DRC-2013-003128 - 0901a068803bb5a0

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
September 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
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"DRC-2013-003128"
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PS Form 3800. .lune 2002 See Revptse for Instructions
Subject: Energy Fuels Resources (USA) Inc. August 27,2013 Response to Notice of Violation and
Compliance Order Docket No. UGW13-05: DRC Findings and Proposed Settlement
Agreement
Dear Ms. Tischler:
The Utah Division of Radiation Control (DRC) has reviewed the Energy Fuels Resources (USA) Inc. ("EFR")
August 27,2013 response to Notice of Violation and Compliance Order, Docket No. UGW13-05 (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 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 ofthe
penalty will then be due within 30 calendar days ofthe date the final SA document is signed by the Director.
Approval - August 27,2013 EFR Plan and Time Schedule
This is to approve the EFR August 27,2013 Plan and Time Schedule for evaluation of tetrahydrofuran
contamination in groundwater at monitoring well MW-01.
1. Provide documentation from published studies and papers that indicate that THF is persistent over
many years in monitoring wells due to solvents and adhesives used for well construction, and,
2. Continue to monitor THF in monitoring well MW-01 on an accelerated quarterly schedule.
EFR will submit a report to the Director within 90 days after approval of this Plan. THF concentrations will
be tracked by EFR for four quarters and a discussion of the results will be included in the 2nd quarter 2014
quarterly groundwater report due to DRC on or before September 1,2014.
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
Jo Ann Tischler
Page 2
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 LundbergrDirector ^
RL:TR:tr
Enclosures: 1. DRC Review Memo (including the proposed penalty calculation)
2. Settlement Agreement Contract UGW13-05SA (2 copies)
U:\rad\MON_WAST\Trushing\Energy FuelsNGroundwater Reports\2013 Groundwater ReportsMst Quarter 2013\Notice of Violation and
Order\UGWl3-05 Penalty MemoXUGWl3-05 SA Letter docx
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State of Utah
GARY R. HERBERT
Governor
GREG BELL
Lieutenant Governor
Department of
Environmental Quality
Amanda Smith
Executive Director
DIVISION OF RADIATION CONTROL
r- Rusty Lundberg
Director
MEMORANDUM
TO: File
THROUGH: Phil Goble, Compliance Section Manager
FROM: Tom Rushing, P.G. °l/^ /^
DATE: September 11, 2013
SUBJECT: July 23, 2013 Notice of Violation and Order Docket No. UGW13-05 (NOV) Energy
Fuels Resources August 27, 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 August 27, 2013 letter
response (Response) to Notice of Violation and Order Docket No. UGW13-05 (NOV), and 2) A civil
penalty calculation for the NOV cited violations.
1. DRC Review of the Response
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.
d) A plan and time schedule for assessment of THF out-of-compliance status at monitoring
well MW-1 in compliance with the Permit Part I.G.4.C.
Per the response, EFR accepts all violations in the NOV (2 violations total). Table 1 below
summarizes the violation cited in the NOV.
195 North 1950 West • Salt Lake City, UT
Mailing Address P O. Box 144850 • Salt Lake City, UT 84114-4850
Telephone [phone] • Fax (801) 533^097 • T.D D [phone]
www deq Utah gov
Pnnted on 100% recycled paper
Notice ofViolation Docket No. UGW13-05
Page 2
Table 1 - Summary of Violations, NOV and Order Docket UGW13-05, EFR Responses and DRC Findings
Violation Summary EFR August 27,2013 Response DRC Findings
Violation 1 - Permit Part I.G.4.C
of the Permit for failing to
provide a plan and a time
schedule for assessment of the
source(s), extent, and potential
dispersion of the monitoring well
MW-1 THF contamination to the
Director.
EFR responds that the issue is being
resolved through DRC agreement
(DRC letter dated April 25,2013)
that ground water protection levels
may be removed from the Permit for
momtoring well MW-1, pursuant to a
modification request made by EFR.
Violation Stands
2 Violations Cited Violation Stands
Each EFR response to the NOV violation is listed below, followed by DRC findings.
EFR RESPONSE
1. Based on the Findings of Fact noted in the July 23, 2013 DRC letter, EFRI is in violation of Part
LG.4(c) of the Permit for failing to provide a plan and schedule for assessment of the sources,
extent and potential dispersion of the monitoring well MW-01 THF contamination to the Director.
a) Root Cause of the Noncompliance
EFRI submitted a Source Assessment Report ("SAR") in October 2012 which requested, among other
things, the removal of the Groundwater Compliance Limits ("GWCLs") from the far-upgradient wells
MW-01, MW-18, and MW-19. EFRI noted that these wells are far-upgradient and are not likely to be
impacted by Mill activities. DRC has noted that kriged water level maps indicate that the elevations
at monitoring wells MW-01, MW-18 and MW-19 are higher than the water elevations in the Burro
Canyon Aquifer beneath all of the Mill Tailings Cells. Additionally, MW-01, MW-18, and MW-19 are
located north and northeast of the Mill Tailings Cells while local groundwater flow is to the south-
southwest. By letter dated April 25, 2013, DRC recommended that the GWCLs be removedfrom the
far-upgradient wells. The DRC letter indicated that all accepted changes would be incorporated into
the next revision of the Permit.
EFRI mistakenly interpreted the April 25, 2013 letter to mean that the 30 day requirement for a plan
and time schedule for assessment of sources and extent and potential dispersion of the contamination
would not be required in MW-01, in light of the recommendation for removal of the GWCLs from the
far upgradient wells. EFRI operated under the incorrect assumption that the recommendation for
removal effectively removed the requirement immediately upon receipt ofthe april 25, 2013 letter,
rather than at the as yet undetermined date for an approved Permit renewal.
b) Steps That Have Been Taken to Correct the Violation
The following steps have been taken to correct the violation:
A Plan and Time Schedule for THF in MW-01 is attached.
Notice ofviolation Docket No. UGW13-05
Page 3
c) Date When Compliance Was or Will be Regained
Compliance has been regained with the submission of the Plan and Time Schedule, which is attached.
d) Steps Taken to Prevent Reoccurrence of the Noncompliance
EFRI now understands that the provisions ofPart I.G. 4. (c) apply to all situations when the
concentration of a constituent in two consecutive samples exceed the GWCL until such time as the
Permit is updated to reflect the changes in the October 2012 SAR and the recommendations in the
Apnl 25, 2013 DRC letter.
Additionally, DRC and EFRI are currently developing an interim revision to the Permit including,
among other changes, the removal of the GWCLs for the upgradient wells.
DRC FINDINGS - VIOLATION 1
Findings related to the August 27,2013 Plan and Time Schedule Under Part I.G.4(d):
The August 27, 2013 Plan and Time Schedule discusses the current out of compliance ("OOC") status
for Tetrahydrofuran ("THF") at point of compliance monitoring well number MW-01.
EFR states that "given the recent analyses in the Background Reports and other recent information
relating to the Chloroform and Nitrate/Chloride investigations at the site, EFRI believes there is no
plausible scenario that would account for THF in MW-01 resulting from the Mill operations, because
it is approximately 2,200feet (over 0.4 miles) upgradient of Mill operations. EFRI maintains that,
even given the presence of THF in tailings solutions, the most plausible explanation for the THF
detection in MW-01 is that it results from something intrinsic to the well or the well sampling. As
identified in our letters of October 17, 2003 and December 18, 2003, EFRI maintains that one source
for THF detected in MW-01 is more likely to be the solvents and adhesives used in well construction."
Monitoring well MW-01 is located upgradient of the White Mesa Facility and is unlikely to have been
impacted by mill activities. EFR notes that although THF is present in tailings solution due to
additives in kerosene, the position of monitoring well MW-01 makes the Mill source highly unlikely
and EFR maintains that "the most plausible explanation for the THF detection in MW-01 is that it
results from something intrinsic to the well or the well sampling."
In terms of action items related to the THF study, EFR proposes to:
1. Provide documentation from published studies and papers that indicate that THF is persistent
over many years in momtoring wells due to solvents and adhesives used for well construction,
and,
2. Continue to monitor THF in monitoring well MW-01 on an accelerated quarterly schedule.
EFR proposes to submit the report to the Director witfiin 90 days after approval of this Plan. THF
concentrations will be tracked by EFR for four quarters and a discussion of the results will be
Notice ofViolation Docket No. UGW13-05
Page 4
included in the 2nd quarter 2014 quarterly groundwater report due to DRC on or before September 1,
2014.
DRC staff recommends that the Director provide approval of the August 27,2013 Plan and Time
Schedule for evaluation of THF in monitoring well MW-01 with the correspondence letter for the
proposed settlement agreement.
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
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 ofviolation not mentioned above severe enough to warrant a penalty
assessment under category A.
Category B - $2,000 to $7,000 per day. Major violations ofthe 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 ofthe Utah Water Pollution Control Act,
associated regulations, permits or orders to include:
Category Cl - 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,
Notice ofviolation Docket No. UGW13-05
Page 5
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 — Penalty Category and Dates of Noncompliance
Penalty Category: Penalties for the Violation will be calculated as Category D.2. Minor violations
of compliance schedule requirements with penalties up to $500 per day. DRC considers Category D
to be conservative.
Calculation ofviolation days: Per the Groundwater Permit Part I.G.4(c) "the Permittee shall prepare
and submit within 30 calendar days to the Director a plan and a time schedule for assessment of the
sources, extent and potential dispersion of the contamination..."
Per the EFR 1st Qtr. 2013 Groundwater Monitoring Report the laboratory report for the groundwater
sample resulting in out of compliance status for THF at MW-01 was dated March 26, 2013
(exceedances for the November 27,2012 and March 12, 2013 samples). Per the Permit, the Plan and
Time Schedule should have been submitted by April 26,2013. The received Plan and Time Schedule
was dated August 27, 2013. Therefore, the period EFR will be considered in violation will be from
the date they should of submitted the plan and schedule for THF (April 26, 2013) to the date they
actually submitted the time and schedule for THF (August 27, 2013) for a total of 122 violation days.
The proposed maximum penalty, therefore, would be calculated for 122 days at $500 per day is
$61,000.
ASSIGNED PENALTY AMOUNT WITHIN CATEGORY D.5
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 Finding: According to DRC records, EFR has failed to provide a Plan and Time
Schedule by the due date on one previous occasion:
• Notice ofviolation and Order Docket No. UGW11-02 (May 9,2011)
Based on this history of this particular violation type, EFR will be given 95% credit for the
history of compliance or non-compliance category.
Notice ofViolation Docket No. UGW13-05
Page 6
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:
EFH states in the Order response that the violation was the result of an oversight in the
reporting process. EFR was under the impression that the out of compliance requirements
were not applicable to the upgradient monitoring wells since the Director had provided
concurrence that the GWCL's were recommended for removal on a future Permit renewal.
DRC agrees that the condition that the GWCL removal would not be active until a future
formal process (including public notice requirements) could have been confusing. Based on
this it is recommended that a 95% credit for this category be granted.
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.
Based on the NOV Response, it is recommended that 100% credit be granted for this category.
Penalty Calculation
Category D, which is a maximum of $500 per day penalty = $ 500
Credits: 1/3 (max $166) History of Compliance: (95% credit) = $ 158
1/3 (max $166) Degree of Willfulness and/or Negligence: (95% credit) = $ 158
1/3 (max $166) Good Faith Efforts to Comply: (100% credit) = $ 166
Total credit = $ 482
Penalty per day violation: = $ 18
Number of violation days: X 122
Total Category Penalty (Gravity Component) = $2,196
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 not providing the required plan and time
schedule.
Notice ofviolation Docket No. UGW13-05
Page 7
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. UGW13-05: $ 2,196
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 UGW13-05SA
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 UGW13-05 (hereinafter the "NOV") issued to the OPERATOR on
July 23, 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 admimstrative
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 $2,196 within 30 calendar days ofthe 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. UGW13-05SA
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 ofthe 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 ofthe 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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