Weapons of Mass Destruction (WMD)

Mr. Chairman and Members of the Subcommittee, I appreciate this opportunity to appear before you to discuss the Department of Energy=s (DOE) Environmental Management (EM) program and its Fiscal Year 1998 budget request.

The Fiscal Year 1998 budget is a transitional one. We are shifting from a program that was projected to span many decades to one designed to accelerate cleanup and complete as much work as possible during the next ten years. We are implementing strong incentives for contractor performance and privatization with a focus on efficiency.

I have challenged the program managers to develop site Ten-Year Plans with a vision of accelerating cleanup schedules to reduce risk faster and substantially reduce long-term costs. Large sites such as Hanford, the Savannah River Site, Idaho National Engineering and Environmental Laboratory and Oak Ridge will take longer than ten years, some of them substantially longer, but with the implementation of the Ten Year Plan we can make considerable progress. This vision will drive budget decisions, the sequencing of projects, and the management of the program.

Through the first four years of the Clinton Administration, we have succeeded in driving down many of the costs of our program while increasing productivity. The financial and management changes implemented by my predecessor have provided the springboard for the program to transition from cleanup to closure in this era of tight federal budget resources.

For the Defense portion of the Fiscal Year 1998 budget for the Environmental Management program, the Department is requesting $5,052 billion in new budget authority; $1 billion for the privatization initiative; and $643 million for the Defense Asset Acquisition Account. In the Non-defense portion of the budget, we are requesting $682 million in new budget authority under our Energy, Supply, Research and Development account; $2 million in the Energy Assets Acquisition account; and $249 million for the Uranium Enrichment D&D Fund. Although the Fiscal Year 1998 budget was developed prior to the Ten-Year Plan, it is being incorporated into the Plan. We are currently reviewing and analyzing draft Site Plans submitted to Headquarters on February 28, 1997, at a summary level. We are exploring opportunities for greater productivity, improved sequencing of work, and more efficient contracting mechanisms that will reduce the overall cost of the program. I have met with the senior field managers and expect the draft National Ten-Year Plan to be released for public review and comment soon.

In this testimony, I wish to focus on the following elements of the EM program:

• History
• Accomplishments
• Challenges
• Privatization
• Promoting Efficiency through the Ten-Year Plan

HISTORY

Fifty years of manufacturing nuclear weapons in support of World War II and the Cold War has left a legacy of environmental contamination. The U.S. Department of Energy is comparable to a major industrial complex and has been the largest government-owned industry in the U.S. The Department=s facilities occupy a total area of about 2.1 million acres -- equal in size to the states of Rhode Island and Delaware combined. This enormous infrastructure still exists, and is largely being maintained and remediated by the Environmental Management program, the largest environmental stewardship program in the world.

The EM program was born in the aftermath of the Cold War. The EM budget grew from an initial $1.3 billion in Fiscal Year 1989 to $6 billion by Fiscal Year 1993. At that time, the budget was projected to rise to more than $10 billion per year by the year 2000. In Fiscal Year 1996, the Department estimated the total cost for stabilizing and cleaning up its facilities to be approximately $220 billion over a 70-year period, depending on the expected future land use and project efficiency.

In June 1996, we set a new goal for cleaning up all but the largest contaminated sites within a decade. By establishing the vision of completing as much remediation as possible within a decade, we can hope to see closure of most sites, and show significant progress on the other, larger facilities. Through this strategy, we also believe that costs can be substantially reduced by appropriately sequencing projects, privatizing activities where appropriate, improving efficiency, initiating fixed-price contracts and reducing support costs.

The Ten-Year Plan vision is only possible through the financial and management improvements made in the program over the last four years. Through aggressive management, the program has achieved many milestones and made many improvements, including:

• Replacement of major management and operating contracts with incentive-based contracts at the Idaho National Engineering and Environmental Laboratory, Hanford, Savannah River, and Rocky Flats sites, and a decision to recompete the contracts at Oak Ridge and Mound.
• Development of completion strategies for Rocky Flats, Fernald, Mound, and Weldon Springs.
• Reductions in support costs at all sites.
• Award of major privatization contracts for cleanup of the Hanford high-level waste tanks and for advanced mixed waste treatment at the Idaho National Engineering and Environmental Laboratory.
• Complete construction and initiation of operation of two vitrification facilities to treat high level wastes -- at West Valley, New York and at the Savannah River Site, the largest waste-treatment facility in the world.
• Completion of the cleanup and transfer of ownership to the private sector of a DOE facility under the Environmental Management program in Pinellas, Florida.
• Completion of all construction work at the Waste Isolation Pilot Plant at Carlsbad, New Mexico, the first geologic repository for disposal of transuranic wastes, to support operations in Fiscal Year 1998.

Overall, we have accelerated the program's activities in the face of fewer resources. This has been accomplished through better management practices, tailoring the workforce to meet specific needs, and innovation by DOE and its contractors.

The challenges facing the Environmental Management program are enormous, and include:

• The responsibility to manage extremely hazardous materials, for example, hundreds of large, underground high-level radioactive waste tanks and plutonium throughout some facilities.
• Extremely high fixed costs to maintain facilities safely and to prevent theft or diversion of nuclear weapons material.
• The need to comply with numerous, complex requirements under Federal and state environmental laws and regulations; compliance agreements and court orders; Defense Nuclear Facilities Safety Board Recommendations; Departmental orders for worker safety; and International Atomic Energy Agency nuclear nonproliferation safeguards requirements.

These unique challenges drive the strategies and modus operandi of the Environmental Management Program. The Department is meeting these challenges in a manner that involves States, Tribes and the public in an open decision-making process. To guide these efforts as we move toward completion of our work, I have established three strategic goals.

Goal I. Reduce the most serious risks first.

Unstable plutonium, spent nuclear fuel and reactor targets, and high level waste tanks are the most serious risks at our sites. The Fiscal Year 1998 request addresses these urgent risks directly. The budget will also be used to reduce the immediate and long-term storage risks associated with the radioactive decay and potential for chemical reactions in high-level waste as well as reducing the health and safety threat from corroded nuclear materials at a number of our sites, including the Savannah River Site, Hanford, the Idaho National Engineering and Environmental Laboratory, and Rocky Flats.

Activities to reduce risks include:

• Producing up to 200 canisters of vitrified high-level waste at the Savannah River Site and continuing to store the waste in a secure, stable glass form.
• Removing spent fuel from the K-basin at Hanford.
• Completing characterization reports for 132 tanks at Hanford which will allow us to move forward with the remediation of the tanks.
• Reducing the high-level waste inventory at Hanford by evaporating 2.2 million gallons of liquid tank waste.
• Stabilizing 1,350 kilograms (out of 9,800 kilograms) of plutonium metal and oxides at Rocky Flats.
• Stabilizing 600 canisters of plutonium scrap that could pose a significant danger to workers at the Savannah River Site.
• Initiating construction of a new plutonium vault at the Savannah River Site for more secure and safe storage.
• Awarding a contract for a dry spent fuel facility at the Savannah River Site.
• Completing the calcination of the non­sodium bearing high level waste at the Idaho National Engineering and Environmental Laboratory.

Subject to authorization from the Environmental Protection Agency (EPA) and issuance of a RCRA Part B permit by the New Mexico Environment Department, we plan to open the Waste Isolation Pilot Plant (WIPP), a geologic repository for transuranic waste in Carlsbad, New Mexico. Assuming the required regulatory approvals are obtained, during Fiscal Year 1998, WIPP will receive shipments of transuranic waste from the Idaho National Engineering and Environmental Laboratory, the Los Alamos National Laboratory in New Mexico, and the Rocky Flats Environmental Technology Site in Colorado. Shipments of transuranic waste to WIPP will start with two shipments per week, ramping up to five shipments each week by the end of Fiscal Year 1998. Three new privatization projects for the transportation and treatment of transuranic waste are expected to yield life-cycle cost savings of more than $250 million.

Goal II. Reduce mortgage and support costs to achieve cleanup of most sites within a decade.

As landlord and steward for thousands of contaminated buildings, facilities, waste streams and land for the Department of Energy, the Environmental Management program has enormous costs in simply maintaining the complex in its present state. Reducing these huge fixed costs is key to both reducing risk and reducing the burden of these costs on future generations. We are, however, in an era of decreasing federal budget resources. Therefore, it is incumbent upon the Department to use existing funding for this monumental task as efficiently as possible. EM is taking a number of steps to allocate and utilize the taxpayers' dollars in a cost-effective and official manner.

One important initiative in making the EM program more efficient is reducing support costs. Currently support costs are roughly 45 per cent of the total costs at EM-managed DOE sites. EM has established a Astretch goal@ to reduce support costs to 30 per cent of the total costs at EM sites by the year 2000, and to establish an overall efficiency target similar to that used in the private sector and invest those savings in risk reduction and Amortgage reduction.@

The term Amortgage reduction@ refers to the reduction of fixed costs for safely maintaining either a facility or a single project. An example of mortgage reduction is the Plutonium Uranium Extraction facility (PUREX) at Hanford. A former spent fuel and irradiated target reprocessing facility, PUREX was costing $35 million a year to maintain in a safe condition. When the facility is completely deactivated in May 1997, the surveillance and maintenance cost will fall to a little over $1 million per year.

We have used our experiences with PUREX and are applying them to the stabilization of the Hanford B-Plant to drive down mortgage costs and achieve results. The Hanford B-Plant was the second chemical separation canyon built at the Hanford site for the Manhattan Project during World War II. In 1995, annual maintenance costs for the B-Plant were $18.7 million. We intend to reduce those annual costs to $1 million or less by complete deactivation of the B-Plant. With a $35 million investment, the Hanford site expects to avoid $100 million in surveillance, maintenance and additional deactivation costs through 2002.

Mortgage reduction will occur at all of our sites by speeding up cleanup and more efficiently sequencing projects. For example, at Rocky Flats, the original life-cycle cost estimate for cleaning up the site was $37 billion over a 40 year period. The latest life-cycle cost estimate for concluding our work is $6 to $8 billion over a ten-year period. There are a number of reasons for the dramatic difference in the estimates, including changes in cleanup levels and scope of work. However, the acceleration of remediation and sequencing of projects results in much of the cost savings.

Accelerating cleanup at the numerous small sites around the country represents another way to reduce fixed costs. We intend to complete two-thirds of the small sites, such as the Oxnard Facility in California or the Inhalation Toxicology Research Institute and South Valley Superfund sites in New Mexico, by the year 2000. By expeditiously finishing the small sites, we can avoid significant outyear maintenance costs -- and turn over more dollars and resources to larger, more complex sites.

Contract reform is also critical to getting more for our dollars. Within the Department of Energy, our program is at the forefront of contract reform. We believe that increasing competition, using results-oriented statements of work, improving financial accountability and management, increasing the use of fixed-price contracts, and using quantitative incentives to motivate the contractors to finish the job will help drive down program costs and ensure that we are paying for results, not for just Ashowing up.@ These kinds of reforms have been included in our new performance-based incentive contracts.

Another important source of cost-savings will be the use of new, efficient technologies for treating and cleaning up waste. The Environmental Management program is confronted with some of the most intractable technical problems in the world. Investing in solutions to these problems is crucial to reducing the long-term costs of the program. Unlike many hazardous chemical wastes, radioactive waste cannot simply be broken down into constituent elements; it requires isolation from the environment through treatment and disposal while it decays. To continue reducing costs and risks from these wastes, we must continue to invest in technology development. But new technologies can only be effective if they are deployed in the field. For this reason, EM created the Technology Deployment Initiative to promote the rapid deployment of innovative technologies currently in the development Apipeline,@ as an alternative to using older, less effective technologies. This initiative provides incentives for Department Operations Offices to use new technologies and innovative approaches to expedite site cleanup. The initiative will fund applications of "breakthrough" technologies that meet the needs of multiple sites. By reducing and minimizing the financial risk of "breakthrough" technologies at sites across the complex, cleanups can be accelerated, savings can be achieved, and regulatory approval can potentially be streamlined by the application of more efficient technologies.

One other potential for cost savings is through integrating our waste treatment and disposal capabilities across the complex. However, any such shifts or changes of responsibilities among sites for the treatment and disposal of wastes will be controversial. The Department cannot make these decisions by itself. We will continue our dialogue with the regulators, affected communities and other stakeholders on how to achieve an equitable and efficient use of capabilities within the complex.

Goal III. Meet regulatory and safety requirements.

DOE will comply with its legal obligations under laws and regulations, compliance agreements and with its commitments to the Defense Nuclear Facilities Safety Board (DNFSB). As the program resources become more limited, innovation and close collaboration with regulators and stakeholders will be required to achieve the objective of meeting our compliance requirements in the most practical and efficient manner possible. We will work closely with regulators and the DNFSB to assure that we are able to reach agreement on how to achieve this objective.

The Fiscal Year 1998 budget funds progress toward the commitments we have made under compliance agreements and in response to recommendations of the DNFSB. Some of the key highlights in our submission include:

• Demolishing two buildings at the Fernald site.
• Stabilizing high-level hazardous residues at Rocky Flats.
• Completing all thorium shipments from the Fernald Site to the Nevada Test Site.
• Continuing to protect workers and the public by beginning work on upgrading ventilation systems at the Hanford Tank farm.
• Completing deactivation of B-Plant at Hanford.

Over the past four years, this Administration has done much to involve local communities directly in its Federal programs. DOE has established 12 Site Specific Advisory Boards (SSABs) to advise it on the cleanup program and options for meeting its environmental and safety obligations. Where cooperation has been closest, this Aopenness@ has reduced costs in some cases. For example, working closely with affected communities and regulators has resulted in life-cycle cost savings of $1 billion at Fernald and $400 million at East Fork Poplar Creek at Oak Ridge.

Ensuring the safety of our workers is a key goal for the Department and EM. Historically, the Environmental Management program=s safety record is better than both the U.S. average and the average for the construction industry, but we still have to work harder at incorporating safety as a fundamental value in our daily work as the cleanup program gathers momentum. We have recently developed a policy of Ado work safely or don=t do it.@ Environmental Management continues to use management practices that incorporate safety and health protection as a basic component of all activities.

PRIVATIZATION

Privatization is key to our ability to accelerate the program and reduce the mortgage. Under the traditional system, whenever the Department needed a product or service, the Management and Operating (M&O) contractor at a site would build or procure the needed item or service. In effect, the Department would pay for a level of effort plus fee. The Department has been increasingly using fixed-price contracts and other incentive-based contracting methods to assure the Department is obtaining the most effective contracts. Under our privatization initiative, contracts are competed with the private sector for the product or service, and the government pays for the product or service when it is delivered and determined to meet specifications. The competitive process alone should sharply reduce the costs of these products or services to the Department. This approach should also substantially reduce the Department=s need to build and maintain its own facilities to produce the needed product or service -- thus reducing the Department=s life cycle costs for the project as well as potentially reducing near-term outlays. The private sector instead provides the funding and assumes many of the risks that were formerly borne by the Department.

The appropriations and authorization requested by the Department are necessary for the government to be able to enter into privatization contracts. The $1.0 billion budget authority for privatization in this year=s request is intended to reflect the government=s determined commitment to the privatized projects. Appropriations in the early years for privatization projects will primarily cover the costs of the government=s obligation should it choose to terminate the project prior to completion. Actual government outlays would not generally occur until the product or service is delivered under the contract as specified.

Some of the major privatization projects we are proposing in Fiscal Year 1998 include:

Tank Waste Remediation System (TWRS). DOE has entered into two contracts for the treatment of high-level waste in Hanford tanks. In Fiscal Year 1997, Congress enacted $170 million for this activity, while the Fiscal Year 1998 budget requests $427 million. The Hanford TWRS project is proceeding consistent with a compliance agreement with the Washington Department of Ecology and the EPA.

Advanced Mixed Waste Treatment Project (AMWTP). At the Idaho National Engineering and Environmental Laboratory, the Department has entered into a contract for a total of $1.18 billion with British Nuclear Fuels Limited, Inc. to treat mixed waste. $70 million has been obligated to the contract for Fiscal Year 1998. The cost savings are anticipated to be in the hundreds of millions of dollars over the cost-plus approach.

Spent Nuclear Fuel Transfer and Storage. At the Savannah River Site, an open fixed­price competitive procurement will be used to select a contractor to prepare spent nuclear fuel for interim dry storage in a "road­ready" form for shipping to and disposal at a Nuclear Regulatory Commission licensed geologic repository. The contractor will also be responsible for the deactivation and clean­out of the required facilities.

Spent Nuclear Fuel Dry Storage. At the Idaho National Engineering and Environmental Laboratory. The Department will be privatizing the construction of a spent nuclear fuel dry storage facility. This project will provide the capabilities to initiate interim dry modular storage of spent nuclear fuel assemblies at the site.

Achievement of the Ten-Year Plan requires the same elements as those driving the Fiscal Year 1998 budget, namely, reducing urgent risks, reducing fixed costs, meeting regulatory commitments and working collaboratively with regulators and stakeholders. In addition, the Plan requires stable funding and substantial productivity improvements. We plan to achieve these productivity improvements through the following mechanisms:

• Projectize@ the entire EM program, i.e., shift from current open ended activities to focused efforts to achieve a specific end result. This is expected to significantly improve efficiency by eliminating work not directly needed to achieve completion of the project.
• Establish a Astretch goal@ for EM sites to reduce support costs from 45 percent in 1997 to approximately 30 percent of the total by the year 2000, and to achieve efficiency improvements equal to those of the private sector.
• Compare EM waste management operations to similar private sector operations in order to streamline EM=s waste management business practices and activities.
• Fund the Army Corps of Engineers to review all baselines to seek opportunities for cost reductions.
• Review integration opportunities designed to take advantage of inter-site efficiencies and avoid duplication among sites.
• Benchmark our costs against those of the private sector and other similar government programs.
• Shift from level of effort to fixed price and incentive contracts.
• Conduct site Awork-outs@ where we assemble federal and state regulators, site, headquarters, and local advisory board representatives with all the necessary information to break through each of the perceived stumbling blocks to progress and achieve further cost savings.
• Initiate a joint effort with EPA to look for administrative and regulatory changes to improve efficiency.

To implement the Ten-Year Plan, EM is establishing a new Integrated Planning, Accountability and Budgeting System (IPABS) to establish quantitative goals and metrics to track progress. The new integrated management system will use projects as the basic measures of progress, assuring a focus on completion, rather than on perpetual activities. The new system will also eliminate current management and tracking systems, reviews, and reports that are duplicative.

PROGRESS IN RESPONDING TO CONGRESSIONAL DIRECTIVES

Before I conclude, I would like to report that we are making good progress in addressing the specific concerns of Congress as expressed in last year's Defense Authorization Act. As noted previously, we have accelerated the production of vitrified high­level waste canisters from the Defense Waste Processing Facility at Savannah River. We expect to produce 180 canisters in FY 1997, an increase of 17 percent over last year's projections for FY 1997. I am also pleased to report that to meet the commitment in the Department=s response to the Defense Nuclear Facilities Safety Board Recommendation 94­1, we have allocated $43 million to the Savannah River Site. These funds will be used to develop and implement a program to accelerate the receipt, reprocessing, stabilization, and interim storage of high­level nuclear waste associated with Department of Energy aluminum clad spent fuel rods, and other nuclear materials.

Last year the Congress authorized and appropriated $42 million above the Department's request for the waste management account. In addition to accelerating production at DWPF, the Department used the funds to demonstrate stir­melter technology at the Savannah River Site, to develop of technologies for treating high­level waste at Richland, to fund the State of New Mexico for improvements for the transportation corridor to the Waste Isolation Pilot Plant (WIPP), and to prepare transuranic waste at the Idaho National Engineering and Environmental Laboratory.

Furthermore, you also directed the Department to reduce our Program Direction Account by $35 million. We have reduced administrative overhead (i.e., support service contracts and travel) by that amount with a primary focus on reducing headquarters expenditures. Headquarters took over two-thirds of the reduction to non-technical support service contracts. And we are in the process of reducing the number of federal employees at headquarters. The EM Redeployment Initiative follows several courses of action to achieve a reduced headquarters workforce that is appropriate for the changing mission and the new relationship we will have with the field offices. The initiative is consistent with the Department=s Strategic Alignment Initiative (SAI), and the National Performance Review recommendations. First, EM has facilitated the transfer of individual EM Headquarters personnel to field offices, when vacancies exist, consistent with the need to enhance the federal workforce in the field where the work is being done. Second, EM has determined that certain national programs could be more effectively conducted in the field and has chosen to establish Centers of Excellence in certain technical areas as well. EM also is transferring headquarters employees to the field to help staff these centers. Finally, EM has aggressively pursued job opportunities for its headquarters staff at other Federal agencies such as the Environmental Protection Agency and the Nuclear Regulatory Commission to further reduce the headquarters workforce. If these efforts do not achieve the results desired, EM will initiate a reduction in force to bring headquarters employment down to appropriate levels.

The Environmental Management program is setting an ambitious agenda for the future. The objective to clean up much of the former weapons complex within ten years will involve a strong commitment to cut unnecessary costs and improve efficiency. Even with such an effort, a substantial amount of work will still need to be undertaken beyond 2006 at larger DOE sites.

Failure to reduce the high fixed costs of this program through reducing the mortgages will result in much greater long-term costs to the taxpayer. Failure also will transfer both the risks and the costs of maintaining this deteriorating system to our children and grandchildren. Our Environmental Management program meets our obligation to provide sound technical and financial investments to resolve the environmental legacy of the Cold War. I look forward to working with you on these most important challenges.

APPENDIX A

STATUS OF SITES IN ENVIRONMENTAL MANAGEMENT PROGRAM

HANFORD

The Hanford Site, the nation=s first full-sized plutonium production operation, encompasses 560 square miles in southeastern Washington. The site contains production reactors, processing plants, fuel fabrication buildings and laboratories, and many other associated facilities. Hanford is the site of some of our most urgent risks -- including hundreds of large, underground high level radioactive waste tanks, some of which have leaked, and some of which may pose a danger of explosion unless properly managed. The current and future mission of the site is to manage the facilities and inventories of special nuclear materials and to remedy the environmental contamination caused by activities related to plutonium production. The Tri-Party Agreement signed between the DOE, the State of Washington, and the Environmental Protection Agency in 1989, and amended most recently in 1996, provides a schedule for site activities to achieve compliance for major waste streams managed at the site. Activities conducted under the Ten-Year Plan will dramatically accelerate the pace of the cleanup as well as drive down the long-term costs at the site.

Accomplishments Through Fiscal Year 1997

• Completed stabilization of the PUREX reprocessing canyon to a low surveillance and maintenance state.
  
• Completed decontamination of all areas in the C-Reactor complex except the fuel basin and Safe Storage and Enclosure Area.
  
• Began treatment of low-level waste at the Effluent Treatment Facility.
  
• Safely stored 55 million gallons of high level waste.
  
• Accelerated the Hanford spent nuclear fuel stabilization project for a total project cost reduction of $300 million.
  
• Completed construction of the Environmental Restoration Disposal Facility (ERDF) three months ahead of schedule and approximately $20 million below the original estimated cost.
  
• Completed deactivation of the remaining 14 facilities at the N-Reactor in preparation for decommissioning.
  
• Deployed a new robotic arm (Light Duty Utility Arm) to characterize Hanford Tank T-106, demonstrating capability for future characterization and retrieval operations.
  

Fiscal Year 1998 Major Commitments

• Remove 282,000 loose cubic yards of contaminated soil from the 100/300 Areas and dispose at ERDF.
  
• Complete stabilization of the B-Plant Canyon Facility to a low surveillance and maintenance state with a cost savings of $100 million over the Fiscal Year 1995 baseline.
  
• Evaporate 2.2 million gallons of liquid tank waste to reduce the need for additional tank space and stabilize 5 single-shell tanks.
  
• Complete Hanford Tank Initiative preparations for Ahot@ deployment of technologies to remove hardened waste in tank bottoms.
  
• Complete removal of spent nuclear fuel from the K-Basin.
  
• Complete characterization reports on 132 of 177 tanks (75% completed).
  
• Award four contracts to private sector vendors to Acold@ demonstrate the ability to remove hardened waste at tank bottom, a problem common to tanks across the complex.
  
• Complete dilution of 230,000 liters of highly enriched uranium solution for conversion to low enriched uranium oxide.
  
• Continue stabilization of plutonium residues in various forms; repackage plutonium for safe storage.
  
• Finalize regulatory disposition of abandoned septic systems.
  
• Open the Hazardous Materials Management and Emergency Response Training (HAMMER) Center.

Privatization for Fiscal Year 1998

Tank Waste Remediation System (TWRS) -- DOE is privatizing the treatment and vitrification of approximately 56 million gallons of high-level radioactive waste that is currently stored in 177 tanks at the Hanford site. The first phase of the two phase project was initiated with the award in 1996 of contracts to British Nuclear Fuels Limited, Inc. and Lockheed Martin Advanced Environmental Services. By increasing competition and the participation of vendors with diverse skills, the Department expects technology innovation that will lead to better solutions in hazardous waste management and cleanup problems and reduce costs and risks.

Progress expected by 2006

• Urgent risks eliminated.

• Tank waste immobilization underway.

• Spent nuclear fuel removed from near the Columbia River to safer storage.

• Complete interim safe storage of four reactors.

• Cleanup along river near completion.

• PUREX and B-Plant deactivated.

IDAHO NATIONAL ENGINEERING AND ENVIRONMENTAL LABORATORY

The Idaho National Engineering and Environmental Laboratory (INEEL) is a multi-purpose DOE laboratory that encompasses 890 square miles in southern Idaho. The site manages a large amount of spent nuclear fuel, transuranic, and high-level waste. The Laboratory=s Environmental Management program is driven in large part by a cleanup agreement (the Federal Facility Agreement) established under CERCLA and the 1995 Settlement Agreement between the State of Idaho, the Department of Energy (DOE) and the Department of the Navy. The Settlement Agreement accelerated waste treatment and disposal of spent nuclear fuel, transuranic waste, and high-level waste. The agreement requires the Department to begin transuranic waste shipments to WIPP by April 1999, and to remove all spent nuclear fuel from the state by Fiscal Year 2035. It allows the Navy to resume shipping spent fuel to Idaho to enable naval warships to perform their national security mission, and provides for essential DOE spent fuel shipments to occur over the next several years.

Other key elements of the settlement agreement include: continuing shipments of Naval spent nuclear fuel shipments to INEEL for examination and storage; allowing for DOE shipments of spent fuel for purposes such as nuclear nonproliferation and national security; accelerating waste treatment and cleanup in Idaho; establishing INEEL as the DOE complex-wide lead laboratory for spent fuel research and development; and provisions for improved (dry) storage of existing spent nuclear fuel at INEEL.

Accomplishments Through Fiscal Year 1997

• Began retrieval of TRU waste to prepare for early shipment to WIPP.
  
• Completed construction and initiated operation of the Vapor Vacuum Extraction Treatment System which will accelerate groundwater cleanup.
  
• Evaporated 330,000 gallons of high-level liquid waste, meeting a key settlement agreement milestone.
  
• Restart new waste calcining facility.
  
• Decommission Auxiliary Reactors II & III.
  
• Completed capping of Landfills I, II, & III.
  
• Awarded contract for Phase I privatization for the Advanced Mixed Waste Treatment Facility (AMWTF) to treat transuranic (TRU) and mixed low-level waste.
  
• Completed incineration of mixed-low level waste backlog.
  
• Signed the first Record of Decision (ROD) for Waste Area Group 2, which signifies the end of assessment and beginning of Aon the ground@ clean-up.

Fiscal Year 1998 Major Commitments

• Complete calcining of non-sodium-bearing high level liquid waste to meet a key Settlement Agreement milestone.
  
• Subject to obtaining required regulatory approvals, initiate TRU shipments to WIPP.
  
• Operate high-level liquid waste evaporator to reduce Tank Farm volume by 330,000 gallons.
  
• Receive and store foreign research reactor fuel in support of the Administration=s non-proliferation initiatives.
  
• Complete removal of all remaining spent nuclear fuel from Idaho=s CPP-603 (Chemical Processing Plant) fuel storage facility (approximately 250 spent fuel assemblies and cans containing pieces of assemblies), 1.13 metric tons of heavy metal).
  
• Complete deactivation of the Advanced Reactor Measurement facility which will transfer degrading fuel elements to safer storage.

Privatization for Fiscal Year 1998

• Low Activity Waste Treatment Facility -- A private contractor will design, obtain permits, construct and operate the Low Activity Waste Treatment Facility to treat and dispose of seven million gallons of liquid low activity mixed waste to meet RCRA land disposal restriction requirements.
  
• Power Burst Facility Deactivation -- The project will take the Power Burst Facility, a shut down test reactor, from its shut down and defueled condition, to an end point ready for decontamination and decommissioning of the facility and surrounding areas.
  
• Spent Nuclear Fuel Dry Storage -- This project will provide the capabilities to initiate interim dry modular storage of spent nuclear fuel assemblies at the site.

Progress Expected by 2006

• All DOE spent fuel will be transferred from wet storage to dry storage, awaiting shipment to a national spent fuel repository except for some naval fuel, which will remain in wet storage.
• Fifty percent of the high-level liquid waste will be stabilized. Two of eleven high-level waste tanks will be closed.
• Processing of stored transuranic waste will be ongoing with the treated product shipped to WIPP.
• Environmental restoration projects will be complete at five of eight Waste Area Groups and significant work will be ongoing for transuranic waste pits and trenches (WAG 7).

NEVADA TEST SITE

The Nevada Test Site, located on 1,350 square miles in the Nevada desert, was the site for many of the country=s above ground and underground nuclear tests. Since the 1992 weapons testing moratorium, the site has focused on remediating inactive sites and facilities contaminated during earlier testing activities. Low-level radioactive waste that originates from the site and from other DOE sites is disposed of on site. The contamination that resulted from historic nuclear testing activities poses a significant environmental remediation challenge for the site.

Accomplishments Through Fiscal Year 1997

• Signed the Federal Facility Agreement/Consent Order with State of Nevada.
  

• Completed Double Tracks Plutonium soils remediation.
  
• Completed Underground Test Area (UGTA) Regional Groundwater Flow and Transport Model and Regional Risk Assessment -- a model indicates that tritium may already be offsite to the west of Pahute Mesa and above drinking water standards.
  
• Completed Rulison Mud Pond Voluntary Corrective Action remediation.
  
• Completed installation of shallow groundwater wells at Salmon Site to monitor contamination.
  
• Removed 9 Underground Storage Tanks; completed closure of one RCRA site and characterized two more; remediated two sites on Tonapah Test Range.

Fiscal Year 1998 Major Commitments

• Seven assessments, including the Corrective Action Decision Document for Clean Slates I and the final Corrective Action Implementation Plan for Frenchman Flat.
  
• Five Remedial Actions, including Closure Reports for five Points Landfill and Double Tracks Plutonium soils site.
  
• Remediation of Clean Slate I, which are contaminated with plutonium.
  
• Remediation of the Area 6 Decontamination Pond.
  
• Remedial activities at two septic tank/sewage lagoons.
  

Progress by 2006

• All cleanup sites characterized and significant progress made on accomplishing remediation.
• Low-level waste shipped from currently approved generators will be disposed.
• Characterization and shipment of all Nevada Test Site legacy TRU waste to the WIPP.
  

ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE

The Rocky Flats Environmental Technology Site, located approximately 16 miles northwest of Denver, comprises approximately 11 square miles. Until 1989, the site=s primary mission was to produce nuclear weapons components manufactured from uranium, plutonium and other metals. In 1992, the primary mission of the site changed from nuclear weapons production to cleanup and restoration. Rocky Flats= mission now focuses on waste and nuclear materials management, environmental remediation, and deactivation and conversion of facilities for disposition or alternative uses. The highest priority at Rocky Flats continues to be the protection of workers, the public and the environment from exposure to plutonium and other hazardous materials, and to safeguard plutonium.

Accomplishments Through Fiscal Year 1997

• Complete installation of the Plutonium Stabilization and Packaging Prototype in Building 707.
  
• Completed draining plutonium solutions from all low-level tanks in one of our most urgent risk buildings (14 tanks total have been drained), and drained four higher concentration plutonium/uranium solution tanks.
  
• Prepare TRU waste at Rocky Flats for shipment to WIPP.
  
• Completed work on 8 of the top 20 Individual Hazardous Substance Sites, including 3700 cubic yards of soil, 6 leaking concrete vaults and tanks, and shipped 2500 gallons of solvent-contaminated oil for incineration.
  
• Completed accelerated removal activities for the mound area and other release sites to reduce on-site contamination in Operable Unit 2 and the buffer zone.
  
• Completed new sanitary landfill.
  
• Designed and fabricated major upgrade of Plant Fire/Security System to meet National Fire Protection standards to ensure the safety of the workforce and the public.
  

Fiscal Year 1998 Major Commitments

• Complete plutonium solution stabilization in Building 771, with stabilization of approximately 3,000 liters of solution.
• Stabilize 1,350 kilograms (out of 9,800 kilograms) of plutonium metal and oxides.
• Operate Plutonium Stabilization and Packaging Prototype and full scale operation of the high-risk residue processing system.
• Complete DNFSB 94-3 upgrades to Building 371 for the interim storage of plutonium.
• Initiate shipments of TRU waste to WIPP.
  

Privatization for Fiscal Year 1998

• Decontamination and Decommissioning of Buildings 779 and 886 -- The vendors will finance and provide systems for the complete decommissioning and dismantlement of the Buildings 779 and 886 clusters, which were used as a plutonium development laboratory and uranyl nitrate processing facility respectively.

Progress by 2006

• The vast majority of site facilities will be demolished, leaving only facilities that are in use for the storage of special nuclear material, treatment of low-level waste and several office buildings.
  
• Low-level, mixed low-level, and transuranic waste will be shipped offsite.
  
• All highly enriched uranium will be removed from the site.
  
• All plutonium stabilization activities will be completed.
  
• Shipments of pits and weapons component parts offsite will be completed.
  
• Deactivation of most major plutonium facilities will be complete.
  
• Final environmental restoration activities will be initiated.

SAVANNAH RIVER SITE

The Savannah River Site, located on 310 square miles in south-central South Carolina, was established to produce special radioactive isotopes for nuclear weapons, particularly tritium and plutonium. With the end of the Cold War, the mission of the site changed from national defense to environmental management. Despite this shift, the Savannah River Site remains a major defense installation capable of processing and purifying tritium and plutonium. The site also plays an important role in support of the nation=s nonproliferation policy by storing urgent relief foreign research reactor spent nuclear fuel.

Accomplishments Through Fiscal Year 1997

• $ Began operating the Defense Waste Processing Facility (DWPF) in March 1996 and to date, have produced over 100 canisters of vitrified waste.
  
• $ Completed closure of first high-level waste tank at Savannah River.
• $ Initiated stabilization of spent nuclear fuel containing 7.3 metric tons of heavy metal.
  
• $ Completed dissolving spent fuel targets containing 147 metric tons of heavy metal helping to place the Department=s fuel in a safe configuration.
  
• $ Began F and H Canyon retention basin groundwater treatment system operations to meet regulatory goals of groundwater cleanup to drinking water standards.
  
• $ Completed construction of Low Level Radioactive Waste Disposal Facility (LLRWDF) closure cap at A and D Areas.
  
• $ Installed 12 recirculation wells to remediate M Area southern sector to remove volatile organic compounds from the groundwater.
  
• $ Completed soil capping at burial ground complex (76 acres) as an interim closure action to prevent the spread of hazardous constituents.
  
• $ Completed early removal action at the R-Reactor seepage basin and the Ford Building waste unit for risk reduction of groundwater contamination.
  
• $ Will reach a decision on utilization of the F and H Canyons.

Fiscal Year 1998 Major Commitments

• $ Produce 125-200 canisters of vitrified high level waste at DWPF.
  
• $ Reduce the high level waste inventory through evaporation.
• $ Stabilize 600 canisters of plutonium scrap that could pose a significant danger to workers.
  
• $ Complete large-scale decontamination and decommissioning demonstrations started in Fiscal Year 1996, including the C-Reactor Interim Safety Storage demonstration.
  
• $ Continue stabilizing plutonium residues in various forms; repackage plutonium for safe storage.
  
• $ Receive and store foreign research reactor fuel in support of the Administration=s non-proliferation initiatives.
  
• $ Complete remediation of the D and F Area Pits.
  
• $ Complete domestic water upgrades project to comply with South Carolina drinking water regulations.
  
• $ Initiate remediation construction associated with the Old F Area Seepage Basin and F/H Retention Basins.
  
• $ Complete remediation of sanitary landfill.

Privatization in Fiscal Year 1998

• $ Spent Nuclear Fuel Transfer and Storage -- An open fixed-price competitive procurement will be used to select a contractor to prepare aluminum-clad spent nuclear fuel rods for interim dry storage in a Aroad-ready@ form prior to shipping and disposal at a Nuclear Regulatory Commission licensed geologic repository. The contractor will also be responsible for the deactivation and clean-out of the required facilities.

Progress by 2006

• $ Cleanup action for all high-risk environmental restoration sites will be completed, leaving only 20 medium risk waste sites to be remediated.
  
• $ Approximately 1/3 of total high-level waste will be vitrified.
  
• $ High-level waste from all 24 high-risk tanks will be removed and 75 percent of the highest risk waste tanks will be closed.
  
• $ All of the nuclear materials stabilization and storage will be completed.
  
  

FERNALD ENVIRONMENTAL MANAGEMENT PROJECT

The Fernald Environmental Management Project (FEMP) site, located 17 miles northwest of Cincinnati, Ohio, covers approximately 1,050 acres. From 1953 to 1989, the site produced uranium metals and compounds for the nation=s defense program. The FEMP was placed on the National Priorities List in November, 1989. In 1991, operations were halted permanently . The site=s main mission is to remediate the site and any off-site contamination. All interim removal actions have been completed to address immediate site risks. Remediation of all the operable units will be initiated by the end of Fiscal Year 1997.

Accomplishments Through Fiscal Year 1997

• $ Initiate Advanced Waste Water Treatment Expansion to process water from the extraction wells, and initiate construction of the regeneration system that includes the ion exchange.
  
• $ Process and dispose of 400, 000 cubic feet of waste.
  
• $ Initiate soil remediation in Areas I and II and manage soil stockpiles.
  
• $ Use a new solvent extraction technology (Terra-Kleen^TM) to completely eliminate tri-mixed waste stream.

Fiscal Year 1998 Major Commitments

• $ Process and dispose of 190,000 cubic feet of low-level waste.
  
• $ Begin work on Plant 9 and the Thorium package, and complete work on the Boiler Plant Complex for D&D.
  
• $ Complete stabilization of remaining Thorium over packing material at Fernald.
  
• $ Begin construction of the volatile organic compound treatment system; begin construction of pipeline and complete the Advanced Waste Water Treatment expansion; continue construction of the regeneration system, and initiate construction of the Sewer Treatment Plant in order to provide waste water treatment systems and well field activities in the South Field Area.

Privatization in Fiscal Year 1998

• Waste Pits Remedial Action -- The Department will privatize the design and construction of a contractor-owned and operated facility for the excavation, processing, treatment, and load out for off-site shipment and disposal of approximately 700,000 tons of low-level radioactive waste from 8 waste pits.

• Silo 3 Waste Treatment -- This initiative will fund a contractor to design, permit, finance, construct and operate treatment facilities. The contractor will process, package, ship and dispose of approximately 5,100 cubic yards of powdery, thorium-bearing residues from Silo 3.

Progress by 2006

• Complete majority of cleanup actions.

• Follow-on work will only require pump-and-treat of groundwater, and monitoring in accordance with the Comprehensive Environmental Response, Compensation, and Liability Act.

WASTE ISOLATION PILOT PLANT

The Waste Isolation Pilot Plant (WIPP) is a geologic repository for transuranic wastes from nuclear weapons production activities. The site is located 26 miles from Carlsbad, New Mexico, and occupies 10,240 acres. Subject to receiving required regulatory authorization from the Environmental Protection Agency and the New Mexico Environment Department, disposal operations at WIPP will begin in Fiscal Year 1998. Opening of the WIPP is critical to the success of the EM Ten-Year Plan as well as to meeting the commitments of the Idaho Settlement Agreement (i.e., requirement to begin shipping transuranic waste from Idaho by April 1999, and remove all transuranic waste from Idaho by 2035). Shipments of transuranic waste to WIPP will start at a rate of two per week, ramping up to five shipments each week by the end of Fiscal Year 1998.

Accomplishments Through Fiscal Year 1997

• Submitted WIPP compliance certification application to EPA.

• Continue actinide source term and gas generation tests and analysis for performance confirmation.

• Issue final Environmental Impact Statement for the disposal stage.

Fiscal Year 1998 Major Commitments

• Seek EPA certification of WIPP=s compliance with disposal standards.

• Obtain RCRA permit to operate WIPP

• Secretarial decision on whether to operate WIPP as a disposal facility.

• Begin TRU waste disposal operations (two shipments per week to start ramping up to five shipments per week by the end of Fiscal Year 1998).

Fiscal Year 1998 Privatization

$ Contact-Handled TRU Waste Transportation -- The fixed-price contract will be for a private vendor to provide for transportation of TRU waste from DOE generator/storage sites across the country to WIPP in Nuclear Regulatory Commission-certified containers.

Progress by 2006

• Continued active operation of WIPP.

OAK RIDGE RESERVATION

The Oak Ridge Reservation consists of several major sites in the state of Tennessee, and several off-site locations. The three main sites include the Y-12 site, which supports manufacturing and development engineering associated with the production and fabrication of nuclear weapons components; the Oak Ridge National Laboratory (ORNL), whose mission is to perform leading-edge nonweapon research and development; and the K-25 site, which was built to supply enriched uranium for nuclear weapons production. During its 50 years of operation, portions of the Oak Ridge Reservation have become contaminated with radioactive and hazardous materials. Remediation of the sites is now a key mission.

Accomplishments Through Fiscal Year 1997

• Treated 1,200 cubic meters of mixed low-level waste.

• Perform a Ahot@ demonstration of a mobile, modular system for removal of cesium from the Melton Valley Storage Tank waste, which is also applicable to the high-level waste at the Savannah River Site, Hanford, and Idaho National Engineering and Environmental Laboratory.

• Continue decommissioning Molten Salt Reactor Experiment to comply with Defense Nuclear Facilities Safety Boards recommendation 94-1 (requires stabilization of radioactive and hazardous materials as a first priority).
• $ Use a new electro-osmosis process (LASAGNA^TM) to collect contaminants from the soil at the Paducah Gaseous Diffusion Plant in Kentucky.
  

Fiscal Year 1998 Major Commitments

• Treat approximately 1,000 cubic meters of mixed low-level waste at the TSCA incinerator.
• Dispose of 678 cubic meters of low-level waste.
• Complete construction of the on-site disposal cell at Weldon Springs and placement of waste.
  
• Continue remediation activities at Clinch River, Poplar Creek and Watts Bar Reservoir.
• Complete decommissioning of 35 facilities.
• Complete removal of liquid and sludge from the Old Hydrofracture Facility Tanks.
  

Privatization for Fiscal Year 1998

• TRU Waste Treatment -- DOE will transfer remote-handled TRU sludge from 13 tanks at ORNL to eight storage tanks that contain the majority of the sludge. A private company will be contracted to remove and treat transuranic sludge from the tanks, and the Oak Ridge solid TRU waste to meet WIPP waste acceptance criteria or Nevada Test Site waste acceptance criteria.

• Environmental Management Waste Management Facility -- The Department will purchase waste disposal services from a private vendor for the site=s low-level, hazardous, mixed and Toxic Substances Control Act wastes.

Progress by 2006

• Lease all leasable K-25 facilities; decommission the unleasable facilities.

• Complete off-site remedial action.

• Complete gunite tanks remedial action.

• Complete nuclear materials and facility stabilization project.

APPENDIX B

ANALYSIS OF THE OFFICE OF ENVIRONMENTAL MANAGEMENT BUDGET

BY PROGRAM AREA

The Environmental Management program is organized into four major program offices:

Waste Management, Environmental Restoration, Nuclear Material and Facility Stabilization, and Science and Technology Development, to carry out the core missions of the Environmental Management program, with assistance from other Departmental offices. Our Fiscal Year 1998 program commitments are provided in Appendix A.

The Department is requesting $7,246,635,000 in new budget authority for Fiscal Year 1998. This includes $5,052 billion in new budget authority under the Defense account. We are requesting $682 million in new budget authority under our Energy, Supply, Research and Development account; $1 billion for the privatization initiative; $643 million for the Defense Asset Acquisition Account; $2 million in the Energy Assets Acquisition account; and $249 million for the Uranium Enrichment D&D Fund.

This budget falls under six separate accounts: the Energy Supply Research and Development account (roughly 9 percent of the budget); the Defense Environment Restoration and Waste Management portion of the Atomic Energy Defense Activities account (roughly 66 percent of the budget); and the Uranium Enrichment Decontamination and Decommissioning (D&D) Fund account (roughly 3 percent of the budget). Beginning in Fiscal Year 1998, funding is being requested in three new appropriations accounts: the Privatization account (roughly 13 percent of the budget); the National Defense Assets Acquisition account (roughly 8 percent of the budget); the Energy Assets Acquisition account (roughly 1 percent of the budget).

In Fiscal Year 1998, the Waste Management Program will continue its efforts to manage safely and efficiently the storage, treatment, and disposal of the Department=s wastes. Waste streams managed by the Waste Management Program include high-level, low-level, mixed low-level, transuranic, and hazardous wastes. With a focus on mission completion as defined by the Ten-Year Plan, the Waste Management Program will direct its efforts toward moving more waste out of storage and into treatment and disposal. Process improvements, including privatization and re-engineering, will contribute significantly to achieving the program=s Ten-Year Vision.

In Fiscal Year 1998 more high-level waste and mixed low-level waste will be treated than in Fiscal Year 1997, while the budget for both waste streams will be lowered. At the Savannah River Site, the production of canisters of vitrified high-level waste will increase as the Defense Waste Processing Facility approaches steady-state operations. At West Valley, the Phase I Vitrification campaign will be completed. The award of a privatization contract through the Oak Ridge Operations Office will enhance the Department=s access to commercial treatment of mixed low-level waste. The Consolidated Incineration Facility at the Savannah River Site will also commence operations, increasing the Department=s capacity for the treatment of mixed low-level waste. More low-level waste will be disposed in 1998 than in 1997, and at a lower cost.

A key element of the program=s success for Fiscal Year 1998 will be the start-up of disposal operations at the Waste Isolation Pilot Plant (WIPP) is required regulatory approval is obtained. In such case, WIPP will receive shipments of transuranic waste from the Idaho National Engineering and Environmental Laboratory, the Los Alamos National Laboratory in New Mexico, and the Rocky Flats Environmental Technology Site in Colorado. Shipments of transuranic waste to WIPP will start with two per week, increasing to five shipments each week by the end of Fiscal Year 1998. Three new privatization projects for the transportation and treatment of transuranic waste will yield life-cycle cost savings of more than $250 million.

Stabilization of the high-level waste in the Richland underground tanks will continue to be a high priority. More than two million gallons of liquid tank waste at Richland will be evaporated and five of the single-shell tanks will be stabilized. The calcining of non-sodium-bearing high-level liquid waste at Idaho will be completed.

A pilot program for the re-engineering of Waste Management=s treatment, storage, and disposal system will be initiated in Fiscal Year 1998. Approximately $16 million will be transferred to other DOE programs that generate waste for the management of their newly generated waste. By returning managerial and financial responsibility to the mission program, waste generation and overall program cost will be reduced. The five pilot programs will include Fermi, Argonne National Laboratory-West, the Stanford Linear Accelerator Center, the Kansas City Plant, and tritium operations at the Savannah River Site.

The Office of Environmental Restoration, with the largest percentage of the Fiscal Year 1998 budget request, is responsible for the assessment and remediation of facilities and land formerly used for nuclear weapons production, as well as other inactive sites. These sites include contaminated buildings, and abandoned or inactive waste disposal sites. Environmental Restoration (ER) is sometimes referred to as the Environmental Management Acleanup program@.

The ER program has made considerable progress in continuing to increase the amount of funds that are spent on cleanup activities and by focusing these funds on achieving near term results. Cleanup progress has been realized by completing all ER cleanup responsibilities at various geographic sites across the nation and by continuing to make progress at individual release sites (discrete areas of contamination within a geographical site) and facilities (contaminated structures). By the end of Fiscal Year 1998, approximately 4,400 of 10,000 release sites and facilities will be completed (approximately 44 percent).

The Environmental Restoration program is contributing to the overall EM effort of moving toward completion and reducing the long-term mortgage costs in a number of ways. Besides the ongoing large-scale remediation work at our larger sites (e.g., Hanford or the Savannah River Site), Environmental Restoration has had marked success with our AExit Strategy@ for small sites that includes the Uranium Mill Tailings Remedial Act (UMTRA) program and Formerly Utilized Sites Remedial Action Programs (FUSRAP). By the end of Fiscal Year 1998, EM will complete cleanup of 45 small sites, leaving only fifty small sites. More specifically, out of the 46 total FUSRAP sites, 23 sites will have been Acleaned up@ as of the end of Fiscal Year 1998. By Fiscal Year 2000, we expect to clean up 5 more sites. Our goal is to complete the FUSRAP cleanup by 2002. Accelerating the pace of cleanup at these sites and reducing the costs of maintaining them over time will free up dollars to be reinvested in the longer-term issues.

The cleanup program is on track to continue its efforts in the most efficient, safe, and effective manner. Performance measures are in place to accurately gauge our progress. We believe that our results orientation will ensure that our cleanup milestones are met in compliance with negotiated agreements and with the support of the public and stakeholders.

Nuclear Material and Facility Stabilization

Budget Request: $1,374,615,000

(18 percent of the total Environmental Management budget)

The mission of the Nuclear Material and Facility Stabilization program is to reduce the high-risk conditions associated with unstable nuclear and chemical materials stored at former nuclear weapons production facilities and to reduce the surveillance and maintenance costs associated with surplus buildings waiting for decontamination or final disposition. Protection of workers and the environment from exposure and contamination, the stabilization of hazardous nuclear and chemical materials, deactivation of facilities to attain the lowest surveillance and maintenance costs, and transfer of facilities to the Office of Environmental Restoration for decontamination and decommissioning, are among the myriad activities. This program deals with some of the Department=s highest risks: plutonium and spent nuclear fuel.

This program is working to address urgent risks to protect the health and safety of the Department=s workers and the public, through implementation of the material stabilization and spent fuel management programs. The efforts to stabilize nuclear materials include the following activities in Fiscal Year 1998: dilution of 230,000 liters of highly enriched uranium solution for conversion to low enriched uranium oxide at Savannah River, stabilization of 240 containers of plutonium scrap and 380 containers of plutonium-containing sand, slag and crucible material at the Savannah River Site, and stabilization of 253 kilograms of plutonium solutions and 1,678 kilograms of plutonium in residues at Hanford. Although they are funded under the Environmental Restoration Program, this program is also responsible for managing stabilization activities at the Rocky Flats site which in Fiscal Year 1998 will include: draining and solidifying 3,000 liters of plutonium solution, and the commencement of full operation of the stabilization and packaging system to prepare plutonium metal and oxides at Rocky Flats for long-term storage.

The efforts to stabilize spent nuclear fuel include the following activities which the program expects to undertake in Fiscal Year 1998: removal of approximately 250 spent fuel assemblies and cans containing pieces of assemblies from Idaho=s CPP-603 fuel storage facility to safe storage; and begin removal of spent nuclear fuel from the K-Basins near the Columbia River at Hanford and placement in Hanford=s dry fuel canister Storage Facility. In Fiscal Year 1998, the Department will receive foreign research reactor spent nuclear fuel in support of the United States= nonproliferation initiatives. There currently are an estimated 22,000 spent nuclear fuel elements in 41 countries. Over a period of 13 years, more than one hundred shipments of this fuel will be received at the Savannah River Site and the Idaho National Engineering and Environmental Laboratory. In Fiscal Year 1998, approximately 30 casks (about 1000 elements) of fuel will be received at the Savannah River Site and five casks will be received at Idaho.

Also, the Department has begun developing alternative technologies for the storage and the treatment of spent nuclear fuel to a form suitable for future geological disposal. This program, which is focused on methods to achieve direct disposal in a geologic repository with minimum pretreatment, will continue in Fiscal Year 1998. For example, at the Savannah River Site, this program will include experimental projects to establish the feasibility of these alternative approaches for aluminum-uranium alloy fuel, as well as development, in consultation with the Nuclear Regulatory Commission, of the requirements for ultimate disposition of this material in a geologic repository. Programs to prepare spent fuel for ultimate disposition are also underway for the spent fuel at the Hanford Site and the Idaho National Engineering and Environmental Laboratory.

The program also focuses on Areducing the mortgage@ by completing deactivation projects and related activities. For example, in Fiscal Year 1998, deactivation activities at the B-Plant at Hanford will be completed three years ahead of schedule, reducing surveillance and maintenance requirements for the facility from approximately $20 million per year to an estimated $3 million per year. This will save nearly $100 million over the life of the facility. Further, construction will begin on the Actinide Packaging and Storage Facility at the Savannah River Site to consolidate nuclear materials currently contained in a number of buildings across the site. When completed, this facility will not only safely store and secure the stabilized materials, but also will facilitate the deactivation of numerous inactive buildings including the canyon processing facilities.

For the past three years, a major component of the deactivation program has been the Fast Flux Test Facility (FFTF) at Hanford. Recently, however, the Department has decided to place FFTF in a Ahot standby@ status pending a scheduled December 1998 determination on the possible role of this reactor as a new tritium supply source in support of the Nation=s nuclear weapons stockpile. The Department will submit a Fiscal Year 1998 budget amendment to reflect this consideration of FFTF for a tritium supply mission.

In recent years, the utilization of the F- and H- processing canyons at the Savannah River Site has been under review. The Department conducted a study in 1995 to determine the most cost-effective utilization of these aging and costly facilities for stabilization and potential material disposition and other future missions. The study recommended consolidation to the F-Canyon facilities, reserving H-Canyon for cold standby. This recommendation was not implemented because of concerns that a decision to consolidate was premature due to limited progress complex-wide on stabilization activities and the uncertainty of other mission needs for these facilities. Because a number of changes have occurred since this evaluation and significant progress has been made in stabilization activities and future mission decisions, the Department has embarked on a new evaluation of operational strategies for these facilities. The results of this evaluation will be used as the basis for the multi-year plan for these facilities required to be submitted to Congress by the Fiscal Year 1997 Defense Authorization Act.

The Office of Science and Technology conducts an aggressive national program of basic and applied research, development, demonstration, testing, and evaluation for environmental cleanup, waste management and related missions. These activities are focused on EM=s major environmental problem areas: mixed waste, radioactive tank waste, subsurface contamination, and decontamination and decommissioning. Our strategy is to invest in technology development to develop new or improved technologies in these areas to reduce risks to workers, the public, and the environment, reduce cleanup costs, and provide cleanup solutions that do not currently exist. Recognizing ongoing budgetary restraints, developing new, effective technologies presents the best opportunity to ensure a reduction of risks and costs. For instance, there are 3 million cubic meters of radioactive and hazardous buried waste in the DOE complex. The landfill caps have breached and pose a potential threat to people and the environment. In FY 1998, we expect to complete full-scale demonstration of a set of advanced landfill capping methods and monitoring techniques to mitigate this problem.

New technology is critical to achieving the goals of the Ten Year Plan -- by accelerating cleanup schedule and thereby reducing cleanup costs, the savings from which can be applied to other cleanup projects. We have recently performed a study of the potential cost savings from 37 of our innovative technologies and called upon the Army Corps of Engineers to peer review our cost savings analyses. Their initial review of these 37 technologies indicates that there is sufficient documentation to support potential cost savings in the order of magnitude of $20 billion. We are continuing, with the help of the Corps= expertise, to conduct a more detailed and expanded cost analysis.

But these technologies must be deployed widespread to fully realize their cost savings potential. To facilitate the use of innovative technology, our FY 1998 budget request includes $50 million for a new Technology Deployment Initiative that will serve as a catalyst for the DOE Operations Offices to use new technologies and innovative approaches to accelerate site cleanup. The initiative will completely fund the first application of a technology meeting a multi-site performance specification. This will allow the problem(s) to be eliminated ahead of schedule and provide user-validated performance data and regulatory acceptance for the technology. Cost savings will be realized through this initiative by accelerating the cleanup schedule, applying more efficient technologies, and reducing the programmatic risk of using alternative technologies at other sites through the DOE complex.

In 1996, the Department established a $50 million Environmental Management Science Program in partnership between EM=s Office of Science and Technology and the Department=s Office of Energy Research to bridge the gap between broad fundamental research that has wide-ranging applicability with applied technology development. The Fiscal Year 1998 budget request includes $42 million to continue the Environmental Management=s Science Program, which is aimed at DOE=s most intractable environmental problems. The research results are focused on science areas addressing high-level radioactive waste tanks, spent nuclear fuel, mixed radioactive and hazardous waste, waste disposal forms, and risk, quantitative methodological, human and environmental health analyses.

The Office of Environmental Management=s risk activities are also conducted from the Office of Science and Technology. These activities support decision making by developing policy and guidance for implementing credible and dependable risk assessment, management and communication processes to assure that EM funds activities to address DOE=s most threatening and widespread environmental problems.

Privatization is a critical component in the Environmental Management program=s strategy to reduce costs and Amortgages.@ Under the traditional system, whenever the Department needed a product or service, the Management and Operating (M&O) contractor at a site would build or procure the needed item or service. In effect, the Department would pay for a level of effort plus fee. The Department has been increasingly using fixed-price contracts and other incentive-based contracting methods to assure the Department is obtaining the most effective contracts. Under privatization, contracts are competed with the private sector for the product or service, and the government pays for the product or service when it is delivered and determined to meet specifications. The competitive process alone should sharply reduce the costs of these products or services to the Department. This approach should also substantially reduce the Department=s need to build and maintain its own facilities to produce the needed product or service thus reducing the Department=s life cycle costs for the project as well as potentially reducing near-term outlays. The private sector instead provides the funding and assumes many of the risks that were formerly borne by the Department. Appropriations in the early years for privatization projects will primarily cover the costs of termination in case the government should choose to terminate the project. Actual government outlays would not generally occur until the product or service is delivered and is determined to meet the previously agreed-upon specifications.

Privatization initiatives currently underway:

$ In Washington -- Hanford Tank Waste Remediation

• In Idaho -- EM recently announced the award of a $1.1 billion contract to British Nuclear Fuels Limited to treat mixed waste at the Idaho National Engineering and Environmental Laboratory and treat waste from across the complex. The cost savings and cost avoidances anticipated from this privatization project will be several hundred million dollars over the cost-plus approach that was planned under the M&O contract.

• Additional privatization initiatives scheduled for contract award in Fiscal Year 1997 include the Oak Ridge Broad Spectrum Low Level Mixed Waste project, and the Transuranic Waste.

Privatization initiatives to be begin in Fiscal Year 1998:

• In New Mexico -- Privatization of contact-handled transuranic waste transportation for the Waste Isolation Pilot Plant. The contract will be for a private vendor to provide transportation of transuranic waste from generator sites to the Waste Isolation Pilot Plant disposal facility using contractor-financed, -owned and -operated tractor trailers and nuclear packaging equipment. Initially, waste will be shipped from just a few sites. However, eventually waste will be shipped from all 25 sites that currently have TRU waste. A standard fee will be paid based on quantity shipped and mileage. This is a recompetition of M&O subcontractor services.

• In Idaho -- Low activity waste treatment project for the Idaho National Engineering and Environmental Laboratory. A private contractor will be used to finance, design, construct and operate a facility to treat seven million gallons of low-level waste from the Idaho Chemical Processing Plant, the Advanced Test Reactor, and other sources. The contractor will be paid for treated waste meeting contract specifications on a dollars per unit cost.

• In Idaho -- Power Burst Facility deactivation for the Idaho National Engineering and Environmental Laboratory. The Department will hire a private contractor to plan, design, and execute the deactivation of the Power Burst Facility (a shut down reactor). Payment is projected at the completion of deactivation and acceptance by the federal government in Fiscal Year 2000.

• In Idaho -- Spent nuclear fuel dry storage at the Idaho National Engineering and Environmental Laboratory. The Department will privatize capital construction of a dry storage facility capable of transferring and storing spent fuel rods. The construction and operation service will be provided through an open fixed-price competition, with the price including contractor design, licensing and fabrication.

• In Tennessee -- Environmental management and waste management disposal at Oak Ridge. The Department will purchase waste disposal services from a private vendor for low-level, hazardous, Toxic Substance Control Act-defined, and mixed wastes generated at Oak Ridge. The contractor would be awarded a fixed unit price contract for waste disposal services including permitting, construction, and operation of the facility.

• In Tennessee -- Transuranic solid waste treatment at Oak Ridge. A private contractor will design, permit, finance, and construct a transuranic (TRU) solid waste treatment facility at Oak Ridge to treat contact-handled and remote-handled solid TRU waste for shipment to the Waste Isolation Pilot Plant in New Mexico. The project will be procured through an open fixed-price competitive bid. DOE will compensate the contractor on a per unit basis for waste treated to performance specifications.

• In Ohio -- Waste pits remedial action at the Fernald Site. The Department will privatize design and construction of a contractor owned and operated facility for the excavation, processing, treatment, and load-out of about 700,000 tons of waste for disposal at a permitted commercial disposal facility. The contractor will be paid on a unit rate for the quantity of processed waste during the operational phase.

• In Ohio -- Silo 3 residue waste treatment at the Fernald Site. This initiative will fund a contractor to design, permit, finance, construction and operation of necessary treatment facilities. The contractor will process, package, ship, and dispose of residues from Silo 3, Fernald Operable Unit #4 remediation. The contractor will be required to reprocess off-specification product at their own expense.

• In Colorado -- Decommissioning of Buildings 779 and 886 at Rocky Flats. The vendors will finance and provide systems for the complete decommissioning and dismantlement of the Buildings 779 and 886 clusters at Rocky Flats. Payment will be made upon the decommissioning and packaging of equipment, and upon complete dismantlement of the building clusters.

• In South Carolina -- Spent nuclear fuel transfer and storage at the Savannah River Site. This initiative is for an open fixed-price competitive procurement for the preparation and interim dry storage of aluminum-based spent nuclear fuel prior to shipment and disposal at a Nuclear Regulatory Commission-licensed geologic repository. Financing, design, permitting, construction and operation would be the responsibility of the contractor. After shipment of the spent fuel for disposal, the contractor would be responsible for the deactivation and clean-out of the facility. The contractor would be paid when spent fuel rods are prepared and stored in dry storage on a fixed-unit price determined at the time of contract award.