ML20044D945
| ML20044D945 | |
| Person / Time | |
|---|---|
| Issue date: | 05/11/1993 |
| From: | Taylor J NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| To: | |
| References | |
| SECY-93-124, NUDOCS 9305210130 | |
| Download: ML20044D945 (16) | |
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POLICY ISSUE Mov 1 - 993 SECY-93-124 (Notation Vote)
FOR:
The Commissioners FROM:
James M. Taylor Executive Director for Operations
SUBJECT:
FINANCIAL ASSURANCE FOR CLEANUP 0F ACCIDENTS FOR ALL MATERIALS LICENSEES WITH POTENTIAL FOR SIGNIFICANT.
ACCIDENTAL CONTAMINATION PURPOSE:
To obtain Commission agreement with the staff's view that rulemaking is not warranted at this time.
SUMMARY
By memorandum dated September 14, 1990, the Commission directed the staff to review the current priority for rulemaking to address financial assurance for cleanup of accidents for all materials licensees with the_ potential for significant accidental contamination..The staff has completed that review and concludes that rulemaking is not needed at this time.
BACKGROUND:
The question of financial assurance for cleanup of accidents for materials licensees has been the subject of consideration for a number of years. On June 7, 1985 (50 FR 23960), the Commission issued an Advance Notice of Pro-posed Rulemaking (ANPRM) on financial responsibility for certain materials licensees (Enclosure 1).
The potential rulemaking, as presented in the ANPRM, would " require financial responsibility for prompt cleanup of radioactive materials both onsite and offsite after accidental or unexpected contamination by fuel cycle and other materials licensees ~"
The NRC received 159 letters of public comment on the ANPRM. A summary of public comments is included (Enclosure 2).
Letters were submitted by NOTE:
TO BE MADE PUBLICLY AVAILABLE re T. Raddatz, DP,A/RES WHEN THE FINAL SRM IS MADE (301) 492-3745 AVAILABLE 1
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3 l*
i
.)
The Commissioners 2
1 1*
industrial and commercial licensees and their associations (86), medical licensees and their associations (36), fuel cycle and waste management i
licensees (05), local, State, and Federal Government (26), public and environmental groups (03), and banking, insurance, and surety companies (03).
i l
i Sixty-five commenters opposed any continued rulemaking, sixty-two were neutral to the rulemaking, and thirty-two supported the rulemaking. Many " neutral" commenters suggested that they themselves be exempted from the requirements of any subsequent proposed rule.
In response to issues raised by public comment, the NRC staff contracted two studies with Sandia National Laboratories (SNL) and one with Pacific Northwest Laboratory (PNL) to develop the basis upon which to decide whether to continue with rulemaking. Meanwhile, on May 29, 1987, the ED0 terminated further l
action on this rulemaking. This action was taken, in part, to await the l
results of these studies. The studies were completed in March 1990. The consideration of rulemaking was not resumed immediately because of higher priority work.
i The issue of financial assurance for cleanup of contamination incidents at l
materials facilities was raised during the Commission review of proposed rulemaking creating a new 10 CFR Part 36 for licensing and regulating large irradiators.
The staff expressed concern over the high cost incurred by DOE i
in cleaning up a sealed source leak at the Radiation Sterilizer, Inc. (RSI) l facility in Decatur, Georgia, in June 1988. Subsequently, in the Staff Requirements Memorandum (SRM) dated September 14, 1990, the Commission directed the staff to reconsider the priority for rulemaking to address financial assurance for cleanup of accidents for materials 11censees, 1
i DISCUSSION:
i Given that cleanup costs have the potential to be high,2 the question is whether there is a public health and safety basis to require materials licens-ees, those licensed under 10 CFR Parts 30, 40, 70, and 72, to obtain. financial assurance for cleanup of radiological accidents.
In an effort to address this issue, the staff contracted with Sandia National Laboratories (SNL) who l
produced two reports: "A Preliminary Evaluation of the Economic Risk for Cleanup of Nuclear Material Licensee Contamination Incidents," NUREG/CR-4825; i
'Although the total cost to DOE related to the RSI incident was $30 i
million, this figure includes tasks in addition to the actual cleanup of the RSI-facility.
From informal conversations with Chem Nuclear, the company hired by DOE to cleanup the RSI facility, the staff understands that the actual cleanup cost for the RSI facility was around $2 million.
In response to an IG recommendation, NMSS has revised its sealed source and device l
evaluation procedures to preclude any future licensing of soluble cesium sources such as the one causing the RSI contamination incident.
1
The Commissioners 3
and " Economic Risk of Contamination Cleanup Costs Resulting from large Nonreactor Nuclear Material Licensee Operations," NUREG/CR-5301.
In all, 26 incidents were studied by SNL that the staff considers contamination incidents.* In each case the licensee had sufficient financial resources to effect cleanup.
Pacific Northwest Laboratories (PNL) was contracted to review characteristics of potentially affected licensees and the costs associated with providing financial assurance.
PNL reported the results of their study in NUREG/CR-4958, " Impact of Proposed Financial Assurance Requirements on Nuclear Materials Licensees."
In these studies, the types and magnitudes of contamination were categorized by class of licensee.
For most classes of licensees, the types of possible contamination events would not result in substantial cleanup costs beyond the ability of the licensee to pay.
- Further, the staff has learned from the American Nuclear Insurers (ANI) that those relatively few licensees whose operations do have a possibility of a significant contamination event resulting in high cleanup costs (> $2 Million)
(i.e., fuel cycle licensees) already have insurance coverage due to other business considerations sufficient to cover the cost of cleanup both onsite and offsite.
The staff funded Sandy Cohen and Associates (SCA) to evaluate and update the results of the original SNL and PNL studies.' SCA produced two reports,
" Review of the Technical Basis for the Financial Assurance for Accidents Rulemaking" and " Financial Responsibility for Cleanup of Accidental Releases of Radioactive Materials by Materials Licensees." SCA determined that the analyses of the original reports remained valid. A synopsis of these reports is attached (Enclosure 3).
To summarize, the staff has reexamined the earlier studies and based upon these studies has concluded that for most materials licensees, contamination events would not result in significant cleanup costs and hence it would not be beyond the financial resources of most licensees to effect cleanup. Those few large materials licensees for whom contamination events could result in significant cleanup costs have insurance adequate to pay for cleanup.
"The cleanup of the John C. Haynes property was included by SNL in their study. However, the staff believes that the incident should be considered as a decommissioning problem rather than an amidental cleanup problem, because contamination was not the result of an acc Nent. With regard to the financial question, the licensee in the John Haynes case became insolvent as a result of business considerations only.
'The staff has also requested SCA to review the NRC Non-Reactor Event Report i
database for the years 1989-1991 to determine whether the original SNL studies should be updated.
SCA found no additional information to improve the SNL stefies.
1 !
The Commissioners 4
Given that large materials licensees already appear to have adequate insurance in place, one option available to the Commission would be a rulemaking requiring such licensees to provide financial assurance for cleanup. Such a rule would impose little or no additional financial burden.
In fact, the rulemaking would be simply codification of industry practice, and would assure the continuance of that practice. The Commission selectively codifies voluntary industry practice to assure continuation of the safety benefit attendant to that practice. However, in the instant case, the insurance coverage that large materials licensees carry is not truly " voluntary."
Customary business practice dictates that any company would carry liability insurance to protect its financial assets. The staff does not believe that it would be very likely that a licensee would drop such insurance.
Furthermore, the issue here is not one of risk to the public health and safety but rather the risk that public funds might be needed to remove contamination following an accident.
Requiring financial assurance will not make an accident less likely.
It will only reduce the risk that the public will need to pay for the cleanup of an accident. Because, in the staff's view, this risk is low, there is no need for a rule to require insurance or other instrument to assure that ddequate funds are available for the cleanup of offsite contamination accidents.
With regard to contamination accidents that are only onsite, in the staff's opinion, the cost of accident cleanup on site would be minor in rAa. tion to the cost of decommissioning the licensee's facility.
Therefore, for the reasons stated above, the staff does not believe there is adequate justification for rulemaking to require materials licensees to provide financial assurance for contamination accident cleanup, and recommends that no rulemaking be initiated.
This action involves no resource adjustments to the NRC Five-Year Plan.
COORDINATION:
Accidents in Agreement States were considered by SNL_who concluded that the limited information in the database restricted its usefulness.
In 1992, selected Agreement States were contacted to determine what actions they have taken in this area. None of the States contacted had proceeded with a financial surety rule for accident clean-up.
However, none of the States contacted were opposed to such a rule.
In 1993, several Agreement States, including the Chair of the Organization of Agreement States, were contacted and asked if they supported the termination of this rulemaking for the reasons discussed in this paper. All of the States contacted stated that they supported this action, and felt that the NRC should inform the States of the Commission's final decision at the May 1993 meeting of the Conference of Radiation Control Program Directors.
I
4 The Commissioners 5
RECOMMENDATION:
That the Commission:
1.
Aaree that no rulemaking action is necessary.
2.
Note that the Office of the General Counsel has no legal objection to the recommended policy.
/
[b mesM.Tlylor xecutive Director for Operations
Enclosures:
1.
ANPRM 2.
Summary of Public Comments l
3.
Summary and Analysis of NUREG/CRs-4825, l-5381, and 4958 and of SC&A Reports i
Commissioners' comments or consent should be provided directly to the Office of the Secretary by COB Wednesday, May 26, 1993.
Commission Staff Office comments, if any, should be submitted to the Commissioners NLT Wednesday, May 19, 1993, with an infor-mation copy to the Office of the Secretary.
If the paper is of such a nature that it requires additional review and comment, the Commissioners and the Secretariat should be apprised of when comments may be expected.
DISTRIBUTION:
Commissioners OGC OCAA OIG OPA OCA OPP EDO SECY
23900 Federal Register / \\*ol. 50. No.110 / Friday, June 7.1983 / Proposed Rules Examine copies of comments received and uses of matenals would not be at: The NRC Public Document Room.
included in the proposed program. The 1717 H Street NW., Washington. DC.
program proposed in this ANPRM is not FOR FURTHER 18ePO#asATIOes CONTACT:
intended to protide compensation to j
Mary Jo Saeman. Office of Nuclear persons for personal injury or pioperty Matenals Safety and Safeguards. U.S.
damage and is. therefore, not a pubhc Nuclear Regulatory Commission.
liability program.
Washingtm. DC 2D556 telephone (3011 Moreover,it appears that the 427-4647.
Comprehens1ve Environtaental susMaasarrearr suponstatioec Response. Compensation and 1.iability Aet of 1980 "CERCLC (Pub. L 96-510J
Background
would not provide cleanup funds for Purpose ondSeope releases involvmg NRC licensees. In a Federal Register notice issued on This ANFRM is seekmg guidance on September 8.1963.148 FR 40658) EPA requirmg certain classes of materials made the following policy statement:
hcensees to demonstrate evidence of financial responsibility for ulaanup of EPA has anno chosen not to list releases of NUC1. EAR REGULATORY accidental releases,i.a an unauthorized source. byproduct. and specist nucteer COMMISSION release of radioactive materials due to matenaMrom any facituy with a current license issued by the Nuclear Regatory human arror, system failure. an act of 10 CFR Parts 30,40,61,70, and 72 God, or defective components. l.icensees hR 1
as a
re a c of under consideration in this ANPRM reiesses from such facilities.
Finandet % Rgh I*
m nufact e in tri a agraphers.
This ANPRM is soliciting public
- "d users of gauging devicas. gas comments on the advisabihty of having g
chromatography, wall-logging. nuclear NRC require financial responsibility for Ac escv: Nuclear Regulatory medicine diagnosis and radiation prompt cleanup of radioactive materials Commission, therapy. Other NRC licensed operations both on-site and off site after accidental Acnosc Advanoe notice of proposed covered by this ANPRM include fuel or unexpected contamination by fuel rulemaking (ANPRM).
cycle activities such as uramum milling.
cycle and other matenals licensees. Any UF. production, and fuel processing and necessary environmental restoration sussssARY:The Nuclear Regulatory fabrication. Regulated weste would also be included.8 Accidental or Commission is considering whether to management actavities include unexpected contamination refers to an amend its regulations to require certain commerciallow-level waste disposal.
unautnonzed release of radioactise persons licensed to possess nuclear independent spent fuel storage facilities. matenals in excess of NRC regulatory materials to demonstrate that they and persons disposing or stormg of their limits regardless of the cause of the possess adequate financial means to own waste under speciallicense release. Examples of causes include pay for cleanup of accidental releases of conditions.' If implemented. such human error or negligence. en act of radioactive materiale. lflicensees lack standards would be a matter of God. licensee misconduct. system (dequate financial resources and funds compatibihty with the Agreement failure. or defectin components.
are not available for peampt cleanup.
States.
This ANPRM focuses on whether to the consequences could be potentially The financial assurance program for require licensees to demonstrate ognificant for the public. the licensee, cleanup of accidental release bems fmancial responsibility for cleanup of j
and the Federal government. This considered by the Commission in this a::cidental or unexpected releases of 1
adsance nottce of proposed rulemaking ANPRM is separate and distinct from radioactive meterials and not for i
is being issued to invite advice and the cornpensation program mandated by authonzed and predictable activities recon.mendations on se5eral questions the Cornmission regulations pursuant tu normally associated w.ii.
pertammg to this proposal concerning the Price-Anderson Act, which does not decemmissioning. The latter is being scope of coverage. as well as the provide funds for cleanup per se.
addressed in a separate ongoing awlebdity and cost to licensees of Cunently. the Price-Anderson program Commission rulemaking on cbtammg the various forms of f' ancial applies only to nuclear reactors on a decomnassioning.
m assura ace.
mandatory basis and to plutonium Need for Actor-part: Comment penod expires October processors and fuel fabncators on a 7.1985. Comments received after this d.screnonary basis.8 These activities At: hough there is little information e ailable ori the financial condition of d.te will be considered if it is practical to do so. but assurance of conmderation
- The pmposed imancel mron.*hty p arem NRC fuel cycle and materials licensees, cannot be given except as to comments
- **1d '****' th' f*lla"ms Department of taersv the NRC sta'ibebeves most of these j
received before this date.
'*"h"" ' *" * * ** "P**rt*' l ""*ed licensees already have some financial under 10 CFR Part 90). Independent spevil fuel ADDRESSE3: Send comments or storuye incil.eies. and monitoreo evirmabie sturene suggestions to the Secretarv of the facd t** toth laneed undu to CFR Port m in trie eseccise of he bcenomst outnener Ha=*6erahe Gennenen has em chosen to eateno Pnte-Commission. U.S. Nuclear RegulatoII
"'" d *",'**'dntmiu eenu m inAAsc funris to se for cleanup. A.Adiuunelly DOE pnwale And,,en indemniGcation to,metenals licensees Comoussion. Washmston. DC 20555.
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.h.nn e, t+w coaan an esmo n.dvissue an u.e ne durrectinn et no i renouven ENCLOSURE 1 L
4 1
Federal Register / Vol. 50. No.110 / Friday. June 7.1985 / Proposed Rules 23961 resources or insurance coverage for on-in labor and cepital costs for removal past cleanup cost expenence (discussed site and off. site cleanup as a prudent and cleanup of the tntium.
previously) as the basis for settmg the busmess practice.
Relatively little data on cleanup costs amount of fmancial responsibility However,if a licensee did not have for accidental releases of licensees is coverage in this ANPRM.The NRC staff adequate financial resoun:es, and an available in NRC records. mainly will consider at a later date. the issue of accidental or unexpected contammation because this type ofinformation is not financial responsibilities for the small did occur. there could be both short and required to be submitted to the agency.
number oflicensees who have the long term adverse public health and However, a recent review of NRC potennal to be involved in the safety consequences from the unusual events reports for radioactive significantly more costly cleanups radioactive contamination, as well as releases by matenals and fuel cycle postulated in the NRC-funded studies.
loss of use of conaminated property.
licensees indicates that from 1980 to gfy pygg Moreover, from an equity viewpoint. the 1983. accidental or unexpected releases Commission believes it appropriate that from licensees' operations believed to A vanety of State and Federal the licensee. and not the pubhc. should involve sigmficant cleanup costa (more agencies have enacted financial assume financial responsibility for than a few thousand doll"s) involved responsibility requirements to provide prompt cleanup of accidental releases fewer than one percent an.nually of the assurance that funds are available for caused by hcensee activities.
total fuel cycle and matenals licensees cleanup of accidentalreleases of vanous The issue oflicensee financial authorized to possess and use substances. Federal agencies have responsibility for cleanup of accidental byproduct. source and special materials. enacted requirements pursuant to the releases of radioactive materials has Besides lacking a comprehensive data Motor Carner Act. (Pub. L 96-296), the also been an issue with the States; the base for licensee cleanup costs for Resource Conservation and Recovery Conference of Radiation Control accidental releases, the Commission Act. (Pub. L 94-580), the Federal Water Program Directors has recogmzed the also has no available records to Pollution Control Act of 1972. (Pub. L need for Federal standarda since at least determme if licensees lack (or 92-500). Surfaca Mining Control and 1978. In August of 1964. in order to previously lacked) adequate funds to Reclamation Act of 1977 (Pub. L 95-fi).
promote intergovernment consultation provide for prompt cleanup of accidental Outer Continental Shelf 1. ands Act, at an early stage of a proposed agency releases. Accordingly. the Commission (Pub. L 95-372), the Trans Alaska action. the Commission sent a draft is usmg this ANPRM to solicit public Pipeline Authorization Act of1973 (Pub.
version of this ANPRM to officials in all and industry input on the scope and L 93-153), and the Deep-Water Port Act fifty States. and also asked for their magnitude of the problem. However.
of 1974 (Pub. L 91-627).
comments. Commission staff also even given this lack of a strong data The stipulated dollar requirements discussed the issue of the ANPRM with base. the NRC staff does not believe it is vary from $10.000 to over 15.000.000 for State radiation control program officials prudent for the Commission to wait until these different programs. As an m October.1984. The comments an event occurs which requires example. the 1984 minimum levels of generally supported the development of expensive cleanup to consider the financial responsibility for motor the rulemakmg. and specific comments development of a regulation. Other carners transporting hazardous were mcorporated into the ANPRM.
agencies, such as the U.S.
substances ranges from between Both NRC and Agreement State Environmental Protection Agency, have
$1.000.000 to $5.000.000 (Motor Carner hcensees have had accidental or gone forward with financial Act of 1980). The EPA regulations for unexpected releases of radioactive responsibihty requirements in the financial responsibility for owners and matenals that have been costly to absence of a large documented data operators of hazardous waste facihties c!eanup. State and Federal estimates for base.
[40 CFR Parts 264 and 265. Subpart H) cleanup costs hase been estimated at up in addition, several NRC-funded require coverage of $1.000.000 dollars for to 52.000.000 for a smgle event.
studies have presented cost estimates each sudden occurrence, with an annual Esamples of some of these cleanup costs for cleanup of NRC-licensed fuel cycle aggregate of at least $2.000.000, and that the NRC staffis aware of melude:
facilities related to emergency planmn8 53.000.000 for each nonsudden issues and the Pnce Anderson Act.*
occurrence, with an annual aggrega te of
-In 1983. a cesium 137 sealed source was accidentally ruptured. Workers Since these studies were prepared for,
at least 56.000.000 (Subtitle C-madsertently spread the different purposes and assumptions. it is Hazardous Waste Management, contammation mto residences and difficult to compare the results or to use Resource Conservation and Recovery their conclusions as the basis for Act),
public buildmgs. "Ihe cost for cleanup of this contammation was estimated estimatm, g cleanup costs for the vast to be at least $500.000.
majonty of fuel cycle and matenal Impacts licensees. Therefore, the NRC staff is The Commission is aware that. if
-In 1982. an amencium 241 sealed source m use in a well-loggmg proposing to use the limited, but actual.
promulgated, the potential rule could impact a vanety of parties. Before the operation was madvertently ruptured.
resultmg m contammation of both on.
- Su I P McEnde. "Econonus con.equences of Commission would implement the
^ce'8'" R* *** * F "'I F* tmc* "*" *"d financial responsibihty requirement, it site dnlimg equipment and off. site
- ($,$*[,*,"$ i[, tf, 3%,$,$,*".
would assure itself, on the basis of the homes and commercial residences.
2rt information gathered from the pubhc C'canup costs were estimated to be s eguistory commi. mon. te'.s. twvIcica.o:
up to at lesst $1.000.000.
ihe reeutie et the cuey - r ai.co..e4 m e u.s.
comments as well ae additional atudy by
-Dunng 1979 and 1980, a tntium f ut **' R'fuk '"5 C*"""*** !af*'**"" 8'P'"-
the NRC staff. that the health and safety manufacturer's operations in Tucson.
t."enE"oheN*"rh "E.[U'E'$n benefits of such a requirement would Anzona retulted m releases both on Piuion.um tstoy.ao-esti. ocieter so. teso. se.s outweigh the costs imposed on licensees and offsite. The company was also H. K. 0 der. Wurt.no Peper. "Technoiogy, and the public.
d ef fmancially unable to pay for cleanup.
S*'lil *"r commye If licensee funds are not promptly
, g p
and State officials estimated that the roii. 1n, p.,,uisied Aeodents." Pecific North-e.i available for cleanup, public fur.ds might State spent approximately 52.000.000 t bor io y. n'Rctica-s:ss. Aususi. seas.
have to be directly expended by State
f 239C Federal Register / Vol. 50. No.110 / Friday June 7.1985 / Proposed Rules and Federal agencses. Even without a enformment proceed:rges and/or
- 5. Types of possible acceptsble bankrupt licensee, there coinld be htigation agamst heansees unable to financial assurances that the sigmficant pubhc imports if cleannp is assure peampt cleanup.
Commission staff is considenng include-
- a. Standard comprehensive general delayed by ensuing litigation over the Summary of Features Being Considered liability insurance.
enpensitdlity and cost.
for Proposed Rula
- b. Envtronmental impairment habihty As preymusty asentioned the NRC staff believes that saast matenals The Comuniesion is seeking comments insurance.
licensees have adegoate financial in this ANFR.M on a proposal that would
- c. Conventional property insurance.
resourses for preenpt cleanup of require certain ful cycle and nurtenals
- d. Non-Pnce Anderson truclear cecidental releases as a matter of heensees to demonstrate adequate liability and property insurance.
prudent business practice. This financial resources for cleanup of
- e. Cash or negotiable secunties held proposed rulemaking would have the accidental releases of anchoacttve by a third party, such as a trust. or most sigstificant tanpact en those matenals on-site and off-site.Ftnancial escrow account.
heensees who may not be able to responsit:ahty would cover desnup for
- f. A fmancial test.
provida adequate financial assurances.
both property and envtrunmental
- g. A surety or performance bond.
Accordingly, the staff is especially restoration (see footnote 3),for
- h. A ccTorste guarantee from a intarsstad in beanng from those purposes of initial discusston. the parent company.
licensees who fasl tney cannot Commission is considenng a 32.000.000 S ecific Considerations d:.monstrate that they have sufficient basehne as the required maximum P
resources to assure cleanup of amount of financial responsibihty for Advice and recommendations on the accidental relassaa.
matenah and fuel cycle fact!ities. This Commrssion's proposed action are ne cost to NRC licensees for meetmg figure was chosen bec.uee it is m the invited from all interested persons. and the Enancial requirements for prompt range of known cieenup sosts for NRC specifically, from licensees. State ci:aaup would vary. dependmg on the licensees sad of otherstsied daiker officials, and representattves of the laal of fundlag and on the type of ameasts of Seete and Pederal finencial finance and insurance industry.
I financial assurance ruechanism selected-responsthihtyvegenements for cleanup Conunent is also invited on which There are a variety of possible legal of accidental rensaaes (See " Regulatory licensees should be considered for instruments and arrangements that Precedents").ne amount would be exemption from this proposed could be used to demonstrate that a adjusted to reflect changes m inflation requerernera, as well as the evailability.
licensee possesees adequate resources and W m.
cost. and applicability of the varices l
to provide funds for prompt cleanup of The Cosamiesion will ceneider. at a financial essurance mechanisms to accrdentai releases of radioactive later date. the issue of financral provide adequate financial assurances matenals. They include insurance, trust responsrbility for the small number of for cleanup of accidental releases.
funds, surety or performance bonds.
licensees who have the potential to be
- 1. Desenbe the extent and nature of escrow accounts certificates of nvolved in the significantly more costly fhiancial responsibility problems, if any.
l deposits. depo <its of secun'.ies. letters of cleanups postulated in the NRC funded for the cleanup of accidental teleases by I
credit. a paren*. x mpany guarantee. and studies referenced in footnote 4.
materials licensees.
en analysis of ti.e licensee's financial ne proposed rule would have the
- 2. Assuming the need for the e est expensive approach would f Ilowing features:
resolution of financial responsibility require that a licensee put aside 100% of
- 1. ne tnmsporting of radioactive problems for the cleanup of accidental the estimeted cost of cleanup. Examples material by common and contract releases, the Commission is seeking of this approach include cash deposits.
carners covered by the financial comments and supporting reasons on or deposits of secunties Less expensive responsibihty requirements of the Motor the followmg questions:
Carner Act of 1980 IPub. L 9S496)
- a. What cntene (such as half. life.
approaches involve purchasmg an would be excluded.
physical form, type of encapsulation.
msurance policy or f.nancial mstrument from a third party such as an insurance
- 2. Ftnancial responsibihty would and amount of radioscrive matenell cover both suoden and nensudden should NRC use for determmmg the company. bank. or financial institution accidental releases and would exclude amount of coverage to be required for with a face amount equal to the estimated costs of cleanup. Specific authertred and predictable activities, different classes of heensees?
costs of the vanous fmancial normally assoctated with
- b. What effect would the ecst of this mechamsms are not easily obtamed decommristemng Additionally. if a coverage have on hcensee operationat from heensees or from the financial and licensee were required to demonstrate
- c. How large should the financial insurance institutions. Accordmgly, the financial responsibility for both responsibihty requirement bei Should NRC is specifically interested m decommissionmg and cleanup of there be a uniform minimum amount. or obtammg comments on the costs of accidental releases. he could not use the a "shdmg scale" requirement. to match these types of fmancial instruments in same fmancial assurance to guarantee the fmancial requirements to the actual this ANPRM.
both commitments. The latter is bemg nsks of vanous types and quantities of The proposed regulatory req'.irement covered by the Commission's rnatenals possessed or the financial would also impact NRC resources. The decontammation and decommissioning site of the licensee? If so. what entena logistics and resource costs for rulemaking.
are suggested in this regard?
cmendmg thousands of matenals
- 3. Fmancial responsibthty wou!d
- d. One basis for determining the hcensees would be significant.The cover on. site and off. site cleanup for amoutst of coverage bems considered requirement would also entail an apeney pnvete and public property. as well as under the Commission's proposed c?ministrative effort for recordk eepmg.
environmental restoration of natural rulemaking would be the charactenstics auditing, and enforcement. Howes er. the resources.
of the bcensed material. Should the proposed fmancial assurance 4 Licensed State. Federal governrnent. Commission exempt licensecs with reginrement conid also avert substantial or other self.msured pubhc autlionties certain types or quantities of radioactive NRC costs resultmg from lengthy w ould be excluded.
materials. such as those with short half.
'L
. _ _ ~. -
i Federal Register / Vol. 50. No.110 '/ Friday. lune 7 1985 / Proposed Rules 23963
' lives with low activities? If so. hat will provide funds for cleanup. and For the Nuclear Regulatory Commission cutoff entena should be applied?
prompt cleanup is necessary for health Samuel l. Chilk.
- e. Should the Commission consider and safety reasons. are there other Secretary of the Comrmss/on increusmg the amount of coverage for avenues for cleanup funds available to lFR Doc. a5-13n5 Filed M-45. a 45 am) hcensees ahose facihties have pocr the Commission or other responsible m, coa,,,,,,,.
safety and/or inspection histones?
State or Federal agene)?
- f. What criteria (such as ensunng that
- 1. Should the Commission also the funds will be promptly available consider requinns licensees to provide when neededl should NRC use in eddence of fmancial responsibihty for caluotmg f.nancial assurance the non. radiological component of mechamsmv cleanup of an accidental release?
g How should the fmancial protection be prouded to ensure that it will be
- m. How should the Commission I
available if needed.
consider settmg up such a program so
- h. Weh regard to comprehensive that it is promptly notified when there is 1
generallimbihty and environmental a change in the fmancial stutus of the -
1 Ucensee?
impairment habihty pohcies, the j
Commission staff as especially
- n. Should the Comm4ssion consider 1
interested m hemnng from offerers of differentietmg between intentional and j
these pohcies reFardmg the availabihty accidentai releases?
l of their msurance for specified nuclear
- o. What amount of coverage would be risks. as well as the terms and appropriate for those fwel fabncation conditions of these types of msurance.
and radioisotope processmg plants What is the availabihty and premium which have the potential for accidents cost of these types of pohcies (as well as resultmg in cleanup costs significantly fecihty form habihty coverage from the higher than $2 milhon?
nuclear msurance pools! to provide cleanup coverage for off. site sudden and Ust of Subjects nonsudden accidental or unexpected 10 CER hrt 30 relenes of radioactive materials from heensee operations, including damage to Byproduct matenal. Government
~
natural resources? Are the terms and contreets. Interitovernmental relations.
conditions of these existmg types of Isotopes. Nuclear ma terials. Penalty, pohcies appropnate for covenna the Radiation protection. Reportmg and nska of accidental nuclear releaset? If neonikeeping nqdrernents.
not. would the insurance industry JO CTR Port 40 provide this type of coverage?
1
- 1. What is the cost and availability of Government contracts. Hazardous l
property insurance from the materiale-transportation. Nuclear conventionalinsurance market and the materials. Penalty. Reporung and l
nuclear insurance pools to provide recordkeepmg requirements. Source j
cleanup coverage for sudden and matertal. lfraruum.
monsudden on-site accidental of 10crgpan61 unexpected releases of radioactive matenals from matenals hoensees? Ar, low-level waste. Nuclear matenals.
the terms and conditions of these Penalty. Weste treatment and disposal.
existmg types of pobeses appropriate for 10 CFR PcM 10 covenng the risks of accidental nuclear releases? If not. would the insurance Hazardous materials. transportation, industry provide this type of coverage?
Nuclear materials. Packaging and
- i. Are there financial assurance containers. Pensity. Radiation mechanisms and insurance policies protection. Reportmg and recordkeeping currently available to provide coverage requirements. Scientific equipment.
for environmental restoration of natural Security measures. Special nuclear resources?
material.
- k. How can the Commission ensure Nd#
that funds for cleanup are promptly available when an accidental release Manpower training programs. Nuclear occurs. while still preserving the rights matertale. Occupational safety and of guarantors to evoluete whether such health. Security measures. Spent fuel.
claims for cleanup are legitimete?
Reporting and recordkeepmg The Coenmission is particularly requirements.
l interested in heenne from both copulatory agencies with a history of The audienty a6tahon for this edmimstenne financial responsibility document is:
programs. as wsl1 as financial and Authertry: Sec.161. Pub 1. a34o3. 68 mourance instituteone on this issue.
Stat. Des as amanead 442 U.S.C. 220ti Furthermore,ifit appears that these is Dated at Washington. D C., tht 4th day of soms to be a delay before the guarentor luna.1ss6.
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SUMMARY
OF COMMENTS ON ANPRM FOR CLEANUP OF ACCIDENTAL RELEASES On November 9, 1985, the comment' period for the ANPRM ended. NRC Docketing Services received 159 letters of comment.
A.
Summarv i
The 159 letters can be broken out into the following categories:
I industrial and commercial licensees and their trade associations;
- medical licensees and medical associations; fuel cycle and waste management' licensees;
- county, state, and federal government agencies;
- banking, insurance, surety companies; j
- members of the public and environmental.
Each Commenter's letter was categorized in the following manner:
- Overall support of NRC rulemaking;
- Overall opposition to NRC rulemaking; or
- Neutral to NRC rulemaking.
For example, those who said that the type of radioactive materials they possessed should be exempted from the scope of this rulemaking, and who were against any rulemaking, were categorized as being opposed to the rule, if a letter of comment did not explicitly oppose the rule, but suggested that certain classes of materials should be exempted from consideration, it was considered neutral-.
The ANPRM asked for specific public input on 14 detailed questions pertaining to the rulemaking, ranging from accident histories, to availability of coverage, to suggestions for how to match the amount of coverage with the type-of material possessed.
Most commenters did not respond to the specific comments, but instead focused on one or two main points. -Most addressed the cost impact of any future regulations, questioned the need for the rule, and suggested exempting certain categories of materials from coverage.
A summary of the issues raised by the various groups follows:
B.
Industrial Licensees and their Associations This group was the largest contributor of comments. Approximately 86 comment-ers (54%) came from this group.
Typical users in this category included industrial radiographers and others who possessed gauging and well logging devices.
Approximately 9% of these commenters supportedffurther Commission 1
rulemaking to develop financial responsibility standards for cleanup of accidental releases.
The remainder of the commenters were divided between those who oppose any continued rulemaking and those comments that could be categorized as neutral to the rulemaking. Most opposing further NRC rulemak-ing in this area did so because of the perceived negative cost impacts such standards would have on their business.
Several commenters noted that their I
e
experience with accidents did not warrant such Commission standards. Several gauging device users said that they had years of experience and had never had a sealed source fail or disperse radioactive materials, even after gauges had been in fires or explosions.
Some felt further NRC rulemaking should be curtailed pending further study of the problem. Others said it was unfair to impose financial assurance require-ments on' all licensees because of a few isolated incidents.
Others expressed opposition to any regulatory requirement because of the high cost and.diffi-culty of obtz",ing any kind of insurance.
A few commenters said they had contacted their insurance agents to ask if insurance coverage was available and were informed that such coverage was not available at the present time.
Several commenters suggested that the lack of insurance coverage could be handled by having a Federally-funded insurance program or fund to pay for cleanup of accidental releases of radioactive materials.
(Note that this is somewhat contrary to what the staff has recently learned from discussions with American Nuclear Insurers (ANI).
According to ANI, normal business insurance would cover contamination accidents in that these would typically be considered as a potential liability.
For large licensees, such as fuel cycle facilities, ANI provides specific radiation accident coverage.)
In general, many industrial users cautioned the Commission to match the amount-of coverage required with the type of materials possessed.
Some felt the Commission should develop a sliding scale of coverage based on quantities or types of materials possessed.
Industrial users-commenting also generally supported exempting certain licensees from consideration.
Most industrial licensees categorized as neutral to the rulemaking. suggested that if the Commission were to proceed with a rulemaking, then certain categories of materials should be exempted, based on the type, activity, or concentration of materials possessed.
A variety of different exemptions were proposed, but, as might be expected, most systems proposed by commenters had the effect of exempting their category of materials from coverage.
Many sealed source users were also careful to note that encapsulation of radioactive materials lessened the chance for accidental release, and many industrial radiographers felt that because their sources were encapsulated, there was almost no chance for significant cleanup to occur following an accident.
Several users of Troxler nuclear gauges said that because their sources were Cs-137 and Am-241, they should be exempted because these gauges could create only minimal contamination.
Several commenters said that it was premature for the Commission to require funding for cleanup, when no standards governing acceptable levels of contami-nation yet exist. They suggested that the Commission consider other alterna-tives to cleanup, such as temporary isolation of the contaminated property.
Other users of gauging devices noted that they were small businesses and that such a requirement would create a more severe impact on them than on other larger companies.
Some gauge users stated that if the NRC were to develop standards requiring them to obtain financial assurance for cleanup, they would either terminate their license and return the device to the manufacturersaDr cease operating.
C.
Medical Licensees and Medical Associations About 36 commenters belonged to this category. This group comprised around 23%
of the total.
Again, the vast majority of this group was either neutral or opposed to a continued NRC rulemaking effort to promulgate financial responsibility requirements for cleanup.
Several stated that their materials were already tightly regulated at the State and Federal level and that no further requirements were necessary.
Interestingly enough,_ neither of the two irrge companies, a large nuclear pharmacy and a radiopharmaceutical production facility, opposed this rule.
However, most of the commenter who possessed medical licenses characterized themselves as small businesses and said that requiring them to demonstratt financial responsibility for cleanup of $2 million would gave a severe economic impact on both themselves and their customers.
Some of the medical groups noted that they had previous ' experience with high premiums for medical malpractice insurance and expressed concern that a similar problem would occur with this rulemaking. Another said that such a program would only benefit insurance companies and attorneys.
Several felt that the. costs would severely impact their patients.
A variety of different sliding scales for coverage were proposed.
Some recommended exempting diagnostic and nuclear medicine users because the majority possessed materials with short half-lives and relatively small activities. One commenter recommended exempting in-vivo nuclear medicine users, because 90% of them use Tc-99m, which has a relatively sof t gamma ray and a half-life of 6 hours6.944444e-5 days <br />0.00167 hours <br />9.920635e-6 weeks <br />2.283e-6 months <br />. Another suggested that diagnostic nuclear medicine users should not be considered in this rulemaking, except for users of gadolinium-153, which has' a long half-life and large activity.
Several therapeutic nuclear medicine commenters who possessed I-131 and P-32 radionuclides recommended they should not be required to demonstrate coverage for the purposes of the ANPRM, because of the short half-lives of these materials.
One commenter suggested that teletherapy machine users should be required to demonstrate financial responsibility for cleanup of a major source disruption, because of the expense and hazard of performing the cleanup. Another suggested that teletherapy users possessing Co-60 or Cs-137 had their teletherapy machined loc <.ted in heavily shielded, isolated rooms, with restricted access. He pointed out that the chances for an accident were remote, and even if one were to occur, it would be relatively easy to cleanup.
Commenters who possessed sources for brachytherapy, such as Cs-137, I-125, and Ir-192, also felt they should be exempted because of their small size and because cleanup would be inexpensive and fairly rapid.
One commenter suggested that institutional licensees probably don't need to oemonstrate financial assurance for cleanup of brachytherapy devices but suggested that individual physicians should be covered.
Several commenters expressed doubt that any insurance coverage was available from the market for this type of risk. As an alternative, several parties suggested that a pool be established for cleanup costs.
Each affected licensee would contribute amounts based on the scope and chance for release of radioactive materials.
D.
Fuel Cycle and Waste Manaaement Licensees NRC received about five letters of comment, or approximately 3% of the total, from this group.
Several commenters suggested they should be exempted from further consideration, the remaining being neutral. One low level waste disposal licensee explained that his operation already had liability coverage from the nuclear insurance pools.
Another felt that NRC should consider other alternatives besides rulemaking. such as more inspections. One erpressed relief that the NRC was considering the use of parent company guarantees.
E.
Local. State. and Federal Govarnments NRC received approximately 25 letters of comments form this group, which constituted around 16% of the total number of comments received. Most commenters I
supported the rulemaking and five were neutral.
One Government commenter expressed the position that the rulemaking did not go far enough.
i State gove nments gave examples of bankrupt licensees in their jurisdiction to support the rulemaking, although many of these examples are decommissioning 3
cases. One noted that their State government had experienced a substantial loss due to a licensee's lack of financial responsibility and urged that the proposed l
rulemaking and implementation should proceed as rapidly as possible.
Other commenters in this category cautioned the NRC to structure any future regulations so as to minimize the administrative burden of such a program. One commenter cautioned that licensees would pass on to the consumers the cost of the l
rule. Several agencies also recommended that any such program should reflect the type and amount of radioactive materials possessed by licensees.
Another cautioned that sealed sources users should not be automatically exempted from coverage, since the possibility for source rupture by well loggers was higher than those sources used by radiographers.
One suggested that a precedent for such a categorization occurred within the NRC's fee schedule found in 10 CFR 170.
Another Federal agency cautioned that the $2 million upper limit may be too low, based on its cleanup experience.
The agency-noted that the average ost of a Superfund remedial action has been estimated at approximately $7 millico and that releases affecting groundwater fall into the $10-$12 million range.
Finally, some commenters asked how such a financial responsibility program would be made a matter of compatibility with the Agreement States.
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E.
Bankina. Insurance. Surety. Public and Environmental Groups The NRC received three letters of comment form members of the general public and environmental groups and three letters of comment from banking, insurance, and-surety groups which constituted around 2% each of the total.
The public and environmental groups are in favor of the rule, and the banking, insurance 'and surety groups are mostly neutral.
Several individuals s'rongly felt that the 1
Commission had not done enough in this area and that tne present situation i
mandated that all costs of cleanup be passed on to either the taxpayers or the ratepayers.
Another felt that the 32 million proposed upper ceiling was too low, when compared to the U.S. EPA's requirements that owners and operators of hazardous waste facilities carry coverage from $1 to $E million. One
I J.
commenter' representing surety companies expressed the fact that-although the Commission may require financial assurance.in this area, most materials
-licensees will not qualify for surety.
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Encl. 3 Sununary and Analysis of NUREG/CR-4825, NUREG/CR-5381, NUREG/CR-4958, and Two SCA Reports NUREG/CR-4825. " A PRELIMINARY EVA'"[ TION OF THE ECONOMIC RISK FOR CLEANUP OF NUCLEAR MATERIAL LICENSEE CONTAMil.N.'ON INCIDENTS" This report documented an analysis of the economic risks from nuclear materials licensee contamination incidents. The purpose of this study was to provide a rational basis for the development of a financial assurance schedule to be implemented through rulemaking. Contamination risk was defined as the average annual cost for accidents per licensee.
For the purpose of this report, health risk associated with such accidents was not considered.
The risk estimates in this report were based solely on data from the NRC Non-Reactor Event Report database.
In the 7 year period covered by this report, only 60 contamination incidents were reported.
Less than half of these were reported by NRC licensees. The remaining incidents were reported by Agreement State licensees.
Based on this extremely limited data, any esticate af potential cost of cleanup contains large uncertainties.
While it is possible to quantify the cost of cleanup of many potential contamination incidents, it is very difficult to determine the likelihood that such an incident might occur. At this time, there is no evidence that the cost for cleanup of any actual contamination incidents were beyond the financial resources of the licensee.'
NUREG/CR-5381. " ECONOMIC RISK OF CONTAMINATION CLEANUP COSTS RESULTING FROM LARGE NONREACTOR NUCLEAR MATERIAL OPERATIONS" This report was the second of two reports on the economic risk of nonreactcr material licensee contamination events.
Potential incident scenarios involving the accidental release of radioactive material at five nonreactor nuclear material facilities were examined. Many of the incident scenarios examined have not occurred at any NRC or Agreement State licensed facilities.
NUREG/CR-4958. " IMPACT OF PROPOSED FINANCIAL ASSURANCE RE0VIREMENTS ON NUCLEAR MATERIALS LICENSEES" This report was prepared to provide information and analysis for potential rulemaking on financial assurance site cleanup following a contamination incident. The report reviewed characteristics of potentially affected i
licensees and the costs associated with providing financial assurance. The report assumed that $2 million was the upper limit of cleanup cost.
Several simplifying assumptions were made to determine the amount of insurance each
' Region III has reported that one licensee which reported a contamination incident in 1980 may become insolvent as a result of cleanup costs.
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licensee type would require.
In addition, the report examined the impact of financial assurance rulemaking on small business. The report states that the impact would be significant.
The PNL report co.cludes that there would be a benefit to the proposed rulemaking. The principal benefit is reduced government costs for accident cleanup. The second benefit is that regulatory agencies would not.have to amass a cleanup fund.
Thirdly, more rapid cleanup would likely occur if financial resources were immediately available.
Finally, the report states t
that accidents would be less likely to occur if insurance premiums were based on an operating history of safe operation. However, the report goes on to i
state that the estimated cost of incident contamination insurance is excessive and that the probability of an incident for which financial resources for cleanup are not available is extremely low. The report also states that the impact on small businesses would be significant.
The total quantifiable financial benefit is estimated to be $1-7 million. The cost is estimated to be over $10 million.
SANDY COHEN AND ASSOCIATES REPORTS " REVIEW 0F THE TECHNICAL BASIS FOR THE FINANCIAL ASSURANCE FOR ACCIDENTS RULEMAKING" AND " FINANCIAL RESPONSIBILITY
)
FOR CLEANUP OF ACCIDENTAL RELEASES OF RADI0 ACTIVE MATERIALS BY MATERIALS LICENSEES" These reports reviewed SNL reports NUREG/CR-4825, NUREG/CR-5381, and PNL the report NUREG/CR-4958.
In addition, these studies examined the available data in the Non-Reactor Event Report database which was reported by licensees since the publication of the above contractor reports.
These reports concluded that the potential number of contamination events is quite small, and of those, the number that could result in costs to the taxpayers is even smaller. Many of the events that are postulated as requiring taxpayer monies for cleanup are not credible given current regulations.
STAFF ANALYSIS While it is possible to quantify the cost of cleanup of certain postulated accidents, it would appear to be very difficult to determine the likelihood of such accidents. Moreover, based upon the staff's review of the.above reports as well as a conversation with an ANI underwriter (noted elsewhere), the staff concluded that the likelihood of an offsite contamination accident resulting in cleanup costs beyond the financial resources of materials licensees (either their own assets, or insurance, or both) is very low.
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