oversight

Department of Energy: Plutonium Needs, Costs, and Management Programs

Published by the Government Accountability Office on 1997-04-17.

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

                 United States General Accounting Office

GAO              Report to the Chairman, Subcommittee
                 on Energy and Power, Committee on
                 Commerce, House of Representatives


April 1997
                 DEPARTMENT OF
                 ENERGY
                 Plutonium Needs,
                 Costs, and
                 Management Programs




GAO/RCED-97-98
                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   Resources, Community, and
                   Economic Development Division

                   B-276407

                   April 17, 1997

                   The Honorable Dan Schaefer
                   Chairman, Subcommittee on Energy
                     and Power
                   Committee on Commerce
                   House of Representatives

                   Dear Mr. Chairman:

                   With the end of the Cold War and the dissolution of the Soviet Union, the
                   Department of Energy (DOE), while continuing to manage weapons-grade
                   plutonium and other nuclear materials used in nuclear weapons, is turning
                   its attention to managing nuclear materials designated as excess to
                   national security requirements and to cleaning up the contamination
                   resulting from 50 years of nuclear weapons production. As part of this
                   transition, the United States has divided its 99.5-metric-ton plutonium
                   inventory into two major categories—that which is allocated for national
                   security needs and that which is designated as excess.

                   Concerned about DOE’s ability to manage the plutonium inventory, you
                   asked us to (1) review how much plutonium the United States allocated
                   for national security needs, how much it designated as excess, and how
                   DOE determined these amounts; (2) review DOE’s estimates of the current
                   and near-term costs for managing plutonium; and (3) review DOE’s
                   estimates of the long-term costs for managing plutonium.


                   The United States allocated 46.8 metric tons of its 99.5-metric-ton
Results in Brief   plutonium inventory for national security purposes and designated the
                   remaining 52.7 metric tons as excess. To determine how much plutonium
                   was needed for national security, DOE reviewed its plutonium inventory
                   database. In general, the plutonium in the custody of the Department of
                   Defense and some of the plutonium managed by DOE’s Defense
                   Programs—the organization responsible for supporting the nation’s
                   nuclear weapons—was categorized as needed for national security
                   purposes. The remaining plutonium managed by Defense Programs and
                   other DOE organizations was categorized as excess to national security
                   needs and will ultimately be disposed of. The national security plutonium
                   is further divided into several subcategories.1 DOE has a technical basis to



                   1
                    The actual inventory amounts allocated among the national security subcategories are classified.



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             support the need for the amounts of plutonium it holds in most but not all
             of these subcategories.

             From fiscal year 1995 through fiscal year 2002, DOE expects to spend about
             $18.8 billion2 on plutonium management and related activities. These costs
             consist of about $10.5 billion for plutonium inventory management
             activities, including approximately $1.8 billion for national security
             plutonium and $8.7 billion for excess plutonium. DOE expects to spend
             another $8.3 billion for plutonium-related waste management and site
             cleanup activities. The costs of managing excess plutonium are about four
             times greater than the costs of managing national security plutonium
             because much of the excess plutonium is held in unstable forms and
             requires special management activities, such as handling, processing, and
             packaging. National security plutonium is generally contained in more
             stable forms, such as metals and weapons components, and therefore
             requires less management.

             DOE also expects to spend over $3 billion for longer-term plutonium
             storage and conversion activities through about 2023.3 This estimate is
             based on DOE’s plans for storing the excess plutonium and converting it to
             forms that will make it more difficult to reuse in nuclear weapons.
             However, DOE’s cost and schedule estimates are subject to many
             uncertainties, a number of which stem from the relative immaturity of the
             planned conversion technologies.


             Plutonium is a man-made, radioactive element that exists in different
Background   isotopes4 and physical forms. The different isotopes of plutonium have
             widely varying half-lives,5 ranging from 20 minutes to 76 million years.
             These isotopes are used to define the different grades of plutonium that
             are used in nuclear warheads and as fuel for nuclear reactors. Physically,
             plutonium exists in several forms—metal, which is relatively stable if
             packaged correctly, and other forms that are often unstable, such as


             2
              All cost estimates are presented in constant 1996 dollars.
             3
              This estimate includes only the costs associated with the long-term storage and disposition of excess
             weapons-usable plutonium; it excludes the continuing costs of other plutonium management and
             related activities.
             4
              An isotope is any of two or more species of atoms of a chemical element with the same atomic
             number (i.e., the same number of protons) and chemical behavior but with differing atomic mass (i.e.,
             differing numbers of neutrons plus protons).
             5
              A half-life is the time required for half of an element’s atoms to decay.



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oxides, solutions, residues, and scraps.6 During the production era, DOE
recycled, purified, and converted the less stable forms of plutonium, which
resulted from weapons production activities, into metal for use in nuclear
warheads. Much of DOE’s excess plutonium was not in a suitable form or
packaged for long-term storage when weapons production ceased. As a
result, some packaging and related problems have developed over time.
(See app. I.)

From World War II to the end of the Cold War, DOE and its predecessor
agencies conducted nuclear research, produced plutonium, and
manufactured and tested nuclear weapons at sites throughout the United
States. No plutonium has been produced for weapons since 1988. The 99.5
metric tons of plutonium that remain in the U.S. government’s inventory
today is in the custody of the Department of Defense (DOD) and DOE. DOD
has custody of the plutonium in warheads in the nuclear weapons
stockpile, which are located at military bases around the world, and DOE
manages the rest of the plutonium, which is located primarily at eight DOE
sites: Argonne National Laboratory-West, Hanford Site, Idaho National
Engineering and Environmental Laboratory (INEEL), Lawrence Livermore
National Laboratory, Los Alamos National Laboratory, Pantex Plant,
Rocky Flats Environmental Technology Site, and Savannah River Site.
(See fig. 1.)




6
 Plutonium may be considered unstable if it is (1) in a chemical form which makes its behavior
difficult to predict (i.e., some forms can spontaneously combust or oxidize), (2) mixed with hazardous
or corrosive materials, or (3) inadequately packaged.



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Figure 1: Sites Storing the Majority of DOE’s Plutonium



          Hanford Site

        Idaho National
        Engineering and
        Environmental
        Laboratory


       Argonne National
       Laboratory-West

   Lawrence Livermore
   National Laboratory

             Rocky Flats
             Environmental
             Technology Site

                         Los Alamos National
                         Laboratory
                                                     Pantex
                                                     Plant
                                                                                 Savannah River
                                                                                 Site


                                            Source: DOE.




                                            Although DOE no longer produces plutonium for weapons, some of the
                                            plutonium it produced in the past continues to present environmental,
                                            safety, and health hazards, as well as concerns about proliferation, and
                                            therefore requires careful management. The hazards and concerns
                                            associated with plutonium include the following:

                                        •   Plutonium is extremely toxic and can be fatal, especially when inhaled.
                                        •   Several kilograms7 of plutonium are sufficient to make a nuclear bomb.
                                            Although attempts are made to control access to nuclear materials, thefts



                                            7
                                             One kilogram equals 2.205 pounds.



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                             have occurred in the former Soviet Union since the end of the Cold War,
                             raising concerns about nuclear proliferation and international terrorism.8
                         •   Today, land, buildings, and equipment used in making nuclear weapons,
                             remain contaminated and present environmental hazards. To address
                             these hazards, DOE expects to spend nearly $229 billion over the next 75
                             years.9 Although DOE does not track cleanup costs specifically for
                             plutonium, a major portion of these costs can likely be attributed to
                             plutonium or related activities.

                             Additional information on the dangers of plutonium is provided in
                             appendix I.

                             Even though the United States no longer manufactures new nuclear
                             weapons, some plutonium is still used in nuclear weapons and for
                             research, development, and testing programs. DOD establishes nuclear
                             weapons requirements, and DOE subsequently determines how much
                             plutonium is necessary to support these requirements. The Nuclear
                             Weapons Council (NWC)10 coordinates nuclear program activities between
                             DOD and DOE and submits documents containing weapons requirements to
                             the National Security Council and the President for approval.


                             The nation’s 99.5-metric-ton inventory of plutonium is divided into two
DOE Has a Technical          categories—that which is allocated for national security (46.8 metric tons)
Basis for Most but Not       and that which is designated as excess (52.7 metric tons). The national
All of Its National          security plutonium is further allocated among several subcategories.
                             Although DOE could justify most of these allocations, we found that it had
Security Plutonium           no technical basis for the amounts of plutonium allocated for reliability
                             replacement warheads and for the strategic reserve.


United States Declares       In 1995, for the first time in the history of the U.S. nuclear weapons
Excess Plutonium             program, the United States declared that 38.2 metric tons of
                             weapons-grade plutonium was no longer needed for national security and
                             was, therefore, excess. (In addition, DOE designated 14.5 metric tons of
                             non-weapons-grade plutonium as excess.) According to DOE, this


                             8
                              DOE’s Nonproliferation and Arms Control Assessment of Weapons-Usable Fissile Material Storage
                             and Excess Plutonium Disposition Alternatives (Jan. 1997).
                             9
                              U.S. Department of Energy Consolidated Financial Statements for Fiscal Year 1996 (Feb. 1997).
                             10
                               Established in 1986, NWC includes the Under Secretary of Defense for Acquisition and Technology;
                             the Vice Chairman of the Joint Chiefs of Staff; and a DOE representative, currently the Deputy
                             Secretary of Energy.



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                                  declaration was an important step in implementing the Nonproliferation
                                  and Export Control Policy, which was issued by the President in
                                  September 1993. This policy calls for the United States to eliminate, where
                                  possible, the accumulation of plutonium stockpiles and prevent the
                                  proliferation of weapons of mass destruction.

                                  According to DOE officials, DOE reviewed its existing plutonium inventory
                                  records to determine how much of its weapons-grade plutonium was
                                  needed for national security. All weapons-grade plutonium that was in the
                                  custody of DOD in the active and inactive stockpile and some of the
                                  weapons-grade plutonium assigned to and managed by DOE’s Defense
                                  Programs organization was categorized as needed for national security.
                                  This plutonium is for use in nuclear weapons; the strategic reserve; mutual
                                  defense; and research, development, and testing programs. All other
                                  plutonium that was assigned to or managed by any other DOE organizations
                                  (as well as the plutonium remaining with Defense Programs that was not
                                  required for national security) was categorized as not needed for national
                                  security. Ultimately, DOE will dispose of this excess plutonium. On the
                                  basis of this inventory review, DOE decided that 46.8 metric tons of
                                  weapons-grade plutonium should be held for national security and that the
                                  remaining 52.7 metric tons of plutonium—including 38.2 metric tons of
                                  weapons-grade and 14.5 metric tons of non-weapons-grade—could be
                                  declared excess to national security needs. The categorization of the
                                  current U.S. plutonium inventory is shown in table 1.

Table 1: Current U.S. Plutonium
Inventory                         Amounts in metric tons
                                  Categories of plutoniuma                                                           Amount
                                       National security weapons-grade                                                   46.8
                                       Excess weapons-grade                                                              38.2
                                       Excess non-weapons-grade                                                          14.5
                                  Total                                                                                  99.5
                                  a
                                      In DOE’s inventory or in nuclear weapons held by DOD.

                                  Source: DOE.




Significant Future Changes        Significant changes in the amounts of plutonium dedicated to national
in the Categorization of          security are unlikely in the near future. According to DOE officials, the
Plutonium Are Unlikely            United States has no plans to formally declare additional amounts of
                                  plutonium excess to national security needs. According to one DOE official,




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                              any future declarations would depend on international agreements or
                              political decisions, such as (1) Russia’s ratification of the second Strategic
                              Arms Reduction Treaty (START-II);11 (2) ratification of possible additional
                              weapons reduction treaties, like START-III; or (3) a change in the role of
                              nuclear weapons in the nation’s defense posture. However, even these
                              events would not necessarily result in additional declarations of excess
                              plutonium. Instead, according to a DOE official, decreases in the active
                              stockpile may be offset by reclassifying some of the plutonium from the
                              active stockpile to the inactive stockpile or the strategic reserve.
                              Therefore, even if the number of active warheads decreases, the total
                              amount of plutonium allocated for national security will likely remain at
                              46.8 metric tons.


DOE Could Justify Most        The national security plutonium is allocated among four categories, and
but Not All of Its National   the amounts in these categories are classified. According to DOE, the
Security Plutonium            allocation for the first and second categories, warheads in the active and
                              inactive nuclear weapons stockpile, are in weapons in the custody of DOD.12
Allocations                    The remainder of the national security plutonium, managed by DOE, is
                              allocated to the strategic reserve13 and to mutual defense and research and
                              development programs. Although DOE could justify the amounts of
                              plutonium allocated to most of these categories, it could not provide a
                              technical basis for the amounts allocated for reliability replacement
                              warheads within the inactive stockpile and for the strategic reserve. Table
                              2 lists the allocations of national security plutonium and their principal
                              uses and indicates whether the allocations have a technical basis.




                              11
                               The two Strategic Arms Reduction Treaties, START-I and START-II, call for the United States and
                              Russia to reduce their deployed strategic nuclear weapons (and remove or destroy these weapons’
                              delivery systems). Additional information on the START treaties appears in app. I.
                              12
                               According to DOE, to determine the amount of plutonium required to support these warheads, DOE
                              multiplies the number of warheads by the amount of plutonium each contains.
                              13
                                According to DOE, a strategic reserve of plutonium is required to support the production of
                              replacement warheads when DOD believes that the number of inactive warheads is insufficient to
                              back up the supply of active warheads.



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Table 2: Principal Uses of National
Security Plutonium                                                                                      Technical basis for the
                                          Allocation                      Principal uses                allocation?
                                          Active nuclear weapons          Warheads in active nuclear    Yes
                                          stockpile                       weapons
                                          Inactive nuclear weapons stockpile
                                            Augmentation                  Warheads in storage that      Yes
                                            warheads                      could be returned to the
                                                                          active stockpile
                                            Reliability                   Warheads stored for            No
                                            replacement                   replacing active stockpile
                                            warheads                      warheads if they develop
                                                                          reliability or safety problems
                                            Additional warheads           Warheads stored to replace Yes
                                                                          active stockpile warheads
                                                                          intentionally destroyed
                                                                          during quality assurance
                                                                          and reliability testing
                                          Strategic reserve               Plutonium stored to replace   No
                                                                          failed active warheads if
                                                                          there is no backup in the
                                                                          inactive stockpile
                                          Mutual defense and              Plutonium held to support     Yes
                                          research and development        agreements with allied
                                                                          countries and DOE’s
                                                                          research and development
                                                                          programs
                                          Source: GAO’s analysis based on data from DOE.



                                          As table 2 indicates, DOE appeared to have a technical basis for most of the
                                          allocations of national security plutonium. DOE provided the following
                                          justifications for these allocations:

                                      •   The allocation for the active stockpile is determined through an annual
                                          process driven by DOD’s nuclear weapons requirements. DOD determines
                                          the types and numbers of weapons it wants to support national security
                                          needs, and DOE determines how much plutonium is needed for the required
                                          warheads and for their support.
                                      •   Augmentation warheads in the inactive stockpile are reserved to allow DOD
                                          and DOE to raise the active stockpile levels if necessary.
                                      •   Additional warheads in the inactive stockpile are held to replace warheads
                                          that are removed from the active stockpile and used for testing. The
                                          number of warheads needed as replacements is based on requirements of
                                          DOE’s Quality Assurance and Reliability Testing Program.




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•   The amount of plutonium held for mutual defense is based on signed
    agreements between the United States and its allies. The plutonium held
    for research and development is used by DOE’s laboratories and its amount
    is based on an established forecast and allotment system.

    While DOE appeared to have adequate justification for these allocations of
    national security plutonium, it could not justify the allocations of
    plutonium for reliability replacement warheads in the inactive stockpile or
    for the strategic reserve, which represent a significant portion of the
    national security plutonium:

•   Neither DOE nor NWC officials could demonstrate a basis for the number of
    reliability replacement warheads being held to replace active stockpile
    warheads in case they develop reliability or safety problems. DOE and NWC
    could not demonstrate that an analysis of the failure rate for active
    warheads had been conducted or that a technical assessment had been
    done to determine the need for this level of backup support.
•   According to DOE, the plutonium held in the strategic reserve is for rapidly
    building warheads to respond to unforeseen events (such as warhead
    failures) that are not already provided for in the inactive stockpile.
    However, neither DOE nor NWC officials could demonstrate that a technical
    analysis had been conducted to justify the amount of plutonium held for
    this purpose.

    DOE   officials believe that the allocations of plutonium for reliability
    replacement warheads and for the strategic reserve are prudent because
    (1) nuclear weapons are required to deter forces hostile to the United
    States and its allies; (2) no new nuclear weapons are currently being
    designed, developed or manufactured; (3) the United States has no active
    underground nuclear testing program; and (4) nuclear weapons in the
    stockpile are being retained beyond their original expected service life.
    For these reasons, DOD and DOE, in deciding how much plutonium to hold
    for reliability replacement warheads and for the strategic reserve, assume
    that all of the nuclear warheads in the active stockpile will fail. Therefore,
    DOD and DOE believe that each active warhead needs to be supported either
    by a backup warhead in the reliability replacement category or by
    plutonium in the strategic reserve. While we recognize the prudence of
    holding some plutonium for these reasons, we question whether there is a
    technical basis for the amounts of plutonium being held in these two
    subcategories. Without a technical basis, the United States cannot be sure
    it is retaining the correct amount of plutonium for national security
    purposes.



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                         DOE  estimates that it spends more than $2 billion a year,14 or over
Current and              12 percent of its current annual budget, to manage its plutonium inventory
Near-Term Plutonium      and perform other plutonium-related activities. Because excess plutonium
Activities Are           is often held in unstable forms—such as oxides, solutions, residues, and
                         scraps—it requires many management activities and is therefore costly to
Estimated to Cost        manage. In contrast, national security plutonium is generally stored in
Billions of Dollars      sealed metal weapons components, is relatively stable, and is therefore
                         less costly to manage. However, the costs of managing excess plutonium
                         are expected to decline after it is disposed of in a permanent repository,15
                         while the costs of managing national security plutonium are likely to
                         continue indefinitely.


Unstable Excess          From fiscal year 1995 through fiscal year 2002, DOE expects to spend about
Plutonium Is Costly to   $18.8 billion on plutonium management and related activities at the eight
Manage                   sites responsible for managing most of its plutonium. These costs include
                         about $10.5 billion for plutonium inventory management and about
                         $8.3 billion for plutonium-related waste management and site cleanup. The
                         inventory management costs include about $8.7 billion for excess
                         plutonium and about $1.8 billion for national security plutonium.

                         The inventory management costs included in DOE’s estimate are for
                         (1) storing and maintaining the plutonium inventories, including providing
                         safeguards and security; (2) stabilizing, handling, and packaging the
                         plutonium; (3) performing weapons-related activities, such as
                         disassembling and dismantling weapons, managing the active stockpile,
                         and conducting research and development; and (4) other activities, mainly
                         managing DOE’s spent nuclear fuel containing plutonium.
                         Plutonium-related waste management and site cleanup activities are
                         generally attributable to past plutonium production or other
                         plutonium-related activities at the sites. Thus, their associated costs
                         cannot be linked directly to either excess or national security plutonium.
                         Table 3 summarizes DOE’s estimates of these costs.




                         14
                          DOE based its estimates of plutonium-related costs, for fiscal year 1995 through fiscal year 2002, on
                         available cost information as well as officials’ technical expertise and professional judgment. All cost
                         estimates are presented in constant 1996 dollars.
                         15
                           The Nuclear Waste Policy Act of 1982, as amended, requires the Secretary of Energy to determine, on
                         the basis of an investigation of Yucca Mountain, Nevada, whether this site is suitable for a repository
                         and, if this determination is positive, to recommend to the President that the site be selected for that
                         purpose. If the site is formally selected, DOE must apply to the Nuclear Regulatory Commission for
                         authorization (a license) to construct a repository there.



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Table 3: Estimated Current and
Near-Term Costs for Plutonium        Dollars in millions
Inventory Management and Related                                                                        Costsa
Activities, Fiscal Years 1995-2002
                                                                          National security                   Excess
                                     Activity                                   plutonium                  plutonium                   Total
                                     Plutonium inventory management activities
                                     Storage and maintenance                           $1,462                  $5,597                 $7,059
                                     Stabilization, handling,                                 174                  655                  829
                                     and packaging
                                     Weapons-related activitiesb                              153                     0                 153
                                     Otherc                                                    4                 2,434                 2,438
                                     Subtotal                                          $1,793                  $8,686                $10,479
                                     Plutonium-related management activities
                                                                                                d                      d
                                     Waste management                                                                                  6,450
                                                                                                d                      d
                                     Site cleanup                                                                                      1,835
                                                                                                d                      d
                                     Subtotal                                                                                         $8,285
                                                                                                e                      e
                                     Total                                                                                           $18,764
                                     a
                                         All dollars are adjusted to constant 1996 dollars.
                                     b
                                      Includes weapons disassembly and dismantlement, stockpile management support, research
                                     and development, and other costs related to plutonium in weapons.
                                     c
                                       Represents predominantly the cost of managing spent nuclear fuel containing plutonium.
                                     Although the plutonium in DOE’s spent nuclear fuel is not considered usable for nuclear weapons,
                                     it is accounted for in DOE’s plutonium inventory.
                                     d
                                         These costs are not related specifically to either excess or national security plutonium.
                                     e
                                         Not applicable.

                                     Source: GAO’s analysis of data from DOE.



                                     As shown in table 3, over 80 percent ($8,686 million) of DOE’s inventory
                                     management costs are attributable to excess plutonium, while less than 20
                                     percent ($1,793 million) are attributable to national security plutonium.

                                     The costs of managing excess plutonium are high because much of
                                     it—including some oxides, solutions, residues, and scraps—is unstable
                                     and requires costly handling, processing, packaging, and storage. At many
                                     DOE facilities, the plutonium in these forms remained in an unsafe
                                     condition after DOE stopped producing plutonium and nuclear weapons. As
                                     a result, contractors at these facilities are still stabilizing the plutonium
                                     and correcting packaging problems that remained when weapons
                                     production ceased. At Rocky Flats, for example, some of the excess
                                     plutonium is contained in highly acidic, corrosive solutions that can



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                    damage containers. Plutonium in this form creates a potential for leakage
                    that could, in turn, expose workers to hazards or contaminate the
                    environment. Accordingly, the plutonium in solutions must be stabilized
                    and repackaged.

                    In contrast, the costs of managing national security plutonium are
                    relatively low because this plutonium is generally stored in sealed metal
                    weapons components (pits), is relatively stable, and requires little
                    near-term management, according to DOE officials. For example, at the
                    Pantex Plant, which stores the majority of DOE’s national security
                    plutonium in pits, the plutonium management costs are relatively low.

                    Although the costs of managing excess plutonium are higher than those of
                    managing national security plutonium, the excess plutonium will
                    eventually be converted to safer forms and disposed of in a permanent
                    underground repository. At that time, its management costs will fall. In
                    contrast, the costs of managing national security plutonium will continue
                    as long as the United States requires plutonium for its nuclear weapons.
                    Given that DOE has no plans to reduce its requirements for national
                    security plutonium or to categorize additional amounts as excess, these
                    costs can be expected to continue into the foreseeable future.


                    In addition to the current and near-term costs of managing plutonium from
DOE’s Storage and   fiscal year 1995 through fiscal year 2002, DOE expects to incur long-term
Conversion Plan     costs, through about 2023, for storing and converting excess plutonium to
Faces Long-Term     safer forms that will ultimately be disposed of in a permanent
                    underground repository. On the basis of early conceptual design data and
Costs and           preliminary plans, DOE estimates that these costs will total more than
Uncertainties       $3 billion. This estimate is based on DOE’s January 1997 record of
                    decision,16 which details the Department’s plan for storing and converting
                    excess plutonium to forms that are difficult to reuse in nuclear weapons
                    and are suitable for permanent disposal. To convert the excess plutonium
                    to such forms, DOE has decided to pursue a dual-track strategy: burning the
                    plutonium in reactors and immobilizing it in glass or ceramics. However,
                    uncertainties surrounding both the storage and the conversion parts of
                    DOE’s strategy have unknown cost and schedule implications.




                    16
                     DOE’s Record of Decision for the Storage and Disposition of Weapons-Usable Fissile Materials Final
                    Programmatic Environmental Impact Statement (Jan. 14, 1997).



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DOE’s Strategy and Cost     While DOE’s recent record of decision focuses on converting the nation’s
Estimates for Storage and   excess plutonium to safer forms for disposal, DOE must store the
Conversion                  plutonium until it can be converted and then store the converted
                            plutonium until a repository is available for its disposal. Currently, neither
                            facilities for converting the plutonium nor a repository for its permanent
                            disposal is available. Until DOE has developed and built conversion
                            facilities, it plans to store the excess plutonium at five sites. DOE estimates
                            that this storage could cost over $1 billion from 2002 through 2019.17 This
                            estimate includes approximately $140 million for constructing a new
                            storage facility at Savannah River; about $390 million for upgrading,
                            expanding, and operating the facilities at Pantex and Savannah River; and
                            as much as $600 million for operating the storage facilities at Hanford,
                            INEEL, and Los Alamos. After the plutonium is converted, DOE plans to store
                            the canisters of immobilized plutonium and the spent fuel at the
                            conversion facilities until a permanent repository is available for their final
                            disposal.

                            DOE’s dual-track strategy calls for the use of two different technologies to
                            convert the plutonium into safer forms that meet the “spent fuel standard.”
                            This standard requires that the plutonium be made as inaccessible and
                            unattractive for use in nuclear weapons as the plutonium in spent fuel
                            from commercial nuclear power reactors. One of the conversion tracks
                            involves immobilizing plutonium in either glass or ceramic material within
                            small containers. These containers are placed inside large stainless steel
                            canisters, which are then filled with glass containing high-level waste to
                            provide a radiation barrier.18 The other track converts plutonium into
                            spent fuel by burning it as fuel in existing commercial reactors. The
                            plutonium is first processed into plutonium dioxide, which is then mixed
                            with uranium dioxide to make mixed oxide (MOX) fuel. The MOX fuel is then
                            burned in a commercial reactor to generate electricity. Regardless of the
                            conversion track used, the end product will meet the spent fuel standard
                            and will ultimately require disposal in a permanent underground
                            repository. Figure 2 illustrates DOE’s storage and conversion strategy.




                            17
                              Storage costs of a few million dollars could be incurred at Pantex as early as 1999 or 2000.
                            18
                             This is the “can-in-canister” variation of the immobilization technology, considered the most likely to
                            be used.



                            Page 13                                                   GAO/RCED-97-98 Plutonium Management
                                          B-276407




Figure 2: DOE’s Storage and Conversion Strategy



                               Store excess plutonium prior to conversion




                             Prepare plutonium for conversion technology




      Make plutonium into MOX fuel                                  Immobilize plutonium in
                                                                      glass or ceramics




      Burn in existing power reactors                               Surround with radioactive
                                                                     waste inside canisters




      Store spent fuel at reactor sites                          Store canisters of plutonium at
                                                                     immobilization facility




                             Dispose of converted plutonium in permanent
                                       underground repository


                                          Source: DOE.




                                          In addition to over $1 billion in storage costs, DOE estimates that
                                          implementing its dual-track conversion strategy will cost approximately
                                          $2 billion through about 2023. (See app. II for more information on DOE’s
                                          schedule estimates for conversion.) This cost estimate reflects both
                                          investment and operating costs. Investment costs cover research and
                                          development, licensing, conceptual design, start-up, engineering, capital



                                          Page 14                                      GAO/RCED-97-98 Plutonium Management
                                        B-276407




                                        equipment, and construction. Operating costs cover staffing, maintenance,
                                        consumables, waste management, and decontamination and
                                        decommissioning. Also, in estimating the MOX fuel costs, DOE assumed that
                                        some costs could be recovered when reactor operators acquire MOX fuel
                                        from DOE instead of purchasing conventional reactor fuel. DOE refers to
                                        these recovered costs as fuel displacement credits. Table 4 presents a
                                        breakdown of DOE’s cost estimate for the conversion strategy.

Table 4: Estimated Costs to Implement
DOE’s Dual-Track Conversion Strategy    Dollars in millions
                                                                                                 Estimated costsa
                                                                                                                    Fuel
                                                                       Investment            Operating      displacement
                                        Facility                             cost                 cost             credit                Total
                                        Preconversion                         $ 360                $ 970               $0              $1,330
                                        processing
                                        Immobilizationb,c                       220                   60                 0                 280
                                                                                                        d
                                        MOX fuel                                360                  680             (930)                 110
                                        fabrication
                                        Reactorc                                200                   90                 0                 290
                                        Repository                                 0e                 30                 0                     30
                                        Total                               $1,140                $1,830            ($930)             $2,040
                                        a
                                            All dollars are adjusted to constant 1996 dollars.
                                        b
                                         Assumes that the “can-in-canister” method will be used and the immobilization portion of the
                                        strategy will have an accelerated start.
                                        c
                                          Assumes that the purest of the excess plutonium will be burned as MOX fuel and the remainder
                                        will be immobilized.
                                        d
                                         Does not include the costs of implementing an option described by DOE as a remote possibility,
                                        namely, that European MOX fuel fabrication facilities will be used to speed up the availability of
                                        MOX fuel until the United States builds its own MOX fuel fabrication facility. This option would add
                                        $140 million to the MOX fuel operating costs and increase the total cost of the strategy from
                                        $2.04 billion to $2.18 billion.
                                        e
                                          Does not include the investment costs for DOE’s underground repository, since they are
                                        included under other DOE budgets.

                                        Source: DOE.




DOE’s Storage and                       Although DOE has developed a strategy for storing and converting excess
Conversion Strategy Is                  plutonium, this strategy is subject to uncertainties that will affect its
Subject to Uncertainties                implementation. These uncertainties are associated with technology,
                                        facility, and nonproliferation issues. How these uncertainties are resolved
                                        will determine whether DOE uses one or both of the conversion



                                        Page 15                                                     GAO/RCED-97-98 Plutonium Management
                               B-276407




                               technologies, how much plutonium will be converted through either
                               technology, and how long the plutonium will have to be stored before and
                               after conversion.


Technology Uncertainties       Uncertainties are associated with developing the immobilization
                               technology and implementing the MOX fuel technology in the United States.
                               Neither technology has yet been proved effective for use in DOE’s
                               conversion strategy, and both pose issues that must be addressed prior to
                               implementation:

                           •   Although immobilization has been used for other industrial purposes and
                               other materials, it has never been used on an industrial scale for
                               plutonium. Unresolved questions include how the plutonium will react in
                               the immobilization processing, how stable and durable the immobilized
                               material will be, how difficult recovering the plutonium from the
                               immobilized forms will be, and what percentage of plutonium will be
                               immobilized in glass or ceramics.
                           •   MOX fuel technology is more advanced and has been used in reactors in
                               other countries for many years. However, MOX fuel is not currently being
                               used in reactors in the United States, no U.S. reactors are licensed to use
                               this fuel, and no MOX fuel fabrication facilities exist in the United States.
                               Additional uncertainties surrounding the MOX technology include the
                               percentage of plutonium that will be used in the U.S. MOX fuel (likely to
                               differ from the percentage used in the European MOX fuel) and the
                               potential effects, on the fuel or reactors, of materials that were added to
                               the plutonium used in weapons components.

                               In addition to fully developing and implementing the two technologies and
                               addressing these uncertainties, DOE must demonstrate the technologies’
                               compliance with regulatory and oversight requirements.

                               Because both conversion technologies are relatively immature and
                               uncertainties surround their development and implementation, DOE cannot
                               confidently forecast how long it will have to store the excess plutonium
                               before conversion facilities are available. Under DOE’s plans, the
                               consolidation and storage of plutonium will be complete in about 2019 at
                               Pantex, about 2011 at Savannah River, and as early as 2006 at the three
                               remaining sites—Hanford, INEEL, and Los Alamos. Delays in conversion
                               would extend the time the plutonium would have to be stored at some or
                               all of the storage sites.




                               Page 16                                    GAO/RCED-97-98 Plutonium Management
                         B-276407




Facility Uncertainties   Questions about facilities also pose uncertainties, most of which stem
                         from the immaturity of the conversion technologies. That is, until the
                         technologies are further developed, DOE cannot decide on the type and
                         number of facilities it will need for immobilization. Furthermore, DOE has
                         not yet decided where to place the facilities that will be required to
                         process the plutonium, whether for immobilization or for use in MOX fuel.
                         Similarly, DOE has not determined the type, number, or locations of the
                         commercial reactors that will be needed to burn the MOX fuel. Resolving
                         these issues will depend not only on the maturation of the conversion
                         technologies but also on such things as contract negotiations with reactor
                         owners, licensing requirements, and environmental reviews.

                         Further uncertainties are associated with the underground repository
                         where DOE plans to permanently dispose of converted plutonium. Although
                         DOE assumes that a permanent repository will be ready to accept the
                         converted plutonium in 2010 (12 years later than originally expected), DOE
                         cannot be certain that a repository will open on schedule. DOE is currently
                         assessing the Yucca Mountain site to determine its viability for a
                         repository. In January 1997, we reported that several impediments and
                         uncertainties about standards and licensing must be resolved in order for
                         DOE to achieve its revised 2010 opening date.19 If a repository is not
                         available, the converted plutonium will have to remain in storage at the
                         conversion facilities and the costs of storage will increase.


Nonproliferation         DOE faces uncertainties concerning nonproliferation issues. DOE’s
Uncertainties            conversion strategy was designed, in part, to support U.S. nonproliferation
                         goals. The United States is beginning to implement the dual-track
                         conversion strategy to set an example for Russia and encourage it to take
                         similar actions. However, according to DOE, the schedule for converting
                         the excess U.S. plutonium depends on reaching agreements with Russia
                         concerning reductions of its stockpiles of excess plutonium. To date, no
                         such agreements have been finalized. These agreements will also influence
                         the extent to which DOE relies on each of the two conversion strategies.


                         The United States has taken important steps to reduce the dangers of
Observations             nuclear proliferation associated with holding excess plutonium. However,
                         how accurately DOD and DOE determine the amount of plutonium needed
                         for national security and how much DOE designates as excess may have

                         19
                          See Nuclear Waste: Impediments to Completing the Yucca Mountain Repository Project
                         (GAO/RCED-97-30, Jan. 17, 1997).



                         Page 17                                              GAO/RCED-97-98 Plutonium Management
                      B-276407




                      important long-term implications. Without a technical basis for its
                      categorizations, we believe that the United States cannot be certain it is
                      retaining the correct amount of plutonium for national security purposes.
                      Potential impacts of not holding the correct amount include the following:

                  •   DOD relies on DOE to provide enough plutonium to support the nuclear
                      stockpile. Without a technical analysis of the amounts required for each of
                      the national security subcategories, DOE cannot ensure that it is holding
                      the correct amount of plutonium to provide this support.
                  •   Conversely, if DOD and DOE are holding more plutonium than is needed for
                      national security, they may not be fully implementing U.S. policies to
                      reduce existing stockpiles of excess weapons-usable plutonium as quickly
                      as practicable.
                  •   Within DOE, plans and budgets depend on how plutonium is categorized.
                      DOE’s plan for the long-term storage and management of national security
                      plutonium is based on current allocations to that category. Similarly, DOE’s
                      plan for storing and converting excess plutonium relies on the amount
                      categorized as excess. A change in the amount of plutonium allocated to
                      either category could affect DOE’s projected costs and schedules for both.


                      We provided a draft of this report to DOE, NWC, and DOD for their review and
Agency Comments       comment. While NWC declined to comment on this report, DOD, as a
                      component of NWC, provided comments on the draft. Although DOE and DOD
                      generally agreed that the information in the report was accurate, they
                      disagreed with our position that a technical basis is lacking for the
                      allocations of national security plutonium for reliability replacement
                      warheads in the inactive nuclear weapons stockpile and for the strategic
                      reserve.

                      In its response to our draft report, DOE noted that the requirements for
                      reliability replacement warheads and for the strategic reserve are
                      prescribed by DOD. DOE also expressed “high confidence [that] the nuclear
                      force structure, as specified by DOD, is based on solid technical analysis
                      and is consistent with legislation, treaties, and policy decisions.” (See app.
                      IV for DOE’s comments.)

                      To follow up on DOE’s written comments, we asked the Director of the
                      Office of Nuclear Weapons Management, Defense Programs, to clarify the
                      Department’s reference to a “solid technical analysis.” While agreeing that
                      DOE could not demonstrate that such an analysis had been conducted for
                      the allocations of plutonium for reliability replacement warheads and for



                      Page 18                                    GAO/RCED-97-98 Plutonium Management
B-276407




the strategic reserve, he maintained that these allocations are based on
prudence and expertise. The Director clarified that the reference to a
“solid technical analysis” pertained to the allocations for warheads in the
active stockpile, not to the allocations for reliability replacement
warheads and for the strategic reserve. As indicated on pages 8 and 9 of
this report, we did not question the technical basis for the allocations of
plutonium for the active stockpile.

In response to our draft report, the Deputy Assistant to the Secretary of
Defense (Nuclear Matters) stated that DOD disagreed with our position that
the plutonium allocations for reliability replacement warheads and for the
strategic reserve lack a technical basis. (See app. V for DOD’s comments.)
DOD said that the number of nuclear warheads for reliability replacement
and the quantity of plutonium for the strategic reserve are documented in
the Nuclear Weapons Stockpile Memorandum and the Long Range
Planning Assessment. We agree that these documents specify the amounts
of plutonium allocated to these two categories, but these documents do
not provide the underlying technical analysis used to determine these
amounts.

Throughout our review, DOE and DOD officials were unable to demonstrate
an underlying technical basis, using scientific or engineering methods or
data, for the allocations of plutonium for reliability replacement warheads
and for the strategic reserve plutonium. These officials told us that the
allocations assume a 100-percent failure rate for warheads in the active
stockpile. As stated, we believe that a technical analysis is needed to
support the reasonableness of this assumption. Therefore, we did not
change the content of our report in response to this comment. However,
both DOE and DOD provided clarifying comments, which we incorporated
into our report as appropriate.


To review DOE’s categorization of plutonium and cost estimates for
managing plutonium, we interviewed DOE officials, reviewed DOE
documents, and analyzed cost data obtained through a survey that we sent
to the eight sites responsible for managing most of DOE’s plutonium
inventory. We conducted our work from June 1996 through April 1997 in
accordance with generally accepted government auditing standards.
Detailed information about our scope and methodology appears in
appendix III.




Page 19                                   GAO/RCED-97-98 Plutonium Management
B-276407




Please contact me at (202) 512-3841 if you or your staff have any questions.
Major contributors to this report are listed in appendix VI.

Sincerely yours,




Victor S. Rezendes
Director, Energy, Resources,
  and Science Issues




Page 20                                   GAO/RCED-97-98 Plutonium Management
Page 21   GAO/RCED-97-98 Plutonium Management
Contents



Letter                                                                                            1


Appendix I                                                                                       24

Forms and Dangers of
Plutonium
Appendix II                                                                                      27

Schedule for
Implementing the
Dual-Track
Conversion Strategy
Appendix III                                                                                     28

Objectives, Scope,
and Methodology
Appendix IV                                                                                      30

Comments From the
Department of Energy
Appendix V                                                                                       32

Comments From the
Department of
Defense
Appendix VI                                                                                      33

Major Contributors to
This Report
Related GAO Products                                                                             35


Tables                  Table 1: Current U.S. Plutonium Inventory                                 6
                        Table 2: Principal Uses of National Security Plutonium                    8




                        Page 22                                  GAO/RCED-97-98 Plutonium Management
          Contents




          Table 3: Estimated Current and Near-Term Costs for Plutonium            11
            Inventory Management and Related Activities, Fiscal Years
            1995-2002
          Table 4: Estimated Costs to Implement DOE’s Dual-Track                  15
            Conversion Strategy


Figures   Figure 1: Sites Storing the Majority of DOE’s Plutonium                  4
          Figure 2: DOE’s Storage and Conversion Strategy                         14
          Figure II.1: DOE’s Schedule for Implementing its Dual-Track             27
            Conversion Strategy




          Abbreviations

          DOD        Department of Defense
          DOE        Department of Energy
          GAO        General Accounting Office
          INEEL      Idaho National Engineering and Environmental Laboratory
          MOX        mixed oxide (fuel)
          NWC        Nuclear Weapons Council
          START      Strategic Arms Reduction Treaty


          Page 23                                 GAO/RCED-97-98 Plutonium Management
Appendix I

Forms and Dangers of Plutonium


                        Plutonium (Pu) is primarily a man-made element, produced by irradiating
Forms of Plutonium      uranium in nuclear reactors. It exists in various forms and grades and is
                        used in nuclear warheads and as fuel in nuclear reactors. Plutonium-239 is
                        fissile and can sustain a nuclear chain reaction, making this isotope
                        suitable for nuclear weapons. Plutonium-240 is more radioactive and
                        generates more heat than plutonium-239. The percentage of plutonium-240
                        in plutonium material determines whether it is classified as weapons grade
                        (less than 7 percent Pu-240), fuel grade (7 to 19 percent Pu-240), or reactor
                        grade (more than 19 percent Pu-240). Spent nuclear fuel, a by-product of
                        power generation in nuclear reactors, also contains some plutonium but
                        would require extensive reprocessing to be reused in a weapon or reactor.
                        The different forms of plutonium have varying half-lives—for example,
                        plutonium-239 has a half-life of about 24,000 years.

                        The plutonium that the Department of Energy (DOE) produced is held in
                        several physical forms, including metals, oxides, solutions, residues, and
                        scraps. Most of DOE’s plutonium is stored as a metal because, during the
                        production era, plutonium was recycled and purified to metal form for use
                        in nuclear warheads. Plutonium oxide, a fine powder produced when
                        plutonium metal reacts with oxygen, was formed when weapons were
                        manufactured or when plutonium metal was inadvertently exposed to
                        oxygen. Containers holding acidic and corrosive plutonium solutions are
                        vulnerable to leakage. Residues or scraps, the by-products of past
                        weapons production activities, generally contain plutonium in
                        concentrations of less than 10 percent. Throughout the weapons complex,
                        the plutonium in residues and scraps is mixed with over 100 metric tons of
                        other materials and waste.


                        Although DOE has ceased to manufacture plutonium for use in nuclear
Dangers of Plutonium    weapons, the plutonium produced in the past continues to present
                        hazards. Because plutonium is highly radioactive, it poses acute dangers to
                        human health and the environment, as well as to national security, unless
                        it is properly stored and safeguarded. Land, buildings, equipment, and
                        materials contaminated with plutonium also present environmental
                        hazards that must be cleaned up or contained.


Health, Safety, and     When DOE stopped producing nuclear materials, much of its plutonium
Environmental Hazards   was improperly stored, posing health, safety, and environmental hazards.
                        If not safely contained and managed, plutonium can be dangerous to
                        human health, even in extremely small quantities. Inhaling a few



                        Page 24                                   GAO/RCED-97-98 Plutonium Management
                        Appendix I
                        Forms and Dangers of Plutonium




                        micrograms of plutonium creates a long-term risk of lung, liver, and bone
                        cancer. Inhaling larger doses can cause immediate lung injuries and death.
                        The potential for exposure occurs when containers or packaging fails to
                        fully contain the plutonium. Leakage from corroded containers or
                        inadvertent accumulations of plutonium dust in piping or duct work
                        present hazards, especially in aging, poorly maintained, or obsolete
                        facilities. After assessing the vulnerabilities associated with its storage of
                        plutonium,20 DOE began stabilizing, packaging, or repackaging the more
                        unstable forms—including oxides, solutions, residues, and scraps—to
                        properly store them, as well as plutonium metals, while they await
                        disposition.


Proliferation Hazards   Like uranium, plutonium is a key ingredient in nuclear weapons, and
                        several kilograms suffice to make a nuclear bomb. According to DOE, most
                        nations and some terrorist groups would be able to produce nuclear
                        weapons if they had access to sufficient quantities of nuclear materials.
                        Therefore, controls on access to nuclear materials are the primary
                        technical barrier to nuclear proliferation in the world today. Several thefts
                        of weapons-usable nuclear materials in the former Soviet Union have been
                        confirmed since the end of the Cold War, leading the Director of the
                        Central Intelligence Agency to warn that these materials are more
                        available now than ever before in history.

                        To help reduce the risk of nuclear proliferation posed by plutonium and
                        other nuclear materials, the United States and Russia are working towards
                        nuclear arms reduction treaties. Agreements such as the Strategic Arms
                        Reduction Treaties (START-I and START-II) require that weapons be retired
                        from deployed status and their delivery systems be removed or destroyed.
                        These treaties do not, however, require that the nuclear warheads be
                        dismantled or that their parts and materials, including plutonium, be
                        destroyed. The United States has nevertheless removed some weapons
                        from its stockpile, dismantled their warheads, and stored or disposed of
                        their components and key nuclear materials.

                        In addition, through a “lead and hedge” approach, the United States is
                        encouraging Russia to reduce both the number of nuclear warheads in its
                        arsenal and the amount of nuclear material it maintains to support these
                        warheads. Specifically, the United States plans to “lead” the Russians by
                        reducing the U.S. arsenal of strategic warheads, as agreed in the START-II


                        20
                         See DOE’s Plutonium Working Group Report on Environmental, Safety and Health Vulnerabilities
                        Associated With the Department’s Plutonium Storage (Nov. 1994).



                        Page 25                                              GAO/RCED-97-98 Plutonium Management
                        Appendix I
                        Forms and Dangers of Plutonium




                        treaty. At the same time, it plans to “hedge” by maintaining its ability to
                        return to the levels established under START-I, should the need for
                        additional warheads arise. Although the Congress ratified START-II in
                        January 1996, the Russian parliament has not yet scheduled a vote on it.
                        Because of Russia’s delay in ratifying START-II, the Department of Defense
                        (DOD) is evaluating its ability to resume START-I levels of nuclear warheads
                        in the active stockpile.


Environmental Cleanup   Now that DOE is no longer producing plutonium for nuclear weapons, it is
                        changing its focus to cleaning up the environmental contamination created
                        by 50 years of production at its facilities. In its consolidated financial
                        statements for fiscal year 1996, DOE estimated that it will spend nearly
                        $229 billion over the next 75 years to clean up sites where plutonium and
                        other nuclear materials were fabricated and used to produce nuclear
                        weapons. DOE has not determined what portion of these costs can be
                        attributed specifically to plutonium or plutonium-related activities.




                        Page 26                                   GAO/RCED-97-98 Plutonium Management
Appendix II

Schedule for Implementing the Dual-Track
Conversion Strategy

                                               Assuming a 1997 start date, DOE estimates the conversion mission will end
                                               in 2023. DOE’s estimate breaks the schedule into four overlapping activities:
                                               (1) preparing the plutonium for conversion, (2) immobilizing the
                                               plutonium, (3) fabricating mixed oxide (MOX) fuel, and (4) burning the MOX
                                               fuel in reactors. Figure II.1 shows the schedule for these four activities.



Figure II.1: DOE’s Schedule for Implementing Its Dual-Track Conversion Strategy



                                   Year
   Activities
                                   97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26


   Preparing plutonium
   for conversion
                           a
   Preoperational activities

   Operation

   Immobilization
                           a
   Preoperational activities

   Operation

   MOX fuel fabrication
                               a
   Preoperational activities

   Operation

   Burn MOX in reactors
                               a
   Preoperational activities
                     b
   MOX irradiation

                                               a
                                                 Preoperational activities include research and development and engineering; licensing,
                                               permitting and siting; modifications; and selecting a utility or utilities to operate the reactor(s) that
                                               will burn the MOX fuel.
                                               b
                                                 The last MOX fuel assembly will achieve the spent fuel standard in about 2020, although
                                               irradiation of the fuel will continue into 2023.




                                               Page 27                                                     GAO/RCED-97-98 Plutonium Management
Appendix III

Objectives, Scope, and Methodology


               Our objectives for this assignment were to (1) review how much
               plutonium the United States allocated for national security, how much was
               designated as excess, and how DOE determined these amounts; (2) review
               DOE’s estimates of the current and near-term costs for managing
               plutonium; and (3) review DOE’s estimates of the long-term costs for
               managing plutonium.

               To review DOE’s and the Nuclear Weapons Council’s (NWC) categorization
               of plutonium and any changes that have occurred or are projected for the
               future, we interviewed DOE and NWC officials and gathered and analyzed
               information from both organizations. As agreed with the requester’s office,
               our study did not include DOD’s roles and activities except to the extent
               that DOD participates in NWC. Therefore, although DOD manages the
               plutonium contained in active nuclear warheads, we did not include the
               cost of managing this plutonium.

               To determine the current and near-term costs of managing DOE’s
               plutonium, we interviewed officials and gathered and analyzed data from
               DOE sites and headquarters. We conducted a survey of the eight DOE sites
               that, according to DOE’s 1996 report Plutonium: The First 50 Years,
               maintain the majority of DOE’s plutonium inventory. These sites are
               Argonne National Laboratory-West, Hanford Site, Idaho National
               Engineering and Environmental Laboratory, Lawrence Livermore National
               Laboratory, Los Alamos National Laboratory, Pantex Plant, Rocky Flats
               Environmental Technology Site, and Savannah River Site. The survey
               asked each site to identify its (1) actual costs for fiscal years 1995 and
               1996, (2) budget estimates for fiscal year 1997, and (3) projected cost
               estimates for fiscal year 1998 through fiscal year 2002. All cost estimates
               were adjusted to constant 1996 dollars. We also included each site’s share
               of the program oversight costs incurred by DOE headquarters and
               operations offices, applying DOE’s own standard formula (4.3 percent plus
               local adjustments) to the cost estimate provided by each site.

               DOE’s budget and accounting systems do not separately collect or report
               plutonium-specific costs. Therefore, DOE provided its “best estimates” of
               plutonium-related costs, based on available cost information as well as
               officials’ technical expertise and professional judgment. We could not
               readily verify the data’s accuracy, as we would have done had the data
               been derived from a budget and accounting system. However, we
               discussed our data-gathering approach with cognizant DOE officials,
               coordinated our request for data through the Office of the Chief Financial
               Officer, and provided our summarized cost data to DOE officials, who



               Page 28                                  GAO/RCED-97-98 Plutonium Management
Appendix III
Objectives, Scope, and Methodology




agreed that the data-gathering approach was reasonable and that the data
provided by the field sites were probably the best that could be obtained
under the circumstances. Similarly, officials from the Congressional
Research Service and Congressional Budget Office reviewed the cost data
and suggested no changes.

To obtain information on the long-term costs of managing plutonium, we
interviewed DOE officials and examined various DOE documents, including
the Record of Decision for the Storage and Disposition of Weapons-Usable
Fissile Materials Final Programmatic Environmental Impact Statement and
documents prepared to support it. In addition, we reviewed DOE’s
consolidated financial statements for fiscal year 1996.

We conducted our review between June 1996 and April 1997 in accordance
with generally accepted government auditing standards.




Page 29                                  GAO/RCED-97-98 Plutonium Management
Appendix IV

Comments From the Department of Energy




              Page 30       GAO/RCED-97-98 Plutonium Management
Appendix IV
Comments From the Department of Energy




Page 31                                  GAO/RCED-97-98 Plutonium Management
Appendix V

Comments From the Department of Defense




             Page 32        GAO/RCED-97-98 Plutonium Management
Appendix VI

Major Contributors to This Report


                       Allen Li
Resources,             Ronald J. Guthrie
Community, and         Pamela J. Timmerman
Economic               Christopher M. Pacheco
                       Lisa P. Gardner
Development Division   Pamela K. Tumler
                       Elizabeth R. Eisenstadt




                       Page 33                   GAO/RCED-97-98 Plutonium Management
Appendix VI
Major Contributors to This Report




Page 34                             GAO/RCED-97-98 Plutonium Management
Related GAO Products


              Department of Energy Contract Management (GAO/HR-97-13, Feb. 1997).

              Nuclear Waste: Impediments to Completing the Yucca Mountain
              Repository Project (GAO/RCED-97-30, Jan. 17, 1997).

              Nuclear Waste: Uncertainties About Opening Waste Isolation Pilot Plant
              (GAO/RCED-96-146, July 16, 1996).

              Nuclear Waste: Greater Use of Removal Actions Could Cut Time and Cost
              for Cleanups (GAO/RCED-96-124, May 23, 1996).

              Energy Downsizing: While DOE is Achieving Budget Cuts, It Is Too Soon to
              Gauge Effects (GAO/RCED-96-154, May 13, 1996).

              Nuclear Weapons: Status of DOE’s Nuclear Stockpile Surveillance Program
              (GAO/T-RCED-96-100, Mar. 13, 1996).

              Nuclear Nonproliferation: U.S. Efforts to Help Newly Independent States
              Improve Their Nuclear Material Controls (GAO/T-NSIAD/RCED-96-118, Mar. 13,
              1996).

              Nuclear Nonproliferation: Status of U.S. Efforts to Improve Nuclear
              Material Controls in Newly Independent States (GAO/NSIAD/RCED-96-89,
              Mar. 8, 1996).

              Nuclear Nonproliferation: Concerns With the U.S. International Nuclear
              Materials Tracking System (GAO/T-RCED/AIMD-96-91, Feb. 28, 1996).

              Nuclear Waste: Management and Technical Problems Continue to Delay
              Characterizing Hanford’s Tank Waste (GAO/RCED-96-56, Jan. 26, 1996).

              Nuclear Safety: Concerns With Nuclear Facilities and Other Sources of
              Radiation in the Former Soviet Union (GAO/RCED-96-4, Nov. 7, 1995).

              Nuclear Waste: Issues Affecting the Opening of DOE’s Waste Isolation Pilot
              Plant (GAO/T-RCED-95-254, July 21, 1995).

              Department of Energy: Savings From Deactivating Facilities Can Be Better
              Estimated (GAO/RCED-95-183, July 7, 1995).

              Nuclear Nonproliferation: Information on Nuclear Exports Controlled by
              U.S.-EURATOM Agreement (GAO/RCED-95-168, June 16, 1995).



              Page 35                                   GAO/RCED-97-98 Plutonium Management
           Related GAO Products




           Nuclear Facility Cleanup: Centralized Contracting of Laboratory Analysis
           Would Produce Budgetary Savings (GAO/RCED-95-118, May 8, 1995).

           Nuclear Materials: Plutonium Storage at DOE’s Rocky Flats Plant
           (GAO/RCED-95-49, Dec. 29, 1994).

           Nuclear Waste: Change in Test Strategy Sound, but DOE Overstated Savings
           (GAO/RCED-95-44, Dec. 27, 1994).

           Nuclear Waste: DOE’s Management and Organization of the Nevada
           Repository Project (GAO/RCED-95-27, Dec. 23, 1994).

           Nuclear Waste: Comprehensive Review of the Disposal Program Is Needed
           (GAO/RCED-94-299, Sept. 27, 1994).

           Nuclear Waste: Yucca Mountain Project Behind Schedule and Facing
           Major Scientific Uncertainties (GAO/RCED-93-124, May 21, 1993).




(302198)   Page 36                                 GAO/RCED-97-98 Plutonium Management
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