Maintaining Department of Energy (DOE) Waste Disposition Pathways in Today’s Uncertain Budgetary Environment Presented by: Lori West July 2015

2 Commercial Providers 20+ year history of developing technologies and systems to meet DOE needs Invested in and piloted technologies to address DOE’s “difficult-to-treat” wastes Used these technologies to perform treatability studies to demonstrate final waste form characteristics Fielded technologies to address unique on-site problems Built fixed-base, high throughput facilities for volume and mass reduction

3 Commercial Providers – Attributes Ability to respond quickly in the marketplace Willingness to accept moderate to high risk Privately funded Robust licenses Broad spectrum of capabilities Very adaptable to unique waste forms Ability to innovate

4 Benefits to DOE Avoiding Expense Commercially developed technologies / capabilities have formed much of the basis for DOE long-range plans for clean-up ProjectNeeded DOE Onsite CapabilityCommercial Providers Rocky Flats, Fernald, and Mound Closures Sort, Survey, Package, Stabilize Thermal Treatment Technologies for Volume Reduction LLW/LLMW Disposal Facilities Perma-Fix Environmental Services, Oak Ridge, TN Duratek, Oak Ridge, TN Energy Solutions, Clive, UT Hanford Suspect TRU and CH/RH TRU WRAP, Cool & Dim WRAP 2 and 2A M-91 Perma-Fix Northwest, Richland, WA (CH TRU) Energy Solutions, Clive, UT Miscellaneous Specialty Storage/Disposal Projects Class C/Greater-than-Class C Disposal Facilities TRU and Spent Fuel Interim Storage Facilities Energy Solutions, Clive, UT Waste Control Specialists, Andrews, TX

5 The Impact of Rocky Flats Commercial providers were encouraged to develop DOE-centric capabilities through favorable procurements Providers aggressively pursued licenses and permits to expand treatment capabilities DOE and State regulators worked with commercial providers Significant cost savings and avoidances to DOE and its contractors using commercial capabilities Rocky Flats Project set new standard for Site D&D / Remediation: $36B reduced to $6B

6 The Impact of Rocky Flats (concluded) Similar savings realized at Fernald and Mound DOE and its contractors developed significant relationships to take advantage of the commercial supply chain DOE sought to attract commercial suppliers through competitive procurements Commercial providers continue to develop capabilities almost exclusive to DOE Many spin-off capabilities in areas such as bulk transportation, container manufacture, in-field processing, etc.

7 ARRA Infusion of funds to “shovel-ready” projects Funds applied to DOE wastes in storage across the complex –Created jobs nation-wide –Boosted local economies –Produced highly specialized / trained work force to replace existing, aging work force at DOE sites –Reduced long-term waste storage, surveillance, and maintenance cost and risk to DOE and Contractors –Encouraged expansion of commercial provider capabilities / throughputs

8 ARRA At Hanford, ARRA funds were used to create more efficient use of offsite commercial facilities for suspect TRU waste treatment Cost Avoidance – $550M Originally, Hanford’s suspect TRU wastes were to be dispositioned through the $1.2B M-91 Facility Today, 90% of Hanford’s suspect TRU wastes will be dispositioned using offsite commercial capabilities at a cost of $300M… The remaining 10% will be dispositioned through a highly specialized onsite capability with a life-cycle cost of $385M

9 Post ARRA Shifts in funding priorities Drove staffing levels to below pre-ARRA levels Necessitated placement of DOE facilities into a “Minimum Safe Operational” condition –Some went “Cold and Dark” and others “Cool and Dim” Drove arbitration and work force reductions complex wide Settlement Agreements diverted funding further At Hanford, the cost savings from placing facilities in min safe condition (more than $9 million in FY13) were redirected to non-remediation activities.

10 Shifts in funding priorities Post ARRA Hanford received level funding overall (~$100M less than pre-ARRA levels) CHPRC received $550 million less than pre-ARRA levels – a >50% decrease in funding Halted all CHPRC waste retrieval, D&D, and waste management activities Drove WRAP, T Plant, CSB and others to min safe

11 Affect on Commercial Processors Some closed unprofitable processes Unfortunately, fixed costs remained the same Shareholders could not understand why, with millions of cubic feet of waste stockpiled at DOE sites, commercial processing facilities sit idle. Loss of revenues, capabilities, and expertise Sharp decrease in stock prices Layoff’s Some closed their doors

12 D&D could last years D&D funding comes from funds set aside by the commercial entity as required by law In many NRC agreement states shortfalls in D&D funds are the responsibility of the State licensing entity Affect on Commercial Processors (concluded) There is no straddling the fence – the facility is either a processing facility or a facility in some state of decommissioning. Once declared, D&D may not be revocable or licenses and permits renewable

13 Retaining Commercial Capability is Good Business Delivers cost avoidances on numerous fronts –Supports DOE cleanup objectives –Reduces the risk and cost of storing and maintaining packaged wastes and storage facilities –Avoids cost of missed milestones and needless litigation Funds from the federal level are decreasing There are very few areas in which additional efficiencies can be realized Risk of loss of commercial capacity creates a spiraling cost increase for DOE to obtain funds to create capabilities Risks continue to climb as waste is stored for longer periods

14 Protect the Investment It’s our obligation to protect this national resource on which we spent tax payer money Establish a “minimum safe” funding supply to assure continued viability of commercial supply chain What would it take? An annual investment of ~$50 M < 1% of DOE EM’s annual allotment of $5.6B would maintain the commercial supply chain What would it take? An annual investment of ~$50 M < 1% of DOE EM’s annual allotment of $5.6B would maintain the commercial supply chain Managed by the Office of Waste Management Operations

15 Questions?