Nuclear Cleanup: DOE Should Reevaluate Waste Disposal Options Before Building New Facilities
Published: 2001-05-25T00:00:00

Fast Facts:

Highlights:
section_title: What GAO Found
paragraphs: Unless the Department of Energy (DOE) revisits its disposal needs and its current option for disposing of wastes off-site, it could miss opportunities to reduce cleanup costs at the Fernald, Oak Ridge, and the Idaho National Engineering and Environmental Laboratory (INEEL) sites and at other sites, such as Paducah, that might propose the development of new on-site facilities. Building in a decision checkpoint before major investment decisions are finalized could identify instances in which the use of off-site disposal would be less expensive, or when the cost difference no longer outweighs the long-term risks associated with on-site disposal. Such validation of the cost comparison is especially important in instances in which DOE is aware that the scope or timeframe of the cleanup effort has changed dramatically. Remaining open to new proposals for off-site disposal would also inject an element of competition into this process. Thus, even if the validation did nothing more than confirm the original decision to dispose of the wastes on-site, it has the potential to ensure that costs are kept to a minimum.

section_title: Letter
paragraphs: As the Department of Energy (DOE) cleans up its contaminated nuclear sites, it must decide how best to dispose of huge volumes of low-level radioactive waste (low-level waste) generated in the cleanup process.DOE estimates that 26 of its 144 nuclear production sites will need to dispose of at least 6.8 million cubic meters of cleanup wastes—primarily contaminated soil and building debris—over the next 70 years.  This amount would fill a space as long and wide as a football field and almost one mile high.  DOE generally allows its sites to select one of several available disposal locations, including existing on-site facilities, facilities at other DOE sites, or—depending on costs and other factors—off-site commercial facilities.  Because some sites do not have existing on-site disposal facilities that can accommodate the projected volumes of cleanup wastes, they are in the process of developing new on-site facilities to specifically accommodate disposal of these wastes.  Since 1996, three DOE sites—the Fernald Environmental Management Project (Ohio); the Oak Ridge Reservation (Tennessee); and the Idaho National Engineering and Environmental Laboratory (INEEL) (Idaho)—have decided to develop new on-site disposal facilities.  To date, only the Fernald facility has disposed of any actual waste.  At least one other site—the Paducah Gaseous Diffusion Plant (Kentucky)—is considering whether or not to develop an on-site disposal facility.
As part of ongoing reviews of DOE’s cleanup program, we determined how each of the three sites decided to dispose of its low-level waste on-site rather than off-site.  Our analysis addressed (1) the extent to which site officials took into account the comparative costs and risks associated with off-site waste disposal, and 2) the extent to which site officials revisited these cost and risk assessments after reaching their decisions to build on- site waste disposal facilities.
subsections: section_title: Background
paragraphs: DOE manages the disposal of cleanup wastes that come from remediation, decontamination, and demolition at sites where operations have been discontinued.  Cleanup wastes are primarily subject to three laws:  the Atomic Energy Act of 1954, as amended; the Resource Conservation and Recovery Act of 1976 as amended (RCRA); and the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (CERCLA). DOE is responsible for the management of its own radioactive wastes under the Atomic Energy Act.  Under RCRA, the Environmental Protection Agency (EPA) or states with programs authorized by EPA regulate the hazardous components of mixed wastes. The Congress enacted CERCLA to clean up the nation’s most severely contaminated hazardous waste sites. Under CERCLA, which is administered by EPA, the parties responsible for the contamination are responsible for conducting or paying for the cleanup.  The statute makes federal facilities subject to the same cleanup requirements as private industry.
For CERCLA projects, EPA has established a decision process designed to involve the public and EPA in identifying, evaluating, and choosing cleanup approaches.  This process requires parties responsible for the cleanup (in this case DOE) to consider a range of cleanup alternatives. EPA uses nine specific criteria, including the estimated costs, feasibility, and risks for each alternative, to evaluate, compare, and balance tradeoffs among these alternatives (see fig. 1).  Under these criteria, any selected cleanup alternative must adequately reduce long-term risks to human health and the environment.  The chosen alternative—including the plan for disposing of the waste—is documented in a Record of Decision (ROD), which EPA must approve.
section_title: Sites Made Decisions Using Preliminary Information About Disposal Needs
paragraphs: Officials at the three sites we reviewed considered detailed estimates of the costs and risks associated with on-site and off-site waste disposal. Among other things, these estimates were based on preliminary determinations on the extent and type of contamination present at the site. In accordance with the CERCLA decision process, site officials also assessed how well each cleanup alternative addressed the nine CERCLA criteria.  After balancing the tradeoffs among the criteria for each alternative, site officials selected an on-site disposal alternative based, at least in part, on their estimation that on-site disposal would cost less than off-site disposal (see table 1).  To meet the CERCLA requirement that human health and the environment be adequately protected, DOE sites adopted accepted strategies, such as limiting the level of contamination allowed in the disposal facility, to mitigate long-term risks.  DOE, EPA, and other stakeholders agreed that the benefits of on-site disposal, including cost savings, outweighed the remaining long-term risks.
subsections: section_title: Sites Identified the Extent of Cleanup Needed and Developed Alternative Cleanup Actions
paragraphs: In accordance with the first steps in EPA’s CERCLA decision process, all three sites conducted remedial investigations to confirm and to quantify the nature and extent of contamination.  They examined site background and historical data, and used limited sampling to project the volumes and types of wastes that could be generated by cleanup activities.  Based on this limited information, officials at each site developed a preliminary model describing the sources of contamination (such as soil or groundwater), possible ways the contaminants could be released, and whether human exposure would be likely.  Using this model, they assessed the cancer and non-cancer risks to humans.
Officials at each site also prepared a feasibility study that established cleanup goals, identified possible cleanup technologies and actions, and analyzed alternative cleanup approaches.  For the contaminants of concern, officials set cleanup goals at contamination levels that posed acceptable risks according to their exposure model.  The waste excavation and disposal approach, either on-site or off-site, was only one of many approaches available to officials to meet these cleanup goals.  For example, each site considered leaving at least some waste in place and limiting human exposure to it by either capping the waste with clean cover materials or restricting access to the waste areas.  Site officials developed their alternative cleanup approaches using the results of their remedial investigations and working closely with EPA and state reviewing officials.
Officials in Oak Ridge and Idaho determined that feasible cleanup approaches were likely to generate more waste than the existing disposal facilities at those sites could accommodate, and the Fernald site had no existing disposal facility.  Therefore, when conducting their feasibility studies, officials at each of the three sites considered whether to dispose of their respective wastes in a new on-site facility or to ship them to an off- site disposal facility.  Specifically, each site used the Envirocare facility in Utah as its representative off-site disposal facility.  DOE and commercial generators of radioactive waste use this facility, which is located 80 miles west of Salt Lake City, to dispose of mildly contaminated soils and debris. In addition to the Envirocare facility, DOE sites that do not have existing on-site disposal facilities are now authorized to dispose of their low-level and mixed low-level wastes at DOE’s disposal facilities for these types of wastes at its Hanford Reservation in southeastern Washington and its Nevada Test Site in southern Nevada.
section_title: Sites Used Nine CERCLA Criteria to Evaluate Cleanup Alternatives
paragraphs: Site officials assessed each proposed cleanup alternative against the cleanup goals, as well as nine decision criteria specified in EPA’s CERCLA regulations and guidance.  Following this guidance step-by-step, officials first considered the two threshold criteria, then evaluated qualifying alternatives against the five balancing criteria, and then applied the two modifying criteria.  CERCLA threshold criteria require a cleanup approach to (1) achieve overall protection of human health and the environment and (2) meet all legal requirements, referred to as “applicable or relevant and appropriate requirements.”  Site officials discarded some alternatives, such as capping some contaminated areas in place, because they did not meet these threshold criteria. In some instances, waivers were needed to develop on-site disposal facilities. For example, the Fernald site obtained a waiver from the state of Ohio’s prohibition on developing a disposal facility over a drinking water aquifer.  Similarly, the Oak Ridge site obtained a waiver from EPA‘s minimum required distance from the bottom of a landfill that contained toxic chemicals to the underlying groundwater. Without these waivers, the sites would not have been able to develop on- site disposal facilities.  (See appendix I.)  In both instances, the host states and EPA agreed with site officials that the proposed facilities could be designed to meet equivalent safety standards.
After screening cleanup alternatives against the two threshold criteria, site officials developed more detailed feasibility studies to demonstrate how well the various surviving alternatives met each of five CERCLA balancing criteria.  The sites used measures that employed varying degrees of data and subjectivity to evaluate how effectively an alternative met each criterion  (see table 2).
All three sites then used these evaluations to balance the criteria for on- site and off-site disposal alternatives.  Generally, each alternative approach had strengths and weaknesses in some of the criteria, and the sites had to make tradeoffs according to their unique conditions and priorities. Table 3 lists the key tradeoffs each site cited in its comparative analysis between on-site and off-site alternatives of similar cleanup scope. (See appendix 1 for a description of each site’s comparative analysis.)
Officials at each site applied the two CERCLA modifying criteria—state and community acceptance—to its preferred alternative of on-site disposal for most of its waste.  Each site involved state and community stakeholders early in the decision process.  State environmental agencies participated in preliminary reviews and informal discussions from the start of the Remedial Investigation throughout the final cleanup decision. Generally, by the time site officials issued their Final Record of Decision, they had addressed, or had a plan to address, environmental concerns raised by the states.  For example, the Ohio Environmental Protection Agency supported the development of an on-site facility in Fernald contingent upon specific restrictions on the source of and radioactivity in any waste accepted for disposal.  The Record of Decision incorporated an approach to meet these restrictions.
Site officials also involved and informed community stakeholders, and received support for their decisions from groups such as the Fernald Citizens Task Force, the Oak Ridge Reservation Environmental Management Site Specific Advisory Board, and the INEEL Citizens Advisory Board.  The Fernald Citizens Task Force, which is comprised of individuals with diverse interests in the future of the site, convened in 1993 to provide focused input on central cleanup issues at Fernald.  A Task Force report issued in 1995 included recommendations on the site’s future use, waste disposal options, and cleanup objectives and priorities.  DOE’s selected alternative mirrored these recommendations.
All three sites held public hearings on their Proposed Plan and ROD, and accepted comments for the time periods required under CERCLA.  The resulting comments and DOE responses were incorporated in the decision documents.  In each case, host state environmental agencies concurred with the proposed decisions.  Each DOE site and its respective EPA region then signed a Final ROD that documented the decision for an on-site disposal facility.  This final decision allowed DOE sites to move forward with planning for site excavation and construction.
section_title: DOE Has Not Used Updated Information to Reassess Disposal Decisions Before Making Major Investments in On-site Facilities
paragraphs: After deciding to build new on-site disposal facilities, site officials continued to refine disposal needs and develop specific plans for these facilities for one or more years.  During this time, significant changes occurred in site assumptions regarding the types and volume of wastes needing disposal, detailed design of on-site facilities, duration of the cleanup, and cost of off-site transportation and disposal.  Under such circumstances, good business practice suggests that earlier cost estimates should be confirmed before construction begins.  Likewise, 1997 guidance issued by the Office of Management and Budget (OMB) states that agencies should validate their earlier planning decisions with updated information before finalizing capital investments.  However, the three sites conducted little further evaluation of off-site disposal options, despite changed circumstances that could narrow the cost difference between on- site and off-site disposal.  At Oak Ridge, for example, a simple update of the projected waste volumes, transportation rates, and costs for off-site disposal of some types of waste effectively reduced the difference between on-site and off-site cost estimates by 51 percent.  Such changes in relative costs could also affect the balancing of costs and other factors considered while making cleanup decisions.  In particular, uncertainties about long-term stewardship needs become more significant as cost differences narrow.  The elapsed time between the preparation of the initial cost estimates that were used to support the disposal decision and the commencement of construction of on-site disposal facilities argues for validating the initial cost comparisons before committing funds to construction of new facilities.  DOE has not taken advantage of this time to update their cost comparisons at the three sites.
subsections: section_title: Assumptions Changed as Sites Refined Cleanup Plans
paragraphs: A year or more can elapse between the time the costs are estimated and the commencement of actual cleanup activities.  During this period, officials at the three sites we reviewed continued to determine the extent and nature of contamination needing cleanup, and often changed their assumptions about waste volumes, waste types, cleanup duration, and the type of disposal facility needed.  Although such changes can have major implications on cost estimates for both on-site and off-site disposal, officials at the sites applied the CERCLA process in a manner that discouraged re-examination of costs for alternatives other than their previously selected approaches.
subsections: section_title: Waste Volume and Types Have Changed
paragraphs: At all three sites, the waste volumes used to compare on-site and off-site disposal costs were significantly less than the waste volume currently projected for on-site disposal.  At two of the sites, site-wide cleanup plans and waste projections were not well defined when the cost estimates were prepared.  Officials at those sites now expect to dispose of much more waste.  Officials at the Fernald site noted that, although the site’s cost estimate was based on 1.4 million cubic meters of waste from one operable unit, the overall decision making process was based on the site- wide estimate of 1.9 million cubic meters.  (See table 4.)  As the volume of waste grows, the potential need to construct additional disposal capacity to accommodate the waste also grows.  At the time of our review, Oak Ridge officials stated that they would need to obtain further geologic surveys and regulatory approval before expanding the disposal facility to accommodate the larger waste volume now projected.  Because the cost comparisons were largely limited to an earlier set of assumptions about waste volumes, without preparing updated cost estimates DOE is not in a position to assess whether these changes will have a substantial effect on the comparative costs of on-site and off-site disposal.
Further investigation of the contaminated areas at the sites also changed assumptions about the types of waste that will be generated.  This is especially important because the disposal requirements—and therefore, the cleanup costs—vary by waste type.  For example, mixed waste—waste that is radioactive and also contains hazardous substances—must be disposed of in facilities that meet more stringent RCRA standards. Because meeting RCRA standards increases disposal costs, the proportion of mixed waste in cleanup waste will affect overall cost estimates. Disposal fees at the Envirocare facility, for example, are much higher for mixed waste than for low-level waste.  Also, cost estimates can be affected by how much of the waste is building debris, such as concrete or metal, and how much is soil.  Building debris can cost more for disposal due to its awkward sizes and shapes.  Sites may also need to obtain additional fill material to properly dispose of debris, or they may need to adjust their disposal schedules to ensure a proper mix of the two types of waste.  On- site facilities that need to increase their disposal capacity, purchase additional fill, or adjust disposal schedules will probably face higher costs than originally estimated.
section_title: Cleanup Schedules Remain in Flux
paragraphs: Since developing their cost comparisons, the three sites have continued to change their assumptions about the length of the cleanup.  After finalizing their cleanup decisions and selecting on-site disposal, site officials revised their on-site cost estimates to provide justification for their annual budget proposals over the next few years.  These revisions often resulted in changed assumptions about the time needed for cleanup operations.  The revised on-site disposal estimates reflected project life cycles that accelerated cleanup schedules according to DOE’s 1998 plan to complete cleanup at most of its sites by 2006. The abbreviated schedules assumed that facilities would operate for fewer years, tending to reduce the original on-site estimates.  For example, since preparing their first cost estimates, Oak Ridge officials have shortened their projected schedule for on-site disposal from about 30 years to about 10 years and officials at Fernald decreased their operating schedule from about 20 years to 13 years. Officials at these sites did not update comparable estimates for off-site disposal because they no longer considered off-site disposal to be a viable option.
The sites’ cleanup schedules remain in flux.  The current operating schedules and related disposal cost estimates appear optimistic.  Fernald officials, for example, state that funding constraints are already forcing a slowdown.  In fiscal year 2001, Fernald plans to dispose of 60,000 cubic yards (after compaction), or 36 percent, of the 168,000 cubic yards called for in the project’s baseline.  Schedules at Oak Ridge and INEEL could face similar pressures.  For example, the INEEL site estimated the operating costs for on-site disposal of site-wide cleanup wastes for approximately 10 years, even though site cleanup could be much longer, because cleanup schedules had not been finalized for all waste areas around the site.  If current schedules prove unworkable, then the costs for on-site disposal will change.  However, there will be no comparable analysis for off-site disposal.
section_title: Facility Designs Are Still Being Developed
paragraphs: As on-site and off-site cost comparisons were originally made, plans for on-site facilities were purely conceptual: design details, engineering drawings, and even the exact locations of the facilities were still being determined.  Concurrent with improving information on the projected waste volume and types following their on-site disposal decisions, officials at the three sites also developed and refined engineering designs for their respective planned facilities.  These refinements reflected changes in assumptions about such things as geologic features at the proposed facility location and the exact nature and level of contamination the disposal facility could safely accept.  For example, additional geological surveys were needed at INEEL to determine how deep the cell could be built without hitting bedrock.  Ultimately the cell depth will affect the area of land covered by the facility and thus the amount of material needed for the final cap.  Another facility design feature that continues to evolve is the proper soil to debris ratio that was discussed above.  DOE officials’ opinions on the optimal ratio have varied from 1:1 to 8:1, and the final ratio will depend upon the physical condition of the debris.
As disposal facility plans become better defined, the resulting decisions are likely to have cost implications.  For example, when INEEL developed its cost estimate, the tentative plans did not include a facility for sizing, sorting or treating the wastes.  INEEL officials have since added plans to construct an on-site treatment facility, which they currently estimate will cost $15 million.  Similarly, since Fernald developed its on-site estimate, the site has added considerable costs to implement waste acceptance oversight activities, in response to stakeholder concerns.  These increases in on-site disposal costs cannot be compared to any rigorous analysis of off-site disposal costs, however, because the sites dismissed off-site disposal alternatives several years ago.
section_title: Off-Site Disposal Costs Could Decrease
paragraphs: Since the three sites made their cost comparisons, some off-site disposal fees have decreased and volume discounts might be available for the higher waste volumes now projected.  The three sites relied upon the best available--though preliminary--information and assumptions in preparing their original off-site cost estimates.  For off-site disposal fees, the sites relied on historical rates, such as those in DOE’s existing contract with Envirocare.  Their estimates for off-site disposal ranged from $242 to $312 per cubic meter of waste disposed.  Such fees change over time, and the sites’ estimates now appear unrealistically high, when compared with current fees for off-site disposal at Envirocare.  That company now prices disposal of bulk rail shipments of soils classified as low-level wastes for as low as $180 per cubic meter.  In addition, DOE’s year 2000 contract with Envirocare provides for significant discounts—a price drop from $519 to $176 per cubic meter—for disposal of specified shipments of debris. Envirocare officials told us that, because the historical DOE contract rates for disposal of soils and debris had been negotiated for relatively small waste volumes, additional volume discounts might be available for the larger volumes of soil and debris now projected by the sites.
For their off-site cost estimates, site officials also used rail transportation rates that appeared high in some cases, but they have not revisited transportation options.  DOE had little historical data on rail costs for low- level radioactive waste shipments, and each site used a different approach to estimate these costs.  Because of the preliminary nature of the cost estimates, site officials made simplified assumptions about shipping configurations and rates.  However, once they had better information regarding the amounts and timetables for waste disposal, officials did not fully reconsider alternative configurations or schedules to determine whether rail costs could be reduced.  For example, they did not attempt to adjust rail costs for possible use of “dedicated” trains.  At Fernald, dedicated trains now carry waste that is not qualified for on-site disposal directly to the Envirocare facility.  These trains make fewer stops and complete the trip in much less time.  If DOE rents rail cars by the day, the overall cost for a train dedicated to low-level cleanup waste could be considerably less.  Envirocare officials suggested that further savings were possible if DOE would consider proposals that bundle the rail transportation and disposal services into one package agreement.  These officials stated that they have negotiated similar agreements with other customers.
section_title: Good Business Practice and Federal Guidance Suggest Reevaluation of Disposal Options
paragraphs: Good business practice suggests that early cost comparisons that are susceptible to uncertainties should be updated before major capital investments are made.  This concept is embedded in recent OMB guidance that advocates such revalidation of planning estimates for capital investment decisions.  OMB seeks to improve agency planning, budgeting for, and acquiring capital assets through guidance issued in Circular A-11, Part 3.  This guidance states that agencies should make effective use of competition and consider alternative solutions.  In this instance, the competition is between disposal options as well as potential contractors. For these sites, competition between on-site and off-site disposal options could provide several incentives.  First, it provides an incentive to keep on-site disposal costs as low as possible.  If off-site disposal is eliminated completely as an option, sites have less incentive to ensure that on-site disposal plans are as economical as possible.  Second, it provides incentives for off-site disposal facility contractors to reduce rates and create more competition with on-site disposal.
OMB’s 1997 supplement to Part 3 of Circular A-11, the Capital Programming Guide, provides even more definitive guidance.  It states that once a capital project has been funded, an agency’s first action is to validate that the planning phase decision is still appropriate.  It further states that, because a year or more can elapse between the planning decision and commitment, agencies should review their needs and the capabilities of the market.  DOE’s own order implementing this guidance, issued in October 2000, calls for independent review of cost estimates and verification of mission need prior to final approval for construction funding.  However, the order does not require the sites to re-validate, using independent reviews, the cost comparisons between on-site and off-site disposal alternatives.
Once site officials have refined their disposal project scope to the point where they can request contract proposals for construction, it appears reasonable for them to consider ways that the off-site disposal services market could compete with the on-site proposals.  The CERCLA process allows for selection of acceptable alternatives when the business environment changes, as long as these alternatives satisfy the regulatory standards for the cleanup.  Moreover, the three sites left open the possibility for changes in their selected remedies.  For example, the INEEL ROD calls for further evaluation of cost effectiveness of on-site or off-site disposal prior to excavation of contaminated areas, but does not specify that this should occur prior to major construction phases.  EPA’s CERCLA guidelines specifically address how agencies need to document changes they make from the alternative selected in the ROD.  In some of EPA’s examples, the guidelines suggest that large increases in the waste volumes, disposal costs, or a change in disposal location from on-site to off-site, should be documented in an Explanation of Significant Difference.  EPA’s guidelines state that more fundamental changes, such as the discovery that additional costly waste treatment will be needed prior to disposal, may require an amendment to the ROD that must reconsider the nine criteria and invite public comments.  Both examples show that the built-in flexibility of the CERCLA process accommodates more cost-effective business decisions as well as improved cleanup technologies.
section_title: Changes in Cost Could Greatly Affect Earlier Balance of Costs and Risks
paragraphs: Changes in both on-site and off-site cost assumptions mean that the balance of costs and risks at each site may now be much different than when the comparisons were made.  As a result, updated comparisons may show that, on a cost basis alone, off-site disposal is now a much more competitive alternative.  However, because cost is only one factor that is considered when making disposal decisions, off-site disposal costs do not necessarily need to drop below on-site disposal costs for off-site disposal to emerge as the better alternative.  To determine the relative advantages of the two alternatives, officials must also assess their respective long- term risks, the stewardship activities that will address these risks, and the estimated costs of these activities.  These long-term stewardship risks are highly uncertain.  As the gap between on-site and off-site disposal costs narrows, this uncertainty becomes relatively more significant to the balancing among CERCLA criteria.  The elapsed time from the ROD until bidding and construction of an on-site disposal facility argues for DOE sites to use current information and ensure that the balance of cost and long-term risk remains favorable.
subsections: section_title: Comparison Updates Substantially Narrow Cost Gap
paragraphs: Changes in cost assumptions for off-site disposal indicate considerable potential for narrowing the cost gap between these disposal alternatives. Of the three sites, only Oak Ridge has updated its off-site cost analysis to reflect more recent circumstances or volume discounts, and even this estimate has been superceded by additional developments.  Table 5 shows how much the gap between on-site and off-site disposal closed when off- site estimates were adjusted to reflect changes in commercial prices for some off-site disposal fees and transportation costs, and in one case, changes in waste-type.
When on-site and off-site disposal costs become more comparable, other factors begin  to assume increased significance.  Among these factors is the issue of retaining the waste on site, where it will pose a potential threat to human health and the environment, for all practical purposes, forever.  The sites have attempted to incorporate the costs of long-term stewardship into their on-site estimates, but these cost estimates are based on extremely limited information.
Expected long-term stewardship costs are uncertain for several reasons. First, the sites develop these estimates before specific plans are drawn up for protecting the waste.  Second, there is little historical information on which to base the preliminary estimates, because DOE has closed very few sites.  Finally, the preliminary estimates at the three sites did not appear to provide any contingency amounts for non-routine problems that might arise, and some long-term issues are open-ended.  For example, the post- closure plan for the Fernald site, issued in May 1997, states that the post- closure leachate collection and monitoring must continue until leachate is no longer detected or ceases to pose a threat, with no mention of how long that might be.
These limitations are likely to persist.  In its October 2000 report on long- term stewardship, DOE states:  “Given the limitations of available data, considerable uncertainty will be associated with any long-term stewardship cost estimates.”  In another recent study, the National Research Council noted that long-term stewardship cost estimates have significant uncertainties due to controversies over such matters as discount rates and hidden costs.  DOE is in the process of developing standardized guidance for estimating long-term stewardship costs, and anticipates that sites will include such estimates in their fiscal year 2003 budget process.
DOE is also examining alternative financing approaches for long-term stewardship.  However, these approaches may not adequately cover the potentially high costs associated with any disposal facility failure and the consequent release of contamination into the environment.  Furthermore, alternative financing may not be sufficient to cover all of the estimated post-closure costs.  For example, according to site officials, the Oak Ridge site and the Tennessee Department of Environment and Conservation entered into an administrative agreement (Consent Order) to establish the Tennessee Perpetual Care Investment Fund.  The Consent Order requires DOE to annually deposit $1 million into the fund for 14 years.  The state will use fund income to cover costs of annual post-closure surveillance and maintenance of the disposal facility.  Site officials had previously estimated these annual costs would range from about $684,000 to about $922,000 in year 2000 dollars.  To generate income in this range, the fund principal—which is equivalent to about $11.3 million in year 2000 dollars— will need to earn an average return of roughly 6 to 8 percent annually. Considering that the average real treasury rate over the past decade was about 3.6 percent, the fund may not generate enough income to cover estimated post-closure costs.
Site officials pointed out that uncertainties surrounding long-term stewardship costs also affect the Envirocare facility.  Envirocare maintains a trust fund, as required by Utah state rules implementing Nuclear Regulatory Commission requirements, to cover future closure and long- term stewardship costs in case the firm goes out of business.  Under CERCLA, according to site officials, the federal government, which disposes of large quantities of waste at the Envirocare facility, would probably be liable in the event that these funds were insufficient.  In our view, however, this point does not diminish the importance of evaluating the risk for on-site disposal.  For several reasons, potential increases in stewardship costs to DOE at the Envirocare facility are less likely than at the planned on-site disposal facilities, especially those in wetter climates. First, the Envirocare facility is located in a dry climate, which would restrict movement of contaminants from the facility to the underlying groundwater.  Second, the groundwater beneath the site is not suitable for human consumption or even for watering livestock because of its high mineral content.  Finally, the facility is in a location that is remote from population centers.
section_title: DOE Should Use Current Information to Validate Planning Decisions
paragraphs: The CERCLA decision process, culminating with the ROD, represents planning and agreement for remediation activities at the three sites.  After the ROD is signed, project assumptions and timeframes are subject to change for an extended period, allowing DOE sites time to confirm their earlier conclusions that on-site disposal remains advantageous despite long-term cost and risk uncertainties.  DOE sites could validate the early cost comparisons by re-estimating the off-site disposal costs using current disposal and transportation prices combined with baseline assumptions (about waste volumes and characteristics, for example) for the proposed on-site disposal facility.  Another approach would be to solicit proposals for off-site disposal along with proposals requested for construction of an on-site facility.  Generally, DOE sites plan to award several contracts over the life of the disposal project, each covering a specific construction phase.  For example, Fernald site officials expect the final disposal facility to consist of 6 to 8 sub-units called cells.  As of November 2000, the site has awarded three separate construction contracts covering construction for various phases of three cells.  At Oak Ridge, the baseline budget for the on-site facility calls for two construction phases, with the second phase proceeding in six expansion steps.  INEEL officials have stated that their planned on-site disposal facility may be expanded in a second phase to accommodate the large quantity of waste generated after its chemical plant—located adjacent to the on-site facility—is dismantled after 2035. Site officials stated that they will re-evaluate cost effectiveness at that time in accordance with ROD requirements.  When sufficient time elapses between such contract phases, DOE could benefit from reevaluating the market for off-site disposal at each phase.  Such competition could provide incentives for both on-site and off-site proposals to be as economical as possible.  Once the DOE sites have these “real world” estimates in hand, they would be in a better position to evaluate the extent to which cost savings for on-site disposal continue to balance the long- term uncertainties.
section_title: Conclusion
paragraphs: Unless DOE revisits its disposal needs and its current options for disposing of wastes off-site, it could miss opportunities to reduce cleanup costs at the three sites and at other sites, such as Paducah, that might propose the development of new on-site facilities.  Building in a decision checkpoint before major investment decisions are finalized could identify instances when the use of off-site disposal would be less expensive, or when the cost difference no longer outweighs the long-term risks associated with on-site disposal.  Such validation of the cost comparison is especially important in instances where DOE is aware that the scope or timeframe of the cleanup effort has changed dramatically.  Remaining open to new proposals for off-site disposal would also inject an element of competition into this process.  Thus, even if the validation did nothing more than confirm the original decision to dispose of the wastes on-site, it has the potential to ensure that costs are kept to a minimum.
section_title: Recommendation
paragraphs: We recommend that, before constructing new or expanding existing facilities for disposal of cleanup waste at the Fernald, INEEL, and Oak Ridge sites, the Secretary of Energy revisit the cost comparisons for on- site and off-site disposal to determine if the cost estimates used to support the ROD remain valid.  If cost advantages for on-site disposal have decreased, the Secretary should reassess whether expected cost savings from on-site disposal facilities outweigh the long-term risks associated with these proposed disposal facilities.  We also recommend that DOE validate cost comparisons at any other sites that may decide to develop an on-site disposal facility.
section_title: Agency Comments
paragraphs: We provided a draft of this report to DOE for review and comment.  DOE generally agreed with the report’s conclusion and recommendation that assumptions used to select on-site disposal need to be re-validated before constructing or expanding on-site disposal facilities.  DOE pointed out that reassessments are already planned for the disposal cell at the INEEL site in Idaho, which is currently in an early design phase.  The Department also stated that it will consider whether to revisit plans to proceed with expansion of existing or construction of new disposal facilities as part of a comprehensive assessment of its Environmental Management program.
Appendix III presents DOE’s comments on the report.  DOE also suggested several technical clarifications which we have incorporated into the report as appropriate.  DOE’s technical comments included the observation that another factor to be considered when evaluating off-site disposal is the receiving facility’s capacity to accommodate incoming waste volumes. GAO agrees that the coordination of multiple waste shipments to an off- site facility would be a challenge that would need to be addressed during any contract negotiations.
section_title: Scope and Methodology
paragraphs: We performed our review at DOE’s Fernald, INEEL, and Oak Ridge sites. We interviewed DOE and contractor officials at each site who are familiar with the sites’ decisions to develop on-site disposal facilities.  To understand how site officials evaluated disposal alternatives, we reviewed each site’s Record of Decision, Feasibility Study and other supporting documentation.  To determine the extent of EPA and state participation in the decision process, we interviewed officials from regional EPA offices and state environmental agencies that reviewed and concurred with DOE’s decision at each site.  We also reviewed pertinent legislation and implementing regulations and guidance on disposal of radioactive and hazardous wastes, including planning for capital investments in new disposal facilities, and discussed waste disposal issues with officials at DOE headquarters and at the Defense Nuclear Facility Safety Board.  To evaluate off-site disposal alternatives used for comparison at each site, we obtained and reviewed information on DOE’s use of the Envirocare commercial disposal facility, and interviewed officials of that company to assess the availability of commercial facilities that dispose of low-level radioactive wastes.  We also determined the extent to which DOE’s cost comparisons depended upon the rates assumed for off-site transportation and commercial disposal fees.  (See app. II for a further discussion of our scope and methodology.)  We conducted our review from May 2000 through May 2001 in accordance with generally accepted government auditing standards.
This report contains a recommendation to you.  As you know, 31 U.S.C. 720 requires the head of a federal agency to submit a written statement of the actions taken on our recommendations to the Senate Committee on Governmental Affairs and to the House Committee on Government Reform not later than 60 days from the date of this letter, and to the House and Senate Committees on Appropriations with the Agency’s first request for appropriations made more than 60 days after the date of this letter.
section_title: Appendix I: DOE Sites’ Analyses of the Primary Tradeoffs Between On-Site and Off- Site Disposal Alternatives
paragraphs: To select a cleanup alternative, officials at the Fernald, Oak Ridge and INEEL sites weighed the various cleanup approaches and made tradeoffs according to the site’s unique conditions and priorities.  Using CERCLA’s five balancing criteria (see Table 6), site officials compared the advantages and disadvantages of their on-site and off-site disposal alternatives.  Their analyses relied on site-specific information developed in their feasibility studies, and varied in depth according to the availability of data and the importance of each criterion at the site.  Each site issued a Proposed Plan that summarized the comparative analysis and designated on-site disposal as the preferred alternative for the cleanup approach.  After considering public comments on the Proposed Plan, each of the three sites issued a Record of Decision selecting an on-site disposal approach.  The following brief summaries describe each site’s analysis of the primary tradeoffs that were considered between its on-site and off-site alternatives of similar cleanup scope.
subsections: section_title: Fernald
paragraphs: According to the Fernald site’s 1995 Proposed Plan, officials preferred the on-site disposal alternative after determining that this approach:  1) was reliable over the long term, 2) offered the lowest overall short-term risks, 3) was less costly in comparison to other alternatives, and 4) employed technologies that could be implemented.  Although officials concluded that on-site disposal was reliable over the long term, their comparative analysis showed that the off-site alternative held an advantage for long- term effectiveness.  This analysis pointed out that off-site disposal left the least amount of contamination at the site and did not require engineering and institutional controls to be reliable over the long term.  In contrast, any on-site disposal facility at Fernald would need a design that ensured protection of the Great Miami Aquifer for thousands of years. Furthermore, Ohio’s solid waste disposal restrictions prohibit building such a landfill over the aquifer, which was designated as a sole source aquifer under the Safe Drinking Water Act.  EPA and the Ohio EPA agreed to waive this restriction if the proposed on-site facility could be designed to meet equivalent safety standards.
To apply CERCLA criteria to the Fernald site, officials weighed the long- term advantage of disposing of all waste off-site against disadvantages of this approach, some of which were of significant concern to various stakeholders.  These disadvantages appeared under three CERCLA criteria:  Site officials judged short-term risks for the off-site disposal option to be higher overall based on increased risks associated with shipping large quantities of waste by rail across country. Officials quantified the increased transportation risks for the comparable off-site alternative in their site’s feasibility study as approximately 10 injuries and 3 fatalities (for approximately 20,000 rail cars travelling to Utah and back).
The site’s comparison of life cycle costs showed that cleanup approaches depending mainly on off-site disposal were more expensive than approaches with an on-site disposal facility.   Its detailed comparison of alternatives showed that, for disposal of similar waste volumes, the estimated cost for off-site disposal was 34 percent more than the on-site estimate.  In their proposed plan, site officials noted that the accuracy of the cost estimates typically varied between –30 to +50 percent because of underlying uncertainties in the available information used to develop them.  Site officials stated that other criteria, particularly the plan’s implementability and community concerns about off-site rail transportation, played a more significant role in the site’s final decision.
Site officials questioned whether the off-site alternative could be successfully implemented if off-site disposal facilities became unavailable over the projected 22-year duration of the cleanup.  Furthermore, they feared that opposition to shipping large volumes of radioactive waste to western states could hinder Fernald’s access to off-site disposal for its more concentrated wastes, which cannot safely remain at the Fernald location.
section_title: Oak Ridge
paragraphs: The Oak Ridge site’s proposed plan (January 1999) stated a preference for the on-site disposal alternative after showing that on-site disposal offered comparable protection at lower cost and less transportation risk than its off-site alternative.  The plan noted that the cost advantage was only significant for estimates that used the high end of the projected range of the anticipated waste volumes requiring disposal.  Similar to the Fernald plan, the Oak Ridge plan also notes that concerns by states receiving the wastes for off-site disposal could hinder access to off-site disposal for large volumes of waste from the Oak Ridge Reservation.
Site officials concluded that an on-site disposal facility would provide adequate long-term protection if engineering barriers were designed to contain waste indefinitely.  To ensure the long-term integrity of the facility, they adopted the following three strategies to:  1) design the disposal facility to meet or exceed long term safety requirements, 2) limit the level of contamination allowed in the facility so that any leaks would pose no unacceptable risks, and 3) provide for long-term monitoring and facility maintenance.  The facility’s design also addresses the need to provide groundwater protection equivalent to that required for landfills under the Toxic Substances Control Act of 1976.  That act, as implemented by federal regulations, requires the bottom of a landfill liner to be 50 feet above the historical high groundwater table.  Based on the protection afforded by the facility’s location and design (predominantly aboveground), EPA agreed to waive this technical requirement.
Unlike the Fernald site, where the cleanup is expected to render most of the site accessible to the public, the Oak Ridge Reservation expects to restrict public access to many areas indefinitely and leave significant contamination on the site, including areas near the proposed on-site facility location.  For various technical and safety reasons, DOE does not plan to excavate these areas.  As a result, some contaminated areas around the Oak Ridge site will pose long-term risks regardless of whether an on- site disposal facility is constructed.  Site officials performed a site-wide (composite) analysis of health risks, and estimated that the radiation from the proposed on-site facility would amount to approximately 1.1 millirem per year (after 1000 years).  This amount represents roughly one-quarter of the estimated radiation dose from all sources within Bear Creek Valley after remediation, and according to site officials, is well within the established values for protection of human health and the environment.
Along with their conclusion that on-site disposal provided comparable protection to the off-site alternative, site officials found that two other CERCLA criteria gave the advantage to the on-site alternative:  The comparison of estimated costs for on-site and off-site disposal showed that on-site disposal cost significantly less only under the high volume scenario.  This high volume scenario envisioned more extensive site-wide cleanup at the Oak Ridge Reservation than DOE’s baseline assumptions. By the time the ROD was issued in November 1999, site officials considered the high volume scenario to be the most realistic and selected the on-site disposal alternative based, in part, on cost comparisons estimated for the higher waste volumes.
Based on calculations in their feasibility study, site officials concluded that the on-site disposal alternative had significantly less transportation risk than the off-site disposal alternative.  The feasibility study reported that the risk of transportation accident-related injuries or fatalities was highest for off-site scenarios that used trucks (111 injuries and 10 fatalities).  For rail transport of the high-end waste volume to the off-site facility in Utah, the risks were 8.2 injuries and .07 fatalities, compared to 0.41 injuries and 0.003 fatalities for the small number of rail shipments required for the on- site alternative.  According to the study, the risks from radiological exposure during transportation were very small for either alternative.
The INEEL proposed plan (October 1998) proposed on-site disposal as the preferred alternative, stating that the on-site approach ensures long-term protection of human health and the environment, complies with applicable legal requirements, and is a permanent and cost-effective solution. According to the summary comparative analysis, three criteria differentiated between on-site and off-site disposal alternatives: short term effectiveness, implementability, and cost.  The proposed plan does not differentiate between the long-term effectiveness for on-site and off-site disposal.  It concludes that, when compared to alternatives that capped waste in place, the two cleanup approaches provided equivalent long-term protection because each excavated contaminated soils and disposed of them in an engineered disposal facility—regardless of the facility’s location.  The plan, and the subsequent ROD issued one year later, further noted that the on-site disposal facility would be designed to protect groundwater quality in the subterranean Snake River Plain Aquifer, as well as to prevent external exposure to radiation.  Similar to the analysis by Oak Ridge officials, INEEL officials relied upon the adequacy of the facility’s design, as well as other strategies intended to maintain protectiveness over the long-term, to reach its conclusion that on-site disposal is as protective as off-site disposal in the long-term.
When site officials evaluated three other CERCLA criteria, they found that the off-site disposal alternative had the following disadvantages when compared with the on-site alternative: In the short term, officials found that both on-site and off-site disposal alternatives posed minor risks to workers or the environment, and that the off-site alternative posed an additional minor risk to communities.  The site’s feasibility study stated more specifically that the off-site alternative would pose some increased risk to communities from transport and potential railroad accidents.  However, the study further noted that the rail lines passed through very rural communities, and stated that potential risk should be minimal. In the proposed plan, site officials concluded that the off-site disposal alternative would be the most difficult to implement because it would require the transport of “large volumes of contaminated soils great distances and depends upon the availability of off-site disposal capability.” The feasibility study did not provide support for this concern, and stated that “off-site disposal…has been previously performed; therefore this alternative should be administratively feasible.” In their proposed plan INEEL officials concluded that the off-site disposal alternative was the most expensive.  They compared the estimated costs for excavation and disposal of 63,000 cubic meters of waste projected for the cleanup area under the Record of Decision.  The off-site estimate was $221 million, 160 percent more costly than on-site estimate of $85 million. In the proposed plan, officials also noted that the on-site disposal facility would be constructed to accept contaminated cleanup materials from sites located throughout the INEEL site.  They estimated that off-site disposal for the projected 356,000 cubic meters of site-wide waste would cost 224 percent more than an on-site alternative ($605 million versus $187 million). Site officials stated that they developed their site-wide cost estimates by modifying the original estimates for 63,000 cubic meters.
section_title: Appendix II: Scope and Methodology
paragraphs: In February 2000, DOE adopted a new policy allowing all DOE sites to dispose of low-level and mixed radioactive wastes at its facilities located at the Nevada Test Site and the Hanford Reservation.  Sites can also use commercial off-site disposal facilities under certain circumstances.  DOE’s policy was aimed at containing low-level and mixed wastes generated from its past or ongoing operations.  However, the Department expects to generate significantly larger quantities of low-level and mixed wastes from its cleanup operations.  In 1996, the Hanford site opened a facility for disposal of its on-site cleanup wastes under the CERLA program.  Since 1996, three other DOE sites have made decisions to develop new, on-site disposal facilities for their low-level cleanup wastes governed by CERCLA, and are in various stages of planning, constructing, and filling these facilities.  These sites are: the Fernald Environmental Management Project (Ohio); the Oak Ridge Reservation (Tennessee); and the Idaho National Engineering and Environmental Laboratory (INEEL) (Idaho).  Plans for the new facilities at these sites entail permanent on-site disposal of significant quantities of wastes that would otherwise qualify for disposal off-site under DOE’s policies.  We reviewed the sites’ decisions to determine (1) the extent that site officials considered the comparative costs and risks of off-site disposal options and (2) the extent that site officials revisited these cost and risk assessments as circumstances warranted.  In addition, at least one other site, the Paducah Gaseous Diffusion Plant (Kentucky), is currently considering proposals to develop a new on-site facility.  Our review covered the decisions already made at Fernald, Oak Ridge, and INEEL.  We did not review the decision at Hanford because DOE’s recent policy designates Hanford as one of two preferred sites for acceptance of DOE-wide low-level wastes.
We visited the three sites to observe the locations of the new disposal facilities and to determine what alternatives, if any, each site considered for disposal of their cleanup wastes.   We interviewed site officials and reviewed decision documents to determine the factors that each site considered, including risks and costs of various disposal alternatives.  We also interviewed officials from the state and Environmental Protection Agency offices that reviewed and concurred with DOE’s decision at each site.
To understand Departmental and legal influences for the sites’ waste disposal decisions, we consulted legislative and executive guidance on radioactive waste disposal and capital investment planning.  We also interviewed federal officials at DOE headquarters as well as the Defense Nuclear Facility Safety Board.
In order to determine current off-site disposal prices for low-level radioactive wastes, we reviewed information on recent uses of commercial disposal by various DOE sites.   We also reviewed DOE’s disposal contracts with Envirocare and interviewed company officials.
We conducted a limited analysis to determine the extent that each site’s cost comparison depended upon the rates used for off-site transportation and commercial disposal fees.  To illustrate how much the gap between on-site and off-site disposal estimates can close when off-site rates are adjusted to reflect changes in commercial prices (and in one case, changes in projected waste-type), we adjusted off-site costs as follows:  For Fernald and INEEL, we substituted the latest contract prices for disposing of low-level bulk soil waste off-site in place of the rates used by the sites’ for low-level waste in their original estimates for cost comparison.  (Neither Fernald nor INEEL had an updated version of the off-site estimate that we could have used to compare to current on-site estimates.)  For INEEL, we also substituted transportation rates that were more in line with current prices.  This exercise decreased the difference between on-site and off-site disposal costs by 36 percent at Fernald and 22 percent at INEEL.
For Oak Ridge, we used the site’s most recent cost comparison analysis, and substituted updated estimates of the type of wastes, as well as current prices for low-level waste disposal and commercial estimates of transportation rates.  When Oak Ridge officials prepared their most recent off-site estimate in 1999, they assumed that 44 percent of the waste would be classified as hazardous for off-site disposal.  They have since revised the figure to less than 1 percent.  The combined effect of reducing the proportion of hazardous waste and applying the lower contract and transportation prices decreased the gap between on-site and off-site disposal cost estimates by 51 percent.
We conducted our review from May 2000 through May 2001 in accordance with generally accepted government auditing standards.
section_title: Appendix III: Comments From the Department of Energy
section_title: Appendix IV: GAO Contacts and Staff Acknowledgements
subsections: section_title: GAO Contacts
section_title: Acknowledgements
paragraphs: In addition to those named above, John Cass, Linda Chu, Christine Colburn, Daniel Feehan, Hova Risen-Robertson and Stan Stenerson made key contributions to this report.
section_title: Related GAO Products
paragraphs: Low-Level Radioactive Wastes: Department of Energy Has Opportunities to Reduce Disposal Costs (GAO/RCED-00-64, Apr. 12, 2000).
Low-Level Radioactive Wastes: States Are Not Developing Disposal Facilities (GAO/RCED-99-238, Sept. 17, 1999).
Nuclear Waste: DOE’s Accelerated Cleanup Strategy Has Benefits but Faces Uncertainties (GAO/RCED-99-129, Apr. 30, 1999).
Nuclear Waste: Corps of Engineers’ Progress in Cleaning Up 22 Nuclear Sites (GAO/RCED-99-48, Feb. 26, 1999).
Department of Energy: Alternative Financing and Contracting Strategies for Cleanup Projects (GAO/RCED-98-169, May 29, 1998).
Radioactive Waste: Interior’s Continuing Review of the Proposed Transfer of the Ward Valley Waste Site (GAO/RCED-97-184, July 15, 1997).
Department of Energy: Management and Oversight of Cleanup Activities at Fernald (GAO/RCED-97-63, Mar. 14, 1997).
Radioactive Waste: Status of Commercial Low-Level Waste Facilities (GAO/RCED-95-67, May 5, 1995).