Maintaining Department of Energy (DOE) Waste Disposition Pathways in Today’s Uncertain Budgetary Environment

Presented by: Lori WestJuly 2015

2

Commercial Providers

20+ year history of developing technologies and systems to meet DOE needs

•Invested in and piloted technologies to address DOE’s “difficult-to-treat” wastes

•Used these technologies to perform treatability studies to demonstrate final waste form characteristics

•Fielded technologies to address unique on-site problems

•Built fixed-base, high throughput facilities for volume and mass reduction

3

Commercial Providers – Attributes

• Ability to respond quickly in the marketplace

• Willingness to accept moderate to high risk

• Privately funded

• Robust licenses

• Broad spectrum of capabilities

• Very adaptable to unique waste forms

• Ability to innovate

4

Benefits to DOE Avoiding Expense

Commercially developed technologies / capabilities have formed much of the basis for DOE long-range plans for clean-up

Project Needed DOE Onsite Capability Commercial Providers

Rocky Flats, Fernald, and Mound Closures

• Sort, Survey, Package, Stabilize• Thermal Treatment

Technologies for Volume Reduction

• LLW/LLMW Disposal Facilities

• Perma-Fix Environmental Services, Oak Ridge, TN

• Duratek, Oak Ridge, TN• Energy Solutions, Clive, UT

Hanford Suspect TRU and CH/RH TRU

• WRAP, Cool & Dim• WRAP 2 and 2A• M-91

• Perma-Fix Northwest, Richland, WA (CH TRU)

• Energy Solutions, Clive, UT

Miscellaneous Specialty Storage/Disposal Projects

• Class C/Greater-than-Class C Disposal Facilities

• TRU and Spent Fuel Interim Storage Facilities

• Energy Solutions, Clive, UT• Waste Control Specialists,

Andrews, TX

5

The Impact of Rocky Flats

• Commercial providers were encouraged to develop DOE-centric capabilities through favorable procurements

• Providers aggressively pursued licenses and permits to expand treatment capabilities

• DOE and State regulators worked with commercial providers

• Significant cost savings and avoidances to DOE and its contractors using commercial capabilities

• Rocky Flats Project set new standard for Site

D&D / Remediation: $36B reduced to $6B

6

The Impact of Rocky Flats (concluded)• Similar savings realized at Fernald and Mound• DOE and its contractors developed significant

relationships to take advantage of the commercial supply chain

• DOE sought to attract commercial suppliers through competitive procurements

• Commercial providers continue to develop capabilities almost exclusive to DOE

• Many spin-off capabilities in areas such as bulk transportation, container manufacture, in-field processing, etc.

7

ARRA

• Infusion of funds to “shovel-ready” projects• Funds applied to DOE wastes in storage across

the complex– Created jobs nation-wide– Boosted local economies– Produced highly specialized / trained work force to

replace existing, aging work force at DOE sites– Reduced long-term waste storage, surveillance, and

maintenance cost and risk to DOE and Contractors– Encouraged expansion of commercial provider

capabilities / throughputs

8

ARRA

At Hanford, ARRA funds were used to create more efficient use of offsite commercial facilities for suspect TRU waste treatment

Cost Avoidance – $550M

Originally, Hanford’s suspect TRU wastes

were to be dispositioned through the $1.2B M-91

Facility

Today, 90% of Hanford’s suspect TRU wastes will be dispositioned using offsite

commercial capabilities at a cost of $300M…

The remaining 10% will be dispositioned through a highly specialized onsite capability

with a life-cycle cost of $385M

9

Post ARRAShifts in funding priorities

• Drove staffing levels to below pre-ARRA levels

• Necessitated placement of DOE facilities into a “Minimum Safe Operational” condition– Some went “Cold and Dark”

and others “Cool and Dim” • Drove arbitration and work force reductions

complex wide• Settlement Agreements diverted funding further

At Hanford, the cost savings from placing facilities in min safe condition (more than $9 million in FY13) were redirected to non-remediation

activities.

10

Shifts in funding prioritiesPost ARRA

• Hanford received level funding overall (~$100M less than pre-ARRA levels)

• CHPRC received $550 million less than pre-ARRA levels – a >50% decrease in funding

• Halted all CHPRC waste retrieval, D&D, and waste management activities

• Drove WRAP, T Plant, CSB and others to min safe

11

Affect on Commercial Processors

• Some closed unprofitable processes

• Unfortunately, fixed costs remained the same

Shareholders could not understand why, with millions

of cubic feet of waste stockpiled at DOE sites, commercial processing

facilities sit idle.

• Loss of revenues, capabilities, and expertise

• Sharp decrease in stock prices• Layoff’s• Some closed their doors

12

• D&D could last years• D&D funding comes from funds

set aside by the commercial entity as required by law

• In many NRC agreement states shortfalls in D&D funds are the responsibility of the State licensing entity

Affect on Commercial Processors (concluded)

There is no straddling the fence – the facility is

either a processing facility or a facility in

some state of decommissioning.

• Once declared, D&D may not be revocable or licenses and permits renewable

13

Retaining Commercial Capability is Good Business

• Delivers cost avoidances on numerous fronts– Supports DOE cleanup objectives

– Reduces the risk and cost of storing and maintaining packaged wastes and storage facilities

– Avoids cost of missed milestones and needless litigation

• Funds from the federal level are decreasing

• There are very few areas in which additional efficiencies can be realized

• Risk of loss of commercial capacity creates a spiraling cost increase for DOE to obtain funds to create capabilities

• Risks continue to climb as waste is stored for longer periods

14

Protect the Investment

• It’s our obligation to protect this national resource on which we spent tax payer money

• Establish a “minimum safe” funding supply to assure continued viability of commercial supply chain

What would it take?

An annual investment of ~$50 M

< 1% of DOE EM’s annual allotment of $5.6B

would maintain the commercial supply chain

• Managed by the Office of Waste Management Operations

15

Questions?