ML20155H112

Insp Rept 99990002/98-02 for Southern Processing Enterprises on 980702-1009.Violations Noted.Major Areas Inspected: Followup on Licensee 980512 Rept to Commonwealth of Kentucky Re Improper Transfer of Licensed Devices

ML20155H112
Person / Time
Issue date:	10/30/1998
From:	NRC OFFICE OF INSPECTION & ENFORCEMENT (IE REGION II)
To:
Shared Package
ML20155H080	List: ML20155H076 ML20155H100 ML20155H112
References
REF-QA-99990002-981030 99990002-98-02, 99990002-98-2, NUDOCS 9811090349
Download: ML20155H112 (6)

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U.S. NUCLEAR REGULATORY COMMISSION REGION 11

- Docket No.: 999-90002 License No.: None '

Report No.:- 999-90002/98-02 Facility: Southern Processing Enterprises i

Location: Beckley, West Virginia Dates: July 2 and October 9,1998 Inspector: H4ctor Berm 0dez, Senior Radiation Specialist  !

. Approved by: Mark S. Lesser, Chief Materials Licensing / Inspection Branch 2 Division of Nuclear Materials Safety Enclosure 2 l

9811090349 981030 "

PDR GA999 EMV*****

999900002 PDR

EXECUTIVE

SUMMARY

. Southern Processing Enterprises NRC Inspection Report No. 999-90002/98-01 This special, announced inspection was conducted in order to follow up on Southern Processing Enterprises'(SPE's) May 12,1998, report to the Commonwealth of Kentucky regarding an improper transfer of generally licensed devices to the Commonwealth of Kentucky and the State of Tennessee on or about early May 1998. The inspection revealed that SPE personnel removed from installation at a generally licensed former Childress Service Corporation facility two generally licensed devices and transferred one device to a non-licensed facility in Kentucky and the other device to a non-licensed facility in Tennessee without having a valid license to conduct such activities. Within the scope of the inspection, the following apparent violations were identified:

Conduct of activities subject to licensing without a valid NRC license, contrary to 10 CFR 31.5(c)(3).

Unauthorized transfer of licensed material, contrary to 10 CFR 31.5(c)(8).

Attachment:

List of Persons Contacted Inspection Procedure Used List of Open items

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1 REPORT DETAILS l l

1. FOLLOW UP TO A REPORTED IMPROPER TRANSFER OF GENERALLY LICENSED I DEVICES TO THE COMMONWEALTH OF KENTUCKY AND THE STATE OF TENNESSEE l

a. Scoce  !

The inspector interviewed Southern Processing Enterprises (SPE) personnel involved in the reported improper transfers of generally licensed devices (nuclear gauges) to determine the circumstances surrounding the transfers and the associated safety and regulatory significance. The inspector reviewed and discussed in detail with SPE personnel pertinent regulatory requirements associated with certain activities conducted by SPE and the reasoning behind them,

b. Backaround On May 15,1998, the NRC Region 11 Office was notified by Commonwealth of Kentucky personnel that, on May 12,1998, they received a report from SPE's i Vice President for Operations regarding an improper transfer of two generally  !

licensed gauges, one to Kentucky and one to Tennessee, from a location in l southwestern West Virginia. Further NRC follow up revealed that the State of l Tennessee had been made aware of the existence of one of the gauges within l their jurisdiction and tt at personnel from both Kentucky and Tennessee I responded to the si9'., within their respective jurisdiction to ensure that I conditions involving the gauges were safe. The gauges involved were Ohmart Model SH-F1 devices and each contained one sealed source with a nominal activity of 250 millicuries of cesium-137. Kentucky personnel further indicated that the shutter of the device located within their jurisdiction was found stuck in the open position.

c. Observations and Findinas Through discussions with SPE's Vice President for Operations (VP) the inspector determined that the previous owner of the generally licensed devices, Childress Service Corporation (CSC), went out of business in late 1997. At that time, various properties, including the gauges, were acquired by SPE and the gauges were removed from installation by SPE's VP and p! aced in storage. The gauges remained mounted to the pipes in which they were originally installed; SPE's VP indicated that he cut the pipes above and below where the gauges were mounted in order to remove them to place them in storage. SPE's VP was an employee of CSC and had direct knowledge of the existence of the gauges and the proper way to transfer them. SPE later sold some equipment to Cumberland Coal Company, located in Tennessee, and Richardson Fuel, Inc., located in l Kentucky. The equipment sold to the two entities included one gauge to each I entity. SPE's VP knew that the gauges needed to be transferred to the vendor prior to the transfer to the two entities but indicated that they were inadvertently

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l transferred directly to the entities along with other equipment. The inadvertent I transfer resulted from miscommunications and/or misunderstandings between individuals who were hired to transport the equipment sold to the entities and SPE's VP, who was not present when the equipment was loaded for transfer.

SPE's VP erroneously assumed that the individuals knew that everything destined to the respective entities, except the gauges, was to be loaded and l transferred. Soon after the equipment was loaded and removed from location, SPE's VP went to the site to prepare the gauges for transfer to the vendor. As soon as he realized that the gauges were inadvertently included in the shipments and, therefore, an improper transfer had taken place, SPE's VP notified the vendor and Commonwealth of Kentucky personnel, who notified the State of Tennessee and the NRC.

The inspector reviewed the Sealed Source and Device Registration Certificate of I the Ohmart SH F1 device and determined that, with the shutter open, the device's output is approximately 1.6 mitirems per hour at 5 centimeters. The i inspector also learned during the inspection that the device remained attached to a section of the pipe on which it was oriphally mounted; therefore, the pipe provided shielding similar to that provided by the shutter. Based on the above, the inspector concluded that the potential for a member of the public to receive a whole body exposure in excess of the regulatory limit of 100 millirems in a year was negligible.

10 CFR 31.5(c)(3) requires, in part, that any person who transfers byproduct material in a device obtained pursuant to the generallicense specified in 10 CFR 31.5(a) assure that removal from installation involving the rad;oactive material, its shielding or containment, be performed by a person holding a specific license to perform such activity. SPE's VP indicated that he personally removed the gauges from installation at the former CSC location for transfer to the two entities through the vendor. He further indicated that neither he nor SPE had a specific license authorizing the activity and that he was unaware of the requirement that the removal from installation be performed by a person who was specifically licensed to perform the activity. The failure to assure that removal of the gauges from installation at the former CSC site be performed by a person specifically licensed to perform such activity was identified as an apparent violation of 10 CFR 31.5(c)(3).

10 CFR 31.5(c)(8) requires, in part, that the subject gauges be transferred only to persons specifically licensed to receive the gauges. Through discussions with personnel from Kentucky and Tennessee, the inspector determined that neither entity possessed a specific license authorizing the receipt of the devices. The inadvertent transfer of the gauges to two entities that did not have a specific license to receive them was identified as an apparent violation of 10 CFR 31.5(c)(8).

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d. Conclusions SPE was aware that the gauges were supposed to be transferred to the vendor, who had a specific license to receive them, prior to the transfer to the two entities and reported the inadvertent direct transfer to the entities. SPE was not aware that they were not authorized to perform the removal of the gauges for transfer to the entities. Two apparent violations of NRC requirements were identified.

2. EXIT MEETING

SUMMARY

At the conclusion of the inspection on October 9,1998, a summary of the inspection results was discussed with SPE representatives identified in the attachment. SPE was advised of the apparent violations of NRC requirements discu.ssed in this report and the NRC's Enforcement Policy was reviewed. No dissenting comments were received from SPE and SPE representatives expressed their interest in ensuring compliance with NRC requirements. Proprietary information is not contained in this report.

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ATTACHMENT

1. PERSONS CONTACTED l

• G. Bailey, Vice President for Operations

• J. Childress, President l

• Attended Exit Interview ,

i 2.- INSPECTION PROCEDURE USED 87100 - Licensed Materials Programs I l

3. LIST OF OPEN ITEMS  !

l item No. Item Tvoe Descriotion

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i 999-90002/98-01-01 eel Conduct of activities subject to  ;

licensing without a valid license. j 1

999-90002/98-01-02 eel Unauthorized transfer of licensed  !

materials.

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