DRC-2011-007576 - 0901a0688028b59e

^^^^^
State of Utah
GARY R. HERBERT
Governor
GREG BELL
Lieutenant Governor.
Department of
Environmental Quality
Amanda Smith
E.xecutive Director
DIVISION OF RADIATION CONTROL
Rusty Lundberg
Director
November 15, 2011
CERTIFIED MAIL
(Return Receipt Requested)
David C. Frydenlund
Vice President, Regulatory Affairs and Counsel
Denison Mines (USA) Coip.
1050 17'^ Street, Suite 950
Denver, CO 80265
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RE: response to letter dated 11 /4/11 / TR
David C Frydenlund
Vice President & General Counsel
Denison Mines (USA) Corp (DUSA)
1050 17th ST STE 950
Denver CO 80265
:PS Iidrrii-38p0.; August 2006 See'Rev'erse for Iristructions
Subject: Response to Denison Mines (USA) Corp. (DUSA) letter dated November 4, 2011
Regarding the DRC Findings and Proposed Settlement Agreement and Monetary
Penalty for Notice of Violation and Order, Docket No. UGW 11 -04
Dear Mr. Frydenlund:
This is in response to your letter dated November 4, 2011. DRC notes that the letter was
submitted as agreed upon during a November 7, 2011 conference call between the Division of
Radiation Control (DRC) and DUSA. Your letter provides the DUSA interpretation of the
applicability of the Ground Water Discharge Permit, Permit No. UGW370004 ("Groimdwater
Pennit") Part I.G.3.C (Affirmative Defense), and also includes documentation regarding past
discussion with DRC regarding that interpretation. The letter also requests a response from DRC
regarding the applicability of Affirmative Defense in general as well as to the recent DRC rejection
ofthe DUSA application for ''Affirmative Defense" for ground water sample violations cited in a
Notice of Violation and Order Docket No. UGWl 1-04. The cited violations are for the
exceedence of holding time requirements listed in the White Mesa Mill Quality Assurance Plan
(QAP) for several samples.
Affirmative Defense Rule
Part I.G.3.C of the Groundwater Permit is based on the State of Utah, Utah Administrative Code
(UAC) R3I7-6. Specifically, UAC R317-6.16.C.3 states ''Affirmative Defense - In the event a
compliance action is initiated against the permittee for violation of permit conditions relating to
best available technology, the permittee may affiirmatively defend against that action by
demonstrating the following...'''
The definition of "Performance Monitoring'^ is found at UAC R317-6-6.9.B. and is relevant to
monitoring performance of best available technology (BAT) standards. Note that the definition of
195 North 1950 West • Salt Ljke City. I IT
Mailing Address: P.O. Box 144850 • Salt Lake City. UT 841 14-4850 '
Telephone [phone] • Fax (801) 5.S.1-4097 • T.D.D. (80 0 5.'iCv-4414
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David C. Frydenlund
Page 2
"Groundwater Monitoring''\s found ai UAC R317-6-6.9.A.
Affirmative Defense in the Groundwater Permit Part l.G.S.c
The Groundwater Permit Part l.G.S.c extends the definition to include violations of Discharge
Minimization Technology (DMT) as eligible for consideration uxxditx Affirmative Defense. Per the
Groundwater Permit, DMT is relevant for Tailings Cells 1, 2, and 3, where BAT is not employed.
PerfoiTnance monitoring requirements for DMT and BAT are clearly defined in the Groundwater
Permit Parts I.E.7 and I.E.8.
Per your November 4, 2011 letter, and as discussed during a conference call with you and your
staff on October 27, 2011, you point out that Part I.D.3.a of the Groundwater Permit is titled
"DMT Monitoring Wells at Tailings Cell 7".and Part I.D.3.d refers to DMT Monitoring Wells at
Cells 2 and 3. You also infer in your letter that the groundwater monitoring well networks for
Cells 1, 2, and 3 (and groundwater monitoring activities) were expanded to serve as DMT
monitoring points to make-up for the failure of these Cells to meet BAT.
We do not agree with this inteipretation. Note that DMT monitoring requirements are listed in
Part I.E.7. of the Groundwater Permit and that no groundwater monitoring for cells 1, 2, or 3 is
prescribed. Per DRC review of Part I.D.3.a and I.D.3.d, the sections were written to clarify that
Cells 1, 2, and 3 are to be maintained and operated by DUSA such that no exceedences of
Groundwater Compliance Limits (as established in the Groundwater Permit) are incurred. An
exceedence of Groundwater Compliance Limits is an indicator of a wastewater release Lo waters
of the State and therefore precludes the applicability of Affirmative Defense.
Past Discussion between DRC and DUSA
Your November 4, 2011 letter also includes an example of DRC's past interpretation of
Affirmative Defense. Specifically, you included several letters related to a single event in 2008.
That event was the failure of DUSA to comply with groundwater sample preservation
(temperature) requirements as listed in the White Mesa QAP.
Per DRC review of the correspondence it is agreed that an application for Affirmative Defense was
made by DUSA for the violation and that DRC requested additional information in an attempt to
satisfy those requirements. However by DRC letter dated October 9, 2008, it was also noted that
Affinnative Defense was not granted, and that in resolution of the matter the Co-Executive
Secretary issued a "Notice of Enforcement Discretion." Therefore, an approval ofthe
applicability of Affirmative Defense was not granted in that matter.
DWQ Interpretation of AppUcabiUty of Affirmative Defense
Your letter also requests clarification regarding the Utah Division of Water Quality (DWQ)
implementation of Affinnative Defense. Per a telephone conversation between representatives of
DRC and DWQ on November 7, 2011, DRC was informed that DWQ has not received an
application fox Affirmative Defense within the past 5 years. It was also clarified that DWQ would
not C0T[s\dQ,r Affirmative Defense applicable for violations of groundwater monitoring quality
assurance. Therefore, the rejection of Affirmative Defense relative to holding time requirements is
consistent with DWQ policies and actions. Per the discussion between DWQ and DRC staff it
David C. Frydenlund
Page 3
was also clarified that it would be unlikely that DWQ would consider Affirmative Defense
applicable for any general violations of groundwater monitoring.
Per our November 7, 2011 conference call it was discussed that DRC does see a potential for
Affirmative Defense to be applicable for violations related to the maintenance and/or repair of
groundwater monitoring wells. However, such determinations of applicability would be made on
a case by case basis.
Conclusions
DRC disagrees with your November 4, 2011 letter conclusion that DRC has applied Affinnative
Defense standards to groundwater monitoring violations in the past. Per DRC review of your .
letter, and attached documents. Affirmative Defense was not applied by DRC. Therefore, please
be advised ihat Affinnative Defense is applicable only for compliance actions/violations related to
DMT and/or BAT as prescribed by the Groundwater Permit.
In relation to DRC protocol regarding violations of groundwater monitoring (standing violations),
DRC does consider Permittee actions related to: 1. History of Compliance or Non-compliance,
2. Degree of Willfulness and/or Negligence, and, 3. Good Faith Efforts to Comply, in
conformance with the DWQ Penalty Criteria for Civil Settlement Negotiations as found in UAC .
R317-1-8. With regard specifically to the holding time violations cited in the NOV Docket
-UGWl 1-04, DRC applied credits as deemed appropriate and in consideration of the DUSA
response to the NOV.
Per discussions between DUSA and DRC staff regarding the economic benefit calculation, via
telephone on October 27, 2011, Settlement Agreement, Docket UGW11-04SA was re-drafted to
reflect the agreements during that discussion. Two copies of the revised SA as well as a copy of
the revised calculation (DRC Review Memo) are aUached. If you wish to resolve the August 15,
2011 NOV based on the enclosed revised calculations, please review the SA and sign both copies
(do not date them), and then retum them both to this office within ten (10) calendar days of receipt
of this letter.
If you have questions regarding this letter, or if you would like to arrange a meeting or conference
call to discuss this issue further, please contact Phil Goble or Tom Rushing at [phone].
Sincerely,
UTAH WATER QUALITY BOARD
tr.
Rusty Lundberg
Co-Executive Secretary
Enclosure: 1) 2 Copies of Revised Contract UGWl 1-04SA, 2) Copy ofthe DRC Penalty
Calculation Memo
RL:TR:tr
F:\DIISAM.lC.Wl 1-04\Affirmalive Defense Documents\DRC Response Re Affirmative Defense I.IGWI i-04.doc
Denison Mines (USA) Corp.
White Mesa Mill
Settlement Agreement, Docket No. UGWl 1-04SA
UTAH WATER QUALITY BOARD
IN THE MATTER OF
DENISON MINES (USA) CORP.
1050 17™ STREET, SUITE 950
DENVER, CO 80265
SETTLEMENT AGREEMENT
DOCKET NUMBER UGW11-04SA
This SETTLEMENT AGREEMENT (hereinafter AGREEMENT") is between DENISON
MINES (USA) CORP. (hereinafter OPERATOR ) and the UTAH WATER QUALITY
BOARD (hereinafter the "BOARD"), conceming violations of the Utah Water Quality Act (the
Act), Utah Code Annotated ("UCA") §§19-5-101 to -124, and the Utah Administrative Code
("UAC")R317-Ito-560.
1. The BOARD has authority to administer the Utah Water Quality Act, and the Utah
Administrative Code. UCA §§19-5-106, -115.
2 The CO-EXECUTIVE SECRETARY of the BOARD (hereinafter the
"CO-EXECUTIVE SECRETARY") will administer the terms and provisions of this
AGREEMENT. UCA §§19-5-106 and 115.
3. This AGREEMENT resolves the 3 violations cited in the NOTICE OF VIOLATION and
ORDER, Docket Number UGWll-04 (hereinafter the "NOTICE") issued to the
OPERATOR on August 15, 2011, by the BOARD. It does not in any way relieve the
OPERATOR from any other obligation imposed under the Act or any other State or
Federal laws.
4. The parties now desire to resolve this matter fully without further administrative
proceedings except to the extent provided herein by entering into this AGREEMENT.
Entering into this AGREEMENT is not an admission of liability or factual allegation set
out in the NOTICE, nor is it an admission of or an agreement to any disputed facts or
disputed legal theories, nor is it an admission of any violation of any law, rule, regulation or
permit by the OPERATOR.
5. In resolution of violations of the NOTICE referenced in Paragraph 3 of this
AGREEMENT, the OPERATOR agrees to pay a total penalty amount of $ 11,955 within
30 days of the effective date of this AGREEMENT by check. The check will be made
payable to the State of Utah, delivered or mailed to the Division of Radiation Control,
Department of Environmental Quality, 195 North 1950 West, P.O. Box 144850, Salt Lake
City, Utah 84114-4850. The penalty has been determined using the Penalty Criteria for
Civil Settlement Negotiations, Utah Administrative Code ("UAC") R317-1-8 which
Page 1 of 2
Denison Mines (USA) Corp.
White Mesa Mill
Settlement Agreement, Docket No. UGW 11-04SA
considers such factors as the nature, severity and extent of the violations, history of
noncompliance, degree of willfulness and/or neghgence, good faith efforts to comply, and
economic benefit.
6. The deadline stipulated in item 5 above may be amended by prior written mutual agreement
of the parties. The party requesting the amendment must write to the other party ,14 days
before the documented deadline and request an amendment of the deadline. The other party
will either agree to or deny the amendment in writing within 10 days of receipt of the
request.
7. Nothing contained in this AGREEMENT shall preclude the BOARD from taking additional
actions to include additional penalties against the OPERATOR for permit violations not
resolved by this AGREEMENT.
8. If an agreement between the OPERATOR and the EXECUTIVE SECRETARY cannot be
reached in a dispute arising under any provision of this AGREEMENT, then the
OPERATOR or the CO-EXECUTIVE SECRETARY may commence a proceeding with'the
BOARD under the Utah Administrative Procedures Ac t, Utah Code Annotated §§63G-4-101
to -601 to resolve the dispute. A final decision in any adjudicative proceeding shall be subject
to judicial review under applicable state law.
9. Nothing in this AGREEMENT shall constitute a waiver by the OPERATOR to raise in
defense any legal or factual contention for future allegations of noncompliance.
10. Nothing in this AGREEMENT shall constitute or be considered as a release from any claims,
to include natural resource damage claims, cause of action, or demand in law or equity which
the STATE may have against the OPERATOR, or any other person, firm, partnership or
corporation for any liability arising out of or relating in any way to the release of pollutants to
waters of the State.
AGREED to this dayof _, 2011.
DENISON MINES (USA) CORP UTAH WATER QUALITY BOARD
By. . By.
David Frydenlund Rusty Lundberg
DUSA Vice President and Counsel Co-Executive Secretary
Page 2 of 2
Denison Mines (USA) Corp.
White Mesa Mill
Settlement Agreement, Docket No. UGW11-04SA
UTAH WATER QUALITY BOARD
IN THE MATTER OF
DENISON MINES (USA) CORP.
1050 17™ STREET, SUITE 950
DENVER, CO 80265
SETTLEMENT AGREEMENT
DOCKET NUMBER UGW11-04SA
This SETTLEMENT AGREEMENT (hereinafter "AGREEMENT") is between DENISON
MINES (USA) CORP. (hereinafter OPERATOR") and the UTAH WATER QUALITY
BOARD (hereinafter the "BOARD"), conceming violations of the Utah Water Quality Act {ihQ
Act), Utah Code Annotated ("UCA") §§19-5-101 to -124, and the Utah Administrative Code
("UAC") R317-1 to-560.
1. The BOARD has authority to administer the Utah Water Quality Act, and the Utah
Administrative Code. UCA §§19-5-106, -115.
2 The CO-EXECUTIVE SECRETARY of the BOARD (hereinafter the
"CO-EXECUTIVE SECRETARY") will administer the terms and provisions of this
AGREEMENT. UCA §§19-5-106 and 115.
3. This AGREEMENT resolves the 3 violations cited in the NOTICE OF VIOLATION and
ORDER, Docket Number UGWll-04 (hereinafter the "NOTICE") issued to the
OPERATOR on August 15, 2011, by the BOARD. It does not in any way relieve the
OPERATOR from any other obligation imposed under the Act or any other State or
Federal laws.
4. The parties now desire to resolve this matter fully without further administrative
proceedings except to the extent provided herein by entering into this AGREEMENT.
Entering into this AGREEMENT is not an admission of liability or factual allegation set
out in the NOTICE, nor is it an admission of or an agreement to any disputed facts or
disputed legal theories, nor is it an admission of any violation of any law, rule, regulation or
permit by the OPERATOR.
5. In resolution of violations of the NOTICE referenced in Paragraph 3 of this
AGREEMENT, the OPERATOR agrees to pay a total penalty amount of $11,955 within
30 days of the effective date of this AGREEMENT by check. The check will be made
payable to the State of Utah, delivered or mailed to the Division of Radiation Control,
Department of Environmental Quality, 195 North 1950 West, P.O. Box 144850, SaltLake
City, Utah 84114-4850. The penalty has been determined using the Penalty Criteria for
Civil Settlement Negotiations, Utah Administrative Code ("UAC") R317-1-8 which
Page 1 of 2
' Denison Mines (USA) Corp.
White Mesa Mill
Settlement Agreement, Docket No. UGW 11-04SA
considers such factors as the nature, severity and extent of the violations, history of
noncompliance, degree of willfulness and/or negligence, good faith efforts to comply, and
economic benefit.
6. The deadline stipulated in item 5 above may be amended by prior written mutual agreement
of the parties. The party requesting the amendment must write to the other party 14 days
before the documented deadline and request an amendment of the deadline. The other party
will either agree to or deny the amendment in writing within 10 days of receipt of the
request.
7. Nothing contained in this AGREEMENT shall preclude the BOARD from taking additional
actions to include additional penalties against the OPERATOR for permit violations not
resolved by this AGREEMENT.
8. If an agreement between the OPERATOR and the EXECUTIVE SECRETARY cannot be
reached in a dispute arising under any provision of this AGREEMENT, then the
OPERATOR or the CO-EXECUTIVE SECRETARY may conunence a proceeding with the
BOARD under the Utah Administrative Procedures Ac t, Utah Code Annotated §§63G-4-101
to -601 to resolve the dispute. A final decision in any adjudicative proceeding shall be subject
to judicial review under applicable state law.
9. Nothing in this AGREEMENT shall constitute a waiver by the OPERATOR to raise in
defense any legal or factual contention for future allegations of noncompliance.
10. Nothing in this AGREEMENT shall constitute or be considered as a release from any claims,
to include natural resource damage claims, cause of action, or demand in law or equity which
the STATE may have against the OPERATOR, or any other person, firm, partnership or
corporation for any liability arising out of or relating in any way to the release of pollutants to
waters of the State.
AGREED to this day of 2011
DENISON MINES (USA) CORP UTAH WATER QUALITY BOARD
By.
David Frydenlund
DUSA Vice President and Counsel
By.
Rusty Lundberg
Co-Executive Secretary
Page 2 of 2
State of Utah
GARY R. HERBERT
Governor
GREG BELL
Lieutenant Governor
Department of
Environmental Quality
Amanda Smith
Executive Director
DIVISION OF RADIATION CONTROL
Rusty Lundberg
Director
MEMORANDUM
TO: File
THROUGH: Phil Goble, Compliance Section Manager
FROM: Tom Rushing, P.G. ;j / (/t/1 /
DATE: November 8, 2011
SUBJECT: Revised Memo " Notice of Violation and Order Docket No. UGWl 1-04, Review of
Denison Mines (USA) Corp. (DUSA) September 19, 2011 response to the NOV, Utah
Division of Radiation Control (DRC) Findings and Proposed Civil Penalty for
Standing Violations
This memo is to provide; 1. The DRC review findings regarding DUSA's September 19, 2011 letter
response (Response) to Notice of Violation and Order Docket No. UGWl 1-04 (NOV), and 2. A civil
penalty calculation for standing violations related to the NOV.
1. DRC Review of the Response
Per review of the Response, DUSA did not reserve their right to request a hearing before the Water
Quality Board.
The Order requires DUSA to prepare a response with the following items:
a) The root cause of the noncompliance,
b) Corrective steps taken or to be taken to prevent re-occurrence of the noncompliance,
c) Date when compliance was or will be achieved.
Table 1 below summarizes the violations cited in the Order, the violations requested to be rescinded
by DUSA per the Response, and the DRC findings.
195 North 1950 West • Sait Uike City, UT
Mailing Address: P.O. Box 144850 • Salt Lake City. UT 84114-4850
Telephone [phone] • Fax [phone] • T.D.D. [phone]
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Page 2
Table 1 - Summary of Violations NOV and Order Docket UGWl 1-04, DUSA Responses and DRC Findings
I Violation Summary J DUSA September 19, 2011 Response | DRC Findings
Violation 1 - NOV cites
violation of Parts I.E. 1(b)(2)
andI.G.l(b)l ofthe
Groundwater Permit for
failing to accelerate samples
for TDS in wells MW-26 and
MW-31 and Uranium in well
MW-25 during December
2010.
Failure to Accelerate
Violation
DUSA does not contest the violation. DRC notes that this violation type has
been cited in 3 previous NOVs,
UGW07-04, UG^V08-01 and UGW'OS-
02.
A penalty has been calculated for the
violation.
1 Violation Stands
Violation 2 - NOV cites
violation of Part I.e. 1(a) of
the Groundwater Permit and
Section 8.2 and Table 1 of the
DUSA QAP for failing to
perform analysis for mercury
in 10 wells and one blind
duplicate within the
recommended holding time
(28 days).
Sample Holding Time
Violation
DUSA requests retraction of the
violation and believes that
affirmative defense per Part I.G.3.(c)
of the Groundwater Permit is
applicable. Specifically, per the
September 19,2011 DUSA response
(and Appendix B - January 26, 2011
DUSA Notice) it is argued that:
1. DUSA provided oral and
written notification per
requirements of UACR317-
6-6.13,
2. The holding time
exceedances were not
intentional or caused by
negligence but were caused
by a "misinterpretation" of
the required holding time by
the contract laboratory,
3. DUSA has taken adequate
measures to meet permit
conditions by notifying the
contract laboratory of the
holding time discrepancy.
4. Provisions of UCA 19-5-107
have not been violated since
the violation did not result in
a pollutant discharge into
waters of the State.
DR|C notes that this violation type has
been cited previously in an April 1,
2008 NOV (UGV/08-02, Violation #3).
The violation is related to "Ground
Water Compliance" Monitoring and
does not fall under monitoring types for
DMT or BAT (See Parts I.E.7 and I.E.8
of the Groundwater Permit for
specifics). Therefore, DUSA's proposal
for DRC to retract the violation based
on Part I.G.3.(c) of the Groundwater
Permit "Affirmative Defense" is not
applicable.
However, in consideration ofthe
affirmative defense arguments made by
DUSA, DRC will allow full credit in
the penalty calculation for: 1. Degree of
Willfulness and/or Negligence, and, 2.
Good faith efforts to comply.
1 Violation Stands
Page 3
Violation 3 - NOV cites
violation of Part I.E. 1 (a) of
the Groundwater Permit and
Section 7.1 and Attachment 1
ofthe DUSA QAP for failing
to use the currently approved
Field Data Worksheet for
Groundwater for the 4'*'
Quarter 2010 monitoring
events.
Fieldsheet Violation -
DUSA requests retraction of the
violation. DUSA states that the field
sheet used for the 4"" Quarter 2010
monitoring contained the same
information as the field sheet in the
DUSA QAP Revision 6 and was only
different in appearance. DUSA
states that these cosmetic changes
were required for the electronic data
capture system which was
implemented in 2010. DUSA also
provides an Appendix A-with the
September 19, 2011 letter which
compares the two forms side by side
to show that the information tabs are
the same.
Based on DRC review of the Field Data
Sheets provided as Appendix A ofthe
DUSA September 19, 2011 response to
NOV Docket UGW 11-04 it appears that
all information required on Attachment
I ofthe DUSA QAP, Revision 6 was
included on the alternate form.
Therefore, DRC agrees with DUSA's
response that the forms are functionally
equivalent.
1 Violation Retracted
3 violations cited 2 violations stand
Each DUSA response to the 3 NOV violations is listed below, followed by DRC findings.
VIOLATION 1
DUSA RESPONSE - VIOLATION 1
1. Parts I.E.l(b)(2) and I.G.l(b)(l) ofthe Permit for failing to accelerate samples for TDS in
wells MW-26 and MW-31 and Uranium in well MW-25 during December 2010. This is also a
continuing violation previously cited in three DRC NOVs dated January 11, 2008 (UGW07-04),
February 28, 2008 (UGW08-01), and April 1, 2008 (UGW08-02).
a) Root Cause ofthe Noncompliance
The Denison Corporate Quality Assurance Manager noted the exceedances ofthe Groundwater
Compliance Limits ("GWCLs") for Q3 2010 and appropriately reported the exceedances in the
November 15, 2010 Exceedance Notice. The Quality Assurance Manager failed to notify Mill
Personnel of the additional accelerated sampling requirements. The Denison Corporate Quality
Assurance Manager noted this oversight during the 4t quarter 2010 data review, and accelerated
monitoring was started in January 2011.
b) Steps That Have Been Taken to Correct the Violation
Denison recently purchased a commercial database system for management ofthe Mill groundwater
data. After all data are entered and have undergone quality control review, the database/data
management capabilities of the software system will allow the Corporate Quality Assurance Manager
to provide the exceedance results to the Mill Personnel in a more timely fashion. In addition, after
completion of training, data reports will be accessible to the Mill Personnel directly which would
allow them to detennine what analytes require accelerated monitoring in addition to the notification
from the Corporate Quality Assurance Manager.
c) Date When Compliance Was or Will be Regained
Page 4
Monitoring for TDS in MW-26 and MW-31 and uranium in MW-25 was accelerated in January 2011
as required.
d) Steps Taken to Prevent Reoccurrence of the Noncompliance
See item (b) above.
DRC FINDINGS - VIOLATION 1
DRC notes that this violation type (acceleration of sampling) has been cited previously in three DRC
NOVs dated January 11, 2008 (UGW07-04), February 28, 2008 (UGWG8-01), and April 1, 2008
(UGW08-02). DRC will calculate a monetary penalty for the reoccurring violation.
DRC accepts that the violation was the result of failure to provide the proper notification ofthe need
for accelerated monitoring to the White Mesa Mill personnel. Additionally, DRC notes that DUSA
has provided a mechanism to avoid this communication failure in the future.
VIOLATION 2
DUSA RESPONSE - VIOLATION 2
2. Part I.E.I(a) of the Permit and Section 8.2 and Table 1 of the DUSA QAP for failing to
perform analysis for mercury in 10 wells (MW-1, MW-3, MW-3A, MW-12, MW-18, MW-19,
MW-20, MW-23, MW-26, and MW-34) and one blind duplicate (MW-70) M ithin the
recommended holding time (28 days). This is also a continuing violation previously cited in the
April 1, 2008 NOV (UGW08-02, Violation #3).
Denison submitted a notice on January 26,2011, under Part I.G.3, which asserted an affirmative
defense under I.G.3.(c) ofthe Permit and UAC R-317-6-6.16C.3 in association with this violation.
This Notice of Violation did not indicate that the Executive Secretary had considered that submittal. A
copy of the January 26, 2011 notice is attached as Appendix B to this letter, for your convenience.
Denison believes that the affirmative defense in Part I.G.3.(c) of the Pennit is applicable to this
incident and that this violation should be retracted.
a) Root Cause ofthe Noncompliance
1. Facts and Background Information
a) Denison perfonned its routine review of laboratory data from Energy Laboratories (UEL") and/
Americ'a West Analytical Laboratories for compliance with requirements ofthe QAP during the
week of January 17, 2011,
b) The currently approved Denison White Mesa Mill QAP, Table 1, requires the use of Method
E200.8forthe analysis of mercury. This table also requires a 28 day holding time for mercury;
that is, that samples be analyzed for mercufj within 28 days,of the date of sample collection.
c) EL has perfonned all the metals analyses for the Mill's groundwater program, since prior to
1995. EL perfonned the inercury analysis for the Mill 's fourth quarter 2010 groimdwater
samples. EL has consistently been able to meet a 28 day holding time for mercury samples^
that is, they have consistently performed mercury analysis within 28 days ofthe sample
Page 5
collection.
d) During the week of January 17, 2011, Denison identified that 10 groundwater samples and one
duplicate sample analyzed by EL for mercury were analyzed after the 28 day h olding time had
expired. Denison contacted EL regarding the lab's failure to meet the holding time required in
the QAP.
e) EL is currently Utah State certified for, and uses for Denison's groundwater analyses, Method
200.8 Detennination of Trace Elements in Water and Wastes by Inductively Coupled PlasmaMass
Spectrometry, Revision 5.4 dated 1994. This method, which is required by the QAP, lists
the holding time for mercury as 6 months. This method is the currently promulgated method
per 40 CFR 141 and 143 (September 1998). A proposed update. Draft Revision 5.5, has not
been approved by EPA.
f) Denison collected all the samples for groundwater mercury during the period from November
15 to November 29, 2010. EL received all of Denison's fourth quarter groundwater mercury
samples during the period from November 19, 2010 through November 24, 2010. Due to the
laboratory staff schedules during the holidays, EL did not have enough available staff to
analyze the mercury samples within the 28 day hold time, which expired on December 13, 2010
for the earliest, and December 28, 2010for the latest ofthe mercury samples.
g) Denison received the initial data reports containing two ofthe mercury results on December 30,
2010, too late to perform re-sampling within the fourth quarter. Denison received the remainder
ofthe needed data reports required for the quality assurance review, after the close ofthe
fourth quarter, on January 6, 2011.
h) Following Denison's review ofthe data, during phone conversations and emails with EL, the lab
advised Denison that:
a. there was room for conftision in interpreting the discrepancy between the 6-month hold
time identified in Method 200.8 Revision 5.4 and the 28-day hold time identified in 40
CFR 141 and 143. This is particularly so given footnote 3 in the table in 40 CFR
141.23(k)(2), which states that:
"In all cases, samples should be.analyzed as soon after collection as possible.
Follow additional (if any) information on preservation, containers or holding
times that is specified in the method."
This could be interpreted to mean that the more specific, 6-month holding time .
requirement in the method should prevail over the holding time specified in the table,
and
b. EL assumed the 6-month hold time in approved Method 200.8 Revision 5.4 was
applicable. Based on EE's interpretation, EL assumed that the 6-month hold time was
applicable and the samples were not out of hold.
i) Denison concluded that regardless of the holding time stated in EE's certified Method, the 28-
day hold time stated in the QAP should be considered correct and should be adhered to for the
following reasons:
a. The Mill's QAP requires a 28-day holding time.
Page 6
b. The September 1998 publication of 40 CFR 141 and 143 states a 28-day holding time
(notwithstanding footnote 3 referred to above).
c. Industry standards and practice appear to require a 28-day holding time for mercury.
d. In the draft revision 5.5 of Method E200.8, the holding time for mercury has been
changed to 28 days, presumably to be consistent with industry practices and
standards.
The root cause analysis is as follows.
a) There exists a discrepancy between the holding time stated in the approved Method 200.8
Revision 5.4, for which EL is certified, and other statements of holding time for this method, as
appear in the 1998 40 CFR 141 and 143, and the proposed update io Method 200.8:
b) There M>as some confusion on the part of the lab in determining the applicable holding time.
The lab misinterpreted the discrepancy. Operating under the assumption that the 6-month
holding time was applicable, the lab did not analyze the samples in time or notify Denison in
time to recollect samples to meet a 28-day holding time.
b) Steps That Have Been Taken to Correct the Violation
The following actions will have already been taken to prevent a reoccurrence ofthis incident:
a) As stated above, Denison re-contacted EL by email and informed the lab that:
a. The 2B-day mercury hold time in the QAP is applicable and mandatory regardless of
EE's interpretation ofa longer hold time as stated in their certified method.
b. EI is required for all future samples to meet the 2B-day hold time for mercury.
c) Date When Compliance Was or WiU be Regained
All mercury analyses conducted since this occurrence in 4th Quarter 2010 have been completed
within the
2B-day holding time as required.
d) Steps Taken to Prevent Reoccurrence of the Noncompliance
As previously stated, Denison has purchased a commercial database system. The database/data
management software will automatically note any holding time deviations at the time the data are
loaded by the laboratory. This would allow resampling efforts to be conducted immediately. As
mentioned above, Denison believes that the affinnative defense in Permit I.G.3. (c) ofthe Permit is
applicable to this incident and that this violation should be retracted.
Page 7
DRC FINDINGS - VIOLATION 2
DRC notes that this violation type (sample not analyzed within recommended holding time) has been
cited previously in an April 1, 2008 NOV (UGW08-02, Violation #3. DRC will calculate a monetary
penalty for the reoccurring violation.
The violation is related to "Ground Water Compliance Monitoring" and does not fall under
monitoring types for DMT or BAT. Therefore, DUSA's request for DRC to retract the violation
based on Part I.G.3.(c) of the Groundwater Permit "Affinnative Defense" is not applicable.
However, in consideration of the affirmative defense arguments made by DUSA, DRC will allow full
credit in the penalty calculation for: 1. Degree of Willfulness and/or Negligence, and, 2. Good faith
efforts to comply.
VIOLATION 3
DUSA RESPONSE - VIOLATION 3
3. Part I.E.I (a) of the Permit and Section 7:i and Attachment 1 df the DUSA QAP for failing to
use the currently approved Field Data Worksheet for Groundwater for the 4th Quarter
(November) and December, 2010 monitoring events, as found in Attachment 1 of the currently
approved DUSA QAP, Revision 6.0.
a) Root Cause of the Noncompliance
DUSA respectfully submits that Violation Number 3 is in error and should be retracted.
The field data sheet used for the 4th Quarter and December 2010 monitoring events is the same field
sheet contained in the approved QAP, with cosmetic changes only, to facilitate electronic data
capture, Denison began implementing an electronic data capture system in 2010. The system required
cleaner, darker fonnatting of the printed pages, specific fonts, marked cells for handwritten data, and
use of shaded electronic watennarked paper. Only these improvements were made to the field fonn.
All content and data contained in the Attachment 1 of the approved QAP have been retained in
approximately the same location on the page. Use of manually filled, handwritten, hand signed hard-
copy sheets in waterproof ink has been retained.
It is also important to note that the approved QAP, Section 7.1 requires the use ofa field data sheet,
and notes that "An example of a Field Data Worksheet that incorporates .... is included as Attachment
1." The QAP does not state that the form included in Attachment 1 will be used, but is an example of a
fonn that incorporates the required infonnation. Based on the wording of the currently approved
QAP, any form that incorporates the required information is allowable. Nonetheless, Denison has
continued to use the same form as provided in Attachment 1 of the QAP, with no data added or
removed, or relocated on the pages. The Field Data Worksheet simply has been cosmetically changed
for ease of digital transfer. The wording in the approved QAP does not preclude the use of a re-
formatted Field Data Worksheet provided the required infonnation is collected.
Page 8
To assist with confirmation that the data sheets are the same, short ofthe cosmetic changes, DUSA
has attached copies of both the fonn included in Attachment 1 ofthe currently approved QAP
("Attachment 1") and the re-fonnatted data sheet. Each data input location on Attachment 1 has been
numbered. The same number has been recorded in the corresponding data input location on the re-
fonnatted field data sheet. Both sheets with the numbered data input locations are included as
Appendix A to th is response letter. It is important to note that all data input locations noted on
Attachment 1 (numbers 1 through 60) are represented on the re-formatted field data sheet; that is, the
data collection requirements are identical. A second set ofthe same Attachment 1 and refonnatted
Attachment 1 have also been included showing each of the pages with numbered content side-by-side.
b) Steps That Have Been Taken to Correct the Violation
The following steps have been taken to correct the violation:
DUSA believes it is already in compliance with the requirements ofthe QAP fOr field data collection
and no violation has occurred.
c) Date When Compliance Was or Will be Regained
DUSA believes it is already in compliance with the requirements ofthe QAP for field data collection
and no violation has occurred.
_d) Steps Taken to Prevent Reoccurrence ofthe Noncompliance _ . _
DUSA believes it is already in compliance with the requirements of the QAP for field data collection
and no non-compliance situation has occurred. v . .
DRC FINDINGS - VIOLATION 3
Based on DRC review of the Field Data Sheets provided as Appendix A of the DUSA September 19,
2011 response to NOV Docket UGWl 1-04, it appears that all infonnation required on Attachment 1
of the DUSA QAP, Revision 6 was included on the alternate form. Therefore, DRC agrees with
DUSA's response that the forms are functionally equivalent and retracts the violation.
2. Civil Penalty Calculation
WATER OUALITY PENALTY CRITERIA
According to R317-1-8 (Penalty Criteria for Civil Settlement Negotiations), the penahy calculation
methodology consists of the following formula:
CIVIL PENALTY = PENALTY + ADJUSTMENTS - ECONOMIC AND LEGAL
CONSIDERATIONS
L Category Selection (R317-1-8.3)
' The table below describes the Water Quality penalty categories.
Water Quality Penalty Categories (UAC R317-1-8.3)
Category A - $7,000 to $10,000 per day. Violations with high impact on public health and the
environment to include:
Page 9
Category A.l - Discharges which result in documented public health effects and/or significant
environmental damage.
Category A.2 - Any type of violation not mentioned above severe enough to warrant a penalty
assessment under category A. .
Category B - $2,000 to $7,000 per day. Major violations of the Utah Water Pollution Control Act,
associated regulations, permits or orders to include:
Category B.l - Discharges which likely caused or would potentially cause (undocumented) public
health effects or significant environmental damage.
Category B.2 - Creation of a serious hazard to public health or the environment.
Category B.3 - Illegal discharges containing significant quantities of concentrations of toxic or
hazardous materials.
Category B.4 - Any type of violation not mentioned previously which warrants a penalty
assessment under category B. •
Category C - $500 to $2,000 per day. Violations of the Utah Water Pollution Control Act,
associated regulations, permits or orders to include:
Category C.l - Significant excursion of pennit effluent limits.
Category C.2 - Substantial non-compliance with the requirements of a compliance schedule.
Category C.3 - Substantial non-compliance with monitoring and reporting requirements.
Category C.4 - Illegal discharge containing significant or concentrations of non toxic or non
hazardous materials.
Category C.5 - Any type of violation not mentioned previously which wanants a penalty
assessment under category C. : „ ; _ „ : _ _ . ..
Category D - up to $500 per day. Minor violations of the Utah Water Pollution Control Act,
associated regulations, permits or orders to include:
Category D.l - Minor excursion of permit effluent limits.
Category D.2 - Minor violations of compliance schedule requirements.
Category D.3 - Minor violations of reporting requirements.
Category D.4 - Illegal discharges not covered in Categories A, B and C.
Category D.5 - Any type of violations not mentioned previously which wanants a penalty
assessment under category D.
Violation 1 - Parts LE.l(b)(2) and I.G.l(b)(l) of the Permit for failing to accelerate samples for
TDS in wells MW-26 and MW.31 and Uranium in well MW-25 during December 2010. This is
also a continuing violation previously cited in three DRC NOVs dated January 11, 2008
(UGW07-04), February 28,2008 (UGW08-01), and April 1, 2008 (UGW08-02).
Violation 1 - Penalty Category and Dates of Noncompliance
Penalty Category: Penalties for Violation 1 will be calculated as Category^ D.3 Minor Violations of
Reporting Requirements with penalties up to $500 per day. DRC considers Category D to be
appropriate and consistent with previous penalty calculations for this violation type. The DUSA
failure to accelerate monitoring for TDS in wells MW-26 and MW-31 and Uranium in well MW-25
during December 2010 resulted in the loss of 1 monthly sample (December 2010) for two parameters
in three wells.
Calculation of violation days: DUSA exceeded the TDS GWCLin wells MW-26 and MW-31 and
the Uranium GWCL in well MW-25 in the 3^'' Quarter, 2010 sampling event. The accelerated sampling
for these parameters should have begun with the December 2010 accelerated monitoring event. Per the
DUSA September 19, 2011 response to the NOV, DUSA accelerated monitoring for TDS in
Page 10
monitoring wells MW-26 and MW-31 and uranium in monitoring well MW-25 in January 2011.
Since the monitoring should have been accelerated in December 2011, the effective period of noii-
compliance is 1 month (30 days).
The proposed maximum penalty, therefore, would be calculated for 30 days at $500 per day is
$15.000.
Violation 2 - Part I.EJ(a) of the Permit and Section 8.2 and Table 1 of the DUSA QAP for
failing to perform analysis for mercury in 10 wells (MW-1, MW-3, MW-3A, MW-12, MW-18,
MW-19, MW-20, MW-23, MW-26, and MW-34) and one blind duplicate (MW-70) within the
recommended holding time (28 days). This is also a continuing violation previously cited in the
April 1, 2008 NOV (UGW08-02^ Violation #3).
Violation 2 - Penalty Category and Dates of Noncompliance
Penalty Category: Category D.3 is also considered applicable for the holding time violation. Failure
to analyze within the holding time for the applicable parameters/monitoring wells resulted in a loss of
the data for the 4"" quarter of 2010.
Calculation of violation days: Per the DUSA September 19, 2011 response to the NOV, DUSA
notes that the 4*^ Quarter 2010 samples were not analyzed/reanalyzed within holding times and that
the 4^^ quarter sample data was therefore lost. Therefore, the violation occuned over a period of a
sampling quarter (90 days).
The proposed maximum penalty, therefore, would be calculated for 90 days at $500 per day is
$45,000.
VIOLATIONS 1 AND 2 STATUTORY MAXIMUM PENALTY CALCULATION
The statutory maximum penalty for Violations 1 and 2, Category D.3 would be calculated for 120
days at $500 per day is $60,000.
ASSIGNED PENALTY AMOUNT WITHIN CATEGORY D.5
DRC consideration of credit as detailed in the Administrative Penalty Policy follows:
VIOLATION 1
A. History of compliance or non-compliance:
Under UAC R317-1-8.3(A), two factors need to be considered, including previous violations
and degree of recidivism.
. • \ -
DRC Finding: According to DRC records, DUSA has failed to accelerate monitoring
previously and has been cited forthe violation type 3 times since 2007, as follows:
• NOV Docket No. UGW07-04 (November 2007) - Failure to accelerate groundwater
monitoring from quarterly to monthly for gross alpha in monitoring well MW-32.
Page 11
• NOV Docket No. UGW08-01 (February 2008) - Failure to accelerate groundwater
monitoring from quarterly to monthly for gross alpha in monitoring well MW-32.
• NOV Docket No. UGW08-02 (April 2008) - Failure to accelerate groundwater
monitoring from quarterly to monthly for gross alpha in monitoring well MW-32.
Per these past violations, DUSA was given a 100% credit for history of compliance or non-
compliance. For this calculation DRC is reducing the credit and will apply 50% credit for the
History of Compliance category.
B. Degree of willfulness and/or negligence:
Four factors need to be considered under the requirements of UAC R317-1-8.3(B), including:
1. How much control the violator had over and the foreseeability of the events constituting
the violation;
2. Whether the violator made or could have made reasonable efforts to prevent the violation;
3. Whether the violator knew of the legal requirements which were violated;
4. Degree of recalcitrance.
DRC finds that:
• DUSA had control over the events constituting the violation and is ultimately responsible for
recognizing exceedances of the GWCLs collecting the accelerated ,
take.
• DUSA could have made a reasonable effort to prevent the violation by properly accelerating
sampling for TDS in MW-26 and MW-31 and Uranium in MW-25 quarterly to monthly.
• DUSA knew of the legal/Permit requirements which were violated which are specifically listed
in Part I.E. 1(c)(2) and Part I.G. i (b)(1) ofthe Permit, signed by the Executive Secretary on
March 8, 2005.
• To DRC knowledge, there is no indication of recalcitrance. However, DUSA has been cited
for this problem in four separate violations.
Therefore, a credit of 25% was given for willfulness or negligence.
C. Good faith efforts to comply:
Under UAC R317-1-8.3(C), this includes the Permittee's openness in dealing with the
violations, promptness in conection of problems, and degree of cooperation with the State.
Per the DUSA September 19, 2011 response to the NOV, the violation was caused by a failure
to provide timely communication from corporate headquarters to the mill. DUSA has
implemented a new process to avoid this type of violation in the future. Considering that this
is a first time violation, and that DUSA has provided conective action, OUSA was given 75%
credit for "good faith efforts to comply" category.
Page 12
Penalty Calculation
Violation 1
Category D, which is a maximum of $500 per day penalty
Credits: 1/3 (max $166) History of Compliance:
1/3 (max $166) Degree of Willfulness and/or Negligence:
1/3 (max $166) Good Faith Efforts to Comply:
Penalty per day violation: =
Number of violation days:
Total Category Penalty (Gravity Component)
ADJUSTMENTS
(50% credit)
(25% credit)
(75% credit)
Total credit
= $500
= $ 83
= $ 42
= $ 125
= $250
$250
X 30
= $ 7,500
According to R317-1-8.3, the civil penalty shall be calculated by adding the following adjustments to
the penalty amount:
a. Economic benefit (Cost Avoided) gained as a result of non-compliance. Part I.G. Kb) of
- r the Permit mandates that when a pollutant in a compliance monitoring sample exceeds a
GWCL in Table 2 ofthe Peimit, DUSA shall immediately initiate accelerated sampling of
the pollutant as required in Part I.E. 1(c)(2) and Part I.G. 1(b)(1) of the Permit. DUSA
saved money by failing to accelerate sampling for TDS in wells MW-26 and MW-31
Gross Alpha in MW-32 from quarterly to monthly, as shown below:
2 day of sampling (8 Hr/day)
to sarnple (3 Samples)
2 Employees @ $30/hr each $480
Laboratory Analysis 3
samples (2 TDS, 1 Total U)
Approx $35 each sample $105
Total Amount Saved by not accelerating TDS sampling in
wells MW-26 and MW-31 and Uranium in well MW-25.
$585
b. Investigative costs - No investigative costs are included for these violations. The
violations were the result of routine inspection findings by DRC.
Grand Total: Gravity Penalty Calculation $7,500 + Economic Benefit $585 = $8,085
VIOLATION 2
A. History of compliance or non-compliance:
Under UAC R317-1-8.3(A), two factors need to be considered, including previous violations
and degree of recidivism.
DRC Finding: According to DRC records, DUSA has failed to meet sample holding times
previously and was cited for the violation type in 2008 as follows: -
Page 13
• NOV Docket No. UGW08-02 (April 2008) - Failure to analyze carbonate and
bicarbonate in October 30, 2007 sample from well MW-19 within 14 day maximum
holding time.
DRC notes that a penalty has not been calculated for this penalty type in the past. DRC will
provide a 75% credit for this category.
B. Degree of willfulness and/or negligence:
Four factors need to be considered under the requirements of UAC R317-1-8.3(B), including:
1. How much control the violator had over and the foreseeabihty ofthe events constituting
the violation;
2. Whether the violator made or could have made reasonable efforts to prevent the violation;
3. Whether the violator knew of the legal requirements which were violated;
4. Degree of recalcitrance.
DRC finds that:
100% credit will be given for this category based on the statements of "affirmative defense" in
the DUSA January 26, 2011 notice to DRC. The letter was included as Appendix B of the
September 19, 2011 response to the NOV.
C. Good faith efforts to comply:
Under UAC R317-1-8.3(C), this includes the Permittee's openness in dealing with the
violations, promptness in conection of problems, and degree of cooperation with the State.
DRC finds that:
100% credit will be given for this category based on the statements of "affirmative defense" in
the DUSA January 26, 2U11 notice to DKG. the letter was included as Appendix B of the
September 19, 2011 response to the NOV.
Penalty Calculation
Violation 2
Category D, which is a maximum of $500 per day penalty =$500
Credits: 1/3 (max $166) History of Compliance: (75% credit) =$125
1/3 (max $166) Degree of Willfulness and/or Negligence: (100% credit) = $ 166
1/3 (max $166) Good Faith Efforts to Comply: (100% credit) = $ 166
Total credit = $ 457
Penalty per day violation: = $ 43
Number of violation days: X 90
Total Category Penalty (Gravity Component) = $ 3,870
Page 14
ADJUSTMENTS
According to R317-1-8.3, the civil penalty shall be calculated by adding the following adjustments to
the penalty amount:
a. Economic benefit - These include costs which were delayed or avoided due to the non-
compliance.
DUSA did not gain econornic benefit for violation 2 since the laboratory analysis was
completed regardless of the holding time violation. Therefore, no economic benefit
calculation will be included in the penalty calculation.
b. Investigative costs - No investigative costs are included for these violations. The
violations were the result of routine inspection findings by DRC.
Proposed Civil Penalty for Docket Nos UGWll-04
Violation 1 - $ 8.085.
Violation 2- $ 3.870.
TOTAL $ 11,955.