DRC-2013-002788 - 0901a0688039fb91

Department of
Environmental Quality
Amanda Smith
Executive Director
DIVISION OF RADIATION CONTROL
Rusty Lundberg
Director
State of Utah
GARY R HERBERT
Governor
GREG BELL
Lieutenant Governor
July 17, 2013
CERTIFIED MAIL
Return Receipt Required
Jo Ann Tischler, Manager, Compliance and Licensing
Energy Fuels Resources (USA) Inc.
225 Union Blvd.
Suite 600
Lakewood, CO 80228
"DRC-2013-002788"
U.S. Postal Service CERTIFIED MAIL RECEIPT
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LAKEWOODCO 80228^ See Reverse for Instructions
Subject: Energy Fuels Resources (USA) Inc. June 28, 2013 Response to Notice of Violation and
Compliance Order Docket No. UGW13-03: DRC Findings and Proposed Settlement
Agreement
Dear Ms. Tischler:
The Utah Division of Radiation Control (DRC) has reviewed the Energy Fuels Resources (USA) Inc.
June 28,2013 response to Notice of Violation and Compliance Order, Docket No. UGW13-03 (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 UGW13-03SA (2 copies)
F \Energy Fuels\Groundwater Reports\2012 Groundwater Reports\2012 4th QuarteT Review\Notice of ViolahomProposed SA UGW13-03SA\UGW13-
03 SA Proposed Ltr docx
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 deg Utah gov
Printed on 100% recycled paper
151
NT"
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.
DATE: Julyl6,20l3
SUBJECT: May 30, 2013 Notice of Violation and Order Docket No. UGW13-03 (NOV), Energy
Fuels Resources (USA) Inc. ("EFR") June 28, 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 June 28,2013 letter response
(Response) to Notice of Violation and Order Docket No. UGW13-03 (NOV), and 2. A civil penalty'
calculation for the NOV cited violations.
1. DRC Review of the Response
The NOV 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 does not contest the violation cited (Violation 1) in the NOV. Table 1 below
summarizes Violation 1 and the EFR response.
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
Pnnted on 100% recycled paper
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-03
Page 2
Table 1 - Summary of Violations NOV and Order Docket UGW13-03, EFR Responses and DRC Findings
Violation Summary EFR June 28, 2013 Response Summary DRC Findings
Violation 1 - Violation of Utah
Groundwater Discharge Permit
No. UGW370004 Part I.G.I for
failing to collect monthly
accelerated samples for selenium
at monitoring well MW-31 during
December 2012 and January
2013.
Missed accelerated monitoring quarters
were identified in time and included in
the 3rd Quarter Exceedance Notice but
were not communicated to the Mill
Field Personnel m time to be included
in the monthly sampling events due to
an oversight by the QA Manager.
Violation Stands
1 violation cited 1 violation stands
Each EFR response to the NOV Violation 1 is listed below, followed by DRC findings:
VIOLATION 1
EFRI violated Part I. G.l of the Permit for failing to collect a monthly accelerated sample for
selenium at monitoring well MW-31 during the December 2012 and January 2013 accelerated
sampling events.
EFR RESPONSE - VIOLATION 1
a) Root Cause of the Noncompliance
The accelerated monitoring conducted in the December 2012 and January 2013 monthly sampling
events did not include the collection of the analyte identified during the third quarter 2012 (selenium
in MW-31) in the accelerated monthly sampling.
It is important to note that although two required data points were missed, there was no delay in
implementation of compliance actions. Selenium in MW-31 exceeded the GWCL in two successive
sampling periods (third and fourth quarter 2012) and a 30 day plan and time schedule was submitted
as required by the GWDP. The missed data points did not delay that submission or the schedule in
any way, and there is no adverse effect on the compliance actions required by EFRI.
The root cause of the violation was that, although the additional monitoring requirements were
identified in time and included in the 3rd Quarter Exceedance Notice, due to an oversight by the
Quality Assurance Manager, the additional monitoring requirements were not communicated to the
Mill Field Personnel by the Quality Assurance Manager in time to be included in the monthly
accelerated sampling events for December 2012 and January 2013.
b) Steps That Have Been Taken to Correct the Violation
The following steps have been taken to correct the violation:
The omission of the analytes from the December 2012 and January 2013 monthly events has
prompted the QA Manager to revise the exceedance tracking procedures and procedures for review of
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-03
Page 3
the analytical data received from the laboratory. Additional review using database reports will be
implemented immediately upon receipt of the data at the time the analytical data are uploaded to the
database by the QA Manager. Specifically, the QA Manager reviews all analytical data prior to
loading it into the electronic database. After loading each analytical data set, the QA Manager will
query the database for exceedances. Any exceedances identified in that analytical data set will be
forwarded to the Mill Field Personnel with the new accelerated frequency as soon as the exceedances
are identified. Mill Personnel will not schedule accelerated monthly sampling until the review of
exceedances has been completed.
c) Date When Compliance Was or Will be Regained
Compliance was regained in February 2013. Beginning with the February 2013 sampling event, the
accelerated monitoring included selenium in MW-31. Additionally, the new procedure for tracking
exceedances was implemented.
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 violation resulted due to lack of
communication from the EFR QA Manager (Lakewood, CO) and the White Mesa Mill Staff. The
violation occurred over a sixty-day period (60 days of violation) and did not result in additional
violations of the Permit related to submission of a 60-day plan and time schedule for. source
assessment activities. EFR has implemented additional measures to ensure that exceedances are
communicated to the Mill staff in a timely manner via immediate review and upload fo the electronic
database when the laboratory reports are received by the QA Manger and submission of results the
White Mesa Mill staff. The EFR submission states that "the new procedure for tracking exceedances
was implemented?' prior to the February 2013 sampling event.
DRC notes that the failure to collect accelerated samples has been cited on five previous NOV's. It is
noted that the EFR corrective actions for these previous violations does not appear to have been
effective and were the same as the current NOV response. Credits for the penalty calculation will be
reduced considering that this is a re-occurring violation.
2. Civil Penalty Calculation
WATER QUALITY 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
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-03
Page 4
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.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 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 accelerate samples for selenium during two months, the failure did not
result in additional violations of schedule requirements.
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-03
Page 5
Calculation of violation days: EFR failed to collect data for 1 parameter for two accelerated ^
monthly periods. The months of December and January have 31 days each; therefore, EFR was out of
compliance for the 1 parameter not sampled for the accelerated period (62 days). This equals 1
parameter x 62 days for a total number of violation days of 62.
VIOLATION 1 STATUTORY MAXIMUM PENALTY CALCULATION
The statutory maximum penalty for Violation 1, Category D.3 would be calculated for 1 violation for
62 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 four previous NOV's (Docket No.'s UGW07-04, UGW08-01, UGW08-02,
. . and UGW11-04).
NOV Docket No. Well/Parameter Cited Comments
UGW07-04 MW-32/Gross Alpha
UGW08-01 MW-32/Gross Alpha
UGW08-02 MW-32/Gross Alpha
UGW11-04 MW-26,MW-31/TDS
MW-25/Uranium
50% Credit for History of
Compliance Category Applied
B.
The last settlement agreement with a calculated penalty for failure to collect accelerated
samples was Docket Number UGW11-04 which applied a credit of 50% in the history of
compliance or non-compliance category. It is noted that^the last violation calculation
(UGW11-04) was done two years ago and that the previous three violation calculations were
five years or more previous to the current calculation. Based on the violations being spaced
far between, and not continuous violations, DRC staff considers application of 50% credit in
the history of compliance or non-compliance to be appropriate for the current violation.
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.
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-03
Page 6
DRC Findings:
EFR states in the Response that the violation was the result of an oversight by the Quality
Assurance ("QA") Manger to report the needed accelerated monitoring requirements to the
Mill groundwater samplers.
• EFR had control over the events constituting the violation and is ultimately responsible
for recognizing exceedances of the GWCLs and collecting the accelerated samples as
required.
• The violations were self-reported in the facility ground water monitoring reports and
the cause was identified as an oversight by the current EFA QA manager.
• EFR has identified and committed to implement a new system (earlier review) of data
review to avoid this type of violation in the future. s
• EFR has been cited for this problem previously and corrective actions have not been
effective, however, DRC notes that the violations are staggered over a long period of
time (6 years) and that the violations are not continuously re-occurring.
The previous calculation for this type of violation, NOV Docket UGW11-04 applied a credit
of 25% for the willfulness or negligence category.
DRC notes that in the current case (UGW13-03) the violations were self-reported in the
facility groundwater monitoring reports and that the corrective actions which were
implemented in the past were done by previous Energy Fuels Resources QA staff which has
since been replaced. With consideration of these facts as well as the nature of the violations, a
credit of 50% will be applied for the willfulness or negligence category.
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:
The current violations were self-reported by EFR in the quarterly groundwater monitoring
reports sent to DRC. DRC staff notes that corrective actions to prevent the violation type in
the future were also provided in the quarterly groundwater reports. EFR was granted 75%
credit for "good faith efforts to comply" category per the previous (UGW11-04) settlement
agreement calculation. DRC staff considers this same credit amount to be appropriate for the
current (UGW13-03) calculation.
Penalty Calculation Memo
Notice of Violation Docket No. UGW13-03
Page 7
Penalty Calculation
Category D, which is a maximum of $500 per day penalty = $500
Credits: 1/3 (max $166) History of Compliance: (50% credit)
1/3 (max $ 166) Degree of Willfulness and/or Negligence: (50% credit)
1/3 (max $ 166) Good Faith Efforts to Comply: (75% credit)
= $83
= $83
= $125
= $291
= $209
X 62
Total Category Penalty (Gravity Component) $12,958
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 - DRC notes that monitoring well MW-31 was required to be
developed and sampled for other monthly accelerated sampling parameter, therefore, labor
and capital costs were not avoided for sample collection. EFR did avoid analytical costs,
including shipping costs, for two selenium samples. DRC estimates these costs, per
typical selenium analysis costs to be as follows:
No additional economic benefit for re-occurring or capital costs is noted.
b. Investigative costs - No investigative costs are included for these violations. The
violations were the result of document inspection findings by DRC.
Analytical costs for selenium analysis: = $15X2 = $30
Estimated shipping costs: = $30
Total Economic Benefit of Avoided Costs = $60
Penalty Calculation ($12,958 + Economic Benefit ($60) = $13,018)
Proposed Total Civil Penalty for Docket No. UGW13-03: = $ 13,018
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 UGW13-03SA
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 UGW13-03 (hereinafter the "NOV") issued to the OPERATOR on
May 30, 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 $13,018 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. UGW13-03SA
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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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 UGW13-03SA
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. AGREEMENTS
1. This AGREEMENT resolves the violation cited in the Notice of Violation and Order,
Docket Number UGW13-03 (hereinafter the "NOV") issued to the OPERATOR on
May 30, 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 $13,018 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. UGW13-03SA
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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