management chain’’, but it also determined that injuries could have been lessened had proper protective equipment been

available for the personnel.4 In April of 1999, Lockheed Martin, DOE, and Fluor

Daniel were all fined at the Hanford site for inadequate monitoring of high level

waste tanks. Finally, on March 6, DOE publicly announced what site managers had

known for over 9 months—that the Ogallala aquifer was contaminated with trichloroethylene from the burning grounds at Pantex.

The list of violations in just one year could fill a textbook. The frequency and severity of some of these accidents continues to astound me. After over 50 years of

nuclear weapons work, DOE and its contractors still fail to realize that they are

dealing with some of the most dangerous materials on earth, and treat safety procedures as optional.

The case for external regulation of DOE has been built over 50 years, and at this

point seems, to the general member of the public, beyond obvious. It cannot be stated more bluntly: DOE cannot regulate itself. The record of such self-regulation is

astounding in its failure. Political obstacles have prevented the common-sense move

towards external regulation for decades, and we see them developing again in this

Congress. We sincerely hope that this committee will not fall prey to partisan disputes, and can overcome the political roadblocks to this much-needed reform. We

ask, how many more accidents, injured workers, and contaminated groundwater is

needed before this effort can move forward?

CRITIQUE OF HR 3907 AND SPECIFIC CONCERNS

In general, the Alliance for Nuclear Accountability greatly supports the concept

of HR 3907 in moving DOE into external regulation. In 1995, the independent advisory committee recommended that DOE be externally regulated, and supported

OSHA as the regulator for worker safety. However, it did not reach consensus on

who the regulator should be for nuclear safety. Unfortunately, with regards to nuclear safety and regulatory enforcement, neither can we.

Occupational Safety and Health Administration

At a minimum, the Occupational Safety and Health Administration (OSHA)

should be brought in as the regulator for all protection of workers, with the caveat

that it needs sufficient resources—both funding and personnel, to do the job right.

It is close to criminal that there is little enforcement system for the worker safety

63

rules at DOE that are not nuclear safety rules, but are equally vital. These include

the new beryllium rule, which is intended to protect workers from berylliosis, a crippling lung disease, or protection from the many chemical hazards that exist at DOE

facilities. OSHA has the statutory authority to enforce these rules, however DOE

exercises its exemption under 4 (b)(1) of the Occupational Safety and Health (OSH)

Act. This exemption was intended to allow agencies to enforce the rules themselves.

Given DOE’s abysmal record of this, combined with the new NNSA’s reluctance to

take orders from anyone, it is time to remove this exemption for DOE and return

OSHA’s authority.

However, to do this requires both time and money. It is not sufficient to say that

OSHA will regulate a facility, and then have the nearest OSHA office be hundreds

of miles away, with an extremely limited capacity for effective oversight. DOE will

require sufficient resources to come into compliance. A time frame must be developed for transitioning to OSHA regulation and for bringing DOE into compliance.

An effective time frame should be on the order of two years, with sufficient incentives for DOE to actually begin work on compliance now.

Nuclear Regulatory Commission

For regulation of facility safety, we are concerned about the Nuclear Regulatory

Commission (NRC) as the choice of regulator. Faced with the choice of DOE or NRC

as a regulator is a bit like being faced with death by hanging or death by firing

squad. Neither is particularly attractive and shifting responsibility from one dubious

entity to another is not much of a solution. The 1995 Advisory Committee recommended looking at either NRC or the Defense Nuclear Facilities Safety Board

(DNFSB). Both of these entities have problems and would need some major structural changes to be acceptable.

NRC has shown a remarkable ability to push nuclear industry interests at the

expense of public health. It proposed a ‘‘below regulatory concern’’ (BRC) category

for nuclear waste, which would allow such waste to be treated as if it were not nuclear. Only strong opposition from the public prevented this step, but NRC generally

still supports it. Given the ongoing trend in radiation standard setting, which finds

that previous standards were not stringent enough, this position is alarming. NRC

has licensed uranium mines in New Mexico even while acknowledging that the result of the mining operation would be contamination of the sole drinking water supply for 15,000 people, mostly Native Americans. Currently NRC is shifting to ‘‘riskinformed’’ regulation, which 60% of its own staff believes will reduce the margins

of safety at nuclear power plants. It is also trying to shift to informal rulemaking,

which will reduce the public’s access to information and ability to intervene in the

process.

For our network of 32 organizations, NRC is not the ‘‘white hat’’ that will come

in to save the day at DOE. However, that does not mean that we support giving

up on the effort to find an external regulator. We should move forward, begin phasing in external regulation under OSHA, and develop tools to evaluate the performance of both NRC and the Defense Nuclear Facilities Safety Board (DNFSB) as possible regulators. External regulation will not come overnight, but the challenges we

face should not dissuade us from doing what is right. Both NRC and DNFSB would

need some changes to its operations to be acceptable as a regulator. The DNFSB

would need to curtail its activities to safety issues, rather than commenting on

equipment choices and preferred technology issues, which are unrelated to safety.

NRC would need to be subject to citizen suit provisions and operate from a basis

that emphasizes public and worker safety, rather than growth of the nuclear industry. Exploration of both options for a regulator should continue, with an eye towards

reforms.

RECOMMENDATIONS

The Alliance for Nuclear Accountability urges the committee to move forward now

on a number of actions that may not be the complete legislative package that we

all want, but will be important steps in the right direction.

Legislative Changes

A. Institute OSHA Regulation for all Worker Safety Requirements.—Currently,

even within the non-NNSA parts of DOE, compliance with EH requirements in

areas other than nuclear safety, such as OSHA requirements, chemical safety rules,

and the new beryllium rule, is entirely voluntary. There are no penalty provisions

for these rules, as exist for nuclear safety rules under the Price-Anderson Act. This

is absolutely unacceptable. If the legislative challenges facing HR 3907 prove too

steep, we urge the committee to excerpt section 4 as an amendment on its own.

Some modifications include providing for baseline reviews of DOE compliance and

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5Peter Eisler. Safety Over a Barrel. USA Today, March 20, 2000. 6To conduct an accident search, go to http://www.osha.gov/oshstats/ and click on Accident Investigation Search. 7To access LANL’s ORPS reports, go to http://drambuie.lanl.gov/esh7/Finals/. LANL’s homepage is www.lanl.gov.

a two-year time frame to move into OSHA enforcement. There is precedent for this

in the transfer of enforcement authority to EPA for CERCLA and RCRA programs

in 1985. In addition, the OSH Act has authority for radiological hazards already,

and could be to cover combined radiological and non-radiological hazards in the absence of a second external regulator.

B. Amend the Atomic Energy Act to Harmonize it with Other Environmental Statutes.—The lack of citizen suit provisions in the AEA eliminates one of the most effective tools available to States and the public for ensuring agency accountability.

The 1995 Advisory Committee on External Regulation recommended that citizens

be allowed to sue DOE and its contractors to comply with applicable statutes and

regulations. We recommend that the citizen suit provision also be extended to the

NRC. The ability of citizens and States to bring suit under the Clean Water Act and

other statutes has been responsible for ensuring much of the compliance within

agencies and corporations we see today (example of State suing, particularly

Texas?). It allows states to enforce regulations and protect its citizens by challenging the regulators when it sees the need. Setting up the same type of citizen

suit provisions on the NRC would go a long way towards making it a more acceptable and accountable regulator.

Within DOE, the problem is even worse. Not only are there no citizen suit provisions with regards to DOE orders, many of those orders are not even enforceable

under DOE’s own rulemaking procedures. In fact, DOE hasn’t even issued all the

safety rules that would provide additional enforcement authority under Price-Anderson. It has finalized only two of the 11 rules it said it needed, and USA Today on

March 20 explores the possibility that industry pressure has prevented the rules

from proceeding.5 Until DOE is externally regulated, one positive step that can be

taken now would be to require DOE to issue all orders pursuant to the Administrative Procedures Act notice and comment. This would allow citizen suits to proceed

under the requirement that the agency must follow its own orders. This would not

address the issue of making contractors more accountable, as they would not be subject to citizen suits under this law. However, even this small step forward would

be welcome.

Administrative Changes

A. Require DOE to Meet OSHA Reporting Standards.—At OSHA, one can log onto

a web site and see a list of violations at a facility, and their ultimate disposition.

OSHA also requires a log of on the job injuries and illnesses. There is no reason

this can’t happen at DOE. Already DOE has the Operation Reporting Program System (ORPS), in which incidents and events are shared with DOE for significant

safety and health items. In addition it has the Computerized Accident and Incident

Reporting System (CAIRS), which is similar to the OSHA log of on the job injuries

and illnesses. I have included with my testimony a copy of the OSHA web site page,

and the results of a search for accidents involving trichloroethylene. OSHA provides

the ability to search by a variety of terms, and lists all accidents that match, as

well as providing detailed information about the accident and fines imposed.6 By

contrast, most DOE sites do not provide easy public access to its ORPS reports.

Only at the Los Alamos National Lab (LANL), due to the persistence of determined

individuals, are ORPS reports posted on a database, and even that is not easy to

find on their web site unless you know it is there. It is buried six screens deep

under Environment, Safety, and Health ‘‘services’’ rather than in the ‘‘databases’’

section. Information from the CAIRS reports, which is relevant to OSHA, is not

available to the public. Other accident and incident data exists in databases that

are not only closed to the public, but closed to many workers as well.7 The basic

infrastructure is in place for DOE to report accidents, which could easily be converted to OSHA-style reports and open to public access. This is important information for both the public and the workforce, and should be made available as a tool

to further contractor and agency accountability. It would not require a legislative

change to make this happen, just a decision by DOE to be more open about its mistakes.

B. Clarify and Invest the Environmental Protection Agency with Standard Setting

Authority.—Protracted fighting between EPA and NRC over standard setting for nuclear issues, such as Yucca Mountain, and reactor decommissioning, have resulted

in few, inconsistent, standards. This is untenable. EPA is the agency charged with

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8GAO. Nuclear Health and Safety: Consensus on Acceptable Radiation Risk to the Public is

Lacking. GAO/RCED-94-190. September 1994.

protecting public health and the environment, and should be given the sole responsibility for standard setting. While we are often not happy with EPA’s standards, and

consider them too weak, they are a far cry from NRC. For example, NRC’s standard

for exposure to the general public would result in a lifetime risk of premature cancer death of one out of every 300 people 8. That is shocking and shameful. The nuclear industry should be subject to the same standards and risk levels as other industries, and EPA should be the regulator in that regard.

C. Set Up Limited NRC Regulation as a Test.—There are several possible activities within DOE sites that could be considered as test cases for NRC regulation and

licensing, beyond the pilot projects already conducted. These include the Low Level

Waste Dumps at DOE sites, and possibly reactors like the Fast Flux Test Facility

(FFTF) at the Hanford site. Currently, DOE’s LLW landfills do not even approach

NRC’s standards, and are a clear threat to the groundwater at many sites. There

are already a clear set of standards and infrastructure in place, including delegated

state programs. Finally, many of DOE’s LLW dumps are de facto illegal hazardous

waste/Resource Conservation and Recovery Act (RCRA) dumps, due to DOE’s inability to properly track and characterize its waste. If the FFTF were restarted, it

should be licensed and regulated by NRC, and meet modern safety standards. Specific facilities at DOE should be reviewed and considered for NRC regulation. However, NRC should be prevented from going to informal rulemaking that could subvert the intent of better, more accountable, regulation.

CONCLUSION

In conclusion, the Alliance for Nuclear Accountability strongly urges the committee to move forward with at least some parts of an external regulation program

for DOE as soon as possible. The creation of the National Nuclear Security Administration has resulted in a number of problems for the protection of the environment,

worker safety, and public health. These can be partially addressed by legislative

remedies and amendments to the NNSA act. Fundamentally, DOE or NNSA as selfregulated entities cannot persist without seriously compromising safety and health.

After 50 years of environmental and safety disasters, it is time to bring DOE into

the future.

ADDENDUM:

The Committee asked for input on two other bills, HR 3383 and HR 3906. With

regards to HR 3383, we strongly endorse this bill and urge you to proceed with it

without delay. It strains credulity that the sole enforcement mechanism available

to DOE for nuclear safety violations cannot be used against the University of California (UC), one of the largest contractors in the weapons complex. UC has the contracts for the weapons laboratories, which are the source of many serious accidents

and will be the source of many future problems. These labs are in ongoing operations with some of the most hazardous material known to humanity. They are now

subject to fines and penalties for security program violations. Surely the protection

of the American public and nuclear workers from radiation hazards deserves as

much.

We have no opinion on HR 3906 at this time.

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Mr. BARTON. Thank you, and I want to say in defense of the minority that is not here, we do have a pending bill on the floor that

is a subcommittee bill, so that many of the subcommittee members

on the minority side would be here if it were not for the fact that

they were engaged in the debate on the floor.

I would now like to hear from Dr. Adelman for 7 minutes. Your

testimony is in the record in its entirety.

STATEMENT OF DAVID E. ADELMAN

Mr. Adelman. Thank you, Chairman Barton and members of the

subcommittee for giving me the opportunity to testify today.

My remarks will focus on external regulation of the Department

of Energy. I want to commend Chairman Barton and the other subcommittee members for introducing H.R. 3907, which represents an

important step toward reforming the DOE regulatory system.

And I urge you to continue to work toward developing a comprehensive bill that will fully address the many complex issues

raised by shifting to external regulatory oversight of DOE.

As this subcommittee is well aware, self-regulation is unique to

DOE and has been an unqualified failure. DOE’s deficient self-regulation has resulted in the largest environmental cleanup in history, over 10,000 individual sites at which toxic or radioactive substances were improperly abandoned or released directly into the

environment, millions of cubic meters of contaminated soil and

groundwater, at a total remediation cost of almost $200 billion.

Moreover, chronic lapses in compliance with environmental, safety, and health regulations continue at DOE sites as evidence by the

recent revelations of failed regulatory compliance at DOE’s Paducah, Kentucky facility, which has led to a major DOE investigation

and Congressional hearings; major accidents, including two fatalities and more than $2 million in environmental and safety fines at

DOE’s Idaho site; and recent findings of inadequate safety standards at Los Alamos, Livermore, and Savannah River by the Defense Nuclear Facilities Safety Board.

Clearly, DOE’s self-regulation is not working. After reviewing

DOE’s regulatory record, it is no wonder that its Advisory Committee on External Regulation, which was composed of government,

nuclear industry, and NGO representatives, found that the severe

problems with DOE’s approach to safety have their roots in DOE’s

unique regulatory history and current regulatory framework, and

that essentially all aspects of safety at DOE’s nuclear facilities and

sites should be externally regulated.

This subcommittee’s efforts to develop legislation to end DOE’s

self-regulation is therefore extremely important, particularly in

light of Secretary Richardson’s untimely and regressive decision in

February 1999 to abandon external regulation of DOE facilities.

There are, however, several critical issues that should be addressed before the proposed legislation proceeds: First, public participation, including citizens suits, should be integral to external

regulation of DOE.

Citizen suits have been important for over two decades. It was

a citizen suit in 1984 that required DOE to comply with environmental, health, and safety regulations, and more recently it was a

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citizen suit brought by several workers at Paducah that exposed

the problems at DOE’s Paducah facility.

Public scrutiny enforcement is essential to agency accountability,

particularly where, as here, state and Federal agencies will be enforcing laws against another government entity. Furthermore,

making itself fully accountable to the public is the only way that

DOE will restore its credibility.

Second, the National Nuclear Security Administration must be

subject to external regulation. As the DOE’s own advisory committee found, the only area of DOE operations that arguably should

be exempt from external regulation is nuclear explosive safety.

Indeed, virtually all of the information that is relevant to the

safe operation of DOE facilities will not be classified. In any event,

the NRC has well established procedures and experience with handling classified information.

Therefore, there is no basis upon which to treat NNSA facilities

differently than other sites in the nuclear weapons complex.

Third, with some 34 sites containing 3500 nuclear facilities, the

transition to external regulation will take time. Consultations with

each of the agencies and review of existing reports and pilot

projects will be essential to identifying a reasonable transfer period.

However, establishing a deadline or series of deadlines for transferring regulatory authority will be essential to ensuring that it is

successful and timely.

The importance of external regulation of DOE cannot be overemphasized. As DOE itself concluded in 1996, external regulation

is an essential element of completing the move from DOE’s historical self-regulated status, which has been variable, costly, and inconsistent, to a stable, efficient, and predictable safety environment.

I appreciate your giving me the opportunity to testify today, and

would be pleased to answer any questions.

Mr. LARGENT [presiding]. Thank you, Dr. Adelman. We understand our last witness is still tied up in a Senate hearing, and with

unanimous consent, we will allow Mr. Miller to submit his testimony for the record.

[The prepared statement of David E. Adelman follows:]

PREPARED STATEMENT OF DAVID E. ADELMAN, PROJECT ATTORNEY, NATURAL

RESOURCES DEFENSE COUNCIL, INC.

Chairman Barton, ranking minority member Hall, and members of the Subcommittee, my name is David Adelman. I am a project attorney with the Natural

Resources Defense Council (‘‘NRDC’’), a national non-profit environmental organization with over 400,000 members and a staff of about 190 scientists, attorneys, resource specialists, and support staff. I am the project attorney for NRDC’s nuclear

program, which for over twenty-five years has actively worked to address serious

environmental, health, and safety problems at the Department of Energy’s (‘‘DOE’’)

nuclear weapons production complex.

Thank you for allowing me to address the issues related to external regulation

of environment, health, and safety at DOE’s facilities. There are three central issues

I will address in my testimony. First, DOE’s self-regulation of environment, safety,

and health, continues—after more than fifty years—to be plagued by deficiencies,

chronic violations, and accidents. Second, fundamental regulatory reform is necessary to ensure that the environment, worker health and safety, and public health

and safety are adequately protected and that public confidence in DOE is restored.

Third, for a new regulatory regime to be effective and credible, citizen participation—particularly citizen suits—must be at the heart of the new regime.

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1Department of Energy, Report of Department of Energy Working Group on External Regulation 3-11 (1996) (hereinafter ‘‘DOE Working Group Report’’).

The bill, H.R. 3907, that the Committee members have introduced is a clear step

in the right direction in reforming the DOE regulatory system, and I urge you to

continue to work towards developing a comprehensive bill that will fully address the

many complex issues raised by transitioning from the current state of DOE self-regulation to external regulation by the Occupation Safety and Health Administration

(‘‘OSHA’’), the Nuclear Regulatory Commission (‘‘NRC’’), and the Environmental

Protection Agency (‘‘EPA’’). Such legislative action by Congress is all the more important in light of Secretary Richardson’s reversal of the Department’s December

1996 decision to submit legislation to Congress on external regulation. There are,

however, several critical issues that must be addressed before the proposed legislation proceeds, including:

(1) ensuring that there is adequate funding—DOE estimates it spends about $1.5

billion annually on safety and health regulation; 1

(2) developing plans to ensure that the external regulators have the personnel necessary to provide competent oversight;

(3) adding a provision to the legislation granting citizens the right to bring enforcement actions;

(4) making it explicit that the National Nuclear Security Administration is also subject to external regulation; and

(5) affording adequate time for a smooth and efficient transition from DOE self-regulation to external regulatory oversight.

I. THE FAILURE OF SELF-REGULATION AT DOE FACILITIES

Under current law, DOE is a largely self-regulating agency pursuant to the Atomic Energy Act. That is, as a general rule, the DOE is not subject to regulation and

oversight by any external administrative entity. Instead, it is responsible for regulating its own activities in regard to worker and public health and safety and in

regard to most types of environmental discharges of radioactive materials. The relatively new Defense Nuclear Facilities Safety Board can make recommendations to

DOE on safety issues; but these recommendations are non-binding, and the Board

has no regulatory power over DOE’s activities.

This self-regulation scheme is utterly unique to the Department of Energy. The

American legal system has, in every other context I can think of, soundly rejected

the concept of self-regulation. Except as regards the DOE, our legal system correctly

rejects the notion that an entity with a mandate for production can effectively ensure, without outside assistance, that this production mandate will not overwhelm

or supersede the need to protect the environment and human health and safety. The

exceptional nature of the DOE regulatory system is all the more astonishing in that

the production of nuclear weapons involves producing, handling, managing, and disposing of some of the most dangerous substance known to humankind.

If we view the DOE experience as an experiment in whether self regulation can

work, it is clear that the experiment has been an unqualified failure. The statistics

are stark. Nuclear weapons production at DOE facilities has resulted in the largest

environmental cleanup in the world, involving more than 100 facilities located in

more than 25 states, an annual budget of almost $6 billion, and conservative estimates of total cleanup costs of approximately $200 billion.

To date, DOE has identified over 10,000 individual sites at these facilities where

toxic or radioactive substances have been improperly abandoned or released directly

into soil, groundwater, or surface waters. Under current estimates, nuclear weapons

production in the United States has resulted in the contamination of more than 79

million cubic meters (21 billion gallons) of soil and 1.8 billion cubic meters (475 billion gallons) of groundwater—in comparison, the Exxon Valdez spill involved the release of 11 million gallons of oil. In addition, DOE manages more than 24 million

cubic meters (6.4 billion gallons) of hazardous or radioactive wastes generated by

past and ongoing nuclear weapons production.

Moreover, despite efforts to improve the regulation of activities at DOE sites, serious incidents and lapses in health and safety regulation continue to occur. At DOE’s

Paducah, Kentucky, uranium enrichment plant, evidence was recently uncovered of

alleged illegal disposal of radioactive and hazardous wastes and chronic failure to

comply with basic environmental and safety regulations, such as inadequate employee monitoring, widespread contamination in the plant cafeterias, and failure to

identify and cordon off hazardous areas. Compounding these problems, in 1998 DOE

determined that the Paducah contractor had illegally retaliated against a worker

who had raised significant safety concerns.

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2 Advisory Committee on External Regulation of U.S. Department of Energy Nuclear Safety,

Improving Regulation of Safety at DOE Nuclear Facilities 12 (1995) (hereinafter ‘‘Advisory Committee Report’’). 3 Advisory Committee Report at 14.

Similar lapses and violations are pandemic at many other DOE facilities. At

DOE’s site in Oak Ridge, Tennessee, an explosion in December 1998 involving hazardous materials injured 11 workers and was blamed on weak safety standards. In

July 1998, DOE’s Oak Ridge contractor was fined more than $400,000 for illegal

dumping of radioactive and hazardous wastes in a local landfill and widespread

mislabeling of wastes. And in 1995, DOE’s Oak Ridge contractor was found to have

withheld information about significant radiation exposures of workers and to have

falsely claimed that numerous test results of radiation exposure for workers were

negative.

At DOE’s Idaho National Engineering and Environmental Laboratory, DOE fined

its own contractor $22,000 in August 1999 for problems with waste containers, unreliable emergency notification systems, and failure to correct adequately prior safety

violations. Weak environmental and safety programs at DOE’s Idaho site have led

to three major accidents, including two fatalities, and more than $2 million in fines

for missing cleanup deadlines, hazardous waste violations, and accidents that exposed workers to unsafe levels of radiation. These violations have included falsifying

safety records, such as in October 1997 when DOE fined its Idaho contractor

$55,000 for falsifying records that testing of nuclear reactor safety systems had been

conducted when in fact these crucial tests had not been performed.

DOE’s Hanford, Washington, facility, which is the site of the most costly, dangerous, and technically challenging cleanup actions, also continues to suffer from

poor environment, health, and safety oversight. In April 1999, for example, DOE

and its contractors were fined for inadequate monitoring of several Hanford storage

tanks containing high-level nuclear wastes, which store some of the most hazardous

materials found in the DOE complex. Indeed, the long-standing deficiencies of selfregulation are a tradition at Hanford, where in 1959 DOE identified significant

leaks in single-shell high-level waste tanks, but because of production pressures continued to build them until 1964 and to introduce wastes into them until 1980—causing millions of cubic meters of groundwater and soil to become contaminated.

The major production and research sites, i.e., Los Alamos, Livermore, and Savannah River, are no different. In 1999 the Defense Nuclear Facilities Safety Board

found health and safety regulation at these facilities to be seriously deficient—last

summer, for example, a major fire occurred at Los Alamos involving plutonium. Putting this in a broader context, in a 1993 internal Department review found that

‘‘DOE facilities... have been averaging around 64,00 reportable items of non-compliance with OSHA standards per year over the past two years.’’ 2 It is therefore clear

that DOE self-regulation continues to fail to protect the environment, worker health

and safety, and the public.

In its December 1995 report, DOE’s Advisory Committee on External Regulation,

which was composed of a broad range of government officials, nuclear industry representatives, and stakeholders, identified the same kinds of ‘‘symptoms’’ that DOE

environment, health, and safety regulation have been and are seriously flawed:

• Poor safety practices have and continue to cause major problems, such as extensive contamination of sites throughout the DOE complex and historical exposure

of workers and local populations to large releases of radioactive materials.

• The public and government officials believe that fiscal and personnel resources

are not being effectively used in undertaking the stabilization, decommissioning,

and cleanup of DOE facilities.

• The public and government officials fundamentally distrust DOE.

• DOE’s workers are profoundly frustrated by the ‘‘regulatory morass that often impedes rather than aids’’ their efforts.

• DOE activities continue to be plagued by non-compliance with safety requirements.3

The Advisory Committee concluded that the root causes of these problems were

the following:

• the built-in conflict of interest between safety and mission under self-regulation;

• a legacy of secrecy that has historically shielded DOE’s operations and activities

from outside view;

• lack of stability in safety management and policy;

• lack of management accountability and inadequately coordinated regulatory and

oversight functions;

• redundant, confusing safety requirements; and

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4 Advisory Committee Report at 14-15.

• lack of balance in addressing hazards.4

In concluding, the Advisory Committee found that ‘‘[t]he severe problems the

Committee has identified with DOE’s approach to safety have their roots in DOE’s

unique regulatory history and current regulatory framework.’’ Advisory Committee

Report at 15. It was with these factors in mind that the Advisory Committee concluded that ‘‘essentially all aspects of safety at DOE’s nuclear facilities and sites

should be externally regulated.’’ Id. at 2.

In NRDC’s view, the profound problems of radioactive and toxic contamination

and failed worker health and safety protection throughout the nuclear weapons complex provide all the evidence necessary to conclude that self-regulation has failed.

We must ensure that this does not occur again, and we must start by rejecting the

self-regulation system that allowed it to occur. As DOE itself concluded in 1996,

‘‘[e]xternal regulation is an essential element of completing the move from DOE’s

historical self-regulated status, which has been variable, costly, and inconsistent, to

a stable, efficient, and predictable safety environment. DOE Working Group Report

at 1-1.

II. SELF-REGULATION UNDERMINES DOE’S CREDIBILITY

The environment and human health and safety were not the only casualties of

DOE’s self-regulation. DOE’s credibility with the American public has suffered nearly as much damage as the soil and groundwater polluted by the nuclear weapons

complex. Many DOE administrators have acknowledged this loss, observing in one

case that DOE’s credibility could not be sold if it were listed as a blue-chip stock

on Wall Street.

Public confidence in DOE continues to be extraordinarily low. Many of the sources

of this credibility crisis lie in DOE’s scheme of self-regulation. For years the Department told the public that its operations were safe and clean, that it was taking care

of the environment and human health and safety, and that there was nothing to

worry about. The truth, of course, turned out to be much different than that, and

as a result the public feels betrayed and lied to. It is unreasonable to expect the

public to trust the DOE to police itself effectively when its operations have caused

such profound harm and its operations continue to be plagued by environment,

health, and safety incidents and violations.

At a November 1993 speech on risk management at the National Academy of

Sciences, then Assistant Secretary Thomas Grumbly expressed the point aptly when

he said: ‘‘Sometimes credibility means giving up control.’’ This is one of those cases.

For the public to have confidence in the safety and effectiveness of DOE’s activities,

DOE must release regulatory control to an independent body. As DOE recently acknowledged, ‘‘DOE’s credibility will be enhanced by the open process inherent in external regulation and the public perception that DOE will be complying with generally applicable and widely accepted requirements.’’ DOE Working Group Report

at 1-2. In short, external regulation is a necessary and essential step DOE must

take to overcome its legacy of environmental mismanagement and failed protection

of human health and safety.

III. CITIZEN PARTICIPATION IS A NECESSARY COMPONENT OF EFFECTIVE EXTERNAL

REGULATION

DOE’s Advisory Committee on External Regulation concluded that in order to

have a credible and effective regulatory system, citizens must have the right to active involvement in its implementation. DOE Advisory Committee Report at 6, 27-

29. Citizen participation takes different forms at each stage of the regulatory process, but the most critical component is the right to bring citizen suits. Similarly,

states must also have a central role in the new regulatory scheme, including the

right to enforce DOE’s obligations under external regulation. Id. at 29-30. Further,

it is essential that any external regulator of DOE be given the power to impose administrative penalties, such that challenges to such penalties would have to go

through an administrative process at OSHA or NRC before being resolved by the

Department of Justice—and citizens and states would have opportunities to intervene in these adjudications.

An effective regulatory system must perform at least three conceptually distinct

functions. First, it must set standards and requirements under which the regulated

entity will operate and under which licensing decisions will be made. Second, it

must administer the licensing system. Third, it must enforce the obligations that

are imposed on licensees either as conditions attached to licenses or under generally

applicable regulations. Certain principles must apply across these three regulatory

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activities; in particular, the external regulator must operate independently of the

regulated entity and the regulatory regime must be transparent to the maximum

extent practicable. And the public must be provided with not just the conclusions

reached (‘‘yes, the facility is safe’’) but also with the basic information and analyses

supporting such determinations. The long-standing closed structure of the DOE regulatory regime is a major reason why the public views it with such distrust.

Accordingly, any legislation mandating external regulation should make it clear

that under established principles of administrative law, citizens will have the right

to participate in the notice-and-comment rulemaking process and to seek judicial review of the adequacy of standards once they have been promulgated. Citizens should

also have the right to participate fully in all licensing proceedings and to seek judicial review of all licensing decisions. Finally—and most importantly—for external

regulation to be effective and credible, the public must have the right to bring citizen suits in federal court to enforce applicable regulations.

As this Subcommittee no doubt knows, citizen suits have a long and effective history as a method of enforcing federal law. Their most familiar and obvious role is

in the body of federal environmental laws enacted since 1970, which rely in significant part on citizen suits as an enforcement mechanism. But citizen suits have a

long pedigree in the Anglo-American legal system, dating back 600 years and including such actions as the citizens informers’ action and qui tam action. They are

critical because federal agencies with authority to enforce laws often lack the fiscal

resources or the political will to rein in violators. Experience has shown that it can

be particularly difficult for state and federal agencies to enforce laws against other

government agencies. Moreover, citizen suits often achieve the desired enforcement

objective without the need for a full, drawn-out lawsuit.

In addition to their unique effectiveness, full public participation and citizen suits

should be integral to the external regulation of DOE in order to address DOE’s lack

of credibility with the public. By opening the doors of the regulatory process to citizens, DOE would be in a position to win back an important measure of credibility

it has lost. Much credibility would flow from the DOE demonstrating to citizens that

it is prepared to be held accountable by citizens for its obligations under the law.

IV. LEGISLATING THE TRANSITION TO EXTERNAL REGULATION OF DOE FACILITIES

For more than a decade, NRDC has been a strong proponent of external regulation for the Department of Energy. However, making the transition from self-regulation to regulation by several external entities must be done carefully. The DOE nuclear weapons complex is comprised of 16 major sites and more than a hundred

smaller ones containing 3,500 nuclear facilities and extending over 2.1 million acres.

The NRC has estimated that it could need as many as 1100 to 1600 more staff

members and $150-200 million annually to regulate nuclear safety at DOE facilities.

Advisory Committee Report at 41. DOE estimates that its current annual expenditures on safety and health are $1.5 billion, which suggests that NRC’s cost estimates are likely not unreasonable. Accordingly, it will be essential to provide both

adequate funding to the NRC and OSHA to take over responsibility for regulating

DOE and sufficient time for the transition from DOE self-regulation to NRC, OSHA,

and EPA external regulation. Further, given that DOE has projected that such a

transfer could take more than five years, complete transfer of regulatory authority

to OSHA and NRC by October 1, 2001, is almost certainly too ambitious.

There are two issues that are of critical importance to the proposed legislation.

The first is that the Atomic Energy Act should be amended to afford adequate public

involvement—particularly citizen suits—which I have discussed in the preceding

section. The second is that it should be made explicit in the legislation transferring

regulatory authority that both DOE and the National Nuclear Security Administration (‘‘NNSA’’) will be subject to external regulation. The only area of DOE operations that the DOE Advisory Committee determined should not be subject to external regulation was ‘‘nuclear explosives safety.’’ Advisory Committee Report at 34.

Specifically, external regulation should not apply to the safety of the nuclear explosive device itself. ‘‘However, all aspects of operations with nuclear explosives other

than nuclear explosives safety... should be subject to external regulation, and the

regulator would have access to the information necessary to determine whether nuclear explosives operations conformed to safety standards.’’ Id.

Most of the information that is relevant to the safe operation of a facility, including safety systems and siting plans, will likely be unclassified. And, in any event,

the NRC has both experience with and procedures for handling classified information. See 10 C.F.R. Parts 10, 11, 73, and 95. Indeed, the NRC has licensed facilities

with important national security functions, including the naval reactor fuel facility

at Erwin, Tennessee. Therefore there is no reason to exclude NNSA facilities from

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the external regulation being proposed for DOE; to the contrary, the long history

of failed self-regulation mandates that external regulation of activities within the

nuclear weapons complex include all NNSA facilities.

In a closely related matter, it is also critical that the legislation from last session

creating the NNSA be amended to protect existing state authority to impose and

enforce environmental regulations at NNSA facilities. Specifically, Sections 3261

and 3296 of Title XXXII of the Fiscal Year 2000 Department of Defense Authorization Bill should be clarified. NRDC is concerned that the language ‘‘all applicable

environmental, safety, and health statutes and subsequent requirements’’ and ‘‘all

provisions of law and regulations in effect immediately before the effective date of

this title’’ could be interpreted as referring only to federal laws and regulations.

However, the Federal Facilities Compliance Act of 1992 explicitly waived federal

sovereign immunity and required the federal government to adhere to state environmental regulations when cleaning up hazardous, radioactive, and mixed hazardous

and radioactive wastes at federal facilities. Like all other federal facilities, NNSA

sites should subject to state laws governing the cleanup of hazardous and radioactive wastes. As the National Governors’ Association, National Conference of State

Legislatures, and others have recognized, it is essential that this ambiguity in the

NNSA legislation be rectified.

There are several additional changes in the proposed legislation that should be

considered. First, NRC regulatory authority is currently limited to hazards from

source, special, and byproduct material, but does not include other sources of radiation (i.e., accelerator-produced radiation or materials and naturally occurring radioactive materials) or non-radiological hazards, all of which are regulated by DOE

under Section 161(i)(3) of the Atomic Energy Act. Such gaps in NRC regulatory authority under the Atomic Energy Act should be closed as part of any legislation to

transfer regulatory authority to the NRC. Second, external regulation of nuclear

safety and worker health and safety should not be limited to OSHA and NRC; rather, where a state can demonstrate that it has the capacity to regulate DOE operations, regulatory authority should be delegated to the state in which the facility

is located. Third, to minimize jurisdictional conflicts, NRDC strongly endorses the

use of a cooperative approach by the regulatory agencies based on designation of a

‘‘Lead Agency,’’ just as occurs under the Superfund Act, for specific elements of decommissioning and cleanup activities. See Advisory Committee Report at 26.

V. CONCLUSION

As I hope my testimony demonstrates, the question of external regulation of the

Department of Energy is of profound importance. We at NRDC believe that the

DOE will be unable to make further progress on any of the daunting issues facing

it until the Department fixes the systematic and corrosive problems caused by an

inadequate, insular, secretive regulatory regime. The public simply will not trust

DOE claims that it has corrected the deficiencies in its regulatory oversight—which

have led to countless violations and accidents and resulted in the largest and most

costly environmental cleanup in the world—until DOE is made an accountable agency. The sponsors of this legislation deserve significant credit for proposing a bill

that, while needing several critical modifications, moves in the right direction by

seeking to end the era of DOE self-regulation.

Fortunately, considerable thought and effort have been dedicated to addressing

how to make the transition from DOE self-regulation to external regulation by NRC,

OSHA, and EPA. The 1995 report of DOE Advisory Committee on External Regulation is particularly useful, as well as the 1996 DOE Working Group Report. In addition, prior to Secretary Richardson’s untimely rejection of external regulation in

February 1999, both OSHA and the NRC were working with DOE to develop concrete plans for making the transition to external regulation, which also provided important information on and insight into how to structure the transition to external

regulation. These pilot projects should be revived and a dialogue reopened with Secretary Richardson to revitalize DOE’s efforts to move towards external regulation.

Thank you again for giving me the opportunity to testify today. I would be pleased

to answer any questions.

Mr. LARGENT. Ms. Jones, I’d like to ask you a question, first, if

I could. Do you believe that the security oversight in the Department of Energy will be improved or at least protected from future

erosion if the Office of Independent Oversight is established in

statute?

76

Ms. JONES. I think here that your term, protected from future

erosion, is a good way of putting it. I think our testimony notes

that one of the benefits of legislatively establishing this office is so

that there isn’t backsliding by the Department.

We have noted that this office was several layers down within

ES&H in 1999, and it was even part of a programming division

earlier than that.

So I think that’s the one benefit of this legislation is that it will

elevate it and keep that elevation.

Mr. LARGENT. Okay. Dr. Adelman, I was looking at your testimony, and you talked about the necessity of having an independent

oversight of DOE. And it said—hold on here just a second—you

made a point in your testimony that for DOE to regain public confidence, it must give up regulatory control to an independent body.

But your statement is really at odds of that of Mr. Conway who

claimed that external regulation will have no effect on DOE’s credibility with the public.

How do you explain such a difference of opinion there between

yourself and Mr. Conway?

Mr. ADELMAN. Well, I’m not sure that I can explain his opinion,

but certain from the perspective of public interest groups that have

worked on these issues for a long time, transferring regulatory

oversight, making it more transparent, allowing fuller public participation is an essential ingredient to DOE regaining its confidence with the public.

And this is something that NRDC and many other groups have

been promoting for over a decade now. And DOE, until relatively

recently, was very supportive of it.

Mr. LARGENT. Why do you think DOE has changed tactics in

terms of being opposed to this now?

Mr. ADELMAN. It’s a question that we have. They’re claiming

right now that there are a number of institutional barriers that

could potentially make the transfer more difficult. However, it’s

hard to imagine that those sorts of considerations like harmonizing

NRC’s regulations with DOE’s, having to integrate current DOE

safety and health regulations weren’t something the Department

was aware of in 1996 when it chose to undertake significant movement toward external regulation.

So, as far as we’re concerned, we haven’t heard any substantive

reasons for them to reject external regulation at this time.

Mr. LARGENT. But they are rejecting external regulation.

Mr. ADELMAN. Apparently.

Mr. LARGENT. Yes. Ms. Eldredge, I wanted to ask you a question

about the Defense Board, and the question is, do you have any concerns or do you believe that the Defense Board may have become

too close to the national security mission it’s trying to regulate?

Ms. ELDREDGE. The problem with the two options for regulators

that were put out in the 1995 committee and in other reports is

that it has looked at the NRC and the Defense Board, both of

which have problems. You might say NRC is too close to the nuclear industry which it regulates, and I think the Defense Board

suffers from the same problems in terms of its relationship to DOE.

That being said, it also has a tremendous amount of expertise

that NRC lacks with regards to some of the weapons programs. So,

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we haven’t really made a conclusive decision on which way we’d

rather go with them.

It’s been our problem to date, but we do think that what ever

happens, both need to maintain and support the technical expertise

of the Defense Board, and perhaps one of the thoughts had been

moving them somehow into the NRC structure. Also do some reforms on NRC or the Board, whichever the direction went, in terms

of their openness to the public, their citizen suit provisions, and

their behavior as a regulator to make them more accountable.

Mr. LARGENT. Dr. Shank, I wanted to ask you a question. You

talked about H.R. 3906 imposing yet another new layer of bureaucratic management and oversight.

Since the Office of Independent Oversight already exists at DOE,

isn’t your lab already subject to the oversight of that office?

Mr. SHANK. Yes.

Mr. LARGENT. So how would H.R. 3906 impose, ‘‘yet another new

layer of bureaucratic management and oversight?’’

Mr. SHANK. I think the question that I’m concerned about is that

it applies to all entities of the DOE. In a laboratory like ours, in

which we do not perform classified work, this entity does apply to

that.

I feel that it is an additional burden that our science programs

must bear, and anytime I have a chance to speak out against that,

I will.

Mr. LARGENT. And do you feel like the cost, regulatory cost, exceeds the benefit?

Mr. SHANK. Well, if you do not have an issue with national security, adding a burden on science performed in DOE laboratories, especially laboratories like ours which are open to the world, it is an

additional cost with no benefit whatsoever, as far as I can see.

Mr. LARGENT. Well, I guess the only issue that I would like to

raise is that it seems to me that we’ve transferred a lot of technology to China, for example, some of it openly, some of it clandestinely, that on the face of it, didn’t seem to have national security

implications.

But, in fact, the application of that technology was transferred to

where it is a national security risk.

So how can you say that one particular type of research would

not potentially, if transferred and into the wrong hands, have risks

to our national security?

Mr. SHANK. I think there are different ways of looking at this.

The nature and character of work that goes on at our laboratory

is very similar to the type of work that goes on at universities

across the country, at other businesses across the country.

We have to weigh our openness in science with the benefits that

we gain. We support about 2 percent of the world’s science. We cannot operate and be effective in the world, unless we have the ability to interact.

We benefit more than we lose by interacting with the world’s scientific community.

A third of the people at our laboratory are not American citizens.

They provide an enormous positive input to our scientific programs,

in building businesses in the United States.

78

I think that if we focus and look inward and cut ourselves off

from the scientific community with excessive zeal, we will no longer

be the partners of international scientific consortia, and we will

have less to learn from the rest of the world.

Mr. LARGENT. I guess what we’re trying to seek to find here is

some sort of balance.

And, of course, I believe that’s the key to life, is finding some sort

of balance, as opposed to swinging from one extreme to another.

And the issue really is, how can we provide—you mentioned in

your response that there are a lot of ways to look at this.

And I think that one of the ways that this committee and this

subcommittee has to look at it, first and foremost, at the highest

priority, has to be from a national security perspective. That’s the

way we have to look at it.

I think that’s the fundamental responsibility of the Federal Government, is to provide for the safety and security of our constituents.

And so the question is, how do we do that in the least intrusive

way, the least regulatory way, and still allow for the communication that is necessary for scientists to be able to communicate with

one another to forward their projects and research, and at the

same time, ensure that we’re protecting the national security interests that we have?

Unfortunately, so often here at the Federal level, we are forced

into a one-size-fits-all mandate that doesn’t fit the research that’s

being conducted at your facility very well, but actually helps protect us in other facilities.

I’m just wondering if you have ideas or thoughts on ways that

we can build this legislation in such a way that we are protecting

national interests and security, in the least regulatory and burdensome way?

Mr. SHANK. I think the focus should be on the work. It should

not be on who does the work.

I think that if the work is done in universities and at laboratories, that’s where the focus ought to be, on what it is, what the

topic of the work is.

I think that placing a burden on science at DOE laboratories,

and disconnecting us from the scientific community, will inevitably

put us in such a position that we will not have anything to secure.

Mr. LARGENT. At this time, I will yield to my colleague from Florida, Mr. Stearns.

Mr. STEARNS. The Federal witnesses claimed 1 year is not

enough time to transition to external regulations. And the NRC

asked for ten, so I guess what’s the difference and what’s the discrepancy and what do you think? Ms. Eldredge?

Ms. ELDREDGE. I do think 1 year is too short. It’s a rather big

task to shift this over.

In talking to some of the DOE people I have spoken to around

the laboratories, they thought for a transition to OSHA, a 2-year

timeframe was reasonable and certainly could be accomplished,

and that was at the Defense labs.

In the case of NRC, I think 10 years is rather excessive. You can

almost graduate from high school in that amount of time.

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And I think a better timeframe might be five, but that’s just off

the top of my head. I think that what most needs to happen is that

there has to be a time line and some requirements to be met, so

that they don’t turn around in 5 years and say, oh, well, we haven’t

quite started yet, and give us another 5 years.

Mr. STEARNS. If they want 10 years, they might want more.

Ms. ELDREDGE. Right, they might want 20 Mr. STEARNS. Yes, 20,

yes. Ms. Jones?

Ms. JONES. Mr. Stearns, from our testimony, while I can’t give

you a magic number in terms of how long it’s going to take, we did

feel it would take longer than the time period provided in the legislation.

And the one point on that was that we were concerned about the

defense facilities. They were not part of the pilot program, so while

NRC and OSHA do have some interest and understanding of them,

we believe that more study was needed.

And one way that you might want to go, as you move forward

in having NRC and OSHA regulate the non-Defense facilities, is to

pilot one of the large Defense facilities to give you more information about some of the issues like national security concerns, costs,

those kinds of things.

Mr. STEARNS. Anyone else like to comment? Dr. Adelman?

Mr. ADELMAN. I would agree that 1 year is a very short time period within which to transfer full regulatory authority over to NRC,

and even OSHA.

I think that there are a few things to keep in mind: The importance of a timeline is obviously essential, but also focusing on different stages of the transfer.

One of the things that I think we view as most significant here

is that if you shift regulatory authority over to NRC, it doesn’t

mean that the key date is when that regulatory authority actually

transfers. A lot is going to happen prior to that, and a lot of improvements, we hope.

So, establishing a time line with clear goals and an open process

is really what should be focused on.

Mr. STEARNS. Yes, sir, Dr. Shank?

Mr. SHANK. As I pointed out in my testimony, even at a simple

facility like the Lawrence Berkeley National Laboratory, there are

many open issues that need to be resolved that are not resolved in

this legislation in terms of who holds the license, whether there is

going to be duplicative regulatory oversight; whether legacy issues

are addressed and how they can be funded and who will be responsible in the future for those legacy issues.

There is enormous complexity, even for a simple facility like ours

to go forward with this.

Mr. STEARNS. Do you think 5 years is sufficient?

Mr. SHANK. I would take the judgment of the NRC.

Mr. STEARNS. Which is 10 years.

Mr. SHANK. I have no way—they talked about a three-step program, each one taking 5 years, if I recall in the testimony.

Mr. STEARNS. That would give you 15, a three-step program at

5 years apiece.

Mr. SHANK. Yes.

Mr. STEARNS. Anyone else? Mr. Van Ness?

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Mr. VAN NESS. I’d like to focus on the two defense laboratories

with respect to this matter. The regulatory climate for the two defense labs has changed considerably for the better in the years

since they supported external regulation before the DOE Advisory

Committee on External Regulation, chaired by John Ahearne.

The factors that drove support for that concept revolved around

the issue of disparate, multiple, and oftentimes conflicting regulatory directions from DOE, which was causing confusion, high

cost, and a dangerous lack of focus regarding improvement of

ES&H.

Since then, two major initiatives have been implemented which

are now embedded in our organizations, as well as in our contracts,

and these are work-smart standards, a process for determining

what standards should be used to govern our work from an ES&H

perspective, and integrated safety management, an approach that

incorporates ES&H into the work, using a set of key principles and

functions.

The work-smart standards process engaged the DOE in the laboratories in collectively identifying the work, the associated hazards, and appropriate controls in a manner that many of the conflicting regulatory directions derived from the standards were and

are being resolved.

The applicable standards are now more clearly defined, more

clearly identified, and agreed to by both DOE and the labs. The

work-smart standards sets are now being effectively managed by a

formal change control process at the laboratories.

Integrated safety management has, in fact, taken hold at the laboratories, and is proving to be an excellent vehicle for doing work

safely. It’s been embraced by our workforce, because it’s rational,

it’s flexible and it’s site-specific.

The results of ISM are evident in the significant performance improvements of the labs over the past few years, and in the success

of integrated safety management verification teams that have been

conducted by DOE during this past year.

In fact, a very important issue now is that we sustain the initiatives and improvements that have taken hold since the mid-1990’s

so that critical cultural changes brought on by ISM continue. It is

essential that the momentum that now exists around ISM be sustained and that approach be allowed to mature. Changing at this

juncture to yet another regulatory approach could put that at serious hazard.

It is important also to note that none of the external regulation

pilot projects——

Mr. STEARNS. Mr. Van Ness——

Mr. VAN NESS. Yes?

Mr. STEARNS. Are you answering the question?

Mr. VAN NESS. Yes, I believe I am.

Mr. STEARNS. The question is——

Mr. VAN NESS. I am telling you that for weapons laboratories I

don’t think at any time the external regulation——

Mr. STEARNS. So you favor 10 years? You favor 10 years?

Mr. VAN NESS. I don’t think that you should address applying external regulation to the weapons laboratories. I think the changes

that have occurred——

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Mr. STEARNS. So you don’t want to apply anything to that?

Mr. VAN NESS. [continuing] at DOE are very effective.

Mr. STEARNS. You don’t want to apply anything to them? In

other words, are you advocating a 5-year, 2-year, 10-year or——

Mr. VAN NESS. No, I am advocating that you not apply external

regulation to the weapons laboratories because the system that

have been put in place since the mid-nineties are in fact working

and we are seeing an improved safety situation at those

laboratories——

Mr. STEARNS. So you cannot, you cannot transition to external

regulation in that case?

Mr. VAN NESS. I am saying that would be an unwise thing to do.

Mr. STEARNS. No matter what time was provided?

Mr. VAN NESS. Yes.

Mr. STEARNS. All right. Thank you, Mr. Chairman.

Mr. LARGENT [presiding]. At this time I would like to ask unanimous consent to enter the attached report by CRS into the record.

This report addresses direct reporting from Executive agencies to

Congress and also at this time recognize the gentleman from Ohio,

Mr. Strickland, for questions.

[The information referred to follows:]

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Mr. STRICKLAND. Thank you very much.

Ms. Eldredge, you stated that several of the DOE labs believe

they no longer have to comply with DOE environmental, health

and safety rules because they are under a new security agency.

Could you talk more about why you——

Ms. ELDREDGE. It comes under the problem that has been talked

about a lot of dual hatting that the Assistant Secretary for Environment, Safety and Health is now dual-hatted to be also for Environment, Safety and Health under the new National Nuclear Security Administration.

However, the laboratories are not comfortable with this, and

some Members of Congress are not either, and one of the results

that is very clearly out there, from a legal perspective, is the PriceAnderson Act enforcement of nuclear safety rules. Normally under

the rest of the Department if the Office of ES&H finds a violation

they issue a notice of violation and they subject the violating DOE

entity to fines directly. They have that delegated authority from

the Secretary.

Now they no longer have that delegated authority with regards

to the NNSA, so if they find one of the weapons sites to be in violation they can put together their whole package but it is a recommendation, it is no longer a penalty, and make that recommendation to the Administrator of the NNSA, and then he or

she would then have to impose a fine on the violator, so—and it

creates a different kind of loop.

You no longer have that kind of independent oversight that they

had in the past. That is one piece of it. The other piece of it is that

the Office of Environment, Safety and Health also has a number

of rules and recommendations with regards to other non-nuclear

safety issues. Unfortunately there is no enforcement program for

them like there is for Price-Anderson, but they are still important

rules for workplace safety and worker safety.

This includes the new beryllium rule and there has been some

indication—I do not have anything in terms of a real smoking gun

on this—but there is some indication from some of the statements

made in lab directors’ testimony and some of what we are hearing

from the labs. They do not believe that they need to take orders

from the Office of Environment, Safety and Health, that they can

create their own safety plans.

Mr. STRICKLAND. Well, Dr. Michaels has said to us recently that

he no longer has the authority to issue notices of violations or to

impose fines under Price-Anderson to the DOE weapons

complex——

Ms. ELDREDGE. Correct.

Mr. STRICKLAND. [continuing] that he can only recommend, as

you say. Under that scenario, do you think it is worthwhile to pass

legislation that would cover the nonprofit contractors?

Ms. ELDREDGE. Regarding the fines for nonprofit contractors I

definitely think the legislation is worth passing. It is sort of ridiculous that the contractor that has the contracts for the sites where

we are going to have ongoing weapons work, it is going to continue

into the foreseeable future, they are not cleaned up sites where

people hope will be closed and walked away from in a couple decades, are not subject to the same kind of penalties and fines as all

160

the other sites are, so I think that piece definitely needs to be corrected and support the legislation this committee has to do so.

The piece about whether the Office of ES&H would get to enforce

those fines once they were allowed I think needs to be also corrected in additional legislation.

I am not sure that the bill that you have right now would cover

that problem.

Mr. STRICKLAND. Okay, and one final question. You say that you

don’t know who the external regulator for nuclear issues ought to

be. Congress probably is not going to establish a new regulatory

agency for DOE so would you give us your best recommendation?

Ms. ELDREDGE. That is a challenge. It is something we have been

struggling with for a long time. Various advisory committees have

also struggled with who would be the best regulator.

The two names that pop up most frequently are the NRC and the

Defense Nuclear Facilities Safety Board. Neither of them is perfect.

As I mentioned earlier, if we were going to go with either of

those, we would recommend reforms to those bodies, one of which

would be citizen suit provisions so that we can hold whoever becomes the regulator accountable for their regulatory actions, and

that would be both for the public and for the states, to be able to

use that tool, which has been very effective with other environmental statutes.

With regards to my best recommendation, I think I will have to

get back to you on that. We probably would be able to come up

with some sort of merged entity of NRC and the Defense Board

with a package of reforms that would be more acceptable than just

a hand-off right now.

Mr. STRICKLAND. Okay, and a final question then, and if each of

you would respond.

All of you seem to agree that there should be some phase-in of

external regulation. You believe there should be external regulation. The proposed legislation would not allow for phase-in. Do you

think an all-or-nothing approach is feasible and you could just give

me a yes or no answer to that.

Ms. JONES. I think the NRC and OSHA said on the first panel

that it would not be feasible to do in a year. That is one of the reasons that we said in our testimony that we felt a phase-in was

more appropriate, so that there would be more experience on some

of the issues that NRC and OSHA were not familiar with.

Mr. SHANK. As I have mentioned, I believe it is not feasible to

do it without a phase-in. There are many issues of who holds licenses, what the legacy issues, how those things are corrected.

There is enormous complexity.

We have had pilots at a simple facility like mine. I believe that

more complex facilities will unravel even more difficulties, so the

answer is no.

Mr. STRICKLAND. Thank you.

Mr. VAN NESS. I would agree that it is not feasible and as I said

before I think there have been changes that one should take account of with regard to whether you do this at all.

Mr. STRICKLAND. Thank you.

161

Ms. ELDREDGE. I think we should give them more time in terms

of phasing in and perhaps a two-step program with OSHA being

able to move a little faster than the NRC parts of it.

However, I do think whatever legislation gets passed needs to

have a date certain for that transfer, because if it is just a

multistep process with pilot projects we might not ever get there,

so we need to make sure that there is a date certain and then give

them a step-wise way to get there.

Mr. ADELMAN. We would also support a phased-in approach. The

approach that is part of the DOE working group that phases it in

with facilities that are most similar to the types of facilities that

NRC is already regulating certainly makes sense and we would

support that.

In terms of a specific dateline I think that so long as the process

is open and the public is involved in the transfer of authority from

DOE to NRC and that there is a strict set of deadlines built into

the legislation, that is certainly something we would support.

Mr. MILLER. I apologize, Mr. Strickland. I was just at the hearing you were at a little while ago. I apologize to Mr. Barton for

being late.

I would just offer you this, that at the Portsmouth Gaseous Diffusion Plant in Paducah which both had takeover OSHA authority

effective July 1, 1993, basically there was just a pre-assessment

that was done by Martin Marietta at that time that identified the

noncompliance events and we went to work on OSHA regulation

immediately, so I don’t see any need for any delay.

Ostensibly the Department of Energy is already supposed to be

having its contractors comply with OSHA and since an order was

issued in 1983 they have already had to be OSHA-compliant, so

what is the difficult leap of turning on the switch in this Congress

to commencing immediately OSHA regulation of DOE facilities?

There is no justification for a phase-in approach because they are

already supposed to be there.

Now there may be some catch-up costs involved and I do not

think anybody should think this is a cost-free transaction, and at

Portsmouth and Paducah we saw roughly a $30 million shall we

say retrofit to come into compliance with the orders DOE had already had in place but there is no need for phase-in on OSHA.

That can start September 30 of this year if we pass legislation and

OSHA had the money so that they were not stuck with an unfunded mandate, and so from our perspective the phase-in has to

deal with the NRC and the certification and licensing, not OSHA.

I see no reason for any delay in moving forward on OSHA regulation.

Mr. STRICKLAND. Thank you, sir.

Mr. STEARNS [presiding]. I thank the gentleman.

Anyone on this side of the aisle who would like to ask questions?

[No response.]

Mr. STEARNS. Okay. Mr. Miller, we previously had by unanimous

consent made your opening statement part of the record and the

only question I was going to ask is just your phasing in of external

regulations dealing with what you just talked about, with OSHA

since they are already in place, so I think you answered that adequately.

162

I don’t think without any further questions from members I

think—we appreciate the panels’ patience with us going back and

forth to vote, and Chairman Barton is on the floor right now in debate so he could not be here, but again we appreciate your testimony.

The committee is adjourned.

[Whereupon, at 1:25 p.m., the subcommittee was adjourned.]

[Additional material submitted for the record follows:]

PREPARED STATEMENT OF RICHARD MILLER, PAPER ALLIED-INDUSTRIAL, CHEMICAL &

ENERGY WORKERS UNION

I am Richard Miller, a Policy Analyst for the Paper, Allied-Industrial, Chemical

& Energy Workers Union (‘‘PACE’’), which, amongst its membership of 320,000 at

oil, paper, chemical, pharmaceutical and cement factories, includes 6,500 hourly

workers at 11 Energy Department (‘‘DOE’’) nuclear facilities, including Portsmouth,

Paducah, Oak Ridge K-25, Mound, Hanford, INEEL, WIPP, Brookhaven, Grand

Junction, Argonne-East and Argonne-West.

PACE, through it predecessor OCAW, was a member of the Advisory Committee

on External Regulation and the NAPA Forum on OSHA-DOE Transition Issues.

Outlined below are the key points in our testimony:

• DOE is the only federal agency whose facilities are exempt from regulation by the

NRC for nuclear safety and by OSHA for worker protection. DOE has been justifiably criticized for lax enforcement of its regulations, and today lacks a robust

program of self regulation. A prompt and orderly transition to OSHA regulation

is feasible and can be accomplished this year.

• The experience at Portsmouth and Paducah offers a key lesson: enforceable

rules will require DOE to spend money on transition ‘‘catch up’’ costs.

• PACE supports external regulation, provided certain protections are put in place

so that workers would not be worse off than they are today. These include:

• requiring NRC (or the DNFSB with enforcement authority) to adopt OSHA’s

worker participation processes so that worker concerns can be better addressed;

• retaining DOE’s corporate health and safety oversight functions, so regulators

don’t end up as de facto safety managers;

• requiring full time ‘‘site residents’’ for both OSHA and NRC inspectors at

major DOE facilities and circuit riders at smaller sites;

• Eliminate the non profit exemption for fines and penalties under the Price Anderson Act;

• Clarify existing state legal authority over National Nuclear Security Agency

(NNSA) facilities to assure full enforceability of environmental laws and compliance agreements.

1. DOE’s Internal Oversight is Inadequate and There is no Prospect for Reform

Although DOE has a highly professional and competent health and safety staff

in its Office of Environment Safety and Health (EH), decisions made at the top levels of the DOE have allowed its modest system of self-regulation to wither to the

point of near invisibility. Three successive Energy Secretaries have eliminated the

‘‘independent’’ health and safety site representatives program. EH is noteworthy for

its attention to after-the-fact investigations of fatalities, major near misses, and

media attention to evident health and safety breaches. With the exception of recent

work at Paducah and the other gaseous diffusion plants, DOE’s system of self-regulation is more myth than reality.

After 12 years of trying, DOE’s EH Office of Enforcement has only managed to

adopt 2 of 11 nuclear safety regulations required under the Price Anderson Act

Amendments of 1988 (‘‘PAAA’’). This poor performance is not due to a lack of trying

by EH, nor due to a lack of Congressional oversight by this Committee. Rather it

reflects a perverse system wherein the internal regulators at EH have to obtain the

permission of the various line programs (Energy Research, Defense, Science, Nuclear Energy, and Environmental Management) and headquarters elements (General Counsel, Field Management) to carry out Congressional directives to regulate

health and safety. DOE’s practice of obtaining consensus from all Department elements on the content of rules further assures lowest common denominator decisions—or no decision at all. Finally, the revolving door between senior DOE managers and contractors has further undercut efforts to build a robust internal accountability system.

163

DOE’s PAAA Enforcement Program—although limited by a staff of 6 inspectors

to cover the entire DOE complex—demonstrates how safety is enhanced when a program is given even a few teeth. Recently, the prospect of Price Anderson enforcement action motivated one DOE contractor to stop radiation related work until continuous airborne radiation monitors were properly functioning. Absent an accountability device that would translate to the contractor’s bottom line, worker protections would have been postponed until it was convenient. The PAAA staff size is

not due to resource shortages or lack of FTEs. Rather its size reflects the length

of the political leash it has been given by the DOE leadership, and the degree to

which it’s enforcement actions will be tolerated without contractors generating a

major political backlash.

Most DOE field offices avoid oversight and rely upon contract provisions to drive

accountability. This sounds appealing on its surface, however, DOE’s understandable desire to get work done more quickly and at lower cost has resulted in competing priorities (productivity vs safety) which tends to make workers the victim.

Reductions in award fees alone have not proven to be a powerful enough motivator

to assure contractor compliance with nuclear safety rules, largely because there is

no practical way to measure every action a contractor takes—or doesn’t take—and

translate it into a fee calculation.

DOE has placed its management and integrating contractors in the position of

overseeing their fixed price subcontractors’ health and safety programs at the same

time they are driving them for ever greater costs savings. Where economic incentives are in potential conflict, the absence of an independent third party ensures

that accountability suffers. DOE’s panacea for safety woes—Integrated Safety Management—is simply a process to plan work up front. It is a complement to external

regulation—not a substitute.

Lastly, the DNFSB has been largely absent from of Environmental Management

sites except where criticality concerns prevail. Their role has been constrained and

could be considerably expanded.

2. A Pathway to External Regulation

Numerous advisory panels have recommended that DOE should no longer selfregulate worker and nuclear facility safety. The only question is how to get it done.

Step one: immediately legislate OSHA regulation of all DOE and NNSA sites.

This would not be a burdensome transition, because DOE has ostensibly required

its contractors to be OSHA compliant under the terms of its contracts and Orders

since 1983. As such, DOE would not be subjected to any new rules. OSHA would

need to update some of its rules to cover occupational radiation protection, and perhaps firearms and explosives safety. Although DOE-OSHA pilots at Oak Ridge,

Berkeley, Argonne East demonstrated that there were no major obstacles to shifting

to OSHA regulation, all of the parties were also on their best behavior perhaps making it seem easier than it will be in reality.

Step two: require DOE and NRC (or DNFSB with enforcement capacity) to establish a plan, schedule and budget to assume control over nuclear activities (except

nuclear explosives) at DOE facilities. Hazel O’Leary proposed NRC authority over

new facilities and case-by-case decision making over which existing facilities would

be covered. Congress needs to establish a schedule for decision making to assure a

case-by-case approach would not result in interminable delays.

Key considerations before moving forward include:

• Dedicating a percentage of DOE’s budget for OSHA staff and program costs, so

that DOE regulation doesn’t become an unfunded mandate on a small agency

that is already underfunded.

• Having OSHA provide some transitional relief on facility upgrades and abatement

actions

• Authorizing DOE to sign up for multi year abatement actions with OSHA or NRC

• Where there are mixed (radiation/non radiation) hazards and one regulator declines to take enforcement action, provide authority for the other regulator to

assert its authority.

• In agreement states, federal OSHA presence is located many miles away and can

only respond after the fact to accidents. For than reason, we recommend full

time OSHA site residents at major DOE facilities (Hanford, INEEL, Oak Ridge,

etc)

3. Several Lessons Learned from the External Regulation of the Gaseous Diffusion

Plants

The 1992 Energy Policy Act mandated OSHA and NRC regulation of the DOE’s

uranium enrichment plants that were leased to the United States Enrichment Corporation (‘‘USEC’’) in Portsmouth, Ohio and Paducah, Kentucky. The USEC operVerDate 11-MAY-2000 07:45 Nov 29, 2000 Jkt 010199 PO 00000 Frm 00167 Fmt 6633 Sfmt 6621 E:\HEARINGS\64031 pfrm07 PsN: 64031
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1 UE OSHA Spending Plan, Martin Marietta Utility Services, May 1994, UEO-1030

ations are basically chemical plants that process a very corrosive chemical with radiological properties: uranium hexaflouride.

Prior to the commencement of OSHA regulation on July 1, 1993, USEC’s M&O

contractor, Martin Marietta, performed a self assessment of OSHA non compliance

items, totaling approximately 12,000 items at Portsmouth and 4,000 items at Paducah. Repairs entailed installation of machine guards, providing fall protection by installing guard rails on working surfaces, updating electrical circuits, upgrading heat

stress protections and providing mobile breathing air units 1. Estimated cost for the

upgrades was $40 million. These expenditures would, if funded, have been required

under Admiral Watkin’s order that all DOE facilities come into full compliance with

all OSHA requirements.

A major dispute arose at Paducah over OSHA’s enforcement authority for mixed

radiation/chemical hazards. The dispute arose out of OSHA citations for uranium

hexaflouride gas releases in 1993 related to violations of OSHA regulations governing emergency response, training and alarms. USEC and Martin Marietta maintained that OSHA had no jurisdiction over mixed chemical/radiation hazards. Rather, they argued that this responsibility rested with exclusively with DOE (and NRC

once it took over) because the chemical release had radiological properties, and

claimed that for OSHA to assert such jurisdiction amounted to dual regulation. The

matter was ultimately settled, but the issue by no means disappeared.

The 1996 USEC Privatization Act required OSHA and NRC to enter into a Memorandum of Agreement delineating their respective jurisdictions. The MOA was modeled after the one OSHA and NRC executed for boiling water reactors. That MOA

gave NRC responsibility for anything related to radiation, and left OSHA with jurisdiction over industrial and construction types of hazards. Regrettably, our concerns

that OSHA retain some jurisdiction over mixed hazards were not heeded, and NRC

assumed full responsibility for mixed hazards.

The OSHA-NRC jurisdiction question resurfaced in 1998 at the Portsmouth, Ohio

plant when NRC failed to act on worker concerns that radiation dose records were

not being properly counted and our local union turned to OSHA for assistance. As

it turned out, management was administratively ‘‘assigning’’ radiation doses in hundreds of cases by pinning a dose badge on the wall, scanning it, and then arbitrarily

assigning that dose to workers. OSHA issued a citation, but USEC maintained in

settlement discussion that OSHA was exceeding its jurisdiction by goings into

NRC’s turf.

While the enforcement matter was ultimately settled (USEC agreed to reconstruct

doses for a 3 year period), a major policy question needs to be resolved in any external regulation regimen: (a) will there be a primary regulator where there are mixed

hazards, and (b) what happens if the primary regulator fails to enforce and the

other regulator determines that there is a mixed hazard violation and issues a penalty? In our view, if one regulator fails to act, then the other regulator should have

the discretion to exercise their authority (provided it is not inconsistent with the

first regulator’s license conditions). This question should be resolved in any legislation directing that OSHA and NRC enter into a new Memorandum of Agreement.

What works for allocating responsibilities at boiling water reactors, may not work

at DOE sites.

Adapting to NRC regulation has been a longer and more expensive process than

OSHA transition. First, NRC had to certify the existing operations. NRC compliance

costs were estimated to exceed $100 million at Paducah alone. Certification required

a 2,300 page application, which was rejected by NRC the first time. The net result

of this regulatory effort, however, was a more rigorous and arguably safer basis for

operations. NRC also required the Paducah plant to make an estimated $21 million

in seismic upgrades because of its location on a seismic fault. To its credit, NRC

has accommodated USEC’s seismic upgrade schedule by granting waivers because

of unforseen obstacles.

4. NRC Needs to Implement the OSHA Procedures Related to Worker Involvement

in Inspections and Enforcement Actions

NRC has not been ‘‘worker friendly’’ in its approach to oversight and regulation.

NRC made it clear from day one at Paducah that their job is to interact with management and they are not in the business of taking concerns from workers and resolving them. NRC excludes workers from any role in walk around inspections,

outbriefings, or enforcement actions.

When NRC started examining issues at Paducah this summer, they never consulted with the local union health and safety reps on issues that required scrutiny,

nor did they include them in the investigation. Ironically, DOE’s EH Oversight

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Team included the designated safety representative to be in the morning outbriefs,

solicited comments on draft reports, and sought cooperation in identifying issues of

concern.

While NRC has procedures to encourage stakeholder input at the national level,

this is more related to public safety than worker safety.

The NRC’s approach stands in contrast with OSHA which targets its resources

to resolving legitimate worker safety and health concerns. OSHA solicits worker

input during inspections, by including worker representatives in the entry briefing,

walkaround inspections, and the exit briefing. Workers can participate in OSHA enforcement proceedings, and they are provided as a matter of course with copies of

findings and, if issued, copies of citations.

NRC would be viewed more favorably as a worker safety regulator if it followed

the OSHA procedures. As such, we recommend that legislation require NRC to follow the OSHA procedures outlined at 29 CFR Part 1903 when regulating at DOE

facilities.

5. Non Profit Fines and Penalties

We support HR 3383. There is no reason that non-profit contractors who are receiving a fee should not be subjected to fines and penalties for nuclear safety violations under the Price Anderson Act Amendments. These same institutions are subject to fines and penalties from other environmental regulatory agencies, and if NRC

were regulating these institutions, they would be similarly subject to fines and penalties. Indeed, when the OSHA-DOE pilots were underway at two non profit contractors, there was no discussion that this would take place on the condition that

these non profits would be exempted from OSHA or NRC fines and penalties.

6. Assure that States Retain Authority at NNSA to Enforce Environmental Laws

The National Association of Attorneys General recently sought legislative clarification regarding states’ authority to regulate and enforce against NNSA facilities.

We support their request for legislative relief to preclude NNSA facilities from asserting sovereign immunity.

We would be pleased to answer any questions you may have.