DRC-2013-002206 - 0901a0688037b266

State of Utah
GARY R HERBERT
Governor
GREG BELL
Lieutenant Governor
May 7, 2013
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Department o
Environmental Quali
Amanda Smith
Executive Director
DIVISION OF RADIATION CONTROL
Rusty Lundberg
Director
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Return Receipt Required
Jo Ann Tischler, Manager, Compliance and Licensing
Energy Fuels Resources (USA) Inc.
225 Union Blvd.
Suite 600
Lakewood, CO 80228
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Response to NOV: Findings & PSA, TR
•Vis. Jo Ann Tischler
Director, Compliance and Permitting
Energy Fuels Resources (USA) Inc.
225 Union Blvd., Suite 600
Lakewood, CO 80228
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Subject: Energy Fuels Resources (USA) Inc. March 8, 2013 Response to Notice of Violation and
Compliance Order Docket No. UGW13-01: DRC Findings and Proposed Settlement
Agreement
Dear Ms. Tischler:
The Utah Division of Radiation Control (DRC) has reviewed the Energy Fuels Resources (USA) Inc.
March 8, 2013 response to Notice of Violation and Compliance Order, Docket No. UGW13-01 (NOV). A
copy of the DRC review memo and proposed penalty calculation is attached.
Two copies of a Settlement Agreement (SA) contract, based on the proposed civil penalty are also attached.
If you wish to resolve the NOV based on the enclosed calculations, please review the SA and sign both copies
(do not date them), and then return them both to this office within ten (10) calendar days of receipt of this
letter. Thereafter, the Director will sign and date the SA's and return one original to you. Payment of the
penalty will then be due within 30 calendar days of the date the final SA document is signed by the Director.
If you would like to discuss the proposed monetary penalty or the content of the SA further, please contact
Tom Rushing at [phone] to arrange a settlement meeting.
Sincerely,
Rusty Lundberg, Director
RL:TR:tr
Enclosures: 1. DRC Review Memo (including the proposed penalty calculation)
2. Settlement Agreement Contract UGW13-01SA (2 copies)
F \Energy Fuels\Groundwater Reports\2012 Groundwater Reports\2012 2nd and 3rd Quarter Review\UGWl3-01SAMJGW13-01 Proposed SA
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195 North 1950 West • Salt Lake City, UT
Mailing Address. P O Box 144850 • Salt Lake City, UT 84114-4850
Telephone [phone] • Fax [phone] • T D D [phone]
www deq Utah gov K Printed on 100% recycled paper
State of Utah
GARY R. HERBERT
Governor
GREGBELL
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 ^/^/^o\2
FROM: Tom Rushing, P.G.
DATE: May 1, 2013
SUBJECT: February 4, 2013 Notice of Violation and Order Docket No. UGW13-01 (NOV),
Energy Fuels Resources (USA) Inc. ("EFR") March 8, 2013 response to the NOV,
Utah Division of Radiation Control (DRC) Findings and Proposed Civil Penalty for
Cited Violations
This memo is to provide 1. The DRC review findings regarding EFR's March 8, 2013 letter response
(Response) to Notice of Violation and Order Docket No. UGW13-01 (NOV), and 2. A civil penalty
calculation for the NOV cited violations.
1. DRC Review of the Response
•
Per review of the Response, EFR did not reserve their right to request a hearing before the Water
Quality Board.
The NOV Order requires EFR 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.
Per the Response, EFR accepts violation 1 in the NOV and "submits that Violation No. 2 should be
re-evaluated". Table 1 below summarizes the 2 violations cited in the NOV.
195 North 1950 West • Salt Lake City, UT
Mailing Address PO Box 144850 • Salt Lake City, UT 84114-4850
Telephone [phone] • Fax [phone] • T D D [phone]
www deq Utah gov
Printed on 100% recycled paper
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-01
Page 2
Table X - Summary of Violations NOV and Order Docket UGW13-01, EFR Responses and DRC Findings
Violation Summary | EFR July 6, 2011 Response Summary | DRC Findings
Violation 1 - Monthly accelerated
samples for chloroform and
dichloromethane were invalid for
monitoring well MW-26 during
September 2012. Violation of the
Permit Part I.G. 1 .b and Part
I.G.4.b.
The EFR contract laboratory (Energy
Laboratories) did not perform the VOC
analysis until holding times were
exceeded and did not notify EFR that
the samples were outside of the hold
time until after September had ended.
EFR does not contest the violation.
Violation Stands
Violation 2 - EFR failed to
collect a monthly accelerated
sample for chloroform and
dichloromethane at well MW-26
during July, 2012. .
Noncompliance with the Permit
Part LG.l.b and Part I.G.4.b.
EFR submits that violation 2 should be
re-evaluated since the accelerated
sample was collected by EFR but was
not reported due to poor agreement
(failure to be within 20% RPD)
between the original sample and the
sample duplicate. EFR includes the
chloroform and dichloromethane data
(sample collected 7/11/2012) with the
Response.
DRC agrees with EFR that
although the blind duplicate at
well MW-26 is outside of the
acceptance limits >20%, the
problem does not appear to be
systematic since the problem
only occurred in the organic
parameters and is not long
standing. DRC contends that
the July sample data should
have been included with the
quarterly ground water report.
DRC agrees to withdraw
Violation 2 based on review of
the Response and QAP
requirements.
Violation Retracted
2 violations cited 1 violation stands
Each EFR response to the NOV violations is listed below, followed by DRC findings.
VIOLATION 1
Samples for the volatile organic compounds (VOC's) exceeded the QAP required sample holding
time for monitoring well MW-26 for the September 2012 accelerated monitoring period. Therefore,
monthly accelerated samples for chloroform and dichloromethane were invalid for September
2012. Violation ofthe Permit Part LG.l.b and Part I.G.4.b.
EFR RESPONSE - VIOLATION 1
a) Root Cause of the Noncompliance
The VOC's referred to in Violation 1 were accelerated monthly chloroform and dichloromethane in
MW-26 for September 2012.
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-01
Page 3
The Samples were collected on September 19, 2012 and were received by the laboratory on
September 21, 2012, well within their holding time. Additionally, the laboratory had more than
sufficient time to analyze two samples from this sampling event (one sample and one trip blank)
within the required holding time. The laboratory did not perform the VOC analysis until October 6,
2012 by which time the samples were outside of their VOC hold times. Further, the laboratory did
not notify EFR that the samples were outside of their hold times due to laboratory delays, until
October 12, 2012. That is, EFR was notified of the laboratory error after the month of September had
ended.
The root cause of the violation with respect to MW-26 has two components. First, due to internal
laboratory issues, the laboratory did not perform the analysis until the VOC holding time on these
samples had expired. Second, EFR did not receive notification that the samples were analyzed
outside their holding time, until October 2012, when a September 2012 sample could no longer be re-
collected to replace the invalid samples. EFR has determined that both components of the root cause
are due to laboratory error.
b) Steps That Have Been Taken to Correct the Violation
The following steps have been taken to correct the violation:
EFR ceased submitting any Mill groundwater monitoring samples to Energy Laboratories and
transferred all groundwater monitoring analyses to GEL Laboratories and American West Analytical
Laboratories beginning with the fourth quarter 2012 sampling event. EFR has discussed with the
replacement laboratories the necessity to have rapid turnaround of data within sufficient time to
discuss any anomalies or needs for re-analysis or resampling. *
c) Date When Compliance Was or Will be Regained
Compliance was regained in the fourth quarter of 2012. Beginning with the fourth quarter of 2012,
groundwater monitoring samples were sent to the replacement laboratories, GEL andAWAL. All
samples were analyzed within holding times at both laboratories. Data were received with quick
turnaround from both of these laboratories, within sufficient time to discuss any anomalies or
potential needs for re-analysis or resampling.
d) Steps Taken to Prevent Reoccurrence of the Noncompliance
See item 1 .(b) above.
DRC FINDINGS - VIOLATION 1
Per DRC review of the EFR Response, it is noted that the organic sample was submitted to the EFR
contract laboratory within a reasonable amount of time for the holding times to have been met;
however, the laboratory failed to provide analysis within that time. In response EFR has changed to a
different contract laboratory. DRC staff recommends the violation stand. DRC staff also notes that
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-01
Page 4
the same violation type has been issued to EFR per two previous Notices of Violation (Docket No.s
UGW08-02 and UGW11-04)
VIOLATION 2
EFR failed to collect a monthly accelerated sample for chloroform and dichloromethane at well
MW-26 during July, 2012. EFR states that the parameter had to be resampled due to "poor
agreement" between the MW-26 sample and the blind duplicate MW-65 sample; however, the
resample was not collected during the required month. Noncompliance with Groudwater
Discharge Permit No. UGW370004 Part LG.l.b and Part I.GA.b. \
EFR RESPONSE - VIOLATION 2
a) Root Cause of the Noncompliance
EFR submits that Violation 2 should be re-evaluated. A sample was taken in July 2012 that satisfies
the criteria in the Mill's Groundwater Quality Assurance Plan, although it was not included in the
Third Quarter 2012 Groundwater Report. The sample that was collected in August 2012 was
voluntary and was not required by the QAP.
EFR did collect and analyze a monthly accelerated sample for chloroform and dichloromethane at
well MW-26 during July 2012. The monthly accelerated sample and analysis for chloroform and
dichloromethane in MW-26 was collected as part of the quarterly sampling of MW-26 for all analytes
during July 2012. The sample arid duplicate data are provided as Attachment 1 to the response letter.
The samples were collected within the required month (July 2012) and analyzed within the required
holding times as required by the QAP. As discussed in the Third Quarter 2012 Groundwater
Monitoring Report, the analytical data were not reported in the Third Quarter 2012 Groundwater
Report due to poor agreement (failure to be within 20% RPD) between the original sample (3200
mg/L chloroform) and the sample duplicate (2,000 mg/L chloroform). The data were first received by
EFR on August 9, 2012 at which point the holding times for chloroform and dichloromethane had
expired. - y
However, the fact that the sample/duplicate pair did not fall within the 20% RPD did not invalidate
the data.
Per the Mill's QAP Section 9. Ic (addressing duplicates):
"Corrective actions for duplicate deviations shall first determine if the deviation is indicative of a
systematic issue which requires the procedures described in Section 10. If the on-conformance is
limited in scope and nature, the QA Manager will:
1. Notify the laboratory,
2. Request the laboratory review all analytical results for transcription and calculation
errors, and
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-01
Page 5
3. If the samples are still within holding time, the QA Manager may request the laboratory
re-analyze the affected samples."
The deviation from the 20% RPD was not indicative of a systematic issue. The non-conformance was
limited in scope and nature since only the one analyte group (VOC's) in one sample pair was
affected. EFR's Quality Assurance Manager performed each of the required steps listed above for a
non-conformance which is limited in scope and nature. The laboratory was notified and reviewed the
results for transcription, calculation and reporting errors. Since the samples were beyond holding
time, it was not possible to re-analyze the sample pair. QAP Section 9.1c) has no other requirements
for duplicates, and the above requirements were met. As mentioned above, the sample and duplicate
data, which met the requirements of QAP Section 9. Ic) above are provided in Attachment 1.
Although not required, EFR's Quality Assurance Manager had an additional sample and duplicate
collected on August 2, 2012. The results of the resampled pair, which did meet the QAP 20% RPD
requirement, were reported in the Third Quarter 2012 Groundwater Monitoring Report.
The root cause of the apparent violation has two components. First, the laboratory (Energy
Laboratories did not provide sample results quickly enough for EFR to determine the poor agreement
in the sample pair early enough to allow resampling in July 2012 should the QA Manager determine
to do so. Second, EFR did not include the initial July data set, which was sampled at the correct time
and which meets the QAP corrective action requirements for duplicates, in the Third Quarter 2012
Groundwater Monitoring Report.
b) Steps That Have Been Taken to Correct the Violation
The following steps have been taken to correct the violation:
1. The data for the July 2012 sample and duplicate pair have been provided as an Attachment to
this response letter.
2. EFR ceased submitting any Mill groundwater monitoring samples to Energy Laboratories and
transferred all groundwater monitoring analyses to GEL Laboratories andAWAL, beginning
with the fourth quarter 2012 sampling event.
c) Date When Compliance Was or Will be Regained
Compliance was regained in the fourth quarter of 2012. Beginning with the fourth quarter 2012,
groundwater monitoring samples were sent to the replacement laboratories, GEL laboratories and
A WAL. All sample duplicates from the fourth quarter 2012 sampling event were within 20% RPD.
d) Steps Taken to Prevent Reoccurrence of the Noncompliance
Please see item 2 (b), above.
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-01
Page 6
DRC FINDINGS - VIOLATION 2
Although DRC contends that the July 2012 laboratory data should have been submitted with the Third
Quarter 2012 Groundwater Monitoring Report, DRC has reviewed the data attached with the
Response and agrees that no additional actions were required according to the currently approved
QAP. Based on review of the Response and QAP, DRC staff recommends that violation 2 be
retracted and will not include violation 2 in the civil penalty calculation below.
2. Civil Penalty Calculation
WATER OUALITY PENALTY CRITERIA
According to R317-1-8 (Penalty Criteria for Civil Settlement Negotiations), the penalty calculation
methodology consists of the following formula:
CIVIL PENALTY = PENALTY + ADJUSTMENTS - ECONOMIC AND LEGAL
CONSIDERATIONS
I. 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:
Category A.1 - 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.1 - 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.
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-01
Page 7
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 permit 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 warrants 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 warrants a penalty
assessment under category D. ___
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 staff considers Category D to be
conservative. EFR failed to have 2 groundwater compliance samples, chloroform and
dichloromethane at monitoring well MW-26 analyzed within required holding times.
Calculation of violation days: EFR failed to submit valid laboratory data for 2 parameters for an
accelerated monthly period. The month of July has 31 days for EFR to collect accelerated samples.
Therefore, EFR was out of compliance for the 2 parameters not sampled for the accelerated period (31
days). This equals to 2 parameters x 31 days for a total number of violation days of 62.
VIOLATIONS 1 STATUTORY MAXIMUM PENALTY CALCULATION
The statutory maximum penalty for Violation 1, Category D.3 would be calculated for 1 violation for
60 days at $500 per day is $31,000.
ASSIGNED PENALTY AMOUNT WITHIN CATEGORY D.3
DRC consideration of credit as detailed in the Administrative Penalty Policy follows:
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 Findings: According to DRC records, EFR has been cited for failing to meet sample
holding times on two previous NOV's (Docket No.'s UGW08-02 and UGW11-04. Per the
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-01
Page 8
penalty calculation for UGW11-04, the DRC provided 75% credit in the History of
compliance for non-compliance category. The credit will be reduced based on this being the
third time that this violation type has been cited and a credit of 50% will be granted in 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 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 Findings:
EFR states in the Response that the violation was the result of an oversight by the contract
laboratory and that EFR had submitted the sample to the laboratory with ample time to
conduct analysis within holding time. Per DRC review of the laboratory reports this appears
to be accurate. Furthermore, EFR has provided corrective action by changing to a new
contract laboratory. Based on these circumstances, DRC staff recommends that 100% credit
be granted in this category since EFR took all reasonable steps to provide data within holding
time and is implementing corrective action.
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 correction of problems, and degree of cooperation with the State.
DRC Findings:
EFR states in the Response that the violation was the result of an oversight by the contract
laboratory and that EFR had submitted the sample to the laboratory with ample time to
conduct analysis within holding time. Per DRC review of the laboratory reports this appears
to be accurate. Furthermore, EFR has provided corrective action by changing to a new
contract laboratory. Based on these circumstances, DRC staff recommends that 100% credit
will be granted in this category since EFR took all reasonable steps to provide data within
holding time and is implementing corrective action.
Penalty Calculation
Category D, which is a maximum of $500 per day penalty = $ 500
Credits: 1/3 (max $166) History of Compliance: (50% credit) =$83
1/3 (max $166) Degree of Willfulness and/or Negligence: (100% credit) = $ 166
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-01
Page 9
Penalty per day violation: =
Number of violation days:
1/3 (max $166) Good Faith Efforts to Comply: (T00% credit) = $ 166
Total credit = $415
$ 85
X 62
Total Category Penalty (Gravity Component) = $ 5,270
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. No economic benefit was gained by exceeding sample holding times.
b. Investigative costs - No investigative costs are included for these violations. The
violations were the result of inspection findings by DRC.
Proposed Total Civil Penalty for Docket No. UGW13-01: $ 5,270
UTAH DIVISION OF RADIATION CONTROL
IN THE MATTER OF
ENERGY FUELS RESOURCES (USA) INC.
225 UNION BLVD. SUITE 600
LAKEWOOD, CO 80228
SETTLEMENT AGREEMENT
DOCKET NUMBER UGW13-01SA
A. STATUTORY AUTHORITY
This Settlement Agreement (hereinafter "AGREEMENT") is between Energy Fuels Resources
(USA) Inc.(hereinafter "OPERATOR") and the Director of the Utah Division of Radiation
Control (hereinafter the "DIRECTOR") under the Utah Water Quality Act, Utah Code Ann. §§
19-5-101 to 19-5-123 (the ACT), including sections 19-5-104,19-5-106,19-5-111 and 19-5-115.
This AGREEMENT is also executed in accordance with the Utah Administrative Procedures
Act, Utah Code Ann. §§ 63G4-101 to 63G-4-601 and Administrative Procedure Rules, Utah
Admin Code R305-6.
Under the Water Quality Act, Utah Code Title 19, Chapter 5, "Director" for purposes of
groundwater quality at a facility licensed by and under the jurisdiction of the Division of
Radiation Control, means the Director of the Division of Radiation Control. Utah Code Ann. §
19-5-102(6).
The Director may enforce rules made by the Water Quality Board through the issuance of orders
in accordance with Utah Code Ann. § 19-5-106(d).
B. AGREEMENT
1. This AGREEMENT resolves the violation cited in the Notice of Violation and Order,
Docket Number UGW13-01 (hereinafter the "NOV") issued to the OPERATOR on
February 4, 2013, by the DIRECTOR. It does not in any way relieve the OPERATOR
from any other obligation imposed under the Act or any other State or Federal laws.
2. 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 NOV, 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.
3. In resolution of violations of the NOV, the OPERATOR agrees to pay a total penalty
amount of $5,270 within 30 calendar days of the effective date of this AGREEMENT by
check made payable to the State of Utah, delivered or mailed to:
Division of Radiation Control
Department of Environmental Quality
195 North 1950 West
Settlement Agreement, Docket No. UGW13-0ISA
P.O. Box 144850
Salt Lake City, UT 84114-4850.
The penalty has been determined using the Penalty Criteria for Civil Settlement
Negotiations, Utah Admin. Code R317-1-8 which 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.
4. The deadline stipulated in item 3 above may be amended by prior written mutual agreement
of the parties. The party requesting the amendment must write to the other party 14
calendar 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 calendar
days of receipt of the request.
C. NOTICE
Nothing contained in this AGREEMENT shall preclude the DIRECTOR from taking
additional actions to include additional penalties against the OPERATOR for permit violations
not resolved by this AGREEMENT.
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.
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 , 2013.
ENERGY FUELS RESOURCES (USA) INC. UTAH DIVISION OF RADIATION CONTROL
By By
Rusty Lundberg
Print Name Director
Title
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