ML20140E425

Requests Commission Direction on Oklahoma Draft Agreement Proposal Which Would Exclude Major Facilities Undergoing Decommissioning

ML20140E425
Person / Time
Issue date:	04/22/1997
From:	Callan L NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
To:
References
SECY-97-087, SECY-97-087-R, SECY-97-87, SECY-97-87-R, NUDOCS 9704280234
Download: ML20140E425 (12)

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POLICY ISSUI j (Notation Vote) j April 22,1997 SECY-97-087 EQB: The Commissioners l

FROM: L. Joseph Callan l Executive Director for Operations

SUBJECT:

OKLAHOMA AGREEMENT STATE NEGOTIATIONS: STATE REQUESTS

! THAT MAJOR FACILITIES UNDERGOING SITE DECOMMISSIONING

! NOT BE RELINQUISHED TO STATE l l

PURPOSE:

To obtain Commission direction on Oklahoma's draft Agreement proposal which would l exclude major facilities undergoing decommissioning.

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SUMMARY

l The State of Oklahoma's draft application to become an Agreement State requests that NRC retain jurisdiction for the five Site Decommissioning Management Plan (SDMP) sites located in Oklahoma. While the Commission has entered into a variety of " limited" Agreements with States in the past, Oklahoma's proposed approach would be inconsistent i with past Commission practice in this area. From a policy perspective, the proposal is  ;

l likely to create an unwieldy and confusing pattern of regulation in Oklahoma and, possibly,

! other States in the future. In addition, under these circumstances, implementation of the I

approach may be inconsistent with the Commission's authority under the Atomic Energy Act (AEA). As such, the staff plans to deny Oklahoma's request. This paper sets out the j staff's planned approach to address requests for limited Agreements in the future.

j BACKGROUND:

In June 1995, the Office of State Programs received a draft application for an Agreement under 274b of the AEA, as amended, from the Executive Director of the State of Oklahoma's Department of Environmental Quality. The draft application / /

Contact:

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! The Commissioners 2 l

i indicated that Oklahoma would like to seek a full Agreement, with authority to regulate l AEA 11e(1) byproduct materials, source material, and special nuclear materials in less than

! critical mass quantities, in addition, the draft application indicated that the State would l like to have excluded from its proposed Agreement AEA 11e(2) byproduct mateJals, and major facilities undergoing decommissioning. These facilities would remain under Federal jurisdiction. The State of Oklahoma identified these facilities as Sequoyah Fuels, Kerr-McGee facilities at Crescent and Cushing, Fansteel, and Kaiser Aluminum. The State noted that those facilities are in various stages of decommissioning and that in order for Oklahoma to assume regulatory responsibility over these facilities the State would have to rapidly develop its expertise, which the State believes would lengthen the decommissioning process. The State of Oklahoma also indicated in a subsequent letter dated November 16, 1995 (Attachment 1) that in addition to a delay in decommissioning, they believe there ara potential legal and technical problems involved in acquiring jurisdiction over these facilities.

Additional information regarding these problems and Oklahoma's view that there are equity and practicality grounds for granting their request are contained in a recent letter dated l March 10,1997 (Attachment 2).

Staff notes that Oklahoma states in their March 10,1997 letter that NRC would always have exercised regulatory jurisdiction over the ' identified SDMP facilities since they are fuel cycle facilities. First, staff notes that fuel cycle facilities that do not qualify as production l facilities under the AEA and possess only source materials licenses (e.g., mills, conversion plants) would normally be subject to Agreement State regulation. Second, with the exception of Sequoyah Fuels, the facilities identified by Oklahoma are not fuel cycle l facilities. In fact, all of the facilities identified by Oklahoma would fall under the State's jurisdiction if the State were to enter into a 274b Agreement that includes source material in the transfer of jurisdiction.

DISCUSSION:

1. Historical Section 274b of the AEA states, l

"... the Commission is authorized to enter into Agreements with the Governor of any State providing for discontinuance of the regulatory authority of the l Commission under chapters 6,7, and 8, and .section 161 of the Act, with respect I

to any one or more (Emphasis added) of the following materials within the State --

(1) byproduct materials as defined in section 11e(1);

(2) byproduct materials as defined in section 11e(2);

[ (3) source materials; (4) special nuclear materials in quantities not sufficient to form a critical mass."

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The Commissioners 3 From the first Agreement signed with the State of Kentucky in 1962 to the 25th j Agreement signed in 1974 with New Mexico, all the Agreement documents in Article I specified the areas to be assumed by the State as byproduct materials, source materials and special nuclear materials in quantities not sufficient to form a critical mass. In 1978, Congress enacted the Uranium Mill Tailings Radiation Control Act (UMTRCA), which, among other things, added to the category of byproduct material " tailings or v'astes produced by the extraction or concentration of uranium or thorium from any . re processed primarily for its source material content." In addition, the Low-Level Radioactive Waste Policy Act of 1980 was enacted which required States to develop low-level radioactive waste disposal facilities.

As a result of these legislative changes, in January 1981 the Commission revised its policy statement regarding criteria for guidance of States and NRC in discontinuance of NRC regulatory authority and assumption of regulatory authority by States through Agreement (46 FR 7540, January 23,1981; as amended by policy statements published at 46 FR 36969, July 16,1981; and 48 FR 33376, July 21,1983). The policy statement allowed States to enter into Agreements for low-level radioactive waste only, and incorporated provisions and requirements of the UMTRCA. The revisions to the policy statement also allowed States that meet the criteria for the regulation of uranium mills and tailings under UMTRCA to obtain regulatory authority over 11e(2) byproduct materials through an Agreement. Thus, subsequent to 1978, all Agreement documents in Article I specified byproduct materials 11e(1) and/or 11e(2) as an area being assumed through Agreement with the Commission. In addition, those States which had entered into an Agreement prior to 1978 and desired to have authority over mill tailings, i.e., AEA 11e(2) byproduct materials, amended their Agreements with NRC to cover this regulatory area (Colorado, Texas, and Washington).

An additional policy change has affected the areas of regulatory authority addressed in Agreements with States. This change is reflected in the Commission's June 30,1995 decision in response to SECY-95-136, " Options to improve and Standardize the Evaluation and Approval of Sealed Sources and Devices Manufactured in Agreement States." The Commission decision offers the Agreement States the opportunity to either voluntarily return to the NRC the authority to evaluate sealed sources and devices (SS&D) or to retain it.

Collectively, these changes have allowed States to enter into more specific Agreements tailored to State needs. These Agreements involve the transfer of authority over l

" subcategories" of material and, as such, constitute limited Agreements. In other words, the transfer of authority has involved portions of the regulated activity covered by the specific categories delineated in Section 274b. For example, a State can elect to obtain authority to regulate byproduct, source, and limited amounts of special nuclear materialin all activities, regulate these materials only with respect to disposal of low-level radioactive waste or elect to exclude low-level radioactive waste or uranium mill tailings activities from 1 its Agreement with the NRC. Examples include the return by the New Mexico Agreement  !

State Program of authority for the regulation of uranium mills to the NRC and the recent decisions by some Agreement States to return jurisdiction to evaluate and approve SS&Ds.

Despite these examples, the acceptable bounds for entering into tailored or limited

The Commissioners 4 Agreements has never been fully defined by NRC. However, absent concerns of national ,

defense, NRC has not entertained requests for Agreements involving the transfer of j authority over single licensees absent an identified subcategory of material. Such Agreements have been viewed as inconsistent with the provisions of the AEA.

Thus, the staff believes that the approach taken by NRC in addressing Oklahoma's request could have a significant impact in the development of future Agreements and any amendments to existing ones. For instance, an approach that may be workable in the L context of the Oklahoma Agreement may create significant difficulties if applied to another i: State, such as allowing States to refrain from obtaining Agreement authority over individual l_ licenses perceived as difficult or complex.

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l 11. Reauests from States l Recently, some Agreement States and non Agreement States have expressed an interest in obtaining more specific Agreements tailored to their needs. Some non-Agreement States have indicated their desire to forego assumption of authority over specific licensees when these States enter into an Agreement with the NRC pursuant to Section 274b of the AEA.

In addition, similar issues have been raised in the past by existing Agreement States. For example, 'in 1994, Wyoming inquired about the possibility of entering into a limited 274b Agreement with the NRC for in situ uranium mining only. Under this proposed Agreement, the NRC would not relinquish regulatory authority over conventional mining and associated mill tailings disposal. The State of Wyoming was informed that the NRC needed to further i evaluate whether such a limited program would be consistent with the Subsection 274a(3) l of the AEA provision which identifies one of the purposes of Section 274 as promoting 1

"... an orderly pattern between the Commission and the State governments with respect to the development and use and regulation of byproduct, source, and special nuclear materials." In addition, the staff informed the State of Wyoming that before the NRC proceeded with further evaluation of a limited Agreement for in situ uranium recovery, the State should provide the NRC additional clarification on whether the State desired to l

pursue the limited Agreement further. No clarification on this issue has yet been provided.

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l Utah has expressed interest in obtaining a modification to their Agreement to allow the State to assume authority over disposal of 11e(2) byproduct material at one facility, Envirocare of Utah, Inc. The staff informed the State of Utah that an NRC Agreement for the transfer of regulatory authority for a single licensee would be inconsistent with the provisions of Section 274b of the AEA. The State of New York requested a decision on their ability to return SS&D evaluation authority back to the Commission. Through the Commission's direction in the Staff Requirement Memorandum for SECY-95136, " Options to improve and Standardize the Evaluation and Approval of Sealed Sources and Devices Manufactured in Agreement States," the Commission approved voluntary relinquishment of authority over SS&D programs by an Agreement State.

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~ lit. Oklahoma's Proposat i

As noted under the "Backgroun;" section of this paper the CMahoma draft application for

Agreement State status indicated that the State would like to r eek a full Agreement, with i

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The Commissioners 5 authority to regulate AEA 11e(1) byproduct materials, source material, and special nuclear i

materials in less than critical mass quantities. However, the State would like to have exempted from its proposed Agreement major facilities undergoing decommissioning. The State of Oklahoma identified these facilities as Sequoyah Fuels, Kerr-McGee facilities at Crescent and Cushing, Fansteel, and Kaiser Aluminum. The State would like these facilities to remain under Federal jurisdiction.

The staff believes that the Oklahoma proposed Agreement approach would be inappropriate from a policy perspective. in addition, the Office of the General Counsel has indicated that implementation of this approach may be inconsistent with the Commission's authority under the AEA. As such, the staff plans to deny Oklahoma's request.

The Oklahoma request raises several concerns. First, the limitation of NRC authority to a few, discrete licensees is likely to create future problems if the State otherwise receives authority to regulate the types of activities conducted by those reserved licensees. Under Oklahoma's proposal, NRC retains authority over Fansteel, a source materiallicensee conducting rare earth extraction, if a similar operation sought a license a month after the Agreement, Oklahoma would have to license and regulate that licensee under the State's newly acquired authority over source material. This would create a form of dual regulation.

Both NRC and Oklahoma would be regulating the same type of activities in the same State.

Nothing in the Oklahoma proposal would allow the State and NRC to avoid the confusion and duplication created by this approach. If such an approach were employed in Oklahoma and other States, the pattern of NRC and Agreement State regulation could become confusing. This is not the case with limited Agreements created by NRC in the past such as the reservation of SS&D authority.

In addition, the basis for Oklahoma's proposal would raise concerns regarding NRC's confidence in the adequacy of Oklahoma's program. At the time of the Agreement, NRC should have reasonable assurance that the State can adequately regulate any matters involving activities and materials included under the Agreement regardless of the complexity of such activities. Accordingly, the fact that the specific sites identified by Oklahoma involve particularly complex regulatory issues is a poor rationale for retaining NRC authority in the manner proposed by Oklahoma.

IV. Future Acoroach In order to aid in addressing such issues in the future, the staff seeks Commission consideration and approval of the staff's planned approach. Since, as discussed earlier, NRC has already entered into a variety of limited Agreements in the past, there is precedent for certain types of arrangements. However, there is little guidance to address new proposals that have not been considered in the past.

Due to the variety of material and licensed activities involved, specific, detailed guidance on this issue is not appropriate. As such, the staff plans to approach future requests for limited Agreements on a case by case basis giving consideration to the following general guidelines stemming from issues raised by the Oklahoma proposal. Overall, the staff would consider whether the proposed Agreement would jeopardize "...an orderly regulatory

I The Commissioners 6 l

j pattern between the Commission and the State governments..." as indicated by Section 274a(3) of the AEA. In particular, requests for limited Agreements would have to identify j- discrete categories of material or classes of licensed activity that (1) can be reserved to l NRC authority without undue confusion to tre regulated community or burden to NRC resources, and (2) can be applied logically, and consistently to existing and future licensees over time. Under this approach, NRC would not reserve authority over a single license i unless that licensee clearly constituted a single class of activity or category of material l meeting the two criteria described above. ,

i p in applying this approach in the future, the staff willinform the Commission concerning 1- any issues that are difficult to resolve or that involve significant disagreement between i NRC and a State.

$ RECOMMENDATION:

i l That the Commission approve: ,

'1. The denial of the Oklahoma request to enter into an Agreement which would

, exc!ude five SDMP sites, Sequoyah Fuels, Kerr-McGee facilities at Crescent

{ and Cushing, Fansteel, and Kaiser Aluminum.

4 j 2. The staff's approach for the handling of requests for limited Agreements.

COORDINATION

4 The Office of the General Counsel has no legal objections with the staff's recommended approach, noting that there would be legalissues if the Oklahoma proposal were approved.

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r L.J< spph Callan ExecWtive Director for Operations Attachments 1. Letter Dated November 16,1995 from H. A. Caves to R. Bangart

2. Letter Dated March 10,1997 from H. A. Caves to R. Bangart

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7 Commissioners' coments or consent should be provided directly to the Office of the Secretary by c.o.b. Friday, May 9, 1997.

. Commission staff office comments, if any, should be submitted to i the Commissioners NLT May 2, 1997, with an information 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 i OGC i

OCAA OIG

OPA OCA EDO REGION IV SECY l

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ATTACHMENT 1 y

j MARKS.COLEMAN FRANK KEATING Executive Directnr Governor State of Oklahoma

DEPARTMENT OF ENVIRONMENTAL QUALITY s

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- November 16, 1995 4

Richard Bangart, Director

! Office of State Programs

Nuclear Regula' tory Commission

? Washington, D. C. 20555

Dear Mr. Bangart:

. As you know, the State of Oklahoma has applied to your agency tnr i

Agreement State status. Our application proposen 1 caving jurisdiction over the large facilities currently unc' ,rgoing decommissioning in our state with the MC due to the complex and

• 4 critical nature of such decommissioning. Recently you informed Mike Broderick, Administrator of the Radiation Management Snetion of the Department of Environmental Quality (DEQ), of your i

preliminary position that the jurisdiction over sodrco material

could not be split between the NRC and the ctato. In addition tn the delay in decommissioning which would be incurred by a trancter i of jurisdiction, we have previously diFCussed the potential 30g01 and technical problems involved.

1 We understand your position stems from a belief that the Atomic Energy Act (AEA) does not allow breaking up a category in this i fashion, but instead requires trancfar of all exampinr, of n i specific sou'rce type (in this case, source material) . However, the AEA plainly intends to allow state programs to assume authority in areas where they are competant. Congress surely did not intend to force states to over-extend themselves.

To avoid these problems, we could withdraw our application as it l

1 pertains to source material. Thic approach would subject a number of licensees to regulation by both the NRC and the DEQ. Further, both agencies would be conducting and funding parallel inspection and licensing programs for the same licensees. Many of these licensees are research institutions which pay no fens or are shielding-only licensees which pay small fees. Splitting i jurisdiction in this manner would create substantial administrativo i problems for both Oklahoma and the NRC. To force regulators and licensees to live under this type of burdensome regulatory scheme is not within the purpose of the AEA.

Precedent for withholding jurisdiction over certain areas from agreement statis exists. The NRC is currently giving states the opticn of decyning jurisdiction over sealed source and device i.u. w.. w . ww .. .. mn 3m O . ~ .e ..

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j i evaluations. NRC correctly reasons that it is impractical for many 1 states to ma $tain the expertise to do these evaluations. NRC is

, not forcing the states to maintain this specialized expertise

! unless the state feels it is necessark. We believe that this same approach can and should be applied t o the special knowledge base needed.for oversight of large decomunseioning facilities.

l In addition, certain state licensees undergoing decommissioning i have been part of the Uranium fuel cycle which Nnc is mandated to regulate. .Th e ' MRC reasons that the facilities are no longer I operational and thus no longer in the futi cycle. Following this l reasoning, states could clain jurisdiction over nuclear reactors j undergoing decommissioning. .

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We look forward to working with the NRC to achieve a reasonabic i resolution of this issue. We genuinely appreciate the efforts v1 4

Region IV and the Office.of State Programs in workjng with ur on

our application, and in assisting our preparation through their l

exceli.>nt training program.

j Sincerely, ef44 ,

H. A. Caves Assistant Division Director Waste Hanagement Division e

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ATTACHMENT 2 I .

4 e MARK S. COLEMAN FRANK KEATING l

Executive Director Governor State of Oklahoma DEPARTMENT OF ENVIRONMENTAL QUALITY March 10,1997 Richard Bangart Office of State Programs U.S. Nuclear Regulatory Commission e Washington, D. C. 20555-0001 g

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Dear Mr. Bangart:

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The Oklahoma Department of Environmental Quality (DEQ) has requested that after $ 7

- Oklahoma becomes an Agreement State, the NRC retainjurisdiction over large sites us undergoing decommissioning. It is our understanding that our request is being sent toge

Commission for consideration. This letter contains our comments on the subject. We l 4

request that you provide this letter to the Commission for their consideration before they l

decide this issue. Our request is based on two grounds, one of practicality, and one of equity. We are convinced that the Atomic Energy Act (AEA) clearly provides a l

mechanism for our request to be fulfilled. I We believe the most practical alternative is for oversight of decommissioning of sites such as these to remain at the federal level. Oklahoma has five such sites, and it is unlikely that more will emerge. Nationally, there are many sites of this sort, and it is likely that newly-closed sites will require decommissioning for as far in the future as can be foreseen.

. Decommissioning of these sites requires a great deal of specialized expertise. We do not believe that it makes sense to require Oklahoma's program to develop this specialized expertise only to have it become unnecessary when the five existing sites are  :

decommissioned. There are undoubtedly other states in a similar situation. If such states ,

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wish to take jurisdiction for this transient function, they should certainly be allowed to do l so, but we do not feel that it is sensible to require it. It makes sense for these projects to be managed on a national level, so that NRC personnel assigned to a successfully- I decommissioned facility can be reassigned to newly-emerging sites in other states.

Most of these sites in Oklahuma have been undergoing decommissioning for several years.

For Oklahoma to assume oversight would undoubtedly incur a significant delay. Some of these sites are at critical points in the process, where changing regulators could cause confusion. To our knowledge, none of the decommissioning sites has expressed an eagerness for the state to take jurisdiction. It does not make sense to introduce these delays and uncertainties into an already difficult process.

There is an important equity issue involved. Several of these sites in Oklahoma were considered part of the nuclear fuel cycle when they were operational. As part of the wonn...a,mn su t ou.n . ca, oua unum O e ,.,,,

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l' i nuclear fuel cycle, the Atomic Energy Act reserved them for federal jurisdiction, even if l

Oklahoma had chosen to become an Agreement State at that time. There was no means for the State to gainjurisdiction over these sites while they were in operation.

! NRC made a number of decisions involving the regulation of these sites, and many now have substantial contamination problems. In addition, NRC made a number of decisions affecting the financial assurance for decommissioning of these sites, including the approval of a sale to a new owner in one case. As a result, the ability of the current owners to I afford decommissioning of some of these sites is in doubt. For the Uranium fuel cycle sites, Oklahoma had no way to have jurisdiction when the decisions were made. I 1

The NRC made the regulatory decisions impacting the current status of these' sites, and j should resolve the resulting problems. l There is ample authority and precedent for granting our request. NRC has separated out jurisdiction over limited functions in other cases, notably sealed source device evaluations. I Subsection 274 (i) of the AEA specifies that "The Commission in carrying out its licensing and regulatory responsibilities under this Act is authorized to enter into agreements with )

any State, or group of states, to perform inspections or other functions on a cooperative '

basis as the Commission deems appropriate." As provided for by Subsection 274(i), we request that NRC retain authority over the inspections and other functions regarding decommissioning oflarge sites in Oklahoma. We would expect this to include Sequoyah Fuels, the Kerr-McGee Cimarron and Cushing sites, Kaiser Aluminum, and Fansteel.

Our understanding is that NRC staff suggests that the only way for NRC to retain jurisdiction of these sites is by Oklahoma excluding the entire category of source material from our Agreement until such time as work on decommissioning these sites was l completed. If necessary, we will do this, but we believe the results will be less than I optimal. This would result in some source material licensees being under dual NRC-DEQ jurisdiction (since DEQ would have jurisdiction over byproduct material there). NRC would be compelled to continue inspection and, licensing activities for many licensees within Oklahoma, a number of which are academic institutions paying no fees. We believe our proposal is more economical and sensible.

We appreciate the cooperation we have received from NRC staffin our move to become an Agreement State, and we thank you for your consideration of our comments on this matter.

Sincerely, l

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H. A. Caves Director Waste Management Division i

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