Copyright 1999 Federal News Service, Inc.
Federal News Service
JULY 22, 1999, THURSDAY
SECTION: IN THE NEWS
LENGTH:
3350 words
HEADLINE: PREPARED TESTIMONY OF
GARY
JONES
ASSOCIATE DIRECTOR
ENERGY, RESOURCES, AND SCIENCE ISSUES,
RESOURCES, COMMUNITY, AND ECONOMIC DEVELOPMENT DIVISION
DEPARTMENT OF
ENERGY
UNITED STATES GENERAL ACCOUNTING OFFICE
BEFORE THE
HOUSE COMMITTEE ON SCIENCE
SUBCOMMITTEE ON ENERGY AND
ENVIRONMENT
SUBJECT - UNCERTAIN FUTURE FOR EXTERNAL REGULATION
OF WORKER
AND NUCLEAR FACILITY SAFETY
BODY:
Mr. Chairman
and Members of the Subcommittee:
We are here today to testify on the status
of the Department of Energy's (DOE) progress toward the external regulation of
nuclear and worker safety at its facilities. DOE has recently completed a pilot
program with the Nuclear Regulatory Commission (NRC) and the Occupational Safety
and Health Administration (OSHA) to simulate external regulation at selected
facilities.1 Our testimony today discusses (1) DOE's changing positions on the
desirability of external regulation for its facilities, (2) the disagreement
between DOE and NRC on the potential costs and value added of external
regulation, and (3) the uncertainties for the future of external regulation in
DOE. Our testimony is based on our past and ongoing work on external
regulation.2
In summary, Mr. Chairman, despite the time and effort by DOE,
NRC and OSHA to test regulatory approaches and simulate regulation of nuclear
and worker safety at three different DOE sites, uncertainty clouds the future of
DOE external regulation. DOE's leadership has changed over the years and each of
the last three Secretaries has changed the Department's position on external
regulation. The current Secretary believes it is no longer a worthwhile pursuit
because the costs would likely outweigh the value of external regulation.
Today's position sharply contrasts with the DOE's previously held positions
supporting external regulation and also conflicts with the Department's own
pilot program results as well as the conclusions reached by NRC and OSHA. The
results of the pilot program and the extensive practical experience gained with
NRC and OSHA show that external regulation improves safety and accountability
and is not likely to be prohibitively expensive. NRC also believes the potential
costs of externally regulating DOE facilities are much less than DOE
projections. While current DOE leadership has decided not to pursue external
regulation, the pilot's results, a decade of reports by blue ribbon panels and
DOE working groups, and the experience with NRC and OSHA give the Congress
valuable information with which to make an informed judgement about the future
of external regulation in DOE.
Background
We, along with others, have
reported on DOE's weaknesses in its self- regulation of environment, safety, and
health responsibilities at its facilities. With few exceptions, worker and
nuclear facility safety has been internally regulated by DOE because of concerns
about national security. Essentially, all federal facilities except DOE's are
subject to external regulation. In 1993, then Secretary of Energy Hazel O'Leary
announced that the Department would seek external regulation for worker safety.
In 1994, legislation was proposed and hearings were held to externally regulate
DOE nuclear safety. Although no laws were enacted, in 1995 DOE created an
advisory committee, which concluded that secrecy had been used as a shield to
deflect public scrutiny. This committee stated that "Widespread environmental
contamination at DOE facilities and the immense costs associated with their
cleanup provide clear evidence that selfregulation has failed."3
In 1996, a
subsequent DOE working group concluded that external regulation could improve
safety, eliminate the inherent conflict of interest from self-regulation, gain
consistency with current domestic and international safety management practices,
and improve credibility and public trust. In 1997, then-Secretary Frederico Pena
took a more cautious approach by launching a pilot program with NRC and OSHA.
The purpose of the pilot was to test regulatory approaches and gain insight
about the costs of external regulation based on actual experience. The pilot
began in January 1998 and was completed in June 1998. (OSHA completed an earlier
pilot at the Argonne National Laboratory in Illinois in 1996.) The pilot was
limited to DOE's nondefense sites. DOE's nuclear weapons sites were not part of
the pilot, but under an earlier strategy would have been eventually externally
regulated.
The facilities that would be subject to external regulation are
substantial. DOE maintains 3,500 nuclear facilities at 34 sites in 13 states,
covering, in all, more than 85 million square feet of building space. Eighty
percent of these facilities are funded by DOE's defense and environmental
management programs. Included in these figures are DOE's 23 laboratories, whose
total annual budget is about $7.5 billion. DOE's facilities are currently
self-regulated and cover a complex array of activities from research reactors,
fuel storage, and nuclear weapons dismantlement to accelerators and fusion
energy experiments.
DOE's Positions on External Regulation Has Changed
In our May 21, 1998, testimony before this Subcommittee, we cited DOE's
changing positions on external regulation.4 At that time, we said that DOE's
latest strategy to conduct this pilot was in contrast to its earlier strong
commitment to proceed directly to external regulation. At that same hearing, DOE
said that it believes there will be clear benefits from external regulation of
worker and nuclear safety at its facilities. In a September 11, 1998, letter to
us, DOE again reaffirmed its commitment to external regulation and wrote that it
would submit legislation for externally regulating single-purpose energy
research laboratories as part of its fiscal year 2000 budget process.
DOE's
position on external regulation has again changed. In a February 19, 1999,
letter to the Chairman, Subcommittee on Energy and Water Development, Senate
Committee on Appropriations, Energy Secretary Richardson stated that the
Department will not submit legislation for externally regulating its facilities
for worker and nuclear facility safety. The Secretary stated that DOE's analysis
of the pilot indicated that "many of the potential benefits that we expected to
see from external regulation have not been demonstrated, and appear to be
outweighed by associated costs and difficulties raised in the pilot projects."
The Secretary cited a number of "significant, unresolved issues" including
licensing questions, the extent to which old facilities can be upgraded, and
costs. As a result, the Secretary wrote that money for external regulation is
better spent on other missions.
Secretary Richardson elaborated on his
position in a March 31, 1999, letter to the Chairman, Subcommittee on Energy and
Water Development, House Committee on Appropriations. This time, the Secretary
noted that DOE and NRC failed to reach agreement on the "conclusions and
ramifications" of the pilot program. The areas of disagreement cited by the
Secretary included the value added by external regulation and the degree to
which regulatory flexibility or exemptions should be available for DOE's
facilities. The high potential costs and the uncertainties associated with the
transition to NRC's regulation were cited as DOE's main concerns. Regarding
OSHA's component of the pilot, the Secretary offered no specific position in
either of his letters.
Disagreement on Potential Cost of External
Regulation
DOE estimates that its costs of transitioning to external
regulation by NRC ranges from $7 to $23 million for three pilot sites, assuming
minimal upgrading of facilities would be required.5 However, DOE also reports
that the costs could be substantially higher--as much as $75 million higher at
the Lawrence Berkeley Laboratory site-depending on NRC flexibility in enforcing
its regulations. Secretary Richardson's position that the cost would outweigh
the benefits of external regulation conflicts with the pilot's results and are
inconsistent with the growing experience between DOE, NRC and OSHA. NRC
concluded from the pilot program that there would be no major retrofitting of
facilities needed to meet its requirements at the various project sites, and
that it could immediately license Lawrence Berkeley and the Oak Ridge facility.
Some changes would be needed before licensing the Savannah River facility,
although the NRC found no safety issues requiring prompt corrective action.
DOE and NRC disagreements on the cost of transitioning to external
regulation is a major point of controversy between the two agencies.
Specifically, DOE estimates one-time transition costs of external regulation
would range from $170,000 at Berkeley to between $5.3 million and $12.8 million
at the Savannah River facility (transition costs include training and
rulemaking, and costs for upgrading facilities where needed). Furthermore, DOE
contends that the many uncertainties associated with having NRC regulate its
"unique facilities" poses potentially large financial risks that could greatly
increase transition costs. DOE is particularly concerned that NRC would not
grant waivers on certain regulatory requirements at its facilities. According to
DOE, waivers are needed to avoid potentially higher transition costs. NRC
disagrees with DOE's position and reports that because few changes to DOE
facilities or procedures would be needed under external regulation by NRC, it
believes that DOE's cost estimates for making the transition to external
regulation are considerably higher than NRC believes is justified. NRC also
noted that the cost to DOE of NRC regulating DOE nuclear facilities could be
minimized, potentially resulting in a net savings, by reducing the level of DOE
oversight to a level consistent with commercial facilities. NRC also reports
that it has a demonstrated history of granting waivers and otherwise applying
flexibility to its regulatory processes as conditions warrant. According to our
review of DOE's pilot reports and subsequent discussions with laboratory
officials who had provided DOE with cost data, DOE's cost estimates appear
inflated and misrepresent actual conditions. For example, at the Berkeley site,
the major cost uncertainty cited by DOE is $75 million to decontaminate and
decommission (D&D) 2 out-of-service accelerators at the laboratory. DOE said
these figures were based on a worst-case scenario in which the laboratory would
be forced to clean up the old accelerators sooner rather than later under NRC's
rules. According to DOE, taking more time for D&D would allow the laboratory
to obtain certain cost savings, such as by recycling materials. However, the $75
million estimate is what the laboratory had always planned to spend to D&D
the accelerators. Thus, it is doubtful that DOE's estimate even relates to the
cost of external regulation. Further, laboratory officials provided us with data
that show the cost to D&D the old accelerators is expected to be about half
of the $75 million DOE had indicated. The $75 million figure used by DOE came
from a 1992 laboratory report which was not updated or corrected for the pilot,
even though laboratory staff had provided DOE officials with the most recent
data. The reduced costs result from the fact that since 1994, the laboratory has
been recycling materials from the accelerators to save money and to recapture
the space as quickly as possible for other scientific use. Regardless of the
actual costs, NRC advised DOE that it would likely grant a waiver on the D&D
of the old accelerators to allow a more cost-effective strategy because the
accelerators pose little risk to public safety. DOE officials acknowledged to us
that NRC officials had said they would likely grant such a waiver.
Similarly, DOE officials told us that they might be required to install
special alarms for detecting radiation leakage at the Radiochemical Engineering
Development Center in Oak Ridge if NRC were the regulator, at a cost of about $4
million. NRC officials advised DOE that they would likely grant a waiver for
these alarms because the facility is safely operated and properly shielded from
radiation exposure. DOE nevertheless included the $4 million figure as a
potential transition cost to being externally regulated.
The potential costs
associated with NRC's requirements represent worst-case scenarios and assumes
NRC would not exercise flexibility in its approach to regulating DOE's unique
facilities. Yet NRC cites many examples of its flexibility, such as providing
waivers of its requirements when there is no safety consequence. For example, in
July 1999, NRC granted the former DOE owned gaseous diffusion plants a 1- year
extension to meet seismic upgrade requirements. Also, NRC recently extended all
of its materials licenses from 2 to 5 years in recognition that radioactive
materials are becoming more stable and predicable. NRC's report on the pilot
notes that there is precedent in NRC policy and practice for resolving many of
the issues raised during the pilot program.
DOE's concerns about high
potential costs posed by the uncertainties in working with NRC are all the more
curious given the extensive interactions and practical experience the two
agencies already share. NRC is now licensing, certifying, and reviewing more
than 20 of DOE's projects and activities. For example, early this year, NRC
granted a license to DOE for operating the TMI2 Independent Spent Fuel Debris
Facility at the Department's Idaho National Engineering and Environmental
Laboratory. NRC had previously licensed the Independent Spent Fuel Storage
Facilities for the Fort St. Vrain, and is conducting prelicensing consultations
with DOE in other areas, including the high-level waste repository at
Yucca Mountain, Nevada, and a proposed facility for making
mixed-oxide fuel. Additional issues examined during the pilot program, that is
decommissioning, potential conflicts of interest, and funding, are being
addressed by NRC and DOE in other regulatory and licensing actions. For example,
many of these issues were addressed in licensing the TMI-2 Independent Fuel
Storage Installation. DOE's report on the pilot references NRC's flexibility but
does not highlight this important distinction in the executive summary nor in
Secretary Richardson's letters to the Chairman.
In addition to transition
costs of external regulation, DOE estimates it will incur annual nuclear safety
inspection-related expenses from $2 to $4 million for the three pilot sites.
These costs, however, could be reduced by reductions in DOE's current oversight
costs for nuclear and worker safety. NRC estimates its transition costs to be
about $2 million and inspection expenses to be less than $1 million for the
three pilot sites.
The estimated costs of complying with OSHA's regulations
raises fewer issues. DOE's own worker safety requirements are often similar to
OSHA's, and the pilot's results indicate that DOE's laboratories resemble those
found in comparable commercial facilities. OSHA reports that the costs to comply
with its inspection findings are generally to correct previously identified
workplace hazards. As with the NRC, OSHA has practical experience in DOE
facilities. For example, OSHA has had regulatory authority at the gaseous
diffusion plants in Paducah, Kentucky, and Piketon, Ohio since 1993. These DOE
facilities are leased to the United States Enrichment Corporation. OSHA has also
accepted regulatory responsibility for two privatized facilities at DOE's
Savannah River site.
NRC officials told us that their concerns with DOE's
cost estimates contributed to their decision to prepare a separate report on the
pilot's results. Both agencies had agreed in their 1997 memorandum of agreement
to prepare a joint report on the pilot's results. OSHA was not part of the
original agreement and was later added to the pilot in response to congressional
direction.6
Disagreement on the Potential Value Added of External Regulation
The second major area of controversy is the value added by external
regulation, about which DOE also disagrees with NRC and OSHA. DOE leadership
stated, without providing detail, that many of the potential benefits that were
expected from external regulation have not been demonstrated. DOE's reports on
the pilot results did not focus on the benefits of external regulation, but
rather on the potential costs and other issues. However, NRC and OSHA concluded
from the pilots that their presence could improve safety at DOE's facilities.
While NRC did not find any significant problems in its visits, the Commission
believes its processes improved safety. Recent experience supports this. For
example, in February 1999, NRC issued a safety assessment of the Brookhaven
National Laboratory High Flux Beam Reactor in which NRC staff "identified no
safety-significant issues" but did find "several apparent instances of
noncompliance with DOE and (laboratory) requirements.
" NRC staff noted
that "the safety programs at the (reactor) were found to provide adequate
protection of the health and safety of the public, the workers, and the
environment." The staff also concluded that "the design and conditions at the
(reactor) do not present any unique regulatory or technical challenges to
regulatory oversight of the (reactor) by outside regulators, such as NRC."
Similarly, OSHA's presence as an external regulator would, according to OSHA,
generally result in more timely correction of workplace hazards. OSHA did find
some problems in its pilot visits and prepared simulated fines for violations:
$75,000 in Oak Ridge, and $58,000 in Berkeley. Fifty four of the 75 violations
at Oak Ridge were classified as "serious," with 2 requiring immediate corrective
action. Fewer hazards were noted at the Berkeley site. OSHA officials told us
that their findings parallel those expected at similarly sized facilities in the
commercial sector.
An important value added benefit from external regulation
is public credibility. As we testified before this subcommittee on July 13,
1999, DOE has resisted independent regulatory oversight of worker and nuclear
safety, which has prompted a perception that it lacks accountability.7
Laboratory officials at the Berkeley and Oak Ridge sites noted the value of
gaining credibility from being externally regulated.
DOE's Efforts Cloud the
Future of External Regulation
DOE's wavering positions and its failure to
reach consensus with participating agencies on the results of the pilot projects
have caused uncertainty about the future of external regulation at its
facilities. After nearly a decade of reports by blue-ribbon panels and internal
working groups, a 2-year pilot effort, and extensive practical experience
supporting the view that external regulation works, DOE's leadership has
reversed course. Given these experiences, we believe that the Congress has an
opportunity to make a decision on whether or not a class of DOE's facilities-as
represented in the pilot -should be externally regulated for worker safety and
nuclear facility safety, a position previously advocated by DOE officials.
Mr. Chairman, this concludes our statement. We would be happy to respond to
any questions you or Members of the Subcommittees may have.
FOOTNTOES:
1
These facilities include all or part of the Lawrence Berkeley National
Laboratory in California, the Oak Ridge National Laboratory in Tennessee, and
the Savannah River Site in South Carolina. OSHA participated in the California
and Tennessee sites and had previously conducted a pilot program at DOE's
Argonne National Laboratory in Illinois.
2 Department of Energy: Clear
Strategy on External Regulation Needed for Worker and Nuclear Facility Safety
(GAO/RCED-98-163, May 21, 1998).
3 Improving Regulation of Safety at DOE
Nuclear Facilities, Advisory Committee on External Regulation of Department of
Energy Nuclear Safety (Dec. 22, 1995).
4 Department of Energy: Clear
Strategy on External Regulation Needed for Worker and Nuclear Facility Safety
(GAO/T-RCED-98-205, May 21, 1998).
5 These estimates exclude transition
costs for meeting OSHA requirements, which were not calculated for all sites.
6 Energy and Water Development Appropriations Act, 1999, P.L. 105-245,
Section 311, Oct. 7, 1998.
7 Department of Energy: Need to Address
Long-standing Management Weaknesses (GAO/T-RCED-99-255, July 13, 1999).
END
LOAD-DATE: July 27, 1999 
