ML23109A143

Environmental Properties Management, LLC - Application for Exemption of Fees Pursuant to 10 CFR 170.12 Docket No. 07000925; License No. SNM-928

ML23109A143
Person / Time
Site:	07000925
Issue date:	04/18/2023
From:	Halliburton B, Lux J Environmental Properties Management
To:	Office of Nuclear Material Safety and Safeguards, NRC/OCFO, Document Control Desk
References
Download: ML23109A143 (1)

Text

April 18, 2023

U.S. Nuclear Regulatory Commission Chief Financial Officer 11555 Rockville Pike Rockville, MD 20852-2738

Re: Application for Exemption of Fees Pursuant to 10 CFR 170.12 Docket No. 07000925; License No. SNM-928

Dear Sirs:

Solely as Trustee for the Cimarron Environmental Response Trust (CERT), Environmental Properties Management LLC (EPM) is advising the U. S. Nuclear Regulatory Commission (NRC), as a beneficiary of the CERT, that its beneficial interest in recovery of oversight fees conflicts with its beneficial interest in the decommissioning of the Cimarron site and termination of special nuclear materials license SNM-928.

The February 14, 2011, Environmental Response Trust Agreement (Cimarron) provides for recovery of NRC fees from CERT accounts. Paragraph 2.2.1 states that one of the objectives of the CERT is to perform all activities pursuant to the terms and conditions of the Cimarron License, including the preparation and impleme ntation of an NRC-approved decommissioning plan and groundwater remediation plan, and all Environmental Actions required under federal or state law.

Unfortunately, based on current remediation cost estimates, the CERT accounts do not provide sufficient funding to achieve compliance with all federal and state requirements. The State of Oklahoma has agreed to defer actions that would complete remediation to State cleanup criteria for the sole purpose of achieving termination of license SNM-928.

All that remains to achieve license termination is the removal of uranium from groundwater. It is not possible to achieve this goal if the NRC continues to recover oversight fees, which have constituted nearly one fourth of all decommissioning expenditures since 2011. Consequently, EPM is requesting exemption of NRC from pursuant to 10 CFR 170.12.

10 CFR 170.11(b) states, The Commission may, upon application by an interested person, or upon its own initiative, grant such exemptions from the requirements of this part as it determines are authorized by law and are otherwise in the public interest. Applications for exemption under this paragraph may include activities such as, but not limited to, the use of licensed materials for educational or noncommercial public displays or scientific collections.

EPM believes it is clearly in the public interest to reduce the concentration of enriched uranium in groundwater at the Cimarron site to concentrations that are less than the NRC Criterion

9400 Ward Parkway

• Kansas City, MO 64114 Tel: 405-642-5152

• jlux@envpm.com

stipulated in NRC license SNM-928, and to the extent achievable if not less than the NRC Criterion.

Prior to the full funding of the Trust accounts, the NRC deferred recovery of costs, with the intent that when the Trust accounts received additional funding from ongoing litigation, the deferred costs would be recovered. When additional funding was received, the NRC invoiced the Trust for all deferred fees. At a minimum, EPM requests that the NRC resume the policy of deferring all fees until the decommissioning of the site is complete.

The CERT is not an operating business that can generate additional funds to address an anticipated shortfall in funding. As both regulator and beneficiary of the CERT, the NRC has a unique role; as beneficiary, the NRC can decide whether to utilize Trust funds to recover fees or to complete the decommissioning of the site. provides background information which describes the formation of the CERT, the impact of NRC fee recovery on expenditures, and the basis for EPMs assertion that exemption or deferral of NRC fees is necessary for EPM to complete the decommissioning of the site.

If you have any questions or desire clarification, please contact me at jlux@envpm.com or (405) 642-5152.

Sincerely,

Bill Halliburton Trust Administrator

Jeff Lux Project Manager

cc: Jane Marshall, NRC Pamela Dizikes, Office of General Counsel, DEQ NRC Public Document Room DEQ vcpsubmittals@deq.ok.gov

9400 Ward Parkway

• Kansas City, MO 64114 Tel: 405-642-5152

• jlux@envpm.com

ATTACHMENT 1 APPLICATION FOR EXEMPTION FROM NRC FEES SUPPORTING INFORMATION

9400 Ward Parkway

• Kansas City, MO 64114 Tel: 405-642-5152

• jlux@envpm.com

ATTACHMENT 1 Application for Exemption from Fees Pursuant to 10 CFR 170.12 Supporting Information

The Formation of the Cimarron Environmental Response Trust The previous licensee, Cimarron Corporation, a subsidiary of Tronox Incorporated (Tronox),

notified the NRC that it had filed for relief under Chapter 11 of the U.S. Bankruptcy Code in a letter dated January 12, 2009.

Approximately two years later, on February 14, 2011, Tronox and its subsidiaries, numerous federal and state agencies, and the Navajo Nation executed a Consent Decree and Environmental Settlement Agreement (the Agreement). The Agreement created six Trusts, including the Cimarron Environmental Response Trust (the CERT). NRC License SNM-928 was transferred from Cimarron Corporation to the CERT.

For the remediation of the Cimarron Site, the Agreement established four accounts, initially funded by Tronox and subsequently by a settlement agreement with the Kerr-McGee Corporation and certain of its affiliates (New Kerr-McGee), and their parent Anadarko Petroleum Corporation, in a fraudulent conveyance case brought by the United States and co-plaintiff Anadarko Litigation Trust (the Trust) in the bankruptcy of Tronox Inc. and its subsidiaries (Tronox).

The NRC (on behalf of the United States) and the Oklahoma Department of Environmental Quality (DEQ) (on behalf of the State of Oklahoma) are the primary beneficiaries of the CERT.

The Agreement established the following three Trust accounts for which the NRC and the DEQ are both beneficiaries:

Cimarron Trust Administrative Account (Administrative Account)

Cimarron Trust Federal Environmental Cost Account (herein, State Account)

Cimarron Trust State Environmental Cost Account (herein, Federal Account)

A Letter of Credit held by the previous licensee was called in to create a Cimarron Standby Trust Fund, for which the NRC is the sole beneficiary.

Decommissioning/remediation costs are to be funded by the Federal Account and the State Account. Theoretically, State Account funds are to be used to achieve State criteria and Federal Account funds are to be used to achieve Federal criteria. Because reducing the concentration of uranium in groundwater represents progress toward achieving both Federal and State criteria, the NRC and the DEQ have agreed that both accounts will fund the decommissioning of the site.

The DEQ has agreed to defer remediation of other contaminants for now to preserve as much funding as possible to achieve termination of special nuclear materials license SNM-928.

The purpose for the Standby Trust Fund was not specifically defined, and EPM has included that account in the available funding for decommissioning.

Decommissioning Expenditures and the Impact of NRC Fee Recovery As of the end of 2022, the CERT costs have totaled over $27,000,000 for regulatory oversight fees, site characterization, remedial alternative evaluation, and preparation of decommissioning plans to achieve license termination. Specifically, NRC fees for that time period exceed

$6,200,000, or 23% of the total decommissioning costs. Exhibit A provides a tabulation of decommissioning costs and NRC fees from the time the CERT was created through the end of 2022.

Although EPM does not assume that NRC fees will continue to represent such a significant portion of decommissioning costs, projected NRC fees represent the greatest single factor that jeopardizes the likelihood of completing the decommissioning of the site.

Basis for Asserting that Decommissioning Could be Completed with NRC Fee Exemption or Deferral EPM submitted a decommissioning plan for the Cimarron site in November 2022. The decommissioning plan included a decommissioning cost estimate in accordance with NUREG-1757, Consolidated Decommissioning Guidance. EPM believes the decommissioning plan can be approved by the end of 2024 and construction can be completed by the end of 2025.

Calculation of the rate of decline of concentrations, based on groundwater flow models which have been reviewed by NRC personnel, provided the basis for a groundwater remediation schedule. Exhibit B presents four schedules from the decommissioning plan:

Figure 9-1, Pre-Construction Schedule Figure 9-2, Construction Schedule Figure 9-3, Remediation Schedule Figure 9-4, Post-Remediation Schedule Figure 9-3 shows that the license criteria for groundwater (the NRC Criterion) is projected to be achieved in the second quarter of 2038.

Exhibit C presents two tables based on Table 16-5 of the decommissioning plan, Cost Summary

- Rev 0. Both tables present the anticipated cost for pre-construction and construction activities, groundwater remediation, and post-remediation activities. The tables show the funds available when the decommissioning plan was submitted, the annual cost in 2022 dollars, and the anticipated depletion of available funds based on a 1% return on invested funds and a 3%

escalation rate.

The first table in Exhibit C, Decommissioning Cost Estimate Including NRC Fees shows that the impact of NRC fees results in the exhaustion of funds approximately two years before the NRC Criterion is achieved. The second table in Exhibit C, Decommissioning Cost Estimate Eliminating NRC Fees, shows that exemption from NRC fees indicates that funding may be sufficient to achieve the NRC Criterion.

EXHIBIT A NRC FEES AS A PERCENTAGE OF DECOMMISSIONING EXPENDITURES

EXHIBIT B FROM FACILITY DECOMMISSIONING PLAN - REV 3 Figure 9-1, Pre-Construction Schedule Figure 9-2, Construction Schedule Figure 9-3, Remediation Schedule Figure 9-4, Post-Remediation Schedule

Figure 9-1 Revision 0 Preparer: E. Dulle; Date: 08/31/22 Pre-Construction Schedule Reviewer: J. Hesemann; Date: 08/31/22

ID Task Name Duration Start Finish Qtr 3, 2022 Qtr 4, 2022 Qtr 1, 2023 Qtr 2, 2023 Qtr 3, 2023 Qtr 4, 2023 Qtr 1, 2024 Qtr 2, 2024 Qtr 3, 2024 Qtr 4, 2024 Qtr 1, 2025 Qtr 2, 2025 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 1 Decom. Plan-Rev3 386 days Fri 9/30/22 Fri 3/22/24

2 EPM submits formal D-Plan 0 days Fri 9/30/22 Fri 9/30/22 9/30

3 NRC Accepts D-Plan for Technical 65 days Fri 9/30/22 Thu 12/29/22 Review

4 NRC Reviews D-Plan 86 days Fri 12/30/22 Fri 4/28/23

5 NRCs Issues RAIs 0 days Fri 4/28/23 Fri 4/28/23 4/28

6 EPM Prepares & Issues RAI 45 days Mon 5/1/23 Fri 6/30/23 Responses

7 NRC Drafts SER, EA, License 190 days Mon 7/3/23 Fri 3/22/24 Amendment

8 License Amendment 153 days Mon 3/25/24 Wed 10/23/24

9 NRC and EPM Reach Concurrence on 43 days Mon 3/25/24 Wed 5/22/24 Draft License Amendment

10 License Amendment Issued 110 days Thu 5/23/24 Wed 10/23/24

11 Design, Bidding, and Contracting 458 days Mon 5/1/23 Wed 1/29/25

12 Prepare remediation infrastructure 170 days Mon 5/1/23 Fri 12/22/23 and facilities bid packages

13 Bidders to prepare and submit bids 70 days Mon 12/25/23 Fri 3/29/24

14 Request and Obtain Construction 148 days Mon 4/1/24 Wed 10/23/24 Funding Approval

15 Execute Contracts 70 days Thu 10/24/24 Wed 1/29/25

16 Pre-Mobilization 14 days Thu 1/30/25 Tue 2/18/25

Page 1 of 1 Figure 9-2 Revision 0 Preparer: E. Dulle; Date: 08/31/22 Construction Schedule Reviewer: J. Hesemann; Date: 08/31/22

ID Task Name Duration Start 2026 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 1 Remediation Well Field Infrastructure 132 days Tue 2/18/25 2 Mobilization and Site Preparation 35 days Tue 2/18/25 3 Equipment Mobilization 15 days Tue 2/18/25 4 BMPs, Road Installation, and Site Work 20 days Tue 3/11/25 5 Extraction and Injection Infrastructure 117 days Tue 3/11/25 6 Extraction Well Installation 15 days Tue 3/11/25 7 Extraction Trench Installation 43 days Tue 4/8/25 8 Injection Trench Installation 60 days Tue 4/8/25 9 Utilities and Outfall Installation 37 days Tue 7/1/25 10 1206 Drainage 15 days Fri 6/6/25 11 Facilities Infrastructure 132 days Tue 4/8/25 12 WATF Facility Infrastructure 132 days Tue 4/8/25 13 WATF Grading and Foundations 45 days Tue 4/8/25 14 Building Construction and Fit-out 87 days Tue 6/10/25 15 BA1 Facility Infrastructure 25 days Tue 6/10/25 16 BA1 Grading and Foundations 10 days Tue 6/10/25 17 Construction and Fit-out 15 days Tue 6/24/25 18 Startup and Commissioning 60 days Thu 10/9/25 19 Startup and Commissioning 30 days Thu 10/9/25 11/19 20 Weather Delays 30 days Thu 11/20/25

Page 1 of 1 Figure 9 Revision 0 Preparer: E. Dulle; Date: 09/16/22 Reviewer: J. Hesemann; Date: 09/23/22 Remediation Schedule

2026 2027 2028 2029 2030 2031 2033 2034 20352032 2036 2037 2038 Remediation Area

BA1-A 150 Time to Reduce Uranium to < NRC Criterion BA1-B 62 Time to Reduce Uranium to < NRC Criterion Water Treatment 126 Time Uranium Treatment System Operates 1 Water Pumping & Injection 150 Time Pumping & Injection Continues

WAA U>DCGL 135 Time to Reduce Uranium to < NRC Criterion 1206 North 5 Time to Reduce Uranium to < NRC Criterion WU-BA3 48 Time to Reduce Uranium to < NRC Criterion Water Pumping & Treatment 135 Time Pumping & Uranium Treatment System Operates 1 WU-BA3 Injection 48 Treated Water Injection

Notes:

1 Either treatment system may be bypassed if the conc entration of uranium in the influent is less than 3 0 µg/L.

Facility Decommissioning Plan - Rev 3 Page 1 of 1

EXHIBIT C DECOMMISSIONING COST ESTIMATE Decommissioning Cost Estimate Including NRC Fees Decommissioning Cost Estimate Eliminating NRC Fees