3.0 What is the Base Case?

This chapter presents the assumptions that define the Base Case cost estimate for the 1996 Baseline Report.

The Environmental Management Base Case is a long-range projection of activities, schedules, and associated costs that describes the current Environmental Management program from its present state to completion (see "Why Life-Cycle Estimates") based upon compliance with current laws, regulations, and agreements. The Base Case looks to the future based on the knowledge, information, and assumptions that are available today. Because these inputs are rapidly changing, the 1996 Base Case is essentially a snapshot in time of a dynamic and complex program. In addition, this analysis helps identify missing information necessary for effective planning. The Base Case is not a budget estimate or a program funding request, nor is it intended to provide details on specific projects.

Section 3.1 describes the Environmental Management Base Case and discusses the challenges inherent in developing it. Sections 3.2 and 3.3 provide an overview of the Base Case development methodology and key Base Case assumptions. Section 3.4 discusses support costs. (For further methodology details, see Appendix C, which provides a detailed explanation of the Base Case development process. For site-specific assumptions, see the site narratives in the 1996 Baseline Report, Volumes II and III .)

WHY LIFE-CYCLE ESTIMATES? The purpose of life-cycle cost analyses, put simply, is to understand the full "costs of doing business." This includes an estimate of the total direct, indirect, recurring, nonrecurring, and related costs incurred -- or estimated to be incurred -- for a project. The life-cycle cost estimate encompasses all costs of a project, including those related to characterization, design, remediation, operation, maintenance, support, deactivation and disposition over the anticipated life span of that project. Traditionally, cost estimates have often failed to include all related costs necessary for the full life cycle of that project, particularly the "externalities" such as waste disposal, decommissioning and decontamination costs. Moreover, life-cycle estimates help identify activities that have the most significant financial impact on a project during its life span and provide information for effective strategic planning, budgeting, execution, and control of project activities. While near-term planning remains critical for budgeting and tasking purposes, it is incapable of identifying the long-term implications of issues and the strategies posed to resolve them. Life-cycle planning is also critical to ensure that issues affecting sites throughout the complex are addressed in a programmatically efficient way.

The information in the Base Case falls into four categories: (1) descriptions of Environmental Management activities; (2) estimates of their annual costs; (3) estimates of the annual waste volumes generated by each activity and (4) initial schedule estimates for each activity, including starting dates and duration. "Activities" are specific sets of actions taken to manage special nuclear materials or contaminated facilities, remediate contaminated areas, manage waste, maintain federal lands and facilities, and manage the programs individually and collectively in an integrated manner.

3.1 LIMITATIONS OF A LIFE-CYCLE ESTIMATE

Developing a life-cycle estimate for the Environmental Management program involves a number of challenges related to the length, scope, and complexity of the cleanup effort and the uncertain and changeable nature of the program. The purpose of outlining the challenges is to explain the element of uncertainty in the Base Case estimates and the development of Base Case assumptions (addressed later in this chapter).

Projecting future activities and costs is always fraught with uncertainty. This uncertainty is compounded when projecting the path of an unprecedented program such as stabilizing and remediating the facilities and residues of the nuclear weapons complex, which is expected to last decades and will be affected by unpredictable factors, such as the development of new technologies and laws, and is extremely controversial. Nonetheless, these are also some of the reasons why good program management and good public policy require that such an estimate be compiled. The following is a list of specific limitations of the life-cycle Base Case for the Environmental Management program:

• The program has a large unknown scope for which the nature and extent of existing waste have not been identified and an approach for decontamination or remediation has not been defined. The largest and most significant of the program's 10,500 release sites are characterized and preliminary information is available for a large portion of the balance, but incomplete characterization still results in a significant information gap.
• The program faces challenges resulting from the production of nuclear materials that are inherent only to the Department of Energy. The contaminants tied to the nuclear weapons complex are largely unknown to commercial industry and differ from site to site. The program must, therefore, develop new approaches and technologies to address unique environmental cleanup problems.
• The program is responsible for environmental management problems for which there are no current effective remedies now or on the horizon (defined as "infeasible"). Some are infeasible for technological reasons (no available technology); others are infeasible because addressing them will result in unacceptable levels of ecological damage. The Base Case does not include costs for undertaking infeasible projects. See Section 3.3.3 for a list of excluded remediation challenges. In addition, the Base Case does not include liabilities due to potential natural resources damage claims. Insufficient information currently exists to provide a meaningful estimate of these potential liabilities.
• The estimate must project how long short-term interim measures will be used to address problems for which no long-term solutions are available. For example, to ensure safe storage of transuranic waste that is currently packaged in corroding or leaking drums, the program is building new storage facilities and placing older drums into larger drums to provide secondary containment until a geologic repository is available.

In addition to technical issues that result from the program's unprecedented nature, the Base Case estimates must also address uncertainties that stem from legal and institutional issues. Department of Energy policy requires management of its facilities in compliance with applicable federal, state, and local regulations. This requirement, combined with the fact that a large portion of the environmental management activities are legally driven by over 100 compliance agreements, creates a substantial inventory of legal obligations. The major federal regulations driving the program are listed in Chapter 2. Congress has targeted many of these laws, including the Comprehensive Environmental Response, Compensation, and Liability Act, the Clean Water Act, and the Clean Air Act for reauthorization. Changes to these laws will likely affect the Environmental Management program, although the timing, substance, and extent of the changes are currently unclear.

Site-specific cleanup and compliance agreements, developed with the U.S. Environmental Protection Agency and states that host Department of Energy facilities, are a primary means for the Department to implement the provisions of federal, state, and local regulations. However, because regulators make final decisions about the choice of remedial action and the satisfactory completion of each action, the process adds complexity and uncertainty to the Department's planning processes. In some cases, final agreements are not yet concluded. In other cases, agreements are signed, but subsequent information and events require that these agreements be renegotiated. Two major agreements that have already been renegotiated include the Hanford Tri-Party Agreement and the Rocky Flats Compliance Agreement.

These issues pose significant uncertainties and challenges to the Base Case development process. The assumptions described below address many of these issues with "best estimate" scenarios based on the information and knowledge that is currently available.

3.2 BASE CASE METHODOLOGY

The Department used a five-step process to develop the cost and schedule estimates for the 1996 Report (see "Steps in the General Methodology" box). Appendix C presents a detailed description of these steps. In developing the Base Case estimate, every effort was made to ensure that personnel at individual sites were fully involved with the data collection and analysis. The overall scope of the Base Case and the national assumptions underlying the estimates were consistent across the program, but each site developed its own, fully integrated, cost and schedule estimates, using their most current data. Once these estimates were complete, the Department conducted a complex-wide integration process to ensure that the interdependencies across sites (for example, waste transfers) were fully understood. (See "Environmental Management Cost Reporting" box for an explanation of how the estimates were structured based on environmental management functional elements.) Volumes II and III of this report present the final estimates for each site.

The Department maintained an active stakeholder involvement process throughout the development of this report. Their objective was to ensure public input to the overall scope and framework for the 1996 estimate and the site-specific assumptions and estimating methods. The Department also sought stakeholder input to ensure that Base Case assumptions were consistent with other Departmental initiatives (for example, future land-use planning). Appendix C outlines the stakeholder involvement process.

STEPS IN THE GENERAL METHODOLOGY The Department implemented the following steps to develop the Base Case. Stakeholders were involved in all steps, providing continuous input and ensuring that the process reflected public values and concerns. Define the Study: Establish the scope, framework, and general assumptions for the estimates. Seek input from stakeholders. Gather and Assemble Data: Collect, verify, and document cost, waste volume, and schedule data Perform Site- and Complex-Wide Integration: Ensure that costs remain within assumed funding limits and all waste transfers are accounted for. Estimate Program Improvements: Evaluate the impacts of technology development, pollution prevention, and productivity improvements. Develop Documentation: Prepare the 1996 report.

The Base Case development process described above is distinct from the budget process. The Base Case methodology was implemented to develop a life-cycle cost estimate for the program based on compliance with existing legal requirements and other current assumptions. Budget estimates are also compliance-based but they are near-term estimates that reflect federal resource constraints. In addition, budget estimates are more focused on the next fiscal year, for which they are more accurate and up-to-date then the Base Case. The Baseline Report is not intended to focus on the near term, but rather to compel project managers to think about the broader implications of actions.

SITE-BASED COST ESTIMATES: "BOTTOM UP" APPROACH The 1996 Base Case cost estimates were developed through the use of a "bottom up" estimating approach. Detailed cost estimates developed for specific projects were aggregated into sequentially larger groupings. This approach, in which project and site managers take responsibility for estimating costs at the site level, offers several advantages: increased estimate credibility (due to involvement of staff that best understands the work); traceability of summary estimates to detailed data; availability of detailed estimates for Headquarters to analyze issues at a national level; and development of analytical tools that can be used for improved site and program management. This method is in contrast to a "top down" method that uses field data in a centralized cost estimation model. Because of a lack of adequately developed life-cycle cost estimates from the field, this "top down" method was used for roughly half of the cost data in the 1995 Baseline Report.

ENVIRONMENTAL MANAGEMENT COST REPORTING: DISTINCT FUNCTIONAL AREAS ARE REFLECTED IN DIFFERENT COST REPORTING STRUCTURES The Environmental Management functional elements (also referred to as "programs") conduct "activities;" however, because their functions are inherently different, each has had its own structure for collecting cost estimates and reporting baseline data. The waste management activities are structured by waste type and waste management function (storage, treatment, and disposal). The environmental restoration activities are reported at the project level and are divided by activity phase (assessment, remedial action/decommissioning, surveillance and monitoring, program management, landlord, site treatment, storage and disposal.) The basic building block for reporting environmental restoration baseline data is the project. Nuclear material and facility stabilization is based on "Scheduling/Transfer Units." These are the basis for grouping facilities and scheduling transfer of projects from deactivation to decommissioning. Each Scheduling/Transfer Unit represents a grouping of facilities that is similar in historical use and cleanup timing and delineated by activity phase, surveillance and maintenance, stabilization, and deactivation. In part as a result of this Baseline analysis, the program structure has become much more integrated.

3.3 ASSUMPTIONS IN THE BASE CASE

A variety of factors significantly affect the estimated scope, schedule, and total cost of the Environmental Management program. This section describes the key assumptions that were used to derive the 1996 Baseline Report estimates. They are divided into four main categories: funding, scheduling/site completion, land use, and functional program element (presented in six categories: environmental restoration, waste management, nuclear material and facility stabilization, science and technology development, landlord, and national program planning and management). In addition, site personnel developed detailed, site-specific assumptions for each factor to estimate their costs. Volumes II and III of the 1996 Baseline Report describe these site-specific assumptions.

Assumptions change over time because of revisions to current federal, state, or local regulations; renegotiated compliance agreements; shifts in national budget priorities; and development or application of new technologies. Assumptions also provide a foundation for estimates that reflect, at a given point in time, the strategy intended for use at a site. The 1996 Baseline Report endeavors to capture all costs that occur during the life of the cleanup effort (to approximately 2070). Because of the long timeframe involved, there will be many opportunities for changes that will affect the Environmental Management program. Nonetheless, the Base Case is built on a set of stated assumptions that bound the estimates. If major changes to these assumptions occur, the Base Case estimates will likely be affected. Future Baseline Reports will reflect those changes. The type and extent of the change will determine the degree of the impact. For purpose of this report, all assumptions are based on program plans and capabilities as of October 1995; some of which have changed because of renegotiated agreements, new information, etc. Changes in these plans or capabilities since that time are not reflected in this report.

3.3.1 Base Case Funding Assumptions

As specified by Congress, site personnel projected the cost for meeting the requirements of applicable provisions of law, permits, regulations, Department of Energy orders, and agreements. This approach involves estimating the cost of meeting the milestones in existing compliance agreements in effect throughout the complex or reasonably anticipated requirements up to FY 2000. For activities that will be required but are not yet specified by milestones in existing compliance agreements, other assumptions were needed to complete the analysis. The annual site costs beyond 2000 were "capped" at the site's FY 2000 estimate of compliance funding, unless cost increases were dictated by existing compliance agreements. See the box below for an example of a site that exceeded the FY 2000 funding cap. This provided for an analysis that accommodated full funding for compliance commitments while ensuring that the program's funding scenario was realistic in light of other national priorities.

EXAMPLE OF AN EXCEPTION TO THE FY 2000 FUNDING CAP The Base Case cost estimate for the Idaho National Engineering Laboratory exceeded the funding cap beyond FY 2000 because of the need to include activities required under a settlement agreement between the Department of Energy and the State of Idaho. For example, the agreement requires the Department of Energy to remove all spent nuclear fuel from the State by 2035 (15 years earlier than previous estimates), and to begin transuranic waste shipments to the Waste Isolation Pilot Plant by April 30, 1999.

The compliance case represented by the Base Case does not incorporate recently established budget targets. The Department of Energy, and hence the Environmental Management program, operates under the same funding pressures as other Departments and federal agencies. It is not possible to predict the level of funding that will be available to support the program over the next several decades. Budget reductions may force difficult choices about cleanup priorities. These choices will require a national discussion of risks, costs, and trade-offs and a management infrastructure that supports analysis of various policy options. The Environmental Management Base Case and the analytical infrastructure established to support its development are positive steps in this direction. (The alternative case analyses in Chapter 6 provide examples of decision analyses that compare program options.)

3.3.2 Schedule/Site Completion Assumptions

There are three site completion categories: (1) sites that are complete (these are the 26 sites listed on the previous page) and have no ongoing surveillance and monitoring activities; (2) sites that are complete but have ongoing surveillance and monitoring activities; and (3) sites that are complete but have ongoing operations outside of their environmental management mission that generate waste (for example, national laboratories). For the remainder of this report, a site is considered "complete" when the following criteria have been met: the site has been remediated to the extent specified in land-use plans; all facilities have been properly stabilized and dispositioned; and all legacy waste has been safely disposed. Where it is assumed that restricted areas (for example, waste disposal sites or nuclear materials storage) will remain, annual surveillance and monitoring costs are assumed to be incurred after "completion."

3.3.3 Environmental Activities Generally Excluded from the Base Case

The 1996 Base Case covers the majority of the activities that must be carried out to fully clean up and manage all newly generated and legacy waste associated with the nuclear weapons complex. However, some activities are excluded from the 1996 Base Case. The exclusions fall into several categories. First, cost estimates for remediation that is either not technically possible or not planned are excluded from the Base Case. These exclusions are typically remediation problems involving contaminants that will naturally attenuate; that currently have no feasible remediation approach; or that, if addressed, will result in collateral ecological damage. The excluded activities in this category are further described in Table 3.1.

Second, cost estimates for sites and/or facilities with ongoing missions (e.g., Defense Programs, Nuclear Energy, Energy Research) are excluded from the Base Case. For purposes of this report, facilities that are not declared "surplus" in the Surplus Facilities Inventory Assessment are assumed to remain operational in support of ongoing mission activities. The costs for cleanup of these facilities are assumed to be the responsibility of the operating programs. A similar responsibility is assumed for management of the chemical and radioactive substances that they generate. At facilities with ongoing missions, (e.g., Argonne National Laboratory, Los Alamos National Laboratory, Oak Ridge Y-12 Plant, Pantex Plant, and Savannah River Site) two types of costs are excluded: (1) stabilization, deactivation, and decommissioning of facilities involved in ongoing mission activities; and, (2) treatment, storage, and disposal of chemical and radioactive substances that result from ongoing mission activities. At two sites (Paducah Gaseous Diffusion Plant, Kentucky, and the Portsmouth Gaseous Diffusion Plant, Ohio), facility stabilization and deactivation costs are excluded from the Base Case. The specific allocation of responsibility for these costs is subject to an agreement between the United States Enrichment Corporation and the Department of Energy, which assigns these responsibilities to the United States Enrichment Corporation.

Third, cost estimates for annual long-term, post-closure surveillance and monitoring for the Environmental Management program are also excluded from the Base Case because of the indefinite and ongoing nature of the costs. For purposes of this report, these long-term activities are reported separately from the Base Case as annual costs after the Base Case period (beyond 2070). These activities include the long-term, post-closure surveillance and monitoring of onsite disposal facilities, continued environmental monitoring, and the safeguard and security associated with special nuclear material. There are a few instances where cost estimates for post-closure site cleanup related to waste management activities are excluded from the Base Case (for example, the West Valley Demonstration Project, New York).

Fourth, the Base Case does not include costs incurred during the first six years of the Environmental Management program (1989-1995), approximately $28.5 billion ($31.8 billion in constant 1996 dollars).

Fifth, the Base Case does not include cost estimates for potential liabilities due to natural resources damages claims. There is the potential that claims for natural resources damages could be filed against the Department of Energy after selection of the remedial action at some of the Department's sites. If any such claims result in payment of a damage claim, this liability would be additive to the costs estimated in the report.

Lastly, the cost (or revenue) for disposition of stockpiled special nuclear materials (e.g., plutonium) or other materials in inventory (e.g., depleted uranium or lithium) (See "Taking Stock: A Look at the Opportunities and Challenges Posed by Inventory from the Cold War Era," January 1996 ) are excluded from the Base Case. Although most costs are generally included in the Base Case for sites where the Environmental Management program serves as "landlord," such as the Rocky Flats and Fernald sites, the responsibility for and cost of disposition of these materials will be assumed by another Office of the Department of Energy or by another office that has not yet been determined.

As a result of these exclusions, the Baseline Report is an incomplete estimate of the "Cold War mortgage" as the title of the 1995 version of the report suggested. The Cold War mortgage may be defined as the total life-cycle cost of cleaning up and safely disposing of all waste, contamination, buildings, and other materials associated with the production and testing of nuclear weapons. The cost estimate in the 1996 Baseline Report is incomplete in several important respects as described above. In terms of fundamental methodological assumptions, the Baseline reports are similar to the previous Department of Energy estimate of total environmental liabilities, the 1988 report entitled "Environmental, Safety, and Health Needs of the U.S. Department of Energy." Both the Baseline reports and the 1988 analysis used the institutional and mission assumptions that existed when the analyses were performed. In 1988, the analyses assumed that most of the facilities would continue operation for nuclear weapons purposes, and that the activities for which costs were estimated were those necessary to bring facilities into compliance with environmental requirements to allow continued operation. For example, no decommissioning costs were included for most facilities. By contrast, the 1995 and 1996 Baseline reports include these costs for a much greater number of facilities and types of activities. The Baseline reports, however, continue to exclude the deactivation and decommissioning costs for facilities that are expected to continue to operate for ongoing Defense Programs, Nuclear Energy, and Energy Research Missions. The additional costs necessary to conduct these activities may be included in future Baseline analyses or as part of the Department of Energy"s Consolidated Financial Statement.

3.3.4 General Assumptions

All sites must develop a vision for the completion of their environmental mission to develop a cleanup strategy and assumptions. It is essential to have assumptions regarding future land use to formulate such an end-state vision. The future uses and the associated cleanup levels reflected in the following table and represented elsewhere in this report were developed for estimating purposes. These land-use and cleanup assumptions do not necessarily reflect decisions. All sites are involved in discussions with local stakeholders and regulators to reach a consensus on these issues. It is likely that final decisions will differ somewhat from what is depicted in this report. Subsequent versions of the Baseline Report will update those assumptions appropriately.

The Department developed a standard set of land-use definitions to conduct the land- use analysis discussed in Chapter 6. A discussion of the land-use standards appears in Appendix D . Volumes II and III depict the site land-use assumptions using the standard definitions. Table 3.2 provides a summary of the assumptions for the five Environmental Management sites with the highest life-cycle cost estimates.

3.3.5 Environmental Restoration Assumptions

Environmental Restoration costs comprise approximately one-third of the current FY 1996 annual program costs. This part of the program is affected by a large number of often site-specific factors. The environmental restoration Base Case encompasses environmental remediation or containment activities at nearly all 150 sites included in this Baseline Report. These sites involve 10,500 potential release sites that can be aggregated into subprojects or operable units. The Baseline Report groups these units into 295 geographically based activities. These groupings are the basis for tracking the cost estimates reported in Volumes II and III.

Virtually all of the 10,500 potential release sites have been at least partially characterized, approximately 46 percent have been fully characterized and regulatory decisions have been made for substantially fewer sites. For this reason, the environmental restoration cost estimate is largely based on two factors: site-specific assumptions regarding program scope (that is, the amount and type of contamination) and the remediation technologies that will be selected (according to applicable regulatory guidelines). Assumptions are essential for cost estimators to have a basis on which to project life-cycle costs. Volume II and III site narratives detail the site-specific assumptions and provide planning information that has resulted from completed regulatory processes.

REMEDIAL STRATEGIES FOR ENVIRONMENTAL CONTAMINATION

The Environmental Restoration Base Case generally assumes containment technologies instead of removal at two types of sites: large isolated facilities and those likely to be used for industrial purposes. In some instances, wide areas of lightly contaminated soil may be consolidated in a smaller area and sealed with an engineered cap. These containment approaches have several advantages: they are less costly than removal techniques, protect the public and workers from exposure to the contaminants, and give protection while providing access to the land's surface area for appropriate reuse. Hanford Site, Idaho National Engineering Laboratory, Nevada Test Site and the Savannah River Site are the highest-cost sites in this category.

The Base Case assumes that most buried waste remains in place. In some cases, because proper techniques were not used when establishing burial sites, contaminant releases have occurred or are likely to occur in the future. These problem sites will be uncovered, and the contained waste will be segregated and properly treated or disposed. An example of such a project is Pit 9 at the Idaho National Engineering Laboratory, where transuranic waste encountered in the segregation process will be treated, repackaged, and transported to the Waste Isolation Pilot Plant for disposal. Mixed radioactive and hazardous waste will then be treated to remove hazardous components to the extent possible, and remaining low-level contaminated soil will be returned to the pit and properly capped.

Remediating ground-water contamination at Department of Energy sites poses a challenge. In general, eliminating the sources of ground-water contamination at sites, is, or will be, a high priority action. Source elimination generally entails removing or capping contaminated soils or burial sites. For ground-water contamination that can be effectively reduced or eliminated by pump-and-treat technology or other "in place" technologies such as bioremediation, technologies will be applied for a limited time period (generally five years in the case of pump-and-treat). Limited application of these technologies is cost-effective because a large volume of contaminants is removed early in the process; however, the efficiency of these technologies declines significantly over time as the total amount of contamination is reduced.

At sites where ground-water flow is relatively slow, natural reduction (referred to as "attenuation") of contaminants may occur prior to passing under the boundary of federally controlled lands. At sites with faster flowing ground water, it may be necessary to contain or slow the migration of the contaminants with hydraulic control techniques such as barriers and pumping (to redirect flows). Ground-water contamination that cannot be eliminated is monitored. The Base Case estimate assumes that all ground-water contamination will be contained within Department of Energy sites.

The Base Case generally assumes that removing sediments will remediate contamination in small ponds and streams. Releases of contaminants to larger surface water bodies, such as the Savannah River in South Carolina and the Clinch River/Watts Bar Reservoir in Tennessee, pose extreme problems for which there are no currently feasible solutions. The course of rivers would need to be diverted at great expense to remediate contaminants present in sediments. The threat posed by present contamination, largely trapped in sediment, does not justify the ecological damage that would be caused by feasible remedies. Lacking a solution, the Department continues to monitor the levels of contaminants in these surface waters and their effect on the living things that depend on them for survival.

DECOMMISSIONING STRATEGIES

The Base Case estimate assumes that large highly contaminated buildings are not fully decontaminated but are contained by entombment (that is, filling voids and engineering a structure to envelop it) or by collapsing and capping with soil or other materials. Entombment approaches provide opportunities for cost-effective use of contaminated waste from other projects as void material. Both containment approaches eliminate the need for handling and transporting large amounts of contaminated rubble.

The Base Case assumes that smaller buildings will be fully decontaminated and demolished or reused for storage or treatment of waste, and that surplus laboratory facilities will be decontaminated and demolished by the Environmental Management program. The Department's laboratory missions, however, are assumed to continue indefinitely. The decontamination costs associated with contaminated facilities slated for reuse in research missions are, therefore, outside of the scope of this report.

3.3.6 Waste Management Assumptions

The Base Case estimates for waste management include costs for: (1) existing inventories from past generation, (2) waste streams from environmental restoration activities, (3) waste from facility stabilization and maintenance activities, (4) additional waste generated by waste management activities, and (5) newly generated waste from Department of Energy programs other than environmental management (e.g., Defense Programs, Nuclear Energy, and Energy Research). Activities for waste management are defined as treatment, storage (and handling), and disposal of waste. Volumes II and III discuss significant projects within these activities.

Table 3.3 highlights the Base Case treatment, storage, and disposal assumptions detailed by waste type. Table 3.4 details these assumptions for spent nuclear fuel. The remainder of this section includes scheduling, transportation, and decontamination and decommissioning assumptions.

SCHEDULE ASSUMPTIONS

• A national geologic repository for high-level waste, special case waste, and spent nuclear fuel will be available to accept Department of Energy waste beginning in 2016. (It will not accept spent nuclear fuel until much later than 2016.) Disposal fees for the repository are included in the costs of the shipping site.
• The current analysis assumes that future generation of low-level waste, low-level mixed waste, and transuranic waste will match mission assumptions on a site-by-site basis.
• The Waste Isolation Pilot Plant will be available to accept transuranic and transuranic mixed waste in 1998.

TRANSPORTATION ASSUMPTIONS

• No major regulatory changes will occur to further restrict the offsite shipments of hazardous and radioactive materials.
• New packaging designs will be required. Department of Transportation / Nuclear Regulatory Commission certification will require three years following preliminary design.
• Site roadways and railways will be upgraded or replaced as necessary to accommodate higher shipping frequencies and larger/heavier items.
• These and all other transportation costs will be included in the facility life-cycle operating and disposal/remediation cost estimates submitted by the various programs.

DECONTAMINATION AND DECOMMISSIONING/SAFE SHUT DOWN ASSUMPTIONS

• Cost estimates associated with decontamination and decommissioning and safe shutdown of existing treatment, storage, and disposal facilities are included in waste management estimates in most cases. In some cases, sites have included these costs in their environmental restoration estimates.

3.3.7 Nuclear Material and Facility Stabilization Assumptions

The total life-cycle cost and schedule estimate for the Nuclear Material and Facility Stabilization program is based upon a defined "universe" of materials and facilities. This "universe" includes a list of facilities that the Department has declared, or will declare, surplus. The Base Case development process involved validating a list of facilities scheduled to undergo stabilization and deactivation in the 1995 Baseline Report. This list was based on the Surplus Facility Inventory and Assessment conducted by the Department in FY 1994. This assessment identified those facilities that are currently surplus or will be surplus within the next three years (prior to FY 1999).

Other facilities are still operating and currently have no scheduled date for shutdown or transfer. These facilities are considered outside the Environmental Management program's planning horizon and are not reflected in the 1996 Base Case. Typically, these facilities are associated with ongoing nuclear weapons activities.

Activities for the Nuclear Material and Facility Stabilization program include material stabilization, facility deactivation, and surveillance and maintenance. Stabilization entails placing nuclear materials into a condition suitable for long-term storage. In some instances, Base Case stabilization costs include storage costs for nuclear materials. For example, at the Rocky Flats Environmental Technology Site, storage costs constitute a significant portion of the stabilization estimate. Deactivation, which usually occurs after completion of stabilization, focuses on removing material, shutting down facility systems, and removing or de-energizing equipment to reduce potential facility hazards.

Surveillance and maintenance activities encompass all actions required to ensure adequate material and facility requirements for safety and security. Surveillance and maintenance activities are assumed to continue during the stabilization and deactivation phases (as well as before and between these phases). The Base Case captures surveillance and maintenance costs that are incurred before and after stabilization and after deactivation activities. Facilities may go directly to stabilization or deactivation, or from stabilization to deactivation, depending on risks associated with the facilities, timing of projects or other priorities such as outyear funding availability. Pre-stabilization surveillance and maintenance costs represent a "holding" cost prior to accomplishing facility stabilization. Post-stabilization surveillance and maintenance costs represent a "holding" cost prior to accomplishing facility deactivation. Post-deactivation surveillance and maintenance costs are associated with maintaining the facility in a safe and cost-effective manner once all material and facility hazards have been removed. The Nuclear Material and Facility Stabilization program incurs post-deactivation surveillance and maintenance costs for two years prior to transfer to the Environmental Restoration program for ultimate disposition.

The Nuclear Material and Facility Stabilization program, established in 1992, is the newest of the Environmental Management programs. As a result, the Department developed the program's cost and schedule estimates for the 1995 Baseline Report using parametric cost-estimating techniques at Headquarters rather than through field-developed estimates. This year's Base Case estimates were developed by field personnel at four large sites (Hanford Site, Idaho National Engineering Laboratory, Rocky Flats Environmental Technology Site and Savannah River Site). Estimates for nuclear materials and facility stabilization costs at other sites (mainly at surplus facilities that have been identified, but not yet transferred into the Environmental Management program), were generated by Headquarters personnel using parametric cost-estimating techniques and site-specific data.

In instances where parametric cost estimating techniques were used, the following hypothetical scheduling scenario was assumed (in this sequence): seven years of surveillance and maintenance after transfer of a facility to the Environmental Management program, three years of stabilization activities, three years of post-stabilization surveillance and maintenance, two years of deactivation activities, and two years of post-deactivation surveillance and maintenance prior to transfer to the Environmental Restoration program for final disposition.

If field-generated estimates were unavailable, facilities already in the Environmental Management program were also scheduled according to this hypothetical scenario. Those facilities not yet in the program were assigned arbitrary transfer dates, typically selected to fit funding constraints assumed in the Base Case. Insufficient data were available to guide scheduling of these facilities according to risk or other priorities. Therefore, although estimates were generated uniformly using the "7-3-3-2-2" scheduling scenario, the scenario does not necessarily represent the way these individual facilities will ultimately be addressed. Rather, it is representative of complex-wide scheduling assumptions.

3.3.8 Science and Technology Development Assumptions

The Science and Technology Development program was established to conduct an aggressive national program of basic and applied research, development, demonstration, testing, and evaluation for innovative environmental cleanup solutions. The program seeks to develop technologies that facilitate compliance with applicable laws, regulations, and agreements; minimize generation of waste; and clean up Environmental Management sites in a manner that is safer, faster, and less expensive than baseline technologies. In many cases, the development of new technologies is critical for providing a method of significantly reducing long-term risks to the environment and improved safety for workers and the public, within realistic financial constraints.

The science and technology development assumptions included in the Base Case are as follows:

• Current Base Case cost estimates for the Environmental Management program are based upon the use of existing technologies. This assumption allows one to calculate future savings resulting from the use of emerging technologies against the baseline.
• Science and technology development funding is currently six percent of the Environmental Management Base Case and is assumed to remain a constant percentage (six percent) annually of the total Environmental Management program through 2030.

The Science and Technology Development program conducts applied and basic research related to environmental cleanup technologies. Applied research is directed toward specific focus areas such as tanks, mixed waste, and plumes containment (See discussion in Appendix F). Basic research is part of a teaming effort with the Department of Energy's Office of Energy Research. Basic research concentrates, at a broader level, on applying essential sciences such as physics and chemistry to environmental problems. Appendix F presents an analysis of projected cost savings from science and technology development activities.

3.3.9 Landlord Assumptions

In developing landlord cost estimates, site personnel first determined a schedule for performing direct mission activities. Then, based on this time profile, they determined the required amount and cost of landlord activities on an annual basis. Specifically, site personnel determined FY 1996 costs for landlord activities, then assessed how these levels might change over time as several factors change: maturity of the program, level of annual direct mission activities performed, cleanup completeness, and other factors relevant to the site. Based on this analysis, the site personnel forecasted landlord costs.

3.3.10 National Program Planning and Management Assumptions

Headquarters personnel used a simple model to estimate the costs for national program planning and management. As part of this process, independent cost estimates were developed for program direction and program management. Program direction costs include salaries, benefits, travel, and training for federal employees. For the purposes of this report, Headquarters assumed that these costs will remain at a constant percentage of total cost over the life-cycle of the program. Hence, as program funding decreases over time, program direction will decrease proportionally. Program management costs fund contractors that support federal employees. Headquarters assumed that program management costs will decrease as a percentage of total cost as the program matures and becomes better defined. These costs have already dropped 55 percent from FY 1994 to FY 1996.

3.4 SUPPORT COSTS

The 1996 Baseline Report focuses on answering several basic questions: what activities will the Environmental Management program perform, how much will these activities cost, and how long will it take for them to be completed? Previous sections of this report focus on the methods and assumptions that were used to estimate the costs for "direct mission" activities. These activities are represented by the six functional areas described in Chapter 2 (including environmental restoration, waste management, nuclear material and facility stabilization, landlord, and national program planning and management).

In addition to direct mission activities, the Environmental Management program, like private firms and other public agencies, also must perform "support" activities. These activities fall into six main categories:

• Management;
• Finance and Administrative Services;
• Environment, Safety, and Health;
• Infrastructure;
• Safeguards and Security; and
• Stakeholder and Regulatory Interactions, and Other.

Support activities are not extraneous; they are vital to maintaining sites and ensuring environmental cleanup progress. For example, it is necessary to conduct environment, safety, and health activities and to provide safeguards and security at all sites, particularly those storing uranium, plutonium, and other nuclear materials.

The benefits of support activities are shared across projects within a functional area. Therefore, the Baseline Report does not identify support costs as a separate category (except for cost estimating purposes). Rather, support costs in this report are spread across the direct mission activities within each appropriate functional area.

ESTIMATION OF SUPPORT COSTS

The level of direct mission activities affects the amount of support activities and costs required at a site. This relationship is similar to the relationship between direct mission activities and landlord costs discussed in Section 3.3.8. The estimation process is also similar. To develop support cost estimates, site personnel first developed a time profile for their direct mission activities. Then, based upon this profile, site personnel estimated the level of support activities that they would need on an annual basis and the associated costs. Specifically, site personnel determined FY 1996 costs for support activities, then assessed how these levels might change over time based on changes to several factors: maturity of the program, level of annual cleanup activity performed, completeness of cleanup, and any other factors relevant to the site.

Uranium mining, United States Atomic Energy Commission, Colorado, 1958. Uranium mining expanded dramatically in the United States after World War II, from 38,000 tons in 1948 to 5.2 million tons in 1958 -- nearly all of it for nuclear weapons production. The United States mined about 60 million tons of ore to produce its uranium.

Excavation of uranium mill tailings from a residential septic system, Grand Junction, Colorado, 1993. Uranium mining produced large volumes of a sandlike byproduct called "mill tailings," containing both toxic heavy metals and radioactive radium and thorium. Uranium-mill tailings account for a small fraction of the radioactivity in the byproducts of weapons production, but they constitute 96 percent of the total volume of radioactive byproducts for which the Environmental Management program is responsible. Because uranium mills typically piled tailings without covers or containment, some material was spread by wind or water. Life-cycle planning is an effective way to understand and predict the importance of such precautions and, ultimately, is an effective method for ensuring long-term cost savings.

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