ML19290E207

Transcript of 800116 Closed Meeting in Washington,Dc Re Discussion of NFS-Erwin.Pp 1-55.Portions Withheld Per Sunshine Act

ML19290E207
Person / Time
Site:	Erwin
Issue date:	01/16/1980
From:	NRC COMMISSION (OCM)
To:
Shared Package
ML19290E206	List: ML19290E205 ML19290E207
References
REF-10CFR9.7 NUDOCS 8003050254
Download: ML19290E207 (55)

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ACE - FEDERAL REPORTERS,INC.

OWealReporters du North Ccpitol Street s

Washington, D.C. 20001 NATIONWIDE COVERAGE - D All.Y gg()d05O b b

1 97 1

2 UNITED STATES OF AMERICA l

NUCLEAR REGULATORY COMMISSION j

4 5

CLOSED MEETING 6

(Exemptions 1, 7& 9) 7 D.

SSION OF NFS-ERWIN 8

9 Room 1130 10 1717 H Street, N.

W.

Washington, D.

C.

11 Wednesday, January 16, 1980 12 The Commission met, pursuant to notice, at 9:35 a.m.

13 BEFORE:

14 JOHN F.

AHEARNE, Chairman of the Commission 15 VICTOR GILINSKY, Commissioner 16 RICHARD T.

KENNEDY, Commissioner I

17 4,

i.

JOSEPH M.

HENDRIE, Commissioner 18 g i

PETER A.

BRADFORD, Commissioner 19 '

ALSO PRESENT:

20 Messrs. Burnett, Dircks, Shapar, Gossick, Bickwit,

'21 Hanrahan, Malsch, Rickover, Leighton, and Crawford.

22 23 I

l 24 '

. :rme neporters, ine. ;.

25 i 9

R 9197 2

3FFMAN 102 te 1 CHAIRMAN AHEARNE:

The meeting will come to order.

Th's is another one of the many meetings we've had, on Erwin.

On advice of general counsel, we should first vote to close. The grounds for closing -- well, we need two votes.

First it's a vote to hold on less than one weeks' notice.

Can I get that?

(A chorus of ayes. )

CHAIRMAN AHEARNE:

Second is to vote to close.-

The grounds of closing are exemption one, classified material, exemption ten, possible adjudication of these matters.

(A chorus of ayes. )

CHAIRMAN AHEARNE:

Before we begin, I'd like to have the general counsel review the status of a letter request we have from the Oil, Chemical, and Atomic Workers International.

They have requested a meeting with the Commission.

A majority of the Commissioners were in favor of such a meeting.

General counsel, would you report the status?

MR. BICKWIT:

Yes.

I talked to Norman Hancock of the OCAW yesterday.

He still wants to meet with the Commission.

I told him the Commission was agreeable to that.

We arranged for a meeting time of 3 :30 tomorrow.

He made clear that he would want to meet with the Commission whether or not the Commission had reached a decision before then.

He

te 2 i

4 made clear that under no circumstances would he want his

=:

request for a meeting to hold up a decision by the Commission the suspension of the license and reopen the plant.

to lift I told him I would transmit that information.

CHAIRMAN AHEARNE:

As far as you know, there will be such a meeting tomorrow afternoon?

MR. BICKWIT:

That's right.

The issues may vary depending on what the Commission decides t oday or if the Commission decides today.

CHAIRMAN AHEARNE:

Can you describe the main issue that he intends to raise?

Is it appropriate?

MR. BICKWIT:

Yes, I think that's appropriate, although I have some limited understanding of it.

He phrased it in terms of relief for the workers of his union.

I would assume that if the Commission decided today to restart the plant, which of course is an interest of his, the discussion would center only on the question of, is the Commission capable of providing some relief, some economic relief for his workers; and if not, have they any suggestions as-to.;.o might be able to.

CHAIRMAN AHEARNE:

P.ll right.

This particular issue has been with us for a long time.

It'a been with us for a long time and with other versions of the Commission for a long time.

I have made a proposal for a set of actions which would lead to a continuation of operation of the ' plant.

It's predicated,

e3 4

4 however, on a t least three assumptions, and I'd like to briefly review those three assumptions and perhaps ask a few individuals whether they're c,orrect.

The first assumption was that there is a vital need for the product of the plant.

This is not really an NRC finding.

The conclusion I had, the assumption was that national security requires the product.

I assume that that is the position of the.. Energy Department or Naval Reactors.

Is that correct?

ADM. RICKOVER:

That is correct.

CHAIRMAN AllEARNE :

The second assumption was that, at least for the foreseable future -- I think It. Deutch's letter said that ADM.

RICKOVER:

That is correct.

CHAIRMAN AHEARNE:

And the third assumption, Bill Dircks, was that you had, I believe, told me that for this type of a process, that no better than one percent was really the realistic estimate of what you could expect.

MR. DIRCKS:

That's been our feeling in discussions with others.

CHAIRMAN AHEARNE:

Right.

So therefore, I had made a proposal, and I asked OPE to. summarize that proposal in addi-tion to the comments that have been made by other people.

And could you summarize the proposal?

(At 9:40 a.m., Commissioner Hendrie entered the room.)

c 4 5

MR. HANRAHAN:

The summary of the p.coposal is that the facility would remain under NRC licensing, thut one percent of material throughput would be established as an action level for requiring a dynamic reinventory, one and a half percent of material throughput would be established as a trigger for static reinventory under shutdown conditions, that the physical security and additional material control and accounting require-ments as given in the appendix to the staff paper SECY-79-650 would be imposed, and that DOE would be requested to provide a study within a year as to their recommendations on whether the facility should be significantly modified to improve those safeguards conditions or whether a new plant should be constructed.

CHAIRMAN AHEARNE:

Now, at least in the material that I had proposed I had made the point that it was not at all clear whether a new facility could do any better, that it may be just inherent limitation of the type of process.

+

The physical security and the MC/A that you referred to ir.

paper I believe are the appendices that the letter from Mr. Deutch said was acceptable to the Energy Department, is that right?

MR. HANRAHAN:

I think with one or teo exceptions.

CHAIRMAN AHEARNE:

The exceptions referred to the conditions on inventory dif ference, a nd those my proposal

.had modified.

But the ones that I had retained in the proposal i

e 5 6

4 I believe are the ones that you people had origir. ally proposed and that the Energy Department had said that they would accept.

MR. DIRCKS:

That's right.

=

CHAIRMAN AHEARNE:

All right, is there any discussion?

COMMISSIONER HENDRIE:

Could we talk a little bit about the percent and a half point?

That amounts, for what I understand to be normal throughput, to something like 1

MR. BURNETT:

you could consider as normal I

throughput.

So COMMISSIONER HENDRIE:

Let's see.

This continues to call'for a shutdown and full inventory at a percent and a half,

MR, ifANRAHAU:

Yes.

COMMISSIONER HENDRIE:

I raise the question whether the number is too low.

The thinking goes a s follows.

What's clear out of experience over the years is that the inventory differences for the process at Erwin are going to be large, simply because the ability to keep track of the material with high precision in that process is not great.

The prospects aren't very good for having it be extremely precise.

It's my own feeling that.there are good and adequate

-reasons for the facility to run, and I don't for myself see why it shouldn't be continued to be a licensed facility.

But

.it does seem to me that we have to f ace the fact that we're 4

e6 7

not going to be able to operate on low inventory difference numbers as controlling elements.

It seems to me that we have to do what.is reasonable ir the way of physical security and material control, to put the primary dependence for keeping the material in the right places in those measures, and recognize that the inventory difference numbers may often run higher than we would all like to see, just by virtue of the intrinsic inaccuracies in material balances in that kind of process.

Now, taking that point of view and being ready to say then, let's go ahead and put it back in operation, on the basis of physical security and material control measures, and recog-nizing that we're never going to get ids then I'm not sure how much weight I want to put on somewhat larger inventory differences, where '-he results of those larger ids would be to shut down the facility.

That is, having declared that we can't make too much out of the inventory differences, I d n. ' t know that kilograms is necessarily the place you need to cut the operation off and keep it down while you do a full physical inventory.

It seems to me a case could be made for the larger number, so that shutdown would only occur on really quite substantial failures of the books to balance, and then indeed you might want to come down.

So I would be' perfectly agreeable

nte 7,

8' I

to seeing the one and a half percent number if you want a e

static shutdown, want a shutdown trigger amount, I'd be perfectly agreeable to seeing it a little bit higher and allow the facility a little greater reliability of operation.

On the other end, suppose a campaign involves a throughput of 100 kilograms.

Do we mean that we shut down and inventory on an ID in that campaign of a kilogram and a half?

I would think not.

That is, I would think we would want some-thing lower than that.

If you set a percent and a half or, I don't know, five to nine kilograms, whichever is locs, or something like that, whichever is larger, I guess --

MR. IIANRAIIAN :

I think in the pass that's been five kilograms, one percent or five kilograms.

CIIAIRMAN AIIEARNE:

So you would end up with approxi-mately what, Joei What is your final proposal?

COMMISSIONER IIENDRIE:

What's the experience on ids?

At a percent and a half, we would have triggered how many tines in the last two years?

MR. BURNETT:

We figured on such a question coming.

If we exceed two percent, they would have done it If you do it at one and a half percent., it would have

\\

fweregains?

COMMISSIONER KENNEDY:

MR. BURNETT:

fthose iwere gains, sir.

i The

,as a loss, a s you know.,

w i

e 8 At one percent, if the line is drawn at one, Have I gone far enough or do you want me to go deeper?

i COMMISSIONER HENDR1 :

Maybe we're up on a flat part of the curve and a percent and a half's a good number.

I don't know.

MR. BURNETT:

We are on a flat part, from a technical point of view.

MR. PARTLOW:

I would like to point out that the l-I So my point is, those were periods of short throughput, because we had the licensee stop and do the dynamic inventory as we're talking here.

Those were really cases of abnormally small throughputs, in which the inventory difference ended up as

)

MR. BURNETT:

That was probably bss than MR. PARTLOW:

The fact that it was a large percent of throughout did not mean it was a large inventory.

COMMISSIO! 'R HENDRIE:

I see.

In a sense, that confuses the statistics a little.

If the rationale -- if this

.e 9 10 were a straightforward commercial activity in which we were making popsicles, you'd say, gee, maybe we ought not to make popsicles that way.

The reason we're here talking about it is

~

I think that most of us have concluded that it is an essential operation in the national interest.

If it's an essential operation and because of that we're prepared to say, all right, the fact that the inventorying methods are not capable of producing material balances down at the precision we would really like, nevertheless we're going to go ahead on the basis of physical security and so on, it doesn't seem to me to make much sense to include in that package still some requirements for shutdown based on inventory differences, if indeed there is a prospect that those shutdown requirements could become onerous in terms of operation of the facility.

And once you say, hell, the inventory differences just are not very helpful in this case, why, you might as well back the limits up and let the operation go.

MR. DIRCKS:

There's a distinction between the gain and the loss.

CHAIRMAN AHEARNE:

In what sense, Bill?

MR. DIRCKS:

In our static inventory, if there would be a loss, if it were done a dynamic inventory it would be a gain.

You might want to do another dynamic.

CHAIRMAN AHEARNE:

For example, you might want to say the one and a half percent might trigger a static only in i

e 10 11 case of a loss.

MR. DIRCKS:

That may get at be point that you made.

COMMISSIONER HENDRIE:

I'm not sure what a

(

inventory difference means at the end of the campaign.

To me, it means the material bookkeeping is out by that much, f t.:

whatever reason.

And I'm not sure, you know, that plus differ-ences necessarily make me happy.

'MR. DIRCKS:

You get back to what these numbers mean in the first place.

COMMISSIONER HENDRIE :

What they mean are that the material balance bookkeeping is out of whack on that campaign by a certain amount.

Heaven only knows what the cause is.

And I'm not sure.

We've commented here before about how enthusiastic one should be about positive or zero inventory differences as compared to negative ones.

I'm not sure positive ones are a cause for joy.

CHAIRMAN AHEARNE:

'Io summarize. then?

COMMISSIONER HENDRIE:

I'd be inclined.to hear what the facility operators think a percent and a half would do to them in terms of operation and whether they would regard that as a burden that they preter ne~c to have to deal with.

CHAIRMAN AHEARNE:

I would imagine any set of license conditions they might view as a burden that they might,

not want to have to deal with.

5 I

e 11 12' COMMISSIONER HENDRIE:

If I were familiar with the Erwin operation, I would sense what's reasonable in terms of the operation as a production facility, but also a facility that has to keep track of some valuable material.

CHAIRMId1 AHEARNE:

You're asking the level of unreasonableness.

COMMISSIONER HENDRIE:

Perhaps it would be that way.

P9. LEIGHTON.

I '.suld like to make a couple comments, Mr. Chairman.

First I would like to point out that the inventory each time

.s taken against the entire amount in the plant.

At any given time there's in the plant.

i j

If we say one and a half percent and the throughout during that period is and many periods it turns out that way, because for many reasons we'd have low throughout -- then we'd trigger at i

That's really a of the full inventory.

So that needs to be taken into account, because the inventory is against everything that's there, whether it's been through throughout during that period or not.

It's still inventorying everything that's in there.

So if you only have throughput during the period you're inventorying and you trigger it at one and a half percent, you would be trigger-ing at approximately

, which I guess would be or something like.

t

te 12 13 Another point I'd like to make is this:

In my view, we could live with the one and a half percent if you did it this way:

If you said, if you exceed one and a half percent inventory, you will do another dynamic inventory and add the two together.

I think it would give you the protection you're looking for, and at the same time take advantage of the problems we had in doing these inventories.

For example, if you come along during an operating period, you exceed one and a half percent, you now do another loss.

You now do another dynamic inventory You get yo.ur results ;ust as fast as you would with the static.

It takes about 3 ') days to do any inventory.

If that came back with a gain, what it tells you is the material wasn't taken out of the plant; it's a problem in the bookkeeping.

Add the two together and see if it still exceeds the one and a half percent of the throughout for the two periods.

If it does, then shut down and find out what's going on.

If you did that, then I think it would be perfectly reasonable, because I think the past history shows that there are very few periods, if any, where that happens.

Even this last period, that didn't happen.

In this last period where you had the August inventory, which was for the period June to August, you had a ilocs.

Then you shut down, did your static inventory, and you get back a gain of of what was put through in that period.

• ^ 13 14

)

If you add up both the segmen'ts, you're just about of what was put in from June through October, from the two of them.

You've got a gain back in the last one.

And I think that if you do it that way in. terms of real loss you'll get identified -- of course, it's possible they make mistakes in the inventory two times in a row.

Well, if that happens that's just tough and we're willing to taue that.

And I don't think it's just c' akes.

It isn' t just like a guy who is entering the raw numbers in the book.

When you say mistake, it's a very_ tricky operation to get the samples and run the whole thing through and get the numbers, add them all up, and come out precisely with the right number.

There's an inherent error in every chamistry measurement, regardless of what you do.

There's no chemiotry measurement you can do that's better than a tenth of a percent on every chemistry measurement that you make.

And there are a lot of other errors just built into the system, no matter how far you refine it.

So I would hope this Commission would consider two things in relation to a one and a half percent limit.

If you do those, we would have no problem with a one and a half percent limit:

if you said, we will go into an automatic shutdown if, after doing another dynamic inventory, the sun at tha two exceeds one and a half percent.

I wouldn't even object to that on gains as well as losses, although I prefer to have it only

te 14

.3 apply to losses, because if it's gains it clearly is not a matter that you have an indication that in some way you took it out of the plant.

What you're 'orried about here is diversion, I

believe.

I think the quantities we're talking about are small enough t hat we're not talking health hazards.

I think what we're all worried about is the potential for diversion.

Jind as long as it's gains, this system is not telling us it's an indicator of somebody taking it out of the plant.

I would prefer that if it's guias you're talking about, we keep.taking dynamic inventories until we get the thing pinned down.

And if it's losses and you reach the one and a half percent, you then do another dynamic, add the two periods together, and see what you get.

In this regard, I would like to point out that if we take the overall in this plant in the last several years, it's less than throughput.

I'm not proud of that.

We're trying to work with Mr. Burnett to reduce

'that and get less than that.

But overall in this plant we're r.

not accounting for of throughput, which we think we can do better -than that in the future.

I think Mr. Burnett agrees wit'h me that we can do better than that in the future.

We're working with him and the company to try and do that.

It's these individual incremental-inventories that are t

a

e 15 16 giving us the trouble, and we have swings in those that we simply haven't been able to explain.

We're trying to, but we haven't been able to explain it.

As long as we have that situation, I think it's part of our present process.

I think chese new accounting things that we have agreed to, that your staff has proposed, hopefully are going to help minimize those swings, although none of us know exactly why.

But we hope they're going to minimize them.

In the meantime, I would hope that you would be willing to consider that you take the one and a half percent, make that another limit, and give a second dynamic inventory to it at the two, and if that exceeds one and a half percent then shut down and. do everything we can think of to find out what happened.

COMMISSIONER KENNEDY:

When you say the second --

MR. LEIGHTON:

The first would automatically be I

dynamic.

~

COMMISSIONER KENNEDY:

Sure.

When you say the second, you mean after another operating period?

+

MR. LEIGHTCN:

Well, you say, you automatically will have another operating period already.

You see, you shut down

[

and then it's 30 days before you get the inventory results.

So e'

it's been running for 30 days.

What I'm saying is, when I get that result and I see us beyond one and a ha]f percent, I immediately do another dynamic.

I add that dynamic to the previous one, and if the

te 16, 17 two of those exceed one and a half percent of the throughput for the two pieces -- the second period will be shorter than the first, because it would just be the time it took to get the

~

first inventory.

If I take the sum of those two and they s till exceed, a loss -- and I would confine it to losses for shutting it down -- if it exceeds the loss of one and a half percent then shut down and do whatever you're going to do to explain it.

Tha t should be an unusual occurrence.

I think it warrants a shutdown and a full investigation of everything you can think of at that time to see what it is that's causing it, because it shouldn't happen very often.

Past experience will

~

show that this will not be a frequent occurrence.

It should be infrequent enough that we can afford to take some shutdown during tha t period.

You have to look against our inventories and everything else.

But if we're able to run the rest of the time,

.=

we should be able to keep our inventory levels up to where we can take a shutdown like that once in a while.

And I don't think we'll have it very often.

But I think that would be a

[f more prudent way to go to get the answers to the questions.

1E You see, unless you run some more, you really can't find out whether the new things you do, et cetera, are right.

think the chances are if you exceed one and a half on a I

loss, a mistake was made in the inventory somehow.

If tha t 's the case, by taking another dynamic, presumably you're not

ite 17 18 going to repeat the same mistake.

At least you get one crack at fixing it.

Then the sum of the two would correct that mistake.

And then you'd see if it was still beyond one and a half.

Maybe you'd make the same mistake twice.

If you did,

that's tough.

You'd still shut down.

I mean, that's the risk we take.

I think that would not shut down the plant often.

I think it would accomplish the objectives that you're trying to achieve to the degree that we can accomplish them with our present material accounting capability.

CHAIRMAN AHEARNE:

Thank you, Dave.

COMMISSIONER GILINSKY:

How would you regard a proposition which had the NRC carry out these activities and then making recommendations to you, then you would act as you see fit?

In effect, turning over responsibility to you, but we would continue to inspect and make these inventories and supervise them, and then turn the results over to yot CHAIRMAN 'diEARNE:

What legal arrangement would you envision?

COMMISSIONER GILINSKY:

Under DOE responsibility.

CHAIRMAN AHEARNE:

Not us licensing it?

COMMISSIONER GILINSKY:

An unlicensed basis, the way we review reactor designs and make recommendations.

same COMMISSIONER HENDRIE:

That is, go through the exemption process so that the facility would not need an NRC

cc 18 i

19' license, but would be found to be capable of operating satis-factorily under the DOE regime.

But we would agree that NRC would offer informal advice and recommendation.

MR.

L EIGHTON:

If you ask what we think of that, I would not favor that.

I know the Department of Energy would not favor it from past discussions with Dr. Deutch and others.

MR. CRAWFORD:

It seems to me that it's very analogous to the parallel procedures, things we already have in effect.

It would La tantamount to our taking back -- we would not favor that.

COMMISSIONER GILINSKY:

Could you explain why?

MR. CRAWFORD:

It seems to me that it would have the effect, as I said, of our taking back responsibility, taking this plant out of the licensing regime.

ADM. RICKOVER:

It would also look like we've run up against a tough problem, your group would like to get rid of it and turn it over to somebody else.

1.

armal life we can't co that.

As far as Congress and the public are concerned, they consider you as the watchdog.

So then, when you run into a touch problem, then you say, turn it over to somebody else and we'll get along with those that are popular or easy to solve.

That's the way it would 'cok to me.

I can't do that in my work.

Whenever any difficulty happens in ny work, I am responsible.

I can't shuck it off on.

anyone else.

There's no one to go to.

I i

te 19 20 COMMISSIONER GILINSKY:

I understand that.

But in effect what we're doing here is relinquishing authority over this plant.

The overriding consideration is going to be the operation of that plant, aul we all agree that if you need the fuel that plant's got to operate.

ADM. RICKOVER:

Look at it this way.

If you turn it back to me, then what goes on is not known to the public.

And the only reason you were set up and the reason that you have your Congressional agency is to see to it that all this gets out.

So in order to make it easy for you, you're suggesting that I take it over, and no one could find o ut what's going on.

We're perfectly willing for people to find out what's going on.

But look, this is your job.

What if you did that on everything?

Pretty soon you'd be here discussing baseball games.

(Laughter.)

COMMISSIONER GILINSKY:

I don't think so, no.

We've got a situation, we've got a plant which, if it were a commer'cial facility, wouldn't operate.

Now, the reason it's

-got to operate is because you need the fuel.

We're all agreed to that.

~:+

ADM. RICKOVER:

Let me add another thing to that.

I've been involved for many, many years with the accountability of fissionable material.

And I have studied this very thoroughly.

You happen to have a process which we don't know how to improve on.

That's the point.

to 20 21' For instance, it's been talked about setting up --

I was told, you can go to Congress and you can get the 40 or $60 million to set up a new plant.

But after considera-bic study, I don't know that we can make as a change in.' design to do any better.

And I am ver.y reluctant to spend another 40 or $50 million of taxpayers' money just.to make it look good.

I don't believe in operating that way.

My main point is, this is your job.

If in your best wisdom it ought to be shut down, that's fine.

You have to make that decision.

On the other hand, you also know the conse-quences.

That's what happens to everybody in life.

If he runs around with two girls, he has to make a decision which one he thinks is going to be better in bed.

(Laughter. )

~

ADM. RICKOVER:

That's what you're faced with.

COMMISSIONER GILINSKY:

We don't regulate everything.

ADM. RICKOVER:

Well, I hope you don't.

(Laughter.)

ADM. RICKOVER:

I hope you don't make public every-thing you regulate.

COMMISSIONER GILINSKY:

We don't regulate most military activities that involve nuclear material..

In a way, this is kind of an anomaly.

ADM. RICKOVER:

I'm not being facetious.

My opinion

c 21 22' is that you guys are really serious.

I'm talking very frankly.

You're accepting your responsibilities, and one has to accept responsibilities at dmes, even though when the general outcry is against it, because the general cutory is instantaneous, the job is a long-term job which has many considerations in it, which the press and I know the public doesn't consider.

The press is interested in immediate headlines.

We can't operate on that basis, because we here are for the permanent protection of the country, the public, to make sure that we get energy.

It's easy for anyone to find what's wrong.

Lut you know, the ancient Locrians had a good rule, the ones in Greece.

They used to say, anyone can get up and say anything he wanted to, but if he was wrong he'd be beheaded.

That's what we ought to apply to the press.

(Laughter.)

COMMISSIONER GILINSKY:

We could use some of thnt here.

COMMISSIONER HENDRIE:

But not to Commissioners.

(Laughter.)

ADM. RICKOVER:

I'm adding a little bit of reality to this session.

I hear you guys, you're all solemn as hell, and I don't run meetings like that.

This is the first meeting I've ever attended h ere and it's quite an education.

.c 22 23 COMMISSIONER GILINSKY:

It seems to me what we're sitting and doing here is concocting a system that will allow this plant to operate.

I think it's just a charade, to be frank with you.

CIIAIRMAN AIIEARNE:

Vic, it's not quite right.

It's a system that would allow it to operate and facing realistically the kind of process that it is.

COMMISSIONER GILINSKY:

We understand that.

But you would not allow a commercial process, and we don't intend to allow, that doesn't allow us to keep track of the material.

CIIAIRMAN AIIEARNE:

It would depend upon the benefit, whether it's a commercial process or this type of process.

It's a balancing of the benefits and the risks.

COMMISSIONER GILINSKY:

Let'~s understand that there's no argument about the need for the material or the plant running.

ADM. RICKOVER:

A commercial process is an easier thing, it's a much easier thing.

This is a very difficult one, because for military reasons the process is a very complex one.

So you can't use the same rules, apply the rules in the same way.

You have to make up your choice, which is the greater evil.

For example, people don' t like nuclear power but they like coal.

And yet, the latest scientific study shows there may be more fallout -- I'm using it in quotation marks -- from

to 23,

24 coal than you get from nuclear power.

But coal sounds good today.

When that happens, you'll find out the press will immediately agitate for more nuclear power.

I mean, this is why those of us who have respon-sibility must consider hat whenever you exercise real respon-sibility there's a lot of flak -- let me use the word fallout.

That's a better expression.

In this case, there's going to be a

lot of f allout.

You have to accept that.

But you know, after it happens, what the press prints is only remembered for one day.

CHAIRMAN AHEARNE:

As far as it being a charade, as you say, I think that we have in previotu sessions, have argued and in fact I think agreed, that there is an advantage to having the commission have oversight over activities.

And the question in the previous situation'. was whether arrangements could be made and we could have oversight, regulatory oversight over.the classified type of an operation.

Here's a: situation where the Energy Department has agreed we can.

We've worked out a system to do it.

COMMISSIONER GILINSKY:

And I would suggest we do it precisely on the same basis that we evaluate reactors.

You cannot, for a lot of reasons, have that on a stric.tly licensed basis.

ADM. RICKOVER:

You can do something about reactors.

I

e 24,

25' I'm quite familiar with the Nuclear Regulatory Commission.

I've had years and years worth of sessions, and I talk from the standpoint that in the nuclear field I have establish"d the best safety record there is in the entire United States, if not the entire world.

And I adopt exactly the same attitude toward this insofar as I can.

Now, for example, I have to select and train the people for the nuclear program.

I don't get what I want all the time.

Yet we have to operate our ships.

So I am forced to do things I don't like to do.

I can't help that.

You're in the same fix.

I'd rather have you guys do it, because then the public knows that it 's not a put-up job.

I don't like that.

In much of my work I cannot inform the public about what I'm doing because of national security.

But I think if they knew they would be highly praiseworthy of what we do.

For example,

.e 2 5,

26 I just want to tell you that don't think that my attitude here is any attempt to circumvent what you're trying to do.

I heartily cyn e with what you're trying to do.

COMMISSIONER GILINSKY:

I hope I didn't suggest anything like that, sir.

ADM. RICKOVER:

I want you guys in it.

I think it's essential for the public, since these are public meetings, that you tell them what's wrong where you can.

I think that's fine.

That's why I object to turning it over to the Energy Department.

MR. LEIGHTON:

May I make a comment on your point, Commissioner Gilinsky?

CCMMISSIONER G ILINSKY :

Sure.

MR. LEIGHTON:

If we here in a theoretical world and this had never been given to NRC in a license, back in the AEC days if an exemption had been granted and this had been

~

operated without a license, we might argue differently.

But we aren't in that theoretical world.

This is a licensed plant.

If we go to move it back to DOE, it is going to be a precedent.

It is going to raise many issues.

And there is no way that DOE is going to avoid the connotation that we're doing it so DOE can sweep it under the rug.

te 26.

27 COMMISSIONER GILINSKY:

It's not a matter of sweeping it under the rug.

ADM. RICKOVER:

I s talking about connotations.

MR. LEIGHTON:

Whoever rcgulates this plant, taking as a given it has to run -- and I think everybody in this room is agreed to that -- taking as a given that it has to run and somebody has to regulate it to protect the public, whoever regulates it has to regulate it in an achievable manner for the technology that exists for that plant at this time, and then keep trying to improve the technology to see if you can't do better.

If this Commission then -- and as far as I know, there's no legal bar for this Commission to make a determina-tion -- if this Commission decides that the ground rules you settle today are the best that can be achieved with the present technology, recognizing that you incrase that you increase the physical security, which you certainly are doing -- we're more than doubling the guards in the place and adding lots of things in physical security, and putting primary reliance there --

then it seems to me that the public has more confidence if this Commission, the independent body, passes. judgment that that's where they think the technology is and continues to work on it, than if you send it back to DOE and then we waive a magic wand

e 27 28 and say that and we're d oing it.

So from where we sit, there are lots of ramifica-

.a tions of moving this plant from a licensed condition to an unlicensed condition.

If it had never been licensed, it would perhaps be different.

I think many of the arguments you're making might well apply in that case.

'ADM. RICKOVER:

We have the guys up before the court ask for a sterner judge.

That's what we're doing, because we think for the ultimate good of this program and for your ultimate good and for everybody concerned, that we 'should have a neutral observer.

COMMISSIONER GILINSKY:

I think what you're saying is right about that facility, how people will regard it.

You're being frank with me.

Let me be frank with you.

My concern is that it's going to affect the rest of our program.

You can't have the inspectors deciding that, - au know, we'll just go with the achievable here, but we're really going to be tough elsewhere.

ADM. RICKOVER:

Any regulatory body or any body has to exercise judgment.

If all you have is rules, you'd need a bunch of zombies here instead of the kind of people you have.

That's what you're saying.

You've got to exercise judgment.

Every one of us has to do it in life.

Ite 28.

29 MR. LEIGilTON:

You do it throughout your program, Mr. Gilinsky.

You have grandfather clauses on many plants that you don't put the same requirements on, nuclear power plants.

COMMISSIONER GILINSKY:

I'm not suggesting it's a black and white situation.

It's all a matter of degree.

ADM. RICKOVER:

Well, you're up against the tough proposition that everyone in life gets into, particularly people in responsible positions.

You have to make a decision which doesn't get away with a normal decision.

You are unfortunately faced with it.

I'm faced with that damn thing all day long.

COMMISSIONER GILINSKY:

It 's not the first one we 've faced here.

And as you say, it's an awkward decision, and there's things to be said on both sides.

I come down on the side of having us participate in a review of that facility.

But I think that, since the over-riding consideration in every case is going to be the need for that fuel --

ADM. RICKOVER:

Look at the way this sounds.

You want to create a situation where the guy is going to judge himself and the guy is objecting to it.

How in the hell are

-2 you g oing to look publicly with that attitude?

30 CR 9197 mgc/DAV Go ahead.

You guys are smart guys.

Now give me the 1-1 answer.

COMMISSIONER GILINSKY:

There's a certain irony in this.

(Laughter)

ADM. RICKOVER:

We're just as sharp as you are.

COMMISSIONER GILINSKY:

I'm sure you are a lot sharper.

ADM. RICKOVER:

I didn't say that.

Furthermore, you've got the authority.

The guy who has the authority always has the greatest wisdom.

(Laughter)

ADM. RICKOVER:

Look, that 's true in the military.

If you go into a room full of officers, you see who has the most gold braid, and that's the smartest guy.

Laughter)

ADM. RICKOVER:

When you come here, the chairman's the amartest guy.

CHAIRMAN AHEARNE:

You've just overstretched your analogy.

COMMISSIONER GILILINSY:

In effect, even though we're retaining legal authority, we're turning over the authority to you, because we're saying this product has got to come out, so we'll just adjust this one percent, one and a half percent.

Joe was concerned that one and a half might

mgc 3-2 squeeze you too often, so let's make it higher.

You know the cile is going to get set by your need for that material, and I'm sure people are going to feel better about it to have us in there, but we can be in --

ADM. RICKOVER:

Yes.

But the strange thing is is that the victim is asking to be judged properly.

I don't see how in the hell you're going to get out of that one.

COMMISSIONER GILINSKY:

But you're not asking to be judged by our standard rules.

You're really asking for these rules to be adjusted.

MR. LEIGHTON:

I don't think your statement is fair, Commissioner, when you say jus turn it over to us, and whatever we do is going to get run.

I think the issue here is that your people have looked, insofar as they're capable of looking, and have at the moment agreed with us that the technology is what's limiting us at the present time.

It isn't just a question of turning it over to us and we run it in some sloppy manner.

There has been some sloppiness.

Everybody is trying to patch it up, but wherever they find that, we'll stamp it out to the best of our ability.

So I don't think it's quite fair to say just turn it over to us, and we are going to run it no matter what.

CHAIRMAN AHEARNE:

In addition, Vic, since it's my proposal that we're looking at, as I recall, many of those

s.

mgc. 3 improvements in the physical security, and in fact even in Y

the MQ/A, were not ones the Energy Department were particularly enthusiastic about -- the large number of gr 2rds that are being used, et cetera.

ADM. RICKOVER:

We are not.

We think it's being overdone.

We can understand why you'fe doing it, because a major part of your job is the physical security, and so we go along with it.

It's going to cost extra money, and in my opinion, it's a facade.

But it's one of those essential facades necessary n u see, I'm being for public approval.

I understand that.

o very frank with you about this.

MR. LEIGHTON:

The price we pay --

COMMISSIONER GILINSKY:

I would like to draw an analogy between this plant and, say, the production reactors.

We don't regulate the production reactors.

Product comes out of there that is required.

It's not inconceivable that we would at some point participate in the reviews of those reactors.

ADM. RICKOVER:

If you keep on this way, you're liable to get those production reactors.

Of course, there's some benefit.

You may double the Commission and have ten membe rs.

(Laughte r. )

MR. LEIGHTON:

You should understand, sir, that there are those people who would like to move this to DOE, who then

I mac 3-4 say that DOE is sweeping it under the rug and that must be what they're doing and everything else, so let's move every-thing to NRC.

There is one line of thought in this city which goes that way, so you might find if you move this to DOE, the only end result is to move everything back to NRC.

COMMISSIONER BRADFORD:

Where have you heard that line of thought coming from.

MR. LEIGHTON:

I'd rather not quote sources, but I don't think it's just a wild thought eigher.

CHAIRMAN AHEARNE:

It's not really relevant either.

That's not a relevant issue.

We do have a regulatory group that I think is a better group to try to apply that objective review than putting it into DOE to do it.

There will end up being a level of tension between us and them, and I think that that 's a healthy level of tension that regulttory oversight ought to have.

COMMISSIONER BRADFORD:

Yol understand, if we do retain jurisdiction, full jurisdic'_ ion over the plant, there could conceivably come a day when one of those Congressional oversight committees asks us about the various facilities in which we're safeguarding HEU and plutonium.

And they say, "Do you have the same level of self-assurance for all of them?-

Do you have a high level of assurance against subversion, and

34 mgc 3-5 I hope that undeer a regulatory regimen, we could answer that yes.

But I suppose it's equally true, we'd have to say, "No, we have one level of assurance for all but one, and that one is Erwin, where we operate on a lower level of assurance because national security requires it.

CHAIRMAN AHEARNE:

It depends on how we would conclude assurance is obtained.

COMMISSIONER BRADFORD:

I'm assuming that obviously we can obtain the same level of assurance overall for all the facilities, then there's no problem.

I assume that all of us would vote for it on that basis.

ADM. RICKOVER:

Mr. Bradford, may I make a comment on that last statement you made.

We have had in every program in the world -- you deal with two people who are producing the same thing for you, and one is better than the other.

If everything in life were uniform, it would be very easy.

That's where the judgment comes in.

So what you do -- we have that in all; manufacturing.

We try to make the lower one better.

But we have to accept in, since we need both of them.

We can't kill one of them.

We can't kill them all.

We have to do everything we can.

That's what we're doing here.

There's nothing -- I think this is probably the first time we've run into an instance like this.

But for people

mgc 3-6 like myself who have been involved in getting things done for many years, this is a daily occurrence that you're talking about.

And i; I emoted as many hours as you guys do on a thing like this, I could never get any ships operating.

CO!CIISSIONER BRADFORD:

Well, it looks to me exactly like the decision that my predecessors on this Commission must have faced following the browns Ferry fire.

That is, a

i situation showed up which indicated that a great many reactors were in unsatisfactory shape.

The thing was to let them continue operating or to shut them down.

ADM. RICKOVER:

If circumstances warranted, I would continue operating.

It depends on the circumstances.

COMMISSIONER BRADFORD:

Indeed, what happened, that people took measures -- the deadline was October 1, 1980, I L

guess -

people took interim measures between 1975 and then to make sure that fires didn 't occur and plants did continue to operate.

What I'm groping towards is the question of whether

=-

this facility is, in fact, analogous to the actions following Browns Ferry -- that is, there was a clear path to improvement,

~

or whether we're looking at a situation here in which, in effect, the interim measures will become measures forever, and we'll just have to accept a lower level of assurance.

s

hid) mgc 3-7 CHAIRMAN AHEARNE:

Peter, first I wasn't proposing this as an interim step in the sense of improving this plant, because from the discussions I've had --

COMMISSIONER BRADFORD:

You're talking about improving the situation.

CHAIRMAN AHEARNE:

That's right.

Because I'm relatively convinced -- because this type of a liquid process, you aren't going to get the better than one percent, that that's going to be inherent in the process.

COMMISSIONER KENNEDY:

Then, it would apply to a new plant, in all probability, as well as this one.

ADM. RICKOVER:

That's exactly the point.

We have considered that.

It's easy.

All I have to do is say yes, and I can get all the millions of dollars I want for a new plant, but I don't know how I'd go about building a new plant so I could afford any further questioning for the next four, five, or six years -- that is, through the appropriation process, the construction process.

We could let the thing disappear, but-that's not an honorable way to do things.

You simply have a process which no one knows how to make more perfect.

CHAIRMAN AHEARNE:

If I could continue, though -- so therefore, that's one of the reasons that I did opt for the tighter physical security, because if you're not really sure where the material is, then you would at least like to increase

37 mgc 3-8 your assurance that it could not have left the grounds.

COMMISSIONER GILINSKY:

But one of the fundamentals of our regulatory process on commercial activity, at least on the one we're heading for, is that you not only have to have the assurance that the stuff hasn't gotten out that you have from having guards surround tae place and none of them report anything leaving any of the exits, but you also have to know that this stuff is there.

CHAIRMAN AHEARNE:

That's a different physical process you ' re talking about there.

ADM. RICKOVER:

That's easy.

The stuff is locked up inside of a radioactive reactor.

You mean the commercial establishment?

COMMISSIONER GILINSKY:

I'm talking about this facility.

ADM. RICKOVER:

Even there, the amount of material, take in Erwin, I thought you were referring to, in other work on 7 nuclear plant, that's a pretty easy thing.

MR. LEIGHTON:

I think the.

i to what Mr. Bradford said is, he said at Browns Ferry where there was a clear road to improvement, if we had a clear road to improvement at Erwin, we would institute it.

But now you are instituting the.

Other 16 things we agreed to, accounting measures and your appendices, the company is studying other suggestions made by our designers as well as their designers.

38 mgc 3-9 We may make some improvements, but we would be misleading you to tell you we know the clear road to improvement, and that is the difference.

We know what we 're talking about here a f ter Browns Ferry.

If we had the clea. road to improvment, we'd be spelling it out.

We might not be able to do it overnight, but we'd be spelling it out, and we would be --

ought to do that.

We just don't have that.

ADM. RICKOVER:

In fact, in the case of Browns Ferry, if they had made the slightest study of the situation, they wouldn't have done that.

There were plenty of examples around why they shouldn't do a thing like that.

It's different here.

We don't know.

If we did, I can assure you -- and I think you know the way I operate --

that we would have taken steps.

We don't know how to do it.

MR. LEIGHTON:

There are things being considered that may -- we may find this improvement.

This remains to be seen.

ADM. RICKOVER:

This doesn't mean -- supposing for the sake of argument, you were to let us go ahead, we would say, " Fine.

Now that's over with.

Now let's go on with our job. "

CHAIRMAN AHEARNE:

Are there any other -- Peter?

COMMISSIONER BRADFORD:

John, let me try to understand.

It does or does not include other facilities?

CHAIRMAN AHEARNE:

What it does include is a

39 mgc 3-10 request to the Energy Department to within a year reach a conclusion as to either upgrading this facility or going to a new facility and the advantages of doing that.

And my uneasiness with the facility is more the age of the f acility.

I have nothing to convince me that a new facility would give you better inventory.

It's the process.

COMMISSIONER KENNEDY:

The age of.the facility is not our business.

CHAIRMAN AHEARNE:

Well, that's what I'm asking the legal opinion on.

COMMISSIONER BRADFORD:

But essentially what's contemplated her is something that I think you wouldn't allow on the reactor side.

That is, instead of the separate levels of defense in depth, we really are talking about substitutions of vastly increased effort on one side -- that is, security or a second barrier.

CHAIRMAN AHEARNE:

If I shift over to the reactor analogy, I am not sure that we won't be facing a similar situation with Indian Point as the NRR people are reviewing such things as core catchers, vented containment, and so forth.

And it may be similar to the situation where you look at an existing reactor and its location and conclude that there are extra measures that you have to impose in that situation.

So I'm not sure --

mgc 3-11 COMMISSIONER BRADFORD:

I'm not saying that this necessarily can't be done.

It is an approach that in the past we have normally declined to take with regard to reactors.

ADM. RICF.OVER:

Mr. Chairman, may I make a comment on your last point?

I think if you investigated, you will find from the very beginning I have insisted on more inspection, more records, before there was any regulatory commission on the use of fissionable material.

You see, I was around when they lost two and a half grams of enriched U-235 at Argonne in the early days.

There was a big Congressional investigation.

Two and a half grams.

I-was burned by that.

I was involved in it.

You find out if you go back historical.y that practically all of the things that have been done on safeguards have been copied, starting off with things that we dia, because I recognized we were dealing with a long range problem, and we had to justify nuclear power and assure that it was' safe.

And to lose material shows there's something wrong.

So we're doing the best we can, and I fully appreciate the dilemma that you have.

But then, that's what.everybody's faced with all the time.

They call it tha moment of truth in bullfighting.

CHAIRMAN AHEARNE:

Peter?

COMMISSIONER BRADFORD:

There are a lot of parallels

64 /

mac 3-11 involved, such as the red flag.

(Laughter.)

ADM. RICKOVER:

I could give you some more analogies.

CIIAIRMAN AllEARNE:

Afraid not.

(Laughter.)

COMMISSIONER BRADFORD:

Were you ever a picador?

(Laughter.)

ADM. RICKOVER:

No.

I think it's stupid.

CHAIRMAN AHEARNE:

Victor, any points or questions?

COMMISSIONER GILINSKY:

No.

I think I've said what I had to say.

CHAIRMAN AHEARNE:

Dick?

Joe?

You seem to be ausy there with regulations and laws.

COMMISSIONER HENDRIE:

I had a comment with regard to Vic's thought, that maybe a way to deal with this is to come out of the licensing regime but maintain, in effect, a parallel procedure review which would result in advice to the Department of Energy with regard to safeguards matters at this facility.

It seems to me, I guess on balance,.I would prefer to see it remain as a licensed facility.' The course of granting an exemption, in effect unlicensing or excluding it from the requirements for a license, is a possible course and has some useful aspects to it.

42 gc 3-13 But whether one continues to license or whether one wants to consider further the possibility of issuing an exemption and allowing it to operate as an exempted facility under the Department of Energy, either way, if the facility is going to operate, it appears to me that we need to face up to the fact that inventory difference numbers at Erwin in I

view of the process which has to be used there -- that inventory difference numbers just aren't going to be very helpful in terms of either assuring us that there 's been no diversion or telling us that there has.

In view of the overall quantities that are used and the nature of that process, our abilitity -- our technological ability to do material inventory -- is not sufficiently precise to produce results down in the few kilogram range that we would like to have in view of minmum critical masses of these h

~

materials.

~

And I think that fact needs to be recognized.

We just simply have to see that and make it clear that if the operation continues -- and I'm sure that it will -- I'm going ii..

P to vote that way, anyway -- if operation continues, it is on the basis that the upgraded physical security and material control measures provide a reasonable degree of compensation for not having as good inventory difference numbers as one would like, and that that improvement in physical security f

43 mgc-14 and material accounting makes it an acceptable proposition in view of the need for the facility.

As I say, if it were making some non-essential, commercial product, why I think the discussion would be much different.

But it is an important product that's produced, and so I think that essential point has to be made, and people have to understand that in our oversight committees.

Theyf.re going to have to understand it, and people on the public side who like to delve into safeguards matters are going to have to understand that.

Whether we give it back to DOE or whether we keep it, Dircks and Burnett have to inspect it, defend it in one thing or another.

Why I think we all need to recognize that we simply are not going to produce inventory difference numbers that are down in the few kilogram range.

[

COMMISSIONER KENNEDY:

Could you articulate whatever proposition is now before us?

+

CHAIRMAN AHEARNE:

Yes.

But I wanted to ask Bill one question.

Bill, Dave made a proposal about the re-inventory at the one and a half percent level, and then the addition of the two.

Could you comment on that.

MR. DIRCKS:

The business of if it's a loss and it exceeds one and a half percent, let's not have a static --

CHAIRMAN AHEARNE:

To do a dynami.c inventory.

44 mgc 3-15 MR. DIRCKS:

Let's do two dynamic inventories.

CIIAIRMAN AIIEARNE:

That's right.

MR. DIRCKS:

It's something I guess I alluded to earlier.

I guess the dynamics may do just as much as the statics.

The problem is --

CIIAIRMAN AllEARNE:

So you would not have any objections?

MR. DIRCKS:

Right now, that's off the top of my head.

I don't know if the technical people are shooting darts in my back or not.

CHAIRMAN AIIEARNE:

Why don't you ask them?

MR. DIRCKS:

Jim, could you comment on that one?

MR. PARTLOW:

Yes, sir.

First, let me point out that our definition of throughput, although it is nominally for a period, in the last two years with the way the plant has been operated, that throughput has gotten up to I believe that the Department of Energy has also told us that their expectation for the plant in the future is for larger throughputs than we had in the past - -not the same or smaller.

Now, this idea of taking one and a half percent, looking at that first on the dynamic inventory, I'm saying tha't that could be as much as one and a half percent, of as much

45 mgc 3-16 f

as CHAIRMAN AHEARNE:

You mean per inventory period?

MR. i' ARTLOW :

Yes, sir.

Then as we understend, it takes 30 days then to reconcile this and realize that we have the problem of an inventory difference and I guess they are then proposing that we stop and take another dynamic inventory.

That takes another 15 days and then another 30 days to get the answer which we add up.

Then we find out that we have a problem, perhaps, of an inventory difference And I haven't added this all up but it must come to be about three months from the time in which we might originally have a problem, a real problem of theft which caused the inventory dif ference in the first place.

So it seems to me to be vacating the whole idea of having an accounting system to give us some kind of protection.

(Commissioner Bradford lef t the room at 10 :4 0 a.m. )

COMMISSIONER HENDRIE:

That 's precisely what we 're sitting here determining and have been coming to over a period of years -- that inventory difference numbers at this facility are not either an assurance that you don 't have diversion or an indication that you do.

But the precision with which you can do these numbers just doesn't help you with regard to diversion.

.It may be

46 gc 3-17 useful from c material accounting standpoint in terms of where uranium goes.

J~

i (Ctnsb.nztuj? os k7 t

GC L A

9

j l 47 MR. PARTLOW:

Yes, Commissioner, if we leave out detection of theft from the accounting system, I also believe that the accounting system and the inventory differ-ence -- that accounting system is somewhat the thread of organization inside the plant that gives you any hope of y

r whole system of safety and safeguards working.

(lL: 41 p.m., Commissioner Bradford has returned to the room. )

MR. PARTLOW:

It's the system that says where the material ought to be and where it ought to move to, and where it shouldn't be.

And if that system ever doesn't have some kind of control to it, I don't see how physical security systems work.

Physical security systems don't know whether the material can move past here or not.

There's implications for whether or not health and safety systems p

can work, whether or not material is located where it should be or.is outside the boundaries of the plant.

So I feel the accounting system is a hard t

structure of our safeguards' health and safety systems, and I think that inventory differences are a measure of how reliable, how coJ2fident we can be in that system that it 's

=

working.

COMMISSIONER HENDRIE:

I agree totally with you.

That's just the way I regard it, but I don't think I would

12 48 then make the transition that you seem

..o from that view of the usefulness of the inventory system to saying, "Well, then there is a very substantial difference between shutting down at the end of a dynamic inventory which was triggered by 1 percent plus."

"ou've come to the end of the first dynamic inventory and discover you've got a 1-1/2 percent plus difference still on the books.

What you' re saying is that the system won't work unless you shut the plant down at that point.

That is that another 45 days for a second dynamic inventory before you decide whether to shut down the plant, but that 45 days -- the time for that second dynamic inven-tory -- is the difference for you between the whole inventory concept being useful or not, and I just can't make that.

MR. PARTLOW:

I don' t think that you can ' t do it perhaps with the dynamic inventory.

I think it's the best way to focus on the problem.

And if we're going to use this information, it's the best way to get serious and say there is a problem here; let's stop, let's freeze the material, and see if we can figure out what we have.

COMMISSIONER GILINSKY:

The static inventories.

MR. PARTLOW:

The static inventories.,

CHAIRMAN AHEARNE:

How long hac the plant been shut down now?

MR. PARTLOW:

The plant began to shut down on

J1 J 49 September 18th.

MR, DIRCKS:

I think probably now that we've narrowed it down, so to speak, to what was it?

-- we still don't have any more idea of whether the material was there or not.

At least I don't.

That's the problem.

CHAIRMANAhlEARNb:

I think that the proposal we have then would be to request the Director of Safeguards to issue an order for the modification of the license and require establishing 1 percent throughput as the level for dynamic reinventory.

COMMISSIONER KENNEDY:

1 percent?

CHAIRMAN AHEARNE:

For dynamic.

And then I guess I woud modify to 1-1/2 percent for an additional dynamic in the context that if at the end of that, in combination with the previous, it led to a continued 1-1/2 percent loss, that at that stage there would be a shutdown to impose the physical security requirements,

P which are in Appendix C, and the additional MC,MA requirements, which are Appendix A.

COMMISSIONER KENNEDY: 'Has the Naval Department and the Energy Department considered those additional physical security requirements?

CHAIRMAN AHEARNE:

We have a letter from Dr. Deutch saying that they will accept both of them.

I

50 COMMISSIONER HENDRIE:

So I take it the proposal you're outlining includes the request for a look.

CHAIRMAN AHEARNE:

That's right, the DOE request, within one year, to examine whether they should modify the design or replace the plant.

MR. BURNETT:

Mr. Chairman, they would be additive.

One point of Dave's was additive, they would be additive.

CHAIRMAN AHEARNE:

That's my point.

COMMISSIONER HENDRIE:

I'll vote for it.

COMMISSIONER KENNEDY :

I will.

COMMISSIONER GILINSKY:

I we ld go with the way I outlined earlier.

COMMISSIONER BRADFORD:

Am I wrong in thin ki.ng that we have a meeting scheduled on this tomorrow?

CHAIRMAN AHEARNE:

You came late.

That's right.

MR. BICKWIT:

The union, in requesting a meeting, made clear that if the Commission were inclined to lift the suspension --

COMMISSIONER BRADFORD:

That's the union.

What about the other groups?

MR. BICKWIT:

No one else has requested a meeting.

COMMISSIONER BRADFORD:

Well, I would approve your proposition, but consider it to be a continuing open k

3 51 question.

If, for example, at the end of the year both the performance and the DOE evaluation would seem to indicate that what we're really doing is simply lending our encourage-ment to a facility in which the actual status of material is uncertain enough to be a problem, at that time I think I'd would be more inclined to go with Victor's.

COMMISSIONER GILINSKY:

Let me tell you I think one of the consequences of this is going to be, because of the nature of our process, we are going to be forced to make, Howard, all sorts of ~ exquisite legal arguments proving that physical security compensates for difficiencies in material accounting.

That will then lead to scuttling the material accounting in other places.

Others will come in and rely on that argument.

And I think it will undermine the progress that we've made elsewhere on material accounting and our continued progress in that area.

CHAIRMAN AHEARNE:

We 'll just have to try our best not to have that happen.

Len, do you have a comment?

MR. BICKWIT:

I think Commission sentiment is clear.

The mechanism by which you do it has been a subject of dispute between the executive legal director and our

jl 6,

52 o f fice.

We both agree that you can do what you want to do.

CHAIRMAN AHEARNE:

Good.

(Laughter.)

COMMISSIONER HENDRIE:

Quick thinking, Howard.

(. Laughter. )

MR. SHAPAR:

I was first.

(Laughter.)

MR. BICKWIT:

What I would request is that y.u not address the legal issues at this point -- I'm not inclined to, and I suspect the Commission is not --- but that you leave the question open.

CHAIRMAN AHEARNE:

Could you -- mind telling me what the legal question is?

MR. BICKWIT:

The legal gr.estion is whether you amend the license effective immediately or you order them to do what the Commission contemplates as requirements and that you amend the license after the hearing.

MR. SHAPAR:

If there are no significant hazards considerations involved here, even under our respective theories, there's no disagreement is there?

MR. BICKWIT:

I believe there is, because under the first sentence of 189 there's a requirement for prior hearings and when you will amend the license.

53 MR. SHAPAR:

We do indeed have a disagreement.

COMMISSIONER KENNEDY :

And with me.

MR. BICKWIT:

I'm not asking that the Commission decide one way or the other, but let the Commission leave the issue open and let Howard and I attempt to work it out.

CHAIRMAN AHEARNE:

All right.

So, I think by 3 to 1 to 1 we have agreed with the conditions and that the issue is with you and Howard.

We' may then have to have a meeting perhaps tomorrow on resolving how that is implemented.

COMMISSIONER HENDRIE:

It's sort of 4 to 1, with an asterisk, which I don't disagree.

COMFISSIONER KENNEDY:

I do.

CHAIRMAN AHEARNE:

I knew Vic was against and the three of us were in favor, and I was putting yours --

COMMISSIONER BRADFORD:

I thought I was stating a position other than the three of you. would hold.

CHAIRMAN AHEARNE:

4 to 1, with an asterisk, with a conditional.

COMMISSIONER BRADFORD:

My vote is yes, although Joe and I may diverge at some point as to how much we would accept by way of " national security" justification or what we would otherwise not tolerate in a facility like this.

What I'm saying is yes for, in effect, a year while DOE does

54 18 the review you suggested and while the Staff has a chance to really see how these new practices work out.

What I'm more hesitant about is applying a national security rationale to saying we would tolerate a situation at the end of that year that really seemed to threaten either the integrity of the rest of our materials control and accounting program or that seemed unacceptable at this facili'ty.

CHAIRMAN AHEARNE:

I see.

Fine.

COMMISSIONER HENDRIE:

Conditions, for assorted reasons, could change.

CHAIRMAN AHEARNE:

That's one of the benefits and the hazards of being involved in the regulatory process.

~

MR. FOUCHARD:

One point, Mr. Chairman, before you adjourn, I think you should announce this decision promptly.

COMMISSIONER KENNEDY:

What decision?

Until the counsel tells us what it is, we haven't decided how to do anything about it.

CHAIRMAN AHEARNE:

Two legal assistants have just proffered some complicating factors which will require us to delay a day.

MR. BICKWIT:

I'm not clear on that, Mr.. Chairman.

I think we both agree that you can issue an order.

CHAIRMAN AHEARNE:

Fine.

The immediate question

9 55 d

will come.

Do we have a hearing on that?

MR. BICKWIT:

We both agree -- to say that there would be a right to a hearing.

MR. SHAPAR:

Only af ter th e fact.

MR. BICKWIT:

I think we both agree that it would be after the requirements are imposed.

CHAIRMAN AHEARNE:

And what is now the remaining debate?

MR. BICKWIT:

Simply the only debate is on wh' ether the license would actually be amended.

MR. SHAPAR:

I think in order to get this thing started I will defer, for the purposes of this, to what I consider to be a mistaken legal view of, which has been done in the past.

(Laughter.)

MR. SHAPAR:

Now you can get your order out immediately.

CHAIRMAN AHEARNE:

All right.

Fine.

COMMISSIONER KENNEDY:

That's an advance.

MR. FOUCHARD:

I'll work with Ed and get something out to you.

CHAIRMAN AHEARNE:

The meeting is over.

(Whereupon, at 10:55 a.m., the meeting was adjourned.)