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March 2013

Energy and Environment

In the News

Shale gas well, courtesy wcn247/

Economics and Air Quality in the Marcellus Shale Region

A new Federal Reserve survey of regional economic trends notes that banks in the area of the Marcellus Shale formation have described positive economic effects from royalty money paid to local residents. Yet the cost of environmental and health damages from air pollutant emissions associated with shale extraction in the state of Pennsylvania is significant, ranging in estimates from $7.2 million to $32 million in 2011, says a new paper by RAND Corporation researchers. The authors recommend that regulatory agencies and the shale gas industry should consider air emissions impacts from long-term activities associated with shale gas development, especially in more populated areas of Pennsylvania where net emissions damagers are significantly higher. Read more »


What type of organization should manage and dispose of spent fuel and high-level radioactive waste in the United States? … Creating a new organization to manage and dispose of nuclear waste

Featured Research

What Type of Organization Should Manage and Dispose of Spent Fuel and High-Level Radioactive Waste in the United States?

dry nuclear storage

Because of the federal government's inability to site a permanent repository for spent fuel and high-level radioactive waste after more than three decades of trying, Secretary of Energy Steven Chu established the Blue Ribbon Commission on America's Nuclear Future to consider a different approach from the status quo. The Commission called for creating a new, single-purpose organization whose sole task would be managing and disposing of nuclear waste. It suggested that this organization should be a congressionally chartered federal government corporation but left open the possibility of alternatives.

While agreeing that a new organization is needed, the Obama administration in its recent strategy concluded that there are several viable organizational models that can "achieve the critical attributes of accountability, transparent decision-making, autonomy, a public interest mission, and organizational stability." This strategy guidance is motivated by findings from research RAND conducted at the request of the Department of Energy (DOE) to analyze the best organizational model to handle the challenging task of disposing of spent fuel and high-level radioactive waste.

In particular, RAND systematically analyzed three potential organizational models—federal government corporations (GOVCORPs), federally chartered private corporations (PRIVCORPs), and independent government agencies (IGAs)—to assess their pros and cons and strengths and vulnerabilities.

Researchers found that the critical attributes required to accomplish the task ahead exist or can be built into an IGA and a GOVCORP—both of which can accommodate many variations—but that several critical attributes are weaker in, or missing altogether from, the PRIVCORP model, including public accountability, a public-interest mission, and linkages to the executive branch and Congress that would ensure the political credibility and influence needed for the challenging responsibility of siting storage and repository facilities.

So in choosing between a GOVCORP or an IGA, the study argues that the key for Congress and the Administration is to move step-by-step through three critical governance choices, first asking what influence the President should have; then determining how insulated and independent the organization should be from congressional oversight (while still ensuring public accountability); and finally determining how it should be structured to increase the likelihood of instilling public trust and attracting the interest, engagement, and commitment of states, tribes, and local communities in siting the facilities. In answering these questions, policymakers will be striking a balance between the competing values of accountability and flexibility called for in the design of the new organization.

Read more»


Creating a New Organization to Manage and Dispose of Nuclear Waste

Debra Knopman

Debra Knopman is vice president and director of RAND Justice, Infrastructure, and Environment. Her expertise is in hydrology, environmental and natural resources policy, systems analysis and operations research, and public administration. Her project work spans a range of topics including long-term water management, policy options for disposition of nuclear waste, governance and funding for U.S. Gulf Coast recovery, and the design of a National Research Fund for Qatar. Knopman served for six years (1997–2003) as a member of the Nuclear Waste Technical Review Board and chaired the board's Site Characterization Panel.

Lynn E. Davis

Lynn E. Davis is a senior political scientist and serves as director of RAND's Washington office. From 1993 to 1997, Davis served as Under Secretary of State for Arms Control and International Security Affairs. Her current research focuses on strategic planning, terrorism, citizen preparedness, and defense strategy, and force structure issues. She was the senior study group advisor for the Commission on National Security/21st Century. A former vice president and director of the RAND Arroyo Center, Davis has also served on the staffs of the Secretary of Defense, the National Security Council, and the first Senate Select Committee on Intelligence.

How much did the past organizational design contribute to past problems in dealing with nuclear waste?

The Office of Civilian Radioactive Waste Management (OCRWM)—which handled this task within DOE in the past—did contribute to problems in implementing the program prescribed by the Nuclear Waste Policy Act as amended, but what we discovered is that it contributed less to such problems than the Act itself and subsequent congressional and executive branch actions. Ultimately, the statutorily based siting process was flawed, funding was inadequate, and the public lost trust in the government's ability to accomplish the task.

How important then is the organizational form to the success of a new organization to manage and dispose of nuclear waste?

The organizational form will be important if the nation is to achieve consensus on the siting and disposition of these materials. But beyond the organization, the evolution of national priorities and changes in the political environment will have a profound effect on success, and there is almost certainly more than one way to design a successful organization to manage and dispose of nuclear waste.

So which model might be better for the particularly vexing problem of nuclear waste?

A PRIVCORP does not work well in this context, but either an IGA or a GOVCORP could; each offers different avenues for blending the features of a private-sector organization (e.g., independence and internal flexibility) and a government entity (e.g., longevity, political influence, and accountability to the public) that are required here.

You argue that establishing the relationship to the President is a key first step. How would an IGA or GOVCORP differ in this regard?

An IGA would have a direct relationship, ensuring that the public interest is taken into account and that the President's influence could be brought to bear in siting the storage and disposal facilities. A GOVCORP would have an independent relationship—one that insulates its activities from the turnover of administrations; gives it the authority to make decisions on siting without political interference; and allows flexibility in siting negotiations, operations (including contracting and procurement), and personnel policy.

Either choice has some disadvantages. How can policymakers lessen those?

Policymakers can build features into the organization's governance structure to do this. In an IGA, for example, some degree of political insulation could be achieved by extending the term of the administrator beyond a four-year presidential term. To increase the leadership accountability in a GOVCORP, policymakers could require in the legislative charter that the President nominate the members of its board of directors.

What other decisions need to be made?

Determining the relationship to Congress (including how Congress will provide oversight), identifying the funding source (will it receive annual congressional appropriations, or will it finance its expenditures from a dedicated fund?), and determining its relationship to stakeholders (i.e., states, tribes, communities, utilities, and rate-payers) are all key decisions that logically follow once the relationship with the President is set.

Any others?

Yes. The responsibilities of the new organization will be first-of-a-kind and complex, and they will extend across the coming decades. This argues for thinking in advance about whether the organization should be a single, fixed organization designed to carry out all its responsibilities or whether its characteristics should be tailored over time to meet the demands of different mission phases.

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Winfield Boerckel
Director, Office of Congressional Relations

Matthew Dicker
Energy and Environment Legislative Analyst

RAND Office of Congressional Relations
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