ML091040550

San Luis Obispo Mother for Peace, Petitioner V. USNRC, Respondent-Intervenor; No. 08-75058 - Answering Brief of Respondent-Intervenor

ML091040550
Person / Time
Site:	Diablo Canyon
Issue date:	04/08/2009
From:	Sullivan K Quinn, Emanuel, Urquhart, Oliver & Hedges, LLP, San Luis Obispo Mothers for Peace, Winston & Strawn, LLP
To:	NRC/OGC, US Federal Judiciary, Court of Appeals, 9th Circuit
Charles Mullins, 301-415-1618
References
08-75058
Download: ML091040550 (72)

Text

No. 08-75058 IN THE 0Iatifteb %_tate.4 Court of Appea[!6 FOR THE NINTH CIRCUIT SAN LuIs OBISPO MOTHERS FOR PEACE, Petitioner, V.

NUCLEAR REGULATORY COMMISSION AND UNITED STATES OF AMERICA, Respondent, PACIFIC GAS AND ELECTRIC COMPANY, Respondent-Intervenor.

On Petition For Review Of Orders Of The U.S. Nuclear Regulatory Commission ANSWERING BRIEF OF RESPONDENT-INTERVENOR David A. Repka WINSTON & STRAWN LLP 1700 K Street, N.W.

Washington, D.C. 20006 (202) 282-5000 Kathleen M. Sullivan William B. Adams QUINN EMANUEL URQUHART OLIVER & HEDGES LLP 51 Madison Avenue, 22nd Floor New York, NY 10010 (212) 849-7000 April 8, 2009

CORPORATE DISCLOSURE STATEMENT Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure, Pacific Gas and Electric Company ("PG&E") states that it is a corporation organized under the laws of the State of California, with its principal executive offices in San Francisco, California. Pacific Gas and Electric Corporation, PG&E's parent corporation, is the only publicly held corporation owning ten percent or more of PG&E's stock.

ii

TABLE OF CONTENTS Page CORPORATE DISCLOSURE STATEMENT..........................................

1i PRELIMINARY STATEMENT.......................................................

1..

JURISDICTION............................................................................

3 QUESTIONS PRESENTED...............................................................

3 STATEMENT OF THE CASE............................................................

4 STATEMENT OF FACTS................................................................

7 A.

Statutory Background.......................................................

7 B.

Initial Proceeding For ISFSI Licensing At Diablo,Canyon............ 10 C.

This Court's Prior Decision In SLOMFP I..............................

14 D.

Proceedings On Remand..................................................

16

1.

The EA Supplement................................................

16

2.

SLOMFP's Contentions Challenging The EA Supplement..........................................................

20

3.

CLI-08-01: The Commission's Response To The Five Initial Contentions..................................................

21

4.

CLI-08-08: The Commission's Response To The Sixth Contention..............I..............................................

24

5.

Contention 1(b) Proceedings.......................................

25

6.

Contention 2 Evidentiary Submissions...........................

26

7.

CLI-08-26: The Commission's Resolution Of Contention 2.......................................................................

30 i

SUMMARY

OF ARGUMENT..........................................................

34 STANDARD OF. REVIEW..............................................................

36 A R G U M EN T......................................................

36

1. NEITHER NEPA NOR THE AEA REQUIRED THE COMMISSION TO HOLD A CLOSED HEARING TO DISCUSS CLASSIFIED AND SENSITIVE SECURITY-RELATED INFORMATION............... 36 A.

The Commission Reasonably Concluded That NEPA Does Not Require Disclosure Of Information That Is Subject To A FOIA Exemption..................................................................

37 B.

The Commission's Decision Not To Disclose Classified Or Sensitive Security Information Was Not Arbitrary Or Capricious Under The AEA...............................................

43

11.

THE COMMISSION'S FINDING OF NO SIGNIFICANT IMPACT ON THE ENVIRONMENT FROM POTENTIAL TERRORIST ATTACKS WAS NOT ARBITRARY OR CAPRICIOUS...................

49 A.

The Commission Considered The Potential Environmental Impact Of All Plausible Attack Scenarios...............................

49

1.

The Commission considered potential land contamination and latent health effects............................................

49

2.

The Commission properly determined that it would be impracticable to adjudicate alternate attack scenarios.......... 51

3.

SLOMFP's arguments with respect to the "Ease" formulation are procedurally barred and substantively baseless...............................................................

53 B.

The Commission Acted Within Its Broad Discretion In Finding That SLOMFP's Attack Scenarios Would Not Result In Significant Environmental Impact........................................

55 111.

EVEN IF THE PROCEEDING IS REMANDED TO THE COMMISSION, PG&E'S LICENSE SHOULD NOT BE REVOKED.....57 ii

C O N C L U SIO N...................................................................................................

60 STATEMENT OF RELATED CASES.............................................................

61 CERTIFICATE OF COMPLIANCE WITH RULE 32(A)(7)(C) & CIRCUIT R U L E 32-1..............................................................................................

.. 62 CERTIFICATE OF SERVICE..........................................................................

63 iii

TABLE OF AUTHORITIES Pane(s)

Cases BPI v. Atomic Energy Comm 'n 502 F.2d 424 (D.C. Cir. 1974)......................................................................

38 Baltimore Gas & Elec. v. NRDC, 462 U.S. 87 (1983)....................................................................

7, 8, 38, 39, 53, 55 Bonneville Power Admin. v. F.E.R.C.,

422 F.3d 908 (9th Cir. 2005)........................................................................

43 Cal. Pro-Life Council, Inc. v. Randolph, 507 F.3d 1172 (9th C ir. 2007)........................................................................

59 Calvert Clffs' Coordinating Committee, Inc. v. U.S. Atomic Energy Comm 'n, 449 F.2d 1109 (D.C. Cir. 1971)................

39 Cities of Statesville v. Atomic Energy Comm 'n, 441 -F.2d 962 (D.C. C ir. 1969)......................................................................

46 Comm. for Nuclear Responsibiliy, Inc. v. Seaborg, 463 F.2d 788 (D.C. Cir. 1971)......................................................................

44 Dep 't of Transp. v. Public Citizen,

. 54 1 U.S. 752 (2004)........................................................................................

7,36 Fall River Rural Elec. Co-op., Inc. v. F.E.R.C.,

543 F.3d 519 (9th C ir. 2008)........................................................................

54 Friends of Endangered Species, Inc. v. Jantzen, 760 F.2d 976 (9th Cir. 1985)

...55 Halicki Films, LLC v. Sanderson Sales & Mktg.,

547 F.3d 1213 (9th C ir. 2008)............................................................................

58 Hudson River Sloop Clearwater, Inc. v. Dep 't of Navy, 891 F.2d 414 (2d C ir. 1989)............................................................................

9 Hughes River Watershed Conservancy v. Glickman, Il F.3d 437 (4th C ir. 1996)..........................................................................

57 Johnston v. Davis, 698 F.2d 1088 (10th C ir. 1983).....................................................................

57 Kleppe v. Sierra Club, 427 U.S. 390 (1976).............

I............................. 56 iv

Limerick Ecology Action v. N.R. C.,

869 F.2d 719 (3d C ir. 1989)..........................................................................

53 Marsh v. Oregon Natural Res. Council, 490 U.S. 3-60 (1989)........................................................................................

55 Missouri ex rel. Shorr v. U.S. Army Corps of Eng'rs, 147 F.3d 708 (8th C ir. 1998)..........................................................................

9 N. Cheyenne Tribe v. Norton, 503 F.3d 836 (9th C ir. 2007)........................................................................

58 New Jersey Department of Environmental Protection v. U.S. Nuclear Regulatory Commission, T.3d _, 2009 WL 819482 (3d Cir. Mar. 31, 2009)............

14,15,16 Price Rd. Neighborhood Ass 'n, Inc. v. U.S. Dep 't of Transp.,

113 F.3d 1505 (9th C ir. 1997)........................................................................

36 Robertson v. Methow Valley Citizens Council, 490 U.S. 332 (1989)........................................................................................

59 San Luis Obispo Mothers For Peace v. Nuclear Regulatory Comm 'n, 449 F.3d 1016 (9th Cir. 2006).................... 1, 2, 3, 4, 5,7, 10, 14, 15, 34, 39, 58 South Louisiana Environmental Council v. Sand, 629 F.2d 1005 (5th C ir. 1980)........................................................................

57 Townsend v. Little 109 U.S. 504 (f883)......................................................................................

43 Union of Concerned Scientists v. U.S. Nuclear Regulatory Comm 'n, 920 F.2d 50 (D.C. Cir. 1990)...............................................

36, 37, 38, 39, 40, 44 United States v. Navarro, 160 F.3d 1254 (9th Cir. 1998)........................................................................

43 Vt. Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519 (1978).......................................................

37,38,39,45,46,53,56 Weinberger v. Catholic Action of Hawaii, 454 U.S. 139 (1981).......................................

9, 15, 22, 25, 34, 39, 40, 41, 42, 57 Winter v. NRDC, 129 S. C t. 365 (2008).................................................................................

8, 58 Administrative Decisions Duke Energy Corp. (Catawba Nuclear Station, Units ] & 2), LBP 10, 59 N.R _C. 296 (2004)......................................................................................

46 V

Pacific Gas & Electric Co. (Diablo Canyon ISFSI), CLI-02-23, 56 N.R.C. 230 (2002)....................................................................................

4 Pacific Gas & Electric Co. (Diablo Canyon ISFSI), LBP-02-23, 56 N.R.C. 413 (2002)......................................................................................

5 Pacific Gas & Electric Co. (Diablo Canyon ISFSI), CLI 1, 57 N.R.C. 1 (2003).....................................................................................

5,13 Pacific Gas & Electric Co. (Diablo Canyon Nuclear Power Plant, Units ] & 2),

ALAB-41 0, 5 N.R.C. 1398 (1977)...................................................................................

46 Statutes, Regulations & Rules 5 U.S.C. § 552(b)...........................................................................................

9, 22 5 U.S.C. § 706(2)(A )...............................................................................................

36 28 U.S.C. § 2342(4)..............

............................... 3

.28 U.S.C. § 2344..................................................................................................

3 42 U.S.C. § 2161................................................................................................

45,57 42 U.S.C. § 2167.........................................................................................

17,45,57 42 U.S.C. § 2232(a)..............................................................................................

9 42 U.S.C. § 2239(a)(1)(A ).................................................................................

10, 44 42 U.S.C. § 2239(b)..............................................................................................

3 42 U.S.C. §§ 4331-35...........................................................................................

8 42 U.S.C. § 4332(2)(C)..................................................................................

8, 22, 57 42 U.S.C. § 10101..............................................................................................

10 42 U.S.C. § 10131(b)(2).....................................................................................

11 42 U.S.C. § 10151(a)(1).....................................................................................

11 42 U.S.C. § 10154(a)...............................................................................................

11 10 C.F.R. § 2.714................................................................................................

23 10 C.F.R. § 2.714(a)(1).......................................................................................

24 vi

10 C.F.R. § 2.714(b)(2)........................................................................................

10 10 C.F.R. § 2.714(d)(2)................................................................................

10, 37, 48 10 C.F.R. § 2.905(h)...........................................................................................

45 10 C.F.R. §§ 51.30-.35..........................................................................................

8 10 C.F.R. § 51.102(c)..........................................................................................

51 10 C.F.R. § 51.117................................................................................................

8 10 C.F.R. § 72.106(b).........................................................................................

28 10 C.F.R. § 73.1(a)(1).......................................................................................

61 10 C.F.R. §§ 73.21-.23.......................................................................................

17 40 C.F.R. § 1508.9(a)............................................................................................

8 40 C.F.R. § 1508.13..............................................................................................

8 10 C.F.R. Part 2, Subpart K.................................................................................

26 10 C.F.R. Part 20.................................................................................................

28 10 C.F.R. Part 72, Subpart H..............................................................................

12 40 C.F.R. Part 1503..............................................................................................

8 Fed. R. App. P. 15(a)(2)(C)................................................................................

58 Other Materials 47 Fed. Reg. 47073-03 (Oct. 22, 1982).............................................................

28 67 Fed. Reg. 19,600-01 (Apr. 22, 2002)...............................................................

4 68 Fed. Reg. 61838-01 (O ct. 30, 2003)..........................................................

5, 13 69 Fed. Reg. 15910-03 (M ar. 26, 2004)..............................................................

5,12 U.S. E.P.A., Manual of Protective Action Guides & Protective Actions for Nuclear Incidents, EPA-400-R-92-001 (May 1992)....................................

28 vii

PRELIMINARY STATEMENT Ignoring longstanding authority under the National Environmental Policy Act

("NEPA") and the Atomic Energy Act ("AEA"), as well the substantial deference to which federal agencies are entitled both in structuring their proceedings and in assessing the potential environmental impacts of agency action, San Luis Obispo Mothers for Peace ("SLOMFP") petitions for review of five decisions of the United States Nuclear Regulatory Commission ("NRC" or "Commission"). These decisions arose out of the Commission's preparation of a supplemental Environmental Assessment ("EA Supplement"), pursuant to this Court's prior decision in this proceeding, San Luis Obispo Mothers for Peace v. Nuclear Regulatory Commission, 449 F.3d 1016 (9th Cir. 2006), cert. denied sub nom. Pacific Gas & Electric Co. v.

San Luis Obispo Mothers for Peace 549 U.S. 1166 (2007) ("SLOMFP F"). The EA Supplement concerns the construction, operation, and decommissioning of an independent spent fuel storage installation ("ISFSI") to temporarily store spent nuclear fuel at the Diablo-Canyon Power Plant owned by Respondent-Intervenor Pacific Gas and Electric Company ("PG&E"). The Commission found that there will be no significant environmental impact from these activities.

SLOMFP argues first that NEPA and Section 189a of the AEA obligated the Commission to hold a closed hearing at which SLOMFP would have had access to 1

classified and sensitive security information.

SLOMFP argues further that the Commission's finding of no significant impact ("FONSI") is unsupported because the Commission declined to consider the environmental impact of certain terrorist attack scenarios.

SLOMFP's petition is baseless. Neither NEPA nor the AEA requires the Commission to hold a closed hearing to discuss classified and sensitive security-related information, particularly where the Commission concludes that the risk that such information will be disseminated heavily outweighs any limited benefit. The Commission is entitled to great deference when evaluating the appropriate procedures for handling classified and sensitive security information, conducting hearings, and performing a NEPA review.

Moreover, in finding that there would be no significant environmental impact, the Commission followed this Court's instruction in SLOMFP I and did consider potential ený,ironmental effects of all plausible terrorist attack scenarios, including potential latent health effects and land contamination, based on the site-specific conditions at Diablo Canyon. The EA Supplement, as well as the Commission's decisions denying SLOMFP's contentions, provide ample support for the FONSI, and there is no basis for deeming it arbitrary or capricious. The petition should be denied.

2

JURISDICTION This Court has jurisdiction to review the Commission's orders pursuant to 42 U.S.C. § 2239(b) and 28 U.S.C. § 2342(4). SLOMFP filed a timely petition for review on December 12, 2008. See 28 U.S.C. § 2344.

QUESTIONS PRESENTED

1.

Whether the Commission acted consistent with NEPA and Section 189a of the AEA in declining to grant SLOMFP a closed hearing to discuss classified and sensitive security information, where NEPA does not provide for a hearing process and the Commission determined that the benefit of giving SLOMFP access to such information was outweighed by the risks inherent in disseminating security-related information.

2.

Whether the Commission acted within its broad discretion and consistent with this Court's decision in SLOMFP I in finding that the construction, operation, and decommissioning of the Diablo Canyon ISFSI will not result in a significant impact to the environment.

3.

Whether, in the event of a remand, PG&E should retain its site-specific license, given SLOMFP's failure to make a showing that it is entitled to injunctive relief.

3

STATEMENT OF THE CASE On December 21,2001, PG&E submitted an application to the Commission for a site-specific license under 10 C.F.R. Part 72 that would authorize it to construct and operate an ISFSI at its Diablo Canyon Power Plant in San Luis Obispo County, California. See SLOMFP I, 449 F.3d at 1021. Following a notice of opportunity for hearing on PG&E's Part 72 application, see 67 Fed. Reg. 19,600-01 (Apr. 22, 2002),

SLOMFP filed a petition to intervene and a request for hearing, which it later amended. SLOMFP raised three contentions based on NEPA related to the threat that terrorism posed either to the proposed ISFSI or to waste canisters in transit from the ISFSI to a waste repository at some time in the future. See SLOMEP 1, 449 F.3d at 1022 & n.2.

In September 2002, SLOMFP filed a second petition with the Commission, seeking review of the adequacy of the Commission's safety requirements related to the threat of terrorism and requesting that the ISFSI licensing proceeding be suspended pending that review or that the proceeding be expanded to allow public participation in connection with potential new security requirements for the Diablo Canyon power plant, as well as the ISFSI. See SLOMFP I, 449 F.3d at 1023. On November 21, 2002, the Commission denied the request to suspend or expand the ISFSI licensing proceeding. PG&E, CLI-02-23, 56 N.R.C. 230 (2002).

4

Subsequently, the Commission's Atomic Safety and Licensing Board ruled that the three NEPA/terrorism contentions filed with the initial petition were inadmissible.

PG&E, LBP-02-23, 56 N.R.C. 413 (2002). By order of January 23, 2003, the Commission affirmed the Licensing Board, ruling that, as a matter of law, it was not required to consider terrorism in the context of NEPA. PG&E, CLI-03-1, 57 N.R.C. 1 (2003). In October 2003, the Commission issued an Environmental Assessment

("EA"), which included a FONSI, see 68 Fed. Reg. 61838-01 (Oct. 30, 2003), and on March 22, 2004, the NRC Staff issued PG&E its Part 72 license, see 69 Fed. Reg.

15910-03 (Mar. 26, 2004).

SLOMFP (and two other petitioners) sought review of the Commission's orders in this Court. In an opinion filed June 2, 2006, this Court (per Thomas, J.) held that the Commission's determination that NEPA does not require consideration of the environmental impacts of terrorist attacks was unreasonable and that it therefore had erred by preparing an EA in reliance on that determination. SLOMFP I, 449 F.3d 1016. This Court thus granted the petition in part and remanded the case to the Commission for further proceedings.

On May 29, 2007, at the Commission's direction, the Staff issued a draft EA Supplement, which contained a draft FONSI. ER 87-102.

On June 28, 2007, SLOMFP filed a request for a hearing and submitted five contentions regarding the 5

draft EA Supplement's purported deficiencies. ER 315-332. On August 30,2007, the NRC Staff published the final EA Supplement, including a final FONSI (ER 56-85),

and SLOMFP reiterated its five contentions on October 1, 2007 (ER 275-88). By order of January 15, 2008, the Commission accepted for hearing, in part, two of SLOMFP's contentions (Contentions l(b) and 2), while rejecting the remaining contentions on the merits.

ER 37-52.

In doing so, the Commission rejected SLOMFP's request for access to classified and sensitive security information. ER 41, 45, 47. The Commission reaffirmed this portion of its ruling in two subsequent opinions. See ER 30, 35. On February 28, 2008, SLOMFP filed a sixth contention, which the Commission ruled was untimely in an order dated April 30, 2008. ER 30-33.

As to admitted Contention 1 (b), the Commission determined that disclosures under NEPA are governed by the Freedom of Information Act ("FOIA") and directed the Staff to prepare a complete list of reference documents and an index indicating any redactions' (along with the appropriate basis for exemption under FOIA), and referred any further proceedings to a presiding officer. ER 35, 43-45. The presiding officer ultimately granted the Staff's unopposed motion for summary disposition with respect to Contention 1 (b). NRC SER 32-48.

6

The Commission also accepted Contention 2 to the extent that it alleged that the Staff had ignored the environmental effects on the surrounding land or non-fatal health effects from a hypothetical terrorist attack. ER 45-46. After receiving written evidentiary submissions and hearing oral argument in accordance with agency rules of practice, on October 23, 2008, the Commission rejected Contention 2 on the merits, concluding that the Staff had adequately analyzed the impacts of the most severe plausible attack, with due consideration of land contamination and radiation exposure levels (and thus potential latent health effects). ER 8-16. Commissioner Jaczko dissented. ER 24-27.

STATEMENT OF FACTS A.

Statutory Background NEPA is a procedural statute that requires federal agencies to consider environmental consequences of their actions but does not compel agencies to reach a certain result. See, e.g., Dep't of Transp. v. Public Citizen, 541 U.S. 752, 756-57 (2004). "The Supreme Court has identified NEPA's 'twin aims' as 'plac[ing] upon an agency the obligation to consider every significant aspect of the environmental impact of a proposed action [, and] ensur[ing] that the agency will inform the public that it has indeed considered environmental concerns in its decisionmaking process."'

SLOMFP I, 449 F.3d at 1020 (quoting Baltimore Gas & Elec. Co. v. NRDC, 462 U.S.

7

87, 97 (1983)). The Supreme Court has made clear that "Congress in enacting NEPA

... did not require agencies to elevate environmental concerns over other appropriate considerations." Baltimore Gas & Elec., 462 U.S. at 97.

NEPA requires that, "to the fullest extent possible," federal agencies prepare an Environmental Impact Statement for "major Federal actions significantly affecting the quality of the human environment."

42 U.S.C. § 4332(2)(C). Where an agency concludes that its proposed action will not have a significant impact on the environment, it may prepare a briefer Environmental Assessment explaining the basis for its "Finding of No Significant Impact." Winter v. NRDC, 129 S. Ct. 365, 372 (2008) (citing 40 C.F.R. §§ 1508.9(a), 1508.13); see also 10 C.F.R. §§ 51.30-.35 (NRC regulations governing preparation of EAs). NEPA does not provide for a hearing process, see 42 U.S.C. §§ 4331-35, but, by regulation, agencies allow the public to submit comments as part of a NEPA review, see, e.g., 40 C.F.R. Part 1503 (Council on Environmental Quality regulations regarding commenting process); 10 C.F.R. § § 51.33, 51.117 (NRC regulations regarding process for commenting on draft EAs and EISs)

Disclosure of materials created and used in a NEPA review is governed by FOIA. See 42 U.S.C. § 4332(2)(C). Where such materials fall within one of the 8

FOIA exemptions, 5 U.S.C. § 552(b), an agency need not disclose them.1 See, e.g.,

Weinberger v. Catholic Action of Hawaii, 454 U.S. 139, 143 (1981) ("[Section]

102(2)(C) contemplates that in a given situation a federal agency might have to include environmental considerations in its decisionmaking process, yet withhold public disclosure of any NEPA documents, in whole or in part, under the authority of an FOIA exemption."); Missouri ex rel. Shorr v. U.S. Army Corps ofEng 'rs, 147 F.3d 708, 711 (8th Cir. 1998) ("NEPA's statutory language specifically indicates that disclosure to the public is to be in accord with FOIA"); Hudson River Sloop Clearwater, Inc. v. Dep 't of Navy, 891 F.2d 414,420 (2d Cir. 1989) ("NEPA provides

... that any information kept from the public under the exemptions in [FOIA], 5 U.S.C. § 552, need not be disclosed.").

The AEA is not an environmental statute, but addresses the minimum safety standards for the licensing and operation of nuclear facilities. See 42 U.S.C. § 2232(a). The AEA and its implementing regulations provide procedures for resolving public health and safety concerns regarding licensing of nuclear power plants. Section 189(a) of the AEA provides in relevant part:

FOIA exempts from disclosure:

(1) materials properly classified by Executive order to be kept secret in the interest of national security; (2) materials related to an agency's confidential operational directives; and (3) materials specifically exempted from disclosure by statute. 5 U.S.C. § 552(b).

9

In any proceeding under this chapter, for the granting, suspending, revoking, or amending of any license or construction permit, or application to transfer control, and in any proceeding for the issuance or modification of rules and regulations dealing with the activities of licensees, and in any proceeding for the payment of compensation, an award or royalties under sections 2183, 2187, 2236(c) or1 2238 of this title, the Commission shall grant a hearing upon the request of any person whose interest may be affected by the proceeding, and shall admit any such person as a party to such proceeding.

42 U.S.C. § 2239(a)(1)(A).

The Commission has established procedural rules regarding the admissibility of contentions. Its pre-2004 rules, which applied to this proceeding (ER 39), provide that a contention shall not be admitted where the petitioner does not provide certain information, see 10 C.F.R. § 2.714(d)(2)(i) (2003) (referring to information required by 10 C.F.R. § 2.714(b)(2)), or, where a contention, if proven, would not entitle the petitioner to relief, see id § 2.714(d)(2)(ii).

B.

Initial Proceeding For ISFSI Licensing At Diablo Canyon In 2001, PG&E submitted an application to the Commission for a site-specific license to construct and operate an ISFSI at PG&E's nuclear power plant at Diablo Canyon. See SLOMFP I, 449 F.3d at 1021.

The ISFSI is a facility designed to provide interim storage of spent nuclear fuel in accordance with the Nuclear Waste Policy Act of 1982, as amended ("NWPA"), 42 U.S.C. §§ 10101, et seq. In the 10

NWPA, Congress determined that the federal government has the responsibility to develop a repository for permanent disposal of spent fuel, see id at § 10131 (b)(2), but until that solution is realized, directed that the operators of civilian nuclear power reactors, such as PG&E, have "primary responsibility" for interim storage of spent fuel, id at § 10151 (a)(1). Congress instructed operators to carry out this responsibility "by maximizing, to the extent practical, the effective use of existing storage facilities at the site of each civilian nuclear power reactor, and by adding new onsite storage capacity in a timely manner where practical." Id. Congress specifically recognized that "dry storage" could be used to increase spent fuel storage capacity. Id. § 10 154(a).

Consistent with the practice at other nuclear power plants, spent fuel at Diablo Canyon is currently stored in a spent fuel pool for each of the two reactor units at the site. ER 58. Dry cask storage allows spent fuel that has already been cooled for a time in a spent fuel pool to be removed from the pool and stored in a leak-tight steel cylinder. See PG&E SER 3-7. The cylinder is typically inserted into a concrete cask to shield workers and the public from radiation. See PG&E SER 3. The casks themselves are robust containers that must meet stringent NRC safety requirements.

See PG&E SER 3-7. An ISFSI accommodates casks up to a licensed maximum, and it too is required to meet rigorous NRC safety and physical security requirements. See, 11

e.g., 10 C.F.R. Part 72, Subpart H. The ISFSI is needed to allow Diablo Canyon to continue to generate electricity beyond the point at which the spent fuel pools reach their storage capacity. ER 58.

Diablo Canyon is a large site located in a sparsely populated area. The power plant itself is located within approximately 760 acres of PG&E-controlled land adjacent to the Pacific Ocean. PG&E SER 14-15, 19-23. The San Luis Range, reaching a height of 1,800 feet, dominates the region between the site and U.S.

Highway 101. PG&E SER 14. The terrain east of the highway, lying in the mostly inaccessible Santa Lucia Mountains, contains little development and little agricultural activity. Id. Only a few individuals reside within 5 miles of the ISFSI site, and the nearest residential community, Los Osos, is approximately 8 miles north of the site.

PG&E SER 14-15, 19, 23. The only nearby agricultural activities are cattle grazing in the area surrounding the site, and a small farm producing legumes and cereal grass starting approximately 3 miles from the plant. PG&E SER 15, 23. The only dairy activity is approximately 12 miles northeast of the site. PG&E SER 15-16.

On March 22, 2004, the NRC Staff issued PG&E a license to construct and operate the ISFSI at Diablo Canyon. 69 Fed. Reg. 15,910-03. In doing so, the NRC Staff concluded that "(1) there is reasonable assurance that the health and safety of the public will not be endangered by operation in the proposed manner; (2) such activities 12

will be conducted in compliance with the Commission's regulations; and (3) the...

physical security plan changes will not be inimical to the common defense and security or to the health and safety of the public." Safety Evaluation Report, Docket No. 72-26, Diablo Canyon ISFSI, Materials License No. SNM-25 11, March 2004, at § 10.1.6, available at http://adamswebsearch.nrc.gov/scripts/securelogin.pl (Accession No. ML040780972). Construction of the ISFSI is complete, and PG&E expects to begin transferring spent fuel from the pools to the ISFSI in June 2009. See PG&E 2008 Form 10-K at 29 (filed Feb.

24, 2009),

available at http://idea.sec.gov/Archives/edgar/data/1004980/000100498009000009/form 10k1231 08.htm ("PG&E Form 10-K").

Prior to issuing a license to PG&E, the Commission prepared an EA, which concluded that "the construction, operation, and decommissioning of the Diablo Canyon ISFSI will not result in a significant impact to the environment." 68 Fed.

Reg. at 61,838. In making that determination, however, the Commission did not evaluate the environmental impact of terrorist attacks because it concluded that, as a matter of law, it was not required to consider terrorism in the context of NEPA.

PG&E, CLI-03-1, 57 N.R.C. 1.

13

C.

This Court's Prior Decision In SLOMFPI SLOMFP, along with another organization and an individual, filed a petition for review. See Dkt. No. 03-74628. This Court granted the petition in part, holding that the Commission had erred in declining, as a matter of law, to consider the environmental impacts of potential terrorist attacks under NEPA. See SLOMFPI, 449 F.3d at 1028-35. SLOMFP I found unreasonable each of the Commission's four rationales, concluding: (1) that "the possibility of [a] terrorist attack is not so 'remote and highly speculative' as to be beyond NEPA's requirements," id. at 1031 ;2 (2) that "precise quantification of a risk is not necessary to trigger NEPA's requirements, and even if it were, the NRC has not established that the risk of a terrorist attack is unquantifiable," id. at 1032; (3) that "worst-case analysis is not defined solely by the low probability of the occurrence of the events analyzed, but also by the range of outcomes of those events" and "Petitioners do not seek to require the NRC to analyze the most extreme (i.e., the 'worst') possible environmental impacts of a terrorist 2 In New Jersey Department ofEnvironmental Protection v. U.S. Nuclear Regulatory Commission, _ F.3d _,

2009 WL 819482 (3d Cir. Mar. 31, 2009), the Third Circuit recently "depart[ed] from the reasoning of [SLOMFP 1]" by concluding that "there is no 'reasonably close causal relationship' between a relicensing proceeding and the environmental effects of an aircraft attack on the licensed facility."

Id. at *9. Thus, in contrast to this Court, the Third Circuit held that "such an attack does not warrant NEPA evaluation." Id. at *4.

14

attack," id, at 1034; and (4) that "sensitive security issues [do not] result in some kind of NEPA waiver," and that Weinberger "can support only the proposition that security considerations may permit or require modification of some of the NEPA procedures,"

id.

This Court noted, however, that a "Weinberger-style limited proceeding might be appropriate," SLOMFP I, 449 F.3d at 1034, because the "issues raised by the petition may involve questions of national security, requiring sensitive treatment on remand," id. at 1035. The Court likewise expressed confidence in the Commission's ability to craft appropriate proceedings that balanced NEPA's requirements with the protection of national security information, noting that the Commission "has dealt with our nation's most sensitive nuclear secrets for many decades, and is well-suited to analyze the questions raised by the petition in an appropriate manner consistent with national security." Id.

In remanding "for the agency to fulfill its responsibilities under NEPA," this Court did not direct the Commission to follow any particular path (including with respect to compliance with NEPA, evaluation of attack scenarios, or assessment of terrorism generally), instead explaining that it was not "constraining the NRC's consideration of the merits on remand, or circumscribing the procedures that the NRC must employ in conducting its analysis." SLOMFP, 449 F.3d at 1035. The Court left 15

to the Commission how to conduct its NEPA review consistent with its procedural rules, emphasizing that "[t]here remain open to the agency a wide variety of actions it may take on remand, consistent with its statutory and regulatory requirements," and that it was not "prejudg[ing] those alternatives" or "the merits of the inquiry." Id.

D.

Proceedings On Remand

1.

The EA Supplement On remand for "further proceedings consistent with this [Court's] opinion," 449 F.3d at 1035, the Commission instructed its Staff to "prepare a revised environmental assessment in accordance with the NRC's regulations -

addressing the likelihood of a terrorist attack at the Diablo Canyon ISFSI site and the potential consequences of such an attack." ER 53. The NRC Staff prepared a draft EA Supplement, which contained a draft FONSI. ER 87-102. After receiving public comments, including from SLOMFP, the Staff published the final EA Supplement responding to those comments, and again containing a FONSI. ER 56-85.

The EA Supplement concluded that "the construction, operation, and decommissioning of the Diablo Canyon ISFSI, even when potential terrorist attacks on the facility are considered, will not result in a significant effect on the human environment." ER 64. This was so because "NRC security requirements, imposed through regulations and orders, and implemented through the licensee's security plans, 16

in combination with the design requirements for dry cask storage systems, provide adequate protection against successful terrorist attacks on ISFSIs" and therefore "a terrorist attack that would result in the significant release of radiation affecting the public is not reasonably expected to occur." Id.

Specifically, th'e NRC Staff concluded that the structural integrity of dry cask storage "provide[s] high assurance that the spent fuel stored in an ISFSI is adequately protected." ER 62. As the EA Supplement explains, "[b]y design, dry cask storage systems are highly resistant to penetration," and given the NRC's stringent licensing requirements, "spent fuel storage casks are extremely robust structures, specifically designed to withstand severe accidents, including the impact of a tornado-generated missile such as a 4000-pound automobile at 126 miles per hour." Id. According to the EA Supplement, in addition to the robust security requirements at Diablo Canyon,3 there are multiple layers of protection provided by the storage system:

The massive HI-STORM 1 OOSA storage casks to be used at the Diablo Canyon ISFSI are made of inner and outer cylindrical carbon steel shells, filled with 30 inches of concrete, and weighing up to 170 tons when fully loaded 3

Although the Commission has designated the precise details of Diablo Canyon's security measures Safeguards Information that may not be released to the public, see 42 U.S.C. § 2167; 10 C.F.R. §§ 73.21-.23, the security requirements include (1) physical barriers; (2) surveillance; (3) intrusion detection; (4) a response to intrusions; and (5) offsite assistance from local law enforcement agencies. ER 61.

17

with spent fuel. Each cask surrounds an internal multi-purpose canister, which safely confines the spent fuel in a completely sealed, welded stainless steel cylinder. The spent fuel is further protected by the metallic zircaloy cladding surrounding the fuel pellets in each fuel rod of a spent fuel assembly. Finally, the nuclear fuel itself is in the form of solid ceramic pellets of uranium dioxide; this means that a large amount of the radioactive material would remain in solid form and in the immediate vicinity of the ISFSI, even if a terrorist attack were successful in breaching the multiple layers of protection. Thus, only a small fraction of the radioactive material released would be in the dispersible form of fine particulate material or radioactive gases with the potential to be transported offsite.

Id.

While the Commission stated in the EA Supplement that it believed the likelihood of a terrorist attack at Diablo Canyon is low, it nevertheless "analyzed plausible threat scenarios" to ISFSIs generally "and compared the assumptions used in these generic assessments to the relevant features of the Diablo Canyon ISFSI.' 4 ER 62-63.

This threshold plausibility determination "was informed by information 4 After the Commission ordered all licensees of operating ISFSIs to implement additional security enhancements in October 2002, the Commission "used a security assessment framework as a screening and assessment tool to determine whether additional security measures... were warranted for NRC-regulated facilities, including ISFSLs." ER 63. That assessment formed the basis for the Commission's subsequent conclusion that further security measures at ISFSIs were unnecessary. See id.

18

gathered during NRC's regular interactions with the law enforcement and intelligence communities." ER 63. Although, due to national security concerns, the Commission would not publicize all of the threat scenarios it deemed plausible with respect to ISFSIs generally, the NRC Staff acknowledged considering "a large aircraft impact similar in magnitude to the attacks of September 11, 2001, and ground assaults using expanded adversary characteristics consistent with the design basis threat for radiological sabotage for nuclear power plants." Id.5 Applying the generic assessments to the Diablo Canyon ISFSI, the NRC Staff "determined that the assumptions... regarding the storage cask design, the source term (amount of radioactive material released), and the atmospheric dispersion, were representative, and in some cases, conservative, relative to the actual conditions at the Diablo Canyon ISFSI." ER 63 (emphasis added). The EA Supplement thus concluded that given the conditions at Diablo Canyon and the specific characteristics of the spent fuel that would be stored there, an attack would result in a dose lower than the generic calculation. Id. Based on the NRC Staff's analysis, "the [radiation] dose to the nearest affected resident, from even the most severe plausible threat scenarios-5 Elsewhere in the EA Supplement, the NRC Staff noted that "the location and low profile of the Diablo Canyon ISFSI make it a difficult target for a large commercial airliner." ER 62.

19

the ground assault and aircraft impact scenarios discussed above-would likely be well below 5 rem" and "[i]n many scenarios, the hypothetical dose to an individual in the affected population could be substantially less than 5 rem, or none at all." Id.6 It is well accepted that a dose of less than 5 rem would not cause a significant risk to human health. See infra at 28.

2.

SLOMFP's Contentions Challenging The EA Supplement SLOMFP initially raised five contentions in response to the draft EA Supplement and the final EA Supplement, and later added a sixth. In this Court, however, it pursues only four of them: Contentions 1, 2, 3 and 6.

In Contention 1 (a), SLOMFP charged that the draft EA Supplement failed to define its terms or explain its reasoning process sufficiently. ER 319-23. SLOMFP also complained in Contention 1 (b) that the Staff had failed to identify the reference documents upon which it had relied in preparing the draft EA Supplement, and sought access, under a protective order, to security studies relied upon by the NRC Staff. ER 323-24.

6 The Commission calculated this dose for the closest resident, located on PG&E property, at 1.5 miles from the ISFSI. As discussed in the hearing process, given Diablo Canyon's location and the amount of the property that PG&E owns around the ISFSI, the closest offsite residents are significantly further from the ISFSI.

20

In Contention 2, SLOMFP charged that the EA Supplement excludes attack scenarios based on a purported assumption that the environmental effects are insignificant unless the potential consequences include early fatalities. ER 324-26. In doing so, SLOMFP contended that the EA Supplement ignored land contamination and latent health effects from a terrorist attack. Id.

In Contention 3, SLOMFP charged that the EA Supplement fails to consider credible threat scenarios that could cause significant environmental damage where the dry storage casks sustain more than minimal damage. ER 326-27. For example, SLOMFP argued that the Staff should have considered the scenario proposed by SLOMFP's expert witness in which a penetrating device accompanied by an incendiary component ignites the zirconium cladding of the spent fuel inside the storage cask, causing dispersal of radioactive material. ER 327-28.

In Contention 6, which was filed well after the other contentions, SLOMFP charged that the Staff had violated NEPA by "excluding reasonably foreseeable threat scenarios from consideration, based on the use of an inappropriate indicator known as

'Ease' as a proxy for the probability of a threat scenario." ER 255.

3.

CLI-08-01: The Commission's Response To The Five Initial Contentions The Commission addressed SLOMFP's first five proposed contentions in an order issued January 15, 2008, accepting two contentions for further consideration.

21

First, the Commission accepted Contention 1 (b) to the extent that it alleged that the Staff failed to provide source documents or information underlying its analysis, and failed to identify appropriate FOIA exemptions for its withholding decisions. ER 43-

45. The Commission directed its Staff to prepare a complete list of documents on which it relied in preparing the EA Supplement and an index for any document (or portion thereof) that the Staff claimed was exempt from disclosure under FOIA, 5 U.S.C. § 552(b), along with the appropriate exemption. ER 45. Relying on 42 U.S.C.

§ 4332(2)(C) and Weinberger, however, the Commission declined to provide SLOMFP access to materials that fall within a FOIA exemption. ER 41, 45, 47.

Nevertheless, the Commission made clear that its "inability to disclose information based on the confidentiality of that information does not mean... that the NRC Staff (and the Commission, on review) has not performed the evaluation the Ninth Circuit directed, consistent with Weinberger-it simply means that certain information cannot be made public for security reasons." ER 41.7 Second, the Commission accepted Contention 2 to the extent that it alleged that the Staff ignored environmental effects on the surrounding land or long-term health 7 The Commission twice denied SLOMFP's petitions for reconsideration of its refusal to grant access to materials exempt from disclosure under FOIA (ER 30, 35),

and directed a previously designated presiding officer to resolve any remaining FOIA issues associated with Contention 1 (b) (ER 35).

22

effects from a hypothetical terrorist attack. ER 46. The Commission stated that, while it could not say at this threshold stage that SLOMFP's concerns were "unworthy of future inquiry," the "Staff may be able to easily explain how such issues were addressed by reference to source documents, including the 2003 environmental assessment, or how such issues are bounded and were implicitly addressed by the very low dose estimates or other considerations." Id.

The Commission rejected SLOMFP's remaining contentions as failing to raise genuine issues for hearing, consistent with its regulation establishing threshold criteria for admissibility of contentions, 10 C.F.R. § 2.714 (2003). ER 46-49. In rejecting Contention 3, the Commission explained that, in preparing the EA Supplement, its Staff had considered plausible threat scenarios based on assumed adversary characteristics and classified threat assessment information. ER 47. The Commission determined that this approach was "reasonable on its face," and explained that it

"[did] not understand the Ninth Circuit's remand decision-which expressly recognized NRC security concerns and suggested the possibility of a 'limited proceeding'-to require a contested adjudicatory inquiry into the credibility of various hypothetical terrorist attacks against the Diablo Canyon ISFSI." Id. The Commission also deemed adjudication of alternate terrorist scenarios to be "impracticable" because

"[tihe range of conceivable (albeit highly unlikely) terrorist scenarios is essentially 23

limitless, confined only by the limits of human ingenuity," and "hearings on such claims could not be conducted in any meaningful way without substantial disclosure of classified and safeguards information on threat assessments and security arrangements." Id.

4.

CLI-08-08: The Commission's Response To The Sixth Contention By order of April 30, 2008, the Commission rejected Contention 6 because it did not satisfy the Commission's late-filed contention standards, 10 C.F.R. § 2.714(a)(1) (2003). Specifically, the Commission ruled that SLOMFP did not have good cause for its late filing because, "[a]part from reliance on the 'Ease' factor, Contention 6 bears a strong resemblance to Contention 3 (which we did not admit),

both in the language of the contention and in the legal and expert witness support SLOMFP provides." ER 32. The Commission noted that whether SLOMFP based its contention on inferences drawn from dose estimates as in Contention 3, or from the existence of the 'Ease' factor as in Contention 6, "the fundamental contention is the same: in either case SLOMFP is challenging the range of threat scenarios examined by the Staff." Id. The Commission therefore concluded that SLOMFP had "not shown good cause to admit today a contention that was not admitted when first proposed." Id.

24

Alternatively, the Commission rejected Contention 6 because, consistent with Weinberger, "it is not practical or legally required for the NRC to adjudicate the essentially limitless range of conceivable (albeit highly unlikely) terrorist scenarios, where the core evidence (threat assessment and security measures) is protected security information." ER 32 (citing ER 47).

5.

Contention 1(b) Proceedings In response to the Commission's directive, the NRC Staff produced a reference list containing the 21 documents that it relied upon in preparing the EA Supplement (NRC SER 49-56, 60, 103) and a voluminous index indicating the portions of those documents that are exempt from disclosure under FOIA (along with the appropriate FOIA exemption).

Consequently, the Staff moved for summary disposition of Contention 1 (b) on the grounds that it had provided all sources that it had relied upon or used as guidance in the development of the Supplemental EA, and that for those documents or portions thereof that it withheld, it had provided detailed justifications that satisfied FOIA standards. In response, SLOMFP agreed that the Staff "has now provided an adequate listing of the reference documents on which it relied for the draft and final supplements to its environmental assessment for the proposed Diablo Canyon ISFSI" (ER 185), and disclaimed any interest in "additional public disclosure 25

8 of information in the reference documents" (ER 187). The presiding officer granted summary disposition, concluding that the NRC Staff had provided a complete list of reference documents, as well as the basis for withholding documents, and that challenges to specific non-disclosures had been resolved. NRC SER 32-48.

6.

Contention 2 Evidentiary Submissions With respect to the portion of Contention 2 that the Commission had accepted, and consistent with the Commission's governing rules of practice (10 C.F.R. Part 2, Subpart K (2003)), the parties made extensive written filings as to whether the EA Supplement had failed to consider the potential for significant land contamination and long term cancer risk from terrorist attacks. The NRC Staff and PG&E focused in their filings on the small dose calculated for the scenarios considered to be plausible, and on how this dose would indicate low risk of land contamination and latent cancers, both generally and at the Diablo Canyon site.

The NRC Staff presented testimony from, among others, Elizabeth Thompson, a Senior Health Physicist in the Commission's Division of Spent Fuel Storage and Transportation. Ms. Thompson described in significant detail the methodology that she used to calculate a hypothetical radiation dose to the resident living nearest the 8 SLOMFP did, however, reiterate its belief that it should have received access to the reference documents under a protective order. ER 187.

26

Diablo Canyon ISFSI based on four days of exposure to contaminated ground. NRC SER 64-73. Ms. Thompson testified that, "to obtain a conservative estimate of environmental impacts, [she] chose the type of plausible attack that results in the largest release of radioactive material." NRC SER 64. Ms. Thompson calculated that the total effective radiation dose to the nearest resident, who lives 1.5 miles NNW of the Diablo Canyon ISFSI, would be less than 5 rem.

NRC SER 73. As Scott Flanders, Deputy Director of the Division of Waste Management and Environment Protection in the Commission's Office of Federal and State Materials and Environmental Management Programs, testified, "Because of the nature of the radioactive material which would be released, which would disperse and settle as it goes downwind, members of the public beyond the nearest resident would be expected to receive lower doses and consequently have a lower likelihood of developing discernible health effects." NRC SER 84. Mr. Flanders further testified that the "Staff considered land contamination to the extent that it contributed to the calculated dose to the nearest resident." Id.

PG&E demonstrated that there would not be significant long-term health effects associated with such small doses. PG&E employee Mark Mayer 9 testified that the 9 Mr. Mayer is a Reactor Engineering Supervisor at Diablo Canyon, and from 1998 to 2007 was a Supervisor, Systems and Transient Analysis, there. In that (footnote continued) 27

maximum credible dose of 5 rem coincides with the design basis accident limit specified in 10 C.F.R. § 72.106(b), that the Commission has set a 5 rem total effective dose equivalent for adult occupational exposures (10 C.F.R. Part 20), and that other federal agencies have recognized that a dose of less than 5 rem would not be expected to cause significant long-term health effects. PG&E SER 9-14. For example, as Mr.

Mayer explained, the U.S. Environmental Protection Agency recommends limiting doses to all workers during emergencies to 5 rem (see PG&E SER 10-12 (citing U.S.

E.P.A., Manual of Protective Action Guides & Protective Actions for Nuclear Incidents, EPA-400-R-92-001 (May 1992))), while the Food and Drug Administration recommends emergency action (e.g., isolating food to prevent its introduction into commerce) at projected radiation doses of 5 rem (see PG&E SER 12-13 (citing 47 Fed. Reg. 47073-03, 47074 (Oct. 22, 1982))).

Mr. Mayer also testified that, given the nature of the site and other site-specific considerations, there would not be significant land contamination or evacuation costs.

Specifically, he noted that only a few individuals reside within 5 miles of the ISFSI site, and the nearest residents on land not owned by PG&E are located approximately capacity, his group prepared thermal/hydraulic analyses, reviewed vendor safety analyses, and prepared and reviewed power plant accident analyses and offsite dose consequence analyses. PG&E SER 1.

28

3 miles from the ISFSI. PG&E SER 15. In contrast, the "less than 5 rem" dose projected in the EA Supplement was calculated at a distance of 1.5 miles from the ISFSI. See id. Moreover, Mr. Mayer noted that because PG&E owns and controls a significant amount of land around Diablo Canyon, very few agricultural activities occur in the immediate vicinity. PG&E SER 15-16.'o In contrast, notwithstanding the limited scope of Contention 2, SLOMFP's expert, Gordon Thompson, contended that because the Staff calculated the maximum dose as being less than 5 rem, it must have failed to consider all scenarios that he considered plausible, or, alternatively, misapprehended the potential consequences of the threat scenarios it did consider.

ER 239-41, 382-86, 389.

Dr. Thompson postulated a threat scenario from a sub-national group that would ignite the zirconium fuel cladding at the Diablo Canyon ISFSI and that he calculated would result in a

'0 Jearl Strickland, the Manager of the Used Fuel Project at Diablo Canyon, also testified as to the robustness of the HI-STORM IOOSA dry cask storage system that will be used at Diablo Canyon, describing it as "a rugged, heavy-walled, cylindrical, steel and concrete structure" (PG&E SER 3), and noting, consistent with conclusions in the EA Supplement (ER 62), that it "has been demonstrated to be able to withstand the impacts of missiles generated by tornados and other natural phenomena" (PG&E SER 4).

NRC Staff experts also testified that their finding of high assurance that a terrorist attack would not result in significant health effects to the nearest resident was also supported by the security measures at the Diablo Canyon ISFSI and the protection afforded by the cask design. NRC SER 84-86.

29

radiological release of 3 million curies of cesium-137, representing approximately fifty percent of the cesium in four spent fuel storage modules. ER 382-86, 389. At oral argument, the Staff indicated that it was "well aware of issues concerning [a zirconium fire]" and while it could not discuss the details of the threat scenario proffered by Dr. Thompson because of national security concerns, "it [did] not alter the [S]taff's conclusion that there would not be any significant environmental consequences from a terrorist attack." NRC SER 149.

Turning to the actual focus of Contention 2, SLOMFP further argued that the EA Supplement had categorically excluded attack scenarios that did not have the potential for early fatalities, such as those that would cause severe land contamination.

ER 219-21. SLOMFP supported its assertion by arguing that the potential for early fatalities was the only direct indicator of an adverse outcome of an attack on an ISFSI that was mentioned in the EA Supplement and that the NRC Staff's reference list included a document that approved screening out non-fatal consequences from security assessments of source materials facilities and research and test reactors. Id.

7.

CLI-08-26: The Commission's Resolution Of Contention 2 After hearing oral argument, the Commission rejected Contention 2 in an order issued on October 23, 2008. ER 1-27. The Commission concluded that its Staff had "examined a range of plausible terrorist attacks on the Diablo Canyon ISFSI and 30

found that even the most severe would cause no immediate or latent health effects after quantitatively evaluating how air and land contamination would contribute to those effects" and after considering the robust nature of the Diablo Canyon storage casks and the unique characteristics of the site. ER 15-16. Based on its own review of non-public information, the Commission concluded the Staff's selection of terrorist attack scenarios was "reasonable." ER 21.

Additionally, the Commission noted that, while SLOMFP had "attempted to re-litigate elements of Contention 2 relating to attack-scenario selection that [the Commission] had already excluded from the proceeding," the "NRC Staff and PG&E provided essentially uncontradicted evidence that the probability of a significant radioactive release caused by a terrorist attack was low, and that the potential latent health and land contamination effects of the most severe plausible attack would be small." ER 8. The Commission accepted the Staff's quantitative and qualitative methodology, ruling that SLOMFP provided no basis for overturning Ms. Thompson's reasonable use of a computer code to determine the behavior of pollutants in the atmosphere (ER 9-12), and that the robustness of the dry cask storage system PG&E plans to use at Diablo Canyon and the particular site conditions there "showed that the probability of a significant radioactive release caused by [a] terrorist attack on the Diablo Canyon ISFSI is very low" (ER 12; see also ER 20-22 (providing overview of 31

Staff process))." Finally, the Commission acknowledged that the NRC Staff's threat-assessment expert had stressed the low likelihood that a terrorist attack would even be attempted at the Diablo Canyon ISFSI. ER 15 (citing NRC SER 83).

The Commission also reiterated that in its January 2008 Order (CLI-08-01), it had rejected SLOMFP's Contention 3 that the Staff should have considered a broader range of terrorist attack scenarios, including the one posited by Dr. Thompson. ER

16. It noted, however, that despite that rejection, SLOMFP sought to continue litigating the issue in its written and oral presentation regarding Contention 2. ER 17.

The Commission once again stated its view that "NEPA does not require us to reveal sensitive government security information regarding the agency's environmental analysis, and there is no compelling policy reason to do so in this case." Id.12 Moreover, having independently reviewed the EA Supplement and the non-public documents upon which the NRC Staff relied, the Commission concluded that The Commission cited testimony from PG&E's employees with respect to the robust structural design of the spent fuel storage canisters and the additional qualitative characteristics of the Diablo Canyon site, including its location in a sparsely populated region where little land is productive, that would limit the human health, land contamination, and other environmental effects of a terrorist attack. ER 13-14.

12 Contrary to SLOMFP's intimations (Br. 41), the Commission did not ultimately rely on the "state secrets" privilege to justify non-disclosure. See ER 18 n.71.

32

"[flurther disclosure of sensitive, security-related information would not assist the Commission in determining whether the agency's environmental review was reasonable under NEPA" (ER 18) and that "any benefit to be gained... from further disclosure is outweighed by the risks inherent in disseminating security-related information, even under [a] protective order" (ER 19).13 The Commission's final order became part of the environmental record of decision along with the EA Supplement itself. ER 23.

Commissioner Jaczko dissented, stating that the EA Supplement should have been remanded to the NRC Staff for consideration of potential land contamination or non-fatal health effects from a terrorist attack, both of which he determined were absent from the EA Supplement. ER 24-26. Commissioner Jaczko chided the majority for withholding too much information in a proceeding that "does not involve military or state secrets." ER 26.

13 The Commission noted that "[n]othing in [its] procedural hearing rules requires greater disclosure of the agency's environmental analysis" (ER 18 (emphasis added)), and found no precedent for closed licensing proceedings where "no party has challenged the ability of the Diablo Canyon ISFSI to meet NRC safety or security requirements" (ER 18-19).

33

SUMMARY

OF ARGUMENT SLOMFP's petition should be denied,first, because neither NEPA nor Section 189a of the AEA requires the Commission to hold a closed hearing to discuss classified or sensitive security information. The Commission reasonably interpreted NEPA not to require a closed hearing to discuss information that is subject to a FOIA exemption. NEPA itself provides that FOIA governs the disclosure of materials created and used in a NEPA review. Moreover, the Supreme Court has held that agencies are subject only to those procedural requirements that NEPA expressly imposes, and NEPA does not establish any hearing process, let alone a closed hearing process, In declining to hold a closed hearing, the Commission properly relied on the Supreme Court's decision in Weinberger, 454 U.S. 139, which makes clear that the Commission need not disclose NEPA materials that are within a FOIA exemption.

The Commission's decision is also consistent with this Court's prior decision in SLOMFP I, which expressly left it to the Commission to develop appropriate procedures for handling classified and sensitive security information on remand.

Nor was the Commission's decision not to disclose classified and sensitive security information arbitrary or capricious under the AEA. SLOMFP cites no authority for its argument that NEPA materials that are exempt from disclosure under FOIA can still be subject to disclosure under an agency's organic statute. And even if 34

the AEA were relevant, the Commission acted well within its broad discretion to structure its own proceedings by denying a closed hearing where it concluded that the limited-to-no benefit of a closed hearing on the plausibility of alternate threat scenarios was well outweighed by the security concerns inherent in disclosing national security information.

SLOMFP's petition should be denied, second, because the Commission's finding of no significant impact was well within its broad discretion.

The Commission evaluated all plausible attack scenarios, considered potential land contamination and latent health effects of such scenarios, and acknowledged the scenario proffered by SLOMFP's expert, but indicated that it did not alter its conclusion. SLOMFP's speculation about the Commission's use of the "Ease" methodology is procedurally barred because SLOMFP does not address the Commission's ruling that it was untimely below. Even if the Commission had used "Ease" to screen for plausibility, the Commission is entitled to great deference with respect to its chosen methodology.

Finally, if any further remand were necessary, this Court should not order the Commission to revoke PG&E's license, as SLOMFP failed to show that it satisfies the standards for injunctive relief.

35

STANDARD OF REVIEW In petitions from agency NEPA determinations, this Court reviews findings that are predominately factual or technical under the deferential arbitrary-and-capricious standard. See, e.g., Price Rd Neighborhood Ass 'n, Inc. v. U.S. Dep 't of Transp., 113 F.3d 1505, 1508 (9th Cir. 1997). In particular, where an agency prepares an EA, its "decision not to prepare an EIS can be set aside only upon a showing that it was 'arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."' Public Citizen, 541 U.S. at 763 (quoting 5 U.S.C. § 706(2)(A)). This Court applies the reasonableness standard to disputed rulings that are predominately legal.

See, e.g., Price Rd., 113 F.3d at 1508.

ARGUMENT I.

NEITHER NEPA NOR THE AEA REQUIRED THE COMMISSION TO HOLD A CLOSED HEARING TO DISCUSS CLASSIFIED AND SENSITIVE SECURITY-RELATED INFORMATION In arguing that the Commission was required to hold a closed hearing so that it could have access to classified and sensitive security information (SLOMFP Br. 33-44), SLOMFP faces a high hurdle: it "mustpoint to a statute specifically mandating that procedure, for 'absent constitutional constraints or extremely compelling circumstances' courts are never free to impose on the NRC (or any other agency) a procedural requirement not provided for by Congress." Union of Concerned Scientists 36

v. U.S. Nuclear Regulatory Comm 'n, 920 F.2d 50, 53 (D.C. Cir. 1990) (quoting Vt.

Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 543 (1978) (emphasis added in part)). While SLOMFP points to NEPA and the AEA as the source of its right to a closed hearing, neither statute compels such a hearing, and the Commission properly declined to provide SLOMFP with access to sensitive information that was exempt from disclosure under FOIA.

A.

The Commission Reasonably Concluded That NEPA Does Not Require Disclosure Of Information That Is Subject To A FOIA Exemption SLOMFP does not contest that all materials related to the preparation of the EA Supplement that the Commission declined to disclose to the public were properly withheld because they were subject to a FOIA exemption, but nevertheless suggests that NEPA requires the Commission to permit it to review and participate in a closed hearing regarding those materials. SLOMFP Br. 35-43; see also ER 185, 187 (not seeking further public disclosure).

In so arguing, SLOMFP disregards the Commission's procedural rules addressing the admissibility of contentions, see 10 C.F.R. § 2.714(d)(2) (2003), as it does not even attempt to demonstrate why any information discussed in a closed hearing would be material to an admissible contention. Thus, SLOMFP seeks a closed hearing-of undefined scope-that is not tethered to any admissible contention. This attempt to override the Commission's 37

longstanding rules finds no support in NEPA's text or thirty years of case law interpreting the statute, and SLOMFP's position should be rejected on this basis alone.

See generally BPI v. Atomic Energy Comm 'n, 502 F.2d 424, 427-29 (D.C. Cir. 1974)

(holding that Commission, consistent with Section 189a of the AEA, may limit hearings to parties that raise an admissible challenge to a licensing action).

The Commission's interpretation of NEPA not to require a closed hearing to discuss information that is subject to a FOIA exemption is in any event reasonable, for no provision of NEPA requires the disclosure of materials that fall within a FOIA exemption to a participant in an agency proceeding.

In fact, NEPA does not independently establish any hearing process at all. See, e.g., Baltimore Gas & Elec.,

462 U.S. at 100 ("NEPA does not require agencies to adopt any particular internal decisionmaking structure."); Union of Concerned Scientists, 920 F.2d at 56 ("While NEPA clearly mandates that an agency fully consider environmental issues, it does not itselfprovide for a hearing on those issues.") (emphasis added). And SLOMFP cannot seek to overcome the absence of textual support for a closed hearing by appealing to either of NEPA's "twin aims," see SLOMFP Br. 36, 39-40, as the Supreme Court has unequivocally held that "the only procedural requirements imposed by NEPA are those stated in the plain language of the Act," Vt. Yankee, 435 U.S. at 548; see also id at 525 ("cautioning reviewing courts against engrafting their 38

own notions of proper procedures upon agencies entrusted with substantive functions by Congress").

SLOMFP's reliance (Br. 38) on Calvert Cliffs' Coordinating Committee, Inc. v.

U.S. Atomic Energy Comm 'n, 449 F.2d 1109 (D.C. Cir. 1971), is misplaced, as there the D.C. Circuit rejected a Commission rule that precluded consideration of any environmental issue that was not raised by a party to the hearing. Id. at 1117-18.

Consistent with the Supreme Court's later decisions in Baltimore Gas & Electric and Vermont Yankee, the D.C. Circuit has explained that Calvert Cliffs "does not establish that NEPA confers on parties an absolute right to a hearing on the documents that Act requires agencies to compile. That case held only that an agency may not consistent with NEPA limit its consideration of environmental issues to those actually raised by parties....

" Union of Concerned Scientists, 920 F.2d at 56 n.6. In any event, here, the Commission did not refuse to consider any environmental issue. The NRC Staff reviewed and considered SLOMFP's information and views in preparation of the EA Supplement, and the Commission separately reviewed and resolved each of SLOMFP's contentions in the hearing process consistent with its procedural rules.

The Commission's decision not to hold a closed hearing is likewise consistent with this Court's prior decision in SLOMFP I, as well as the Supreme Court's decision in Weinberger. SLOMFP I expressly recognized that the "issues raised by the petition 39

may involve questions of national security, requiring sensitive treatment on remand,"

449 F.3d at 1035, and suggested that a "limited proceeding might be appropriate," id at 1034. The Commission followed just such a course after concluding that there was "no compelling policy reason" to "reveal sensitive government security information regarding the agency's environmental analysis" (ER 17), and that "[fWurther disclosure of sensitive, security-related information would not assist the Commission in determining whether the agency's environmental review was reasonable under NEPA" (ER 18). The Commission's choice of procedures is entitled to substantial deference. See, e.g., Union of Concerned Scientists, 920 F.2d at 54.

In Weinberger, private organizations sought to enjoin the Navy from building new facilities in Hawaii on the basis that an EA had ignored the heightened risk of an accident resulting from the potential storage of nuclear weapons there. 454 U.S. at 142. On appeal of a district court decision dismissing the complaint because the Navy had complied with NEPA "to the fullest extent possible," this Court reversed and directed the Navy to prepare and disclose a "Hypothetical Environmental Impact Statement" that "would assess the impact of the storage of nuclear weapons at [the facilities] without revealing specific information regarding the number and type of nuclear weapons to be stored at the facility." Id. at 143-44. The Supreme Court reversed. While acknowledging NEPA's "twin aims," the Supreme Court held that 40

NEPA's decision-making and public disclosure goals are "not necessarily coextensive" and that "in a given situation a federal agency might have to include environmental considerations in its decisionmaking process, yet withhold public disclosure of any NEPA documents, in whole or in part, under the authority of [a]

FOIA exemption." Id. at 143. To uphold the balance struck by Congress "between the needs of the public for access to documents prepared by a federal agency and the necessity of nondisclosure or secrecy," id. at 145, the Court held that "public disclosure of the EIS shall be governed by FOIA," id at 144. And while the Court noted that the Navy was required to prepare an EIS if it proposed to store nuclear weapons at the facility, such a document would be for internal purposes only and need not be disclosed to the public. Id. at 146. Consequently, according to the Supreme Court, "whether or not the Navy has complied with NEPA 'to the fullest extent possible' is beyond judicial scrutiny in this case." Id.

SLOMFP attempts to sidestep Weinberger by contending that, even if public disclosure of sensitive information is not required, the Commission was still obligated to have a closed hearing in which SLOMFP, as a party to the proceeding, could discuss this information with the Commission. SLOMFP Br. 39-40. Weinberger, however, makes clear that the Commission need not disclose exempt information to any member of the public, even those that are participating in the administrative 41

process, and that an agency satisfies NEPA through non-public consideration of classified or sensitive information. See 454 U.S. at 144-46. Here, the Commission satisfied both of NEPA's goals by independently reviewing the non-public information upon which the Staff relied (see ER 18, 21) and by requiring the NRC Staff to provide a detailed list of all source documents and explanations for any redactions (ER 18). Were the law as SLOMFP suggests, and a closed hearing required, Weinberger would have turned out differently.

SLOMFP purports not to be addressing NEPA's "public disclosure" goal (SLOMFP Br. 39), but in fact seeks to disrupt "the balance struck by Congress" with respect to disclosure versus secrecy under NEPA. Weinberger, 445 U.S. at 145. A closed hearing to discuss classified or sensitive information, including what attack scenarios the NRC Staff considered and whether it considered particular scenarios plausible, would undermine "the express intent of Congress... that public disclosure

... shall be governed by FOIA." Id. at 144. Thus, the Commission reasonably concluded that NEPA, as interpreted by the Supreme Court in Weinberger, does not provide for a closed hearing to discuss materials exempt from disclosure under FOIA.

42

B.

The Commission's Decision Not To Disclose Classified Or Sensitive Security Information Was Not Arbitrary Or Capricious Under The AEA SLOMFP also relies on the Commission's organic statute, the AEA, in a backdoor attempt to get access to information related to the NEPA review that is exempt from disclosure under FOIA. SLOMFP Br. 37-39. SLOMFP offers no support for its argument that, notwithstanding NEPA's express reference to FOIA, disclosure of materials created and reviewed as part of a NEPA proceeding are actually subject to each agency's organic statute. Such an end run would undermine the uniformity of procedures that Congress sought to ensure when enacting NEPA, and would "ignor[e] a basic principle of statutory construction, namely that the specific prevails over the general," Bonneville Power Admin. v. F.E.R. C., 422 F.3d 908, 916 (9th Cir. 2005) (rejecting agency's argument that it had authority to order refunds from governmental entities under its broad powers over wholesale sales of electric energy, where a specific statutory provision limited its authority with respect to such entities); see also United States v. Navarro, 160 F.3d 1254, 1256-57 (9th Cir.

1998) ("' [G]eneral and specific provisions, in apparent contradiction, whether in the same *or different statutes, and without regard to priority of enactment, may subsist together, the specific qualifying and supplying exceptions to the general.") (quoting Townsendv. Little, 109 U.S. 504, 512 (1883)). At least one court has recognized that 43

an agency's disclosure of NEPA-related materials is subject to FOIA, even though a different standard may be applicable to other documents that the agency possesses.

See Comm. for Nuclear Responsibility, Inc. v. Seaborg, 463 F.2d 788, 794 (D.C. Cir.

1971) (holding, in a case seeking to enjoin Commission action based on a NEPA violation, that FOIA governed validity of claims of executive privilege to the extent documents related to the NEPA process, while documents not related to the NEPA process were subject to the traditional balancing test).

But even if the AEA were relevant, the Commission's decision not to hold a closed hearing here was consistent with Section 189a of the AEA and thus should not be set aside as arbitrary or capricious. That section does not compel greater access to information created and used during a NEPA review than does NEPA itself. In fact, that Section does not on its face provide access to any information, let alone classified or sensitive security information. Rather, it mnerely states that "the Commission shall grant a hearing upon the request of any person whose interest may be affected by the

[licensing] proceeding, and shall admit any such person as a party to such proceeding." 42 U.S.C. § 2239(a)(1)(A) (emphasis added). The AEA does not define the scope of the required hearing, and it is well established that courts are "obliged to defer to the operating procedures employed by an agency when the governing statute requires only that a 'hearing' be held." Union of Concerned Scientists, 920 F.2d at 54 44

(citing cases).

As the Supreme Court has explained, "[a]bsent constitutional constraints or extremely compelling circumstances, the administrative agencies should be free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their multitudinous duties." Vt. Yankee, 435 U.S. at 543 (internal quotation marks omitted).

Pursuant to its obligation under the AEA to protect national security information, see, e.g., 42 U.S.C. §§ 2161, 2167,14 the Commission has adopted regulations governing the handling and disclosure of sensitive information relevant to licensing and other proceedings, see, e.g., 10 C.F.R. § 2.905(h) (stating that the Commission may preclude access to sensitive information where it would be "inimical to the common defense and security" or where it originated from another agency).

Consistent with these regulations, after reviewing the "sensitive, security-related information" that was withheld from the public, the Commission concluded that "further disclosure... would not assist [it] in determining whether the agency's environmental review was reasonable under NEPA" (ER 18),and that "any benefit to be gained in this case from further disclosure is outweighed by the risks inherent in 14 Section 2161 directs the Commission to control information in "a manner to assure the common defense and security," while Section 2167 requires the Commission to take actions "to prohibit the unauthorized disclosure" of sensitive information, including security measures.

45

disseminating security-related information, even under [a] protective order" (ER 19). 15 SLOMFP points to nothing in the Commission's procedural hearing rules that requires a closed hearing, and it does not contend that the Commission violated its regulations by denying a closed hearing.

The Commission's decision, which was based on the particular circumstances of this case, including the contents of the sensitive information and the perceived threat to national security from disclosure of that information, is entitled to substantial deference. See, e.g., Vt. Yankee, 435 U.S. at 543; Cities of Statesville v. Atomic Energy Comm 'n, 441 F.2d 962, 977 (D.C. Cir. 1969)

(en banc) (the NRC "should be accorded broad discretion in establishing and applying rules for... public participation") (internal quotation marks omitted).

SLOMFP's reliance (at Br. 43) on the fact that the Commission has held closed hearings involving security issues on two occasions does not undermine the Commission's decision not to do so here. In both Duke Energy Corp. (Catawba Nuclear Station, Units 1 & 2), LBP-04-10, 59 N.R.C. 296 (2004), and Pacific Gas &

Electric Co. (Diablo Canyon Nuclear Power Plant, Units 1 & 2), ALAB-410,5 N.R.C.

1398 (1977), the disclosure of classified information was unrelated to NEPA. Rather, 15 In so ruling, the Commission made clear that both it and the NRC Staff had considered SLOMFP's (and other commenters') views with respect to the -EA, including SLOMFP's "zircaloy fire" scenario, but that they did not alter the finding of no significant impact. ER 19.

46

it was related to litigation of contentions addressing whether the licensees (and the Commission) had complied with the AEA's safety and security requirements. The dispute here, in contrast, does not present any issues of regulatory compliance, as it is limited to evaluating the adequacy of the NRC Staff s EA Supplement. Therefore, as the Commission found, the interest in providing classified information to NRC hearing litigants is significantly reduced here. ER 18_19.16 While SLOMFP glosses over the procedural posture of each of its contentions, the only contention the Commission admitted for hearing was whether the EA Supplement ignored the environmental effects on the surrounding land or non-fatal health effects from a hypothetical terrorist attack (Contention 2). ER 46. SLOMFP, however, fails to explain what information from the non-public record would be relevant to that contention.

To the extent that SLOMFP is arguing that the sensitive security information it would like to discuss in a closed hearing is relevant to the portions of Contentions 2 16 Indeed, SLOMFP knowingly brought environmental contentions in a NEPA review instead of litigating over safety and security requirements for a licensed facility under the AEA. SLOMFP's reliance on the Commission's procedures in a disparate context that it opted not to pursue is hardly persuasive.

47

and 3 regarding attack-scenario selection,17 the Commission ruled those contentions inadmissible under 10 C.F.R. § 2.714(d)(2)(ii) (2003) because it "did not understand

[this Court's] remand decision... to require a contested adjudicatory inquiry into the credibility of various hypothetical terrorists attacks against the Diablo Canyon ISFSI,"

which the Commission deemed "impracticable."

ER 47. To have any basis for document disclosure and a closed hearing with respect to those contentions, however, SLOMFP first must demonstrate that the contentions are admissible under the Commission's procedural rules. See SLOMFP Br. 36-37 (recognizing as much).

To the extent that SLOMFP directly challenges the Commission's failure to admit Contention 2 fully and Contention 3, its arguments fail. See infra Part II. Thus, the Commission acted well within its substantial discretion when it declined to hold a closed hearing to discuss classified and sensitive security information pertaining to the EA Supplement.

17 See ER 17 (stating that SLOMFP's arguments with respect to a closed hearing "amount to a request that we revisit our decision in CLI-08-01 against litigating the [S]taff's screening of plausible terrorist scenarios").

48

II.

THE COMMISSION'S FINDING OF NO SIGNIFICANT IMPACT ON THE ENVIRONMENT FROM POTENTIAL TERRORIST ATTACKS WAS NOT ARBITRARY OR CAPRICIOUS SLOMFP asserts additionally that the FONSI is flawed because the EA Supplement "ignored a whole range of credible... attack scenarios involving the instigation of a fire in the fuel storage modules that could lead to release of an airborne radioactive plume."

SLOMFP Br. 44. To the contrary, however, the Commission did consider all plausible attack scenarios before issuing its FONSI. The Commission's determination that "the construction, operation, and decommissioning of the Diablo Canyon ISFSL, even when potential terrorist attacks on the facility are considered, will not result in a significant effect on the human environment" (ER 64) is therefore far from arbitrary or capricious, and this portion of the petition should be denied as well.

A.

The Commission Considered The Potential Environmental Impact Of All Plausible Attack Scenarios

1.

The Commission considered potential land contamination and latent health effects Contrary to SLOMFP's assertions, the record indicates that the Commission did consider the potential environmental consequences of plausible attack scenarios with the greatest consequences. SLOMFP's argument appears to be that, because the EA Supplement does not discuss significant land contamination or latent health effects, 49

then the Staff must have excluded scenarios that could cause such harms. SLOMFP Br. 46-48.

But this argument misapprehends the Staff's process.

As the EA Supplement states, the Staff first addressed the plausibility of an attack scenario and then, separately, considered the environmental consequences for scenarios it had found to be plausible. ER 63.

Nor (contra SLOMFP Br. 54) was the Commission's treatment of land contamination and latent health effects arbitrary or capricious. Although the EA Supplement does not expressly refer to land contamination or latent health effects, the Staff, having concluded that the most severe plausible terrorist attack would cause only minor radiation doses (5 rem), implicitly determined that there would be no discernible latent health effects and that it was unnecessary to analyze further the potential for significant land contamination. See, e.g., NRC SER 144-45 (stating that the Staff "considered land contamination" but did not analyze it because "[a]bsent a significant release from the cask, there cannot be any significant amount of land contamination"); NRC SER 152 (stating that the Staff "considered nonfatal health effects, yes, and specifically... the [S]taff concluded... there would not be any discernible health effects of any kind from a dose of less than 5 rem."). Indeed, after concluding that the total effective dose to the nearest resident would be less than 5 rem (NRC SER 64-73), the NRC Staff expert, Elizabeth Thompson, testified that 50

"[t]he likelihood of an individual developing any discernible health effect from a radiation dose on the order of 5 rem is very small" (NRC SER 73-74). Similarly, the Commission's decision rejecting Contention 2 on the merits, which became part of the agency's record of decision for the NEPA review, see 10 C.F.R. § 51.102(c), cited PG&E's submission and testimony from its experts regarding the lack of significant land contamination or long-term health effects from releases that would cause a 5 rem dose, see ER 10-11, 21-22. Based on the "evidence presented in the adjudicatory record, including the affidavit of the Staff expert who performed the dose calculation" (ER 15 n.65), the Commission concluded that the "Staff examined a range of plausible terrorist attacks on the Diablo Canyon ISFSI and found that even the most severe would cause no immediate or latent health effects after quantitatively evaluating how air and land contamination would contribute to those effects" (ER 15).

The Commission's conclusion thus is based on a substantial record.

2.

The Commission properly determined that it would be impracticable to adjudicate alternate attack scenarios SLOMFP contends that "at the very threshold of this proceeding, the Commission determined that any attacks on the Diablo Canyon ISFSI are remote and speculative and therefore unworthy of consideration in a NEPA analysis." SLOMFP Br. 48-49. That is simply not so. The Commission here did not adhere to its earlier decision that, as a matter of law, terrorist attacks were not "proximately caused" by 51

issuing the license, nor that they were "speculative" and not "reasonably foreseeable" at particular sites. To the contrary, the FONSI reflects consideration of all plausible attack scenarios. For example, in the EA Supplement, the Staff explained that it "analyzed plausible threat scenarios" to ISFSIs generally, including "a large aircraft impact similar in magnitude to the attacks of September 11, 2001, and ground assaults using expanded adversary characteristics consistent with the design basis threat for radiological sabotage for nuclear power plants,... and compared the assumptions used in these generic assessments to the relevant features of the Diablo Canyon ISFSI." ER 62-63. And, as the Commission later explained, "[t]he Staff's selection of plausible attack scenarios-a concept it used to assess the effects of a terrorist attack-was based on information gathered through the agency's regular interactions with the law enforcement and intelligence communities regarding the capabilities of potential adversaries, as well as the Staff s expert judgment in intelligence analysis." ER 20-21 (citing ER 63; NRC SER211).

Moreover, far from determining as a matter oflaw that all attack scenarios were irrelevant to NEPA when it rejected Contention 3 (contra SLOMFP Br,. 49), the Commission stated that the EA Supplement reflected the Staff S consideration of all plausible attack scenarios, and ruled that it was not required to consider other scenarios that it determined to be "remote and speculative" as a matter offact. ER 52

47.18 Indeed, the Commission later concluded, based on its independent review of the public and non-public information underlying the Staff s selection of terrorist attack scenarios, that the "selection was reasonable." ER 21.19 Thus, SLOMFP has no basis to contend that the Commission concluded that all attacks were "unworthy of consideration." SLOMFP Br. 49.

3.

SLOMFP's arguments with respect to the "Ease" formulation are procedurally barred and substantively baseless SLOMFP's argument that the Staff may have used "Ease" as a proxy for the probability of a threat scenario in preparing the EA Supplement is unavailing.

SLOMFP Br. 48. SLOMFP fails to acknowledge that the Commission rejected Contention 6, in which SLOMFP raised the "Ease" formulation, as untimely under its procedural rules. See ER 32.20 By not challenging the timeliness ruling in its opening 18 As SLOMFP acknowledges, NEPA does not require an agency to consider environmental impacts that are "remote and speculative." SLOMFP Br. 6 (citing Vt.

Yankee, 435 U.S. at 551; Limerick Ecology Action v. NRC, 869 F.2d 719, 745 (3d Cir.

1989)).

'9 SLOMFP (Br. 50-52) points to nothing in NEPA, the AEA, or the APA requiring the Commissioners to review and discuss the non-public information regarding the range of attack scenarios as a group. See, e.g., Baltimore Gas & Elec.,

462 U.S. at 100 ("NEPA does not require agencies to adopt any particular internal decisionmaking structure.").

20 The Commission reasonably concluded SLOMFP lacked "good cause" to raise Contention 6 out of time because "the fundamental contention is the same" as (footnote continued) 53

brief, SLOMFP has waived this argument. See, e.g., Fall River Rural Elec. Co-op.,

Inc. v. F.E.R.C., 543 F.3d 519, 531 (9th Cir. 2008) (where petitioner does not raise argument "specifically and distinctly in its opening brief we deem it waived").

Even if the merits of this argument were reached, however, the record does not reflect that the Commission actually used the "Ease" formulation to screen for plausibility. See NRC Br. 47 (citing NRC SER 11-12). But even if it did, SLOMFP's cursory objection is unpersuasive, as this methodology reflects an intuitive proposition: that the probability of a terrorist attack on a particular target cannot be quantified but could depend to some degree on the difficulty of mounting an attack on that target.2' Since the Commission is entitled to great deference with respect to its chosen methodology, if indeed it had used "Ease" to screen for plausibility, it would Contention 3, which it had previously rejected on the merits: "in either case SLOMFP is challenging the range of threat scenarios examined by the Staff." ER 32.

21 The "Ease" formulation is described in an unredacted portion of the "NRC Spent Fuel Source Term Guidance Document," which was prepared by consultants from the Sandia National Laboratories, dated November 5, 2004, and is listed in the index of materials that the Staff consulted when preparing the EA. See NRC SER 51.

According to the Guidance Document: "For sabotage, it is not possible to calculate or even estimate a 'probability' or 'likelihood' of successful completion for each scenario (or even the likelihood of an attempt). Rather, a simple measure (called Ease) was developed to estimate how easy or difficult it is to complete an attack scenario. [Redacted] Ease includes three parameters: (1) time required to complete the attack, (2) complexity (number of steps required), and (3) technology (low vs.

high)." PG&E SER 38 (emphasis added).

54

have acted within its broad discretion. See, e.g., Marsh v. Oregon Natural Res.

Council, 490 U.S. 360, 378 (1989) ("When specialists express conflicting views, an agency must have discretion to rely on the reasonable opinions of its own qualified experts even if, as an original matter, a court might find contrary views more persuasive."); Baltimore Gas & Elec., 462 U.S. at 103 ("[A] reviewing court must remember that the Commission is making predictions, within its area of special expertise, at the frontiers of science.

When examining this kind of scientific information, as opposed to simple findings of fact, a reviewing court must generally be at its most deferential."); Friends of Endangered Species, Inc. v. Jantzen, 760 F.2d 976, 986 (9th Cir. 1985) ("NEPA does not require that we decide whether an [EA] is based on the best scientific methodology available, nor does NEPA require us to resolve disagreements among various scientists as to methodology.").

B.

The Commission Acted Within Its Broad Discretion In Finding That SLOMFP's Attack Scenarios Would Not Result In Significant Environmental Impact SLOMFP also incorrectly argues that the Staff and subsequently the Commission failed to consider its submissions that the instigation of a fire in a dry storage cask could result in the release of a radioactive plume that would cause significant land contamination. SLOMFP Br. 52-54. Rather, both the Staff and the Commission expressly stated that they were aware of SLOMFP's "zircaloy fire" 55

scenario but could not discuss it for national security reasons, and that it did not alter the "conclusion that there would not be any significant environmental consequences from a terrorist attack." NRC SER 149; see also ER 19 (same); ER 21 ("[W]e ourselves, outside the adjudicatory proceeding, have reviewed the non-public information underlying the NRC Staff's selection of terrorist attack scenarios, and are satisfied that the selection was reasonable."). Thus, there is every reason to believe that the Commission considered this scenario as part of its decision-making process, and it is not this Court's role to second-guess the Commission's analysis on arbitrary-or-capricious review. See, e.g., Vt. Yankee, 435 U.S. at 555 ("[T]he role of a court in reviewing the sufficiency of an agency's consideration of environmental factors is a limited one[.]... 'Neither the statute nor its legislative history contemplates that a court should substitute its judgment for that of the agency as to the environmental consequences of its actions."') (quoting Kleppe v. Sierra Club, 427 U.S. 390, 410 n.21 (1976)).22 22 SLOMFP also contends that the Staff made "evasive and misleading public statements" when it stated that it considered but did not analyze land contamination.

SLOMFP Br. 53.

There is, however, nothing evasive or misleading about this statement. As explained in text, the Staff was aware of the potential for land contamination but had no need to analyze it after determining that the maximum radiation dose to the nearest effected resident was very low (less than 5 rem). See supra at 50-51.

(footnote continued) 56

Moreover, the EA Supplement was not required to discuss expressly the plausibility of particular scenarios, even those proffered by SLOMFP, because doing so would be inconsistent with the Commission's obligations under the AEA to protect classified and sensitive security information from disclosure, see 42 U.S.C. §§ 2161, 2167, as well as its authority under NEPA to withhold information subject to a FOIA exemption, see id. § 4332(2)(C).23 Here, as in Weinberger, "whether or not the

[Commission] has complied with NEPA 'to the fullest extent possible' is beyond judicial scrutiny." Weinberger, 454 U.S. at 146.

III.

EVEN IF THE PROCEEDING IS REMANDED TO THE COMMISSION, PG&E'S LICENSE SHOULD NOT BE REVOKED Even if this Court grants the petition, PG&E's site-specific license to construct and operate the Diablo Canyon ISFSI should not be revoked pending the In any event, the cases upon which SLOMFP relies-Hughes River Watershed Conservancy v. Glickman, 81 F.3d 437 (4th Cir. 1996); Johnston v. Davis, 698 F.2d 1088 (10th Cir. 1983); South Louisiana Environmental Council v. Sand, 629 F.2d 1005 (5th Cir. 1980)-have no relevance here, as each involved an agency's overstatement of the economic benefit of an action (such that the cost-benefit analysis was skewed in favor of acting despite adverse environment consequences), not the sufficiency of the Staff's review of environmental factors.

23 As discussed above, SLOMFP does not contend that any of the non-public materials should have been disclosed under FOIA. See supra at 37.

57

Commission's rulings on remand. SLOMFP's undeveloped, last-second request for such relief (Br. 55) fails for at least three reasons.

First, SLOMFP's passing reference to revocation of PG&E's license in a single sentence of its Conclusion is insufficient to preserve the issue for review, particularly where it did not even seek review of the Commission's 2004 decision to issue a license. See, e.g., Halicki Films, LLC v. Sanderson Sales & Mktg., 547 F.3d 1213, 1229 (9th Cir. 2008) ("passing references" to arguments are "insufficient to preserve

[them] for appellate review"); FED. R. App. P. 15(a)(2)(C) ("The petition must...

specify the order or part thereof to be reviewed.").

Second, contrary to SLOMFP's intimations, a remand due to a NEPA violation does not automatically require revocation or suspension of the agency action that 24 triggered the NEPA review.

Rather, this Court is "bound by precedent to hold that a NEPA violation is subject to traditional standards in equity for injunctive relief and does not require an automatic blanket injunction.... " N. Cheyenne Tribe v. Norton, 503 F.3d 836, 842 (9th Cir. 2007); see also Winter, 129 S. Ct. at 381 ("A court concluding that the Navy is required to prepare an EIS has many remedial tools at its 24 Notably, in SLOMFP's prior appeal in this case, it did not request, and this Court did not order, revocation of PG&E's license pending a remand to cure the NEPA violation. See SLOMFP 1, 449 F.3d at 1035 (granting petition and remanding for further proceedings consistent with opinion) 58

disposal, including declaratory relief or an injunction tailored to the preparation of an EIS rather than the Navy's training in the interim."). The case upon which SLOMFP relies, Robertson v. Methow Valley Citizens Council, 490 U.S. 332 (1989), does not address injunctive relief, but instead only suggests in the most general terms that NEPA seeks to force agencies to consider environmental consequences prior to making a decision. See id. at 349.

Third, SLOMFP has made no showing that it satisfies the rigorous standards for injunctive relief, and it is too late to do so on reply. See, e.g., Cal. Pro-Life Council, Inc. v. Randolph, 507 F.3d 1172, 1188 n.20 (9th Cir. 2007). SLOMFP will not be irreparably injured absent revocation of the license, given that the issues for environmental review involve a hypothetical terrorist attack. And absent an increase in storage capacity, PG&E's inability to begin moving the spent fuel from the pools to dry cask storage would result in the partial shutdown of Diablo Canyon and a reduction of power available to the public as early as October 2010. See PG&E Form 10-K at 29. Thus the balance of equities tips decisively in PG&E's favor, and even if a remand is necessary, SLOMFP has presented no basis for directing the Commission to revoke PG&E's license.

59

CONCLUSION The petition for review should be denied in its entirety.

DATED: April 8, 2009 Respectfully submitted, QUINN EMANUEL URQUHART OLIVER & HEDGES, LLP David A. Repka Winston & Strawn LLP 1700 K Street, N.W.

Washington, D.C. 20006 (202) 282-5000 By s/ Kathleen M. Sullivan Kathleen M. Sullivan William B. Adams 51 Madison Avenue, 22nd Floor New York, NY 10010 (212) 849-7000 A ttorneysfor Respondent-Intervenor Pacific Gas and Electric Company 60

STATEMENT OF RELATED CASES Pursuant to Circuit Rule 28-2.6, Respondent-Intervenor Pacific Gas and Electric Company states that it is not aware of any related cases pending in this Court. While Petitioner references in its Statement the consolidated case of Public Citizen, Inc. v.

N.R.C., Nos. 07-71868 & 07-72555 (argued Nov. 17, 2008), that case concerns the Commission's "Design Basis Threat" rule (10 C.F.R. § 73.1 (a)(1)), which codified increased security requirements for nuclear power plants with respect to radiological sabotage, and does not involve factual or legal issues that are similar to this case.

61

CERTIFICATE OF COMPLIANCE WITH RULE 32(a)(7)(C) & CIRCUIT RULE 32-1 Pursuant to Fed. R. App. P. 32(a)(7)(C) and Ninth Circuit Rule 32-1, the attached opening brief is proportionately spaced, has a typeface of 14 points or more and contains 13,488 words.

s/ Kathleen M. Sullivan April 8, 2009 A ttorneyfor Respondent-Intervenor Date 62

CERTIFICATE OF SERVICE I, Kathleen M. Sullivan, a member of the Bar of this Court, hereby certify that on April 8, 2009, I electronically filed the foregoing "Answering Brief Of Respondent-Intervenor" with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system.

I certify that all participants in the case are registered CM/ECF users and that service will be accomplished by the appellate CM/ECF system.

s/ Kathleen M. Sullivan 63