Results Act: Observations on the Department of Energy's August 15, 1997, Draft Strategic Plan

Published by the Government Accountability Office on 1997-09-02.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

      United States
GAO   General Accounting
                    D.C. 20548

      Resources,    Commu&%      and
      Economic     Development   Division


      September 2, 1997

      The Honorable Federico Pefia
      The Secretary of Energy

      Subject:       Results Act: Observations on the Deuartment of Energv’s August
                     15. 1997. Draft Strategic Plan

      Dear Mr. Secretary:

      In JUry 1997, you requested our support for the Department’s goal of ensuring
      the success of the strategic plan you are developing under the Government
      Performance and Results Act of 1993. In response to a congressional
      request, we provided our assessment of your June 16, 1997, plan in July -
      1997.l Following this assessment, the Department revised its plan, and your
      Office of Strategic Planning, Budget and Program Evaluation asked us to
      comment on the August 15, 1997, revision.

      Overall, we believe that the current draft plan is much improved over the
      June 16, 1997, draft. Speciika.lly, the revised draft now includes all six
      elements required by the Government Performance and Results Act.
      However, we are still concerned that some of the strategies and many of the
      measures do not appear to be results-oriented.

      Enclosures I through III highlight some selected aspects of three of the
      Department’s four business lines and the business lines’ related objectives,
      strategies, and measures. These comments focus on issues on which we
      have previously reported. Enclosure I focuses on our concerns about the
      Department’s efforts to reduce the vulnerability of the U.S. economy from
      disruptions in oil supplies. Enclosure II focuses on our concerns about the
      Department’s efforts to strengthen nuclear nonproliferation efforts and
      improve international nuclear safety. Enclosure Ill focuses on our concerns

      ‘Results Act: Observations on the Department of Enerw’s Draft Strategic
      &Q (GAOIRCED-97499R, July 11, 1997).
                                            GAO/WED-97-248R   DOE’s Revised Draft Strategic   Plan

about the Department’s efforts to reduce the risks from the en%ironmentaI
legacy of the U.S. nuclear weapons program. We believe, on the basis of the
work that we have previously conducted, that additional opportunities exist
to improve the Department’s plan for these three business lines. However,
we did not discuss DOE’s fourth business line-science and technology-
because our July 1997 report laid out our concerns about this business line.
These concerns have not changed. We believe that the Department’s
strategic plan does not address the potential for the unnecessary overlap that
its science mission may have w$h those of other federal agencies.

We are providing copies of this letter to the Members of Congress who
requested our earlier report on the Department’s draft strategic plan: the
Majority Leader, House of Representatives, and the Chairmen of the House
Committees on the Budget, Government Reform and Oversight, and
Appropriations. In addition, we are sending copies to the Ranking Minority
Members of the same Committees. We will also send copies to others on

Please caIl me at (202) 512-3841or Jeffrey Heil on (202) 512-7206if you or
your staff have any questions about this letter.

Sincerely yours,

     and Scienc

Enclosures -

 2                               GAOLRCED-97-248R   DOE’s Revised Draft Strategic   Plan
ENCLOSURE I                                                                      ENCLOSURE I


DOE’s strategic goal for the energy resources business line focuses on the Department’s
promotion of secure, competitive, and environmentally responsible energy systems that
serve the needs of the public. To address this goal, DOE has identified five objectives
supported by multiple strategies and measures. The following comments focus on the
first objective and its strategies and measures where we believe that our past reports
suggest a different approach.

Obiective 1. “Reduce the vulnerability of the U.S. economy to disruptions in energy


DOE sets the stage for and defines the energy security issue on page 1 of its draft by
stating that
     8,                                                                                           .
         there have been three major oil disruptions in the past 23 years. . . . By
      . . .
     2010, U.S. oil imports are expected to grow to 60 percent of domestic
     consumption, and the Persian Gulf nations will likely provide more than 70
     percent of the world’s oil exports, surpassing their peak of 67 percent in the
     embargo year of 1974. This is unacceptable.”

However, our December 1996 report on the vulnerability of the U.S. oil suppl? observed
that in today’s world oil market, replacing oil imports with domestically produced oil
would only marginally lower the potential costs of disruptions because oil prices are set
in the global marketplace and the price for all oil rises during disruptions. Even if the
United States were to produce all of the oil it consumes, as long as the domestic
economy is integrated into the world economy and oil prices are set in the marketplace,
oil disruptions anywhere in the world will have substantial effects on the U.S. economy.

The previous administration’s 1991 National Energy Strate,s also recognizes this point by

     “Popular opinion aside, our vulnerability to price shocks is not determined by
     how much oil we import. Our vulnerability to oil price shocks is more directly

“Ener,sv Securitv: Evaluating U.S. Vulnerabilitv to Oil SUD&T l&xx&ions        and Options for
Mitigating Their Effects (GAORCED-97-6, Dec. 12, 1996).
3                                            GAOIRCED-97-248R   DOE’s Revised Draft   Strategic   Plan
ENCLOSURE I                                                                       ENCLOSURE I
     linked to: (1) how oil dependent our economy is; (2) our capacity for switching
     to alternative fuels; (3) reserve oil stocks around the world; and (4) the spare
     worldwide oil production capacity that can be quickly brought on line.”

Barring a catastrophic disruption during which oil is not available in the world
marketplace at any price, we observed that the economic costs of oil price shocks depend
largely upon the rise in the price of oil coupled with the nation’s level of oil consumption,
rather than on the level of imports. We also observed that while the economic costs of
disruptions are large, the overall economic benefits of importing oil from its cheapest
source are even larger.

Under the first objective in the ener,ay resources business line, DOE presents six
strategies and related measures. For example, the fzrst strategy requires DOE to support
research and development, policies, and improved regulatory practices capable of ending
the decline in domestic oil production before 2005. Furthermore, one of the measures of
success requires DOE to demonstrate four advanced production enhancement
technologies that could ultimately add 190 million barrels of domestic reserves, including
30 million barrels during fiscal years 1998 and 1999.

As we pointed out in our 1996 energy security report, however, these measures are not a
very useful indicator of how DOE’s programs will affect the economy’s vulnerability to oil
supply disruptions because they are not expressed in terms that measure vulnerability.
Neither do they consider projected increases in the demand for oil and other expected
changes in the economy that could affect vulnerability.

Our report analyzed six measures of vulnerability to oil disruptions that we believe would
better focus DOE’s efforts in achieving its energy security goal: (I) concentration of
world oil production, (2) excess world oil production capacity, (3) oil intensity of the U.S.
economy, (4) oil dependence of the U.S. transportation sector, (5) world oil stocks, and
(6) dependence of the U.S. economy on oil imports. However, for the reasons cited
above, we reported that the sixth measure is a weak indicator of vulnerability and cannot
stand alone.

 4                                            GAOfRCED-97-248R   DOE’s Revised   Draft   Strategic   Plan
ENCLOSURE II                                                                    ENCLOSURE II

DOE’s strategic goal for the national security business line focuses on the Department’s
efforts to maintain U.S. national securily, promote international nuclear safely, and reduce
the global danger from weapons of mass destruction. To address this goal, DOE has
identified seven objectives supported by multiple strategies and measures. The following
comments focus on the fifth and seventh objectives and selected strategies and measures
where we believe our past reports suggest a different approach.

Obiective 5. “Continue leadership in policy support and technology development for
international arms control and nonproliferation efforts.”

Sixategv 1. “Strengthen the nuclear nonproliferation regime through support of treaties
and international agreements.”

Measure. “Identify long-term strategies to address the future safeguards, storage, and
disposition of the Democratic Peoples Republic of Korea spent fuel within the scope of
the Agreed Framework.”


This measure is too broad and undefmed to measure DOE’s success in supporting the
U.S./North Korean Agreed Framework. Specifically, it does not define what is meant by
“identify long-term strategies” for storing, safeguarding, and disposing of North Korea’s
spent fuel. Ideally, the measure should be tied to desired outcomes. However, if DOE
cannot develop an outcome measure, it should identify (1) a specific number of realistic
strategies for each of the three areas and (2) a time frame for identifying the strategies.
The measure should also be structured in a manner that would preclude DOE from simply
holding a meeting, brainstorming possible strategies, and declaring its success. For
example, as discussed in our June 1997 report, strategies or options for disposing of
North Korea’s spent fuel are already lmown3 What is really needed are decisions about
(1) who wilI be responsible for the spent fuel once it is removed from North Korea,
(2) the method of disposal, (3) the party responsible for implementing the disposal
method, and (4) the fuel’s final destination,

Additional detail is also needed to define the specsc strategies DOE intends to identify.
For example, the Agreed Framework specifies that the United States and North Korea will

3Nuclear Nonuroliferation: Imnlementation of the U.S./ North Korean Agreed Framework
on Nuclear Issues (GAORCEDNSIAD-97-165, June 2, 1997).
5                                           GAOLRCED-97-248R   DOE’s Revised   Draft Strategic   Plan
ENCLOSURE II                                                                   ENCLOSURE II
cooperate in the safe storage of spent fuel for North Korea’s experimental reactor.
Barring unforeseen difficulties, DOE plans to complete the repackaging of the fuel later
this year. While DOE plansto conduct monitoring and maintenance of the spent fuel in
the years ahead, since the fuel will have been stored, it is unclear what, if any, storage
strategies will be needed.

A similar point can be made for safeguarding and disposing of North Korea’s spent fuel.
DOE’s performance measure implies that under the Agreed Framework, DOE has a
clearly defined role in these areas when, in fact, it does not. Thus, DOE may be assuming
responsibilities that it will never have. While DOE could become involved, the
performance measure fails to recognize the importance of other parties in achieving
success in these areas. For example, under the Agreed Framework, the responsibility for
safeguarding the fuel rests with the International Atomic Energy Agency (IAEA). As a
result, any long-term strategies would need to be developed with-if not largely by-the
IAEA. DOE’s role in disposing of North Korea’s spent fuel is equally unclear. According
to the State Department, numerous parties, including the relevant U.S. agencies; the
countries of Japan, South Korea, and North Korea; IAEA; and the international consortium
created to implement portions of the Agreed Framework could be involved in the disposal

Stratee[v2. “Work with the states of the former Soviet Union and others to minimize the
risks of proliferation.”

Measure. “Discourage the states of the former Soviet Union from reprocessing spent fuel
by enabling the use of dry cask storage in those countries in FY [fiscal year] 2000.”


Enabling the use of dry cask storage in the countries of the former Soviet Union by fiscal
year 2000 does not contribute to minimizing the long-term risks of proliferation. It is an
interim storage measure which does not necessarily reduce the risk of diversion of fissile
material. Generally, dry cask storage is used in the interim between the period when
spent fuel need no longer be stored in a pool (wet storage) and when it can be moved on
for final disposition. However, one option for final disposition that still remains is
reprocessing (a process that yields plutonium that may be used in a nuclear explosive), a
result that DOE wants to avoid.

Objective 7. “Improve international nuclear safety.”

Strate,sv 1. “Assist countries in reducing the risks from Soviet-designed nuclear power
plants and implement a self-sustaining nuclear safety improvement program capable of
reaching internationally accepted safety practices.”

 6                                            GAO/WED-97-248R   DOE’s Revised Draft Strategic   Plan
ENCLOSURE II                                                                     ENCLOSURE II
Measure. “Establish, in FY 1999,reactor plant operator training programs at key plants
based on the Systematic Approach to Training methodology used in the United States and
provide plant simulators for operator trainmg.”


lit our 1994 and 1996 reports, we discussed performance measures as a way for DOE to
gauge improvements in its international nuclear safety program? As noted in our 1994
report, DOE told us that it did not yet know how to measure the safe@ improvements
made with U.S. assistance. In our 1996 report, we recommended that DOE develop a
strategic plan that (1) clearly linked the program’s goals and objectives to performance
measurements and (2) provided well-detied time frames for completing the program.

Specif$ally, this measure would be more appropriately stated as a strategy. The
associated success measure might be the number of operators trained, objective evidence
that they have achieved the level of competence intended, and evidence that a sufficient
number can be trained to have a positive impact on the safety of the plants. We agree
that well and appropriately trained plant operators can be positive contributors to plant
safety. However, just having a training program is not enough. The trainees must be
examined and selected or rejected depending on how well they can perform. In addition,
DOE should establish benchmarks that show, in a measurable way, the impact of the
training. DOE will not have achieved success until operators are demonstrably trained.

‘Nuclear Safety: International   Assistance Efforts to Make Soviet-Designed Reactors Safer
(GAO/RCED-94-234,     Sept. 29, 1994), and Nuclear Safetv: Status of U.S. Assistance to
Imnrove the Safetv of Soviet-Designed Reactors (GAOLRCED-97-5,Oct. 29, 1996).
7                                             GAOIRCED-97-248R   DOE’s Revised Draft   Strategic   Plan
ENCLOSURE HI                                                                 ENCLOSURE III


DOE’s strategic goal for the environmental quality business line focuses on the
Department’s efforts to clean up the environmental legacy of nuclear weapons and civilian
nuclear research and development programs, minimize future waste generation, safely
manage nuclear materials, and permanently dispose of the nation’s radioactive wastes. To
address this goal, DOE has identified six objectives supported by multiple strategies and
measures. The following comments focus on the first and sixth objectives and selected
strategies and measures where we believe our past reports suggest a different approach.

Obiective 1. “Reduce the most serious risks from the environmental legacy of the U.S.
nuclear weapons complex frrst.”


While this objective is a valid and important program goal, its achievement cannot be
determined because DOE has not identified priorities across its various sites. As we
reported in 1995, DOE’s cleanup strategy has been shaped by site-specific environmental
agreements without consideration of other agreements or available resources.5 To enable
DOE to allocate its resources to reducing the greatest environmental risks, we
recommended that DOE set national priorities and initiate discussions with regulators to
renegotiate milestones in agreements according to national priorities. Without an overall
prioritization of the risks to be addressed, the Congress will not be able to determine
whether this objective has been achieved, nor will the Department be able to target its
resources in order to ensure the achievement of this objective.

Obiective 6. “hkimize the beneficial reuse of land and effectively control risks from
residual contamination.”

Measure. “Submit to Congress future use plans for the Hanford Site, Savannah River Site,
Rocky Flats Environmental Technology Site, and Idaho National Engineering and
Environmental Laboratory by May 1998.”

Measure. “Develop future use plans for all other major DOE sites in conjunction with

“Denartment of Energv: National Priorities Needed for Meeting Environmental
Agreements (GAORCED-95-1, Mar. 3, 1995).
 8                                          GAOLRCED-97-248R   DOE’s Revised Draft   Strategic   Plan
ENCLOSURE III                                                                 ENCLOSURE III

Neither of these measures address how DOE wilI maximize the beneficial use of land and
would be more appropriately stated as strategies. Furthermore, the National Defense
Authorization Act for Fiscal Year 1997 requires that f&al future use plans be developed
for the listed four sites by March 15, 1998. As we reported in 1994, a future use report
was completed for DOE’s Hanford Site in December 1992, and the Savannah River, Rocky
Flats, and Idaho sites were beginning at that time to develop land use plans with citizen
involvement.6 DOE reported in April 1996 that 15 of the 20 sites that intend to develop
future use plans had completed their recommendations at that time, including Savannah
River, Rocky Flats, and Idaho.7 Unless subsequent events have required that the land use
plans be re-visited, we believe that they could be completed and submitted earlier than
May 1998 and should meet the time frame spe&ed in the fiscal year 1997 authorization
act. In addition, to make the second measure more effective, DOE needs to specify the
time ikune for the completion of the use plans and number of sites to be studied.


‘Nuclear Cleanup: Comnletion of Standards and Effectiveness of Land Use Planning Are
Uncertain (GAO/RCED-94-144,Aug. 26, 1994).
‘Charting the Course: The F’uture Use ReDort (DOE/EM-0283, Apr. 1996).

9                                          GAOIRCED-97-248R   DOE’s Revised Draft Strategic   Plan
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