DRC-1999-001144 - 0901a06880adec69

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UNITED STATES OF AMERICA
NUCLEAR REGULATORY COMMISSION
ATOMIC SAFETY AND LICENSING BOARD PANEL
I Berore Administrative Judges: ffiLi F'l'"tlli,1l:,'ff^",:',,;il,
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IN THE MATTER OF
INTERNATIONAL URANIUM (USA)
CORPORATION
(Source Material License Amendment)
Docket No. 40-868 l -MLA-4
ASLBP No. 98-748-03-MLA
January 19,1999
INTERNATIONAL URANIUM (USA) CORPORATION'S (,,IUSA',S") REPLY
TO THE STATE OF UTAH'S BRIEF IN OPPOSITION TO IUSA'S
SOURCE MATERIAL LICENSE AMENDMENT 6
Anthony J. Thompson
Warren U. Lehrenbaum
David C. Lashway
SHAW PITTMAN POTTS & TROWBRIDGE
2300 N Street, N.W.
Washington, DC 20037
[phone]
Counsel to Licensee, International
Uranium (USA) Corporation
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TABLE OF CONTENTS
INTRODUCTION .....................1
THE LEGAL FRAMEWORK CREATED BY UMTRCA............ .,...,...,.,.,.....7
A. Creation And Objectives Of UMTRCA .....-.....-7
B. UMTRCA's Legislative History Shows That Neither Economics
Nor Uranium Profitability Control The Primary Purpose
Determination ........... ......".............1 I
C. UMTRCA's Legislative History Shows That Uranium
Concentration In Ore Is Irrelevant To The Primary Purpose
Determination ........... .....................I2
D. UMTRCA Creates A Presumption That Ores Processed In A
Uranium Mill That [s Licensed As Part Of The Nuclear Fuel Cycle
Are Proces sed Primarily F or Their Source Material Content ... .... ... '.. I 4
E. Conclusions Regarding UMTRCA.............. ......................18
NRC'S ALTERNATE FEED POLICY... .,.,,......,........20
A. The Relationship Between the AEA, as Amended by UMTRCA,
and the Alternate Feed Po1icy............... ..........'21
B. Some Alternate Feeds May Require Closer Scrutiny Than
Conventional Ores .......23
C. The Primary Purpose Requirement In The Alternate Feed PoIicy........................30
1. The Certification Test.......... ................31
a. Financial Considerations........... .................32
(l) The Expected Incremental Cost of
Processing the Material for Uranium is Less
than the Expected Incremental Benefit of
Producing Uranium from the Materials ...-.......32
(2) Other Valuable Metals That Can be
Extracted as Co-products.......... .....34
(3) Contractual Obligations to Process....................................34
(4) Receipt of a Recycling Fee .'..'...'...35
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b. High Uranium Content of the Feed Material.................................36
c. Other Grounds... .....37
d. Conclusions Regarding the Certification Test...............................39
2. The Co-Disposal Test.......... ................39
UTAH'S ARGUMENTS ARE MTHOUT MERIT..... ................40
A. The State Of Utah Has Fundamentally Misconstrued The Meaning
Of "Processed PrimarilyFor Its Source Material Content" As Used
In NRC's Alternate Feed PoIicy............... .......40
l. Summary of Utatr's Argument. ............40
2. Neither Congress Nor NRC Intended That An Economic Or
Profitability Test Be Imposed to Determine Whether A
Material Is Processed Primarily For lts Source MaterialContent.... ...........41
3. The State of Utatr Misconstrues The Meaning of the "High
Uranium Content" Justification............... ..............45
4. Utatr Is Incorrect In Suggesting That IUSA's Processing Of
The Ashland 2 Material Might Implicate "Sham Disposal"Issues....... ..........46
B. IUSA Has Provided NRC With Documentation Sufficient To
Demonstrate That IUSA Is Processing The Ashland 2 Material
Primarily For Its Source Material Content. .....49
l. IUSA Has Satisfied The Alternate Feed Policy's
Certification Test ................49
a. IUSA Has Provided NRC StaffWith Suffrcient
Evidence To Justifr Its Certification On FinancialGrounds... ...............50
b. IUSA's Certification May Also Be Justified On The
Basis Of High Uranium Content..... ...........52
c. IUSA's Certification Can Also Be Justified On
"Other Grounds" ......................54
2. IUSA's Processing Of The Ashland 2 Material Satisfies
The Alternate Feed Policy's Co-Disposal Test....... .................57
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C.IUSA's Processing Of The Ashland 2 Material Satisfies All Of The
Criteria Set Out In The Alternate Feed Po1icy............... .....62
The Ashland 2 Material Is Not LLRW ............63
Approval Of Amendment 6 Would Not Undermine Policy And
Guidance And Would Not Harm The State Of Utah. ........65
IUSA's License Amendment Is Based Upon A Complete And
Adequately Reviewed Record That Does Not Violate Due Process. ....................71
l. Procedural Due Process............. ..........72
2. The Record Is Adequate To Support The Decision Of TheStaff......... ..........72
3. The Staff Conducted An Adequate RCRA Review..... ............74
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UNITED STATES OF AMERICA
NUCLEAR REGULATORY COMMISSION
ATOMIC SAFETY AND LICENSING BOARD PANEL
Before Administrative Judges: Peter B. Bloch, Presiding Officer
Richard F. Cole, Special Assistant
IN THE MATTER OF
INTERNATIONAL URANIUM (USA)
CORPORATION
(Source Material License Amendment)
Docket No. 40-8681 -MLA-4
ASLBP No. 98-748-03-MLA
January 19,1999
INTERNATIONAL URANIUM (USA) CORPORATION'S ("IUSA',S") REPLY
TO THE STATE OF UTAH'S BRIEF IN OPPOSITION TO IUSA'S
SOURCE MATERIAL LICENSE AMENDMENT 6
I I. INTRoDUCTIoN
Intemational Uranium (USA) Corporation ("IUSA") submits this brief in response to the
I State of Ut ah's Brief In Opposition To International (Jranium (USA) Corporation's Source
I Maturial License Amendmenr, dated December 7,lggg (*Utah Brief'). In its brief, Utah asserts
- that the Nuclear Regulatory Commission ("NRC" or'oCommission") Staff ened in amending thetsource material license for IUSA's White Mesa uranium mill near Blanding, Utah (the "Mill").
I The license amendment Utah complains of, Amendment 6, allows IUSA to process as an
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alternate feedstock at its Mill certain uranium-bearing material from the Ashland 2 site located in
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Tonawanda, New York. See letter from J. Holonich to M. Rehmann Approving License
Amendment 6 with enclosures (June 23, 1998) (Anached as Exhibit 1). The Ashland 2 site is
administered by the Army Corps of Engineers ("USACE") under the Department of Energy's
("DOE's") Formerly Utilized Sites Remedial Action Program (FUSRAP).r
Amendment 6 to IUSA's license was approved by NRC Staff on June 23,1998 pursuant
to the Commission's Final Position and Guidance on the Use of Uranium Mill Feed ,Vaterials
Other Than Natural Ores,60 Fed. Reg. 49,296 (September 22,1995) (the "Alternate Feed
Policy"). Among other things, the Alternate Feed Policy requires that a material processed as
alternate feed must be processe d primarily for its source material content.z Id.
Utah's brief raises a number of arguments intended to support the State's contention that
NRC Staffshould not have approved Amendment 6 to IUSA's license.3 However, the primary
thrust underlying the State's argument is simple: Utah seeks to displace NRC's jurisdiction and
impose its own regulatory program on the operations of IUSA's NRC-licensed mill by arguing
that the "primary purpose" for which IUSA is processing the Ashland 2 material is not for its
uranium content. Specifically, Utatr argues that IUSA cannotbe processing the Ashland 2
mateial primarily for its uranium content because (i) the economic value of the uranium IUSA
can expect to recover from the Ashland 2 material, in and of itself, is less than the value of fees
t The FUSRAP program was established by the Atomic Energy Commission (*AEC") in 1974, to clean up and
control radioactive contamination at sites associated with activities that were previously carried out on behalf of the
Manhattan Engineering District, it successes the AEC and other related entities during the early days of the nation's
nuclear program. See generally U.S. Department of Energy, The Formerly Utilized Sites Remedial Action Program
(FUSMP): Buitding Stakeholder Partnerships to Achieve Effective Cleanup, DOE/EM-0233 (April 1995).
(Attached as Exhibit 2).
2 Because they are key terms used often in this discussion and for ease of reference, we have highlighted the words
"primarily," ''secondary," "side-stream," and"non-l le.(2) byprOduct material" thrOughOut this dOcument.
3 In its prayer for relief Utah asks the presiding officer to revoke Amendment 6 and to prohibit IUSA from further
processing any Ashland 2 material present at the Mill or received by the Mill in the future.
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the company will receive in connection with its processing of the material; and (ii) the average
concentration of uranium in the Ashland 2 material is "low."
In addition to its central assertion that IUSA is not processing the Ashland 2 material
primarily for its source material content, Utah raises a number of other arguments questioning
the validity of the Staff s licensing decision. The State argues that the Ashland 2 material may
constitute low level radioactive waste ("LLRW') and, as such, would be subject to State, not
NRC, regulation. The State contends that NRC's regulation of the tailings and wastes generated
from IUSA's processing of the Ashland 2 material would not adequately protect health and
safety in the State. And, finally, the State argues that NRC's decision to approve Amendment 6
was based upon an incomplete record and inadequate consideration of the record by NRC Staff.
When analyzed closely, however, all of the State's arguments depend on the resolution of
a single issue: what is meant by the phrase "processed primarily for its source material content"?
The answer to this question will determine whether the State or NRC has jurisdiction over the
ultimate disposition of the Ashland 2 material and may help resolve a jurisdictional issue that has
spawned considerable public controversy, not to mention substantial litigation. The State wants
to exercise jurisdiction because it is not satisfied with NRC's l0 C.F.R. Part 40 regulatory
regime and it wants to impose its own requirements on these materials. However, although Utah
is an Agreement State for the disposal of LLRW, it is not an Agreement State with respect to the
milling of uranium and the disposal of the resulting tailings and wastes. Thus, the only way for
the State to exercise jurisdiction over IUSA's milling of the Ashland 2 material and disposition
of the resulting tailings and wastes, without having the appropriate Agreement State authority, is
to argue that IUSA is not processing the Ashland 2 material primarily for its source material
content.
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IUSA will demonstrate that the State fundamentally misunderstands how NRC's
I Alternate Feed Policy is intended to operate and completely misconstrues what the policy means
I when it refers to materials being processed "primarily" for their source material content. [n
particular, IUSA will demonstrate each of the following:
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o First, under the Atomic Energy Act,42 U.S.C. $ 2001 et seq. (the "AEA"), as
amended by the Uranium Mill Tailings Radiation Control Act of 1978, Pub. Law No.
95-604 ("UMTRCA") and its amendments, apresumption is created that ore is
processed "primarily" for its source material content if it is processed for the
extraction or concentration of uranium in an NRC-licensed uranium mill that is part
of the nuclear fuel cycle. The phrase "processed primarily for its source material
content" is intended to distinguish between ores processed for the recoverya of
uranium in licensed uranium mills that are part of the nuclear fuel cycle, on the one
hand, and ores processed for the recovery ofuranium in secondarl, or side-stream
operations at mineral or metal recovery facilities that are not part of the nuclear fuel
cycle, on the other hand;
o Second, the Alternate Feed Policy sets out procedures intended to ensure that
altemate feeds are processedprimarily for their uranium content so that the resulting
tailings and wastes qualiff as 1le.(2) byproduct material under the AEA, as amended
by UMTRCA. The phrase, "processed primarily for its source material content,"
must have the same meaning when used'in the Alternate Feed Policy as it has in the
4 tn this document the terms "extraction" and "recovery" each mean "extraction or concenffition" within the
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meaning of the AEA.
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AEA, in order to ensure that tailings and wastes tiom processing alternate t'eed
materials will fall within the definition of I le.(2) byproduct material under the AEA.
Thus, NRC's use of the term "processed primarily for its source material content" in
the Alternate Feed Policy is directly and inextricably linked to Congress' use of the
identical phrase in the definition of l1e.(2) byproduct material. In both cases it is
presumed that ore is being processed primarily for its source material content if it is
processed for the extraction of uranium in a licensed uranium mill that is part of the
nuclear fuel cycle.
Third, unlike conventional ores, alternate feeds often are o'wastes" generated from
some other entity's processing activities. As a result, altemate feeds can vary widely
in composition, so it is incumbent upon the licensee, and subsequently NRC, to
determine that there is uranium in the alternate feed, that it is reasonable to expect
that uranium will be extracted, and that there are no characteristics of the alternate
feed material that would prevent the mill from complying with the requirements
established in NRC's regulations at 10 C.F.R. Part 40 or that implicate concerns
regarding dual or overlapping jurisdiction. If it is not reasonable to expect uranium
will be extracted from the alternate feed and in fact uranium is not extracted then the
material would not be presumed to be processed primarily for its source material
content within the meaning of the AEA. Tests built into the Alternate Feed Policy
effectively ensure that a license amendment will not be granted if it is not reasonable
to expect that uranium will be extracted from a particular alternate feed material at a
licensed uranium mill (in effect, these tests ensure that the presumption that a
licensed mill is processing ore primarily for its source material content is not
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rebutted). [f', based on these tests. the licensee and NRC statf conclude it is
reasonable to expect that uranium will be extracted from an alternate feed material,
the alternate feed material is presumed under both the AEA and the Alternate Feed
Policy to be processed primarily for its uranium content and the resulting tailings
would be I le.(2) byproduct material. If, on the other hand, the tests set out in the
Alternate Feed Policy indicate that it is not reasonable to expect that uranium will be
extracted from an alternate feed material, or if it is reasonable to expect that uranium
will be extracted from the material, a good faith effort is not made to extract the
uranium and no uranium is extracted, the presumption that the material is being
processedprimarily for its source material content would be rebutted, the resulting
tailings may not be I le.(2) byproduct material, and processing the material might
implicate "sham disposal." In addition, as noted above, due to the varying
composition of altemate feed materials, the Alternate Feed Policy also contains
protections against disposing of materials that might jeopardize compliance with
10 C.F.R. Part 40 and disposing of certain hazardous wastes in the mill's tailings
impoundment, in order to avoid problems of overlapping jurisdiction that both the
licensee and NRC will seek to avoid in all circumstances.
Fourth, Congress and NRC did not intend to require that an economic test or a
profitability test must be satisfied in order to conclude that a material is being
processedprimarily for its source material content; neither did they intend to require
a certain minimum concentration of uranium or thorium in feed materials. In fact, the
contrary is true.
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. Fifth, IUSA satisfies each of the two alternative tests set out in the Alternate Feed
Policy for determining whether a material is being processedprimarily for its source
material content. Thus, without question, IUSA is processing the Ashland 2 material
primarily for its source material content and for no otherprimary purpose.
Finally, having established that IUSA is processing the Ashland 2 material primarily for
its source material content, and that the Ashland 2 material and the tailings and wastes generated
from its processing fall within NRC's jurisdiction and not the State's, the remaining arguments
offered by Utah, which assume State jurisdiction, fail on their face. Accordingly, IUSA
respectfully requests that the Presiding Officer deny the relief requested by the State and affirm
NRC Staff s decision to approve Amendment 6 to IUSA's license.
II. THE LEGAL FRAMEWORK CREATED BY UMTRCA
In order to understand the Alternate Feed Policy and NRC's application of the policy in
this matter, one must first understand the legal framework within which the policy was created
and must operate. At the core of this legal framework is the AEA, as specifically amended by
UMTRCA.
A. Creation And Obiectives Of UMTRCA
Congress enacted UMTRCA in 1978 in response to growing concerns about the potential
health and environmental hazards presented by uncontrolled wanrum and thorium mill tailings.
Thus, one of the central objectives of UMTRCA was to create under the AEA a comprehensive
progftrm for the regulation of tailings and other wastes generated from uranium and thorium ore
processing activities both at active milling operations and, in particular, after termination of such
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operations. Pub. Law No. 95-604 at2(b)(2),92 Stat. 3022. The centerpiece of this regulatory
program was a new category of AEA-regulated material, known as 1le.(2) byproduct material,
which Congress created by amending the existing definition of "byproduct material" in
Section l1 of the AEA. Specifically, Congress amended the definition of "byproduct material"
to include the tailings and wastes produced by the extraction of uranium from any ore processed
primarily for its source material content.5
This new class of material was (and is) unique among the materials regulated under the
AEA because it was defined not solely in terms of its radiologic characteristics, but instead was
defined broadly enough to encompass a// wastes - including both radioactive and non-
radioactive wastes - resulting from uranium ore processing. As NRC has noted:
The definition of byproduct material in Section I le.(2) of the AEA
includes a// wastes resulting from the milling process, not just the
radioactive components.
57 Fed. Reg. 20,525,20,526 (May 13,1992). Indeed, by developing such a broad definition of
1 le.(2) byproduct material Congress sought to ensure that all wastes from uranium milling
operations would be regulated under UMTRCA's comprehensive regulatory scheme, and that
none of the wastes from these NRC-regulated milling operations would become orphaned and go
unregulated by the Commission. Thus, following a review of UMTRCA's legislative history, the
D.C. Circuit concluded:
5 Byproduct material is defined in AEA Section I le.(2) to mean "the tailings or wastes produced by the exnaction or
concentration of uranium or thorium from any ore processed primarily for its source material content." 42 U.S.C.
g 20lae.(2). Although this definition encompasses wastes produced as a result of activities directed at recovering
thorium as well as uranium, since IUSA's mill is licensed to recover uranium and not thorium this brief omits any
discussion of thorium, unless required by the particular context.
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It is clear from this exchange [in the legislative history] that the
definition of ''byproduct material" proposed by [then NRC
chairman] Dr. Hendrie and adopted by Congress was designed to
extend the NRC's regulatory authority over all wastes resulting
. from the extraction or concentration of source materials in the
course of the nuclear fuel cycle.
Kerr-McGee v. U.S. Nuclear Regulatory Com'n,903 F.2d 1, 7 (D.C. Cir. 1990).
To complement the broad scope of waste materials encompassed within the definition of
l1e.(2) byproduct material, Congress, through UMTRCA, directed the creation of an equally
broad and comprehensive regulatory program intended to address all aspects of the management
and disposition of uranium mill tailings and related wastes. For example, Congress assigned to
the Environmental Protection Agency ("EPA") the authority to promulgate standards of general
applicability addressing both the radiological and non-radiological hazards of uranium mill
tailings and related wastes. For non-radiological hazards, these generally applicable standards
are to provide protection equivalent to that provided by EPA's Resource Conservation and
Recovery Act ("RCRA") standards. AEA $ 275(b),42 U.S.C. $ 2022(b). UMTRCA calls upon
NRC to implement, through licensing, the standards of general applicability created by EPA. In
addition, Congress directed NRC to independently develop specific requirements and criteria
applicable to licensees that (i) the Commission deems appropriate to protect against both
potential radiological and non-radiological hazards associated with I le.(2) byproduct material,
and (ii) that are compatible with EPA's generally-applicable RCRA-based standards. AEA
$$ sa; 27s(d),42 U.S.C. $$ 20la; 2022(d).
To ensure long-term protection of public health, safety and the environment following
disposal, Congress included in UMTRCA the requirement that, following license termination,
title to and custody of uranium mill tailings and the land used for their disposal must be
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transferred either to the federal government or to the State in which the byproduct material is
located (at the State's option) for long-term care and surveillance pursuant to a perpetual NRC
license. 42 U.S.C. $ 2l13. This long-tern care and surveillance is financed by funds required to
be set aside by licensees prior to site closure. 10 C.F.R. Part 40, Appendix A, Criterion 10.
Prior to the enactment of UMTRCA, the AEC had concluded that uranium mill tailings
could not be classified as licensablq source material, since their source material content was
below the licensable level (0.05%) stipulated in AEC's regulations, and, therefore, they were
outside AEC's statutory licensing authority and beyond its regulatory reach. See AEC General
Counsel Memoranda dated December 7, 1960 and April 25, 1960, reprinted in Uranium Mill
Tailings Radiation Control Act of 1978, Hearings on H.R. I I698, H.R. 12229, H.R. I 2938, H.R.
12535, H.R. 13049 and H.R. I3650, Subcomm. On Energy and Power, House Comm. On
Interstate and Foreign Commerce, 95m Cong. (hereinafter "[Jranium Mill Tailings Radiation
Control Act of 1978 Hearings") at343-44 (1978) (attached as Exhibit 3). A fi.rndamental
objective of Congress in enacting UMTRCA, therefore, was to extend NRC's regulatory
jurisdiction to cover uranium mill tailings directly, and to establish a comprehensive regulatory
system for the safe disposal and long-term stabilization of tailings. See Keru-McGee 903 F.2d
at7.
In order to achieve regulatory control over the wide range of waste materials intended to
be covered by the definition of 11e.(2) byproduct material, Congress had to ensure that an
equally broad range of material would qualiry as "ore," so that wastes generated from processing
such ore would be covered under UMTRCA's regulatory progftrm. Thus, Congress defined
I le.(2) byproduct material as the tailings and wastes produced by the extraction of uranium from
any ore. As NRC has noted, Congress used the term "any ore" to ensure that tailings and wastes
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fiom a broad range of feed materials used in uranium milling operations would be covered by the
regulatory program applicable to I le.(2) byproduct material:
The tbct that the term "any ore" rather than "unrefined and unprocessed ore" is
used in the definition of I le.(2) byproduct material implies that a broader range of
feed materials could be processed in a mill, with the wastes still being considered
as I le.(2) byproduct material.
57 Fed. Reg. at 20,532.
B. UMTRCA's Legislative Historv Shows That Neither Economics Nor Uranium
Profitability Control The Primary Purpose Determination
Contrary to Utah's assertions, UMTRCA's legislative history reveals that Congress did
nol intend to require an economic or profitability showing in order to demonstrate that an ore is
being processed primarily for its source material content. Committee hearings prior to the
enactment of UMTRCA demonstrate Congress' focus on modifring the definition of "byproduct
material" in the AEA to encompass a// wastes and tailings from uranium milling operations. The
definition that was ultimately incorporated into Section l1e.(2) of the AEA was suggested by
then NRC Chairman, Joseph M. Hendrie, in a dialogue with Congressman Dingell.
Dr. Hendrie. [T]he Commission would suggest that the definition
of byproduct material in H.R. 13382 be revised to include tailings
produced by extraction of uranium or thorium from any ore
processed primarilyfor its source material content.
Mr. Dingell. I am curious about wlry you include in that the word
"processed" primarilyfor source material content. There are
other ores that are being processed that do not contain thorium
and uranium in amounts and I assume equal in value to those you
are discussing here.
Is there any reason why we ought not give you the same
[regulatory] authority with regard to those ores?
Dr. Hendrie. Mr. Chairman, the intent of the language is to keep
NRC's regulatory authority primarily in thefield of the nuclear
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fuel cycle. Not to extend this out into such things as phosphate
mining and perhaps even limestone mining which are operations
that do disturb the radium-bearing crust of the Earth and produce
some exposures barl those other activities ore not connected with
the nuclear fuel cycle. EPA is looking at those and those appear to
me to be things that ought to be left to EPA regulation under the
Resource Conservation Recovery Act and general authorities.
Uranium Mill Tailings Radiation Control Act of 1978 Hearings at343-44 (emphasis added) (See
Exhibit 3).
As this colloquy reveals, Congress' inclusion of the phrase "processed primarily for its
source material content" in the definition of l le.(2) byproduct material was not intended to
distinguish between feed materials based upon, in Congressman Dingell's words, the "amount"
or "value" or relative profitability of the source material that might be recovered. lnstead, the
phrase "processed primarily for its source material content" was intended to distinguish between
ores that are processed in facilities that are licensed to be part of the nuclear fuel cycle and ores
that are processed in facilities outside the nuclear fuel cycle, which may recover uranium as a
byproduct of their operations or concentrate uranium in a waste stream. (e.g., at mills processing
phosphates, rare earths or other metals that are not licensed uranium mills). Certainly, Congress
did not intend to require that the economic value of recovered source material, by itself, exceed
all, or any, other economic values associated with the processing of a feed material in order to
demonstrate that the feed material is being processedprimarily for its source material content.
f. UMTRCA's Legislative Histon Shows That Uranium Concentration In Ore Is
Irrelevant To The Primary Purpose Determination
Similarly, Congress, when it defined l le.(2) byproduct material, did not intend to
prescribe a minimum percentage of uranium or thorium that must be present in an ore before the
ore can be considered to be processe d primarily for its source material content. Indeed, the
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I opposite is true: Congress intended to include within the scope of 11e.(2) byproduct material a//
I tailings and wastes from processing ores for their uranium content at a licensed uranium mill,
regardless of the concentration of uranium contained in the ore. Thus, as NRC has noted,
I commenting on the Iegislative history of UMTRCA:
I The definition of 1le.(2) byproduct material as originally
presented in UMTRCA was:
I The tailings or wastes produced by the exftaction or
concentration of uranium or thorium from any
I source material.
However, there was concern that tailings resultingfrom the
I processing of ore containing less than 0.05 percent uranium (the
I minimum concentration that would still meet the definition of
fiicensableJ source material) wouldfall outside the definition. To
I preclude that possibility, it was suggested that the words "any ore
I processed primarily for its source material contenf' be substituted
for "any source material."
I 57 Fed. Reg. at 20,532(emphasis added). Indeed, the legislative history reveals that in
t committee hearings prior to the enactment of UMTRCA, Chairman Hendrie suggested Congress
modift the definition of 11e.(2) byproduct material specifically to accommodate tailings and
I wastes generated from the processing of ores containing less than 0.05o/ouranium.
I The Commission is informed that there are a few mills currently
using feedstock of less than 0.05-percent uranium. As high-grade
I ores become scarcer, there may be a greater incentive in the futue
I to turn to such low grade materials.
I Since such operations should be covered by any regulatory regime
I over mill tailings, the Commission would suggest that the
definition of byproduct material in H.R. 13382 be revised to
I include tailings produced by extraction of uranium or thorium from
I any ore processedprimarily for its so'uce material content.
I
Uranium Mill Tailings Radiation Hearings at343 (emphasis added) (see Exhibit 3). Thus, as the
legislative history indicates, Congress modified the definition of 11e.(2) byproduct material to
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apply to"any ore'processed primarily for its source material content in a licensed uranium mill.
for the specific purpose of ensuring that all wastes from processing such ores. including ores
containing less than 015% uranium, would fall within the regulatory program established for
I le.(2) byproduct material.6 Congress clearly intended that an ore could be processed"primarily
for its source material content" even if the uranium concentration in the ore is below 0.05%.
Consequently, even if the Ashland 2 material contains uranium concentrations at or below 0.05%
this does not in any way preclude a finding that IUSA is processing the material primarily for its
source material content.
D. UMTRCA Creates A Presumption That Ores Processed In A Uranium Mill That
Is Licensed As Part Of The Nuclear Fuel Cycle Are Processed Primarr'ly For Their
Source Material Content
As demonstrated above, and contrary to Utah's assertion, the determination of whether a
feed material is being processed primarily for its source material content does not depend on the
relative profitability of recovering uranium from the feed material or on the concentration of
uranium in the alternate feed material. Instead, as the legislative history of UMTRCA and
NRC's interpretation of the statute indicate, the phrase "processed primarily for its source
material content" is intended to distinguish between ores that are processed at licensed uranium
mills that are part of the nuclear fuel cycle and ores that are processed at facilities outside the
nuclear fuel cycle (e.g., at mills processing phosphates, rare earths or other metals). Again, as
noted earlier, in testimony before Congress prior to the enactment of UMTRCA, Chairman
Hendrie explained the significance of the phrase "processed primarily for its source material
u As it turns out, NRC and Congress were prescient in deciding to modiff the defnition of I le.(2) byproduct
material to accommodate the processing of ores containing below 0.05olo uranium, since higher gpde domestic
uranium ores are increasingly difficult to frnd.
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content" in the proposed definition of I le.(2) byproduct material. In Chairman Hendrie's w'ords.
"the intent of the language ['processed primarily for its source materialcontent'] is to keep
NRC's regulatory authority primarily in the field of the nuclear fuel cycle." Uranium Mill
Tailings Radiation Contol Act of 1978 Hearings at343-44 (emphasis added) (See Exhibit 3). In
other words, Congress wanted to ensure that the comprehensive program it had created for the
regulation of l1e.(2) byproduct material would extend only to tailings and wastes produced as
part of the nuclearfuel cycle, and that waste materials created outside of the nuclear fuel cycle
would not be affected.T Consequently, feed materials that are processed for the extraction of
uranium outside of the nuclear fuel cycle (for example in a secondary or side-stream process at a
phosphate recovery operation) are deemed not tobe processe d primarily for their source material
content, and, therefore, the tailings and wastes from such processing are not regulated as I le.(2)
byproduct material.
NRC has articulated a position in the context of the Altemate Feed Policy that is
consistent with the intent Congress expressed when it enacted UMTRCA: namely, that a material
will be presumed to be processed primarily for its source material content if it is processed for
the extraction of uranium in a licensed uranium mill that is part of the nuclear fuel cycle, rather
than in a non-fuel cycle facility as part of a secondary, side-stream recovery operation. For
example, in the preamble discussing the proposed Alternate Feed Policy, the Commission
indicates that an ore processed through a licensed uranium mill is processed as part of the nuclear
7 Congress' effort to limit the sweep of the regulatory system created under UMTRCA to apply only to tailings and
wastes generated in licensed facilities that are part of the nuclear fuel cycle is understandable, given the enormous
commitment of resources that must be made in order to become a mill that is licensed as part of the nuclear fuel
cycle, and the heavy burden ofregulations that apply to such facilities. See discussion at p. 19, footnote 8, infra.
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fuel cycle and theretbre will be presumed to be processed primarily fbr its source material
content as follows:
NRC staff has recorrunended a definition of ore as follows:
Ore is a natural or native matter that may be mined and treated for
the extraction of any of its constituents or any other matter from
which source material is extracted in a licensed uranium or
thorium mill.
Two major considerations that went into this proposed definition
of ore were:
l. It is broad enough to include a wide variety of feed materials.
2. The definition continues to be tied to the nuclear fuel cycle.
Because the extraction of uranium in a licensed mill remains the
primary purpose of processing the feed material, it excludes
secondary uranium side-stream recovery operations at mills
processing ores for other metals. Thus, tailings from such side-
stream operations at facilities that are not licensed as uranium or
thorium mills would not meet the definition of under 11e.(2)
byproduct material.
57 Fed. Reg. at 20,532 (emphasis added). As the Commission explains, this stands in sharp
contrast to the status of materials processed in a non-fuel cycle mill:
Frequently, natural ores that are processed for rare-earth or other
materials have significant concentrations of radioactive elements.
Examples include copper, zirconium, and vanadium ores.
Sometimes the uranium is captured in a side-stream recovery
operation, in which uranium is precipitated out of the pregnant
solution before or afier the rare earth or other metal. Although
this side-stream recovery operation is licensed by NRC, the
tailings (which consist of crushed depleted ore and the depleted
solution afier recovery of metals and rare earths) are not I le.(2)
byproduct material. This is because the ore was not processed
primarilyfor its source material content, but for the rare earth or
other metal.
Id. at20,527 (emphasis added). In other words, an ore processed in a side-stredm process to
recover uranium is not being processed primarily for its uranium content and, therefore, the
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tailings and wastes from such processing will not be regulated as I le.(2) byproduct material.
whereas an ore processed at a licensed uranium mill that is part of the nuclear fuel cycle can be
presumed to be processed primarily for its source material content because "the extraction of
uranium in a licensed mill remains the primary purpose of processing the feed material . . . ".
The limited case law in this area also supports the conclusion that an ore is processed
primarily for its source material content so long as it is processed at a licensed uranium mill that
is part of the nuclear fuel cycle, regardless of the relative economic value of the source material
as compared to other components of the ore. In the Ket McGee case, the United States Court of
Appeals for the District of Columbia was asked to review a decision by NRC regarding the status
of tailings produced at Kerr-McGee's West Chicago facility. The facility in question had
processed monazite ore starting in the 1930's. Initially the monazite was processed to recover
the ore's rare earth content, with only a fraction of the ore being processed for source material.
A number of years after this initial processing, however, the tailings from the rare earth
processing were reprocessed to recover their source material content. NRC determined that the
tailings and wastes from this reprocessing did not qualiff as l1e.(2) byproduct material because
source material was not the first (or presumably the most valuable) component for which the
monazite had been processed. Therefore, the Commission concluded, the ore had not been
processedprimarily for its sotuce material content.
The D.C. Circuit rejected this interpretation as being inconsistent with Congress' intent.
The court found that Congress had enacted UMTRCA to accomplish trvo objectives:
first, to close the gap in NRC regulatory jurisdiction over the
nuclear fuel cycle by subjecting uranium and thorium mill tailings
to the NRC's licensing authoriry; and second, to provide a
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comprehensive regulatory regime for the safe disposal and
stabilization of the tailings.
903 F.2d at 7. According to the court, NRC's interpretation would have recreated the regulatory
gap Congress had sought to close, because under NRC's approach, the determination of whether
a waste material constitutes 1le.(2) byproduct material would be made "not on the basis of [the
material's] physical characteristics or relationship to the nuclear fuel cycle, but solely on the
objectives for which the ore is first processed." Id. Tlte court concluded that NRC had too
narrowly construed the phrase "processed primarily for its source material content" when it
interpreted that phrase to mean that the extraction of uranium had to be the "first, chief or
principal reason for processing the ore." Id. The court noted that the term "primarily" has a
number of meanings, and it suggested that it might be more appropriate to interpret the term
"primarily" as used in the definition of 1le.(2) byproduct material to require that an ore be
processed "substantially" for its source material content. ,Id.
The decision of the court in Ket-McGee is instructive in that it once again underscores
the fact that the term"primarily" as used in the definition of I le.(2) byproduct material does not
mean "solely" or "only," much less "most profitable." There can be, and frequently are, other
good and substantial reasons associated with a transaction involving milling of alternate feed
material in a licensed uranium mill, including secondary or side-stream recovery of other
minerals (e.g., vanadium, tantalum) or the provision of recycling services for a fee, which at a
given point in time may be more valuable than the source material extracted.
E. Conclusions Regarding UMTRCA
As amply demonstrated by the language and legislative history of UMTRCA, Congress
and the Commission carefully crafted a flexible definition of 1le.(2) byproduct material to
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provide tbr the milling of a broad range of feed materials for their source material content and to
t ensure that resulting tailings and wastes would be subject to the comprehensive regulatory
I regime created for I le.(2) byproduct material under UMTRCA. By defining I le.(2) byproduct
material in terms of ore processedprimarily for its source material content, Congress did not
I intend to impose an economic or profitability test or a minimum concentration requirement on
I the determination of what ores, when processed, wilt yield l1e.(2) byproduct material. Instead,
I
Congress used the term "proc essed primarily for its source material content" to distinguish
r between ores that are processed for the extraction of uranium as part of the nuclear fuel cycle
I (i.e., inlicensed uranium mills) and ores that are processed for the extraction of uranium outside
r the nuclear fuel cycle (e.g., at mills processing phosphates, rare earths or other metals). In effect,I
Congress created apresumption that ores processed for their uranium content as part of the
I nuclear fuel cycle (in licensed uranium mills) are being processedp rimarilyfor their source
r material content and that ores processed for their uranium content outside of the nuclear fuelI
cycle (not in licensed uranium mills) are not processed primarily for their source material
I content.8
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I 8 Indeed, as a practical matter, a facility likely would avoid assuming the substantial financial and regulatory
I burdens associated with obtaining an NRC source material license and complying with the detailed criteria of l0r C.F.R. Part 40, Appendix A - including long term stabilization and financial assurance requirements - if it did not
intend to process feed material "primarily" for its source material content. As NRC has noted:I w::#:x";::L':;::'#:tr1;*::H;::?',;?;'t'{;{ff!itl'i,,
tailings pile constitutes a low-level waste burial site containing long-lived
I radioactive materials, the Commission believes that prudence requires that
I specific methods of tailings disposal, mill ddcontamination, site reclamation,
surety arrangements, and arrangements to allow for transfer of site and tailings
I 44Fed nee so,oll-r:ilH1:l;;ifff::::ffi 'ffi:T::J.on,ro,ove*hedisposa,and
stabilization of uranium mill tailings and related wastes was and remains a primary focus of the regulatory system
r created by Congress and NRC under UMTRCA.I
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IUSA's Mill is a licensed nuclear fuel cycle facility. It is licensed pursuant to rules
promulgated by the Commission for the regulation of uranium recovery operations. and therefore
must comply with the rigorous requirements established in 10 C.F.R. Part 40, including
Appendix A. Consequently, IUSA's processing of the Ashland 2 material for the extraction of
uranium, should be presumed to be primarily for the Ashland 2 material's source material
content.
III. NRC'S ALTERNATE FEED POLICY
The Alternate Feed Policy was developed by NRC to establish a set of criteria to be used
in evaluating whether feed materials that are not conventional ores can be processed at uranium
mills such that the tailings and wastes generated from such processing will still be considered
I le.(2) byproduct material. The Policy establishes four criteria that must be satisfied before
uranium-bearing materials other than conventional ores may be processed at a licensed uranium
mill. First, processing the alternate feed material (and disposal of the tailings and wastes
associated with such processing) must conform with the requirements of l0 C.F.R. Part 40.
Second, the alternate feed material must not contain any "listed" hazardous wastes (i.e., any
wastes listed under 40 C.F.R. $$ 261.30-33 or under comparable state law provisions) or residues
that constitute hazardous waste from any wastewater treatment process. Third, the alternate feed
material must qualiff as an "ore."e And finally, the alternate feed material must be processed
primarily for its source material content. Much of Utah's argument centers upon this last prong
e Consistent with Congress' intent to include a broad range of materials within the scope of the term "ore" (and,
thereby, to encompass a wide range of materials within the regulatory progrcm for I le.(2) byproduct material), NRC
defines "ore" for purposes of the Alternate Feed Policy to mean: "a natural or native matter that may be mined and
treated for the extraction of any of its constituents or any other matter from which source material is extracted in q
licensed uranium or thorium mill. 60 Fed. Reg. at 49,296 (emphasis added).
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of the Alternate Feed Policy, the requirement that an altemate feed material be processed
primarily for its source material content. As the foregoing discussion demonstrates, this last
requirement and the one preceding (the requirement that the altemate feed qualiff as "ore") are
really two ways of looking at the same question: whether a material is processed for its source
material content at a licensed uranium mill that is part of the nuclear fuel cycle. The first two
requirements set out above reflect the additional factors that must be considered when evaluating
altemate feed materials because of their potential qualitative differences from conventional ores.
(See discussion at p.24, infra.\
A. The Relationship Between the AEA. as Amended by UMTRCA, and the
Alternate Feed Policy
As is evident from the discussion in Section II.A above, Congress' fundamental purpose
in enacting UMTRCA was to create a comprehensive system for regulating the management and
final disposition of uranium mill tailings and related wastes. Central to this regulatory system
was a new class of material known as l1e.(2) byproduct material. In order to ensure that the
broad range of wastes generated at uranium mills would be encompassed within the regulatory
system it had created, Congress defined 1le.(2) byproduct material broadly, to mean a// wastes
from ores processed for their source material content. To ensure that this regulatory system
would be applied only to wastes generated as part of the nuclear fuel cycle, Congress defined
1 1e.(2) byproduct material as wastes derived from ores that are processedprimarily for their
source material content. Thus, Congress created a presumption that ores processed for the
extraction of uranium at licensed uranium mills that are part of the nuclear fuel cycle are
processedprimarily for their source material content.
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I NRC developed its Alternate Feed Policy in response to requests from licensees to
I process materials other than conventional ores for the extraction of uranium. 57 Fed. Reg. at
r 20,531. The Altemate Feed Policy works to avoid the possibility that the tailings and wastesIfrom processing an alternate feed material might be subject to dual (or multiple) jurisdiction by
I ensuring that the tailings and wastes from processing an alternate feed qualiff as l1e.(2)
I byproduct material. It does this by requiring a uranium recovery licensee to demonstrate that it
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will be processing the material primarily for its source material content. 60 Fed. Reg. at 49,297.
I Thus, the requirement in the Altemate Feed Policy that an altemate feed be processedpr imarily
I
for its source material content is directly and inextricably linked to the definition of I le.(2)
byproduct material, to ensure that the resulting tailings qualiff as I le.(2) byproduct material. As
I NRC explained in the preamble to the proposed Alternate Feed Policy:
I l::ff:"i::T;Tl,:,it ff##Ti,:",',Tf,ffiH[--T,:H,
I the ore must be processedprimarily for its source material content.
57 Fed. Reg. at 20,530. The Commission Staffreiterated this point in its response to comments
I on the proposed Alternate Feed Policy, where it succinctly explained that:
I The purpose of the proposed [altemate feed] guidance is to ensure
that processing of alternate feed materials would only be permitted
I fff#:rting wastes meet the definition of I le.(2) byproduct
r U.S. NRC, SECY-95-211 (August 15, 1995), Attachment 3 at l8 (attached as Exhibit 4).'0I
Consequently, when performing an evaluation under the Alternate Feed Policy to determine
I
I '' The Commission explained its concem that wastes from processing alternate feeds qualiff as I le.(2) byproduct
I materialas follows:
If the altemate feed material does not meet the definition of ore, or is not
I
processedprimaritv for its source material' there are *""1:tfi;#:fl1Hed
on next page
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whether a material is being processed primarily for its source material content. it is absolutely
necessary to look to the statutory definition of l1e.(2) byproduct material, and to evaluate what
Congress intended by the phrase 'oprocessed primarily for its source material content."
B. Some Alternate Feeds May Require Closer Scrutiny Than Conventional Ores
As demonstrated above, in Section II.D, Congress created a presumption under
UMTRCA that an ore is processedprimarily for its source material content if it is processed for
the extraction of uranium in a licensed uranium mill that is part of the nuclear fuel cycle. Since
the phrase "processed primarily for its source material content" must have the same meaning in
the Alternate Feed Policy that it has under UMTRCA, this presumption is also implicit in the
Alternate Feed Policy.rl Indeed, as discussed previously, NRC has articulated a position in the
context of the Alternate Feed Policy that is consistent with the presumption that ores processed
Footnote continued from previous page
that complicated dual regulation of the tailings pile by both NRC and the
Environmental Protection Agency (EPA) under RCRA could result. The second
concern is that the requested activity might jeopardize the ultimate transfer of
the reclaimed tailings pile to the State or Federal Government for perpetual
custody and maintenance [because Section 83 of the AEA only requires the
govemment to take custody of I 1e.(2) byproduct material and the land used for
its disposal, and there is no requirement for the government to take custody of
material that is nor I le.(2) byproduct materiall.
57 Fed. Reg. at 20,531. Thus, the requirement that alternate feed material be processed primarily for its source
material content within the meaning of the AEA, as amended by UMTRCA, was incorporated by NRC into the
Alternate Feed Policy in order to ensure that the tailings and other wastes associated with the processing of alternate
feed material would qualifr as I l(e).2 byproduct material and could be disposed of in a mill's tailings impoundment
(along with the wastes from processing conventional ores), without altering the regulatory status of the tailings
impoundment.
" The AEA defines I le.(2) byproduct material to mean:
the tailings or wastes produced by the extraction or concentration of uranium or
thorium from any ore processed primarily for its source material content.
42 U.S.C. g 20la(eX2) (emphasis added). By comparison, the Alternate Feed Policy requires that alternate feed
material (i) qualiff as an "ore" and (ii) be processed primarily for its source material content.
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for the extraction of uranium in licensed uranium mills are processed primarily tbr their source
material content. See discussion at pp. 15- l 7 , supra.
However, in developing its Alternate Feed Policy, NRC recognized that the physical,
chemical, and radiological characteristics of alternate feed materials may vary widely in
comparison to conventional ores. Accordingly, the Altemate Feed Policy sets out a number of
criteria intended to ensure that wastes generated from processing alternate feed material will
qualify as I le.(2) byproduct material and will not otherwise be subject to dual or multiple
jurisdiction. Thus, for example, the policy requires a licensee to ensure that processing an
alternate feed, and disposing of the resulting tailings and wastes, will not compromise a mill's
ability to comply with the regulatory requirements contained in l0 C.F.R. Part 40. See 60 Fed.
Reg. at 49,296.
Also, in order to avoid the possibility that wastes from processing an alternate feed might
be regulated as a mixed hazardous and radioactive waste, the Alternate Feed Policy provides that
an alternate feed material must not contain any listed hazardous wastes or residues that constitute
hazardous waste from any wastewater treatment process. 60 Fed. Reg. at 49,296-97. Tltis
requirement recognizes that many alternate feed materials are the residues or wastes from other
processing activities that might, unlike conventional ores, introduce listed hazardous wastes into
the tailings and wastes generated from processing the materials.
Similarly, it is implicit in the definition of I le.(2) byproduct material, and in the
presumption that an ore is processe d primarily for iis source material content if it is processed for
the extraction of uranium in a licensed uranium mill, that uranium will be extracted from the ore.
In order to ensure that the presumption under UMTRCA is justified and that the proposed
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alternate t'eed material will be processedprimarily for its source material content. and that the
resulting tailings will be I le.(2) byproduct material, it is necessary to determine, prior to trnding
that a material may be processed as alternate feed, whether or not it is reasonable to expect that
uranium will be extracted from the proposed alternate feed material.l2 This requirement
recognizes that, unlike conventional ores, altemate feeds can have wide variations in their
physical characteristics, and therefore it may not be reasonable to expect that uranium will be
extracted from every potential alternate feed. Hence, the co-disposal and certification tests in the
Altemate Feed Policy can assist in determining whether or not it is reasonable to expect that
uranium will be extracted from the proposed alternate feed at the mill.13
If it is reasonable to expect that uranium will be extracted (i.e., that the alternate feed
contains uranium and that the licensee will make a good faith eflort to extract uranium from the
altemate feed) then, in evaluating the proposed alternate feed material, it is appropriate for the
licensee and NRC Staffto apply the presumption that the altemate feed material will be
processedprimarily for its source material content and the resulting tailings will be I le.(2)
byproduct material. Il on the other hand, it is not reasonable to expect that uranium will be
'' It is important to note that this is a "reasonable expectation" test, which must be satisfied prior to frnding that a
proposed alternate feed is acceptable for processing. So long as it is reasonable to expect that uranium will be
recovered, regardless of whether or not any uranium ultimately is recovered, the presumption that the alternate feed
material is being processed primarily for its source material content is satisfied. The conclusion that an alternate
feed may be processed is based on the reasonable expectation prior to finding that a proposed alternate feed is
acceptable for processing as alternate feed material and hence the materials are being processed for the primary
purpose of satisfring that expectation. This presumption can be rebutted if the licensee does not make a good faith
effort to recover uranium. Interestingly, whether or not recycling of hazardous wastes under RCRA is considered
recycling rather than "sham recycling" similarly is based on the reasonable expectations of the parties or on the
actual results of the recycling. See infra at p. 28-29.
'3 The Alternate Feed Policy does not expressly use these words. However, given that the fundamental purpose of
the Alternate Feed Policy is to ensure that all tailings resulting from the processing of alternate feed materials are
I le.(2) byproduct material, and given the presumption that a licensed uranium mill that is processing ore for the
extraction of uranium is presumed to be processing the ore primarily for its uranium content, the only determination
that remains to be made in order to conclude that the tailings from processing an alternate feed will qualiff as
Footnote continued on next page
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extracted tiom processing the alternate t'eed material (and as a result the tailings may not qualifl
as I le.(2) byproduct material), then the presumption that the alternate feed material will be
processedprimarily for its uranium content would not be satisfied, and neither the licensee nor
NRC should permit processing of the alternate feed material.la
This is what is contemplated as "sham disposal" within the context of the Altemate Feed
Policy, where the Commission states:
For the tailings and wastes from the proposed processing to qualiff
as I le.(2) byproduct material, the ore must be processedprimarily
for its source-material content. There is concern that wastes that
would hwe to be disposed o/as radioactive or mixed waste would
be proposed for processing at a uranium mill primarily to be able
to dispose of it in the tailings pile as I le.(2) byproduct material. In
determining whether the proposed processingis primarily for the
source-material content or for the disposal of waste, either of the
following tests can be used [the policy then describes the co-
disposal test and the certification test]
60 Fed. Reg. at 49,297 (emphasis added). If it is not reasonable to expect that uranium will be
extracted from an altemate feed and in fact uranium is not extracted, the tailings will not qualifr
Footnote continued from previous page
I I e.(2) byproduct material is whether or not it is reasonable to expect that uranium will be exfi?cted from the
material.
'n Some examples of proposed alternate feed materials from which it may not be reasonable to expect that uranium
will be extracted include:
(a) Alternate feed materials that may be high in other radionuclides, such as radium or thorium, but that do
not contain uranium. Although the resulting tailings from the processing of such materials may be
essentially similar to the tailings that result from processing conventional ores, the inability to extact
uranium may preclude such an alternate feed material from satisffing the statutory requirements for the
tailings to qualifl as I le.(2) byproduct material.
(b)Alternate feed materials that do not contain any uranium that can be separated from various
contaminants or other metals in the feed materials.
. (c) Altemate feed materials where there are not adequate considerations (e.9., financial, uranium content, or
any other considerations) that would make it reasonable to expect that the mill operator will make a good
faith effort to extract uranium by processing the material through the mill.
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as l1e.(2) byproduct material under the AEA and hence would have to be disposed of elsew'here
as radioactive or mixed waste.'t Ho*euer, if it is reasonable to expect that uranium will be
extracted from a feed material, in which case the tailings from processing the material will meet
the statutory definition of I le.(2) byproduct material, the feed can be processed at the mill and
need not be disposed of in a LLRW or mixed waste disposal facility.
Sham disposal therefore occurs when a mill processes a proposed alternate feed even
though it is not reasonable to expect that uranium can be extracted from such material, and, in
fact, no uranium is extracted. This is because the tailings will not be I le.(2) byproduct material
under UMTRCA and therefore should properly have been disposed of in a LLRW or mixed
waste disposal facility. Under such circumstances processing the material through a uranium
mill would be considered a "sham" intended to avoid having to dispose of the material in a
LLRW or mixed disposal facility. Of course, if uranium is actually recovered, the tailings would
be I le.(2) byproduct material under UMTRCA and processing the alternate feed would not be
considered "sham disposal," even if at the outset a reasonable person might not have expected
that uranium could actually be extracted. tn addition, it would also be "sham disposal" if it was
reasonable to expect that uranium would be extracted from a proposed alternative feed but a
good faith effort was not made to extract the uranium and no uranium was in fact recovered.16
These are the only siale;tions that could constitute "sham disposal" under the Altemate Feed
't This would not be the case for I le.(2) byproduct materials or other materials that satisff the Alternate Feed
Poticy's co-difrsal test, which provides an independenr basis for concluding that an ore is being processed
primarily for its source material content since those materials, by definition, could be disposed of directly in a mill's
tailings impoundment. Thus, for example, I le.(2) byproduct material, which can be disposed of directly into a
licensed mill's tailings impoundment, can be processed as an alternate feed.
16 In these cases of "sham disposal," the presumption that on alternate feed material that is processed for the
extraction of uranium at a licensed uranium mill is being processed primarily for the extraction of uranium within
the meaning of the AEA, as amended by UMTRCA, cannot be relied upon, or if relied upon, would be rebutted.
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Policy because they are the only circumstances where the resulting tailings would not constitute
I le.(2) byproduct material.
lt is interesting to note that the concept of "sham disposal" described above is consistent
with EPA's concept of "sham recycling." EPA has focused considerable attention on "sham
recycling," which the Agency has described as waste treatment or disposal masquerading "under
the guise of'recycling. 63 Fed. Reg. 28,556,28,586 (May 26,1998). In the context of mineral
recovery from mineral processing waste streams (which is closely analogous to uranium
recovery from alternate feeds), EPA has identified as "sham recycling" situations where
ostensibly desired minerals are not, in fact, recovered from the waste stream and situations where
there is no reasonable expectation that the desirable minerals be recovered. See 6l Fed. Reg.
2338,2343 (January 25,1996). Similarly, in the context of alternate feed material, provided that
a mill processing alternate feed is able to extract uranium or was reasonably expected to extract
uranium, it wold not be sham recycling under EPA's guidance.
Another indication of "sham recycling" in mineral recovery operations, according to
EPA, is where the material being recycled is substantially different, chemically, from the
customarily used raw material, and, in particular, where toxic constituents are present in the
material to be recycled in quantities "significantly in excess" of those normally found in the raw
material. The analogous concem with respect to "sham disposal" in the alternate feed context
would exist if the tailings and other wastes generated from processing an alternate feed material
differed substantially, in terms of chemical or radiological characteristics, from the tailings and
wastes already disposed of in the mill's tailings impoundments. However, as NRC has
suggested, in order for processing of an alternate feed material to conform with the requirements
of l0 C.F.R. Part 40, Appendix A, the wastes and tailings generated from processing such feed
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material must be substantially similar to I I e.(2) byproduct material in terms of chemical and
radiological characteristics. See 57 Fed. Reg. at 20,529. Thus, so long as a licensee satisfies the
Alternate Feed Policy's requirement to demonstrate that processing an alternate feed will
conform with the requirements of l0 C.F.R. Part 40, Appendix A, this issue is not of concern.
Finally, the term "sham recycling" also implies disposing or recycling of a material in
order to circumvent regulation of the material. 61 Fed. Reg. at 2342. Clearly, this last issue is
not a concern with respect to the processing of alternate feed material at licensed uranium mills,
since the wastes and tailings generated from such processing are subject to the rigorous and
comprehensive regulatory regime established under 10 C.F.R. Part 40 for the disposal and long
term management of uranium mill tailings and related wastes. This regulatory regime requires,
among other things, that tailings impoundments (i) provide protection of public health and safety
without the need for active maintenance (i.e., relying solely on passive controls) for a period of
1,000 years, to the extent practicable, and for no less than 200 years; (ii) achieve levels of
protection against hazardous constituents in groundwater equivalent to those provided by RCRA;
(iii) incorporate a radon barrier to limit radon emissions to no more than 20 pCi/m2ls; and (iv)
clean-up any soils on or offof the mill site contaminated by radionuclides (primarily from
windblown tailings) to meet the so-called 5/15 pCr/gradium in soil standard that allows
unrestricted use of such property. l0 C.F.R. Part 40, Appendix A. The regulatory regime also
requires that either DOE or the State take title to and custody of the tailings impoundment
following site closure, pursuant to a perpetual NRC license, to provide for long term monitoring
and surveillance. Id.
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C. The Primary Purpose Requirement In The Alternate Feed Policy
As indicated previously, the Alternate Feed Policy provides that in order to process an
alternate feed material, a licensee must demonstrate that the feed will be processedprimarily for
its source material content. We have just discussed what this "primary purpose" requirement is
intended to mean and how it will be satisfied if it can be established that it is reasonable to
expect that uranium will be extracted from a particular proposed alternate feed. The Altemate
Feed Policy sets out two tests to be used in determining whether a proposed altemate feed
material will be processedprimarily for its source material content (f.e., whether it is reasonable
to expect that uranium will be extracted from a material). These two tests are: (i) the
certification test, and (ii) the co-disposal test.
Under the certification test, the licensee must certiry that the feed material is to be
processedprimarily for its source material content and for no otherprimary purpose. The
licensee must justiff its certification with "reasonable" documentation, which can be based on
"financial considerations, the high uranium content of the feed material, or other grounds."
60 Fed. Reg. at 49,297. The co-disposal test evaluates whether the alternate feed material could
be disposed of directly into the mill tailings impoundment, consistent with NRC's policy on the
disposal of non-Il.e(2) byproduct material.rT The rationale underlying the co-disposal test is
straightforward: if an alternate feed material can be disposed of directly into a licensed mill
tailings impoundment without having to be processed through the mill first it can be presumed
that the mill operator is processing the alternate feed primarily for its source material content.
t1 Final Revised Guidance on Disposal of Non-Atomic Energt Act of 1954, Section I le.(2) Byproduct Material in
Tailings Impoundmenrs , 60 Fed. Reg.49,296 (Sept. 22, 1995) (hereinafter referred to as the "Non-l le.(2) Disposat
Policy")
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Id. lmportantly, the primary purpose requirement will be satisfied if either the co-disposal or the
I certification test is met. It is not necessary to satisfu both tests.r8
I The Altemate Feed Policy specifically states that the determination of whether an
t alternate feed material is to be processe d, primarily for its source material content, using either
the certification test or the co-disposal test, must be made on a case-specific basis. /dI
1. The Certification Test
If a licensee certifies that it will be processing an alternate feed primarily for its source
I material content and for no otherpr imarypurpose,'' that certification must be justified with
t reasonable documentation. Under the Alternate Feed Policy, this justification can be based on
(a) financial considerations, (b) the high uranium content of the feed material, (c) or other
I grounds. As discussed above, this test is intended to demonstrate whether or not there is a
t reasonable expectation that uranium will be extracted from the proposed altemate feed material
(i.e., whether it is appropriate to apply the presumption under UMTRCA that ore processed in aIr licensed uranium mill is processedprimarily for its source material content). If it is reasonable
I to expect that uranium will be extracted from the proposed alternate feed materi al at alicensed
mill based on any one of the grounds described above, then the proposed altemate feed material
I wi[ be presumed under UMTRCA to be proce ssed primarily forits uranium content and the
I resulting tailings and wastes will be lle.(2)byproduct material.
II 18 Notably, in its Technical Evaluation Report (*TER") and approval of the Ashland 2 Amendment, NRC staff
concluded that IUSA in fact satisfied both tests.
I re The inclusion of the phrase "and no other primarypurpose" in the Alternate Feed Policy indicates that a licensedr mill may legitimately have one or more secondary purposes in processing an ore (e.g., to recover other metals such
as vanadium or tantalum, or to provide a recycling services for a fee), in addition to its primary purpose of
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recovering uranium.
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a. Financial Considerations
Although the Altemate Feed Policy provides that a licensee's certification can be justified
on the basis of "financial considerations," the Policy does not specifu or limit the meaning of that
term nor is it a mandatory component of a licensee's justification for certification. Neither, does
the Altemate Feed Policy certainly state anywhere that the term "financial considerations"
means, let alone is limited to, a comparison of the profitability of processing the alternate feed
material for uranium compared to the magnitude of a toll milling or recycling fee. Instead, for
the reasons discussed earlier, at pages 24-25, financial considerations as used in the Altemate
Feed Policy's certification test should be interpreted to mean any financial consideration that
supports the conclusion that itis reasonable to expect that uranium will be extracted from the
feed material. Some examples of financial considerations that lead to this conclusion include the
following:
(1) The Expected Inc;emental Cost of Processing the
Material for Uranium is Less than the Expected
Incremental Benefit of Producing Uranium from the
Materials
If the expected incremental cost of processing the altemate feed material is less than the
expected incremental benefit from producing uranium from the material, it is reasonable to
expect that uranium will be recovered from the material. In this context several points must be
considered. First, when looking at "financial considerations" it is appropriate to consider the total
economic impact on the licensee. There may be indirect cost savings associated with processing
alternate feed material, in the form of mill scheduling efficiencies and the like that create benefits
that can effectively be deducted from other costs of production. For example, if the mill were on
standby during the period that the materials were to be processed, the incremental cost of
processing the materials would not include the cost of certain categories of labor, utilities and
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overhead that would have been incuned anyway. If keeping the mill operating on a more regular
basis reduces employee training and retention costs (both in terms of time and et'fort and in terms
of operating inefficiencies to be expected during training) these types of benefits can be factored
against other costs of production in determining the true incremental costs of production. [N
addition, IUSA's Mill due to its size, historically has run conventional ores in campaigns
between which ore is stockpiled. To the extent that alternate feed materials reduce the standby
time between campaigns, operating efficiencies are increased and the benefit of these operating
efficiencies must be factored into the calculation of incremental benefit. Similarly, if running
alternate feeds reduces the time between conventional or mill runs the licensee can better assess
and adjust to commodity price fluctuations.
Similarly, there may be factors that increase the value of production. For example, there
may be commercial benefits to the production of U.S. origin uranium at a given time, such as
delivery into long term matched sales contracts at prices significantly higher than current or
expected spot prices or to allow production against expected royalties.
There can also be a net benefit to processing even low-grade uranium if it is easy and cost
effective to process a feed for uranium. Some altemate feeds have proven very easy to process
for uranium requiring little processing effort and cost. And finally, a toll milling, recycling, or
disposal fee can add to the net incremental benefit of processing an alternate feed.
In short, if the licensee determines that it is better off by processing the altemate feed
material for uranium than it is by not processing it, then it is reasonable to expect that uranium
will be extracted from the alternate feed material, in which case the presumption in the AEA, that
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the altemate feed material is being processed at the mill primarily for its uranium content. will be
applied.
(2) Other Valuable Metals That Can be Extracted as
Co-products
Often uranium is found in nature with other minerals such as vanadium, tantalum,
niobium, scandium, and zirconium. Depending on the type of processing that originally
generated the alternate feed material, the alternate feed may contain recoverable quantities of
these other metals in addition to uranium. IUSA's Mill has a secondary, side-stream recovery
circuit, originally designed to extract vanadium from the uranium/vanadium ores found in the
Colorado Plateau regions of Utah and Colorado, that makes it possible for the Mill to extract
other metals in addition to uranium from alternate feeds. If a licensee can process for other
metals and there is little incremental cost of also processing for uranium, it is reasonable to
expect that uranium will be extracted as well. Again, this is true regardless of any toll milling, or
recycling fee that may be paid to the mill operator. Also, depending on relative commodity
prices, the net value of the other metals may exceed the net value of the uranium, but this does
not make it unreasonable that uranium will not be extracted.
(3) Contractual Obligations to Process
The licensee may commit contractually with the generator of the altemate feed material
to process the material for the extraction of uranium, either to separate the unwanted uranium
from the metal or mineral that the generator wants rbnrrned after processing or to ensure that the
licensee satisfies the statutory presumption, thereby eventually extinguishing the generator's
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potential long term liability tbr final disposition of the waste, since it becomes l1e.(2) bvproduct
I material subject to l0 C.F.R. Part 40.
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In addition, the licensee could have contractually committed to rebate a certain portion of
t the regulatory fee based on the uranium contact of the material.
(4) Receipt of a Recycling Fee
I In general in the United States, recycling a waste stream to extract valuable resources is
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considered to be desirable and worthwhile; consequently, people are prepared to pay for
recycling services. One commentator on the Alternate Feed Policy noted:
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In many cases, it is necessary to charge a fee to the customer to
make a recycling system economically viable; and yet, nobody
claims that these systems are "sham recycling" because the waste
"generator" is compelled to pay to support the recycling process.
For example . . . used oil and used tires are almost never purchased
from the customer by recyclers; rather, the consumer pays to get
rid of them. Yet bottles, used oil and used tires that are
accumulated and are actually reprocessed and reused are clearly
being'orecycled" despite the fact that the money is going in the
o'wrong direction." . . . . Infact, none of these programs involve
sham recycling. They involve real, bonafide recycling because
used materials are reolly being processed and valuable
components are really being recovered and reused . . .
Reclamation of source material wastes in uranium mills will serve
these same beneficial purposes.2o
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l,"*'-"@erformanceMaterialstoChief,RulesandDirectivesReviewBranch,r U.S. Nuclear Regulatory Commission 7 (June I l, 1992) (Aftached as Exhibit 5). In fact virnrally all forms of
recycling - including perhaps processing of such source material wastes as altemate feed - require some type of
I subsidy or fee, because none of it is very profitable. In his article published in the New York Times under the title,
I "Recycling [s Garbage," John Tierney pointed out that for every ton of glass, plastic and metal that the City of New
York recycles, it spends $200 more than it would spend to bury the material in a landfill. John Tierney, Recycling ls
r Garbage, N.Y. Times, June 30, 1996 (Attached as Exhibit 6). Simply pug "recycling costs money."I
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A commitment to process an alternate feed material for the extraction of uranium, together with
the payment of a recycling fee to the licensee is sufficient evidence that it is reasonable to expect
that the material will be extracted at the mill.
These are some illustrative examples of the types of financial considerations that are
relevant in determining whether it is reasonable to expect that uranium will be extracted from an
alternate feed material. Any one of these factors would be sufficient to justiff a licensee's
certification, although no single one is required in order to justiff the certification.
b. High Uranium Content of the Feed Material
The second factor identified in the Alternate Feed Policy as potentially justiffing a
licensee's certification is the high uranium content of an altemate feed. 60 Fed. Reg. at 49,297.
Significantly, the Altemate Feed Policy speaks in terms ofjustifuing a certification on the basis
of high uranium content, not high uranium concentration. Tlte word content can mean content
per ton (i.e., concentration), or the total quantiry contained in the entire volume of feed material
to be processed.
If an altemate feed material contains a high enough concentration of uranium, it is
reasonable to assume that uranium will be extracted from the feed material, and there is no need
to inquire further. There are also circumstances, however, where it is reasonable to expect that
uranium will be extracted from a large quantity of relatively low concentration alternate feed
material so long as the total quantiry of uranium in the feed material is "high." This may be
particularly so where the composition of the feed material is relatively well-understood and
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where it would normally be expected that reprocessing would yield uranium, such as with
I le.(2) byproduct material.
The Alternate Feed Policy does not specifu what is to be considered a high uranium
concentration, so the licensee and NRC have wide discretion in interpreting what constitutes
"high" uranium content. See Bernstein v. Sullivan, gl4 F.2d 1395, 1400 1l0th Cir. 1990).
However, for the reasons discussed previously, the concentration should be high enough so that
it is reasonable to expect that uranium will be extracted from the feed material.2l.
c- Other Grounds
In its response to comments on the proposed Alternate Feed Policy, the Commission Staff
stated that:
The licensee justification can be based on financial considerations,
on the high uranium content ofthe ore, or on any other grounds
that the licensee determines will justifr that the proposed
processing is primarily for the uranium content of the material and
is not sham disposal.
SECY 95-211, Attachment 3 at 17 (emphasis added) (see Exhibit 4). In other words, the
certification can be justified on any grounds that the licensee determines will lead to the
reasonable expectation that uranium will be extracted from the feed material in a licensed
uranium mill, thereby ensuring that the resulting tailings are I le.(2) byproduct material.
Examples of such other grounds may include the following:
2r It would seem that ifan alternate feed had a uranium concentration at least as high as the average grade of
uranium in conventional ores processed at the mill, it would be reasonable to expect that uranium will be extracted
from the material - particularly since there typically are no mining or transportation costs associated with milling
alternate feeds.
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. Contractual obligations with a generator of the altemate t-eed material to process the
material for the extraction of uranium;
o A pressing national or local need, which might strongly encourage a mill operator to
recover uranium from whatever source possible;
o The public policy considerations underlying recycling. Such recycling service
provides low cost environmental clean-up or consolidation of waste to as few sites as
possible. Recycling is a favored national environmental policy; furthering that
national policy is another ground upon which a licensee's certification that it is
processing a proposed alternate feed primarily for its source material content may be
justified;
o Processing alternate feeds may be beneficial to the overall operation of the Mill
process, and in fact enhance the value of other feed streams. For example, test work
has shown that combining altemate feed materials containing calcium fluoride with
conventional uranium/vanadium ores results in small increases in the leach recovery
rates. The alternate feed material provides the fluoride component and the contained
uranium. Also, materials with lower radionuclide content (including uranium) can
have beneficial impacts in tailings impoundments. Properly managed, the tailings
solids with lower levels of radioactive elements can act as a shield for the higher
levels of radiation present in wastes from processing higher grade ores. This
shielding also assists in lowering radon emanation from the tailings (the primary
public health concern associated with uranium mill tailings) and puts less of a
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perforrnance burden on the final radon barrier, essentially increasing the factor of
safety in the design of the barrier; and
o The licensee's past experience in processing similar types of altemate feed materials.
Indeed, when determining whether any justification provided to the NRC is sufficient
to support a certification, it is appropriate for the NRC to take into consideration the
past experience the mill has had in processing alternate feeds, and the level of trust
the NRC has in the licensee's and in the licensee's ability to successfully process
alternate feeds for the extraction of uranium.
d Conclusions Regarding the CertiJication Test
In summary, the purpose of the certification test is to provide evidence to NRC to allow
the Commission to conclude that it is reasonable to expect that uranium will be extracted from a
proposed alternate feed material. We have provided above some examples of factors that might
support such a conclusion. No single factor is required; any grounds that support that conclusion
are sufficient to justiff the licensees certification.
2. The Co-Disposal Test
The co-disposal test provides an alternative method for demonstrating that an ore is being
processedprimarily for its source material content (i.e., that it is reasonable to expect that
uranium will be extracted from the altemate feed at a licensed uranium mill). Under the co-
disposal test, an alternate feed material will be presttmed to be processedprimarily for its source
material content if the feed material would be approved for disposal in a licensed mill tailings
impoundment consistent with NRC's Non-lle.(2) Disposal Policy. 60 Fed. Reg. at 49,297. T\e
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rationale underlying this position is straighttbrward: if an altemate t'eed material can be disposed
of for a fee. directly into a licensed mill tailings impoundment without having to be processed
through the mill first, it can be presumed that the licensee milling this material must be
processing it primarily for its source material content. As NRC has explained:
The clearest way to show, beyond any doubt, that proposed feed
material would be processed primarily for its source material
content, is to show that it would be allowed to be disposed of in the
tailings impoundment in any case. Such a demonstration would
dispel any accusation of "sham disposal."
SECY 95-21l, Enclosure 3 at l7 (see Exhibit 4).
IV. UTAH'S ARGUMENTS ARE WITHOUT MERIT
As demonstrated below, IUSA's processing of the Ashland 2 material satisfies all of the
criteria set out in the Altemate Feed Policy, including, most importantly, the requirement that the
alternate feed be processedprimarily for its source material content. NRC Staffs decision to
approve Amendment 6 to IUSA's license was based on a reasonable and proper application of
the Alternate Feed Policy and was adequately supported by the administrative record.
Accordingly, the Staffs decision to approve Amendment 6 should be affirmed.
A. The State Of Utah Has Fundamentally Misconstrued The Meaning Of
"Processed Pn'mcrily For Its Source Material Content" As Used In NRC's Alternate
Feed Policv
1. Summary of Utah's Argument
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Utah asserts that IUSA is not processing the Ashland 2 material primarily for its source
material content. Utah Brtef at3,5,9. The State makes two arguments to support this core
assertion. First, the State argues that IUSA is processing the Ashland 2 material primarily for the
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purpose of collecting a handling and disposal fee. Id. At 3, 9. It makes this assertion based on
calculations it has performed that purport to show that the revenue IUSA will generate from the
handling and disposal fees it receives in connection with the Ashland 2 material will be
substantially greater than the potential revenue IUSA will receive from the uranium it recovers.
The State argues that this disparity - the fact that the value of the uranium recovered from the
Ashland 2 material may not be as great as the value of the fees IUSA collects - requires the
conclusion that IUSA is not processing the Ashland 2 material primarily for its source material
content but instead is processing the materi al primarily for handling and disposal fees. Id. at 7 -8.
In other words, according to the State, because the recovered uranium, in and of itself, is not the
most profitable aspect of IUSA's processing of the Ashland 2 material, IUSA is not processing
that material primarily for its uranium content.
The State's second argument is a conclusory one. According to the State, IUSA cannot
justifu its certification that it is processing the Ashland 2 mateial primarily for its uranium
content based on "high uranium content," because the average concentration of uranium in the
Ashland 2 material is "low." Utah Briefat 10-12.
As discussed below, the State's arguments regarding the uranium content and relative
profitability of the Ashland 2 material are wrong and in any event, are iruelevanl in determining
whether IUSA is processing the Ashland 2 material primarily for its source material content.
2. Neither Congress Nor NRC Intended That An Economic Or Prolitability
Test Be Imposed to Determine Whether A Material Is Processed Prinrcrily
For Its Source Material Content
As demonstrated above in Section II.B, UMTRCA's legislative history reveals that
Congress did not intend to require an economic or profitability showing in order to demonstrate
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that an ore is being processed primarily for its source material content. There certainly is no
suggestion in the legislative history that the extracted source material must be the most profitable
aspect of the milling of an ore in order for the ore to be processed primarily for its source
material content. Instead, as discussed in Sections II.C and II.D above, Congress used the word
"primarily" to distinguish between ores processed in licensed uranium mills that are part of the
nuclear fuel cycle and ores processed in secondary or side-stream operations at facilities that are
not nuclear fuel cycle facilities.22
Given its aim of sweeping a broad range of materials into the definition of I le.(2)
byproduct material (to ensure that all wastes and tailings from licensed uranium recovery
operations would be covered by UMTRCA's comprehensive regulatory scheme for 1le.(2)
byproduct material), it is difficult to imagine that Congress or NRC would have intended to link
the determination of whether a material qualifies as I le.(2) byproduct material (r.e., whether a
feed material is processed primarily for its source material content) to something so ephemeral as
the relative profitability of the uranium produced from the processed feed material. For example,
depending on normal market fluctuations, on any given day uranium might be the most
profitable mineral to be extracted from a feed material - whether conventional ore or alternate
feed -- while on the next day a different mineral present in the feed material (e.g., vanadium,
tantalum, etc.) might be more profitable than uranium. If Congress intended to link the
determination of whether an ore is being processed primarily for its uranium content solely to the
" Similarly, there is no suggestion in the Alternate Feed Policy that NRC intended the term primarily to mean "most
profitable" when it provided that an alternate feed must be processed primarily for its source material content.
Indeed, a careful reading of the Alternate Feed Policy suggests just the opposite conclusion: a material may be found
to be process ed primarily for its source material content regardless of the profitability of the source material that
may be recovered, financial considerations are only one of several different grounds for justiffing a licensee's
certification under the Altemate Feed Policy. The co-disposal test does not involve any profitability considerations
whatsoever.
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relative profitability of extracting the uranium, mills would be put in the untenable position of
producing wastes which are regulated by NRC as I le.(2) byproduct material on one day and on
the following day producing wastes, from the same ore, which are regulated under a different
regulatory regime (e.g., RCRA), solely because fluctuations in the market price of uranium (and
corresponding shifts in the relative profitability of uranium as compared to other mineral values
in the ore) might cause the ore to be deemed to be processed "primarily" for uranium on one day
and"primarily" for a different mineral on the following day.
Similarly, adopting a profitability test such as Utah urges would ignore years of
established NRC precedent. Historically, licensed uranium mills processing conventional ores
have recovered other minerals in addition to uranium as part of secondary or side-stream
operations. Vanadium is a mineral that is typically recovered in such side-stream processes,
particularly when processing uranium ores from the Colorado Plateau. Often in the past, when
ores containing vanadium and uranium have been processed at the Mill, the value of the
vanadium contained in the ore (and the relative profitability of extracting the vanadium) has
exceeded the value of uranium recovered from the ore. However, neither NRC nor the State has
ever suggested that uranium ore processed under such circumstances is not being processed
primarily for its source material content, nor has NRC ever asserted that the tailings from such
processing do not quafiry as I le.(2) byproduct material. Indeed, as discussed previously, the
D.C. Circuit has indicated that ores that are processed first to recover rare earths and later to
recover uranium or thorium may still be deemed to be processed"primarily" for their source
material content. See Kerr McGee,903 F.2d at 7-8.
Given Congress' desire to create in UMTRCA a comprehensive, uniform, national
program for the long-term regulation and control of I le.(2) byproduct material (and given its
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intent to include within the definition of 11e.(2) byproduct material the broad range of materials
I generated as wastes from licensed uranium recovery operations), it is inconceivable that
I Congress could have intended that a material's status as l1e.(2) byproduct material (or as an ore
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that yields I le.(2) byproduct material) would be so uncertain as to shift from one day to the next
I based upon the market value of uranium.
I Furthermore, tying the concept of l1e.(2) byproduct material to a profitability test such as
I that urged by the State leads to the absurd result that the determination of whether or not a
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licensee's process wastes will be regulated as l1e.(2) byproduct material could be based upon
I the licensee's ability to negotiate favorable commercial terms with the generator of the alternate
t feed material. For example, IUSA's predecessor accepted alternate feed materials for processing
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at the Mill in the past without requiring fees of the magnitude associated with the Ashland 2
I material. Under the profitability test urged by the State, the processing of this altemate feed
I material in the past would have resulted in the creation of 11e.(2) byproduct material (1.e., IUSA,
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or its predecessor, would have been deemed to be processing the alternate feed material
primarily for its source material content) simply because IUSA, or its predecessor, was unable
I to, or chose not to, negotiate handling and recycling fees as favorable as those IUSA negotiated
I for the Ashland 2 material. It seems unlikely that Congress would have intended to have aI
material's status as 11e.(2) byproduct material hinge on the ability of a licensee to negotiate
I favorable commercial contractual terms, yet this could be one result of the profitability test urged
I by the State. 23
TI " For example, in 1997 the Mill's license was amended to allow the processing of another DOE material, known as
- the "Cotter Concentrate," as an alternate feed at the Mill. The Cotter Concentrate had been stored as a strategic
I material in inventory at the Nevada test site. Originally, it had been anticipated that the material would undergor Footnote continued on next page
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Utah's assertion that the value of the uranium must be the most protitable aspect of
processing conventional ores or alternate feeds. has no basis in the statute, the Altemate Feed
Policy, in case law or in NRC practice.
3. The State of Utah Misconstrues The Meaning of the "High Uranium
Content" Justilication
Utah's second argument, that Ashland 2 material contains a "low" uranium content and
as such fails another possible justification under the Alternate Feed Policy, is similarly without
merit.
Based on its review of the history of the Ashland 2 site, the State of Utah concludes that
'1he Ashland 2 Material probably contains very little recoverable uranium" (Utah Brief, p. l0).
Nevertheless, the State of Utah estimates that the average grade of uranium in the Ashland 2
Materials ranges between 0.008% and 0.058%, yielding a total of approximately 8,000 to 70,000
pounds of yellow cake (Herbert testimony at p. 6-8).
Footnote continued from previous page
further processing for urmium extraction, to support the nation's nuclear weapons progratn. However, suspension
of large-scale weapons production eliminated the need for this material. This led DOE to conhact with IUSA to
proceis the Cotter Concentrate to extract its uranium content, and to dispose of the tailings and related processing
wastes in the Mill's existing tailings impoundment. Sigrificantly, the State of Utah did not object to IUSA's
processing of this altemate feed material, and ultimately, IUSA was able to recover approximately 60,000 pounds of
uranium from the Cotter Concentrate.
DOE has estimated that it saved approximately S3 million in disposal costs by recycling the Cotter Concentmte at
IUSA's Mill. O'Laughhn et al., Saving Time, Expense, and a Yaluable Resource by Recovering Uranium From
Surplus DOE Strategic Material at a Corwentional [Jranium Mill, repdnted in Proceedings of WM'98' Tucson,
Ariiona. This suggests that IUSA could have assessed DOE fees on the order of close to $3 million, had it chosen
to do so. Under Utah's theory, had IUSA in fact charged such a fee, the whole nature of IUSA's processing of the
Cotter Concentrate would have been altere4 as would the legal status of the tailings and related wastes generated
from such processing. Specifically, IUSA would no longer be presumed to be processing the Cotter Concentrate
primarily for its source material content and the tailings and wastes generated from processing the material would no
ionger be considered I le.(2) byproduct material - even though IUSA would be processing aactly the same material.
This result makes no sense.
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The State o[Utah misunderstands two points. First, as mentioned above. the Alternate
Feed Policy does not detlne what is meant by ''high" uranium content, so licensee and NRC hal'e
wide discretion in interpreting what constitutes "high" uranium content. As will be discussed in
Section IV.B. below, the Ashland 2 Materials should be considered to have "high" uranium
content within the meaning of the Alternate Feed Policy. In coming to its conclusion that the
Ashland 2 Materials probably contain very linle recoverable uranium, the State does not set out a
standard for comparison, in order to reach that conclusion. Certainly 8,000 to 70,000 pounds of
uranium is a significant amount of uranium. If the State of Utah means that "high" uranium
content requires that the value of the uranium must be the most economic aspect of the
processing, then the State is confusing the "high" uranium content justification with its
interpretation of the "financial considerations" justification.
Second, the State appears to ignore the fact that even if one could argue that the uranium
concentration is not "high," the total uranium content can still be considered to be "high."
4. Utah Is Incorrect In Suggesting That IUSA's Processing Of The
Ashland 2 Material Might Implicate *Sham Disposal" Issues
Utatr correctly points out that NRC, in the Alternate Feed Policy, states that potential
problems of "sham disposal" are eliminated if a licensee seeking to process an alternate feed
demonstrates that it will be processing the feed primarily for its source material content. Utah
Brief at4. To the extent that Utatr's discussion of "sham disposal" is intended to suggest that
IUSA's processing of the Ashland 2 material raises. gham disposal concerns, that suggestion is
baseless.
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First. as It SA has demonstrated. the mere t'act that the value of the uranium recorered
tiom the Ashland 2 material may not be as great as other values associated with IUSA's
processing of the material does not preclude a determination that [USA's processing of the
material is primarily for its source material content. Neither does the fact that the Ashland 2
material may not contain high concentrations of uranium. This is because neither Congress nor
NRC intended to impose a profitability test or a minimum uranium concentration requirement in
determining whether a material is being processedprimarily for its source material content.
Indeed, NRC has expressly indicated that a f,rnding of "sham disposal" cannot be based solely on
the economics or relative profitability of uranium recovered from an alternate feed material. [n
its response to comments on the proposed Alternate Feed Policy, the Commission Staff stated
that:
We agree that a licensee certification may not be sufficient to
prevent sham disposal, but also agree that the economic aspects
may not be able to dffirentiate between legitimate uranium
processing and sham disposal. We therefore have expanded the
test to require both a licensee certification and justification. The
licensee justiJication can be based onfinancial considerations, on
the high uranium content of the ore, or on any other grounds that
the licensee determines will justiff that the proposed processing is
primarily for the uranium content of the material and is not sham
disposal.
SECY 95-211, Attachment 3 at 17 (emphasis added) (see Exhibit 4).
This approach is similar to that recently adopted by EPA when addressing "sham
recycling" concerns in the context of mineral processing wastes. Specifically, the Agency
declined to adopt an economic test or a minimum concentration requirement for determining
whether such wastes are being processed to recover their mineral content or for sham recycling
purposes. According to the Agency:
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The main issue in this rulemaking was whether the Agency should
I develop quantified criteria for use in assessing the legitimacy of
f reclamation activities within the mineral processing industry. The
Agency proposed quantitative criteria including the potential use of
I an ore grade cut off, normal operating range. efficiency standard,
f and an economic test.
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Industry commenters also rejected the proposed use of an
I economic test because recycling need not be profitable to ber 5:1.;T;[#ijx;';ji:?|]:'J'Jfi|3;:*".'ff',il'.1ilff"*
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was legitimately reusing the recycled materials.
For these reasons the Agency has declined to adopt any of the
I ProPosed quantitative tests'
63 Fed. Reg. at 28,587.
t As discussed in Section IILB. above, "sham disposal" within the meaning of UMTRCA
t and the Alternate Feed Policy, is intended to mean sinrations where it is not reasonable to expect
r that uranium will be recovered from an altemate feed material and in fact no uranium isI
recovered, or where it may be reasonable to expect that uranium will be recovered from an
I alternate feed material, a good faith effort is not made to recover the uranium and no uranium is
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recovered. In these cases, the presumption that an alternate feed material that is processed for
the extraction of uranium at a licensed uranium mill is being processedprimarily for the
I recovery of uranium within the meaning of the AEA, as amended by UMTRCA, cannot be relied
I upon or if relied uPo$ would be rebutted.
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However, even the State's calculations indicate that IUSA is likely to recover between
roughly 8,000 to 70,000 pounds of uranium from the Ashland 2 material. Herbert Testimony at
t 7-8. Therefore, it is diffrcult to conclude that it is not reasonable to expect that uranium will be
I extracted from the Ashland 2 material.
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\loreover. using RCR{'s detlnitions of ''sham recl'cling" as a comparison. the
I processing of the Ashland 2 materials bears none of the indiciaof "sham recycling" under
I RCRA, described previously in Section IILB. above. First, it is reasonable to expect that
uranium will be recovered from the Ashland 2 material. Secondly, the tailings and wastes
I generated from processing the Ashland 2 material are substantially similar to the tailings already
I disposed of in the Mill's tailings impoundments and NRC Staffhas determined that IUSA'sr ;#::,ffiil:::*-:-::.;J-=;:,,.:::;*-'
I Ashland 2 material will not escape regulation by virtue of being processed at the Mill, as they
will be subject to the same comprehensive regime for regulating the disposal and long term
I management of uranium mill tailings and related wastes, under l0 C.F.R. Part 40, that already
I applies to the tailings and wastes disposed of at the mill from processing conventional ores.
I B. IUSA Has Provided NRC With Documentation Suflicient To Demonstrate That
I
IUSA has provided NRC with documentation sufficient to demonstrate that IUSA is
I processing the Ashland 2&at*ialprimarilyfor its source material content. In fact,IUSA has
t satisfied both the certification and co-disposal tests.
I l. IUSA Has Setisfied The Alternate Feed Policy's Certification Test
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Utah argues that IUSA cannot justiff its certification that it is processing the Ashland 2
material primarily for its source material content because the handling and disposal fees IUSA
I expects to receive from processing the Ashland 2 material will exceed the economic value of the
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uranium IUSA wiil recover and the alternate tted's uranium content is "low." L'tah BrieJ at 7- 10.
Neither of the State's arguments has merit.
a. IUSA Has Provided NRC Staff With Sulftcient Evidence To
Justify lts Certificotion On Financial Grounds
In its brief, Utah offers several calculations that it uses to compare the revenue IUSA
could receive from handling and disposal fees imposed on the Ashland 2 material versus the
revenue IUSA might generate from the uranium recovered from the alternate feed material.
Utah Brief, at 7-8. Utah uses these calculations, which are based on a number of assumptions
regarding the composition and physical characteristics of the Ashland 2 material and the nature
of the world market tbr uranium, to demonstrate that IUSA will receive substantially more
revenue from handling and disposal fees than it will receive from the sale of uranium extracted
from the Ashland 2 material (on the order of $4 million versus approximately $70,000 to
$600,000). Id. The State argues that this apparent disparity indicates that IUSA cannot use
"financial considerations" to justiff its certification that it is processing the Ashland 2 material
primarily for its source material content.
The State assumes, without any basis, that when the Alternate Feed Policy speaks of
justiffing a certification on the basis of financial considerations, those considerations must be
limited to the value or profitability of the uranium recovered from the alternate feed relative to
the magnitude of any recycling or processing fees. In fact, as discussed in Section III.C.l.a.
above, the Alternate Feed Policy does not limit in any way the specific types of "financial
considerations" that might justiff a licensee's certification. Certainly, the Policy does no,
require that the licensee demonstrate that the market value of the recovered source material
outweighs any other economic benefit that might flow from processing the alternate feed.
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ln its license amendment application. IUSA provided NRC with considerable er idence tcr
support the conclusion that IUSA will receive a substanrial economic benefit from processing
the Ashland 2 material to recover the material's uranium content. Even the State acknow'ledges
that the value of the uranium recovered from the Ashland 2 material, on its own, may total more
than $600,000. These anticipated revenues plus the additional economic advantages addressed in
IUSA's application for Amendment 6 represent a substantial economic benefit to IUSA
associated with its processing of the Ashland 2 material to recover uranium. In addition, IUSA
committed contractually to process the Ashland 2 materials at the Mill for the recycling of
uranium in consideration of receiving a recycling fee. Furthernore, IUSA has agreed to rebate a
portion of the recycling fee to USACE based on uranium content of the Ashland 2 material.
These factors alone provides a sufficient basis to conclude that it is reasonable to expect that
uranium will be extracted from the Ashland 2 material.
Thus, it was reasonable for NRC to conclude that there was a reasonable expectation that
uranium would be recovered from the Ashland 2 material and, therefore, that the Ashland 2
material would be processedprimarily for its source material content. The State of Utah may
disagree with this conclusion; however, since the Alternate Feed Policy does not prescribe any
specific showings that must be made or standards that must be applied in order to justiff a
certification based on financial considerations, NRC should have wide discretion in deciding
what constitutes reasonable documentation to justiff such a certification. See Bernstein v.
Sullivan, gl4 F.2d 1395, 1400 (lO6 Cir. 1990). Thus, any reasonable interpretation by the
Commission should be upheld. See, e.g., (ldalt v.'Tallman,380 U.S. I at24(1965).
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b. ILSA's CertiJication .Voy Also Be Justified On The Basis Of
High Uronium Content
Utah also argues that IUSA failed to justift its certification under the Alternate Feed
Policy on the basis of the Ashland 2 material's uranium content. Utah Briefat l0-12. Since
IUSA's certification was adequately justified on the basis of financial considerations. as just
discussed, no further justification is required in order to satisff the Alternate Feed Policy's
certification test. However, the uranium content of the Ashland 2 material provides a second,
independenr basis for justiffing IUSA's certification.
In written testimony submiued with its brief, the State provides a range of uranium
concentrations that it estimates are likely to be found in the Ashland 2 material. The State's low-
end estimate puts the uranium concentration of the Ashland 2 material at 0.008 percent by
weight; the high-end estimate puts the uranium concentration at 0.058 percent by weight.
Herbert Testimony at 6-7. The State concludes from this that "the Ashland 2 material probably
contains very linle recoverable uranium" and, therefore, IUSA's certification cannot be justified
on the basis of the uranium content of the alternate feed,. (Jtah Brief at 12.
IUSA believes that the State's characterization of the uranium concentration in the
Ashland 2 material is misleading. As explained in IUSA's application for Amendment 6 and in
responses to NRC comments on the application, IUSA has estimated an average uranium
concentration in excess of 0.05 percent based upon data provided by the USACE. However, the
real flaw in Utah's argument lies not with the State's estimates of uranium concentration but
with the premise underlying the State's argument, which is that the uranium content of the
Ashland 2 material is "low."
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There are three tlaws with Utah's argument. First. "high" uranium content is an
inherently relative concept. that will vary depending on whether one looks at uranium content
from the perspective of current market conditions (e.g., the uranium content of an alternate feed
as compared to conventional ores available on the domestic or international market), historical
values (e.g., the uranium content in an altemate feed compared to the highest average content in
conventional ores over the past 40 years), or anticipated trends (e.g., the uranium content in an
alternate feed as compared to the expected content in conventional ores over the next 20 years).
Generally speaking, the vast majority of conventional ore mined and processed in the United
States would not be classified as "high" grade in relation to ores available in other parts of the
world. Moreover, some estimates suggest that uranium concentrations as low as 17.6 parts per
million (r.e., 0.00176oh) could lead to exposures of 25 mrem/y which would satisff NRC's new
dose criteria for "unrestricted" use, and would require disposal or other types of remediation in
certain cases. The estimated average grade of the Ashland 2 material of 0.05% is approximately
28 times as high as levels estimated to satisff the 25 mrem clean-up standard. By comparison, to
that standard is high.
Second, because the Altemate Feed Policy does not speciff what constitutes "high"
uranium content, and does not provide any standards to be applied in evaluating whether a feed
material's uranium content is "high," NRC has discretion in determining what constitutes "high"
uranium content sufficient to justiff a licensee's certification. See, Bernstein 914 F.2d at 1400.
Any reasonable interpretation by the Commission should be upheld. See, e.g., Udall v. Tallman,
380 U.S. I at24 (1965). Compared to 0.00176yo, .05yo is "high." It is clearly "high" enough to
expect that uranium can be extracted from it. In fact, the Mill is currently purchasing
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conventionai ores tbr the extraction of uranium and uranium that contaln a!erage grades oI
uranium of between 0.05 and 0.07%.
Finally. as discussed previously in Section tll.C.l.b, the Alternate Feed Policy speaks in
terns ofjustifying a certification on the basis of high uranium content, not high uranium
concentration This distinction is significant. In its license amendment application, IUSA
provided NRC with sufficient evidence to support the conclusion that the Ashland 2 material
being processed by IUSA will yield a substantial quantity of uranium, even assuming arguendo
that the average concentration of uranium in the Ashland 2 material might not be characterized
as "high." Indeed, the State of Utatr itself estimates that somewhere between roughly 8,000 to
70,000 pounds of uranium will be recovered from the Ashland 2 material being processed by
IUSA. (Herbert Testimony at 7-8.) Thus, even based on the State's analysis, it is evident that a
significant amount of uranium will be recovered from the Ashland 2 material by [USA, and it is
well within NRC's discretion to conclude that the ability to recover such a substantial quantity of
uranium from the Ashland 2 material indicates that the material has a "high" uranium content.
Consequently, NRC could appropriately conclude, based on the total quantlry of uranium in the
Ashland 2 material, that it is reasonable to expect that uranium will be extracted from the
Ashland 2 material and, therefore, that the Ashland 2 material will presumed to be processed
primarily for its source material content within the meaning of the AEA, as amended by
UMTRCA, and the Alternate Feed Policy.
c. IIISA's Certiftcation Ciit Also Be Justified On "Other
Grounds"
Under the Alternate Feed Policy, a licensee's certification that it is processing an
alternate feed primarily for its source material content can be justified "based on financial
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considerations. the high uranium content of the feed material. or [ant'J other grourlrls." o0 Fed.
Reg. at 19,297 (emphasis added). In addition. "[t]he determination that a proposed processing is
primarily for the source material content must be made on a case-specific basis." /d
IUSA believes that its certification can be justified on a number of grounds in addition to
the financial considerations and uranium content issues just discussed. Specifically, these "other
grounds" justifting IUSA's certification include the following:
o First, IUSA will be recycling substantial quantities of a valuable material. As already
discussed, even based on the conservative numbers calculated by the State, IUSA is
likely to recover between 8,000 to 70,000 pounds of uranium from its processing of
the Ashland 2 material. In all likelihood, if IUSA were not processing the Ashland 2
material this substantial quantity of valuable uranium would be lost to disposal.
Recovering and recycling such a substantial quantity of valuable uranium is an
important benefit, and provides an additional justification for IUSA's certification.2a
This was perceived to be a benefit by USACE, the agency administering remediation
of the Ashland 2 site, which is one of the reasons why IUSA was chosen by USACE
and committed contractually to process the Ashland 2 materials for the recovery of
uranium;25
2a Indeed, as EPA has note4 recycling can be legitimate and beneficial even if it is not profitable. See generally, 63
Fed. Reg. at 28,556.
25 Thus, in its value engineering proposal for disposition of th6 Ashland 2 material, the USACE specifically listed
among the advantages associated with IUSA's processing of the material:
ADVANTAGES
l. Conforms to Congressional and regulatory mandates which encourage use of
recycling.
Footnote continued on next page
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o Second. by recovering uranium lrom the Ashland 2 material. IUSA's processine
makes the material less radioactive, thereby reducing the hazards associated r,''ith its
ultimate disposition and, in effect, making it safer for disposal. This was also
perceived to be a benefit by the USACE and hence is another reason that IUSA was
chosen to and contractually committed to process the Ashland 2 materials for the
recovery of uranium;
o Third, recycling the Ashland 2 material provides a benefit to the government, and
therefore to the public at large, by allowing the FUSRAP progftrm to reduce its
inventories of unwanted materials and accomplish environment clean-up in a manner
that is environmentally sound, that is cost efficient, and that allows for the recovery of
a valuable product that would otherwise be disposed;
o Fourth, the Ashland 2 materials are 1le.(2) byproduct materials that originated from
conventional ores and are therefore chemically, radiologically and physically similar
to the existing Mill tailings and should be expected to be able to be processed for the
recovery of uranium at the Mill; and,
Footnote continued from previous page
2. Reduces radioactivity of the material to be disposed of.
3. Recycles uranium and other minerals.
7. Actual cost savings for treatment and disposal versus cost of direct disposal
can only be greater than projected in this pfqposal, depending upon the actual
content of recoverable uranium or other minerals found in the waste stream.
See USACE, Value Engineering Proposal, hoposal No. C- l l, originally included with IUSA's license amendment
application, by lener from Michelle R. Rehmann to Joseph J. Holonich (May E, 1998). (A copy of the value
engineering report is included here as Exhibit 7)
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o Finally'. IUSA has a history of successfully' extracting uranium tiom alternate t'eed
materials and has developed credibility with the NRC, not only for being technically
competent, but also for fulfilling its proposals to recover uranium from altemate
t-eeds.
These factors must be taken into consideration in determining whether or not the NRC
acted reasonably in relying on IUSA's justification of its certification. In order to justify its
certification, IUSA provided the Commission with "reasonable" documentation for NRC to
conclude that there is a reasonable expectation that IUSA will extract uranium from the
Ashland 2 materials
2. IUSA's Processing Of The Ashland 2 Material Satisfig The Altemate
Feed Policy's Co-Disposal Test
The co-disposal test provides an alternative method for demonstrating that an ore is being
processedprimarily for its source material content. Under the co-disposal test, an alternate feed
material is presumed to be processedprimarily for its source material content if the feed material
would be approved for disposal in a licensed mill tailings impoundment consistent with NRC's
Non-lle.(Z) Disposal Policy. 60 Fed. Reg. at 49,297. This is because a licensee that is
processing a feed material that could simply be disposed, for a fee, directly into a licensed mill
tailings impoundment can be presumed to be processing the feed material primarily for its source
material content.
It will be noted that the co-disposal test references NRC's Non-|le.(2) Policy, by
providing that an alternate feed material will be presumed to be processedpr imarilyfor its
source material content if the altemate feed would be approved for disposal in the tailings pile
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pursuant to the Non-lle.(2) Disposal Policlt. The,\bn-l le.(2) Disposal Policy was dereloped
by NRC to establish a uniform set of criteria to be applied in evaluating whether materials that
are radiologically, physically, and chemically similar to I le.(2) byproduct material, but that are
not regulated as I le.(2) byproduct material, can be disposed of in a licensed mill tailings
impoundment.26 As such, the Non-lle.(2) Disposal Poticy is applicable only to materials that
are not l1e.(2) byproduct material. The policy is not directly relevant to the direct disposal of
materials that qualifu as I le.(2) byproduct material.
Utah argues that IUSA has failed to demonstrate how its processing of the Ashland 2
material will satisff certain of the criteria set out in the Non-l le(2) Disposal Policy. For
example, the State asserts that IUSA "has not provided any documentation of [Regional Low
Level Waste] Compact approval." Utah Briefat 13. In addition, the State notes that "Utah, as an
Agreement State with low level waste licensing authority, has not granted [IUSA] any exemption
from its regulations." Id. at 14 Finally, the State complains that'NRC staffmade no attempt to
address further issues under this [Non-l le.(2) Disposal] guidance, such as a demonstration that
there are no CERCLA issues related to disposal of the Ashland 2 mateial." Id.
26 In developing its rVon'l le.(2) Disposal Policy, NRC Staffdetermined that two classes of material - Special
Nuclear Material (*SNM") as defined in Section I laa of the AEA, and byproduct material as defrned in AEA
Section I le.(l) - were qualitatively too different from I le.(2) byproduct material to be evaluated for disposal under
the rVon- I I e.(2) Disposal Policy. Accordingly, SNM and I to.( t ) byproduct material are not evaluated for disposal
in uranium mill tailings impoundments under the iVon-l le.(2) Disposal Policy. See 57 Fed. Reg. at 20,529' In
addition, the Commission Staffconcluded that Natnrally Occurring and Accelerator-produced Radioactive Materials
(*NARM") also could not be approved for disposal into licensed uranium mill tailings impoundments because of
concerns regarding dualjurisdiction (i.e., because states, not NRC, regulate NARM and therefore disposal of
NARM in an NRC-licensed mill tailings pile might give rise to dual stateA.,lRC jurisdiction over the materials in the
plle. Id.
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All of the tactors raised by Utah relate to specific substantive requirements under the
I !{on-lLe.(2) Disposal Policy.rT As NRC has explained, these criteria are designed to achieve two
I ends: (i) to prevent the possibility of dual (e.g., NRC/EPA) jurisdiction over the materials present
in the tailings impoundment as a result of the placement in the impoundment of non-l le.(2)
I materials subject to regulation by EPA or a State; and (ii) to ensure that the government
t custodian (DOE or the State in which the impoundment is located) will accept title and custody
over the tailings impoundment following site closure, as provided for in Section 83 of the
t AEA.2t See 57Fed. Reg. at20,528-29. In other words, the substantive criteria of the Non-
I I le.(2) Disposal Policy are intended to address potential jurisdictional and site transfer concerns
that could arise from the placem ent of non-t le.(2) materialinto a licensed uranium mill tailings
I impoundment containing 1le.(2) byproduct material.
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I " For example, the policy sets out the following substantive criteria that must be satisfied in order for non- I I e.(2)! marerial to be approved for disposal in a licensed mill tailings impoundment:
r H:"J;l,L:'3J[:".:i:[i:l?:ffiXqTJ:,f.?5:l:tH*T*:ffi"*.'I Frotection Agency ("EPA") standards for hazardous or toxic wastes prior to
disposal;
I Disposal of the non-l le.(2) material must not implicate any issues under theI Comprehensive Environmental Response, Compensation and Liability Act
("cERCLA");
t ffiXff:.e
non-l te.(2) material must not result in sigrihcant environmental
I li'ifi.j{t:J:ll};gl,*rffiffi'fi:TgHxlT,t'sil:'I#f'
60 Fed. Reg.,at 49,296.
I ttThis laner concern is triggered by the fact that Section 83 of the AEA only requires the government to take
custody of I le.(2) byproduct material and the land used for is disposal, and there is no requirement, under AEA
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Section 83, for the govemment to take custody of material that is not I le.(2) byproduct material
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However, as DOE has determtned. the .lshland 2 material is I le.(21 byprotluct
material.re Therefore. the substantive criteria of the Non-11e.(2) Disposal Policy. set out above.
are simply inapplicable, since those criteria are only intended to apply to non-l le.(2) byproduct
material. Indeed, I le.(2) material such as the Ashland 2 material can be disposed of directly into
a licensed uranium mill tailings facility (provided that the tailings facility's license permits such
disposal) without demonstrating compliance with any of the substantive criteria set out in the
Non-lle.(2) Disposal Policy. As NRC has itself noted in responding to comments on the Mon-
I te.(2) Disposal Policy:
If the material [being considered for disposal] can be shown to be
I le.(2) byproduct material, it can be disposed of in a tailings
impoundment without meeting the requirements of this[Non-
I Ie.(2) DisPosalJ PolicY.
SECY g5-Zll, Enclosure 3 at4(emphasis added) (Exhibit 4).30
lndeed, NRC has stated with respect to the Ashland 2 material specifically that:
Based on DOE's characterization [of the Ashland 2 material as
being 1le.(2) byproduct materiall, USACE could have opted to
remediate the [Ashland 2] site by disposing of the material in
question directly into a mill tailings impoundmenr authorized to
take material other than that generated as part of milling
operations. . .
2'This determination is entitled to deference, since DOE is granted specific authority under Title I of UMTRCA for
making determinations regarding the sAtus of materials as "residual radioactive material" and "residual radioactive
materiil" is defined in UMTRCA to subsume t le.(2) byproduct material. See 42 U.S.C. S 791l. Moreover, DOE's
determination that the Ashland 2 material is I le.(2) byproduct material was conculred in by the ACE, which is
administering the Ashland 2 site, and by NRC. TER at a (see Exhibit l)
r0 It should be noted that this result is consistent with NRC's regulations in l0 C.F.R. Patt 40, Appendix A, which
specifically allow, and indeed require, that I le.(2) material generated at in-situ leach ("lSL") or small heap leach
ficilities bl disposed of in a licensed uranium mill tailings impoundment. In fact, the licensc for IUSA's Mill allows
IUSA to uccept I le.(2) byproduct material from tSL sites for direct disposal, and IUSA has accepted and disposed
of such materials at the Mill. See l0 C.F.R. Part 40, Appendix A , Criterion 2.
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Lener tiom Richard L. Bangart, Director. Otfice of State Programs, to Paul J. \lerges. Director.
Bureau of Pesticides and Radiation [New York Department of Environmental Consen'ation]
(Sept. 15, 1998) at 2 (attached as Exhibit 8).
Since the co-disposal test is premised on the notion that "the clearest way to show,
beyond any doubt, that proposed feed material would be processed primarily for its source
material content, is to show that it would be allowed to be disposed of in the tailings
impoundment in any case," SECY 95-211, Enclosure 3 at l7 (see Exhibit 4), the fact that the
Ashland 2 material could be disposed of directly into IUSA's mill tailings impoundment
(without having to satisfu the l/on-l le.(2) Disposal Policy criteria) provides conclusive proof
that the co-disposal test is satisfied and the Ashland 2 material is being processedprimarily for
its source material content.3l
3r In addition, NRC also included in is /{on-l le.(2) policy two additional criteria intended to address compliance
with existing regulatory regimes that could be applicable to certain types of non-l le.(2) material. Specifically, the
Commission required that:
o To the extent that the non-l le.(2) material is regulated under the Low Level
Radioactive Waste Policy Amendments Act of l9E5 (*LLRWPA"),
disposal of such material must be approved by the Regional Low Level
Waste Compact in whose jurisdiction the material originates, and by the
Compact with jurisdiction over the tailings impoundment in which the non-
I le.(2) material is to be disposed; and
. The licensee must obtain an exemption from the requirements of 40 C.F.R.
Part 61, pertaining to the disposal of radioactive wastes received from
others.
57 Fed. Reg. at 20,529-60. Section I le.(2) byproduct material, such as the Ashland 2 material, is specifically
excluded from regulation under LLRWPA. See 42 U.S.C. $ 2021b(9). Therefore, Compact approval is not required
for the Ashland 2 material to be disposed of in a licensed uranium mill tailings impoundment. Similarly, I le.(2)
byproduct material that is disposed of in a licensed uranium mill tailings impoundment in quantities of 10,000 kg or
more, and that contains more than 5 millicuries of radium-226, is specifically excluded from regulation under Part
6l of NRC's regulations. lO C.F.R. $ 6l.l(b). The Ashland 2 material satisfies these criteria (see Affidavit of
JoAnn Tischler at 7) (attached as Exhibit 9); consequently an exemption from Part 6l requirements also is not
needed to allow the Ashland 2 material to be disposed of in a licensed uranium mill tailings facility.
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Consequentl.v, Utah's assertion that "the NRC Statf s determination about the Co-
Disposal Test is completely unsupported" (L'tah Brief at 14) has no merit.
C. IUSA's Processing Of The Ashland 2 Material Satisfies All Of The Criteria Set
Out In The Alternate Feed PolicY.
IUSA has conclusively established that it is processing the Ashland 2 material primarily
for its source material content. In particular, IUSA has demonstrated that because it is
processing the Ashland 2 material through the primary circuit in a licensed uranium mill, IUSA
is entitled to a presumption that it is processing the Ashland 2 material primarily for its source
material content. In addition, IUSA has provided ample proof that it satisfied both the
certification test and the co-disposal test, thereby leading to the conclusion that it is appropriate
to apply the presumption in this case and that IUSA is in fact processing the Ashland 2 material
primarily for its uranium content. Thus, IUSA has clearly satisfied the most important of the
four criteria set out in the Alternate Feed Policy.
The State of Utatr has not challenged IUSA's satisfaction of the remaining three criteria
in the Alternate Feed Policy. Nevertheless, it should be noted that IUSA has provided sufficient
evidence to demonstrate that those three remaining criteria are also satisfied. Finq IUSA has
demonstrated and NRC Staffhas concluded that the Ashland 2 material qualifies as "ore"
(indeed, since the definition of "ore" is so closely tied to the concept of processingprimarily for
source material content, IUSA's satisfaction of the primary purpose test necessarily implies
satisfaction of the "ore" requirement). See Exhibit I at 4 (Attached as Exhibit l). Second, IUSA
has demonstrated, NRC Staffconcurs, and the State of Utah agrees that the Ashland 2 material
does not contain arry listed hazardous wastes. (Exhibit I at 4); Letter from Fred Nelson (Counsel
for the State of Utatr) and Frederick Phillips (Counsel for IUSA) to Hon. Peter Bloch, Oct. 26,
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1998 (anached as Exhibit 9). .And tinally. NRC Statf has concluded that processing of the
t Ashland 2 material and disposal of the tailings and wastes ftom such processing will not
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undermine tUSA's compliance with the requirements of l0 C.F.R. Part 40. (Exhibit 1 at 8.)
Therefore, IUSA has successfully demonstrated that processing the Ashland 2 material satisfies
I all of the criteria of the Alternate Feed Policy.
D. The Ashland 2 Material Is Not LLRW
I Utah asserts in its brief that the Ashland 2 material "may be" LLRW, and therefore
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subject to regulation by the State, not NRC. (Utah Brief at 14-15.) To support this speculation,
the State offers two arguments.
I First, Utalr argues that since IUSA is not processing the Ashland 2 material primarily for
t its source material content, waste from processing the material "may not" quafiry as I le.(2)
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byproduct material and, therefore, would be subject to the State's jnrisdiction as LLRW. As
demonstrated, processing the Ashland 2 material at the Mill satisfies both of the tests developed
I by NRC to establish that a material is being processedp rimarilyfor its source material content.
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Consequently, under the Alternate Feed Policy, tailings and wastes from processing the Ashland
2 material will quali& as 1le.(2) byproduct material that can be disposed of in IUSA's licensed
I uranium mill tailings impoundment without invoking state jurisdiction. See discussion at pp. 2l-
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22, supra. There is no basis upon which to suggest that processing the material through the Mill
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mightcausethetailingsandotherwastestobeconsideredany'thingotherthan tle.11)b1prc',duct
material.i2
Second, the State argues that because the original 8.000 pounds of 1le.(2) byproduct
material disposed of at the Ashland I site have subsequently been dispersed and mixed with soils
at the Ashland 2 site the material that is being excavated from the Ashland 2 site is no longer
I le.(2) byproduct material and instead may be regulated as LLRW. (Utah Brief at l5-16.)
There is no foundation for this argument. The dispersal of I le.(2) byproduct material, and its
subsequent mixing with soils, does not convert that 1le(2) byproduct material into LLRW.
When I le.(2) byproduct material is dispersed and mixed with soils, the material retains its
character as I 1e.(2) byproduct material. For example, when uranium mill tailings at a licensed
mill tailings impoundment are dispersed by the win4 the tailings retain their character as I le.(2)
material. These so-called windblown tailings, and the soils into which they harte been dispersed
are required to be retrieved and disposed of in the licensed tailings impoundment as I le.(2)
byproduct material. See, e.g., USEPA, Final Environmental Impact Statement for Standards fo,
the Control of Byproduct Materialsfrom Uranium Ore Processing (40 C.F.R. 192),EPApub.
no. 520/l-83-008-l (September, 1983) at 9-14 to 9-16 (addressing clean-up standards for
windblown tailings) (attached as Exhibit l0).
For these reasons, the State's musings that the Ashland 2 material "may be" LLRW are
baseless and unworthy of further consideration. In any event, even if the Ashland 2 material are
'2 Moreover, as we have seen, the Ashland 2 material already qualifies as I le.(2) byproduct material. As such, the
material can be processed through IUSA's mill under the authority of l0 C.F.R. Paft 40 without invoking State
jurisdiction over either the Ashland 2 material itself or the tailings and other wastes generated in connection with its
processing. lndeed, when Congress enacted UMTRCA it specifically contemplated that I le.(2) byproduct material
would be processed in uranium mills, and that the resulting tailings and wastes would be disposed of in licensed
uranium mill tailings impoundments. See 42 U.S.C. $7918(b).
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classit'ied as LLRW. this does not preclude them trom being processed at the Nlill primaril.v' lor
their source material content and the tailings disposed of as I le.(2) byproduct material in the
Mill's tailings impoundments. So long as the requirements of Part 40 are met and the LLRW
does not contain listed hazardous wastes or characteristic hazardous wastes from waste water
treatment residues, the LLRW can qualiff as an alternate feed and the resulting tailings as
I le.(2) byproduct material. Moreover, as with the processing of conventional ores, so long as
the Ashland 2 material qualifies as alternate feed, the State (since it is not an Agreement State for
uranium recovery operations) has no authority over IUSA's processing of the material or its
disposal of the resulting tailings.
E.al Of Amendment 6 Would Not Undermine Po And Guidance And
Would Not Harm The State Of Utah.
The State argues that NRC regulation of the tailings and wastes generated from IUSA's
processing of the Ashland 2 material under l0 C.F.R. Part 40 would not adequately protect
health and safety in the State. Utah Briefat 13. To the extent that the State wants to challenge
the adequacy of NRC's regulations governing I le.(2) byproduct material, the State has chosen
the wrong forum and is more than a decade too late to do so. NRC's regulations, and the EPA
regulations to which they were required to conform, were promulgated more than ten years ago.
Upon promulgation, those regulations were subjected to several court challenges in the United
States Court of Appeals. Utah's oppornrnity to challenge the sufficiency of NRC's mill tailings
regulations has long since passed; moreover, this licensing proceeding is not the appropriate
forum for such a challenge.
As a factual matter, the State's allegations regarding the inadequacy of the protection
afforded by NRC's regulation of the wastes from IUSA's processing of Ashland 2 material are
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incorrect. since they ignore the comprehensive s,vstem established under the AEA. as amended
by UMTRCA, for regulating uranium milling operations and the tailings and wastes produced as
a result ofsuch operations. See supra at7'll.
The State's generalized ruminations about IUSA subverting NRC and State regulatory
programs for LLRW by processing the Ashland 2 material are misguided. For the reasons
discussed at length above, the resulting waste from processing the Ashland 2 material is 1le.(2)
byproduct material and must be disposed of in accordance with UMTRCA and its implementing
regulations set forth at l0 C.F.R. Part 40, including Appendix A. Contrary to the State's
assertions, IUSA's Mill is not operating as a "land disposal facility" but rather as a uranium
mill, licensed to process various uranium-bearing feeds and to dispose, in an NRC-regulated, on-
site containment cell, the tailings and other wastes generated from such processing.33
With respect to the State's concerns about harm, specifically harm to groundwater, that
may result from the regulation of the material by NRC, the State ignores several fundamental
facts. First, wastes generated by operations at the Mill are disposed onsite in impoundments that
are designed and constnrcted to minimize the potential for seepage of any fluids into the
subsurface soil, surface water, or groundwater in accordance with 10 C.F.R. Part 40,
Appendix A. The impoundment design incorporates natural and synthetic liners and a leak
"As discussed above, thc operation of the Mill is authorized by an NRC source material license originally issued in
1979, and subsequently renewe( undcr l0 C.F.R. Part 40, which allows IUSA to process feedstocks for their
uranium content and to possess the waste generated from such milling operations. See Lener from R. Scarano, NRC
to R. Adams, Energy Fuels Nuclear, Inc. (Aug. 7,1979) (issuing Source Material License SUA-1358); Letter from
R. Smith, NRC, to UMETCO Minerals Corp. (Sept. 26, 1985); and Letter from J. Holonich, NRC, to H. Roberts,
IUSA (March 14, lggT). The State cites William J. Sinclair, Director of the Division of Radiation Control, Utah
Departrnent of Environmental Quality ("DEQ") and Robert F. Herbert, Geologist, DEQ for the proposition that the
Miil "as currently regulated does not satisfr the way in which Utatr regulates land disposal facilities." Utah Brief at
14. For the reasons set forth above, the Mill need not meet the State's regulations for land disposal facilities as the
Mill is not a "land disposal facility" but an "operating uranium mill" that produces I le.(2) byproduct material as
waste which must be disposed of in accordance with UMTRCA and is Part 40 license.
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detection system that is monitored daily. See Ent'ironmental .lssessment for Renev'al oJ'Source
,V[aterial License l,to. 5U,4.-1358, Energy Fuels Nuclear, Inc., W]rite Mesa lvfill, dated Feb. 1997
(Renewal EA), at 15, l8; IUSA, LBP-98-21 at I l. The Staff concluded in its "Technical
Evaluation Report: Request to Receive and Process Ashland 2 FUSRAP Material," dated
June 23, 1998 (Exhibit l), that (l) the feed material qualified as o'ore," (2) no hazardous wastes
had been identified on the Ashland 2 properry and confirmatory measures to guard against the
presence of listed hazardous w.lstes would be taken prior to shipment and upon receipt at the
Mill, (3) the Licensee had provided adequate certification that the material is being processed
primarily for recovery of uranium, and (4) there would be no significant increase in
environmental impacts particularly since the annual yellowcake production limit would not be
exceeded, tailings would be stored in an existing impoundment, disposal would increase the total
amount of tailings in the cell by only one percent, and the Ashland 2 material is similar in
composition to tailings currently stored in the impoundment. Id. Moreover, analysis indicates
that the tailings and related wastes generated from processing the Ashland 2 material are
substantially similar, chemically and radiologically, to the tailings and wastes already disposed
of in the Mill's tailings impoundment. In fact, the radioactivity is significantly lower than that
assumed in the Renewal EA for worker exposure or airborne environmental impacts, and the
organic content is two orders of magnitude lower than that assumed for the composition of
disposed tailings. See Affrdavit of JoAnn Tischler at 6 (Attached as Exhibit I l).
Second, as the Staffnoted in response to the petition filed by the State of Utah in a
pending case pertaining to another license amendment to accept alternate feed at the Mill (ln the
Matter of International (Jranium (USA) Corporation, Docket No. 40-8681-MLA'5)
("Ashland l"), seepage from the White Mesa Mill tailings cells would have to travel through
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approximately 1.300 tbet of lorv permeabilit.v rock betbre reaching the Entrada.,Navajo aquit'er
(the regional aquifer) and it is unlikely that potential seepage would ever impact the water
quality of that aquifer. See VRC Staff Response to Utah Request for Hearing, Dkt. No. 40-868 l -
MLA-S, n. l3 (Dec. 14. 1998).
Third, the State's reliance on the testimony of Sinclair regarding groundwater
contamination is misplaced. On page 5 of his testimony, Sinclair states: "it is my opinion that
the groundwater protection system in place at the White Mesa facility is inadequate to protect the
State's groundwater resources." Sinclair Testimony at 5. Sinclair's conclusion is based, in part,
on the affidavit prepared by Loren Morten, a member of Sinclair's staff, that attempts to describe
the groundwater protection system in place at the White Mesa Mill. See Affrdavit of Loren
Morten, (Attached to State's Amendment to its Request for Hearing and Petition for Leave to
lntervene, dated Aug. 18, 1998). The State's claims are not grounded upon any evidence of
leakage at White Mesa over the 18 years of operation, but on a gross misinterpretation of
predictive modeling. See Affidavits of Loren Morten at flfl 8-12 and S. Billin at 5-7 (attached as
Exhibit 12). The perched groundwater zone used to monitor tailings impoundment performance
cited in the Morten Affidavit is located in the Bturo Canyon formation and is about 73 to 109
feet below the land strrface in the area of the Mill. However, as pointed out above, any seepage
would have to travel through approximately 1,300 feet of low permeability rock before reaching
the Entrada/Navajo aquifer that supplies local drinking water. See Renewal EA at 9. Yields
from the Buno Canyon perched groundwater zone are low, and non-sustainable, and the water
quality is poor. See Affidavit of S. Billin at 12. prii.ut., using the 1994 Titan modeling, also
used by Morten, which were based on unrealistically conservative assumptions meant to predict
worst-case transport potential, including the total absence of the liner (i.e., total liner failure),
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show that. if such seepage scenarios \4'ere to occur. it w'ould still take trom 50 to I501ears tbr
moisture to tra!'el tiom the bonom of the tailings disposal cell to the perched groundwater zone
in the Burro Canyon formation and more than 8.500 years for the seepage to travel in this
perched water zone to the downgradient edge of the Mesa, where it could seep into the
environment. Renewal EA at 16.
These hydrogeologic conditions described in the EA and the Titan report point to the
conclusion that it is extremely unlikely that any potential seepage from the impoundment would
ever impact the water quality of the regional aquifer, the Entrada/Navajo. This conclusion is
further confirmed by a review of data collected over the past l8 years of operation, and recent .
detailed analyses of cell 3, including modeling based on actual site data which indicate that there
is no probable cause to believe that tailings solution could impact even the perched groundwater
zone underlying the site, much less the deep Entrada./f,lavajo aquifer located 1,300 feet below the
site. Affidavit of S. Billin at7-8. Based on these facts, the State's assertion that its groundwater
resources would be harmed as a result of the regulation of the Ashland 2 material by NRC is
unfounded.
Fourth, the tailings cells were constructed with state-of-the-art technology that continues
to provide adequate protection of groundwater resotrces. Affidavit of S. Billin at 6. Contrary to
the testimony of Herbert, the tailings impoundments were not designed and constructed using
"obsolete" technology. See Herbert Testimony at9. In fact, the tailings cells were designed and
constructed in accordance with standards and requirements of the NRC, which approved both the
design and constnrction. Many years of intensive monitoring of the tailings cells have developed
a proven record of performance that attests to the quality of their constnrction and their
continuing protectiveness. This 18 year record of no impacts to groundwater quality allows a
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better tbrecast of future cell performance than if a new. unpro!'en cell were to be constructed
today. Affidavit of S. Billin at 7. Construction inspection records indicate that the tailings cells
were built in accordance with NRC approved specifications and significant effort was exerted to
prevent any damage to the installed PVC liner. Affidavit of S. Billin at 4.
In addition, infiltration and groundwater flow modeling conducted by Knight Piesold
LLC, based on observations documented throughout the facility life, indicates that de minimis
quantities of fluid could permeate the PVC liner system and infiltrate the Burro Canyon bedrock
formation. These de minimis quantities are inherent to PVC liners according to EPA guidance
documents. See Knight Piesold LLC, Evaluation of Potentialfor Tailings Cell Discharge -
Wrhrte Mesa Mil/ (Nov. 23,1998) ("Knight Piesold Report") (attached as Exhibit l3). This
seepage, however, "would require more than 1,300 years to reach the perched water zone. Even
then, impacts to water quality are unlikely due to closure of the facility, regional changes in
groundwater hydrology, microfiltration by the low permeability liner and attenuating processes
occurring in slowly moving groundwater." Id. at 8. As impact to the perched water zone is
unlikely, the likelihood of impact to the EntradaAlavajo aquifer, some 1,300 feet below the site,
is even more remote. Id.
While Herbert is correct that the leak detection system employed at the Mill does not
have a secondary synthetic liner beneath the primary synthetic liner to divert and accumulate
leakage to the leak collection pipe, Herbert Testimony at 9, any leakage of significant quantities
should be detectable because construction documents indicate that the native sandstone below
the synthetic liner was ripped and crushed to a sand consistency and recompacted to form the
bedding layer for the PVC liner. The liner 6-inch thick bedding material was specified to have
hydraulic conductivity 1,000 times greater than the underlying formation. All areas of bedding
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have at least 6 inches of prepared material belorv the liner. This creates a permeable hl draulic
connection between the leakage collection pipes and all areas directly beneath the liner. Thus.
although no secondary synthetic liner is employed, the difference in hydraulic conductivity
serves the same purpose as a secondary liner would of forcing horizontal flow of any leakage to
the collection pipe where it may be observed during daily inspections. See Affidavit of S. Billin
at9; see also, Exhibit 12.
Finally, relying on the testimony of Sinclair, the State claims it will suffer harm because
it has developed "its own siting criteria for radioactive and hazardous waste facilities, and by
approving sham disposal, the NRC is allowing the White Mesa Mill to snub the State's siting
criteria." Sinclair Testimony at 5-6. IUSA is a Part 40 facility regulated by NRC and is not
subject to State jurisdiction or siting requirements. Thus, although the State might suffer harm as
a result of being unable to collect fees from IUSA's operations (see Sinclair testimony at 5-6), it
cannot legitimately complain of any harm to health and safety. Utah's complaints of harm are
particularly ironic given its suggestion, in its petition to intervene in this matter, that the State
would not object to [USA's processing of alternate feed materials if they have a higher
radioactive content than the Ashland 2 material. See State of Utah's Requestfor Hearing and
Petitionfor Leave to Interttene, Docket No. 40'8681 (July 23,1998) at 16.
f'. IUSA's License Amendment Js Based Upon A Complete And Adequately
Reviewed Record That Does Not Violate Due Process.
The State alleges that NRC's decision to approve Amendment 6 to IUSA's license was
based upon an incomplete record that was inadequately considered by NRC Staff. In addition,
the State asserts that NRC Staff violated "procedural due process" by failing to provide adequate
notice. The State's allegations regarding the incompleteness of the record and allegations
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concerning the inadequacy of the Statf s review of the record are factually and legally incorrect.
as well as being largely irrelevant. Moreover, the StatTdid not violate any norrns of "procedural
due process."
l. Procedural Due Process
The State asserts that NRC Staff"violated procedural due process by failing to provide
adequate notice of the receipt and approval of the Ashland 2 license amendment." Utah Brief at
19. It bases this claim on the fact that the NRC published a notice of IUSA's amendment request
in the Federal Register on November 3, 1998 "only after the State filed . . . a request for Hearing
and Petition to Intervete." Id. The State is correct that the notice was published in the Federdl
Register on November 3; however, this fact alone does not result in a violation of "procedural
due process." NRC regulations do not require the issuance of a notice in the Federal Register
following the grant of a materials license to an applicant. See l0 C.F.R. $ 2.1205(d)(2). Thus,
NRC Staffhas not violated "procedural due process," as notice is not required by the regulations
and, therefore, is not "process" that is due. In any event, the State has suffered no harm as a
result of the failure to publish the notice at an earlier date as it has been granted party status in
the proceeding.
2. The Record Is Adequate To Support The Decision Of The Staff
In support of the State's claim that the record is inadequate, the State asserts that NRC
Staffrelied "solely on conclusory statements contained in the Record of Decision and the
Baseline Environmental Report instead of conducting a firsthand review of the Ashland 2
contaminants provided in Section 4.0 of the Remedial Investigation report ["zu"] and evaluating
them for potential hazardous wastes." Utah Brief at20. Moreover, the State argues that "the
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hazardous waste determination in the [RI] was based on RCRA. hazardous characteristic
determination, not listed hazardous waste constituents." Id. The State concludes by stating:
''[h]ad the NRC Staff adequately reviewed available contaminant data contained in the [RI], it
would have noticed that several chemical constituents were detected in the Ashland material that
could potentially be associated with listed hazardous wastes generated by oil refineries." /d
Contrary to the State's claims, the record supporting the Staff s determination is adequate and
the State's concerns regarding listed hazardous wastes in the Ashland 2 material are unfounded.
The record supporting the decision of the Staff to grant the license to IUSA permitting
the processing of the Ashland 2 material is legally adequate generally. See e.9., Vermont Yankee
Nuclear Power Corp. v. NRDC,435 U.S. 519, 534 (1977).
With regard to the adequacy of the record with respect hazardous wastes specifically, the
State is incorrect that the RI was based on RCRA hazardous characteristic determinations alone,
and not on listed waste constituents. The R[ reflects the efforts of Bechtel, a DOE contractor, to
report sources of potential RCRA listed hazardous contaminants at Ashland 2. For example, the
lntroduction "History" identifies process sources and annual generation rates of wastes known to
have been disposed by the Ashland refinery at the landfill area of the Ashland 2 site. None of the
waste streams identified in this section are RCRA listed sources. (See RI at l-26.) The RI also
reflects the fact that Bechtel considered the source of refinery wastes other than those known to
be disposed of in the landfill portion of Ashland 2. Id. In addition to the discussion in the RI
regarding listed waste, NRC Staffreviewed the Radioactive Waste Profile Record (EC-0230)
Soil/Building ("Radioactive Waste Profile") which is part of the record. The Radioactive Waste
Proflrle states:
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Bechtel has no reason to believe. after historical research, personal
interviews, and physical inspection, that any of this waste stream
contains any amount of listed waste. Furthermore there have been
no spills of listed waste into this stream, none of this waste has
been generated as a result of the treatment. storage or disposal of a
listed hazardous waste, and no waste has been mixed with, or is
contained in, or commingled with this waste strearn.
Radioactive Waste Profile at Attachment l. Moreover, the Radioactive Waste Profile states that
the Ashland 2 material is I le.(2) byproduct material and does not contain listed hazardous waste.
Id. at l-2.
Thus, the record supporting the Staffs determination is adequate and the State's concerns
regarding listed hazardous wastes in the Ashland 2 material are unfounded; NRC is not required
to itself repeat several years worth of site characterization, but is instead entitled to rely upon
reports and documentation {6veloped by other qualified entities.
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decision, as evidenced by the fact that the State of Utah withdrew its concern that the Ashland 2
material could contain rtsted hazardous wastes.
3. The StafiConducted An Adequete RCRA Review
The State argues that NRC Stafffailed to conduct an adequate RCRA review to
determine whether listed hazardous waste may be present in the Ashland 2 material. Utah Brief
at2}. Pursuant to RCRA, it is the generator's role, not NRC's, to conduct a RCRA review. As
stated above, Bechtel developed the Radioactive \Yaste Profile which concludes that the
Ashland 2 material does not contain listed hazardous waste. The Radioactive Waste Profile was
part of the record NRC reviewed prior to granting the license amendment. Moreover, as further
evidence, the New York State Department of Environmental Conservation ('NYSDEC"), based
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upon its own Site lnvestigation (''SI"). review of supplementary characterization data generated
after the SI reports, and inspection of the site, determined that the Ashland 2 material does not
contain listed hazardous waste. See Letterfrom Stephen Hammond, P.E., NYSDEC to Don
Verbica, L'tah DEQ, Oct., 1998 (attached as Exhibit l3); see also, Affidavit of J. Tischler at 4-5
(Exhibit 9).
Even assuming arguendo that the State is correct that the Staff s determination to grant
the license amendment was based on an inadequate record and failure to conduct an adequate
RCRA review to determine whether listed hazardous waste may be present in the Ashland 2
materials, the license amendment should not be revoked.
Because licensing boards and presiding offrcers have no authority to direct the Staff in
the performance of its safety reviews, Carolina Power & Light Co. (Shearson Harris Nuclear
Power Plant, Units 1,2,3, and 4), CLI-80-12, I I NRC 514, 516 (1980); Recoil International
Corp. (Rocketdyne Division), ALAB-925, 30 NRC 709,721-l I (1989), afd,CLl-90-5, 3l
NRC 337 (1980), and the applicant has the burden of proof in this proceeding, the adequacy of
the Staffs review is not determinative of whether an action should be approve d. Curalors of the
University of Missouri, CLI-95-1, 4l NRC at l2l. Even if a presiding offtcer or board
determines that the NRC Stafffailed to conduct a suflicient review, to deny a meritorious
application for a license based on the Staffs error would be "grossly unfair." /d. Thus, the
"sole focus of the hearing is on whether the application satisfies NRC regulatory requirements,
rather than the adequacy of the NRC Staffperformance." Id.
Importantly, as indicated above, the State of Utatr withdrew its concern that the alternate
feed material could contain listed hazardous wastes. Thus, it would be "grossly unfaiC'to revoke
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the license amendment based on a failure of the Statf to create an adequate record w'ith respect to
hazardous waste issues and to conduct an adequate RCRA review as the State has agreed that
listed hazardous waste in the alternate feed material is no longer at issue in this hearing.
In addition as discussed above, operation of the Mill is authorized by an NRC source
material license issued under l0 C.F.R. Part 40, which allows IUSA to process feedstocks for
their uranium content and to possess the waste generated from such milling operations. In
processing the amendment request regarding material from the Ashland 2 site, the Staff
concluded that processing of the material would not result in (1) a significant change or increase
in the types or amounts of effluents that may be released offsite, (2) a significant increase in
individual or cumulative occupational exposures, (3) a significant construction impact, or (4) a
significant increase in the potential for, or consequences from, radiological accidents. IUSA,
LBP-98-21, slip op. at 12-13. The bases for these conclusions include that (a) the annual
yellowcake production limit would not be exceeded, (b) tailings from the processed material
would be disposed onsite in an existing impoundments (c) disposal of the tailings would increase
the total amount of tailings in the cell by only l-2 percent, and (d) the Ashland 2 material is
similar in composition to mill tailing currently in the Cell 3 impoundment. Id. at 13.
Because the State has failed to present any facts demonstrating how the material from
Ashland 2 will be compositionally different from materials, whether from conventional ores or
alternate feed materials, previously or presently processed and disposed of at the Mill under the
existing license, or how the tailings represent an iqcreased health or safety hazard, it has failed to
show how it will be harmed by the amendment or how the licensing amendment fails to satisff
NRC regutatory requirements. See In the Matter of International Uranium (USA) Corporation,
46 NRC 55,1997 NRC LEXIS 17, *3 (1997).
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Thus. even if the Staffls determination was based on an inadequate record and a t'ailure to
conduct an adequate RCRA review, the license should not be revoked as it would be "grossly
unfair" to do so.
Finally, the State's claim that NRC failed to review whether its regulatory requirements
at the Mill are adequate to protect groundwater resources from contamination by alternate feed
materials is unfounded. The State's claim is based on its assertion that the "uppermost aquifer"
associated with the Mill is used as a groundwater resource and the bald assertion that the liner
system, the number of compliance monitoring wells, and the number and type of groundwater
monitoring parameters that NRC requires at the Mill are "totally inadequate to allow the disposal
of alternate feed material, such as the Ashland 2 material." Utah Brief at 17. The State is wrong.
The Staffconducted a thorough review of water rights in the area of the Mill in the Final
Environmental Statemenr (U.S. NRC, May 1979) and through its review of the Hydrogeologic
Evaluation of ll'hite Mesa Mill,TitanEnvironmental (July 1994). These reviews indicate one
water right downgradient of the Mill owned by L. Hawkins. This well was dry at the time of
drilling and has long been abandoned. One water right identified by the State as downgradient of
the Mill is, in fact, cross-gradient, where it could not be impacted by potential tailings cell
discharge. This well produced only limited, intermittent flows before being capped many years
ago. Afiidavit of S. Billin at l0-11. Given these facts, it is unlikely that these water rights
represent a viable groundwater resource as they cannot dependably yield the water quantities
sufficient to sustain stockwatering, domestic or irrigation uses. Affidavit of S. Billin at I l - 12.
In fact, the natnral water quality of the perched water is not acceptable for irrigation or domestic
use. Affidavit of S. Billin at 12 Final Environmental Statement (U.5. NRC, May 1979);
Hydrogeologic Evaluation of Wrhite Mesa Mill,Titan Environmental (July 1994).
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The liner svstem, monitoring parameters and number of monitoring wells were all
del'eloped in accordance with NRC requirements. Detailed statistical evaluations have shown
that the existing groundwater monitoring program, developed in concert with the NRC, is
adequate to detect potential impacts by tailings solution. Affidavit of S. Billin at 9. Eighteen
years of operation and monitoring have resulted in no indication that operation of the Mill has
impacted the water quality of the perched water zone or the deep EntradaAlavajo aquifer. See
Affidavit of S. Billin at 5.
V. CONCLUSION
This controversy centers upon the State of utatr's efforts to impose its own regulatory
requirements on IUSA's processing of the Ashland 2 material in IUSA's NRC-licensed uranium
mill, pusuant to a license amendment granted by NRC for the specific purpose of processing the
Ashland 2 material (Amendment 6).
Utatr attempts tO ilgu€, in a number of different ways, that NRC acted inappropriately in
approving Amendment 6. First and foremott, Ud argues that IUSA failed to satisfr the criteria
set out in NRC's Altemate Feed Policy. The State contends that IUSA cannot satisff the
Alternate Feed Policy's "primary purpose" requirement (1.e., that IUSA cannot be processing the
Ashland 2 material primarily for its source material content) for two reasons. First, the State
argues that becanse the value of the uranium IUSA will recover from the Ashland 2 material is
less than value of certain "handling and disposal fees" the company will collect in connection
with the processing of the feed material, IUSA canhot be processing the Ashland 2 material
primarily for its source material content. Second, the State contends that IUSA's certification
that it is processing the Ashland 2 material primarily for its uranium content cannot be justified,
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because the al.erage uranium concentration in the Ashland 2 material is low. In other riords. the
State interprets the phrase "processed primarily for its source material content" in the Alternate
Feed Policy to mean that either (i) the value of the uranium extracted from an alternate feed must
be greater than any other aspect of processing the feed material, or (ii) the alternate tbed material
must have a "high" uranium concentration.
IUSA has demonstrated that the State's interpretation of the "primary purpose"
requirement in the Alternate Feed Policy is incorrect, as follows:
First, the phrase "processed primarily for its source material content" as used in the
Altemate Feed Policy is intended to have the same meaning as the identical phrase as used in
UMTRCA.
Second, neither Congress nor NRC intended to require an economic or profitability
showing in order to demonstrate that a material is being processedprimarily for its source
material content. Instead, the phrase "processed primarily for its source material content" is
intended to distinguish between ores processed for the extraction of uranium in a licensed
uranium mill that is part of the nuclear fuel cycle, versus ores processed for the recovery of
uranium in secondary, or side-stream processing operations in non-nuclear fuel cycle facilities.
Third, Congress and NRC, when they used the term "processed primarily for its source
material content" did not intend to prescribe a minimum percentage of tuanium or thorium that
must be present in an ore before the ore can be considered to be processed primarly for its
source material content. lndeed, the opposite is true. The legislative history reveals that
Congress intended to include within the scope of t 1e.(2) byproduct material a// tailings and
wastes from the processing of ores for their uanium content, regardless of the concentration of
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uranium contained in the ore. NRC did not intend anlthing ditferent when it used the phrase
"processed primarily for its source material content" in the Altemate Feed Policy.
Fourth, Congress and NRC intended that ores processed for the extraction of uranium in
licensed uranium mills that are part of the nuclear fuel cycle would be presumed to be processed
primarily for their source material content. However, because of the variability of alternate feed
materials, NRC created in the Alternate Feed Policy a multi-part test to ensure that, with any
given alternate feed, it is reasonable to expect that uranium will be extracted, and therefore
appropriate to apply the presumption that the feed will be processed primarily for its source
material content. So long as these tests are satisfied, "sham disposal" is not a concem.
Fifth, the "certification test" set out in the Alternate Feed Policy will be satisfied if, on
the basis of financial considerations, considerations of uranium content, or any other
considerations a licensee can justiff that it is reasonable to expect that uranium will be extracted
from an altemate feed. NRC has wide discretion in determining what constitutes adequate
justification in a case-specific manner; however, in appropriate cases adequate justification for
the expectation that uranium wilt be extracted from an alternate feed material can be based on
considerations such as: contractual commitnents to recover uranium; the presence of other
valuable minerals to be recovered from the alternate feed, along with uranium; the receipt of a
toll milling, recycling or recycling fee; increased production efficiencies associated with
recovering uranium from the alternate feed, and so forth. In another proceeding involving
different parties, the Presiding Officer stated, perhaps rhetorically, that the petitioners in that case
had not demonstrated "why it would be improper to operate an unprofitable milling operation
that reduced the cost of waste disposal by recovering valuable yellowcake." There is nothing
improper about assessing a fee (or receiving other consideration) in order to offset the
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incremental costs of recovering uranium tiom an ore. and that to do so does not mean that the ore
is not being processed primarily for its source material content or that the mill is engaging in
"sham disposal."
Sixth, IUSA provided the Commission with suffrcient documentation to justifu its
certification that it is processing the Ashland 2 mateial primarily for its source material content
based on financial grounds, considerations of uraniun content, and other grounds even though
satisfaction of an ore of these test would be suffrcient.
Seventh, the Alternate Feed Policy's co-disposal test provides a separate and independent
basis for concluding that an alternate feed material is being processedprimarily for its source
material content, and that a proposed material will satisff this test if it would be approved for
direct disposal in a uranium mill tailings impoundment. We have demonstrated that, because the
Ashland 2 material is 11e.(2) byproduct material it would be approved for direct disposal in
IUSA's mill tailings impoundment, and therefore would satisff the co-disposal test.
Thus, Utah's assertion that IUSA is not processing the Ashland 2 material primarily for
its source material content is without merit, ,N are its suggestions that IUSA is attempting to
engage in "sham disposal."
With respect to Utah's remaining arguments that the Ashland 2 material might be LLRW,
that NRC's regulatory program is inadequate to protect health and safety in Utatt, that there are
deficiencies in the administrative record and that there were inadequacies in NRC Staffs review
ofthe record, are baseless.
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Accordingly, forall of the foregoing reasons, the State of Utah lacks jurisdiction orer the
Ashland 2 material, therefore, IUSA respectfully requests that the Presiding Officer deny the
relief requested by the State of Utah and affirm NRC Staff s decision to approve Amendment 6
to IUSA's license.
Respectfully submitted,
David C. Lashway
SHAW PITTMAN POTTS & TROWBRIDGE
2300 N Street, N.W.
Washington, DC 20037
[phone]
Counsel to Licensee, International
Uranium (USA) Corporation
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UNITED STATES OF AMERICA
NUCLEAR REGULATORY COMMISSION
ATOMIC SAFETY AND LICENSING BOARD PANEL
Before Administrative Judges:Peter B. Bloch, Presiding Officer
Richard F. Cole, Special Assistant
CERTIFICATE OF SERYICE
I hereby certiry that I caused tnre and complete copies of the foregoing
INTERNATIONAL URANIUM (USA) CORPORATION'S (*IUSA'S") REPLY TO THE
STATE OF UTAH'S BzuEF IN OPPOSITION TO IUSA'S SOURCE MATERIAL LICENSE
AMENDMENT in the above-captioned matter to be served, via facsimile, certified mail, and e-
mail on this 19th day of January, 1999 to:
TN THE MATTER OF
INTERNATIONAL URANTUM (USA)
CORPORATION
(Source Material License Amendment)
Office of Rulemakings and Adjudications
U.S. Nuclear Regulatory Commission
I1555 Rockville Pike
Rockville, MD 20852
Fred G. Nelson, Assistant Attorney General
Denise Chancellor
Attorney for State of Utah
Utatr Attomey General's Offrce
160 East 30 South, 5th Floor
P.O. Box 140873
Salt Lake City, Utatr 84114-0873
Docket No. 40-868 I -MLA-4
ASLBP No. 98-748-03-MLA
January 19, 1998
Mr. John C. Hoyle
Office of the Secretary
U.S. Nuclear Regulatory Commission
11555 Rockville Pike
Rockville, MD 20852
Administrative Judge Peter B. Bloch
Presiding Officer
Atomic Safety and Licensing Board Panel
U.S. Nuclear Regulatory Commission
Washington, DC 20555
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Administrative Judge Richard F. Cole
Special Assistant
Atomic Safety and Licensing Board Panel
U.S. Nuclear Regulatory Commission
Washington, DC 20555
Commissioner Shirley Ann Jackson
U.S. Nuclear Regulatory Commission
11555 Rockville Pike
Rockville, MD 20852
Commissioner Nils J. Diaz
U.S. Nuclear Regulatory Commission
11555 Rockville Pike
Rockville, MD 20852
Elocumcnt #: 7Q4367 v.l
Atomic Safety and Licensing Board Panel
U.S. Nuclear Regulatory Commission
Mail stop T3F23
Washington, DC 20555
Commissioner Edward McGaffigan, Jr.
U.S. Nuclear Regulatory Commission
11555 Rockville Pike
Rockville, MD 20852
Mitzi A. Young, Esq.
U.S. Nuclear Regulatory Commission
Office of the General Counsel
11555 Rockville Pike
Rockville, MD 20852
Waren U. Lehrenbaum
David C. Lashway
SHAW PITTMAN POTTS & TROWBRIDGE
2300 N Street, N.W.
Washington, DC 20037
[phone]
Cotrnsel to Licensee, International
Uranium (USA) Corporation
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UNITED STATES OF A-MERICA
NUCLEAR REGULATORY COMMISSION
ATOMIC SAFETY AI\[D LICENSING BOARD PANEL
Before Administrative Judges:Peter B. Bloch, Presiding Offrcer
Nchard F. Cole, Special Assistant
TN THE MATTER OF
INTERNATIONAL URANIUM (USA)
COPJORATION
(Sotrce Material License Amendment)
Docket No. 40-868 l -MLA-4
ASLBP No. 98-748-03-MLA
January 19, 1998
NOTICE OF APPEARANCE
The undersipe{ Warren U. Lehrenbaunr, being an attorney at law in good standing
admitted to practice before the courts of the District of Columbia hereby enters his appearance as
counsel on behalf of INTERNATIONAL URA}.IIUM ruSA) CORPORATION, in the above
captioned matter.
2300 N Street, N.W.
Washin$o& D.C. 20037 -l 128
Tel: [phone]
Fa.x: [phone]
ON BEHALF OF INTERNATIONAL URANIUM
(usA) CoRPoRATION
Warren U.
, POTTS & TROWBRIDGE
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T.INITED STATES OF fuVIERICA
NUCLEAR REGULATORY COMMISSION
ATOMIC SAFETY AIYD LICENSING BOARD PANEL
Before Administrative Judges: Peter B. Bloch, Presiding Offrcer
Richard F. Cole, Special Assistant
TN THE MATTER OF
INTERNATIONAL URANIUM (USA)
CORPORATION
(Soruce Material License Amendmen$
Docket No. 40-8681 -MLA-4
ASLBP No. 98-748-03-MLA
January 18, 1998
CERTIFICATE OF SERVICE
t I hereby certiff that I caued tnre and complete copies of the foregoing Notice of
Appearance in the above-captioned matter to be serve4 via facsimile, certified mail, and e-mail
I on this lfttr day of Jantrary, 1999 to:
I Office of Rulemakings and Adjudications Mr. John C. Hoyler U.S. Nuclear Regulatory Commission Office of the Secr*ary
r 11555 Rockvilte Pike U.S. Nuclear Regulatory Cornmission
t Rockville, MD 20t52 11555 Rockville Pike
Rockville, MD 20852
t Fred G. Nelson, Assistant Attorney General Administrative Judge Peter B. Blochr Denise Chancellor Prcsiding Officer
Attorney for State of Utah Atomic Safety and Licensing Board Panel
t Utatr Attomey General's OfEce U.S,Nuclear Regulatory Commissionr 160 East 30 South, 5th Floor Washington, DC 20555
P.O. Box 140873
I Salt Lake City, Utah 84114-0873
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Administrative Judge Richard F. Cole
Special Assistant
Atomic Safety and Licensing Board Panel
U.S. Nuclear Regulatory Commission
Washington, DC 20555
Commissioner Shirley Ann Jackson
U. S. Nuclear Regulatory Commission
I1555 Rockville Pike
Rockville, MD 20852
Commissioner Nils l. Diaz
U.S. Nuclear Regulatory Commission
I1555 Rockville Pike
Rockville, MD 20852
Docurncot #: 7(Xlfi) v.l
Atomic Safety and Licensing Board Panel
U.S. Nuclear Regulatory Commission
Mail Stop T3F23
Washington, DC 20555
Commissioner Edward McGafFrgan, Jr.
U. S. Nuclear Regulatory Commission
11555 Rockville Pike
Rockville, MD 20852
Mitzi A. Young, Esq.
U.S. Nuclear Regulatory Commission
Office of the General Coursel
11555 Rockville Pike
Rockville, MD 20852
Warren U. Lehrenbaum
Counscl for IUSA
Shaw, Pittnan" Potu & Trowbridge
2300 N Sreet, N.W.
Washington, DC 20037
[phone]
2