Mr. LAROCCA. I would also appreciate making an oral or written report to the committee after I have heard the other witnesses. If we find there are other matters to bring to your committee, what is the process for rebuttal?

Mr. GORE. We will take any further statements that you care to submit to the committee for consideration as part of the record. We will make the judgment at a later time.

Mr. GORE. Thank you very much. Thanks to all of you.

We would like to call our last panel from the Department of Energy up now.

Mr. GORE. Gentlemen, if you would all stand and raise your right hands.

Do you swear the testimony you are about to give will be the truth, the whole truth and nothing but the truth, so help you God? Mr. MEYERS. I do.

Mr. McGOFF. I do.
Mr. BERGHOLZ. I do.

Mr. SILVERSTROM. I do.

Mr. GORE. Dr. Meyers and gentlemen, welcome.

You have a prepared statement, Dr. Meyers. So any of the other witnesses have prepared statements? Evidently not.

We will recognize you, Dr. Meyers, to present your statement. STATEMENT OF SHELDON MEYERS, ACTING DEPUTY ASSISTANT SECRETARY FOR NUCLEAR WASTE MANAGEMENT; DAVID MCGOFF, CHIEF, WASTE PRODUCTS MANAGEMENT DIVISION; WARREN BERGHOLZ, OFFICE OF THE GENERAL COUNSEL; AND LEON SILVERSTROM, OFFICE OF THE GENERAL COUNSEL

Mr. MEYERS. Mr. Chairman and members of the subcommittee, I am pleased to appear before you today to discuss the cooperative agreement between the State of New York and the Department of Energy on the high-level waste management demonstration project at West Valley, N.Y.

With me today are David McGoff, the West Valley Program Manager; and Leon Silverstrom and Warren Bergholz from the Office of General Counsel.

The West Valley Demonstration Project Act, enacted on October 1, 1980, required the Secretary of Energy to enter into a cooperative agreement with the State of New York. This agreement was negotiated and signed by the Acting Under Secretary on November 3, 1980, on behalf of the Department of Energy.

As the new administration proceeded to implement the agreement, it became apparent that further discussion was needed with the State of New York to clarify certain aspects of the agreement. This, concurrent with a number of external inquiries, prompted an internal review. As a result of this review, we have concluded that there are some areas of the agreement which need to be amended in order to permit the Department to carry out the project in a cost effective manner. We are working with representatives of the State of New York to obtain their concurrence on needed changes.

One part of the cooperative agreement that needs to be examined concerns the value of the onsite facilities that will be used in the solidification project and the value of the State services identified

for credit. The Department does not now have a supportable basis for the estimates in the agreement and we plan to validate the need and value of these facilities and services.

Two other areas to be examined in the agreement are the ceiling on the State share of costs and the October 1, 1981 occupancy date for the Department of Energy.

In addition, there are three ambiguous areas that need clarification. These are: the extent of the Department's obligations for decommissioning the facilities; the responsibility for costs of disposal of the high-level solidified wastes; and the project management responsibilities. We have advised the Congress of the results of our review of the cooperative agreement.

In closing, I would like to say that the Department of Energy continues to strongly support the West Valley Demonstration Project. We feel that the project is in the national interest by providing a technically sound approach to demonstrating the solidification of liquid high-level nuclear waste.

This completes my formal statement, Mr. Chairman. And I would be pleased to answer any questions that you may have at this time.

Mr. GORE. Thank you very much.

What is the most current cost estimate DOE is operating under for the West Valley project?

Mr. MEYERS. Right now-and I would like to caution you about cost estimates-we are using about $300 million to $500 million. The range is wide because, up until now, we have gotten various cost estimates based upon information at hand.

As you well know, there are many Federal projects where people insist upon having cost estimates and you do the best you can at the time. As many have said, not only is the agreement with the State of New York complicated, but this is a complicated project. My own feelings as an engineer would be satisfied greatly if we had a detailed design against which we could do a good cost estimate, which does not presently exist.

Mr. GORE. Dr. McGoff, is it true that on October 30, 1981, you briefed Assistant Secretary Cunningham who, in turn, briefed Acting Deputy Secretary Bateman on the problems with the cooperative agreement?

Mr. McGOFF. Yes, sir.

Mr. GORE. Was your impression at that time that the negotiations were at a temporary standstill, or at least were still ongoing negotiations?

Mr. McGOFF. Subsequent to the briefing, I had the impression the negotiations were at a temporary standstill, and that the State representatives would be back in about 2 weeks with another proposal.

Mr. GORE. Were you then surprised to learn that the agreement had been signed?

Mr. McGOFF. Yes, sir.

Mr. GORE. You were?

Mr. McGOFF. Yes, sir.

Mr. GORE. What was your position at the time?

Mr. McGOFF. I was Director of the Projects Division in the Office of Nuclear Waste Management.

The $10.2 million value of the process

plant used by DOE was low and should be substantially
increased based on the following considerations:

Cost of construction and engineering of a new
solidification building is much greater than
$29 million. In 1975 NFS estimated the cost of
a solidification building to be $48 million (1976
dollars). Adjusted for inflation, the 1980 cost
of such a building would be $68 million.

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Cost of decontaminating primary and secondary
cells in existing process plant is much less
than the $18.8 million ($6.6 million for
primary, $12.2 million for secondary) assumed
by DOE. The secondary cells are "cleaner" than
the primary cells and therefore will require
less decontamination. A more realistic cost of

decontamination is $7.5 million.

Since DOE's estimate of the cost of a new solidification building was partially based on the costs incurred at its Idaho Calcine Facility, DOE agreed to determine if there was any difference between the New York and Idaho construction cost indexes.

DOE did not give any credit for the value that use of the NRC burial area would have to the Project.

Mr. GORE. And you were quite current on the technical negotiations; is that right?

Mr. McGOFF. Yes, sir.

Mr. GORE. When did you first find out that the project-that the agreement had been signed?

Mr. McGoFF. On November 4.

Mr. GORE. On November 4?

Mr. McGOFF. Yes, sir.

Mr. GORE. Quite a dramatic day, wasn't it, with the election and all.

Did you find out when you came to work in the morning?

Mr. McGOFF. I am not entirely clear as to what time of day I learned of that.

Mr. GORE. Was it your impression that matters still in dispute were simply ignored?

Mr. McGOFF. I lost sight of the agreement subsequent to Friday the 31st, so I can't speak to what happened between the 31st of October and the 4th of November.

Mr. GORE. Up until the 31st, had you been involved in the negotiating sessions?

Mr. McGOFF. During the month of October.

Mr. GORE. Were there quite a few negotiating sessions where you were not present prior to the October 31st time?

Mr. McGOFF. There were some discussions between Dr. Bateman and New York State, but the major negotiations took place subsequent to October 6.

Mr. GORE. We entered a document into the record earlier that was dated November 3, 1980. Can the staff provide that? It is called West Valley Agreement with New York Status and Changes. Have you ever seen that before, Dr. McGoff?

Mr. McGOFF. I believe I have, sir,

Mr. GORE. Were you the author of that?

Mr. McGOFF. No, sir.

Mr. GORE. Who do you think authored that?

Mr. McGOFF. I believe that was authored by Dr. Oertel, who is

my direct supervisor.

Mr. GORE. What was his position at the time?

Mr. McGOFF. He was Director of the Office of Waste Operations and Technology.

Mr. GORE. Was he intimately involved in the negotiations also? Mr. McGOFF. No, sir, he was not.

Mr. GORE. Did you provide to him the material which served as the basis of this memorandum?

Mr. McGOFF. I believe he wrote this subsequent to a briefing I gave him on Friday, October 31.

Mr. GORE. Are the conclusions accurate, "New York is expected to make their next proposal to us within about 2 weeks. The details of the agreement continue to be worked out. While awaiting the next proposal ***," and so forth.

Mr. McGOFF. It represented my understanding on the 31st. I had a brief discussion with the New York representatives as they left for their plane on the 31st, and they advised me they would be back in a few weeks.