Appendix C (Page 2)

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C.3 INTEGRATION ANALYSES

A variety of integration analyses was performed for the Base Case and alternative scenarios. Section C.3.1 describes the approach used for the Base Case; Section C.3.2 describes the approach used for the alternative scenarios.

C.3.1 Base Case Scenario

The Department used a 10-step process to develop the Base Case Scenario for the 1996 report (Figure C.1). Each step is described below.

Figure C.1. Steps in Developing the Base Case Scenario

Step 1 - Input data on cost, schedule, and waste volumes for each analytical unit

The final set of data representing the Base Case scenario was assembled and loaded into the Baseline Environmental Management Report Integration Tool data bases.

Step 2 - Calculate cost and waste volumes over time

The input data for the Base Case scenario included estimates of when each activity would start and end, annual cost during that period, and annual waste volumes generated during that period. In this step, cost and waste volumes were summed to develop an initial schedule for the Environmental Management program activities.

Step 3 - Compare waste volumes to treatment, storage, and disposal capacity

The initial schedule for waste generation was compared to the schedule for waste treatment, storage, and disposal. Differences between total volumes, annual profile of volumes, waste types, and treatability groups were identified. Estimates of waste flows between sites made by both the sending and receiving sites were compared and differences identified.

Step 4 - Define new treatment, storage, and disposal needs over time (if necessary)

Differences between waste generation activities and waste treatment, storage, and disposal schedules were resolved by working with the sites. Updates were applied to the input data base.

Step 5 - Calculate new treatment, storage, and disposal costs over time (if necessary)

Sites provided revised estimates of waste management costs based on the revised treatment, storage, and disposal needs developed in Step 4. These revised estimates were input into the Baseline Environmental Management Report Integration Tool data bases.

Step 6 - Calculate total cost over time

Total costs and waste volumes were calculated with any changes applied in Steps 3 to 5.

Step 7 - Compare total program cost to funding levels

The initial total program cost estimate was compared to assumed annual funding levels. Where costs exceeded assumed funding levels, rescheduling of activities was necessary.

Step 8 - Reschedule activities as needed

Individual activities or projects were rescheduled manually to match more closely cost and funding estimates. Rescheduling was performed jointly by Department of Energy staff from Headquarters and sites. Steps 3 through 8 were repeated as necessary until total program cost matched assumed funding levels on an annual basis within a reasonable tolerance. This cost and schedule estimate was considered the initial Base Case scenario.

Step 9 - Review Base Case scenario

Program managers at Headquarters and field sites reviewed the initial Base Case scenario. Minor changes were made based on this review process.

Step 10 - Document final Base Case scenario

Department personnel documented the final Base Case scenario based on programmatic review. Cost and schedule estimates, aggregated at the activity level and shown for specific projects, are presented in the individual site summaries presented in Volumes II and III of the 1996 report.

C.3.1.1 PERFORMING THE INTEGRATION

The integration analysis was performed jointly by Department of Energy staff from Headquarters and the sites. The participation of site staff ensured that the individual sites were cognizant of all changes in estimated schedule and that all schedule changes were consistent with site-specific compliance agreements, work sequencing, and other constraints. The integration and scheduling analysis was aimed at smoothing projected costs and waste generation rates to match available funding and waste management capacities. The only "new" activities generated during this process were treatment, storage, and disposal facilities needed to manage low-level waste, low-level mixed waste, and transuranic waste generated from environmental restoration and nuclear material and facility stabilization activities. Otherwise, the analysis only moved project start dates for individual activities or projects backward or forward in time.

Rescheduling required to meet funding or waste management capacity limitations may result in differences between the schedule and funding profiles for activities in the 1996 report and those in site baselines or other source documents. Therefore, baselines and other documents in reading rooms and elsewhere may not match up exactly with the Base Case in the 1996 report.

Certain general rules were used during the integration/scheduling process. Projects under way in 1995 or scheduled to begin from 1995 to 2000 were not rescheduled. Projects that are governed by existing compliance agreements were not rescheduled regardless of starting date. No attempt was made to trade off funding between sites. A flat funding assumption was applied to each site.

C.3.1.2 DOCUMENTATION

Department personnel developed a change control process for documenting all changes in the input data and in scheduled starting dates for projects and activities. This process included (1) operator procedures to be used at the beginning and end of each session to document how the operator made changes in the data base and (2) data manager procedures to merge changes made by multiple operators into a single copy of the data base and to maintain appropriate configuration control. A change control process also was used to manage revised data submissions from the field sites.

C.3.2 Alternative Scenarios

The Base Case scenario incorporates a broad range of assumptions regarding the eventual outcomes of various decisionmaking processes that will determine the solutions applied to problems and the ultimate end states for Department of Energy facilities. The final cost and schedule for the Environmental Management program will depend considerably on decisions reached through processes specified in the Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation and Recovery Act, the National Environmental Policy Act, and other environmental laws. It is important to understand which decisions are likely to affect life-cycle cost and schedule significantly as well as the potential magnitude of these effects. The Department identified three general categories of decisions that have the potential to affect significantly the life-cycle cost and schedule for the Environmental Management program (Table C-12).

Table C-12. Types of Decisions Likely to Affect the Life-Cycle Costs of the Environmental Management Program

C.3.2.1 GENERAL APPROACH

With some modifications, the ten-step process used to develop the Base Case (see Figure C-1) also was used to develop alternative scenarios. The modifications generally consisted of either changing input data at the start of the process or assumptions at specific steps during the process. The most significant difference was that the alternative scenarios were evaluated only for the five sites that had the highest life-cycle costs in the 1996 Baseline Report: Hanford Site, Idaho National Engineering Laboratory, Oak Ridge Reservation (consisting of the K-25 Site, the Y-12 Site, Oak Ridge National Laboratory and Oak Ridge Associated Universities), Rocky Flats Environmental Technology Site, and Savannah River Site). This limitation was imposed for several reasons. First, the five highest-cost sites represent approximately 70 percent of the total 1996 Baseline Environmental Management Report cost estimate; therefore, changes from the Base Case estimates at these sites will have the greatest influence on the total Environmental Management program cost. Second, many of the highest-cost sites have developed tools and data sets for evaluating programmatic alternatives; this allowed maximum use of previous analyses. Third, plans for the final disposition of many of the other sites are well developed (e.g., future-use plans have been made); therefore, there is less uncertainty about the future of the Environmental Management program at these other sites. Finally, focusing on the five highest-cost sites allowed the Department of Energy to perform the alternatives analysis with efficiency (i.e., obtain a high benefit with low cost).

The analysis of alternative scenarios for the 1996 report is a joint effort between Headquarters and field personnel. This is an important improvement over the approach used for the 1995 Baseline Environmental Management Report. For the 1996 report, Headquarters developed the overall framework for the analyses, provided written guidance, and developed survey instruments to assist in data collection. Joint workshops were held at each of the five highest-cost sites to enable field personnel to provide critical input on assumptions, determine the data sources to use for the analyses, and determine the specific scenarios to use for each analysis. For the Land-Use and Funding/Schedule analyses, Headquarters assembled data provided by the field, used parametric models to supplement missing data, and analyzed the alternative scenarios; the field sites reviewed the results prior to publishing the 1996 report. For the Minimal Action scenario, field personnel provided all alternative data.

A second improvement this year is the inclusion of examples illustrating how risks may change for a project as part of the alternative scenario analyses. This year's analyses begin to incorporate information on risk using an approach that builds on the Risk Principles established by the Department and the process used to develop Risk Data Sheets for the annual budget. Incorporating these principles and processes, this year's analyses encompassed a "bottom-up" process using site-driven methods, data sets, and assumptions.

C.3.2.2 LAND USE

The five highest-cost sites comprise over 470,000 hectares (1.16 million acres) of federal land in a variety of environmental settings from saturated bottomlands to high desert. While much of this land is uncontaminated, future use of the land is driven not only by level of residual contamination but also by its proximity to ongoing Department of Energy activities, permanent waste disposal sites and other practical considerations. The analyses presented in the 1995 Baseline Environmental Management Report suggested that land-use decisions could change the total cost of the Environmental Management program by hundreds of billions of dollars. This year's analyses focused on improving on the 1995 analysis in three major ways (Table C-13). The first phase of the analysis focused on two improvements: (1) verifying and quantifying the Base Case assumptions on land use, remedial technology strategies, and problems with no feasible solution; and (2) understanding the relationship between the Base Case land-use assumptions and alternative land-use preferences being developed by the Environmental Management program's Future-Use Project. The second phase of the analysis focused on the third improvement, using each site's best judgments on what future uses were feasible and what technology strategies would be used to achieve those uses to evaluate costs and risks associated with alternative land-use scenarios. Each of these two phases is described in detail below.

Table C-13. Improved Focus of Land-Use Analyses

Verifying Base Case Assumptions - The Department used an eight-step process to verify Base Case assumptions (Table C-14). Each step is described below.

Table C-14. Steps in Verifying Base Case Assumptions

Step 1 - Develop land-use standards.

The Department developed operating definitions for six land-use categories for this analysis (Table C-15). These standards provide a consistent basis for quantifying and comparing land-use assumptions across the five highest-cost sites. These standards are not intended to replace specific land-use definitions at any site nor usurp the authority of each site to define land-use categories.

Step 2 - Define technology strategy standards for each land-use category.

Technology strategy standards were developed for each land-use category. Separate standards were developed for contaminated media, waste in storage, and contaminated buildings. Table C-16 presents an example of these standards (for contaminated media). These standards provide a consistent basis for comparing and evaluating remedial technology strategies across the five highest-cost sites. These standards are intended as a general description of the overall technology strategy that would be used to meet a given land-use standard. It is recognized that site-specific conditions may require deviations from the overall strategy (e.g., removal of "hot spots" of soil contamination in an area where the general strategy is containment of contamination via capping).

¹ Underground tanks with petroleum products must be removed under current law.

Step 3 - Divide sites into geographical map units.

The five highest-cost sites were divided into appropriate "map units" for this analysis. Each map unit is comprised of a discrete geographical area based on the types of problems, activities, and contamination present. For the most part, the map units represented portions of the sites currently managed as one regulatory or geographical unit (e.g., Waste Area Groups, operable units, or other recognizable areas). The objective was to divide the sites into logical "pieces" within which land-use standards and technology strategies would be reasonably uniform. Thus, the process for verifying Base Case assumptions and developing alternative land-use and technology strategies would be simplified.

Step 4 - Map Baseline Environmental Management Report activities and projects into map units.

Crosswalks between activities and projects were developed and the geographical map units defined above. Many activities and projects are defined geographically (e.g., the 100 and 200 Areas at the Hanford Site); these generally corresponded directly to the map units on a one-to-one basis. Other activities and projects are more site-wide in nature (e.g., program management, long-term surveillance and monitoring). These were either allocated by percentage to the appropriate geographic areas or analyzed separately.

Step 5 - Ensure that Base Case assumptions regarding current and future land use are consistent with standards.

Base Case assumptions were revised so that they were consistent with the standard land-use categories and technology strategies defined above. In many cases the Base Case assumptions were consistent with the standards, but terminology differed. Some of the standards were modified to accommodate the realities at each site. For example, the "open space" category was altered to include "resource management" because some open space areas are effectively wildlife preserves, some are used for cattle grazing, and others for controlled hunting.

Two important distinctions were made during this verification process. The first is the distinction between current land use at each site and the future land-use assumptions that form the basis for the Base Case cost and schedule estimates. The second is the distinction between residual contamination, or how clean each area is at present or is anticipated to be after cleanup, and the actual or anticipated use that the area can support, given both the residual contamination as well as real world constraints. This latter distinction is extremely important because certain lands managed by the Environmental Management program are currently not contaminated (i.e., they meet the residual contamination standards for any land use, including agricultural) but are unlikely to ever be used for agricultural use. For example, some uncontaminated land areas at the five highest-cost sites are critical habitat for endangered or threatened species. Under current law, some control over use of these lands to protect these species is likely, even though the land and ground water are clean enough to support agriculture. An important part of the verification process was to ensure identification of all constraints on actual future use, including the presence of permanent storage and disposal facilities and ongoing Department of Energy missions (e.g., Defense Programs, Energy Research).

Step 6 - Compare Base Case technology strategies with land-use standards.

Base Case technology strategies were compared with land use defined by residual contamination and actual/anticipated use. One objective was to verify that the technology strategy standards defined above were consistent with site-specific technology strategies when aiming at a given residual contamination standard. A second objective was to document instances where Base Case technology strategies, governed by laws, regulations, and legal agreements, are aimed at achieving residual contamination standards that are more (or less) stringent than anticipated use.

Step 7 - Compare Baseline Environmental Management Report assumptions with Future-Use preferences.

Headquarters and field staff worked jointly with representatives of the Environmental Management program's Future Use Project to compare, and reconcile where possible, Base Case anticipated use assumptions with preferred future uses being developed in conjunction with stakeholders through the Future Use Project. The 1996 report presents the Project assumptions and point out where they are in conflict with Baseline Environmental Management Report Base Case assumptions. This document provides a basis for continuing dialogue on future land-use choices and how they will affect the Environmental Management program.

Step 8 - Verify problems excluded from Base Case because of no feasible solution.

Those problems excluded from the Base Case because they cannot feasibly be remediated using existing technologies were identified. Reasons for such exclusions include no suitable technology (e.g., certain contaminants cannot be removed from ground water with current technologies), high collateral ecological damage (e.g., draining a surface-water body to remove contaminated sediments would severely damage the ecosystem), and excessively high cost (e.g., remediating subsurface contamination from underground nuclear test explosions can be accomplished with current technologies, but the cost would be in the trillions of dollars).

Evaluating Alternative Land-Use Scenarios - A four-step process was used to evaluate alternative land-use scenarios (Table C-17). Each step is described below.

Table C-17. Steps in Evaluating Alternative Land-Use Scenarios

Step 1 - Define alternative land-use scenarios.

Using the verified Base Case as a point of departure, the effect of five alternative land-use scenarios on the estimated life-cycle costs for the Environmental Management program was evaluated: Maximum Feasible Green Fields, Modified Green Fields, Recreational, Industrial, and Iron Fence. These five alternative scenarios were chosen to represent varying land-use outcomes and differing levels of cleanup. The Maximum Feasible Green Fields case and the Iron Fence case were chosen to represent the two endpoints of the land-use continuum. The Recreational scenario represents an intermediate land use end-state without access restrictions, while the Industrial scenario represents an intermediate land-use end state with access restrictions. The Modified Green Fields represents a special scenario that illustrates how an aggressive cleanup strategy might be tempered when considering continued Departmental missions. Note also that the Iron Fence scenario is intended as the least-cost alternative. Therefore, in a few instances where removal actions are less costly than containment actions, the scenario selects the least-cost alternative. The decision rules for developing these scenarios are described below.

Maximum Feasible Green Fields - The decision rule requires that all portions of the site be remediated to the Residential or Agricultural land-use standard. All Department of Energy missions at the sites were assumed to end at some future time. Most of the site-specific constraints noted below were ignored, with the exceptions of technology challenges and a limited number of disposal areas at the Hanford Site, Idaho National Engineering Laboratory, and the Savannah River Site.

Modified Green Fields - The decision rule requires that all portions of the site not meeting the site-specific constraints noted below be remediated to the Residential or Agricultural land-use standard. Areas already achieving an equivalent land-use standard need not be remediated at all. Areas that cannot be feasibly remediated to these land-use standards should be remediated to the greatest extent possible.

Recreational - The decision rule for this case requires that all portions of the site not meeting the site-specific constraints noted below be remediated to the Recreational land-use standard with water use restricted. Areas already achieving equivalent or more stringent land-use standards (e.g., Residential) need not be remediated at all. Areas that cannot feasibly be remediated to the Recreational land-use standard should be remediated to the greatest extent possible.

Industrial - The decision rule for this case requires that all portions of the site not meeting the site-specific constraints noted below be remediated to the Industrial land-use standard with water use restricted. Areas already achieving an equivalent or more stringent land-use standard (e.g., Residential, Agricultural) need not be remediated at all. Areas that cannot feasibly be remediated to the Industrial land-use standard should be remediated to the greatest extent possible.

Iron Fence - The decision rule for this case requires that all portions of the site not meeting the site-specific constraints noted below be remediated to the Disposal/Storage Area land-use standard. Areas already achieving an equivalent or more stringent land-use standard (e.g., Agricultural) need not be remediated at all. Areas that cannot be remediated to the Disposal/Storage Area land-use standard should be remediated to the greatest extent possible.

Site-Specific Constraints - To ensure that the land-use analysis took account of all site-specific constraints on future use, certain exceptions were made for portions of the five highest-cost sites. For these circumstances, the Base Case land-use assumptions (including cost and waste volume estimates) are carried through each alternative scenario but are left unchanged. Criteria for exceptions included legal decisions, contractual relationships, technical limitations, and program plans:

• Legal Commitments - A Record of Decision, contractual agreement or other legally binding decision document (e.g., Corrective Measures under the Resource Conservation and Recovery Act or specific conditions in a Consent Order) that dictates future use has been signed, or local laws place restrictions on access to ground water (e.g., the Snake River Plain Aquifer in Idaho).
• Technical Constraints - Contamination problems that have no viable removal strategies compatible with Agricultural or Residential use (e.g., ground water contaminated with tritium) or present unacceptably high risks to workers using conventional construction-type removal technologies.
• Safeguarding of Natural, Historical, and Cultural Resources - The need to maintain buffer zones supporting endangered species (e.g., the red-cockaded woodpecker at the Savannah River Site) or ecologically unique habitats (e.g., the tall grass prairie at the Rocky Flats Environmental Technology Site) and the need to preserve certain buildings as part of the nation's historical heritage due to their role in developing nuclear weapons and energy.
• Site Safety Considerations - The need to establish and maintain buffer zones around ongoing or planned waste disposal areas (e.g., the 200 Areas at the Hanford Site), storage of dangerous materials (e.g., special nuclear materials).
• Practical Constraints - The need to limit future use on certain areas due to spatial relationships with other areas (e.g., clean parcels of land effectively surrounded by industrial or waste storage/disposal areas cannot be effectively used for many activities).

Step 2 - Develop site maps for each alternative scenario.

Once the alternative scenarios were defined, a set of maps was developed for each site that presented final land-use assumptions under the four alternative scenarios. As with the Base Case, these maps distinguish between the residual contamination standards that can be achieved under each scenario and the anticipated alternative uses. The maps also included the site's judgments about the technology strategies that would be used to achieve the land uses specified in each alternative scenario.

Step 3 - Develop project cost and waste volume estimates for each alternative scenario.

Using the maps and assumptions developed above, alternative sets of cost and waste volume data were obtained for all projects and activities under each alternative scenario. These data were obtained using two general approaches. In some cases, the sites provided alternative cost, waste volume, and project duration estimates for specific projects or activities. Where sites were unable to provide these estimates, Department personnel used the Automated Remedial Assessment Methodology, a computer-based estimating tool (Table C-18). After being calibrated to each site's Base Case assumptions, the methodology estimated changes in cost, waste, and duration for environmental restoration projects and activities. The alternative data sets were assembled and loaded into the Baseline Environmental Management Report Integration Tool as input data.

Table C-18. The Automated Remedial Assessment Methodology

Step 4 - Develop integrated cost estimates for each alternative scenario.

Using the alternative data sets as inputs, the Baseline Environmental Management Report Integration Tool was used to provide integrated cost and schedule estimates for each alternative land-use scenario. Use of the Integration Tool ensured that all estimates were fully integrated and that waste management and support costs were adequately accounted. Costs for managing low-level, low-level mixed, transuranic, and transuranic mixed waste were estimated using the System Cost Model (Table C-19).

Table C-19. The System Cost Model

C.3.2.3 PROGRAM AND PROJECT SCHEDULING

The analyses presented in the 1995 Baseline Environmental Management Report suggested that scheduling of Environmental Management activities has the potential to affect life-cycle cost substantially. Changes in funding levels or delays in the shipment of high-level waste and spent nuclear fuel to a geologic repository may influence the pace and cost of the Environmental Management program. To provide insight into the cost consequences of higher or lower funding and project delays, the potential influence of funding and schedule on life-cycle cost was evaluated. This year's analyses focused on improving the 1995 analysis in two major ways (Table C-20). First, the analysis focused on developing an understanding of how the scope of work required to complete a project would change if the starting date for that project were accelerated or delayed. Second, the analysis focused on using each site's best judgment on the most reasonable way to reschedule projects and activities to accommodate funding constraints or delays.

Table C-20. Improved Focus of Program and Project Scheduling Analyses

Understanding Scope Growth

The Department used a two-step process to obtain a better understanding of scope growth: (1) Defining scope growth for this analysis, and (2) Determining scope growth factors for high-cost environmental management projects. Each of these steps is described below.

Step 1 - Defining scope growth.

The Base Case cost and schedule estimate is based on numerous assumptions about when activities and projects are expected to begin and end. Changes to that schedule could affect the amount of work required to complete the activity for many reasons. For example, a delay in starting a project could increase the scope because of the spread of contamination in the environment or the deterioration of a building or structure. Delays also may reduce the scope of a project if, for example, significant radioactive decay occurs. Note that project delays may result in missed compliance milestones, and the Department would be liable for fines and penalties if such milestones were missed. This analysis does not include the impacts of fines and penalties on total program cost. The methodology used for the scheduling analyses in the 1995 Baseline Environmental Management Report did not allow consideration of scope growth (or decline). Three elements of scope growth were defined for this analysis:

Duration scope growth - Some activities are necessary to keep a waste, an area, or a facility in a safe, secure state until a final cleanup action is implemented. These activities (e.g., surveillance and maintenance, waste storage) must be performed for safety and health reasons. Accelerating or delaying cleanup actions will not affect these costs on an annual basis but will affect how long these costs will be incurred. Thus, accelerating cleanup actions will shorten these activities and reduce life-cycle costs, and delaying cleanup actions will lengthen these activities and increase life-cycle costs.

Physical scope growth - Many environmental problems worsen over time. For example, contaminant plumes may spread over a larger area; buildings, waste storage containers, and tanks may deteriorate. A small number of problems actually improve over time (e.g., short-lived radionuclides such as tritium decay rapidly). Costs for Environmental Management activities will increase or decrease as the physical nature of the problem changes. Where delaying a project results in physical scope growth, project costs will increase. Conversely, accelerating a project that has physical scope growth potential will likely decrease project cost.

Fixed nature of support costs - A large portion of Environmental Management program costs are not incurred for specific projects. Site- or program-wide support activities include things such as information services, general infrastructure support, and program management. The 1995 Baseline Environmental Management Report analyses suggested that the costs for these support activities are relatively fixed with respect to the level of "direct mission" activities at the site. In other words, a site or program's support costs would be similar whether two, four, or ten projects are in progress at the site. Accelerating the completion of Environmental Management program activities would reduce the number of years for which support costs would be incurred and thus reduce the life-cycle cost for that site. Conversely, delaying the completion of the Environmental Management program would increase the number of years for which support costs are paid and increase life-cycle cost.

Step 2 - Determining scope growth factors for highest-cost projects.

Headquarters and field staff worked jointly to identify the highest-cost projects at each of the five highest-cost sites and estimate scope growth factors for these projects. The analysis focused on the highest-cost projects (those that represented 80 or 90 percent of total program costs) to gather the greatest amount of data at least cost. Additional types of projects were included in the analysis to obtain representative examples of all types of environmental management activities.

For environmental restoration and nuclear material and facility stabilization activities, Headquarters personnel developed a survey instrument to estimate scope growth factors associated with delays of 5, 10, 25, and 50 years or acceleration of 5 or 10 years. Field personnel completed the surveys. Scope growth factors for each project were based on total project cost (i.e., a scope growth factor of 2 indicated that the project would be twice as expensive). The field personnel also estimated increases or decreases in waste volumes associated with acceleration or delays. Headquarters and field personnel reviewed the surveys at joint site workshops to finalize the scope growth estimates. The scope growth factors were used to modify Base Case cost estimates for each project during the analysis phase described below.

The approach for determining scope growth for waste management activities depended on the type of waste. For high-level waste and spent nuclear fuel, sites provided alternative life-cycle cost estimates for each of the funding and schedule scenarios. In some cases, more than one estimate was provided for each scenario (e.g., two or three separate estimates were prepared for the reduction in funding scenario to reflect several levels of reduced annual funding). Scope growth for low-level, low-level mixed, transuranic, and transuranic mixed waste was estimated using the calibrated System Cost Model (see Table C-19). The model calculates duration scope growth associated with prolonged periods of waste storage. Costs for hazardous and sanitary waste are sufficiently low that these waste streams were not included in this analysis.

Evaluating Alternative Program and Project Scheduling Scenarios

The Department used a three-step process to evaluate alternative program and project scheduling scenarios: (1) Define alternative scenarios; (2) Develop scheduling priorities based on scope growth factors, and (3) Develop an integrated cost estimate for each alternative scenario. Each step is described below.

Step 1 - Define alternative program and project scheduling scenarios.

Using the Base Case schedule as a point of departure, the effect of three program and project scheduling scenarios on the estimated life-cycle costs for the Environmental Management program was evaluated: Accelerating Stabilization and Deactivation, Funding Reduction, and Delaying Waste Disposal. The rationale, assumptions, and decision rules for these scenarios are described below. All scenarios assume that existing compliance agreements may not be met and that no fines or penalties will be assessed as a consequence.

Accelerating Stabilization and Deactivation - Surveillance and maintenance activities are required to maintain nuclear material and contaminated facilities in a safe condition prior to stabilization and deactivation. These costs decrease, often dramatically, after nuclear material stabilization and facility deactivation actions are completed. This case examines how the total cost of the Environmental Management program could be reduced by accelerating stabilization and deactivation and how much additional funding would be necessary for this acceleration. Also examined in this case are the cost savings achievable from the reduced support costs associated with more rapid completion of stabilization and deactivation activities. This analysis assumes:

• Funding for environmental restoration and waste management activities is the same as in the Base Case, but otherwise funding will increase sufficiently to stabilize all nuclear materials by FY 2002 and deactivate all facilities by FY 2010.
• Only nuclear material and facility stabilization projects will be accelerated.
• A geologic repository for high-level waste and spent nuclear fuel will open as scheduled in the Base Case.

Funding Reduction - This scenario evaluates the impacts of across-the-board reductions in the Environmental Management program budget. This analysis assumes:

• Funding is reduced for the duration of the Environmental Management program to $4.9 billion (in constant 1996 dollars).
• Projects with high scope growth will be accelerated and projects with little or no scope growth will be delayed.
• There are no constraints on funding allocation/reallocation, so that funds can be shifted from one type of activity to another (e.g., from environmental restoration to waste management).
• Shipments of high-level waste and spent nuclear fuel to a geologic repository may not occur as scheduled in the Base Case.

Delaying Waste Disposal - The final case analyzes the effect of a delay in shipments of high-level waste and spent nuclear fuel to a geologic repository. Delays in shipments to a repository will force the Environmental Management program to store these materials for a longer period of time. For this analysis:

• Funding for environmental restoration and nuclear material and facility stabilization activities are the same as in the Base Case, but funding for waste management activities will increase to cover the increased storage costs.
• Disposal of high-level waste and spent nuclear fuel is delayed. Treatment activities will be completed using the Base Case schedule, but post-treatment storage will continue until shipments to a repository are completed.
• Acceptance of Department of Energy high-level waste and spent nuclear fuel at a geologic repository is delayed for 30 years.

Step 2 - Determine scheduling priorities based on scope growth factors.

Using the scope growth factors defined above, and site-specific understanding of urgent risks and project inter-dependencies, priorities for rescheduling projects to meet the parameters of the three funding and schedule scenarios were developed. Where funding constraints are critical (e.g., in the funding reduction scenario), efforts ensured that delays were assigned to a sufficiently large number of projects to meet the reduced funding limits. These priorities were used to accelerate and delay projects in the integration analysis described in Step 3.

Step 3 - Develop integrated cost estimate for each alternative scenario.

The first part of this process was to revise the Baseline Environmental Management Report Integration Tool to apply scope growth factors as projects are rescheduled (i.e., annual costs for each activity were inflated or deflated based on the scope growth/decrease factors). Using the assumptions and scheduling priorities developed in the first two steps, Headquarters staff rescheduled projects in a manner that attempted to minimize the cost for each case. Using the revised schedules, the Integration Tool recalculated project costs and associated support costs. Waste management costs for low-level, low-level mixed, transuranic, and transuranic mixed waste were recalculated using the calibrated System Cost Model. All annual costs were summed and compared to funding limit assumptions. Projects were rescheduled as necessary to meet funding limits. Final alternative life-cycle costs were aggregated and reported for each scenario.

C.3.2.4 MINIMAL ACTION

The assumed strategies in the Base Case reflect actions required by regulations or compliance agreements and/or likely to be acceptable to internal and external stakeholders. These actions are likely to go beyond those required to safeguard waste and surplus materials in an efficient, cost-effective manner. For example, regulations or agreements may require complete treatment and disposal of a volume of radioactive waste when safe, long-term storage of all or a portion of that volume would be feasible and cost-effective. Similarly, program plans may call for complete decontamination and dismantlement of a surplus facility when entombment would be feasible and cost-effective.

The analyses presented in the 1995 Baseline Environmental Management Report suggested that adopting a "minimal action" strategy could reduce the annual costs of the Environmental Management program in the near term, but long-term surveillance and monitoring costs would increase. The methodology used for that report did not allow the Department to determine how low the annual costs could go by pursuing this type of strategy. The objective of this year's analysis has been to develop a scenario which will minimize the total cost of the Environmental Management program over the next 75 years without increasing risks to offsite populations, onsite workers, or ecological receptors (except where such increases are a necessary component of actions taken to reduce other risks). The first phase of this analysis focused on defining the general principles and guidelines for this analysis and site-specific assumptions for the five highest-cost sites. The second phase focused on using each site's best judgments on how the program would change to estimate the costs and risks associated with this scenario. Each of these phases is described in detail below.

Defining General Principles and Guidelines - The minimal action scenario combines elements of urgent risk reduction, mortgage reduction, minimum action, regulatory relief, prudent management practices, and institutional controls into an overall strategy aimed at (1) minimizing risks to public health, workers, and the environment, and (2) minimizing cost during the minimal action period (75 years). Increased risks and costs after the end of the minimal action are permitted. The following general principles guided development of this scenario:

• Use institutional controls. The Federal Government will maintain control of federal lands.
• Assume regulatory relief. All actions must meet minimum onsite worker safety standards, but are not necessarily in compliance with current environmental, safety, and health laws and regulations unless needed to meet the above-stated goals.
• Address urgent risks. All urgent risks must be reduced through actions such as stabilizing unstable materials as needed to meet the above-stated goal; moving waste from unsafe storage into safe storage as needed to meet the above-stated goal; intercepting plumes at the installation boundary; stabilizing high-risk nuclear materials; deactivating high-risk facilities; and removing and vitrifying unstable high-level waste.
• Pursue mortgage reduction. High mortgages must be reduced through actions such as stabilizing nuclear materials and deactivating facilities with high surveillance and maintenance costs and completing technology development to support the above actions and the above-stated goals.
• Minimize waste treatment. Waste treatment should be minimized to the extent necessary to meet the above-stated goal through actions such as stabilizing or continuing to monitor high-level waste in place (except urgent risk tanks), maintaining spent nuclear fuel in safe (dry) storage, placing other radioactive or mixed waste in permanent storage, minimizing shipments of high-level waste and spent nuclear fuel to a geologic repository, and completing technology development to support the above actions and the above-stated goal. In each case, the 75-year costs associated with the "treat and store/dispose" versus "store only" strategy were compared to identify the minimum cost option that is consistent with the above-stated goals.
• Minimize remediation and facility decommissioning. Remedial actions and decontamination and decommissioning should be minimized to those necessary to meet the above-stated goal through actions such as maximizing No Further Action sites, maximizing containment and entombment strategies, and completing technology development to support the above actions and the above-stated goals. In each case, the 75-year costs associated with the "removal" versus "containment" strategy were compared to identify the minimum cost option that is consistent with the above-stated goals.
• Minimize stabilization and deactivation. Stabilization and deactivation efforts should be minimized to those necessary to meet the above-stated goal through actions such as minimizing removal of contaminated equipment, minimizing removal of materials in pipelines and ducts, and completing technology development to support the above actions and the above-stated goals. In each case, the 75-year costs associated with the "complete" versus "partial" stabilization/deactivation strategy were compared to identify the minimum cost/effort option that is consistent with the above-stated goals.
• Minimize support and technology development costs. Support and technology development costs should be minimized to those necessary to support the above actions and the above-stated goals through actions such as minimizing support costs and identifying where emerging and new technologies can enable cost savings or changes in program/project priorities.
• Pursue prudent management practices. More "complete" actions (e.g., full stabilization, complete decontamination and decommissioning, waste treatment and disposal) should be pursued if the 75-year costs for these actions are lower than the above actions.

Using the above general principles, field personnel developed site-specific assumptions for Environmental Management activities at their sites. Although specific assumptions varied somewhat among the five highest-cost sites, there was considerable convergence in these assumptions.

• Contaminated environmental media. No further action will be taken for the majority of problems unless they pose urgent environmental of human health risk within the next 75 years. A limited amount of removal and containment strategies will be used for problems where contaminants are spreading rapidly onsite or offsite.
• Special nuclear material. All nuclear material stabilization activities will be completed as planned in the Base Case to reduce urgent risks and high mortgages. Materials will be consolidated into central long-term storage facilities at each site.
• Contaminated buildings. For large, heavily contaminated buildings, nearly all facility deactivation activities will be completed as planned in the Base Case to reduce urgent risks and high mortgages. In some cases, less stringent deactivation strategies will be followed (i.e., more contamination is left in place). Facility decommissioning activities will be reduced significantly. Most large structures will be entombed. Most smaller buildings will be deactivated and decommissioned consistent with prudent management practices.
• Spent nuclear fuel. Spent nuclear fuel will be placed in dry storage and left onsite for the 75-year period. No fuel will be shipped to a geologic repository.
• Low-level, low-level mixed, transuranic, transuranic mixed, and special case waste. Most waste will be placed in long-term storage and left onsite for the 75-year period. Storage facilities will meet safety requirements but generally will not meet Resource Conservation and Recovery Act requirements.
• Hazardous and sanitary waste. This waste will be managed in accordance with Base Case assumptions.
• High-level waste. Strategies for this waste differ among sites. At the Savannah River Site, all high-level waste will be vitrified and placed in onsite storage because the vitrification facility is operational and the tanks pose high risks due to their age and proximity to ground and surface waters. At the Idaho National Engineering Laboratory, all high-level waste will be calcined and placed in above-ground storage. At the Hanford Site, single-shell tanks containing high-level waste will be stabilized and the waste will remain in these tanks with continuous surveillance and maintenance. High-level waste in double-shell tanks will be consolidated into two tanks that will be replaced every 50 years.

Evaluating the Minimal Action Scenario - The Department used a two-step process to evaluate the cost and risk implications of the minimal action scenario. The first step was to develop alternative cost estimates; the second was to evaluate the long-term cost and risk implications. Each step is described below.

Step 1 - Developing alternative cost estimates.

Headquarters personnel developed a survey instrument to assist the field staff in developing alternative cost estimates. The survey instrument identified the highest-cost projects at each site (generally in the top 80 or 90 percent). For each project, the survey instrument contained the Base Case cost estimates by activity and time (in five-year increments). Using these data as a guide, site personnel provided alternative cost and schedule estimates using available site-specific sources (e.g., Environmental Impact Statements, other planning initiatives and best professional judgment). Site personnel also provided estimates of how support costs would change under the minimal action scenario, largely based on best professional judgment. Headquarters collected the survey instruments and aggregated the data for the 1996 report. No changes to the data were made at Headquarters.

Step 2 - Evaluating the long-term cost and risk implications.

Each site submission described the end states resulting at the end of the Minimal Action period in terms of the physical conditions at the site (e.g., number of buildings still standing and amount and form of waste onsite). Site submissions identified problems that posed a significant liability (a) during the first 100 years following the Minimal Action period and (b) over the longer term (that is, 1,000 years following the Minimal Action period). The submissions by each site also identified the types of hazards associated with these liabilities, the types of receptors (that is, public, worker, or ecological) that might be exposed to these hazards, and the types of exposure scenarios that might result in risks.

C.3.3 Risk

One of the responsibilities of the Environmental Management program is to safely manage the risks and hazards associated with cleaning up radioactive waste and materials left from more than 50 years of research, development, testing, production of nuclear weapons, and other defense and nondefense activities. This responsibility makes it important to consider risks and hazards when developing and evaluating programmatic alternatives. Because the Baseline Report is not a planning or decisionmaking document, a vigorous assessment of all the risk consequences associated with each alternative scenario was not performed. However, since it is important to demonstrate that risk to human health and the environment can be affected when changing program cleanup strategies, specific project case studies were provided by the sites as input to the alternatives analyses. These case studies illustrate the importance of a comprehensive evaluation of risk before implementing any changes in Environmental Management program strategies.

The primary objective of evaluating risk in the Baseline Report is to identify areas where land use designations or rescheduling of projects may have the potential to significantly affect human health and safety or drastically impact environmental conditions. The Department used a field-driven approach for the case study examples to ensure that the data and methodology used to develop risk estimates are consistent with those used in the annual budget process (i.e., Risk Data Sheets) and familiar to site-specific stakeholders.

Personnel at each of the five highest-cost sites were requested to use the methodologies and approaches currently employed in the field to estimate the differences in risk on selected projects between the Base Case and alternative scenarios evaluated for the 1996 report. A new risk evaluation methodology was not developed. Site personnel were also requested to be consistent with the risk information they are providing for the 1998 budget formulation process, where such information is appropriate. Headquarters staff developed the overall framework and guidelines for the analysis, but personnel at the sites developed all assumptions and methods used to evaluate risks associated with the Base Case and alternative scenarios.

Site personnel were specifically requested to assess risk before, during, and after an activity was complete. The before evaluation is defined as the risks or hazards posed by the conditions at the site prior to initiating activities. The during evaluation is defined as the risks or hazards posed by the conditions at the site while the actual activity (i.e., remediation) is occurring. These risks and hazards are typically those risks to workers involved in the activity. The after evaluation is defined as the risks or hazards posed by the conditions that remain at the site after the activity has been completed and no further work is planned.

The case study examples provided by the sites include an evaluation of potential impacts to onsite personnel, workers, the public, and the environment. Site personnel were encouraged to focus on a few key projects or activities where risk information is critical to the decisionmaking process.

C.4 ESTIMATING PROGRAM IMPROVEMENTS

The Department evaluated potential impacts of two types of program improvements on the estimated total life-cycle cost of the Environmental Management program: technology development and pollution prevention. Each of these potential improvements is discussed in a separate section below.

C.4.1 Technology Development

The Base Case cost and schedule estimates are based on the use of existing technologies (e.g., no cost savings from the use of emerging technologies has been assumed). The Department used a three-step process to estimate potential cost savings from the successful application of 37 emerging technology systems and subsystems: (1) Develop an implementation scenario for each alternative technology; (2) Calculate raw cost savings for substituting an alternative technology for a Base Case technology on a unit cost basis; and (3) Develop "success coefficients" to adjust the raw cost savings estimates to reflect uncertainties in how widely applicable the alternative technologies may be and real-world constraints in substituting technologies, such as regulatory acceptance. Appendix F presents a detailed description of the methods and results of the technology development analysis.

C.4.2 Pollution Prevention

The Environmental Management program has initiated an aggressive pollution prevention/waste minimization program to reduce costs and waste generation. For the 1996 report, the Department evaluated potential life-cycle savings from 24 past pollution prevention projects, 26 ongoing field projects, 13 more recent pilot demonstrations, and 40 new projects approved for funding in FY 1996. Actual savings achieved from past projects were extrapolated for a period of 10 years (the useful life of most pollution prevention efforts) to obtain a total program cost estimate. Appendix G presents a detailed description of the methods and results of the pollution prevention analysis.

C.4.3 Productivity

Productivity initiatives in the Environmental Management program were initiated in 1993. Because these initiatives are recent, there are little historic data regarding Environmental Management program productivity. In preparing cost estimates for the 1996 report, site personnel were requested to estimate the productivity savings they expect to achieve in comparison to the 1995 Baseline Environmental Management Report. These productivity savings are incorporated into the mid-range Base Case estimate of $227 billion. The Department also estimated the magnitude of potential cost reductions if additional productivity can be achieved in the outyears. For this estimate, the Department assumed a one percent annual productivity improvement from FY 2001 through FY 2070 (the historical annual productivity gains for public sector agencies). The Department also evaluated the total cost estimate if the field-based productivity estimates were ignored by adding the field site's estimated productivity savings to the mid-range Base Case estimate.

C.5 DEVELOPING DOCUMENTATION

The Department prepared the 1996 report to summarize the background for this effort, methods used to develop life-cycle estimates for the Base Case and alternative scenarios, and results of the analyses. The report was prepared by Headquarters staff and reviewed throughout Headquarters.

The Department also prepared individual reports for each site (see Volumes II and III). These include background information about the site, description of the problems being addressed by the Environmental Management program, and descriptions of the types of remedies assumed to be used for each problem. Results of the Base Case analysis are reported by Environmental Management program element and activity level, and for major projects. Headquarters activities are reported in a separate site summary. Site summaries were reviewed throughout Headquarters and the field.

C.6 STAKEHOLDER INVOLVEMENT

The 1995 National Defense Authorization Act directed the Secretary of Energy to consult with appropriate stakeholders in developing the 1996 Baseline Environmental Management Report. The Department's efforts are summarized in Table C-21 and described below.

Table C-21. Stakeholder Participation Activities Related to the 1996 Baseline Environmental Management Report

The Department developed and issued in May 1995 a comprehensive public participation plan to guide stakeholder involvement efforts for the 1996 report. Opportunities for stakeholder involvement throughout the planning and development stages of the 1996 report were provided by many sites and are detailed in Volumes II and III. Public participation efforts had three goals:

• Obtain feedback on the 1995 Baseline Environmental Management Report, site-specific assumptions for the 1996 Baseline Environmental Management Report, and the proposed lists of activities and projects for the 1996 Baseline Environmental Management Report.
• Engage stakeholders in evaluating alternative scenarios for the 1996 Baseline Environmental Management Report.
• Seek stakeholder input on the analytical process used to develop the 1996 Baseline Environmental Management Report.

Headquarters staff were responsible for stakeholder involvement at a national level, presenting information and taking comments at a number of national fora that addressed program-wide issues. The goal of the July 1995 meeting, for example, was to integrate a broad set of stakeholder perspectives early in the 1996 Baseline Environmental Management Report development process. The agenda included discussion of the results of the 1995 Baseline Environmental Management Report, new requirements for the 1996 Baseline Environmental Management Report, and the proposed technical approach and methodology. Both site leads and Headquarters staff were assigned to ensure that comments received at these fora formed the basis for action items to incorporate changes in assumptions and other aspects of the methodology into the 1996 report.

Personnel at each site were responsible for site-level stakeholder involvement. The general strategy was for sites to use existing fora to inform the public and solicit input on both national and site-specific levels. Specific activities varied among sites but included the following:

• Distributing brochures, fact sheets, and newsletters at related forums.
• Publishing notices of availability of the 1995 Baseline Environmental Management Report.
• Placing the 1995 Baseline Environmental Management Report in Department of Energy reading rooms.
• Mailing information to local stakeholders.
• Issuing articles and press releases.
• Holding stakeholder meetings and workshops.
• Making presentations to advisory boards.
• Taking and responding to public comments.

Both Headquarters and site personnel completed Public Comment Records that tracked activities, comments, and the status of action items. This record was available to all Headquarters staff involved in production of the 1996 Baseline Environmental Management Report and to designated coordinators at the sites. It also will be available to stakeholders upon request.

C.7 BASE CASE UNCERTAINTY ANALYSIS

The objective of the uncertainty analysis is to establish a reasonable range around the Base Case life-cycle cost estimate. The analysis is based on information provided by the sites on the level of confidence in their project life-cycle cost estimates. In general, the data were provided at the project level for over 1,300 estimates. Site personnel rated the estimates in three categories: high confidence, medium confidence, and low confidence. An example of the question used to rate the level of confidence in environmental restoration projects is shown in Table C-22.

Table C-22. Sample Data Collection Question for Level of Confidence Analysis

Using the confidence ratings, a low, most likely, and high estimate were established for each project. For example, a $10 million project estimate with a medium confidence rating would yield a $5 million low cost estimate, a $10 million most likely estimate, and a $15 million high estimate. All projects that did not have an assigned confidence rating (approximately 6 percent of the project estimates) assumed a value of medium confidence. Using the three estimates for each project (low, most likely, and high), a mean and standard deviation were calculated to establish a normal distribution. A Monte Carlo simulation was conducted across all of the estimates to generate a range of possible total life-cycle cost estimates. The simulation was run for 1,000 trials. To account for outliers, the range produced by the simulation was adjusted to three standard deviations around the mean estimate.

The use of Monte Carlo simulation has a number of important limitations. First, the simulation assumes independence among all of the projects. Certainly, many projects are related and the availability of funds for one project could greatly influence other projects. Second, the use of a normal distribution may not reflect the true distribution of uncertainty in this class of projects. Two other distributions (triangular and log-normal) may be more representative, but the normal distribution was selected. Finally, the level of confidence ratings were collected at the project level and did not take into account the effects of time. Consequently, the level of confidence is the same whether it is the first year or the last year of the project. Since the uncertainty surrounding the estimate is likely to increase over time, the simulation may have underestimated the uncertainty range.

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