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U.S. Government's Environmental Liability

This information appears as published in the 2017 High Risk Report.

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The federal government's environmental liability has been growing for the past 20 years and is likely to continue to increase. For fiscal year 2016, the federal government's estimated environmental liability was $447 billion—up from $212 billion for fiscal year 1997.1 However, this estimate does not reflect all of the future cleanup responsibilities federal agencies may face. Because of the lack of complete information and the often inconsistent approach to making cleanup decisions, federal agencies cannot always address their environmental liabilities in ways that maximize the reduction of health and safety risks to the public and the environment in a cost effective manner.

The federal government is financially liable for cleaning up areas where federal activities have contaminated the environment. Various federal laws, agreements with states, and court decisions require the federal government to clean up environmental hazards at federal sites and facilities—such as nuclear weapons production facilities and military installations. Such sites are contaminated by many types of waste.

Federal accounting standards require agencies responsible for cleaning up contamination to estimate future cleanup and waste disposal costs and to report such costs in their annual financial statements as environmental liabilities. Per federal accounting standards, federal agencies' environmental liability estimates are to include probable and reasonably estimable costs of cleanup work. Where the federal government is not legally responsible for environmental cleanup, but acknowledges that it will assume financial responsibility for the cleanup, a liability is recorded for unpaid amounts due, not necessarily the full cost of cleanup. Also, where the government is legally responsible for environmental cleanup but there is no known technology to clean up a particular site, then known costs for which the entity is responsible, such as a remedial investigation, feasibility studies, and costs to contain the contamination, are recorded as a liability. Further, federal agencies' environmental liability estimates do not include cost estimates for work for which reasonable estimates cannot currently be generated. Consequently, the ultimate cost of addressing the U.S. government's environmental cleanup is likely greater than $447 billion. Federal agencies' approaches to addressing their environmental liabilities and cleaning up the contamination from past activities are often influenced by numerous site-specific factors, stakeholder agreements, and legal provisions.

We have also found that some agencies do not take a holistic, risk-informed approach to environmental cleanup that aligns limited funds with the greatest risks to human health and the environment. Since 1994, we have made at least 28 recommendations related to addressing the federal government's environmental liability. These include 22 recommendations to the Department of Energy (DOE) or the Department of Defense (DOD), 1 recommendation to the Office of Management and Budget to consult with Congress on agencies' environmental cleanup costs, 1 recommendation to the Department of Agriculture (USDA), and 4 recommendations to Congress to change the law governing cleanup activities. Of these, 13 recommendations remain unimplemented. If implemented, these steps would improve the completeness and reliability of the estimated costs of future cleanup responsibilities and lead to more risk-based management of the cleanup work.

[1] As used herein, environmental liabilities includes environmental and disposal liabilities.

Of the federal government's estimated $447 billion environmental liability—up from $212 billion for fiscal year 1997 1—DOE is responsible for by far the largest share of the liability and DOD is responsible for the second largest share. The rest of the federal government makes up the remaining 3 percent of the liability with agencies such as the National Aeronautics and Space Administration (NASA) and the Departments of Transportation, Veterans Affairs, USDA, and Interior holding large liabilities (see figure 13).

Figure 13: Total Reported U.S. Environmental Liability, Fiscal Year 2016

Note: We did not adjust environmental liability estimates for inflation because information about the amount of the liability applicable to each fiscal year was not available.

Department of Energy

DOE was responsible for over 80 percent ($372 billion) of the U.S. government's fiscal year 2016 reported environmental liability, mostly related to nuclear waste cleanup. 2 DOE's total reported environmental liability has generally increased since fiscal year 2000 (see figure 14). According to audit documentation related to DOE's fiscal year 2016 financial statements, 50 percent of the DOE's environmental liability resides at two cleanup sites: the Hanford Site in Washington State and the Savannah River Site in South Carolina.

Figure 14: Total Reported Department of Energy Environmental Liability, Fiscal Years 2000 to 2016

Note: We did not adjust environmental liability estimates for inflation because information about the amount of the liability applicable to each fiscal year was not available.

Since 1989, DOE's Office of Environmental Management (EM) has spent over $164 billion to retrieve, treat, and dispose of nuclear and hazardous waste and to date has completed cleanup at 91 of 107 sites across the country. (The 91 sites were generally viewed by the department as the smallest and least contaminated sites to address.) Despite billions spent on environmental cleanup, DOE's environmental liability has roughly doubled from a low of $176 billion in fiscal year 1997 to the fiscal year 2016 estimate of $372 billion. In the last 6 years alone, EM has spent $35 billion, primarily to treat and dispose of nuclear and hazardous waste and construct capital asset projects to treat the waste, while EM's portion of the environmental liability has grown over this same time period by over $90 billion, from $163 billion to $257 billion (see figure 15).

Figure 15: Department of Energy's Office of Environmental Management's Annual Spending and Growing Environmental Liability

Note: EM is the organization within the Department of Energy responsible for managing environmental cleanup and is responsible for cleaning up 107 sites across the country. To date, EM has completed cleanup at 91 of these sites. EM spending includes money to treat and dispose of nuclear and hazardous waste and to construct capital asset projects to treat the waste. We did not adjust environmental liability estimates for inflation because information about the amount of the liability applicable to each fiscal year was not available.

In its fiscal year 2016 financial statement, DOE attributed recent environmental liability increases to (1) inflation adjustments for the current year; (2) improved and updated estimates for the same scope of work, including changes resulting from deferral or acceleration of work; (3) revisions in technical approach or scope for cleanup activities; and (4) regulatory and legal changes. Notably, in recent annual financial reports, DOE has cited other significant causes for increases in the liability. Other causes have included the lack of a disposal path for high-level radioactive waste—because of the termination of the Yucca Mountain repository program —and delays and scope changes for major construction projects at the Hanford and Savannah River sites.3

We testified in February 2016 that DOE's estimated liability does not include billions in expected costs. According to government accounting standards, environmental liability estimates include costs that are probable and reasonably estimable, meaning that costs that cannot yet be reasonably estimated are not included in total environmental liability.4 Examples of costs that DOE cannot yet estimate include the following:

  • DOE has not yet developed a cleanup plan or cost estimate for the Nevada National Security Site and, as a result, the cost of future cleanup of this site was not included in DOE's fiscal year 2015 reported environmental liability. The nearly 1,400-square-mile site has been used for hundreds of nuclear weapons tests since 1951. These activities have resulted in more than 45 million cubic feet of radioactive waste at the site. According to DOE's financial statement, since DOE is not yet required to establish a plan to clean up the site, the costs for this work are excluded from DOE's annually reported environmental liability.
  • DOE's reported environmental liability includes an estimate for the cost of a permanent nuclear waste repository, but these estimates are highly uncertain and likely to increase. In response to the termination of the Yucca Mountain repository program, DOE proposed separate repositories for defense high-level and commercial waste in March 2015. In January 2017, we reported that the cost estimate for DOE's new approach excluded the costs and time frames for key activities. As a result, the full cost of these activities is likely more than what is reflected in DOE's environmental liability.5

There are several possible causes for the large and growing amount of money that DOE will need to meet its cleanup responsibilities. First, as our and other organizations' reports issued over the last 2 decades have found, DOE's environmental cleanup decisions are not risk-based and its risk-based decision making is sometimes impeded by selection of cleanup remedies that are not appropriately tailored to the risks presented, and inconsistencies in the regulatory approaches followed at different sites. We and others have pointed out that DOE needs to take a nation-wide, risk-based approach to cleaning up these sites, which could reduce costs while also reducing environmental risks more quickly. Examples include the following:

  • In 1995, we found that DOE's cleanup strategy had been shaped by site-specific environmental agreements whose priorities and requirements had not always been consistent with technical or fiscal realities and that, under severe budgetary constraints, using many separately-negotiated agreements is not well suited to setting priorities among sites.6 We recommended that DOE set national priorities for cleaning up its contaminated sites. DOE responded at that time that because of limitations on the science of risk assessment, it had no intention of developing national, risk-based priorities for its cleanup work. In a later report, we found that DOE's compliance agreements did not provide a means of prioritizing among sites and, therefore, DOE had not developed a comprehensive, relative ranking of the risks that it faces across its sites. DOE has been unsuccessful in its attempts to develop such a methodology in the past and, as a result, DOE has no systematic way to make cleanup decisions among sites based on risk.
  • In 2006, the National Academy of Sciences (the Academy) reported that the nation's cleanup approach—primarily carried out by DOE among other agencies—was complex, inconsistent, and not systematically risk-based. For example, the Academy noted that the current regulatory structure for low activity waste is based primarily on the waste's origins rather than on its actual radiological risks. The Academy concluded that by working with regulators, public authorities, and local citizens to implement risk-informed practices, waste cleanup efforts can be done more cost-effectively. The report also suggested that statutory changes were likely needed. In 2011, the Academy also reported that DOE could realize significant benefits by providing more realistic safety- and risk-informed analyses.
  • In 2015, a review organized by the Consortium for Risk Evaluation with Stakeholder Participation reported that DOE is not optimally using available resources to reduce risk.7 According to the report, factors such as inconsistent regulatory approaches and certain requirements in federal facility agreements cause disproportionate resources to be directed at lower priority risks. The report called for a more systematic effort to assess and rank risks within and among sites, including through headquarters guidance to sites, and to allocate federal taxpayer monies to remedy the highest priority risks through the most efficient means.

Second, DOE's cleanup approach is based primarily on a series of compliance agreements and consent orders between DOE, the Environmental Protection Agency (EPA), and state regulators. According to one DOE official, 40 such agreements establish the requirements for DOE's cleanup work. We have reported in the past that these agreements include thousands of associated milestones. Some of the 40 agreements were made decades ago and may be based on outdated information about the effectiveness of certain cleanup technologies.

Third, DOE may have insufficient controls in place to accurately account for its environmental liabilities. In January 2017, the DOE Inspector General reported a significant deficiency in internal control related to the reconciliation of environmental liabilities.

Department of Defense

DOD was responsible for the second largest share of the federal government's reported environmental liability—$63 billion in fiscal year 2016. DOD's total reported environmental liability has remained relatively constant since fiscal year 2000 (see figure 16). We have found in the past that DOD has spent billions on environmental cleanup and restoration at its sites. In July 2010, we reported that DOD spent almost $30 billion from 1986 to 2008 across its environmental cleanup and restoration activities at its installations.8 More recently, in its July 2016 annual report to Congress on environmental cleanup, DOD reported spending an average of about $1.8 billion each year for its environmental cleanup activities from fiscal years 2011 to 2016.

Figure 16: Total Reported Department of Defense Environmental Liability, Fiscal Years 2000 to 2016

Note: We did not adjust environmental liability estimates for inflation because information about the amount of the liability applicable to each fiscal year was not available.

DOD's $63 billion reported environmental liability includes cleanup responsibilities for base realignment and closure (BRAC), disposal of weapon systems, and environmental cleanup and restoration of DOD sites. Our recent work found that DOD's environmental liability is likely to exceed its current estimate because a number of activities are not fully included in the estimate; the activities are not included because their scopes are not yet known. Notably, we reported in February 2014 that our audit of the government's consolidated financial statements found that DOD's inability to estimate with assurance key components of its environmental liabilities was a material weakness. We reported in January 2017 that this weakness still exists. Examples of uncertainties in DOD reported environmental liabilities include the following:

  • DOD's current environmental liability estimate does not include additional costs that will likely be needed for DOD to complete the cleanup for BRAC activities. We reported in January 2017 that DOD estimates it will need about $3.4 billion in addition to the $11.5 billion it has already spent to manage and complete environmental cleanup of BRAC installations.9 We also found that DOD's annual report on its environmental cleanup program does not include significant costs associated with cleanup of contaminants at its installations, including those closed under BRAC.
  • DOD's estimate does not include the total costs associated with cleaning up weapons sites. According to DOD's fiscal year 2015 Agency Financial Report (AFR), DOD is unable to estimate and report a liability for the environmental restoration that is needed to clean up buried chemical munitions and agents at certain sites, among other things, because the extent of the buried chemical munitions and agents is unknown.10
  • DOD may also incur costs not currently included in its environmental liability estimate for restoration initiatives in conjunction with returning overseas DOD facilities to host nations. According to DOD's fiscal year 2015 AFR, DOD is unable to provide a reasonable estimate because the extent of required restoration is unknown.

Other Federal Agencies

The remainder of the U.S. government's estimated environmental liability (about $12 billion in fiscal year 2016) was managed by numerous departments and agencies and, similar to the DOE and DOD portions, is likely to increase. Federal agencies with large reported environmental liabilities in fiscal year 2016 included NASA, USDA, and the Departments of Transportation, Veterans Affairs, and Interior. Since 2000, the reported environmental liability for these agencies has also increased (see figure 17).

Figure 17: Change in Reported Environmental Liability for Selected Agencies, Fiscal Years 2000 to 2016

Note: We did not adjust environmental liability estimates for inflation because information about the amount of the liability applicable to each fiscal year was not available.

a In fiscal year 2000, the Department of Agriculture did not include any estimated environmental liability in its financial statement but did include a note indicating that the Forest Service estimates cleanup for sites on National Forest System lands could cost $2.5 billion.

b The figures used for the Department of Transportation are reported environmental liabilities for fiscal years 2001 and 2016 since the department's fiscal year 2000 reported environmental liability of $2.28 billion was incorrect according to a department official.

We have done work recently at USDA and Interior. We found in January 2015 that the environmental liabilities for USDA and Interior do not include many contaminated and potentially contaminated sites—primarily abandoned mines—and that the ultimate costs of future cleanup are therefore likely much higher than what is currently reported in the these departments' environmental liability estimates.11 Further, the extent to which the federal government will pay cleanup costs may depend on whether or not financially viable responsible parties, including current and former mine owners and operators, can be identified. Additionally, neither department has a complete inventory of its cleanup responsibilities. For example,

  • USDA: For fiscal year 2016, USDA reported an environmental liability of $196 million. As of April 2014, USDA had identified 1,491 contaminated sites but this list is incomplete as many more potentially contaminated sites, including abandoned mines, have not yet been identified. In 2015, we found that USDA does not have a reliable, centralized site inventory or plans and procedures for completing one, in particular for abandoned mines. For example, in fiscal year 2013, USDA reported $3 million for the Forest Service's environmental liability. In 2015, we found that this figure did not include any cleanup costs for abandoned mines. The Forest Service estimates that there could be from 27,000 to 39,000 abandoned mines on its lands—approximately 20 percent of which may pose some level of risk to human health or the environment—and the federal government may have to pay for cleanup of some of these mines. USDA's Forest Service has not developed a complete, consistent, or usable inventory of abandoned mines and had no plans and procedures for developing such an inventory. Without a reliable inventory, USDA cannot effectively estimate its ultimate cost to cleanup these sites.
  • Interior: For fiscal year 2016, Interior reported an environmental liability of about $830 million. We found in 2015 that Interior had an inventory of 4,722 sites, including 85 abandoned mines, with confirmed or likely contamination. However, Interior may have future cleanup responsibilities and, as a result, ultimate cleanup costs may exceed the currently reported environmental liability. Specifically, Interior's Bureau of Land Management (BLM) has identified over 30,000 abandoned mines—some of which will the federal government may have to pay to clean up—that have not yet been assessed for contamination. Furthermore, this inventory is not complete as BLM estimated that there are at least 100,000 abandoned mines that have not yet been inventoried. While cost estimates for addressing these mines are not currently included in Interior's liability, information for certain types of mines indicates that the ultimate cost of Interior's future cleanup responsibilities are greater than what is reflected in the reported environmental liability. BLM is working to improve the completeness and accuracy of its inventory.

[1] We did not adjust environmental liability estimates for inflation because information about the amount of the liability applicable to each fiscal year was not available.

[2] The majority of DOE's annual environmental cleanup funding—over 80 percent in fiscal year 2016—comes from annual defense authorization spending.

[3] In June 2008, DOE submitted a license application to the NRC seeking authorization to construct a high-level nuclear waste repository at Yucca Mountain. In the application, DOE stated that it planned to open the repository in 2017. DOE later delayed the date to 2020. In March 2009, however, the Secretary of Energy announced plans to terminate the Yucca Mountain repository program and instead study other nuclear waste options. The President's fiscal year 2011 budget proposal, released in February 2010, proposed eliminating all funding for the Yucca Mountain repository program. For more information, see GAO, Commercial Nuclear Waste: Effects of a Termination of the Yucca Mountain Repository Program and Lessons Learned, GAO-11-229 (Washington D.C.: Apr. 8, 2011).

[4] Federal Accounting Standards Advisory Board, FASAB Handbook of Federal Accounting Standards and Other Pronouncements, as Amended (Washington, D.C.: June 30, 2016).

[5] GAO, Nuclear Waste: Benefits and Costs Should Be Better Understood Before DOE Commits to a Separate Repository for Defense Waste, GAO-17-174 (Washington, D.C.: Jan. 31, 2017).

[6] GAO, Department of Energy: National Priorities Needed for Meeting Environmental Agreements, GAO/RCED-95-1 (Washington, D.C.: Mar. 3, 1995).

[7] The Consortium for Risk Evaluation with Stakeholder Participation is a multi-university consortium organized in 1995 that provides several types of independent, multi-disciplinary reviews of DOE documents, projects, and reports.

[8] GAO, Superfund: Interagency Agreements and Improved Project Management Needed to Achieve Cleanup Progress at Key Defense Installations, GAO-10-348 (Washington, D.C.: July 15, 2010).

[9] GAO, Military Base Realignments and Closures: DOD Has Improved Environmental Cleanup Reporting but Should Obtain and Share More Information, GAO-17-151 (Washington, D.C.: Jan. 19, 2017).

[10] DOD had not yet issued a fiscal year 2016 financial statement at the time of publication.

[11] GAO, Hazardous Waste: Agencies Should Take Steps to Improve Information on USDA's and Interior's Potentially Contaminated Sites, GAO-15-35 (Washington, D.C.: Jan. 16, 2015).

U.S. Government's Environmental Liability

Future progress in addressing the U.S. government's environmental liabilities depends, among other things, on how effectively federal departments and agencies set priorities, under increasingly restrictive budgets, that maximize the risk reduction and cost-effectiveness of cleanup approaches. As a first step, some departments and agencies may need to improve the completeness of information about long-term cleanup responsibilities and their associated costs so that decision makers, including Congress, can consider the full scope of the federal government's cleanup obligations. As a next step, certain departments, such as DOE, may need to change how they establish cleanup priorities. For example, DOE's current practice of negotiating agreements with individual sites without considering other sites' agreements or available resources may not ensure that limited resources will be allocated to reducing the greatest environmental risks, and costs will be minimized.

We have recommended actions to federal agencies that, if implemented, would improve the completeness and reliability of the estimated costs of future cleanup responsibilities and lead to more risk-based management of the cleanup work.


Completeness of Environmental Liability Estimates

  • In 1994, we recommended that Congress amend certain legislation to require agencies to report annually on progress in implementing plans for completing site inventories, estimates of the total costs to clean up their potential hazardous waste sites, and agencies' progress toward completing their site inventories and on their latest estimates of total cleanup costs. We believe these recommendations are as relevant, if not more so, today.
  • In 2015, we recommended that the USDA develop plans and procedures for completing their inventories of potentially contaminated sites. USDA disagreed with this recommendation. However, we continue to believe that USDA's inventory of contaminated and potentially contaminated sites—in particular, abandoned mines, primarily on Forest Service land—is insufficient for effectively managing USDA's overall cleanup program. Interior is also faced with an incomplete inventory of abandoned mines that they are working to improve.

Reliability of Environmental Liability Estimates

  • In 2006, we recommended that DOD develop, document, and implement a program for financial management review, assessment, and monitoring of the processes for estimating and reporting environmental liabilities. This recommendation has not been implemented.

Risk-Based Decision-Making

  • We have found in the past that DOE's cleanup strategy is not risk-based and should be re-evaluated. DOE's decisions are often driven by local stakeholders and certain requirements in federal facilities agreements and consent decrees. In 1995, we recommended that DOE set national priorities for cleaning up its contaminated sites using data gathered during ongoing risk evaluations. This recommendation has not been implemented.
  • In 2003, we recommended that DOE ask Congress to clarify its authority for designating certain waste with relatively low levels of radioactivity as waste incidental to reprocessing, and therefore not managed as high-level waste. In 2004, DOE received this specific authority from Congress for the Savannah River and Idaho Sites,1 thereby allowing DOE to save billions of dollars in waste treatment costs. The law, however, excluded the Hanford Site.

    More recently, in 2015 we found that DOE is not comprehensively integrating risks posed by National Nuclear Security Administration's (NNSA) nonoperational contaminated facilities with EM's portfolio of cleanup work. 2 By not integrating nonoperational facilities from NNSA, EM is not providing Congress with complete information about EM's current and future cleanup obligations as Congress deliberates annually about appropriating funds for cleanup activities. We recommended that DOE integrate its lists of facilities prioritized for disposition with all NNSA facilities that meet EM's transfer requirements, and that EM should include this integrated list as part of the Congressional Budget Justification for DOE. DOE neither agreed nor disagreed with this recommendation.

[1] Pub. L. No. 108-375, § 3116 (2004).

[2] NNSA has identified 83 contaminated facilities for potential transfer to EM for disposition over a 25-year period, 56 of which are currently nonoperational. NNSA is maintaining these facilities for future transfer to EM, but the condition of nonoperational facilities continues to degrade, resulting in increasing costs to NNSA to maintain them to prevent the spread of contamination.

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