Waste Cleanup: Status and Implications of DOE's Compliance Agreements
Published: 2002-05-30T00:00:00

Fast Facts:

Highlights:
section_title: What GAO Found
paragraphs: The Department of Energy (DOE) spends between $6 billion and $7 billion annually to store, clean up, and monitor nuclear and hazardous waste at its sites. Various federal and state agencies with jurisdiction over environmental and health issues related to the cleanup are therefore involved in regulating and overseeing DOE's activities. Much of the cleanup activity has been implemented under compliance agreements between the DOE and these agencies. There are three types of compliance agreements governing DOE's sites: (1) legal requirements that address the cleanup of federal sites on the National Priorities List of the nation's most serious hazardous waste sites or that address treatment and storage of mixed hazardous and radioactive waste at DOE facilities; (2) court-ordered agreements resulting from lawsuits initiated primarily by states; and (3) other agreements, such as state administrative orders enforcing state hazardous waste management laws, that do not fall into the first two categories. Through the end of fiscal year 2001, DOE had completed 4,500 milestones, although for several reasons, the number of milestones is not a good indication of cleanup progress. Many of the milestones are administrative in nature, such as issuing a report. Also, some agreements allow for adding more milestones as time goes on, and because the total number of milestones associated with those agreements is not yet known, progress is difficult to determine. Finally, many of the milestones not yet due involve some of the most complex and costly cleanup work to be undertaken. The cost of complying with these agreements is not specifically identified in the DOE budget. Individual DOE sites include the cost of the compliance when preparing their initial budget requests, but as DOE headquarters officials adjust individual site estimates to reflect national priorities and to reconcile various competing demands, the final budget does not identify what portion of the request reflects compliance requirements. However, compliance agreements are site-specific and are not intended to provide a mechanism for DOE to use in prioritizing risks among various sites.

section_title: Letter
paragraphs: The Department of Energy (DOE) spends between $6 billion and $7 billion  annually to store, clean up, and monitor nuclear and hazardous waste at  its sites around the country. This waste is primarily a result of more than  50 years of producing material for the nation’s nuclear weapons program.  It ranges from millions of gallons of high-level liquid radioactive waste in  underground storage tanks to solvents, oils, and hazardous chemicals in  covered pits and trenches. At many of its sites, DOE has had difficulty  making significant progress on the cleanup, particularly for the most  dangerous wastes. Until recently, DOE’s plan for cleaning up every site  was expected to cost a total of about $220 billion and take at least   70 years.
The processes that govern the cleanup at DOE’s nuclear waste sites are  complicated, involving multiple laws, agencies, and administrative steps.  DOE’s Office of Environmental Management (EM) is responsible for much  of the actual cleanup activity, which is carried out primarily under two  federal laws—the Comprehensive Environmental Response,  Compensation, and Liability Act of 1980, as amended (CERCLA), and the  Resource Conservation and Recovery Act of 1976, as amended (RCRA).  CERCLA addresses the cleanup of hazardous substances at inactive or  abandoned sites, some of which are listed on the National Priorities List of  the nation’s most serious hazardous waste sites; RCRA regulates the  treatment, storage, and disposal of hazardous waste and the cleanup of  hazardous waste released from covered facilities. Various federal and state  agencies have jurisdiction over environmental and health issues involved  with the cleanup and are therefore involved in regulating and overseeing  DOE’s activities. Over the years, much of the cleanup activity has been  implemented under compliance agreements between DOE and these  agencies. Compliance agreements provide for establishing legally  enforceable schedule milestones that govern the work to be done.  Regulators and DOE can negotiate to amend or modify the agreements,  including extending or eliminating milestone dates. Regulators can also  impose monetary or other penalties for missing milestones. Some  agreements cover virtually all cleanup activities at a site, while others  cover just a portion of the activities. Most of DOE’s major sites have more  than one agreement in place.
Because the compliance agreements are so varied and numerous, their  effect on DOE’s cleanup program can be difficult to ascertain. You asked  us to address four questions with regard to these agreements:    What are the major types of compliance agreements?    What progress is DOE making in complying with milestones specified in  the agreements?
To what extent is the cost to comply with these agreements reflected in  the DOE budget submitted to the Congress?
To what extent do these agreements allow DOE to prioritize work across  sites according to the relative risk posed by the various wastes?
As we were conducting our work, the Secretary of Energy announced a  new DOE initiative aimed at improving management of the cleanup  program, shortening the program’s life by at least 30 years, and reducing  program costs by at least $100 billion. Under this initiative, DOE would  accelerate cleanup projects at some sites; revise other cleanup plans, such  as reclassifying certain waste to different risk categories to speed cleanup  and reduce cost; and concentrate funding more on cleanup and less on  maintenance and non-cleanup activities. Because the detailed proposals to  come from this initiative were still being developed at the time of this  report, we cannot determine specifically how the existing compliance  agreements will affect DOE’s ability to implement the new initiative. As  agreed with your office, however, we do offer some general observations  about the possible implications of compliance agreements on DOE’s  efforts to improve its cleanup program.
Among the steps taken to respond to this request, we administered a  questionnaire to DOE’s sites with compliance agreements. We also  conducted fieldwork at DOE headquarters and four of the department’s  largest environmental management program offices—the Richland, Idaho,  Oak Ridge, and Savannah River operations offices. For a complete  discussion of our scope and methodology, see appendix III.
subsections: section_title: Background
paragraphs: DOE is responsible for a nationwide complex of facilities created during  World War II and the Cold War to research, produce, and test nuclear  weapons. Much of the complex is no longer in productive use, but  contains vast quantities of nuclear and hazardous waste and other  materials related to the production of nuclear material. Since the 1980s,  DOE has been planning and carrying out activities around the complex to  clean up, contain, safely store, and dispose of these materials. It is a  daunting challenge, involving the development of complicated  technologies, costing about $220 billion, and expecting to take 70 years or  longer. DOE has reported completing its cleanup work at 74 of the 114  sites in the complex, but those were small and the least difficult to deal  with. The sites remaining to be cleaned up present enormous challenges to  DOE.
DOE’s cleanup program is carried out primarily under two environmental  laws: the Comprehensive Environmental Response, Compensation, and  Liability Act of 1980, as amended, and the Resource Conservation  Recovery Act of 1976, as amended. Under section 120 of CERCLA, EPA  must, where appropriate, evaluate hazardous waste sites at DOE’s  facilities to determine whether the waste sites qualify for inclusion on the  National Priorities List, EPA’s list of the nation’s most serious hazardous  waste sites. For each facility listed on the National Priorities List, section  120(e) (2) of CERCLA requires DOE to enter into an interagency  agreement with EPA for the completion of all necessary remedial actions  at the facility. The interagency agreement must include, among other  things, the selection of and schedule for the completion of the remedial  action. Interagency agreements are revised, as necessary, to incorporate  new information, adjust schedules, and address changing conditions.  These agreements often include the affected states as parties to the  agreements. These agreements may be known as Federal Facility  Agreements or Tri-Party Agreements. Under amendments to RCRA  contained in section 105 of the Federal Facility Compliance Act of 1992,  DOE generally must develop site treatment plans for its mixed-waste  sites. These plans are submitted for approval to states authorized by EPA  to perform regulatory responsibilities for RCRA within their borders or to  EPA if the state does not have the required authority. Upon approval of the  treatment plans, the state or EPA must issue an order requiring  compliance with the approved plan. The agreements are generally known  as Federal Facility Compliance orders.
DOE carries out its cleanup program through the Assistant Secretary for  Environmental Management and in consultation with a variety of  stakeholders. The Assistant Secretary directs DOE’s cleanup program at  those sites under her direct control, including Hanford, Washington; Idaho  Falls, Idaho; Savannah River, South Carolina; Rocky Flats, Colorado; and  Fernald, Ohio; and is also responsible for the cleanup programs at other  DOE sites, including Oak Ridge, Tennessee; the Nevada Test Site, Nevada;  and Los Alamos National Laboratory, New Mexico. Many other  stakeholders are involved in the cleanup. These include the federal EPA  and state environmental agencies, county and local governmental  agencies, citizen groups, advisory groups, Native American tribes, and  other organizations. In most cases, DOE’s regulators are parties to the  compliance agreements. Other stakeholders advocate their views through  various public involvement processes including site-specific advisory  boards.
section_title: Compliance Agreements Are of Three Main Types
paragraphs: The 70 compliance agreements at DOE sites vary greatly but can be  divided into three main types: (1) 29 are agreements specifically required  by CERCLA to address cleanup of federal sites on EPA’s national priorities  list of the nation’s worst hazardous waste sites or by RCRA to address the  management of hazardous waste or mixed radioactive and hazardous  waste at DOE facilities, (2) 6 are court-ordered agreements resulting from  lawsuits initiated primarily by states, and (3) 35 are other agreements,  including state administrative orders enforcing state hazardous waste  management laws. All of DOE’s major sites have at least one compliance  agreement in place, and many of these sites have all three types of  agreements. Regardless of type, the agreements all contain enforceable  milestones that DOE has agreed to meet. Collectively, as of December  2001, the 70 agreements had almost 7,200 schedule milestones. The  milestones range from completing a report or obtaining a permit to  finishing small cleanup actions or major cleanup projects. Table 1 shows,  for each type of agreement, the number of sites and the number of  schedule milestones they contain. See appendix I for a complete list of the  70 compliance agreements and information on the schedule milestones  they contain.
Agreements of the first type—those specifically required by CERCLA or by  RCRA—are in effect at all of DOE’s major sites. They tend to cover a  relatively large number of cleanup activities and have the majority of  schedule milestones that DOE must meet. Even within this category of  agreements, however, the number of milestones in a particular agreement  varies widely. For example, the Tri-Party Agreement at the Hanford site,  which implements both CERCLA and RCRA requirements, contains 951  milestones, and more milestones will be added in the future. The  agreement addresses nearly all of the cleanup work and many  administrative processes to be completed at the site over the next 70  years. At another site, the agreement implementing CERCLA requirements  at DOE’s Brookhaven National Laboratory, New York, contains 63  milestones and more milestones will be added in the future. This  agreement also addresses most of the cleanup activities that will occur at  that site. Several factors can influence the number of milestones in an  agreement, including the extent of environmental contamination and the  preferences of the regulators.
Agreements that implement court-ordered settlements exist at only a few  DOE sites, tend to be focused on a specific issue or concern, and have  fewer associated schedule milestones. These agreements are typically  between DOE and states. The issues addressed by the agreements ranged  from treating high-level waste so it could be disposed of outside the state  to submitting permit applications for treating, storing, and disposing of  hazardous wastes in specific locations. For example, at the Idaho National  Engineering and Environmental Laboratory, a settlement agreement  containing 33 milestones was signed that, among other things, established  a schedule for removing used (“spent”) nuclear fuel from Idaho. The  agreement was between DOE, the state of Idaho, and the U.S. Navy,  because spent nuclear fuel from Navy ships is stored at the Idaho Falls  site. The settlement agreement resolved a long-standing dispute between  Idaho and DOE about shipping waste in and out of the state.
The remaining agreements are based on either federal or state  environmental laws and address a variety of purposes, such as cleaning up  spills of hazardous waste or remediating groundwater contamination, and  have a wide-ranging number of milestones. For example, an agreement at  DOE’s Fernald, Ohio, site contains only four milestones and addresses  neutralizing and removing hazardous waste at the site. In contrast, an  agreement at the Nevada Test Site contains 464 milestones and addresses  identifying locations of potential contamination and implementing  corrective actions and also implementing specific sampling and  monitoring requirements.
section_title: Most Milestone Dates Have Been Met, but Meeting Milestones Is Not a Good Measure of Cleanup Progress
paragraphs: DOE reported completing 4,558 of the 7,186 milestones in these  agreements as of December 2001, about 80 percent of them by the time  originally scheduled in the agreements. Many of the milestones completed  either have been administrative, such as issuing a report, or have involved  completing some kind of step in the cleanup process, such as conducting  certain tests. Although such process steps may be important in arriving at  eventual cleanup, it is unreliable to use them to judge how much has been  accomplished in actually cleaning up the sites. When DOE misses a  milestone, regulators have several options, including negotiating a new  date or assessing a penalty. Thus far, regulators have generally been  willing to negotiate extensions when DOE found itself unable to complete  a milestone on time, approving about 93 percent of DOE’s requests for  milestone changes. In 13 cases, regulators (generally the EPA) took  enforcement actions for not meeting a milestone date. The 13 enforcement  actions resulted in DOE making $1.8 million in monetary payments and  about $4 million in other penalties (such as added work requirements),  and were for problems such as delaying the construction of a mixed-waste  laboratory or the selection of a method to remove and treat contamination  from soil. At the sites we visited, regulators said that so far, they had been  willing to take a collaborative and flexible approach to extending  milestones. However, regulators said that they generally were unwilling to  extend milestones just to accommodate lower funding levels by DOE. At  one site, we found instances in which this concern had grown to the point  that DOE decided to adhere to a sensitive milestone rather than to propose  using a less expensive approach that would have taken longer.
subsections: section_title: DOE Completed Most Schedule Milestones on Time
paragraphs: DOE reported completing about two-thirds of the 7,186 milestones  contained in its compliance agreements as of December 2001. Of the  4,558 milestones completed, 3,639, or about 80 percent, were finished by  the original due date for the milestone. The remainder of the completed  milestones were finished either after the original due date had passed or  on a renegotiated due date, but DOE reported that the regulators  considered the milestones to be met. Currently, DOE has agreed to  complete at least 2,400 additional milestones in the future. However, the  actual number of milestones DOE will need to complete will likely be  higher, as milestones will be added with changes in cleanup strategies or  as new work is identified.
Most of the milestones DOE must meet are contained in the compliance  agreements at its six largest sites—Hanford, Savannah River, Idaho Falls,  Rocky Flats, Oak Ridge, and Fernald. These six DOE sites are important  because about two-thirds of DOE’s cleanup funding goes to them. These  sites reported completing a total of 2,901 of their 4,262 milestones and met  the original completion date for the milestones an average of 79 percent of  the time. As table 2 shows, this percentage varied from a high of 95  percent at Rocky Flats to a low of 47 percent at Savannah River. Besides  the 1,334 milestones currently yet to be completed, additional milestones  will be added in the future.
section_title: Number of Completed Milestones Is Not a Good Measure of DOE’s Cleanup Progress, but Milestones Are Useful to Regulators
paragraphs: For several reasons DOE’s success in completing milestones on time is not  a good measure of progress in cleaning up the weapons complex.  Specifically:    Many of the milestones do not indicate what cleanup work has been  accomplished. For example, many milestones require completing an  administrative requirement that may not indicate what, if any, actual  cleanup work was performed. At DOE’s six largest sites, DOE officials  reported that about 73 percent of the 2,901 schedule milestones completed  were tied to administrative requirements, such as obtaining a permit or  submitting a report.
Some agreements do not have a fixed number of milestones, and  additional milestones are added over time as work scope is more fully  defined. For example, one of Idaho’s compliance agreements establishes  milestones for remedial activities after a record of decision has been  signed for a given work area. Four records of decision associated with the  agreement have not yet been approved. Their approval will increase the  number of enforceable milestones required under that agreement. Because  the total number of milestones associated with those types of agreements  is not yet known, DOE’s overall progress in accomplishing the cleanup is  difficult to determine.
Many of the remaining milestones are tied to DOE’s most expensive and  challenging cleanup work, much of which still lies ahead. Approximately  two-thirds of the estimated $220 billion cost of cleaning up DOE sites will  be incurred after 2006. DOE has reported that the cleanup activities  remaining to be done present enormous technical and management  challenges, and considerable uncertainties exist over the final cost and  time frame for completing the cleanup.
Although schedule milestones are of questionable value as a measure of  cleanup progress, the milestones do help regulators track DOE’s activities.  Regulators at the four sites we visited said that the compliance agreements  they oversee and the milestones associated with those agreements provide  a way to bring DOE into compliance with existing environmental laws and  regulations. They said the agreements also help to integrate the  requirements that exist under various federal laws and allow regulators to  track annual progress against DOE’s milestone commitments.
section_title: Regulators Have Generally Been Willing to Accommodate Delayed or Missed Milestones
paragraphs: Regulators have generally been flexible in agreeing with DOE to change  milestone dates when the original milestone cannot be met. DOE received  approval to change milestone deadlines in over 93 percent of the 1,413  requests made to regulators. Only 3 percent of DOE’s requests were  denied. Regulators at the four sites we visited told us they prefer to be  flexible with DOE on accomplishing an agreement’s cleanup goals. For  example, they generally expressed willingness to work with DOE to  extend milestone deadlines when a problem arises due to technology  limitations or engineering problems. Because regulators have been so  willing to adjust milestones, DOE officials reported missing a total of only  48 milestones, or about 1 percent of milestones that have been completed.
Even in those few instances where DOE missed milestone deadlines and  regulators were unwilling to negotiate revised dates, regulators have  infrequently applied penalties available under the compliance agreements.  DOE reported that regulators have taken enforcement actions only 13  times since 1988 when DOE failed to meet milestone deadlines. These  enforcement actions resulted in DOE paying about $1.8 million in  monetary penalties, as shown in table 3.
In addition to or instead of regulators assessing monetary penalties,  several DOE sites agreed to other arrangements valued at about $4 million.  For example, for missing a milestone to open a transuranic waste storage  facility at the Rocky Flats site, the site agreed to provide a $40,000 grant to  a local emergency planning committee to support a chemical safety in  schools program. At the Oak Ridge site, because of delays in operating a  mixed waste incinerator, site officials agreed to move up the completion  date for $1.4 million worth of cleanup work already scheduled. Also, at  three sites—Paducah, Kentucky; Lawrence Livermore Main Site,  California; and Nevada Test Site, Nevada—the regulators either did not  impose penalties for missed milestones or the issue was still under  discussion with DOE.
section_title: Regulators May Be Less Flexible if Level of Effort Declines
paragraphs: While the consequences so far of not meeting schedule milestones have  been few, regulators at individual sites may be less tolerant if DOE’s level  of effort declines at their site. Regulators at the four sites we visited told  us while they were willing to renegotiate milestone deadlines for technical  uncertainties, they were far less inclined to be flexible if delays occurred  because DOE did not provide the funding needed to accomplish work by  the dates agreed to in the compliance agreements. The federal and state  regulators told us that they prefer to be flexible and work with DOE to  renegotiate milestone deadlines that will allow DOE to develop  appropriate strategies to accomplish the work. However, these regulators  also noted that a lack of funding was not a valid reason for DOE to avoid  meeting its compliance requirements.
At DOE’s Idaho Falls site, DOE has chosen not to pursue potentially less  expensive ways to accomplish cleanup work in order to comply with a  court-ordered milestone for shipment of wastes off-site. For example,  DOE agreed with its regulators to characterize and prepare for shipment  off-site about 15,000 barrels of untreated transuranic waste by December  31, 2002. This milestone is part of an agreement that also allows separate  shipments of spent nuclear fuel from navy ships to be received at DOE’s  Idaho Falls site. According to a February 1999 report by its inspector  general, DOE could save about $66 million by deferring the processing and  shipment off-site of the transuranic waste until a planned on-site treatment  facility was completed, thus reducing the waste volume and cost to  prepare it for shipment. But doing so would have caused DOE to miss the  deadline set in the site’s compliance agreement to ship the waste from the  state. Although missing the deadline carries no monetary penalties under  this agreement, missing it would allow the state to suspend shipments of  DOE spent nuclear fuel into the Idaho site for storage. To avoid this  possibility, DOE decided not to wait until March 2003 or later, when DOE  estimated a new treatment facility would be operational to prepare the  waste for shipment at a substantially reduced cost. Instead, DOE chose to  comply with the milestone to characterize, repackage, and ship the waste  without treatment, even though it was the more expensive option.
section_title: DOE’s Budget Request Does Not Identify the Funding Needed to Meet Compliance Requirements
paragraphs: The president’s budget proposal for DOE, which is the version of the DOE  budget submitted to the Congress, does not specifically identify the cost of  complying with compliance agreements. DOE is not required to provide  this information. As part of formulating their budget requests for DOE  headquarters, individual DOE sites go through a process that includes  developing compliance estimates. However, in the process that DOE  headquarters uses to finalize the DOE-wide budget request, the site-level  estimates become absorbed without specific identification into broader  budget considerations that revolve around DOE-wide funding availability  and other needs. As DOE headquarters officials adjust the budget amounts  in the process of reconciling various competing funding needs, the final  budget submitted to the Congress has, with few exceptions, no clear  relationship to the amounts sites estimated were needed to fund  compliance requirements. Even if it were possible to trace this  relationship in the final budget, the figure would have limited significance,  because sites’ compliance cost estimates are based primarily on the  expected size of the budget. If the funding sites receive is insufficient to  accomplish all of the compliance activities planned for that year, sites  must decide which activities to defer to future years. If sites receive more  funding than anticipated in a particular year, they have an opportunity to  increase the amount of money spent on compliance requirements.
subsections: section_title: Cost of Compliance Requirements Is Not Identified in the Budget Submitted to the Congress
paragraphs: The president’s budget submitted to the Congress does not provide  information on the amount of funding requested for DOE’s compliance  requirements. DOE sites prepare budget estimates that include compliance  cost estimates and submit them for consideration by DOE headquarters.  DOE headquarters officials evaluate individual site estimates and combine  them into an overall DOE-wide budget, taking into account broader  considerations and other priorities that DOE must address as part of the  give and take of the budget process. The budget sent to the Congress has  summary information on DOE’s programs and activities, but it provides no  information on the portion of the budget needed to fund compliance  requirements. DOE is not required to develop or present this information  to the Congress. The president’s budget typically states that the DOE  funding requested is sufficient to substantially comply with compliance  agreements, but the total amount of funding needed for compliance is not  developed or disclosed.
Officials at DOE headquarters told us that they did not think information  on funding to meet compliance requirements was needed in the  president’s budget. They noted that budget guidance from the Office of  Management and Budget does not require DOE to develop or present  information on the cost of meeting compliance requirements, and they  said doing so for the thousands of milestones DOE must meet would be  unnecessarily burdensome. They said their approach has been to allocate  funds appropriated by the Congress and make it the sites’ responsibility to  use the funds in a way that meets the compliance agreement milestones  established at the site level.
section_title: Compliance Estimates at the Site Level Mainly Reflect Anticipated Budget Levels
paragraphs: Although DOE is not required to identify its compliance costs in the  budget request that goes to the Congress, DOE does develop this  information at the site level. This occurs because many of the compliance  agreements require DOE to request sufficient funding each year to meet all  of the requirements in the agreements. Also, DOE must respond to  Executive Order 12088, which directs executive agencies to ensure that  they request sufficient funds to comply with pollution control standards.  Accordingly, each year DOE’s sites develop budget estimates that also  identify the amount needed to meet compliance requirements.
The sites’ process in developing these compliance estimates shows that a  compliance estimate is a flexible number. DOE sites develop at least two  budget estimates each year, and each estimate includes an amount  identified as compliance requirements. Two budget estimates typically  completed by the sites each year are the “full requirements” estimate and  the “target” estimate. The full requirements estimate identifies how much  money a site would need to accomplish its work in what site officials  consider to be the most desirable fashion. The target estimate reflects a  budget strategy based primarily on the amount of funding the site received  the previous year and is considered a more realistic estimate of the  funding a site can expect to receive. For each of these budget estimates,  DOE sites also include an estimate of their compliance costs. As a result of  this process, DOE sites usually have different estimates of their  compliance costs for the same budget year. Table 4 shows how the  compliance cost estimates related to compliance agreements changed  under different budget scenarios.
The multiple estimates of compliance costs developed by DOE sites  indicate that DOE sites have alternative ways of achieving compliance in  any given year. When we asked DOE officials to explain how the sites can  have different estimates of the cost of meeting compliance requirements in  the same year, they said that how much DOE plans to spend on  compliance activities each year varies depending on the total amount of  money available. Because many of the compliance milestones are due in  the future, sites estimate how much compliance activity is needed each  year to meet the future milestones. If sites anticipate that less money will  be available, they must decide what compliance activities are critical for  that year and defer work on some longer-term milestones to future years.  On the other hand, if more money is available, sites have an opportunity to  increase spending on compliance activities earlier than absolutely  necessary.
DOE is concerned that deferring activities that support milestones in  future years may cause future milestones to be missed or renegotiated. In  general, the sites’ target estimates and actual funding received have been  below the sites’ full requirements estimates. DOE officials in headquarters  and the sites we visited are concerned that recurring years of funding  below the “full requirements” level could result in a growth of future  funding needs that eventually may cause DOE to fail to meet milestone  dates and/or require it to renegotiate the milestones. As an alternative to  receiving more funding, DOE occasionally is able to identify operational  efficiencies that accomplish the work for less money. DOE officials also  acknowledged that DOE’s current initiative to reassess its overall cleanup  approach may result in identifying alternative cleanup approaches that  could eliminate the need to perform some of the future cleanup work that  has been deferred.
section_title: Compliance Agreements Are Site Specific and Do Not Allow for Managing Risks across DOE Sites
paragraphs: Compliance agreements are site-specific and are not intended as a way to  manage environmental risks across DOE’s many sites. The agreements  generally reflect cleanup priorities established by local stakeholders and  set out a sequence for accomplishing the work. Risk is one factor  considered in sequencing the cleanup work at the sites, but other factors  such as demonstrating cleanup progress and reducing the overall cost of  maintaining facilities are also considered. DOE has not developed a  comprehensive, relative ranking of the risks that it faces across its sites; as  a result, it has no systematic way to make decisions among sites based on  risk. DOE has tried to develop such a methodology in the past but has  been unsuccessful in doing so. Instead, DOE has provided relatively stable  funding to its sites each year and generally allowed local stakeholders to  determine their priorities for sequencing work at the sites. This approach  may change: the department’s recently announced initiative to improve the  performance of the environmental management program includes, as a key  step, developing a risk-based cleanup strategy. DOE is currently evaluating  how best to proceed in developing the risk-based strategy.
subsections: section_title: Compliance Agreements Do Not Provide a Basis for Setting Cleanup Priorities across DOE Sites
paragraphs: DOE’s compliance agreements focus on environmental issues at specific  sites. Because they are site-specific and do not include information on the  risks being addressed, the agreements do not provide a means of  prioritizing among sites and, therefore, do not provide a basis for decision- making across all DOE sites. For example, a compliance agreement at  Savannah River focuses on achieving compliance with applicable CERCLA  and RCRA requirements but does not specify the level of risks being  addressed by specific cleanup activities.
In developing the compliance agreements, risk is only one of several  factors considered in setting agreement milestones. Other factors include  the preferences and concerns of local stakeholders, business and technical  risk, the cost associated with maintaining old facilities, and the desire to  achieve demonstrable progress on cleanup. The schedules for when and in  what sequence to perform the cleanup work reflect local DOE and  stakeholder views on these and other factors. For example, Savannah  River regulators told us that they were primarily concerned that DOE  maintain a certain level of effort linked to the compliance agreement and  they expected DOE to schedule this work to most efficiently clean up the  site. DOE developed a decision model to determine how to allocate its  cleanup dollars at Savannah River to achieve this efficiency. A group of  outside reviewers assessing the system at the request of site management  concluded that the model was so strongly weighted to efficiency that it  was unlikely that serious risks to human health or the environment could  alter the sequencing of work. DOE officials said they revised the model so  that serious risks receive greater emphasis.
section_title: DOE’s Past Attempts to Develop a Risk-based Approach to Cleanup Were Unsuccessful
paragraphs: In response to concerns expressed by the Congress and others about the  effectiveness of the cleanup program, DOE has made several attempts to  develop a national, risk-based approach to cleanup. As early as 1993, the  Congress was urging DOE to develop a mechanism for establishing  priorities among competing cleanup requirements. In 1995, we reported  that unrealistic cleanup plans had impeded DOE’s progress and that DOE  needed to adopt a national risk-based cleanup strategy. DOE’s efforts to do  so occurred over several years. For example,  In 1995, DOE developed risk data sheets as part of the budget  development process. First used to develop the budget estimate for fiscal  year 1998, the risk data sheets were used to assign scores based on such  elements as public and worker health and environmental protection. The  approach suffered from data limitations, poor definitions of the activities,  inconsistent scoring of risk, and inadequate involvement with  stakeholders. Finally, in 1997 DOE abandoned this effort.  In 1997, DOE established risk classifications as part of its project baseline  summaries. The project baseline summaries contained a component that  addressed each project’s environmental risk. However, DOE did not have  a clear basis for classifying risks, and the effort was not implemented  consistently or generally accepted by DOE field staff. After 1998, this  information was no longer developed.  In 1999, DOE pilot tested the use of site risk profiles at 10 DOE offices.  The profiles were intended to provide risk information about the sites,  make effective use of existing data at the sites, and incorporate  stakeholder input. However, reviewers found that the site profiles failed to  adequately address environmental or worker risks because the risks were  not consistently or adequately documented. In 2001, DOE eliminated a  support group responsible for assisting the sites with this effort, and the  risk profiles are generally no longer being developed or used.
A 1999 DOE-funded study to evaluate its efforts to establish greater use of  risk-based decision making concluded that none of the attempts had been  successful. Common problems identified by the study included poor  documentation of risks and inconsistent scoring of risks between sites.  The study reported that factors contributing to the failure of these efforts  included a lack of consistent vision about how to use risk to establish  work priorities, the lack of confidence in the results by DOE personnel,  the unacceptability of the approaches to stakeholders at the sites, and  DOE’s overall failure to integrate any of the approaches into the decision- making process. However, the study concluded that the use of risk as a  criterion for cleanup decision-making across DOE’s sites was not only  essential, but was feasible and practical, given an appropriate level of  commitment and effort by DOE.
Without a national, risk-based approach to cleanup in place, DOE’s budget  strategy has been to provide stable funding for individual sites and let the  sites determine what they needed most to accomplish. For example, over  the last 5 years, funding for Savannah River has ranged from $1.1 billion to  $1.2 billion and Rocky Flats received from $621 million to $665 million.  DOE’s Associate Deputy Assistant Secretary for Policy, Planning, and  Budget told us that this approach allowed sites to allocate their funding  based on their site-specific risk, compliance, and closure objectives.
section_title: DOE’s Current Initiative to Improve the Cleanup Program Has Identified Accelerated Risk Reduction as a Central Theme
paragraphs: DOE plans to shift its cleanup program to place greater focus on rapid  reduction of environmental risk. In February 2002, DOE released a report  describing numerous problems with the environmental management  program and recommending a number of corrective actions. The report  concluded that, among other things, the cleanup program was not based  on a comprehensive, coherent, technically supported risk prioritization; it  was not focused on accelerating risk reduction; and it was not addressing  the challenges of uncontrolled cost and schedule growth. The report  recommended that DOE, in consultation with its regulators, move to a  national strategy for cleanup. In addition, the report noted that the  compliance agreements have failed to achieve the expected risk reduction  and have sometimes not focused on the highest risk. The report  recommended that DOE develop specific proposals and present them to  the states and EPA with accelerated risk reduction as the goal.
DOE’s new initiative provides additional funds for cleanup reform and is  designed to serve as an incentive to sites and regulators to identify  accelerated risk reduction and cleanup approaches. DOE’s fiscal year 2003  budget request includes a request for $800 million for this purpose.  Moreover, the Administration has agreed to support up to an additional  $300 million if needed for cleanup reforms. The set-aside would come  from a reduction in individual site funding levels and an increase in the  overall funding level for the cleanup program. The money would be made  available to sites that reach agreements with federal and state regulators  on accelerated cleanup approaches. Sites that do not develop accelerated  programs would not be eligible for the funds. As a result, sites that do not  participate could receive less funding than in past years. One initial  response has been at Hanford, where DOE and the regulators signed a  letter of intent in March 2002 to accelerate cleanup at the site by 35 years  or more. DOE and the regulators agreed to consider the greatest risks first  as a principle in setting cleanup priorities. They also agreed to consider, as  targets of opportunity for accelerated risk reduction, 42 potential areas  identified in a recent study at the site. While accelerating the cleanup may  hold promise, Hanford officials acknowledged that much technical,  regulatory, and operational work is required to actually implement the  proposals in the new approach.
DOE is proceeding with the selection and approval of accelerated  programs at the sites, as well as identifying the funding for those  accelerated programs. At the same time, DOE is considering how to best  develop a risk-based cleanup strategy. DOE’s Assistant Secretary for  Environmental Management said that in developing the risk-based  approach, DOE should use available technical information, existing  reports, DOE’s own knowledge, and common sense to make risk-based  decisions. Because DOE’s approach to risk assessment is under  development, it is unclear how effective it will be or whether in  implementing it, DOE will be able to overcome the barriers encountered  during past efforts to formalize a risk-assessment process. In the interim,  DOE headquarters review teams were evaluating the activities at each site  and were qualitatively incorporating risk into those evaluations.
section_title: Compliance Agreements Were Not a Barrier to Past Management Improvements, but Impact on February 2002 Initiative Is Unclear
paragraphs: Compliance agreements have not been a barrier to previous DOE  management improvements, but it is not clear if the agreements will be  used to oppose proposed changes stemming from the February 2002  initiative. In the past, DOE has tried other management initiatives, within  the framework of the compliance agreements. These initiatives generally  have not involved significant changes in cleanup approach or the potential  for significant reductions in funding at individual sites. We found no  evidence that the compliance agreements were a barrier to implementing  such initiatives or were a factor in their success or failure. Instead, the  agreements have been used primarily to hold DOE accountable, through  enforceable milestones, for cleaning up environmental hazards using  whatever management strategy DOE employed to do so.
The outcome could be different if regulators at individual sites perceive  DOE’s latest initiative as an attempt to reduce the level of cleanup activity  at the sites. Although DOE generally did not involve regulators in  developing its February 2002 initiative to implement faster, risk-based  cleanup of its sites, based on our discussions with regulators at several  sites, it is unlikely that the compliance agreements would be a barrier to  the initiative, as long as DOE’s approach is consistent with environmental  laws and results in no reduction in funding at individual sites. However,  the discussions indicated that DOE could encounter opposition if its  realignment of cleanup priorities results in a site’s receiving significantly  less funding and therefore accomplishing considerably less work than  called for in the agreement. Parties to the compliance agreements  indicated that if this occurs, they may not be willing to negotiate with DOE  to extend schedule milestones further. In addition, it is unclear if  regulators will use the compliance agreements to resist other aspects of  DOE’s initiative, such as reclassifying waste to different risk categories in  order to increase disposal options.
subsections: section_title: Compliance Agreements Have Not Been a Barrier to DOE’s Past Management Initiatives
paragraphs: DOE has implemented or tried to implement a number of management  initiatives in recent years to improve its performance and address  uncontrolled cost and schedule growth. For example, in 1994 it launched  its contract reform initiative, in 1995 it established its privatization  initiative, and in 1998 it implemented its accelerated path-to-closure  initiative. These initiatives affected how DOE approached the cleanup  work, the relationship DOE had with its contractors, and in some cases the  schedule for completing the work. Based on reviewing past evaluations of  these initiatives and discussions with DOE officials, it appears that DOE  proceeded with these initiatives without significant resistance or  constraints as a result of the compliance agreements. For example:    DOE’s contract reform initiative involved a number of separate efforts,  including greater use of fixed-price contracts and performance-based  contracts, and a shift to greater use of management and integrating  contracts that encourage using a greater number of specialized  contractors and an integrating contractor to coordinate the various  activities. DOE has implemented these reforms at many of its sites,  including all of its large cleanup sites. Although the overall result of DOE’s  contract reform initiative is difficult to measure, the various contracting  reforms occurred within the framework of the existing cleanup  approaches reflected in the compliance agreements in effect at those  sites.
DOE’s privatization initiative was intended to reduce the cost of cleanup  by attracting “best in class” contractors with fixed-price contracts that  required contractors to design, finance, build, own, and operate treatment  facilities and to receive payments only for successfully treating DOE’s  wastes. Although this approach required substantially different  contracting and financing arrangements and there was considerable  uncertainty about its eventual success, DOE implemented privatization  projects at a number of its major sites, even though doing so sometimes  required delaying or renegotiating near-term milestones in the compliance  agreements. For example, to implement a privatization contract for the  Hanford tank waste project, DOE renegotiated several milestones with its  regulators. The state of Washington and EPA eventually agreed to the  changes, even though they had concerns about DOE’s approach. This  privatization project failed a few years later, stemming primarily from  significant cost growth, poor contractor performance, and inadequate  DOE management.
DOE’s path-to-closure initiative was aimed at developing more efficient  ways to conduct cleanup and, as a result, accelerate cleanup and closure  of DOE sites. DOE’s goal was to clean up 41 of its 53 remaining  contaminated sites by 2006. It proceeded to establish new cleanup and  closure goals at many of its sites within the framework of the existing  compliance agreements. For example, the planned closure of the Rocky  Flats site was changed from 2010 to 2006 through a revision of the project  baseline and award of a new closure contract. State of Colorado and EPA  regulators supported those changes, even though they were not consistent  with milestone dates in the site agreement.
Regulators at the DOE sites we visited acknowledged that compliance  agreements have not been a barrier to DOE’s management improvement  initiatives. They said that although the agreements hold DOE accountable  for its cleanup responsibilities, the agreements do not prescribe how DOE  should manage its program. Several milestones in the compliance  agreements have been renegotiated because DOE wanted to incorporate  changes in its management approach with a resulting effect on specific  projects. For example, DOE’s spent nuclear fuel project at Hanford is an  effort to stabilize about 2,100 metric tons of highly radioactive spent fuel  stored in aging basins and move the stabilized fuel farther from the  Columbia River. Regulators agreed to revised interim milestones for the  work after DOE proposed changes that would save money and reduce the  risk of radiation exposure to workers.
section_title: Effect of Compliance Agreements on Current Management Initiative Is Unclear
paragraphs: DOE’s management reform initiative is in the early stages and site-specific  strategies are only beginning to emerge. DOE has begun discussions with  officials in several states to implement this accelerated initiative.  However, because DOE’s cleanup reform initiative is in its early stages, it  is unclear how the site compliance agreements will affect implementation  of DOE’s latest cleanup reforms. For example, it is not yet known how  many sites will participate in DOE’s initiative and how many other sites  will encounter cleanup delays because of reduced funding.
Parties to the agreements at the sites we visited were supportive of DOE  efforts to improve management of the cleanup program, but expressed  some concerns about proposals stemming from the February 2002 review  of the program. They said that DOE’s efforts to accelerate cleanup and  focus attention on the more serious environmental risks are welcomed  and encouraged because such initiatives are consistent with the  regulators’ overall goals of reducing risks to human health and the  environment. Most regulators added, however, that DOE generally had not  consulted with them in developing its reform initiative and the regulators  were concerned about being excluded from the process. They also said  that DOE’s initiative lacked specifics and that they had numerous  questions about the criteria DOE will use to select sites and the process  DOE will follow at those sites to develop an implementation plan to  accelerate cleanup and modify cleanup approaches. Most regulators said  they would not view as favorable any attempt by DOE to avoid appropriate  waste treatment activities or significantly delay treatment by reducing  funding available to sites. In such a case, these regulators are likely to  oppose DOE’s initiative. They told us that they most likely would not be  willing to renegotiate milestones in the compliance agreements if doing so  would lead to delays in the cleanup program at their sites. In addition,  these regulators said that if DOE misses the milestones after reducing the  funding at individual sites, they would enforce the milestones in the  compliance agreements.
The effect of compliance agreements on other aspects of DOE’s initiative,  especially its proposal to reclassify waste into different risk categories to  increase disposal options, is also unclear. Some of the proposed changes  in waste treatment, such as eliminating the need to vitrify at least 75  percent of the high-level waste, which could result in disposing of more of  the waste at DOE sites, would signal major changes in DOE assumptions  about acceptable waste treatment and disposal options. For example, DOE  is considering the possibility of reclassifying much of its high-level waste  as low-level mixed waste or transuranic waste based on the risk  attributable to its actual composition. Most of the high-level waste is  located at DOE’s Hanford site. In addition, DOE officials at Hanford are  considering relaxing the requirement to transport a portion of its  transuranic waste to New Mexico, allowing instead for disposal on-site.  While these options could reduce treatment and disposal costs and time  frames, DOE would need to obtain regulatory and stakeholder agreement  to alter key commitments. These types of changes in treatment approach  would require modifications to current compliance agreements. It is  unclear whether DOE’s regulators will be supportive of these changes. At  Hanford, the regulators have agreed to discuss these types of changes in  cleanup strategy. However, at all four sites we visited, regulators said that,  although they supported DOE efforts to improve its operations, they also  wanted DOE to meet its compliance commitments. The regulators  commented that it is unclear how DOE’s proposed initiatives will be  implemented, what technologies will be considered, and whether the  changes will result in reduced cost and accelerated cleanup while  adequately protecting human health and the environment.
DOE generally did not seek input from site regulators or other  stakeholders when developing its latest initiative. DOE’s review team  leader said that at the time the review team visited individual sites, the  team had not formulated its conclusions or recommendations and so did  not seek regulator input. Furthermore, the team leader said that, during  the review, internal discussions were being held within DOE about  improving ineffective cleanup processes, such as contracting procedures.  To include regulators on the review team during these discussions,  according to the team leader, could have created the impression that the  criticism of DOE processes was regulator driven rather than reflecting the  views of DOE and contractor staff. According to the Associate Deputy  Assistant Secretary for Planning and Budget, since the proposals coming  from the review team were made public in February, DOE has held  discussions with regulators at all sites and headquarters about  implementing the proposals.
section_title: Conclusions
paragraphs: DOE carries out its cleanup program in a complex legal and regulatory  environment. Compliance agreements are one mechanism used to  organize these legal and regulatory requirements and set priorities for  cleanup at specific sites. As such, the agreements are not a useful tool, nor  were they intended to be, for managing DOE’s cleanup program from a  national, system-wide perspective.
It is unclear if compliance agreements will be a potential barrier to DOE’s  current national cleanup reform initiative. This initiative involves placing a  greater focus on rapidly reducing environmental risks and, as a result,  restructuring how DOE allocates its funding for cleanup across its sites. In  some cases DOE is also considering dramatically different cleanup  approaches than regulators and other stakeholders have come to expect.  DOE’s compliance agreements could be a potential barrier to these  changes, particularly at those sites where funding may be reduced as a  result of implementing the new initiatives or where a significantly different  approach is being proposed.
DOE faces two main challenges in going forward with its initiative. The  first is following through on its plan to develop and implement a risk- based method to prioritize its various cleanup activities. Given past failed  attempts to implement a risk-based approach to cleanup, management  leadership and resolve will be needed to overcome the barriers  encountered in past attempts. The second challenge for DOE is following  through on its plan to involve regulators in site implementation plans.  DOE generally did not involve states and regulatory agencies in the  development of its management improvement initiative. Regulators have  expressed concerns about the lack of specifics in the initiative, how  implementation plans will be developed at individual sites, and about  proposals that may delay or significantly alter cleanup strategies.  Addressing both of these challenges will be important to better ensure that  DOE’s latest management improvement initiative will achieve the desired  results of accelerating risk reduction and reducing cleanup costs.
section_title: Agency Comments
paragraphs: We provided a copy of our draft report to the Department of Energy for  review and comment. DOE’s Assistant Secretary for Environmental  Management responded that our draft report accurately presented  information on the current status of compliance agreements, and generally  agreed with the findings of the report. In addition, DOE provided technical  clarifications and corrections to our report, which we incorporated as  appropriate.
We performed our review from July 2001 through May 2002 in accordance  with generally accepted government auditing standards.
section_title: Appendix I: Compliance Orders and Agreements Affecting DOE’s Environmental Management Cleanup Program
paragraphs: This appendix presents information provided by DOE and from a  questionnaire we administered to each of the operations offices that have  sites with compliance agreements. The agreements are categorized into  three types: “1” indicates agreements specifically required by section  120(e) (2) of CERCLA or by RCRA (as amended by section 105 of the  Federal Facility Compliance Act of 1992), “2” indicates court-ordered  agreements resulting from lawsuits, “3” indicates all other agreements. We  defined a “compliance agreement” as a legally enforceable agreement  between DOE and another party or parties that contained enforceable  milestones defining cleanup activities that DOE must achieve by specified  or ascertainable dates and that are funded by DOE’s EM program.
DOE; New  Mexico  Environment  Department;  University of  California  dispose of  covered mixed  wastes at the  laboratory  (incorporates  Site Treatment  Plan)
Number of  milestones  completed on  original date  5  If an agreement was signed on multiple dates by the various parties, the latest date was used in this  appendix.
This agreement has been completed.
Site was transferred to DOE’s Office of Science and receives no further environmental management  funding.
section_title: Appendix II: Comments from the Department of Energy
section_title: Appendix III: Scope and Methodology
paragraphs: To determine the types of compliance agreements and what progress DOE  is making in meeting milestone commitments, we administered a  questionnaire to all DOE sites with compliance agreements funded by  DOE’s Environmental Management program. We defined a “compliance  agreement” as a legally enforceable agreement between DOE and another  party or parties that contained enforceable milestones defining cleanup  activities that DOE must achieve by specified or ascertainable dates and  that are funded by DOE’s EM program. To determine the universe of  compliance agreements, we obtained a list of all EM-funded compliance  agreements from DOE. We also compared this list to EM sites listed on the  EPA’s National Priorities List, which are required to have compliance  agreements implementing CERCLA requirements. We discussed these  agreements with staff from the DOE Chief Counsel’s office and the EM  program to validate both the number of sites with agreements and the  number of agreements. We removed from our study any agreement that  did not contain enforceable milestones that DOE was required to meet. In  addition, we did not include RCRA permits in our universe because (1) the  great majority of DOE’s cleanup work is covered under compliance  agreements and very little of that work is required under RCRA permits  and (2) cleanup activities required as a condition of RCRA permits are  generally also included in compliance agreements at DOE sites.
Some of the compliance agreements we identified had been subsequently  amended or replaced by other agreements. We included in the universe  milestones from the original agreements if they were unique to those  agreements and not repeated in the subsequent agreements. In addition,  five of the agreements are no longer active because all the milestones  associated with the agreements had been completed. We included those  agreements and their milestones in our study. For each DOE site having  one or more compliance agreement, we requested, for each agreement,  information on the type of agreement, the scope of cleanup activities  covered by the agreement, and information on the schedule milestones in  the agreement. We also asked officials at each site to verify that the list of  compliance agreements for their site was complete. We did not  independently verify the accuracy of the information provided by each  DOE site, but at the four sites we visited, we selectively tested the  reasonableness of the information by reviewing site records and  discussing compliance agreements with DOE officials. At some sites, DOE  officials were unable to provide exact numbers, especially concerning the  number of milestone dates that had been changed and the number of  milestones that would be completed in the future. In these cases, DOE  officials said the information provided represented their best estimates.
To determine the extent that compliance with DOE agreements is  reflected in the DOE budget submitted to the Congress, we reviewed  numerous budget formulation documents at DOE sites and at DOE  headquarters, budgeting guidance and standards, and we analyzed  information from DOE’s integrated planning and budgeting system. We  visited four of DOE’s largest environmental management program  offices—the Richland, Idaho, Oak Ridge, and Savannah River operations  offices—to document how these offices include compliance agreement  requirements in their budget submittals to DOE headquarters. Although  sites develop estimates of the compliance costs associated with  compliance agreements as well as federal, state, or local environmental  laws and regulations, in this report, compliance costs are limited to those  costs associated with DOE’s compliance agreements. To determine how  DOE headquarters uses site budget submittals, including compliance  requirements, in its final budget submittal to the Congress, we reviewed  budget documentation and interviewed officials at DOE’s headquarters  office of the environmental management program and the Office of  Management and Budget.
To identify whether compliance agreements could be used to prioritize  cleanup work across DOE sites, we reviewed the compliance agreements,  interviewed DOE headquarters and site staff involved in the EM program  to determine how environmental risks are considered in carrying out the  cleanup program, and discussed the agreements with federal and state  regulators at the four sites we visited. We also reviewed various studies  and reports prepared by DOE and other organizations that discussed risk- based decision-making in the EM program.
To assess the implications of compliance agreements on DOE’s initiatives  to improve its EM program, we discussed the initiatives with DOE  managers and staff in headquarters, including the leader of DOE’s  February 2002 report, A Review of the Environmental Management  Program. We also reviewed the proposal coming out of that report and  discussed it with staff at the four field offices we visited as well as the  regulators we interviewed about those sites. In addition, we reviewed  other related documents and reports as well as reports issued by us and  others on past EM management reform initiatives attempted or  implemented by DOE.
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the person named above Chris Abraham, Doreen Feldman,  Rachel Hesselink, Rich Johnson, Nancy Kintner-Meyer, Tom Perry, Ilene  Pollack, Laura Shumway, and Stan Stenersen made key contributions to  this report.