Merle Sykes Deputy Assistant Secretary Office of Program Planning and Budget

Merle SykesMerle SykesDeputy Assistant SecretaryDeputy Assistant Secretary

Office of Program Planning and Budget Office of Program Planning and Budget

November 13, 2008

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Progress — EM has made substantial cleanup progress

Rocky Flats Nuclear Weapons Component Production Plant

Cleanup Wildlife Refuge

Fernald Uranium Processing Facility Cleanup Wetlands

Plus hundreds of other cleanup success stories

Tremendous Risk

Reduction

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Progress — EM has made substantial cleanup progress

% of lifecycle total projected to be completed

10 20 30 40 50 60 70 80 90 100EM Performance Metrics

Completed

Life-Cycle Total

As of 2002 As of 2008Legend

Plutonium packaged for long-term disposition

Enriched uranium packaged for disposition

Pu and U residues packaged for disposition

Depleted U and other U packaged for disposition

Liquid waste eliminated

Transuranic (CH and RH) waste disposed

SNF packaged for final disposition

Low-level/mixed low-level waste disposed

Material access areas (MAAs) eliminated

Nuclear facility D&D completions

Radioactive facility D&D completions

Industrial facility D&D completions

Site remediation complete

Geographic sites eliminated

Liquid waste tanks closed

High-level waste packaged for final disposition

6,314 containers

7,482 containers

107,828 kg

692,982 metric tons

88,000,000 gallons

239 tanks

22,464 containers

2,418 metric tons

157,664 cubic meters

1,380,370 cubic meters

13 areas

454 facilities

902 facilities

3,619 facilities

10,547 sites

108 sites

% of lifecycle total projected to be completed

10 20 30 40 50 60 70 80 90 100EM Performance Metrics

Completed Completed

Life-Cycle Total

As of 2002 As of 2008Legend

Plutonium packaged for long-term disposition

Enriched uranium packaged for disposition

Pu and U residues packaged for disposition

Depleted U and other U packaged for disposition

Liquid waste eliminated

Transuranic (CH and RH) waste disposed

SNF packaged for final disposition

Low-level/mixed low-level waste disposed

Material access areas (MAAs) eliminated

Nuclear facility D&D completions

Radioactive facility D&D completions

Industrial facility D&D completions

Site remediation complete

Geographic sites eliminated

Liquid waste tanks closed

High-level waste packaged for final disposition

6,314 containers

7,482 containers

107,828 kg

692,982 metric tons

88,000,000 gallons

239 tanks

22,464 containers

2,418 metric tons

157,664 cubic meters

1,380,370 cubic meters

13 areas

454 facilities

902 facilities

3,619 facilities

10,547 sites

108 sites

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Life-Cycle Cost Estimate for Current EM Scope

FY 2003Environmental Liability

$163 Billion2035 1997 - 2007

$69B

Remaining EM Work Scope $205 - $260B

$274 - $330B2050 - 2062

FY 2008Environmental Liability

$1

11

- $1

67

Billio

n

Planning and Analysis – understand changes in life-cycle cost estimate

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Baselines

Fiscal Year 08 09 10 11 12 13 14 15>

Scope • • • • • • • •

Cost • • • • • • • •

Schedule • • • • • • • •

• Well-defined work scope

• Defensible near-term cost and reasonable out-year cost estimate

• Schedule milestones and critical path

• Risks understood

Independently Reviewed

Building Baselines — realistic planning and funding assumptions

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•ABB C•XxXx

•XxXx

• Analytical Building Blocks (ABBs) established within baseline (400)

• Discrete work units tied to certified baselines• ABBs and their data provide ability to:

– Integrate life-cycle scope and schedule;

– Understand and communicate life-cycle cost quantities, and linkage to other programmatic work scope;

– Identify budget/planning “head room” needed to accept non-EM work scope into the program;

– Re-sequence (“rack and stack”) while maintaining linkage to baselines; and

– Build alternative scenarios and conduct analyses

• Analytical Building Blocks (ABBs) established within baseline (400)

• Discrete work units tied to certified baselines• ABBs and their data provide ability to:

– Integrate life-cycle scope and schedule;

– Understand and communicate life-cycle cost quantities, and linkage to other programmatic work scope;

– Identify budget/planning “head room” needed to accept non-EM work scope into the program;

– Re-sequence (“rack and stack”) while maintaining linkage to baselines; and

– Build alternative scenarios and conduct analyses

Development of Planning Tools – directly tied to baselines

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10 11 12 13 14 15 16 17 18

Baseline

“Stacking”Schedule

Compression

Making Progress

Maintenance

10 11 12 13 14 15 16 17 18 10 11 12 13 14 15 16 17 18

“Racking” Schedule

Shift

Life-cycle Model based on Assumptions “Making progress” life-cycle costs assumed to remain equal whether racking and/or stacking When the schedule is changed, “maintenance costs” will end earlier, resulting in cost savings, or headroom, thereby allowing for acceleration of additional activities

Development of Planning Tools –— understand life-cycle cost impacts

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Development of Planning Tools — support resource allocation

decisions

1. Sound business practices• Near-term completions• Footprint reduction

2. Alternative approaches to dispositioning tank waste

3. Alternative approaches to dispositioning excess nuclear materials & spent nuclear fuel

4. Alternative management approaches

Risk an

d C

ost

Retu

rn o

nIn

vestmen

t

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$0.0

$4.0

$8.0

2008 2009 2010 2011 2012 2013 2014 2015

Bill

ions “Making Progress”

“Maintenance—Min Safe”

Life Cycle

2008-2015(avg)

46% 51%

54% 49%

Development of Planning Tools — life-cycle cost analysis

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Strategic Planning Outputs — notional

Hanford Footprint Reduction Hanford’s footprint reduction scenario to clean up the River Corridor and

complete the D&D of the PFP by 2015 results in an 87% reduction of the site footprint. The scenario reduces the highest environmental risk with a large return on investment.

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INL Footprint Reduction INL’s footprint reduction scenario consists of the acceleration of D&D of

facilities from the FY 2021-2030 timeframe to the FY 2012 – 2015. This scenario will result in a 68% footprint reduction and substantial savings from D&D

efficiencies resulting from economies of scale.

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Small Site Completions EM work from 22 sites in 14 states to 10 sites in 10 states reducing EM’s

footprint by 750 square miles, which is about the size of the State of Rhode Island. This will result in a significant reduction in the EM Program life- cycle cost and schedule.

2008 2015

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$ in billions

$6.4$6.7 $7.0 $7.0 $7.3 $6.6

$6.2 $5.7 $5.5 $6.0 $6.2 $6.2

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

*FY10 through FY 12 targets based on EM’s Published FY 2008 Five-Year Plan.

EM Funding History

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Legend:

Over $1 billion $300 million to $1 billion $50 million to $300 million

Kentucky

New York

Washington

SouthCarolina

Idaho

NewMexico

Tennessee

Ohio

EM Budget$5.5 Billion

Nevada Statea

FY 2009 EM Budget Request

($ in Millions)

Washington 1,981 South Carolina 1,391 Ohio 320 Idaho 447 Tennessee 465 New Mexico 397 Kentucky 153 New York 83 Nevada 69

aTable only includes states with $50M or greater in EM funding.

EM Program FY 2009 Budget

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FY 2009 Budget Composition

32.9%

3.1%

14.4%15.3%

1.6%

9.5%

15.5%

7.6%

Radioactive Liquid WasteStabilization/Disposition

Spent Nuclear Fuel Stabilization/Disposition

Solid Waste Stabilization/Disposition

Special Nuclear Materials and Safeguards &Security

Site Closure

Soil and Water Remediation

Decontamination/Decommissioning

Other

$5.528B

Other is comprised of: Program Direction, Technology Development, Contribution to the D&D Fund, Uranium/Thorium Reimbursements, Headquarters, and Community and Regulatory Support

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JAN FEB MAR APR MAY JU JUL AUG SEP OCT NOV DEC JAN FEB

Within 30 Days of Budget

submissionto Congress,

provide briefing to

EM SSAB & Other

Stakeholders

1st Mon. in Feb., DOE submits

President’s Budget to Congress

Within 30 Days of

Appropriation,provide

briefing to EM SSAB &

Other Stakeholders

Issuance of EM Budget Guidance

Schedule meetings with

EM SSAB & Other

Stakeholders

EM SSAB & Other Stakeholders

submit advice to sites

Sites submit budget request to EM HQ, with EM SSAB & Other

Stakeholder advice and the

site’s recommended

course of action

EM BUDGET REQUEST BECOMES

EMBARGOED

EM prepares budget submissionto CFO ; Includes funding requirements to meet all

environmental compliance requirements

EM budget deliberations between the sites, DOE management, CFO, and

the Office of Management and Budget

CFO/EM prepares Budget

submissionto OMB

Overview of Budget Process

EM identifies and submits funding requirements to CFOAnd OMB needed to meet all environmental compliance

requirements

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EM Risk-Based PrioritiesHighest Risk-Based Priorities Minimum safety and essential services across EM cleanup sites Radioactive tank waste waste storage, treatment, and disposal (including

technology development and deployment activities in support of high-level waste)

Spent nuclear fuel storage, receipts and disposition Special nuclear material storage, processing, and disposition High priority groundwater remediation (selected Hanford, Paducah and Los

Alamos plumes) Solid waste (transuranic and mixed/low-level waste) treatment, storage, and

disposal

Lower Risk-Based Priorities Soil and groundwater remediation Nuclear facility D&D Non-nuclear facility D&D

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$150

$200

$250

$300

$350

$400

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Dolla

rs in

Bill

ions

RF, FN, and MD complete

BEMR•First life-cycle estimate•Top down estimate•Unknown end states

Paths to Closure•Stable funding•No new scope•Transfer of newly generated waste

Top to Bottom Review • Focus on reducing rather than managing risk

• No new scope• Increase in Hanford WTP cost

Accelerated Cleanup Plans•Aggressive cleanup assumptions•New cleanup approaches including new regulatory strategies•Increased funding

Baselines Established•Independently reviewed and certified•Realistic planning and funding assumptions•Increased Scope

80% confidence50% confidence

Evolution of EM Life-cycle Cost

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Evolution of EM Life-cycle Cost1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Top to Bottom Review and Accelerated Cleanup Plans•Aggressive cleanup assumptions•New cleanup approaches including new regulatory strategies•Increased funding•Portsmouth & Paducah GDP D&D removed from scope•Office of Future Liabilities responsible for any new scope •Removal of Pu from Hanford•Low activity tank waste treated/disposed in situ •Transfer of spent fuel program to RW•Transfer of H canyon to NNSA in FY2008• No treatment of Idaho calcine waste

Certified Baselines• Re-baseline to more realistic funding assumptions • Increased Scope:

• Hanford WTP due to changing requirements • More robust design criteria for SRS Salt Waste Processing Facility • Los Alamos Consent Order • Portsmouth & Paducah GDP D&D• Pension & benefit liabilities • SNF program remains in EM

• New scope: •IFDP at Oak Ridge• Treatment and disposal of U233 in Building 3019 at Oak Ridge•Consolidation of Pu at SRS • Disposition of 13 MT of Surplus PU utilizing H-canyon• No in tank disposal of low activity waste activity tank• Treatment of Idaho calcine waste

Ke

y S

cop

e A

ssu

mpt

ion

s

BEMR•First life-cycle estimate•Top down estimate•Unknown end states

Paths to Closure•Stable funding•No new scope•Transfer of newly generated waste

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Credibility—Imperative to use achievable assumptions End States Scope Regulatory Decisions Treatment Capability Funding Predictability

Auditability Baseline development Internal controls

Lessons Learned

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NNSA, SC and NE identified cleanup work for EM consideration

306 surplus facilities

34 types of materials

$3.7B-9.2B Cost estimate

Unfunded Liability

Alpha-5

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Excess Facilities and

Materials Strategy Identify excess facilities and

materials

Assess condition of facilities and materials

Shipping Casks

Building 3026 2000 Complex

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EXCESS FACLITY AND MATERIAL PLANNING PROCESS

Surveying condition of excess facilities; establish if excess material resulted from Legacy activities

Risk of facility is established and prioritized Determine investment required in order to be “Transfer

Ready”

Establish Mission Need Develop MOA for business function transfer procedures

Timing of transfer Funds and/or FTE’s that will transfer Authorities and accountabilities

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Summary

EM has made substantial cleanup progress There is still much to do Thorough planning and analysis are keys to

our future success EM is developing creditable baselines and

management tools Plans and alternative approaches are being

developed to: Reduce risk and achieve compliance Achieve footprint reduction and near-term

completions—maximize ROI Sustain progress Finish the job: tank waste; nuclear materials;

and spent nuclear fuel

Documents

Merle Sykes Deputy Assistant Secretary Office of Program Planning and Budget