Plutonium Disposition: Proposed Dilute and Dispose Approach Highlights Need for More Work at the Waste Isolation Pilot Plant
Released: 2017-09-05T00:00:00

Letter

Background

This section provides information on NNSA’s Plutonium Disposition Program, DOE’s WIPP, and GAO cost estimating best practices.

NNSA’s Plutonium Disposition Program

NNSA established the Plutonium Disposition Program in 1997 to address the disposition of weapons-grade plutonium at the end of the Cold War. To date, the United States has declared a total of 61.5 MT of plutonium as excess to defense needs. This quantity includes the 34 MT that is subject to the Plutonium Management and Disposition Agreement. The majority of the 34 MT is in the form of pits, which are nuclear weapons’ central cores and are commonly produced using plutonium. The remainder of the 34 MT is in non-pit forms, such as metal and oxides. In addition to the 34 MT, DOE officials told us that EM is in the early stages of diluting approximately 6 MT of non-pit plutonium at the Savannah River Site, some of which has already been sent to WIPP for disposal.

NNSA’s Plutonium Disposition Program manages the multiple projects and facility operations that comprise the effort to dispose of U.S. surplus, weapons-grade plutonium. For both the MOX and dilute and dispose approaches, NNSA plans to store pits at the Pantex Plant in Texas, and to disassemble some of the pits and convert some of the plutonium into oxide at Los Alamos National Laboratory. At the Savannah River Site, NNSA plans to fabricate the plutonium oxide into MOX fuel for the MOX approach or dilute the plutonium for disposal as TRU waste. In addition, NNSA estimates that both approaches will produce TRU waste that will need disposal at WIPP. Figure 1 illustrates the MOX approach and the dilute and dispose approach for disposing of surplus plutonium.

The MOX facility is designed to remove impurities from plutonium feedstock obtained from pits, form the plutonium into MOX fuel pellets, and fabricate these pellets into fuel assemblies for use in a reactor. The facility is designed to be a reinforced concrete structure measuring about 600,000 square feet (including support buildings) and, when complete, would include about 300 separate process systems using approximately 23,000 instruments; 85 miles of process piping; 500,000 linear feet of conduit; 3,600,000 linear feet of power and control cable; and 1,000 tons of heating, ventilation, and air conditioning duct work. As part of the Plutonium Disposition Program, NNSA in 2015 completed construction of the Waste Solidification Building, which is located near the MOX facility and is designed to process and dispose of liquid waste from the MOX facility. The building is a 33,000-square-foot reinforced concrete structure and includes tanks, evaporators, and solidification equipment to process radioactive liquid waste streams from the MOX facility into solid waste forms suitable for disposal at WIPP.

According to NNSA officials, the dilute and dispose approach is based on a process first used by DOE in 1999 to remove excess plutonium stored at its former site at Rocky Flats near Denver, Colorado; this process is currently being used at the Savannah River Site. Approximately 5 MT of plutonium material from Rocky Flats and other DOE sites were diluted and shipped to WIPP for disposal. In addition, as a result of plutonium consolidation activities across the DOE complex, non-pit plutonium is stored at the Savannah River Site. In 2011, EM approved the dilution of some of this non-pit plutonium at the site and disposal of this material at WIPP. In 2016, DOE made a formal decision to continue the dilute and dispose process for 6 MT of non-pit plutonium. As of March 2017, according to a DOE official, EM had diluted approximately 67.2 kilograms of this plutonium.

Recent Cost Estimates for the MOX and Dilute and Dispose Approaches

In April 2014, DOE completed an analysis of alternative disposition options in its 2014 Plutonium Disposition Working Group Report. This report found that the dilute and dispose approach would be significantly less expensive than the MOX approach and would face fewer technical risks. After DOE published this report, three other groups also estimated the life-cycle costs of the program using the MOX approach or the dilute and dispose approach, producing a range of estimated costs for both. Specifically:

The Plutonium Disposition Working Group estimated in its report that the life-cycle cost of the program using the dilute and dispose approach would be approximately $8.8 billion and that the life-cycle cost of the program using the MOX approach would be approximately $25.1 billion—each of these estimates assumed annual funding of $500 million for construction activities. The report, however, reached this conclusion based on a life-cycle cost estimate for the dilute and dispose approach that had a high level of uncertainty and a life-cycle cost estimate for the MOX approach that we found to be unreliable in a prior report.

In response to congressional direction, DOE contracted with the Aerospace Corporation to assess the validity of the Plutonium Working Group’s analysis and findings. In April 2015, Aerospace issued a report that also found that the dilute and dispose approach would be less costly than the MOX approach. The report estimated that, not including any prior costs for the Plutonium Disposition Program through fiscal year 2013, the life-cycle cost of the program using the dilute and dispose approach would be approximately $17.2 billion. In comparison, the report estimated that the remaining costs to complete the program using the MOX approach would be approximately $110.4 billion.

To further evaluate the MOX and dilute and dispose approaches, the Secretary of Energy requested that a team at Oak Ridge National Laboratory assess what the preferred approach for the Plutonium Disposition Program should be. In August 2015, the resulting report, known as the Red Team report, concluded that the dilute and dispose approach has lower technical risks and lower costs. Specifically, the report concluded that the dilute and dispose approach would require approximately $400 million annually for the duration of the program, compared to approximately $700 million to $800 million annually using the MOX approach for approximately the same duration of time.

In 2015, CB&I AREVA MOX Services LLC, the contractor constructing the MOX facility, commissioned High Bridge Associates to develop a series of reports that assessed the MOX approach and the dilute and dispose approach. In contrast to the other three reports, High Bridge concluded that using the dilute and dispose approach would introduce significant risks and thus could be the more costly approach. High Bridge’s report estimated that the life-cycle cost of the program using the dilute and dispose approach would be from $21.9 billion to $41.5 billion and that the life-cycle cost of the program using the MOX approach would be $19.4 billion. The higher costs for the dilute and dispose approach were primarily driven by High Bridge’s conclusion that placing the 34 MT of diluted plutonium in WIPP would increase the potential for an uncontrolled nuclear chain reaction in the WIPP underground and that DOE would need to undertake costly compensatory steps to avoid such risks. However, according to DOE officials, High Bridge staff did not consult with DOE officials in developing its reports. Officials at Sandia National Laboratories who are responsible for evaluating the impact of any changes to WIPP on the facility’s long-term performance explained that they had reviewed the findings of the High Bridge study and found that the study used unrealistic assumptions regarding the conditions at WIPP and overstated the potential for an uncontrolled nuclear chain reaction as a result. Nonetheless, the officials explained that an analysis that Sandia has under way looking at the disposal of diluted plutonium will include an analysis of the potential for an uncontrolled nuclear chain reaction and will determine whether DOE would need to take any compensatory steps to decrease the potential for such an event.

WIPP and TRU Waste Volumes

If DOE were to pursue the dilute and dispose option, the 34 MT of diluted plutonium would likely be disposed at WIPP near Carlsbad, New Mexico. WIPP was established by the WIPP Land Withdrawal Act, which places a limit on the amount of TRU waste that can be disposed of in WIPP—the act caps the amount of TRU waste at 175,565 cubic meters (m) and specifies that WIPP is intended only for the disposal of radioactive waste generated from atomic energy defense activities.

TRU waste at WIPP is divided into “contact-handled” and “remote- handled,” based on the amount of radiation dose measured at the surface of the waste container. Contact-handled waste comprises the vast majority of the TRU waste planned for disposal at WIPP. WIPP was designed to safely dispose of TRU waste in deep underground rooms excavated out of an ancient salt formation more than 2,000 feet below the earth’s surface. DOE analysis has shown that, over a period of decades, the salt will shift and collapse to encapsulate the waste, permanently sealing it underground. The original design plan of the underground portions of WIPP comprised 10 waste disposal units, or panels, for placement of waste containers for final disposal. of TRU waste in 10 disposal panels—8 of these panels were designed as individual disposal units, and the other 2 panels (panels 9 and 10) consist of access hallways running north to south through the repository. Specifically, panel 9 is to the south and provides access to panels 3, 4, 5 and 6, and panel 10 to the north provides access to panels 1, 2, 7, and 8. of the performance assessment, and—in some cases—a federal rulemaking process that includes public comment. EPA officials told us that for less significant changes, DOE can notify EPA through a planned change notice, which does not require the same level of review. However, according to EPA officials, once DOE submits a notice, EPA can require that DOE resubmit the change as a planned change request if EPA judges the change to be significant enough to potentially impact WIPP’s long-term performance. EPA also determines whether WIPP complies with other federal environmental and public health and safety regulations, including the Clean Air Act and the Solid Waste Disposal Act.

The New Mexico Environment Department also has regulatory authority over WIPP through the WIPP hazardous waste facility permit. This permit is issued under the New Mexico Hazardous Waste Act and New Mexico regulations as authorized by EPA under the Resource Conservation and Recovery Act. Changes or modifications to the WIPP permit must be approved by the New Mexico Environment Department. There are three classes of permit modifications (classes 1, 2, and 3) that vary in terms of the level of review and the amount of supporting documentation required. The type of permit change required depends on the type of change requested, and New Mexico follows the guidelines outlined in federal regulations for modifying hazardous waste facility permits. In general, class 3 modifications require the most significant level of review.

DOE’s TRU Waste Planning

DOE has developed two documents to plan for how to handle the department’s TRU waste—a TRU waste management plan, which outlines how DOE will conduct TRU waste disposal operations over a 5- year time frame, and the annual TRU waste inventory report. According to DOE officials, the TRU waste management plan is an operational planning document and not a strategic plan that focuses on near-term issues such as the number of shipments expected from waste generator sites over the next 5 years. DOE’s annual TRU waste inventory report, however, is used for strategic planning. This report is intended to keep track of the TRU waste disposed of at WIPP and to estimate the volumes of TRU waste planned for disposal at WIPP until the facility’s closure. On an annual basis, DOE officials at WIPP send guidance to all DOE TRU waste-generating sites on how each site should develop an updated estimate of the amount of TRU waste it has stored at the site and the amount it anticipates will be generated in the future. According to the 2015 guidance document, waste generators were asked to report stored waste and waste they anticipated will be generated through 2050, when WIPP is scheduled to stop accepting waste for disposal and begin the process of closing the facility. DOE officials at WIPP take this data from the waste generators and compile it into the annual inventory report. According to the inventory report, these estimates of future TRU waste planned for disposal at WIPP are to be used for, among other things, strategic planning purposes, to support any requests to change the design of the facility, and as a basis for WIPP’s performance assessment as part of EPA’s 5-year recertification process. Since WIPP began accepting waste in 1999, DOE has depended on the facility to support its cleanup and national security missions. As of December 2015, DOE had disposed of approximately 91,129 m of contact-handled TRU waste and approximately 357 mcontainers. The radioactive contents, gases, and other materials ignited and triggered a fire in the disposal room, igniting other materials in the room. WIPP’s ventilation system failed to contain all of the airborne radiological material underground and allowed a small amount of this material to enter the environment. As a result of the release, portions of the WIPP underground and the existing ventilation system were radiologically contaminated. The suspension of WIPP’s operations as a result of the accidents has impaired DOE’s ability to meet its cleanup and national security missions as well as regulatory cleanup milestones agreed to with states that host DOE sites. WIPP reopened and DOE began limited waste disposal in January 2017. DOE plans to conduct limited waste disposal until a new ventilation system and exhaust shaft are installed in WIPP, which DOE officials stated is tentatively scheduled for fiscal year 2021 (pending independent assessment validation).

DOE Capital Asset Acquisition Process

DOE is required to manage projects over a certain cost threshold in accordance with DOE Order 413.3B. This order provides project management requirements for managing the acquisition of capital assets, with the stated goal of delivering fully capable projects within the original performance baseline for cost and schedule and that meet mission performance and other requirements. The order establishes five critical decision processes for project development over the life of a project, with each process ending with a major approval milestone—or critical decision (CD) point. These CD points are as follows:

CD-0: Approve mission need.

CD-1: Approve alternative selection and cost range.

CD-2: Approve project performance baseline.

CD-3: Approve start of construction.

CD-4: Approve start of operations or project completion.

The order specifies the requirements that must be met—including for developing and managing project cost and schedule estimates—to move a project past each CD milestone. In addition, the order requires senior management to review the supporting documentation and decide whether to approve the project moving forward at each CD.

While DOE Order 413.3B establishes requirements for estimating the cost of a capital asset project, these requirements do not apply to programs, such as the Plutonium Disposition Program. In November 2014, we found that DOE programs were not required to meet any cost estimating best practices and concluded that because DOE does not require the use of best practices for its programs, it is unlikely to consistently develop reliable cost estimates. We recommended that DOE revise its program and project management order to require that life-cycle cost estimates be developed in accordance with our best practices. DOE agreed with our recommendation and updated the order to require best practices for cost and schedule estimate for projects, however, these requirements still are not required for programs, such as the Plutonium Disposition Program.

GAO Cost-Estimating Best Practices

Drawing from federal cost-estimating organizations and industry, our cost estimating guide provides best practices about the processes, procedures, and practices needed for ensuring development of high- quality—that is, reliable—cost estimates. A high-quality cost estimate helps ensure that management is given the information it needs to make informed decisions. The guide identifies the following four characteristics of a high-quality cost estimate. Specifically, such an estimate is: comprehensive when it accounts for all possible costs associated with a project and contains a cost estimating structure in sufficient detail to ensure that costs are neither omitted nor double-counted, and the estimating teams’ composition is commensurate with the assignment; well-documented when supporting documentation is accompanied by a narrative explaining the process, sources, and methods used to create the estimate and contains the underlying data used to develop the estimate; accurate when it is not overly conservative or too optimistic and is based on an assessment of the costs most likely to be incurred; and credible when it has been cross-checked with an independent cost estimate, the level of confidence associated with the estimate has been identified through the use of risk and uncertainty analysis, and a sensitivity analysis has been conducted.

To develop a cost estimate that embodies these four characteristics, our cost estimating guide lays out 12 best practice steps. For example, one step—determining the estimating structure—includes the need to develop a “product-oriented” work breakdown structure that reflects the requirements and basis for identifying resources and tasks necessary to accomplish the project’s objectives. A product-oriented work breakdown structure is organized to reflect the cost, schedule, and technical performance of project components. Such a work breakdown structure allows a project to track cost by defined deliverables, promotes accountability by identifying work products that are independent of one another, and provides a basis for identifying resources and tasks for developing a cost estimate. Table 1 includes a listing of each of the 12 steps and the four corresponding characteristics.

DOE’s Revised Cost Estimate for Constructing the MOX Facility Substantially Met Best Practices, but NNSA Has Not Yet Applied Best Practices to the Revised Life-cycle Cost Estimate for Completing the Overall Program

DOE’s revised cost estimate for completing construction of the MOX facility substantially met best practices and, therefore, we believe it can be considered reliable because it substantially met all four characteristics of a high-quality estimate. In contrast, NNSA has not yet applied best practices when revising its life-cycle cost estimate for the Plutonium Disposition Program using the MOX approach, as we previously recommended.

DOE’s Revised Cost Estimate for Constructing the MOX Facility Substantially Met Best Practices and Can Be Considered Reliable

DOE’s revised cost estimate for constructing the MOX facility substantially met best practices. DOE developed the revised cost estimate in 2016 using two different funding scenarios reflecting the expected appropriation for the project. DOE estimated the MOX facility construction would cost $17.2 billion assuming $350 million in funding per year until project completion, which is consistent with recent appropriations for the project, or $14.3 billion assuming $500 million per year until project completion. These two estimates were developed to illustrate the effect of varying funding levels on the project cost and duration. DOE’s 2016 revised cost estimate for MOX construction substantially met all four characteristics of a high-quality, reliable cost estimate: comprehensive, well-documented, accurate, and credible.

Therefore, we believe it can be considered reliable. Table 2 summarizes our assessment of DOE’s cost estimate by characteristic.

Our assessment noted the following for each of the four characteristics:

Comprehensive: DOE’s revised estimate was substantially comprehensive because, among other things, it followed the best practices of including all costs incurred and estimated future costs to complete construction of the MOX facility, including the government’s and contractor’s costs. According to DOE officials responsible for revising this cost estimate, the estimate was based on the methodology and costs in a 2013 Independent Cost Estimate for constructing the MOX facility that was developed by the U.S. Army Corps of Engineers (Corps). For the revised estimate, DOE updated the costs of the work completed as of 2016 by adding to the costs for the work completed in the 2013 Independent Cost Estimate, the cost of materials that had actually been installed and inspected and that did not require rework as of 2016, the cost of different management accounts, escalation, and the costs to account for equipment and technology that had been or would be acquired and installed but that DOE officials expected to become obsolete and would need to be replaced before the facility construction was completed.

Well-documented: DOE’s revised estimate was substantially well- documented, in part because DOE’s documentation captures the data sources the department used for this estimate. For example, the estimate included sources of data from the 2013 Independent Cost Estimate and from the contractor’s performance data. In addition, the revised estimate was based on the work breakdown structure used in the 2013 Independent Cost Estimate, which described in detail the methodology for each element of work. We also found that DOE’s revised cost estimate was based on the same program and technical description as the 2013 Independent Cost Estimate. According to DOE officials, the revised estimate has a range of minus 10 percent to plus 10 percent. In addition, in developing its revised estimate, DOE followed the best practice of presenting the estimate to DOE management for approval.

Accurate: DOE’s revised estimate was substantially accurate. Among other things, we independently verified a selection of the cost output and found no mathematical errors. We also found that DOE properly adjusted this estimate for inflation, applying a 4 percent escalation rate to account for inflation, which is the same factor that the Corps used in developing the 2013 Independent Cost Estimate and is consistent with NNSA’s escalation rate used for this type of project, according to DOE. We assessed this characteristic as substantially accurate but not fully accurate, in part because it did not fully meet the best practice of basing the estimate on a historical record of costs from previous efforts and actual experiences from other comparable projects. This was because a portion of the estimate was not based on historical experience of other projects. For example, DOE added costs to the estimate to account for equipment and technology that had been or would be acquired and installed but that DOE officials expected to become obsolete and would need to be replaced before the facility construction was completed. According to DOE officials, this added cost was not based on a historical record because the MOX project is the first project for which this cost was added.

Credible: DOE’s revised estimate was substantially credible, in part because DOE followed the best practices of conducting sensitivity, and risk and uncertainty analyses. For example, DOE conducted statistical sensitivity analysis to understand the biggest cost drivers for the funds held by the government and the contractor that might be needed to cover risks. In addition, DOE’s revised estimate also followed the best practice of conducting a schedule risk analysis as specified in our schedule guide. DOE officials conducted schedule risk analysis to include the costs of possible schedule slippage in the estimate. Based on this analysis, DOE added a total of approximately 49 months, and this schedule addition increased the cost estimate by $744 million plus escalation, according to DOE officials. We assessed this characteristic as substantially credible and not fully credible, in part because it did not fully meet the best practice of conducting an independent cost estimate. While DOE’s 2016 revised estimate was itself not an independent cost estimate, it was based on the 2013 Independent Cost Estimate. In addition, according to DOE officials, DOE also compared its revised estimate to the estimates in the 2014 Plutonium Disposition Working Group Report and the 2015 Aerospace and Red Team reports and concluded that its estimate was in line with the results of these other reviews. Appendix II provides more detail on our assessment of how well DOE’s 2016 cost estimate for completing MOX facility construction met each best practice for developing a high-quality estimate.

NNSA Has Not Yet Applied Best Practices When Revising Its Life-Cycle Cost Estimate for the Plutonium Disposition Program Using the MOX Approach

NNSA has not yet applied best practices when revising its life-cycle cost estimate for the Plutonium Disposition Program using the MOX approach, as we previously recommended. This is because, according to NNSA officials, they developed the $56 billion cost estimate to satisfy an annual requirement to record the plutonium environmental liability on departmental financial statements that were due in September 2016.

Specifically, NNSA revised the life-cycle cost estimate for the Plutonium Disposition Program using the MOX approach, increasing it from $24.2 billion in 2013 to $56 billion in 2016. In revising the life-cycle cost estimate, NNSA included DOE’s revised MOX facility construction cost estimate of $17.2 billion. NNSA then extended the completion date for the program from the previous estimated completion date of 2036 to a new estimated completion date of 2065 to account for the 29 years DOE now estimates it will take to complete the construction of the MOX facility. NNSA officials explained that a significant part of the increase in the 2016 life-cycle cost estimate from the 2013 estimate was from applying escalation rates to account for inflation over the new, longer time period. Table 3 shows the difference between the two estimates for each program component, while appendix III provides more information on the amounts spent to date and the estimated future costs.

NNSA officials told us that they did not develop a life-cycle cost estimate following best practices for the MOX approach because they only had sufficient funding to develop the life-cycle cost estimate for the dilute and dispose approach that Congress requested in 2016. NNSA officials explained that if the Plutonium Disposition Program was not authorized to move forward with the dilute and dispose approach, NNSA would need approximately $30 million and about 3 to 4 years to revise both the MOX facility cost estimate and the program’s life-cycle cost estimate using the MOX approach.

In our February 2014 report, we recommended that NNSA revise and update the Plutonium Disposition Program’s life-cycle cost estimate using the MOX approach following our cost estimating best practices, such as conducting an independent cost estimate. NNSA generally agreed with our recommendation, but has not yet implemented it. While, as mentioned previously, there have been several other recent estimates for the life- cycle cost of the program using the MOX approach, these estimates concluded a wide range of potential life-cycle costs and used different methodologies. Based on the findings of our review of NNSA’s revised life-cycle cost estimate, we continue to believe that our recommendation remains valid and that, should DOE choose to pursue the MOX approach, NNSA should revise this estimate consistent with our cost and schedule estimating best practices. NNSA officials in charge of revising this estimate stated that they will apply cost and schedule best practices to revise this estimate, including conducting an independent cost estimate, should there be a decision to continue with the MOX approach.

NNSA Is Developing a Life-cycle Cost Estimate for Completing the Plutonium Disposition Program Using the Dilute and Dispose Approach

NNSA is currently in the process of developing a life-cycle cost estimate for completing the Plutonium Disposition Program using the dilute and dispose approach. NNSA is currently assessing the extent to which any new equipment and facilities would be needed to pursue this approach and, according to NNSA officials, will complete a life-cycle cost estimate that will follow GAO’s cost estimating best practices, including having the estimate independently validated. NNSA officials also told us that while they originally expected to have an independently validated life-cycle cost estimate completed in mid-2018, they had to suspend almost all estimating work because they were initially limited to $5 million in fiscal year 2017 for this work. According to these officials, the soonest they will have the program life-cycle cost estimate ready to be submitted for independent validation will be in the second quarter of fiscal year 2018. Based on this schedule, officials stated that the program life-cycle cost estimate could be independently validated by the end of 2018.

According to the program requirements document that NNSA created to outline its plans for conducting the dilute and dispose approach and NNSA officials, NNSA’s life-cycle cost estimate for the program using this approach will include several program elements: preparing the plutonium for dilution, diluting the plutonium into waste, and disposing of it at WIPP. NNSA identified in the program requirements document that it will need to expand its existing capabilities for preparing plutonium and diluting it, and according to NNSA officials, its life-cycle cost estimate will define the extent of these expansions and the overall cost for each element. To assist with the development of the cost estimates for each of the program elements, NNSA included an initial set of milestones for completing the program in the program requirements document. According to an NNSA official, program estimators can use these milestones to determine the rates at which each program element needs to process the plutonium in order to complete the program by the established date. These milestones are outlined in appendix IV.

NNSA Has Determined It Will Need to Expand Its Plutonium Preparation Capabilities for Dilute and Dispose

NNSA has determined that in order to complete the program using the dilute and dispose approach, it will need to expand its plutonium preparation capabilities. NNSA is currently assessing the extent of this expansion and how much it will cost. Currently, NNSA operates the Advanced Recovery and Integrated Extraction System (ARIES) project at Los Alamos National Laboratory, which has equipment for disassembling nuclear weapons pits and converting the plutonium in these pits into plutonium oxide. DOE developed this capability as a technology development project. According to NNSA officials, the ARIES project has operated sporadically since 1998 and has thus far produced approximately 667 kilograms of plutonium oxide, which NNSA had planned to use as feedstock for the MOX Facility. NNSA determined that, should the Plutonium Disposition Program continue forward with the MOX approach, NNSA would need to expand the capabilities of ARIES to produce sufficient plutonium oxide for operating the MOX facility. According to NNSA officials, the existing capabilities of ARIES are also insufficient for meeting the plutonium oxide production rates that NNSA has established for the dilute and dispose approach over the estimated lifetime of the program. According to NNSA officials, additional equipment is needed, such as gloveboxes and tools for both disassembling nuclear weapons pits and converting the plutonium into plutonium oxide, so that ARIES can achieve the production rates outlined in the program requirements for the dilute and dispose approach. To estimate the life-cycle costs associated with expanding and operating the ARIES project, NNSA currently is assessing the quantities of equipment it would need to install and the floor space it would need to achieve specified production rates. NNSA officials in the Plutonium Disposition Program told us they consulted with the NNSA officials responsible for managing the relevant space at Los Alamos, who told them that current plans for the space would allow for an expansion of the ARIES project. NNSA officials also told us they suspended their assessment of the costs to expand ARIES for dilute and dispose in January 2017 as they had reached the initial fiscal year 2017 funding limit for analyzing the dilute and dispose approach. These officials stated that the completion of the analysis would be delayed by at least 6 months past the original June 2017 completion date and acknowledged that this estimate must be completed prior to developing the life-cycle cost estimate for the dilute and dispose approach.

According to NNSA officials, NNSA has not initiated the capital asset acquisition process to expand its plutonium preparation capabilities because the extent of this expansion will differ depending on whether NNSA pursues the MOX approach or the dilute and dispose approach. NNSA officials explained that if NNSA started the acquisition process using the requirements of the dilute and dispose approach and then this approach was rejected, NNSA would have to restart the process using the MOX requirements. These officials stated that if NNSA receives congressional authorization to pursue the dilute and dispose approach, it will initiate DOE’s capital asset acquisition process for the expansion of ARIES to obtain the needed equipment. If this authorization is received, NNSA would use the ARIES expansion analysis it is currently conducting to develop the documentation needed for reaching the CD-0 milestone. The information provided by this analysis would support an assessment of the gap in capabilities in the existing ARIES project and a rough order- of-magnitude cost estimate to procure the equipment needed to close this gap. However, if NNSA does not receive authorization to pursue the dilute and dispose approach, NNSA will need to update its assessment of ARIES expansion requirements under the MOX approach, according to NNSA officials. In 2013, NNSA assessed the costs of expanding ARIES to support the MOX approach and estimated that it would need approximately $438 million for new equipment and that this expansion would take approximately 12 years to complete. This estimate was based on a plutonium oxide production rate that, according to NNSA officials, was significantly higher than the rate being used in the estimate for the dilute and dispose approach. NNSA officials told us that the ARIES requirements for the program using the MOX approach could be significantly different if operations begin in 2048, as DOE’s revised MOX cost estimate concluded.

NNSA Has Determined It Needs Additional Equipment and Facilities to Dilute Plutonium and Is Estimating the Cost to Acquire It

NNSA has determined it will need additional equipment and facilities to dilute the 34 MT of plutonium subject to the Plutonium Management and Disposition Agreement and is estimating the cost to acquire these using DOE’s capital asset acquisition process. In September 2016, NNSA approved a revised mission need statement that identified the need for additional equipment and facilities to dilute plutonium and securely store it prior to disposal. This document also included a rough order-of- magnitude cost estimate for the capital asset construction project needed to install the dilution and storage capabilities with a range of $200 million to $500 million. NNSA is in the process of further refining this cost estimate as part of its work towards the CD-1 milestone, which NNSA estimates will occur in the third quarter of fiscal year 2018. According to NNSA officials, NNSA is moving forward with CD-1 for the dilution portion of the program because, unlike for the ARIES expansion portion of the program, the need for the dilution capability only applies to the dilute and dispose approach. NNSA officials told us that they could stop the acquisition process for the dilution capabilities if the dilute and dispose approach does not move forward.

In order to reach CD-1 approval, NNSA is required, among other things, to conduct an analysis of alternatives to select a preferred alternative. The contractor NNSA hired to conduct this analysis identified dilution operations at the Savannah River Site—requiring $330 million in construction, including the installation of three gloveboxes and waste storage—as the highest scoring alternative. NNSA approved the analysis of alternatives in May 2017. To identify the preferred alternative, the analysis began with nine potential alternatives that were put through an initial screening to determine whether each of the alternatives was sufficiently different from one another and whether each alternative could meet all the necessary requirements established in the dilute and dispose program requirements document and other documents. This screening identified four alternatives that were judged as viable for providing the necessary dilution and waste storage capabilities to meet the program’s requirements; NNSA then fully analyzed each of these four alternatives. These alternatives and their estimated costs are outlined in table 4 below.

Among the four alternatives, the contractor’s analysis ranked alternative 2, in the table above, as the highest scoring; this alternative proposes to dilute the 34 MT of both pit and non-pit plutonium at the Savannah River Site. This alternative was the highest scoring alternative for several reasons, including that (1) it was judged to have the lowest risk of any of the four based on the analysis of potential threats and opportunities for each alternative, (2) diluting the pit and non-pit plutonium at the Savannah River Site would make the most extensive use of existing facilities and capabilities and would have a lower impact on other ongoing site operations during construction and operations than would occur if dilution capabilities were installed at Los Alamos National Laboratory, and (3) it would provide easier access to a third party, such as the International Atomic Energy Agency to monitor and inspect the plutonium disposition process as required by the Plutonium Management and Disposition Agreement.

According to NNSA officials, they will use the results of the analysis of alternatives process to develop the conceptual design and estimated cost of the preferred alternative. NNSA officials told us that they were planning for NNSA management to approve CD-1 in September 2017. However, according to NNSA officials, they had suspended additional work towards CD-1 because of the initial restriction in fiscal year 2017 on their use of additional funds for dilute and dispose planning. As a result, completion and approval of CD-1 is expected to be delayed by at least six months or more.

NNSA Is Assessing Potential Costs Associated with Disposing of Diluted Plutonium at WIPP

NNSA has been assessing what upgrades would be necessary and the costs for disposing of the 34 MT of diluted plutonium at WIPP. NNSA officials stated that any upgrades that are needed will likely be completed as part of normal operations and maintenance work at WIPP and will not require the initiation of a capital asset project. These officials also said they have identified some upgrades that will be needed at WIPP to accept the diluted plutonium. For example, security upgrades in the aboveground storage area of WIPP will be required so that the diluted plutonium can be monitored and protected in the case of an unplanned outage of the WIPP facility that prevents the diluted plutonium from being placed underground. Additionally, NNSA will need to pay for a system that allows a third party, such as the International Atomic Energy Agency, to monitor the diluted plutonium as it goes through the dilution process and is disposed of at WIPP. According to NNSA officials, the Plutonium Disposition Program will pay for the costs of the identified upgrades at WIPP associated with the disposal of diluted plutonium at WIPP. However, according to NNSA officials, their analysis for the costs of disposing of the diluted plutonium assumes that DOE will provide sufficient disposal space for this waste. These officials also said that if DOE needs to expand the disposal space at WIPP in order to accept all of the plutonium from the dilute and dispose approach, the costs for such an expansion would not be part of the life-cycle cost estimate currently under development for the program using the dilute and dispose approach. NNSA officials told us they do not have a current estimate of the costs for the upgrades at WIPP and have suspended the work assessing the costs for disposing of the plutonium at WIPP due to budget constraints.

WIPP Does Not Have Sufficient Space to Meet Current TRU Waste Disposal Needs, and Future Volumes May Exceed Statutory Capacity Even Without Diluted Plutonium

DOE does not have sufficient disposal space at WIPP to dispose of all defense TRU waste already planned for disposal, and future sources of waste could exceed WIPP’s statutory capacity. To accommodate the waste identified in DOE’s 2016 annual TRU waste inventory report as going to WIPP, DOE will need to further excavate the repository. To address WIPP’s statutory capacity issue, DOE is considering changing its method of counting the volumes of waste disposed of at WIPP, which could allow it to dispose of the waste included in the inventory and much of the possible future volumes without exceeding the statutory capacity. However, DOE has not developed plans to obtain the requisite regulatory approvals to excavate more disposal space or plans for changing its method of counting waste volumes, which risks delaying the dilute and dispose approach if selected.

WIPP Will Need to Be Expanded to Dispose of Defense TRU Waste Already Planned for WIPP

DOE does not have sufficient disposal space available in WIPP for the TRU waste planned for disposal identified in its 2016 annual TRU waste inventory report, and DOE will need to expand the repository to accommodate this waste. DOE’s inventory report includes the amount of TRU waste that DOE estimates will require disposal at WIPP or another geologic repository through 2050, the planned closure date for WIPP. The 2016 inventory report includes 68,350 m of contact-handled waste and 3,160 m These inventory totals do not include the 34 MT of diluted plutonium from the dilute and dispose approach. The inventory also has a separate section for “potential waste,” which is waste that may be disposed of at WIPP but that, because of issues such as regulatory or physical restrictions, DOE has not yet determined meets all of WIPP’s waste acceptance criteria. portion of the panel where the radiological release took place will no longer be used for waste disposal. Additionally, according to DOE officials, they were unable to conduct sufficient maintenance of the entire WIPP underground while working to recover from the 2014 accidents, and as a result, additional portions of the facility’s space are no longer suitable for waste disposal. In particular, these officials told us that they are not likely to dispose of waste in panel 9 due to the instability in the ceiling in that area. Figure 2 provides an illustration of the remaining disposal space available at WIPP and the extent to which prior panels were filled to their permitted capacity. For more information on the difficulties DOE faced in filling panels 1 through 6 to their permitted capacity, see appendix V.

WIPP’s capability to accommodate the TRU waste planned for disposal is complicated by special requirements for disposing of the relatively small portion of remote-handled waste. Specifically, DOE may not be able to dispose of the 3,160 m of remote-handled waste planned for disposal at WIPP in any of the remaining planned space at WIPP because of the additional requirements for remote-handled waste. Currently, remote- handled waste is disposed of in WIPP either in boreholes drilled into the walls or in specially designed shielded containers. DOE officials told us that it is possible that none of the remaining space at WIPP may be available for disposing of remote-handled waste using boreholes in the panels due to two factors. First, contamination from the February 2014 radioactive release accident is now contained in some of the facility’s walls, making them potentially unsuitable for borehole disposal. Second, officials told us panels 9 and 10 were not designed for borehole disposal. However, these officials also explained that DOE is still evaluating the suitability of WIPP’s planned space for borehole disposal, and it has not yet made a final decision. DOE officials have approved the use of a shielded container that allows remote-handled waste to be disposed of alongside contact-handled waste in panels instead of in boreholes, but this container has not been widely used at WIPP. The department also issued an analysis of alternatives that suggests DOE expand its use of shielded containers for remote-handled waste.

Current DOE plans for WIPP do not include an analysis of whether the facility will need to be expanded to accommodate the TRU waste planned for disposal identified in its inventory, even though the department’s current plan is to fill the remaining disposal space by 2026 and the facility is not expected to close until 2050. While DOE officials stated that they recognize expansion of WIPP’s disposal space may be necessary in the future, they have not analyzed or planned for expanding the facility because their focus has been on resuming waste emplacement operations at WIPP. According to our analysis of DOE’s 2016 annual TRU waste inventory report and the constraints on the remaining planned disposal space at WIPP, WIPP will not be able to accommodate all the waste planned for disposal without expansion. Using DOE’s plans for filling WIPP’s remaining disposal space, we estimate that DOE has space for approximately 25,350 m The extent to which any space remains for disposal of remote-handled waste is unknown because DOE officials told us the suitability of this space is still under evaluation. As shown in table 5, the waste planned for disposal at WIPP that is identified in DOE’s 2016 inventory report exceeds the facility’s disposal space. of potential waste estimated from the West Valley Demonstration Project because it is included in DOE’s estimate of 12,000 m. According to these officials, the difference between the estimates is caused by several factors, including that estimates in the Environmental Impact Statement were developed as conservative, lower-bound estimates, and uncertainty regarding quantities of GTCC LLW and GTCC-like waste that may be generated at the West Valley Demonstration Project in the future that were not reported to the inventory. Department of Energy, Final Environmental Impact Statement for the Disposal of Greater- Than-Class-C (GTCC) Low-Level Radioactive Waste and GTCC-Like Waste, DOE/EIS- 0375 (January 2016). waste needs to be included as part of DOE’s planning for WIPP’s future space and capacity needs.

Other Estimated Waste That May Go to WIPP: Two other sources of waste could significantly impact the available capacity at WIPP. For the first source—GTCC LLW and GTCC-like waste—DOE issued a final environmental impact statement in 2016 that identified 12,000 m As of May 2017, DOE has not submitted the report to Congress. For the second source, DOE estimates that the diluted plutonium from the dilute and dispose approach would generate 23,800 m of waste. In its current planning documents, NNSA assumes that WIPP will be the geologic repository for this waste if the decision is made to move forward with this approach for the Plutonium Disposition Program. As seen in table 6, if DOE were to dispose of all potential waste and GTCC LLW and GTCC-like waste at WIPP, it could exceed the statutory capacity established in the Land Withdrawal Act even without the 34 MT of diluted plutonium.

In addition to these estimated sources of waste that may be disposed of at WIPP in the future, there are other possible sources of TRU waste that DOE may need to dispose of at WIPP that have been identified but not yet estimated and are not reflected in the inventory. Specifically, DOE officials acknowledged that the possible TRU waste that could result from decontamination and decommissioning of facilities and exhumation of buried waste may represent a significant quantity of waste. Officials we interviewed at the five major DOE waste-generating sites told us of at least 44 facilities that could generate TRU waste during decontamination and decommissioning or that have buried TRU waste for which no volume estimates have been reported to DOE. Site officials told us that, in general, they do not estimate the volume of TRU waste that may result from these cleanup operations until they have agreements with state regulators on proposed methods for cleanup and plans to execute these agreements. Moreover, according to these officials, the amount of TRU waste that could be generated can vary greatly based on which cleanup methods are chosen. For a few of these facilities, site officials were able to make general estimates of the possible quantities of TRU waste. For example, officials at one site told us about a facility that did not yet have a cleanup plan and that could generate anywhere from 300 m to 2,600 m to 3,000 mpotentially significant volumes of waste resulting from decontamination and decommissioning of facilities and exhumation of buried waste that have not yet been estimated increase the potential for WIPP to exceed its statutory disposal capacity in the future. Figure 3 shows how the addition of this possible future waste that has not yet been estimated, along with waste for which there is an estimate, could result in DOE exceeding WIPP’s statutory disposal capacity.

As noted above, while DOE cannot plan for the disposal of GTCC waste and waste from the dilute and dispose approach until key decisions are made, its current planning mechanisms do not account for all waste it may need to dispose of in WIPP in the future. Federal standards for internal control state that management should use quality information to achieve the entity’s objectives. Among other characteristics, quality information is to be complete. While DOE has developed guidance to instruct TRU waste generator sites on what information to include for the annual update to the TRU waste inventory report, this guidance does not explain how or whether sites should develop estimates of the volumes of TRU waste that may be generated in the future. Without developing guidance that helps sites produce more comprehensive estimates of the volumes of TRU waste that may be generated in the future from cleanup operations—including estimates of buried waste, waste that may be generated from decontamination and decommissioning of nuclear facilities, waste that may be generated past WIPP’s expected closure date of 2050, and other possible future sources of TRU waste not currently reflected in the annual TRU waste inventory report—DOE will not have the information needed to effectively estimate the need for future space for TRU waste disposal and ensure that its plans are in compliance with WIPP’s statutory capacity.

DOE Is Reviewing Alternative Waste Counting Methods That Would Allow It to Dispose of More Waste, including Diluted Plutonium, at WIPP without Exceeding the Statutory Capacity

DOE officials told us that they recognize that additional volumes of waste could result in WIPP exceeding its statutory capacity, and they are reviewing alternative methods for counting the volumes of TRU waste disposed of at WIPP that could increase the volume of waste DOE could dispose of there before reaching the facility’s statutory capacity. Specifically, as identified in our analysis above, DOE will need to take steps in order to be able to confirm that waste volumes that could result in WIPP exceeding its statutory capacity, such as the 34 MT of diluted plutonium, can be disposed of at WIPP. DOE currently counts the volume of waste disposed of at WIPP using the volume of the outermost container rather than the inner containers holding the waste or the volume of the waste itself. Most of the TRU waste disposed of at WIPP is packaged initially in 55-gallon drums, but some of these drums are subsequently packed inside larger containers, called overpacks, that hold multiple drums. DOE relies on several types of overpacks for the disposal of TRU waste. For the dilute and dispose approach, NNSA plans to package the waste inside small cylinders, which are then placed within 55-gallon drums. According to DOE officials, if the method for counting waste volumes changes for all TRU waste so that DOE counts the inner containers or the waste itself, this change would likely provide sufficient additional disposal capacity at WIPP for the waste planned for disposal identified in the 2016 inventory, potential waste, and the 34 MT of diluted plutonium.

In September 2016, DOE completed an analysis of alternative methods for counting the volume of TRU waste already at WIPP and the waste expected in the future. The report evaluated 13 prospective alternative calculation methods and recommended 2 preferred alternatives to present for final selection to DOE officials responsible for managing WIPP operations.

One of the preferred alternatives proposed to recalculate the volume of waste already disposed of in the repository using only the volume of the innermost waste container, and proposed that the volume of waste disposed of at WIPP in the future be determined by the volume of TRU waste in each container.

The other preferred alternative proposed to recalculate the volume of waste already disposed of in the repository and future volumes of TRU waste using the volume of the innermost container, regardless of the amount of TRU waste in the container.

While either of the above methods would provide additional disposal capacity at WIPP, according to DOE officials, the department is still considering its options. DOE officials responsible for managing WIPP operations have previously estimated that revising the method for counting the amount of waste already disposed of could free up more than 30,000 m Additionally, while the volume of the 34 MT of diluted plutonium would be 23,800 m using DOE’s current counting method, this volume would decrease to 1,417 mexceed the EPA regulatory thresholds for the potential of a radiological release over a 10,000-year period. According to Sandia National Laboratories officials, the new model they are developing is required for expanding WIPP’s disposal space in the areas DOE is currently considering, and they estimate that this model will be completed and validated by 2024.

If NNSA proceeds with the dilute and dispose approach and the 34 MT of diluted plutonium is sent to WIPP, DOE will need to include in its expansion planning the results of an assessment of the environmental impact of disposing of this waste in order to ensure that WIPP will be able to accept all of the plutonium. Officials from Sandia told us that they are currently conducting an analysis that will contribute to this environmental impact assessment and expect to complete it by fiscal year 2019. According to DOE officials, this analysis includes estimating the impact on WIPP’s long-term performance to determine whether disposal of the diluted plutonium at WIPP would cause cumulative radioactive releases exceeding EPA’s release limits. If the analysis by Sandia National Laboratories determines that the diluted plutonium would have a significant enough impact, steps to change the design of future disposal space at WIPP in order to reduce the potential impact could be necessary. For example, Sandia officials stated that new panels that are smaller than the current design could be used to reduce the concentration of the diluted plutonium in the repository and thereby reduce the potential for a radiological release.

DOE will also need regulatory approvals from EPA and the New Mexico Environment Department to expand the disposal space at WIPP. To get approval from EPA, DOE will need to submit a formal change request to the agency. DOE officials told us that expanding WIPP’s disposal space would constitute a significant change to the original design of the facility, and according to EPA officials, change requests of this magnitude require significant review. In some cases, the EPA officials said granting this type of change could require EPA to go through the federal rulemaking process, which could include public comment and publication of a proposed federal rule. EPA officials told us that, historically, these change requests may take as long as 2 years. According to officials from the New Mexico Environment Department, to excavate additional waste disposal panels, DOE must also seek a permit modification from their agency. EPA officials told us that approval for these kinds of changes generally take between 1 and 2 years and that they are unsure whether the New Mexico Environment Department would be able to process a permit modification request concurrently with EPA’s review. Once all necessary approvals have been completed, DOE could then begin excavating new disposal space at WIPP. There is no set time frame for how long the excavation would take, and DOE officials stated that this time frame would vary based on the design of the new disposal space. However, DOE officials noted that it took about two years to excavate each of the existing panels at the facility.

DOE officials told us they have begun work on the new model and there is sufficient time to complete all necessary actions before WIPP operations are significantly impacted; however, DOE has no plans yet for seeking the approvals that would show that these approvals and subsequent construction can be completed before the facility’s existing disposal space is full. DOE’s most current formal planning document for WIPP, the TRU waste management plan, covers 5 years. DOE officials told us that the plan is limited to 5 years because it is an operational plan that is used to plan near-term waste shipments, not a long-term strategic plan. The most current version of this plan addresses the period up to 2019 and does not address possible future WIPP expansion needs. Completion of the new model for WIPP that is needed to begin the regulatory approval process for expansion is not expected to be ready until 2024, and then the approval and subsequent construction process could take another 4 years or longer. Given that these time frames extend well beyond the period addressed in the TRU waste management plan, DOE’s current planning is insufficient for addressing possible WIPP expansion. As discussed above, under federal standards for internal control, management should use quality information to achieve agency objectives; among other characteristics, quality information is to be complete. However, DOE’s TRU waste management plan does not contain information necessary to plan for the future of WIPP through its closure. Without developing a long-term plan for WIPP that includes the need for expanding WIPP’s disposal space and an integrated schedule that describes how DOE will complete the regulatory approval process and construction of new space before WIPP’s existing space is full, DOE will not have reasonable assurance that it will be able to expand the repository in a timely manner. Instead, according to DOE officials, they may have to slow or suspend waste shipments to WIPP in the future, which could delay the implementation of the dilute and dispose approach, should it move forward. The slowing or suspension of waste shipments from waste generator sites could also delay the completion of cleanup projects at those sites and could impact their ability to meet cleanup deadlines negotiated with state regulators.

Revision of Method for Counting Waste Volumes

To revise the method DOE uses to count waste volumes disposed of at WIPP against the statutory disposal capacity, DOE officials explained that they will need regulatory approval from the New Mexico Environment Department to change the facility’s hazardous waste operating permit, and such approval could take 2 years. DOE has not yet completed its internal deliberations about the specifics of this proposed change and, as such, has not yet sought a determination from the New Mexico Environment Department about what type of review would be required to approve this change or clarified how long this approval process may take. As noted above, DOE officials told us that they have been focused on efforts related to reopening WIPP, and enough time exists to obtain regulatory approval to meet the dilute and dispose milestones. However, one of the assumptions in NNSA’s program requirements for the dilute and dispose approach is that WIPP will be able to dispose of the diluted plutonium and that if there are capacity constraints that would impact the facility’s ability to do so, they would be addressed by 2020. In order to meet this requirement, DOE would need to implement this change by 2020 or risk delays in planning for the dilute and dispose approach. According to New Mexico Environment Department officials, the request to change the method of counting waste volumes could be completed either through a policy determination by the New Mexico Environment Department or through the formal WIPP hazardous waste facility operating permit modification process. New Mexico Environment Department officials noted that the formal permit modification process could take as long as 2 years as opposed to a policy determination, which would likely be completed more quickly. According to DOE officials, unless they receive approval from the New Mexico Environment Department to change the method for counting waste volumes, Congress will need to raise WIPP’s statutory disposal limit by amending the WIPP Land Withdrawal Act or the repository will be unable to accept significant quantities of additional waste not currently planned for disposal.

With the uncertain time frames involved with receiving approval from regulators to change the volume counting method, it is unclear whether DOE officials responsible for managing WIPP operations will be able to meet NNSA’s 2020 milestone for resolving potential disposal space constraints at WIPP for disposing of the waste from the dilute and dispose approach. Under federal standards for internal control, management should use quality information to achieve the entity’s objectives, and among other characteristics, quality information is provided on a timely basis. Without DOE developing a timeline to help determine whether it can change its method of counting waste volumes to meet NNSA’s 2020 milestone, DOE and other stakeholders may not have the information they need in a timely manner to know whether possible future waste, such as waste from the dilute and dispose approach, can be added to the waste planned for disposal at WIPP without potentially exceeding the facility’s statutory disposal capacity.

Conclusions

DOE is currently in the process of reevaluating the best approach for disposing of 34 MT of surplus weapons-grade plutonium. DOE’s 2016 revised cost estimate of $17.2 billion for construction of the MOX facility substantially followed best practices, and we believe it can be considered reliable. However, NNSA’s revised life-cycle cost estimate for the Plutonium Disposition Program using the MOX approach of $56 billion does not yet incorporate cost estimating best practices as we have previously recommended. Reviews by NNSA and some outside experts found that the dilute and dispose approach has the potential to cost significantly less, but NNSA is still developing a life-cycle cost estimate for this alternative. If the decision is made to move forward with the dilute and dispose approach, DOE will need to ensure that there is sufficient disposal space and statutory capacity at WIPP to dispose of the diluted plutonium. WIPP is a geologic repository for defense TRU waste and will need to accommodate all such waste unless DOE pursues an additional repository.

DOE has not adequately planned for all possible waste that it may be expected to dispose of in WIPP, complicating its ability to determine whether the waste from the dilute and dispose approach can be disposed of at WIPP. In particular, DOE does not have a schedule for when TRU waste generator sites will complete the determinations on whether the potential waste identified in DOE’s annual TRU waste inventory report can be disposed of at WIPP. Without developing this schedule, DOE cannot be assured that it has timely information on whether to include this waste as part of its planning for WIPP’s future space and capacity needs. In addition, DOE’s TRU waste inventory report does not capture several possible future sources of waste, including waste from the decontamination and decommissioning of facilities or waste that may be generated after 2050. DOE’s guidance for estimating future waste does not specify how possible future waste should be estimated and reported. Without developing guidance that helps sites produce a more comprehensive estimate for the volumes of TRU waste that may be generated in the future from cleanup operations, including estimates of buried waste, waste that may be generated from facility closure and cleanup, and other potential sources of TRU waste not currently reflected in the TRU waste inventory report, DOE will not have the information it needs to effectively estimate the need for future space for TRU waste disposal and ensure that its plans are in compliance with WIPP’s statutory capacity.

To address WIPP’s future space and capacity needs, DOE will need approvals from EPA and the New Mexico Environment Department. However, DOE is uncertain about the extent of approvals required and has not initiated planning efforts to obtain these approvals. DOE does not have plans to show how additional space will be excavated in time to prevent a disruption in waste shipments after the facility’s existing disposal space is filled in 2026. Without a long-term plan that includes the need for expanding WIPP’s disposal space and an integrated schedule that describes how DOE will complete the regulatory approval process and construction of new space before WIPP’s existing space is full, DOE does not have reasonable assurance that it will be able to expand the repository before waste shipments must be slowed or suspended. DOE also does not have a timeline for determining whether it will change its method of counting waste volumes and therefore does not know whether this action will be completed by 2020, when NNSA’s program requirements for the dilute and dispose approach assume that potential capacity constraints at WIPP will have been addressed. Without DOE developing a timeline to help determine whether it can change its method of counting waste volumes to meet NNSA’s 2020 milestone for resolving potential disposal space constraints at WIPP, DOE and other stakeholders may not have the information they need in a timely manner to know whether possible future waste, such as waste from the dilute and dispose approach, can be added to the waste planned for disposal at WIPP without potentially exceeding the facility’s statutory disposal capacity.

Recommendations for Executive Action

To ensure that DOE has a full understanding of the department’s long- term TRU waste disposal requirements and the capability of WIPP to meet those requirements, we recommend that the Secretary of Energy take the following four actions:

Develop a schedule for deciding whether the volumes of “potential waste” identified in the annual TRU waste inventory report can be disposed of at WIPP.

Develop guidance that helps sites produce a more comprehensive estimate for the volumes of TRU waste that may be generated in the future from cleanup operations, including estimates of buried waste, waste that may be generated from decontamination and decommissioning of nuclear facilities, and waste that may be generated past WIPP’s expected closure date of 2050.

Develop a long-term plan for disposing of DOE’s TRU waste that the need for excavating additional disposal space at WIPP and an integrated schedule that describes how DOE will complete the regulatory approval process and construction of new space before WIPP’s existing space is full, and a timeline to help determine whether DOE can change its method of counting waste volumes to meet NNSA’s 2020 milestone for resolving potential disposal space constraints at WIPP.

Agency Comments and Our Evaluation

We provided a draft of this report to DOE for review and comment. In written comments, reproduced in appendix VI, DOE concurred with the report’s recommendations. DOE stated that our recommendations were consistent with the department’s commitment to improve management of the national TRU waste program and to efficiently and effectively utilize WIPP for disposal of eligible TRU waste. DOE outlined actions that it intends to take in response to our recommendations, including developing disposal schedules for potential waste once certain prerequisite actions are taken that provide the basis for determining whether or not the waste is TRU waste that can be disposed of at WIPP; developing new guidance by December 2018 to assist DOE sites produce more comprehensive estimates of future TRU waste that may be generated from cleanup operations; and developing a long-term plan by December 2018 for disposal of DOE’s TRU waste, including an initial design for potential new waste disposal panels at WIPP and options for changing the method of counting waste volumes disposed of at WIPP. We believe that these steps, once implemented, would address our recommendations.

In addition, DOE highlighted the following two points:

DOE’s Office of Environmental Management is focused on the WIPP mission as currently defined by law.

DOE has not made a final decision to use the dilute and dispose approach to dispose of the 34 metric tons of surplus plutonium that the department previously decided to fabricate into mixed-oxide fuel.

DOE also provided technical comments, which we incorporated as appropriate.

We are sending copies of this report to the appropriate congressional committees, the Secretary of Energy, and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff members have any questions about this report, please contact me at (202) 512-3841 or trimbled@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix VII.

Appendix I: Objectives, Scope, and Methodology

Our report examined (1) the extent to which the Department of Energy’s (DOE) revised cost estimate for completing construction of the Mixed- oxide Fuel Fabrication Facility (MOX facility) and the revised life-cycle estimate for completing the Plutonium Disposition Program using the mixed-oxide (MOX) fuel approach met cost-estimating best practices, (2) the status of the National Nuclear Security Administration’s (NNSA) development of a life-cycle cost estimate for completing the Plutonium Disposition Program using the dilute and dispose approach, and (3) the extent to which DOE has sufficient disposal space and statutory capacity at its Waste Isolation Pilot Plant (WIPP) to dispose of all defense transuranic (TRU) waste, including the diluted plutonium resulting from the dilute and dispose approach.

To assess the extent to which DOE’s revised cost estimates for completing construction of the MOX facility and for completing the overall Plutonium Disposition Program relying on the MOX approach meet cost estimating best practices, we used the following methodology:

DOE’s 2016 performance baseline cost estimate to complete the MOX facility. We compared the process DOE used to develop the 2016 performance baseline cost estimate with the 12 key steps described in the GAO Cost Estimating and Assessment Guide that, when followed correctly, should result in a high-quality, reliable cost estimate. We evaluated DOE’s 2016 performance baseline report and reviewed backup documentation supporting the information in this report, including the U.S. Army Corps of Engineers’ 2013 Independent Cost Estimate of the MOX facility construction, and the contractor’s 2015 and 2016 estimate at completion reports. We also interviewed DOE cost estimating experts and officials who prepared DOE’s performance baseline cost estimate. We provided a draft of our assessment to DOE and revised the draft, as appropriate, after discussing our assessment with DOE officials and receiving additional information from them, such as data on how DOE included the effects of schedule slippage in the cost estimate.

NNSA’s life-cycle cost estimate for the Plutonium Disposition Program using the MOX approach: Because NNSA officials stated that they did not prepare the updated 2016 life-cycle cost estimate for the program using the MOX approach based on GAO’s 12 steps of a high-quality, reliable cost estimate, we interviewed NNSA officials responsible for developing the estimate as well as officials in charge of various parts of the program to determine whether they took any steps that might have changed the estimate’s reliability since we assessed it in a 2014 report. We determined at that time that the estimate did not meet the characteristics of a high-quality, reliable estimate. We also tried to understand what led to cost increases in some areas of the estimate. In addition, we reviewed back-up documentation for the 2016 life-cycle cost estimate and compared it with the documentation we evaluated in our 2014 report.

To determine the status of NNSA’s development of a life-cycle cost estimate for completing the Plutonium Disposition Program using the dilute and dispose approach, we reviewed the planning documents that had been completed to date, including the mission need and program requirements documents that outlined the scope of the Plutonium Disposition Program relying on the dilute and dispose approach and dates for completing key program milestones. We also interviewed NNSA officials managing the Plutonium Disposition Program to determine the extent of planning that they had completed to date for this approach and the schedule for completing the remaining plans. To understand what efforts were ongoing to study the impact of disposing of diluted plutonium at WIPP on long term repository performance, we interviewed officials from the Carlsbad Field Office and Sandia National Laboratories and reviewed documents on preliminary analysis work they had begun. We also visited DOE’s Savannah River Site to interview NNSA officials responsible for the Plutonium Disposition Program and officials from DOE’s Office of Environmental Management (EM) project to dilute the 6 MT of non-pit plutonium. At the site, we also viewed a demonstration mock-up of the plutonium dilution equipment that EM already had in operation.

To determine the extent to which DOE has sufficient physical space and statutory capacity at WIPP to dispose of all defense TRU waste, including the diluted plutonium resulting from the dilute and dispose approach, we reviewed relevant legislation relating to WIPP’s statutory capacity, DOE’s annual TRU waste inventory report, and data from the Waste Data System, which tracks the waste already disposed of in the repository. We also reviewed DOE’s WIPP hazardous waste facility permit and the 1992 WIPP Land Withdrawal Act to understand the legal requirements governing waste disposal at WIPP. To assess the reliability of DOE’s inventory, we reviewed documents on its development and interviewed officials responsible for maintaining it. Based on our review, we determined that the data it contains are sufficiently reliable for our purposes. However, in discussions with DOE officials, they told us there is uncertainty in the estimated volume of waste expected to come to WIPP in the future. For example, DOE officials stated that the actual volume of waste that is disposed of at WIPP may be higher than their current estimates, in some cases due to circumstances that DOE cannot currently predict, such as the need to repackage certain stored wastes into multiple containers and thereby increase the total volume of waste. Additionally, a DOE official told us that the actual volume of waste disposed of at WIPP could be lower than what they currently estimate in certain cases because they are working on minimizing the volumes of TRU waste produced in the future by, for example, developing more efficient waste packaging processes. As part of developing its inventory of TRU waste, DOE updates on an annual basis the estimates on the volume of waste expected to be disposed of at WIPP in the future, using a process we found to be reliable; therefore, we used the information from this inventory for our analysis. We also conducted a site visit to WIPP to interview DOE officials responsible for managing WIPP operations to understand how the waste disposal space is managed and how they plan for DOE’s future disposal needs. In interviews with DOE officials knowledgeable about DOE’s cleanup efforts, we identified other sources of waste that may be disposed of at WIPP in the future but that are not currently included in DOE’s inventory report. In particular, we spoke with a DOE official responsible for managing the department’s strategy for disposing of greater-than-Class C waste. To understand what efforts were ongoing to study the impact of disposing of diluted plutonium at WIPP, we interviewed officials from Sandia National Laboratories who are responsible for analyzing potential changes at WIPP. To evaluate potential sources of TRU waste from generator sites that may not be included in DOE’s inventory report, understand how such sites estimate the amount of TRU waste they will need to ship to WIPP, and get these sites’ perspectives on potential disposal space availability and capacity issues, we reviewed documents from and interviewed officials at DOE’s five major waste-generating sites. Specifically, we conducted interviews with officials from the Hanford Site in Washington state, Idaho National Laboratory, Los Alamos National Laboratory in New Mexico, Oak Ridge National Laboratory in Tennessee, and Savannah River Site in South Carolina. These interviews included a site visit to Idaho National Laboratory. In addition, to understand the regulatory process through which DOE must work to operate WIPP, we spoke to officials from agencies that have regulatory authority over the WIPP facility—the U.S. Environmental Protection Agency and the State of New Mexico Environment Department.

Appendix II: GAO Assessment of Department of Energy’s (DOE) Revised Cost Estimate for Construction of the Mixed-Oxide (MOX) Fuel Fabrication Facility

Best practice characteristic and overall assessment Comprehensive: Substantially met

Best practice The cost estimate includes all life-cycle costs.

Detailed Assessment Substantially met. The estimate included all actual and estimated future costs to construct the MOX facility, including government’s and contractor’s costs. The estimate was an update of the 2013 Independent Cost Estimate, with updates to account for the contractor’s actual cost and a new estimate of future work.

The cost estimate completely defines the program, reflects the current schedule, and is technically reasonable.

Substantially met. The estimate was based on the MOX facility construction project’s technical baseline and on the methodology and costs in the 2013 Independent Cost Estimate conducted by the U.S. Army Corps of Engineers. DOE used updated installation rates for this estimate that were different than the rates used in the contractor’s technical baseline. For example, the contractor counted that 11 percent of the pipes had been installed, while DOE’s 2016 estimate used an updated contractor validation report that stated that only 1 percent of the pipe had actually been installed, inspected, and accepted.

The cost estimate work breakdown structure is product-oriented, traceable to the statement of work/objective, and at an appropriate level of detail to ensure that cost elements are neither omitted nor double-counted.

Partially met. The entire MOX work breakdown structure was taken from the 2013 Independent Cost Estimate. It shows five levels of detail. This structure is the contractor’s work breakdown structure, which was decertified by DOE in October 2016. The decertification report stated that one deficiency of the contractor’s work breakdown structure was that the contractor did not implement a single product-oriented work breakdown structure to provide direct representation of the project work scope and document the hierarchy and description of tasks to be performed and their relationship to the product deliverables.

The estimate documents all cost-influencing ground rules and assumptions.

Fully met. The estimate was based on well- described ground rules and assumptions that were identified in DOE’s revised cost estimate report, as well as the 2013 Independent Cost Estimate. The assumptions were developed by cost estimators who consulted the technical community.

Best practice characteristic and overall assessment Well-documented: Substantially met

Best practice The documentation captures the source data used, the reliability of the data, and how the data were normalized.

Detailed Assessment Substantially met. DOE’s documentation captures all data sources used for this update, which are all primary sources. For example, in most cases, the source data for the estimate are the contractor’s performance data, the 2013 Independent Cost Estimate, and the contractor’s estimate at completion. DOE normalized the estimate at completion data used in the 2013 Independent Cost Estimate by adding escalation, obsolescence, level of effort adjustments, and construction adjustments to bring it up to date to 2016.

The documentation describes in sufficient detail the calculations performed and the estimating methodology used to derive each element’s cost.

Fully met. Each level 4 work breakdown structure has a description of the methodology used to estimate it. While the 2013 Independent Cost Estimate was a better Class 2 estimate, DOE’s 2016 estimate was a Class 3 estimate with a range of minus 10 percent to plus 10.

The documentation describes, step by step, how the estimate was developed so that a cost analyst unfamiliar with the program could understand what was done and replicate it.

Substantially met. The documentation was mathematically sensible and logical. Some but not all of the supporting data was available in the back up documentation provided by DOE. The data was adequate for easily updating the estimate to reflect actual costs or program changes since it came from the contractor’s actuals. However, some costs were added to the historical data that were not based on actuals, such as a factor for obsolescence that was not based on any historical data.

The documentation discusses the technical baseline description and the data in the baseline is consistent with the estimate.

Fully met. The estimate was based on the same program and technical description as the 2013 Independent Cost Estimate. Each work breakdown structure element had a brief technical description associated with it. The technical descriptions in the estimate could be found in the technical baseline document.

The documentation provides evidence that the cost estimate was reviewed and accepted by management.

Substantially met. DOE provided documentation that would indicate that management understood all the details of the cost estimate, including the risks associated with the underlying data and methods, before management approved it.

Best practice characteristic and overall assessment Accurate: Substantially met

Best practice The cost estimate results are unbiased, not overly conservative or optimistic, and based on an assessment of most likely costs.

Detailed Assessment Partially met. The estimate included an additional approximately $207 million in extra funding, which might be needed to address known risks. DOE calculated the confidence level at 95 percent. According to our Cost Estimating Guide, while no specific confidence level is considered a best practice, experts agree that project cost estimates should be budgeted with at least 50 percent confidence level, but budgeting at a higher level (of 70 to 80 percent) is now common practice.

The estimate has been adjusted properly for inflation.

Fully met. DOE properly adjusted the estimate for inflation by using a 4 percent escalation rate. This was the same escalation rate used in the 2013 Independent Cost Estimate and, according to DOE’s report, was consistent with the escalation rate used by NNSA for this type of projects.

The estimate contains few, if any, minor mistakes.

Fully met. We independently verified a selection of the cost output and found no mathematical errors. The estimating team was also charged with maintaining a quality control plan, which included doing quality checks and reviews throughout the process as well as a technical review of the estimate.

The cost estimate is regularly updated to reflect significant changes in the program so that it always reflects current status.

Partially met. The estimate was an update of the 2013 Independent Cost Estimate. In addition, the contractor’s estimate at completion was updated in 2016. However, this was not a full update, and elements of the 2013 Independent Cost Estimate were updated only by re-escalating and making some adjustments.

Variances between planned and actual costs are documented, explained, and reviewed.

Partially met. The contractor examined actual costs and variances. DOE used these variances to determine the updated estimate. However, DOE decertified the contractor’s earned value management system in October 2016, because DOE determined that the data in this system were not reliable, timely, auditable, traceable, or reconcilable.

The estimate is based on a historical record of cost estimating and actual experiences from other comparable programs.

Partially met. The estimate was mostly based on historical data that was applicable to the MOX construction project. Some costs were added to the historical data that were not based on actual costs incurred, such as obsolescence. The data was current and within 1 year old. The data mostly came from the contractor’s earned value management system, which DOE decertified in October 2016.

Best practice characteristic and overall assessment

Best practice The estimating technique for each cost element was used appropriately.

Detailed Assessment Fully met. The estimate was developed using parametric cost estimating techniques, applying statistical relationships between historical costs and other program variables such as facility or process, physical or performance characteristics, contractor output measures, and manpower loading. Each technique appears to be used appropriately for the work breakdown structure element being estimated.

The cost estimate includes a sensitivity analysis that identifies a range of possible costs based on varying major assumptions, parameters, and data inputs.

Fully met. DOE conducted statistical sensitivity analysis to understand the biggest cost drivers within management reserve and contingency.

A risk and uncertainty analysis was conducted that quantified the imperfectly understood risks and identified the effects of changing key cost driver assumptions and factors.

Substantially met. DOE conducted a quantitative risk and uncertainty analysis using Monte Carlo simulation to determine the confidence levels and associated range of contingencies. DOE did not independently identify the risks; the contractor provided the list of risks. Programmatic risks were considered to be bounding assumptions and were not included.

Major cost elements were cross-checked to see whether results were similar.

Partially met. We did not find evidence of cross checking while reviewing the documentation for both the 2016 estimate and 2013 Independent Cost Estimate. DOE stated that the estimating team performed cross checks by evaluating the 2013 Independent Cost Estimate against the contractor’s actuals and analyzing the costs on a monthly basis. This allowed DOE to determine that the actuals were close to the 2013 estimate and the contractor’s estimate to complete needed adjustments.

An independent cost estimate was conducted by a group outside the acquiring organization to determine whether other estimating methods produce similar results.

Partially met. DOE’s 2016 cost estimate was not an independent cost estimate, but it was built on the 2013 Independent Cost Estimate. As part of the estimate development, DOE consulted several other independent studies previously conducted on the construction project, such as the Red Team and the Aerospace Corporation reports. DOE concluded that its estimate was in line with these other reviews.

Appendix III: National Nuclear Security Administration’s (NNSA) Life-cycle Cost Estimates for the Plutonium Disposition Program Using the Mixed-Oxide (MOX) Approach

Facility or Program Component MOX Fuel Fabrication Facility

MOX Irradiation, Feedstock, and Transportation is the program component that includes: (1) production of plutonium feedstock for the MOX Fuel Fabrication Facility, (2) qualification of MOX fuel for use in commercial nuclear reactors, and (3) procurement and maintenance of shipping containers for plutonium feedstock and MOX fuel. The Program Management and Integration is the program component, that includes overall management and integration of the MOX Fuel Fabrication Facility and the Waste Solidification Building projects, and integration of the projects with activities falling under the MOX Irradiation, Feedstock, and Transportation component. The Program Management and Integration component used to be called the Plutonium Disposition and Infrastructure Program.

Appendix IV: Milestones for the Plutonium Disposition Program Using the Dilute and Dispose Approach

To assist with the developing of the life-cycle estimate for the Plutonium Disposition Program using the dilute and dispose approach, the National Nuclear Security Administration (NNSA) established a set of milestones for completing the program. These milestones, according to an NNSA official, will be used to determine the rates at which each element of the program need to operate and the extent that the element would need to be expanded to meet that rate. For example, NNSA will need to install equipment for diluting the plutonium at a rate so that all 34 metric tons of plutonium will be diluted by the end of the program in fiscal year 2047. These milestones are outlined in Figure 4 below.

Appendix V: History of the Closed Panels at the Waste Isolation Pilot Plant

The closed panels vary in terms of the extent to which they were filled to their maximum permitted volume of waste. One of the six panels accommodated nearly 100 percent of its maximum permitted contact- handled waste, while others ranged from 58 percent to 91 percent full. According to Department of Energy (DOE) officials, DOE was unable to fill the panels with the permitted volume of waste as planned primarily because it approved additional waste packaging called “overpacks,” in which waste containers are encased to increase safety for workers handling or transporting the waste and to comply with limits on how much radioactive material can be transported. Encasing waste in overpacks resulted in a less efficient use of the disposal space because some of these packages could not be efficiently arranged next to one another, and others could not be safely stacked on top of one another because of their weight or size. Overpacks also include some empty space between containers within the overpack, further reducing available space.

In addition, DOE has faced challenges accommodating the disposal of remote-handled TRU waste. Because of the higher hazard, there are greater restrictions on how remote-handled waste can be disposed of. To date, remote-handled waste has been permitted for disposal primarily in boreholes drilled into the walls in panels 4 through 8. According to DOE officials, some of the boreholes in the walls of panels 4 through 6 were blocked by overpacks of contact-handled waste containers already disposed of in those panels before sufficient remote-handled waste arrived at the site for disposal. Because of the inability to use the boreholes as planned in panels 4 through 6, none of the borehole disposal space in these panels was filled to more than 35 percent of its permitted volume. See figure 5 for an illustration of how the typical placement of waste in panels has resulted in DOE’s inability to use panel space as planned.

Appendix VI: Comments from the Department of Energy

Appendix VII: GAO Contact and Staff Acknowledgments

GAO Contact

David C. Trimble, (202) 512-3841 or trimbled@gao.gov.

Staff Acknowledgments

In addition to the contact named above, Daniel Feehan, Assistant Director; Mark Braza; Richard P. Burkard; Lindsey Cross; Jennifer Echard; Quindi Franco; Cristian Ion; Eli Lewine; Ned Malone; Emily Norman; Cynthia Norris; Katrina Pekar-Carpenter; and Kiki Theodoropoulos made key contributions to this report.