1996 Baseline Environmental Management Report

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Comparison of Results to the 1995 Baseline Environmental Management Report

The 1996 Base Case estimate is similar to the 1995 Base Case in some respects, and quite different in other respects. The total 1995 Base Case estimate, including productivity estimates, was $237 (constant 1996 dollars). This total appears quite similar to the 1996 Base Case of $227 billion. There are important differences, however, that reflect changes in analytical methods and in the Environmental Management program as a whole.

First, the projected cost savings due to productivity improvements greatly affect the estimates. The 1995 total Base Case estimate was reduced from the sum of estimates provided by field offices ($360 billion in 1996 constant dollars) to reflect a projection of the amount of overall improvement in productivity expected. The 1996 Base Case does not include this type of alteration of cost projections provided by field offices, and, therefore, does not include an explicit productivity estimate. Instead, productivity is assumed to be included in estimates provided by field offices. The 1996 Base Case is essentially an integrated sum of estimates provided by field offices.

To reflect efforts underway to reduce costs, the Environmental Management headquarters office applied substantial improvements in productivity up through the year 2000 to the 1995 Base Case cost estimates provided by field offices. This "top down" change in cost estimates reflected a goal of achieving an approximately 20 percent increase in productivity and efficiency. Beyond the year 2000, the Department assumed a sustained productivity improvement rate of one percent compounded annually. Using these assumptions for projecting costs, the 1995 total life-cycle cost estimate was $237 billion (in constant 1996 dollars). It is worthwhile to note, however, that the site cost estimates reported in Volume II of the 1995 Baseline Report did not include productivity projections, and total cumulatively to $360 billion (in 1996 dollars). If comparable "top down" changes were made to the 1996 Base Case cost estimate provided by the sites in the 1995 Base Case estimate, then an additional one percent compounded annually would be applied to the 1996 Base Case estimate of $227 billion after the year 2000. Imposing this additional productivity change to the cost estimate provided by field offices would result in a 1996 Base Case of approximately $195 billion in constant 1996 dollars.

Another difference between the 1995 and 1996 Base Case estimates is how the range of estimated costs was calculated. In the 1995 report, the range of $200-$350 was developed using different productivity assumptions. Alternatively, the 1996 cost range of $189 billion to $265 billion is based on site confidence in the cost estimates as reported.

Because total estimates submitted by the sites in 1996 ($227 billion) are directly comparable to the total estimates submitted by the sites in 1995 ($360 billion), the 1996 Base Case of $227 billion is compared to the 1995 cost estimate of $360 billion. The 1996 cost estimate is thus approximately one-third lower than the 1995 estimate.

Figure 9. Comparison of 1995 and 1996 Baseline Report Cost Estimates

The Benefits of a New Base Case

The 1996 Base Case analysis is significantly more useful than the 1995 analysis for several reasons, all of which result from the "bottom-up" estimating approach. First, the data are generally more reliable at a more detailed level. By moving the estimating process closer to the knowledge base in the field, the Department has built the report on a better quality data base. As a result, the analyses of state, site, and project costs are considerably more rigorous and accurate than those in the 1995 estimate.

Second, the analysis of cost estimates principally by field personnel (by contrast, approximately half of the 1995 cost estimates were developed by Headquarters personnel), has had a number of collateral benefits that should help improve program management capabilities, thereby helping to reduce costs. As a result of this process of compiling the cost estimates, the Department now has a cadre of experienced life-cycle cost analysts. Field personnel have been encouraged and empowered to define meaningful long-range assump tions and outline long-term strategies for their sites. This capability provides a better basis for integrated site planning and facilitates better communication with regulators and other stake holders, as well as between sites and program areas.

Sites also were encouraged to develop their Base Case estimates with input from integrated project teams, to identify interdependencies between programs, and to work together to resolve conflicting assumptions. The integration effort enhanced the quality and usefulness of the final product.

1995 Versus 1996 Estimate - Reasons for Differences

Two major factors underlie the differences between the 1995 and 1996 estimates. For the 1996 report, the Environmental Management program has better knowledge of the scope of the program and a better understanding of how to achieve this scope cost-effectively. A detailed analysis indicates that more accurate information results in a different 1996 life-cycle cost estimate for four reasons: change in scope of the estimate, change in technical assumptions for addressing environmental problems, change in anticipated productivity improvements, and change in the analytical model used to estimate costs. Table 7 provides definitions and examples for each reason.

Although Table 7 presents four main categories for changes in cost estimates, there is not always a clear delineation between the categories. Some cost differences are caused solely by one factor. For example, a decrease in spent nuclear fuel disposal costs from the 1995 estimate to the 1996 estimate is due to a change in the cost estimating model ­ site models were used in 1996 rather than the national model used in 1995. Other cost differences cannot be classified so simply. For example, success in waste minimization can be described as both a reduction in scope and an improvement in productivity.

The scope of the estimate is smaller (i.e., fewer activities to be estimated) in the 1996 estimate than in 1995. Technical assumptions for addressing environmental problems have changed from 1995 to 1996. In general, the 1996 estimate reflects less costly technical approaches to facility decommissioning and waste management.

The majority of the cost reduction in the 1996 report occurs in five major Environmental Management activities (Table 8):

• Facility decommissioning cost estimates dropped primarily due to a change in technical approach. In the 1996 report, site plans reflect a better understanding of the scope of decontamination activities required prior to facility demolition.
• To treat and store low-level, low-level mixed, and transuranic waste, sites assume the use of less costly commercial waste management facilities rather than more costly government facilities. Sites also plan to reuse existing government facilities instead of building new ones. Other cost reduction factors include better estimates of waste volume and more aggressive waste minimization and recycling efforts.
• Sites plan to accelerate spent nuclear fuel disposal at a national geologic repository. A reduction in cost also stems from the use of better methods to estimate disposal costs.
• Some sites have reduced the required scope of remedial activities based on the results of recent negotiations with regulators. These estimates also reflect more insight to the potential results of future agreements.
• Program management and other support cost estimates are lower because the estimates for direct mission activities are lower.

Although cost estimates generally are lower in 1996 than in 1995, life-cycle estimates for several Environmental Management activities did not change significantly. These include high-level waste management, surveillance and maintenance of facilities, and support/landlord activities for the nuclear material and facility stabilization program. Note that the 1995 estimates have been inflated to constant 1996 dollars for this comparison.

Differences By Site

Almost all of the $133 billion reduction in estimated costs from the 1995 Baseline Report occurs at the five highest-cost sites (Figure 10).

• At the Hanford site, the estimate for waste management support costs dropped from $15 billion in the 1995 report to $7 billion in 1996. This reflects the overall lower estimates for direct mission costs in the 1996 estimate. Also, low-level and low-level mixed waste management cost estimates dropped from $10 billion in the 1995 report to $3 billion in 1996 due to lower expected waste volumes.
• At the Idaho National Engineering Laboratory, a change in schedule accounts for the major difference between the 1995 and 1996 estimates. An agreement signed by the Department of Energy and the State of Idaho requires the Department to remove all spent nuclear fuel from the state by 2035 (15 years earlier than previously planned); to prepare all high-level waste for disposal by 2035 (15 years earlier than previous estimates); and to begin transuranic waste shipments to the Waste Isolation Pilot Plant in 1999.
• At the Oak Ridge Reservation, the majority of the cost difference ($14 billion) is due to changes in the technical approach for waste management and decommissioning. The 1996 report emphasizes commercial rather than government treatment and disposal, a less costly strategy. The decrease in decommissioning estimates reflects a change in decommissioning strategies for the gaseous diffusion plants.
• At the Rocky Flats Environmental Technology Site, facility decommissioning cost estimates dropped from $11 billion in 1995 to $4 billion in 1996 due to a decrease in the amount of decontamination activities anticipated to be performed prior to demolition. Low-level and low-level mixed waste management cost estimates decreased from $5.5 billion to $1.2 billion reflecting a reduction in expected waste volumes and a shift from offsite disposal strategy to a mixture of onsite and offsite disposal.
• At the Savannah River Site, the facility decommissioning cost estimate dropped from $12 billion in 1995 to $7 billion in 1996 primarily due to the assumption of a less costly technical approach to decommissioning reactors and canyons. In addition, support cost estimates for waste management and nuclear material and facility stabilization activities dropped from $20 billion in 1995 to $10 billion in 1996 because the 1996 estimate reflects a smaller program and fewer direct mission costs.

Figure 10. Comparison of the 1995 and 1996 Cost Estimates for the Five Highest-Cost Sites

Alternative Scenarios

A number of significant assumptions underlie the Base Case estimate. Varying these assumptions can often influence the overall life-cycle cost estimate. To help inform national policymaking and local decisionmaking processes, the 1996 Baseline Report provides a more rigorous analysis of alternative program scenarios. By changing certain key assumptions we are able to examine the influence of each factor on the life-cycle cost and schedule of the Environmental Management program. The analyses varied assumptions regarding the following three factors expected to influence program costs:

• Land Use ­ What effect do future land-use decisions have on the overall scope, cost, and schedule of cleanup for Environmental Management sites? What factors limit consideration of land uses?
• Program and Project Scheduling ­ What are the cost consequences of delaying and accelerating programs and projects? What is the relationship between program pace, schedule, funding levels, and total life-cycle cost?
• A "Minimal Action" Scenario ­ What is the minimum funding required for preventing risks to human health and the environment from increasing for 75 years without the constraints of current legal requirements?

The approach for estimating life-cycle costs for the alternative scenarios mirrors the basic methodology employed for the Base Case estimate. Site estimates and assumptions provided the basis for these analyses. The land-use analysis varies from the Base Case in that the analysis assumes different end states suitable for various uses, and measures the cost and waste volume consequences of cleaning up to these alternative end states. The program and project scheduling analysis assumes the same actions and subsequent end states for programs and projects as described in the Base Case, but applies funding and scheduling constraints to better analyze the cost consequences of accelerating or delaying programs and projects. The minimal action scenario uses methods developed by site personnel to re-scope projects and activities to meet a set of minimal action assumptions. Therefore, the minimal action case diverges dramatically from the Base Case. No scenario examines the impact of changing existing regulatory requirements.

The three alternative scenario analyses focus on the five sites in the Environmental Management program estimated to have the highest life-cycle costs - Hanford Site, Washington; Idaho National Engineering Laboratory, Idaho; Oak Ridge Reservation, Tennessee; Rocky Flats Environmental Technology Site, Colorado; and, Savannah River Site, South Carolina. Together, these sites account for approximately 70 percent of the Environmental Management total program cost estimate.

One of the primary difficulties in estimating the total cost of the Environmental Management program is that future land use (e.g., the ultimate disposition of lands currently managed by the Department) generally has not been determined. Until the future land uses are decided there is a considerable amount of uncertainty regarding the degree of cleanup required and the resulting program cost.

The land-use analysis in the 1995 Baseline Report indicated that decisions affecting future land use could affect total program cost by billions of dollars. It was a broad analysis, without site-specific data. The analysis in the 1996 report provides site-specific data and focuses more narrowly on how land-use decisions may affect environmental restoration activities and associated waste management costs. The analysis also quantifies the amount of land achieving various uses under a set of alternative assumptions. The 1996 analysis also considers real-world constraints on the future uses that can be achieved. Such constraints include ongoing program missions, legal commitments, the presence of unique or sensitive ecological systems, and the limits of current technology.

Using the underlying land-use assumptions in the Base Case as the point of reference, this analysis examines the effect of the following five alternative land-use scenarios on the estimated life-cycle costs of the Environmental Management program: Maximum Feasible Green Fields, Modified Green Fields, Recreational, Industrial, and Iron Fence.

These five scenarios were chosen to represent varying land-use outcomes (and differing levels of cleanup). The "Maximum Feasible Green Fields" and "Iron Fence" scenarios were chosen to represent the two endpoints of the land-use continuum reasonably attained at the five highest-cost sites. The "Recreational" scenario represents an inter mediate 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 clean up strategy might be tempered when considering continued Department of Energy missions at these five large sites.

Each of the three scenarios is a combination of three variables that significantly impact environmental restoration activities: (1) level of existing contamination, (2) future use assumption, and (3) site-specific constraints. Future use assumptions (goals) determine the types of activities that are assumed to occur in the future, the possible pathways of exposure, and the type and extent of environmental restoration activities that may be required. Site-specific constraints place limits on the land-use goals such as: technology limitations, unacceptable risks to remediation workers, ongoing Department of Energy activities, legal commitments, and ecological sensitivity. The level of existing contamination and the remedial action required to meet a specific land-use goal further affects environmental restoration activities. In most cases some remedial action will be required, even to meet disposal /storage area standards. In some areas, however, existing contamination is sufficiently low that remedial action may be required under some future use assumptions (e.g. Residential) but not others (e.g. Open Space). The estimated cost is based on performing enough clean up to allow for the intended land use, but no more. As a consequence, the postulated remedy for a plot of contaminated soil might be containment (capping) under the Iron Fence, Industrial, and Recreational scenarios, but removal under the two Green Fields scenarios. For areas with site-specific constraints, the Base Case remedial strategy was generally left unchanged across all scenarios. The only exception was the Maximum Feasible Green Fields scenario, in which all site-specific constraints were lifted except for technology constraints, and certain waste disposal areas at the Hanford Site, Idaho National Engineering Laboratory, and the Savannah River Site. Table 9 summarizes the assumptions and life-cycle cost estimates for each of the land-use scenarios.

Estimated costs for the Environmental Management program at the five highest-cost sites range from $150 billion for the Iron Fence scenario to $284 billion for the Maximum Feasible Green Fields scenario (Figure 11). These estimated costs are respectively 6 percent lower and 77 percent greater than the Base Case estimate of $160 billion for these five sites. When site-specific constraints are considered (i.e., Iron Fence through Modified Green Fields), there is little difference in estimated cost among the alternative scenarios. The estimate for the Modified Green Fields scenario ($166 billion) is only 10 percent greater than the estimate for the Iron Fence scenario and 6 percent greater than the Base Case estimate. The Base Case estimate falls between that of the Industrial scenario ($155 billion) and the Recreational scenario ($162 billion). It is important to remember that these are generalized findings, and that actual land use will likely vary significantly among different sites.

Figure 11. Cost by Land-Use Scenario

The land-use analysis shows that the effect of land-use decisions, after considering site-specific constraints, is relatively narrow. This result is vividly illustrated when one compares the Maximum Feasible Green Fields to the Modified Green Fields scenario. Both scenarios employ the same aggressive clean up standards, but yet yield dramatically different results. The reason is that consideration of the constraints outside of technological limitations yields an additional 141,000 hectares (350,000 acres) of Residential and Agricultural use at an increased cost of approximately $118 billion. This difference in results leads to the conclusion that site-specific considerations are of critical importance in land-use planning.

Many of the site-specific constraints examined in this analysis stem from federal and local policies or priorities. For example, legal commitments and local regulations limit future use options for approximately 295,000 hectares (730,000 acres) (63 percent) of the uncontaminated land at the five highest-cost sites. In addition, the presence of endangered species and ecologically unique habitats may limit future use of approximately 57,000 hectares (140,000 acres) (12 percent) of uncontaminated land and some contaminated land at these sites. It will be necessary to consider these constraints, along with stakeholder and regulator preferences, in order to make ultimate decisions regarding future use. Near-term resolution of these issues is important, because the decisionmaking processes that govern environmental restoration activities will continue in the absence of coherent integrated site planning. Land-use options may become limited after deployment of certain remedial strategies, or remedies designed to meet residential standards may be applied inappropriately, resulting in higher than necessary costs.

The siting of disposal/storage areas and continuing Department missions have implications beyond the land directly around these structures. The implications of these future missions on land-use alternatives underscores the importance of clarifying overall Department goals and developing integrated, complex-wide, multimission facilities plans.

Technological challenges relating to ground water and surface water will continue to limit land-use alternatives in the near term. Information relating to technological limits and costs of aggressive remediation strategies should be integral to all decisionmaking activities regarding land use and remedial strategies.

Many observers have speculated that the pacing of the Environmental Management program has a significant impact on life-cycle cost. In very simple terms, there is an expectation that costs will increase if the program is extended and decrease if cleanup activities are completed more rapidly. Given the scale of Environmental Management projects, their cost, and the long-term commitment required, it is important to fully understand the relationship between cost and schedule. A clear understanding of how these two factors interact provides a basis for effective long-term planning and greater integration of the component activities of the program.

The Department developed three alternative scheduling scenarios for the analysis. (Note: all scenarios were developed independent of compliance agreements and potential fines and penalties.) Two of these scenarios are highlighted.

Funding Reduction ­ The current Base Case projects that annual funding requirements will increase to $7.5 billion in FY 2000. The National Defense Authorization Act, which mandates the Baseline Report, requires the Department to provide a cost estimate associated with complying with existing compliance agreements regardless of budget targets. Because the Base Case cost estimate clearly exceeds expected funding availability, it is prudent to analyze the long-term impacts of reduced funding using a scenario that constrains the overall program spending. This is exactly what is analyzed through the Funding Reduction case, which constrains the Environmental Management program's annual budget to $4.9 billion ($5.5 billion for FY 2000 when converted into constant 1996 dollars). The results of this analysis are shown in Figure 12 and indicate:

• There is a $49 billion increase in life-cycle cost largely due to increased pretreatment storage for high-level waste, increased surveillance and maintenance for plutonium storage buildings and chemical separations facilities, and support costs. Support costs account for roughly half of the life-cycle cost increase.
• Support costs do not decrease proportionately as the Environmental Management budget is reduced. Many support activities such as safeguards and security cannot be reduced below a certain minimum as long as any amount of special nuclear material is present at a facility. Consequently, reduced funding, combined with relatively constant support costs, result in fewer resources available for cleanup activities. In the Funding Reduction scenario, cleanup activities are delayed, thereby stretching out the duration of the Environmental Management program about 20 years.

Figure 12. Annual Comparisons of the Funding Reduction for the Five Highest Cost Sites

Delaying Waste Disposal ­ Base Case costs are based on the availability, begin ning in 2016, of a national geologic repository for high-level waste. This scenario analyzes the impact of a 30-year delay in disposal at this repository on the life-cycle costs of the Environmental Management program. The results of this scenario:

• A 30-year delay increases total life-cycle costs by about one percent ($1 billion).
• The increase in total life-cycle cost above the Base Case is due to longer durations in waste storage and support cost durations.

Figure 13 provides life-cycle cost comparisons of the Base Case and two alternative scheduling scenarios.

Figure 13. Comparison of Alternative Scheduling Scenarios Life-Cycle Cost Estimates for the Five Highest-Cost Sites

Note: The costs incurred by a delay in waste shipments to a repository for this analysis represent only those direct costs to the Environmental Management program. This analysis does not account for any costs incurred by the Department's Civilian Radioactive Waste Management program. The results of this analysis are not to be applied to the commercial nuclear industry or to costs associated with the disposal of commercial nuclear waste.

The current budget deficit and the growing need to reassess national priorities lead to a controversial yet pragmatic question: What is the minimum funding required for maintaining the Environmental Management program without jeopardizing human health or the environment and without the constraints of current environmental regulations and compliance agreements? The interest in this "minimal action" scenario is driven by a number of diverse perspectives on the program. Some observers, especially supporters of the current program, have speculated that the cost of a minimal action scenario is not significantly different from current program expenditures (especially in the short term). This view is based on the fact that a large amount of funding currently is required simply for the program to serve as the landlord at Environmental Management sites and to monitor the storage of highly radioactive waste and special nuclear materials.

Other observers, especially critics of the current regulatory system, believe that current requirements can be relaxed, generating a substantial cost savings without negative human health and environmental consequences. Finally, policy -makers express interest in this minimal action case because it provides a lower boundary for the range of alternatives available to the program. With this information in hand, policymakers and stakeholders can better understand what tasks are truly necessary for short- and long-term risk and cost reduction.

The Minimal Action scenario examines the costs necessary for preventing human health and environmental risks from increasing from current levels to workers and offsite individuals, and minimizing costs during a period comparable to the Base Case period (i.e., 75 years). Costs devoted solely to meeting compliance agreements and regulatory requirements were not included.

Personnel at each site developed a site-specific minimal action scenario. Using the 1996 Base Case data as a foundation, each site developed site-specific assumptions and 75-year cost estimates. From the Base Case, site personnel modified their project and activity schedules and assumed scopes of work based on minimal action assumptions. Table 10 depicts these minimal action assumptions.

After identifying the projects and activities that would fulfill this minimal action case, each site evaluated cost differences through 2070, described the resulting situation in 2070, and analyzed what additional costs and risks might be incurred beyond 2070. The results of this analysis indicate that:

• Costs during the 75-year Minimal Action period would be more than 40 percent less than the Base Case.
• Eliminating most environmental restoration activities reduces estimated environmental restoration costs by 70 percent.
• Minimum onsite treatment and disposal of low-level, low-level mixed, and transuranic waste reduces the cost estimate by 54 percent for those waste types.
• Eliminating offsite shipping and disposal activities at the Hanford Site, Idaho National Engineering Laboratory, and the Savannah River Site reduce high-level waste cost estimates by 43 percent.
• Although estimated costs during the 75-year period decrease by more than 40 percent, estimated costs for these activities after the 75-year period are significantly higher than the Base Case.

The general cost differences under this scenario analysis compared to the 75-year Base Case cost estimate are presented in Figure 14 (total costs) and Figure 15 (cost by functional area).

Figure 14. Base Case Cost Estimates for the Five Highest-Cost Sites

Figure 15. 75 Year Estimates for the Five Highest-Cost Sites

The difference in the estimated costs between the Base Case and the Minimal Action case reflects the costs of buying very different "end states" at the end of the 75-year period. Unlike most situations in the Base Case, the Minimal Action case leaves waste inventories onsite. This requires not only continual surveillance and monitoring activities, but also increases long-term risk of contamination to onsite and offsite receptors. Under the Minimal Action case, buildings left standing require long-term surveillance and monitoring, which may pose a potential risk to workers as these facilities continue to deteriorate. Therefore, reducing costs during the Minimal Action period may actually produce greater costs beyond 2070.

In addition to analyzing a lower cost end state, the Minimal Action case suggests a third alternative scenario: any savings gained from a minimal action case approach could be used to develop and use new technologies to address any post-life cycle remediation activities or other end-state risks. Under this strategy, a comparable end state might be achieved with new technologies developed using savings that result from initially focusing activities on risks to workers, offsite populations, and mortgage cost reduction. In creased funding of new technologies also could be directed at long-term waste storage and disposal strategies, which could alleviate the need for sites to continue repackaging stored waste.

Comparison of Alternative Cases

Because the Environmental Management program is only seven years into a projected life cycle period that could span over 75 years, decisions yet to be made may dramatically change the direction of the program. The results of the alternative cases provide an understanding of how changes in scope and schedule can influence program costs and end states ­ a first step toward assessing program options.

To accurately compare these alternative cases to the Base Case, all cost estimates are presented for the 75-year Base Case life-cycle period (1996-2070). In three of the alternative cases (Maximum Feasible Green Fields, Funding Reduction, and Minimal Action), the change in scope and schedule require the program to extend beyond 2070. Both the Maximum Feasible Green Fields case and the Funding Reduction case estimate the program to complete around 2080. In the Minimal Action case, the length of time required to complete the program was not determined but is assumed to continue past 2070 for purposes of comparison to the Base Case.

The 75-year cost estimates of the Base Case and alternative cases for the five highest-cost sites range from less than $90 billion (Minimal Action) to more than $272 billion (Modified Feasible Green Fields). Figure 16 shows the range of 75-year cost estimates for each of the nine alternative cases and the Base Case.

Figure 16. 75-Year Cost Estimates for the Five Highest-Cost Sites

Each alternative scenario has cost and benefit implications, as Table 11 illustrates.

Through an evaluation of these alternative cases, Department of Energy personnel, regulators, and other stake holders can better understand the potential implications of various policy options and thus participate more effectively in the policymaking and decisionmaking processes.

Conclusion

Like all recently formed organizations, the Environmental Management program spent the first several years of its life building a foundation: defining its mission, gauging its scope, identifying key issues and priorities, and assembling an infrastructure to support successful planning and management. Since 1989, the program has introduced many planning initiatives focused on gathering programmatic data and providing a basis for strategic planning and program analysis. However, most of these initiatives failed to evaluate the Environmental Management program from a life-cycle perspective.

The program has matured in seven years. The Department has now identified the program's basic scope and where the greatest risks lie. In addition, the baseline process has established a capability for projecting future costs and schedules, analyzing changes in assumptions and potential scenarios, and accounting for the interconnections between distinct sites and programs. This analytical foundation for sound program management is summarized in the 1996 Baseline Report. Using the foundation provided by the Baseline Report, program managers and policy makers can make more informed decisions regarding the direction of the Environmental Management program and of the programs that affect the Environmental Management program.

The purpose of the Baseline Report is to articulate clearly two elements of the Department of Energy's Environmental Management program: projected life-cycle costs and schedules. The report describes the program, with Base Case results, from a variety of perspectives. Because of the uncertainties inherent in estimating environmental management costs and schedules, the overall results are presented with a cost range rather than a single figure. The program's overall life-cycle cost is based on Base Case estimates developed by site personnel for the mid-range estimate, with upper and lower bounds. This range spans from $189 to $265 billion.

The Environmental Management program now has improved information available to analyze policy decisions and set a future course. The program is in a critical transition period; it faces near- and midterm decisions that will have important long-term ramifications. Some of these decisions can be made now and adjusted later (if new information calls for a different course); others will require long-term commitment to a specific path.

An important conclusion of the Baseline Report is that changes to the scope and schedule of the program can significantly affect Base Case costs. By understanding the impacts of various policy decisions, decisionmakers and stakeholders can direct the program in a manner that minimizes life-cycle costs, reduces program schedules, optimizes program end states, and achieves maximum reduction of risks. However, a great deal remains to be done to ensure that issues highlighted in this Baseline Report are framed effectively; data and methodologies supporting subsequent analyses are continually improved; and interested stakeholders have a voice in the debate. Specific steps include the following:

• Improve Life-Cycle Cost and Schedule Estimates: The 1996 Baseline Report is the program's second attempt to develop a comprehensive life-cycle cost estimate. This report improves upon the estimates and analyses developed last year based on a better methodology (that is, a bottom-up approach that emphasizes estimates developed by field personnel); better information in areas such as program scope and outyear costs; and improved integration across programs and sites. Because the program is constantly changing, however, these estimates will need to be adjusted and improved. In addition, the program must continue to address uncertainties and information gaps with ongoing data gathering and refined methodologies.
• Use the Baseline Report to Address Ongoing Issues, Analyze Program Options, Provide Input to Strategic Decisions, and Develop Ties to Program Budgets: The analyses included in the 1996 Baseline Report are examples of what can be done with baseline information and site input. Other alternative scenario analyses would also benefit the program (for example, impacts of various regulatory changes, effects of increased privatization, effects of greater waste minimization). These analyses can be used to help inform strategic planning decisions, better focus the program's near-term planning and budgeting, and support legislative and regulatory reform.
• Promote Informed, Broad-based Citizen Involvement in the Debate on the Program's Future: One of the "next steps" included in the 1995 Baseline Report was to include more stakeholders in the debate and actively seek citizen's views (in subsequent Baseline Report cost estimates). The 1996 Baseline Report achieved the goal of greater stakeholder participation. However, the task of using the information to cultivate more informed debate on the program's future still lies ahead.

Contents

The 1996 Baseline Report consists of three volumes: Volume I ­ The 1996 Baseline Environmental Management Report , and Volumes II and III ­ Site Summaries for the 1996 Baseline Environmental Management Report.

Volume I

Introduction (Chapter 1) outlines the framework of the report by providing a background on the scope and technical complexity of the environmental management program, a description of alternative analyses performed, and an overview of the contents of the Baseline Report.

The Environmental Management Program (Chapter 2) describes the mission and scope for each of the six major functional elements that are encompassed in the Environmental Management program: Environmental Restoration; Waste Management, Nuclear Material and Facility Stabilization; Science and Technology Development; Landlord; and National Program Planning and Management.

What is the Base Case? (Chapter 3) outlines the methodology and key assumptions used to develop the Base Case long-range projections of activities, schedules, and associated costs.

Results (Chapter 4) summarizes the projected life -cycle costs for the Environmental Management program including discussion on the range of estimates, distribution of cost estimates by geographical area, and distribution of cost estimates by functional area.

Comparison of Results to the 1995 Baseline Environmental Management Report (Chapter 5) describes the differences between the 1996 Base line Report and the 1995 Baseline Report in terms of methodology and assumptions, including highlights of changes at the five highest-cost sites.

Alternative Scenarios (Chapter 6) and Comparison of Alternative Cases (Chapter 7) present and evaluate the findings of nine alternative approaches (five land-use cases, three program and project scheduling cases, and one minimal action case) to the Environmental Management program.

Conclusion (Chapter 8) discusses how the Base line Report can serve as a tool for program decisions and how the report can continue to be improved in the future.

Volumes II and III: Site Summaries

Volumes II and III present the site data and assumptions used to develop the 1996 Baseline Environmental Management Report. Each site summary provides a brief discussion of the site's past, current, and future missions and is followed by discussions of the projects and activities necessary to manage and remediate the site. Volume II covers Alaska through New Jersey and Volume III covers New Mexico through Wyoming.

This executive summary provides a brief, nontechnical overview of the report, which is available in Department of Energy reading rooms and the Center for Environmental Management Information (1-800-736-3282).

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