DRC-2013-001877 - 0901a06880363a09

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
TO:
FROM:
DATE:
SUBJECT:
MEMORANDUM
Phil Goble, Section Manager
Russell J. Topham, P.E.
March 23,2012 DRC-2013-001877
Engineering Module 70 (Project C-2013-59), Annual Surety Review, Energy Fuels
Resources, White Mesa Mill, Blanding, Utah.
This is a summary of Utah Division of Radiation Control (DRC) staff review of the Energy Fuels
Resources (EFR) Surety Submittal for 2012. This review entailed analysis of the following list of
documents, some of which are cited in the text below, as well as a site visit to note changes to the plant
over the past year. This list duplicated the list reviewed during the 2012 surety review activities.
1. Attachment C, White Mesa Mill Reclamation Plan, Revision 4.13, Revised Cost Estimates for
Reclamation of the White Mesa Mill and Tailings Management System, dated March 2013 and
received March 5, 2013 (Surety Estimate).
2. Radioactive Materials License UTl 900479, Amendment 5, approved August 24, 2012 (RAML).
3. Amended Stipulated Consent Agreement for the Nitrate Plume - Docket No. UGW09-03-A (SCA).
4. DUSA Response to January 19, 2012 DRC/URS Comments on Nitrate Corrective Action Plan,
dated February 27, 2012 (Comments).
5. Corrective Action Plan for Nitrate, White Mesa Mill near Blanding, Utah dated May 7, 2012
(Nitrate CAP).
6. Safety Evaluation Report for the Denison Mines White Mesa Mill 2007 License Renewal
Application dated October, 2011 (SER).
7. Review of Containment and Closure Issues, Denison USA/White Mesa Uranium Mill Relicensing
Application; Revision 5.0, September 2011, by RRD Intemational Corp, dated December 1, 2011.
Provided to the DRC as Exhibit H in the Ute Mountain Ute Tribe's comments for the DUSA
License Renewal.
Selected unit cost figures in the Surety Estimate were compared with the RSMeans online cost estimating
utility, 2012 annual update (RSMeans). The following are my findings and recommendations.
195 North 1950 West • Salt Uke City, UT
Mailing Address P 0 Box 144850 • Salt Lake City, UT 84114-4850
Telephone [phone] • Fax [phone] 'TDD [phone]
www deq ulah gov
Printed on 100% recycled paper
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1.0 Summary Findings and Recommendations
Finding: A violation of License Condition 9.5 of the RAML likely occurred in that the Surety Estimate
arrived a day late.
Recommendation: The DRC should request that EFR produce the package tracking information to verify
the shipping and delivery date(s). The DRC can use this information in conjunction with information on the
completeness and comprehensiveness of the Surety Estimate and the timeliness of receipt of other
documents pertaining to the surety, e.g., responses to RFIs or receipt of the surety instrument, to determine
whether to cite EFR for the violation or to extend enforcement discretion. In any event, documenting that
the DRC noticed the tardy submittal, and detailing the reasons used to determine a response, seems
prudent.
Recommendation: I recommend requiring EFR to present the work breakdown structure in the Surety
Estimate in a graphical format in which relationships between tasks become easier to identify and
deployment ofthe workforce and equipment can be managed to eliminate double scheduling. This supports
the request already made twice above for preparation of a PERT or Gantt chart. This would help answer
multiple questions in the Surety Estimate, including:
1. Justifying the 3-year coverage period for utilities to the office facilities.
2. Justifying the 6-month rental of office trailer facilities.
3. Evaluating the DRC's staffing requirements for contract oversight, and the adequacy ofthe 4
percent UDEQ Contract Administration line item.
4. Evaluating the adequacy of the Management ^Support line item for contractor coordination ofthe
closure activities.
Recommendation: I recommend requesting coordinates and maps to locate all monitoring wells, and
inclusion in the Surety Estimate offunding for abandonment for those wells.
Finding: The unit costs employed to assemble the Surety Estimate reflect a reasonable approximation of
the rates the DRC can expect to pay.
Finding: EFR has complied with the agreement to increase the Contingency line item to 20 percent for
2013.
2.0 Surety timeliness
License Condition 9.5 of the RAML requires submittal of the Surety Estimate on or before March 4
annually. The cover letter accompanying the Surety Estimate bears the date of March 4, 2013, and the
document reached the Division of Radiation Control in hard copy and CD soft copy formats on March 5,
2013, one day after the due date. I have no record of receiving the Surety Estimate via email.
Mail is placed in the DRC's mail slot on the first floor of the MASOB as it arrives, then brought to the
DRC reception desk by DRC persormel at unspecified, irregular times throughout the day. Hypothetically,
a package could arrive in the mail slot one day and reach the DRC reception desk the next day.
Accepting the date on the cover letter as accurate, in order to determine whether the Surety Estimate could
have arrived at the DRC mail slot by 5:00 p.m. on March 4*, I placed a call to FedEx. Same-day delivery
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required that EFR call in the package pickup by 9:00 a.m. March 4* for the package to have arrived by the
close of business, 5:00 p.m., March 4 . The customer service agent performed a search of the FedEx
database, and stated affirmatively that no same-day shipments occurred between the Denver metroplex,
including EFR's ZIP code, to Salt Lake City on March 4* using the FedEx service. I do not know whether
another service could have made the delivery, but believe that the probability is extremely low that such
could have taken place. The only scenario I can conceive under which the package arrived on time is if the
cover letter were post-dated.
Finding: A violation of Licence Condition 9.5 of the RAML likely occurred in that the Surety Estimate
arrived a day late.
Recommendation: The DRC should request that EFR produce the package tracking information to verify
the shipping and delivery date(s). The DRC can use this information in conjunction with information on the
completeness and comprehensiveness of the Surety Estimate and the timeliness of receipt of other
documents pertaining to the surety, e.g., responses to RFIs or receipt of the surety instrument, to determine
whether to cite EFR for the violation or to extend enforcement discretion. In any event, documenting that
the DRC noticed the tardy submittal, and detailing the reasons used to determine a response, seems
prudent.
3.0 Surety comprehensiveness
The Surety Estimate presents a general work breakdown structure for closure of the White Mesa uranium
processing mill. The Surety Estimate appears generally complete, except as detailed below.
Office Facilities
The Surety Estimate provides 36 months of utility service to office facilities, but only 3 months of office
trailer rental. This suggests that EFR intends for those conducting decommissioning activities to use the
existing office facilities during the bulk of the decommissioning time. The documentation does not include
justification for this estimate of the time required for decommissioning. If the decommissioning period will
exceed 36 months, the DRC would have insufficient fiinding for utility coverage.
Recommendation: I recommend requiring EFR to justify the coverage period for the utilities. The most
useful form this justification could take would place the work breakdown structure currently present in the
Surety Estimate in a graphical format showing the staging and sequencing of the work. The diagram would
highlight the critical path. Beyond justifying the 3 month rental period for the office trailer and the 36
months of utility coverage, the justification document would provide means for the DRC to plan its work
and quantify its financial burden should it have to manage closure. I prefer that the justification take the
form of a precedence network diagram with activity on the node (PERT chart); however, a Gantt chart, or
other alternative that meets the above criteria would suffice.
Manasement/Support
The Management/Support category provides a line item for the contractor to oversee the work of
decommissioning. The Surety Estimate contains a separate line item for DEQ project management costs.
The Surety Estimate assumes a fixed relationship between crew hours for decommissioning and contractor
project management. Depending on the staging of the work, and whether the assumed three-year closure
period is sufficient, this relationship may or may not reflect a reasonable expectation.
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Recommendation: I recommend requiring EFR to revisit the Management/Support line item in process of
assembling the PERT or Gantt chart, and to make adjustments to this line item accordingly.
Mill Decommissionins. Reclamation of Cells
This line item includes multiple examples of using the same piece of equipment for several pieces of work.
Evaluating the sequencing of the work will reveal the critical path for plant decommissioning and cell
reclamation which, in tum, reveals a better estimate ofthe project length than we have at present.
Interrelationships between the decommissioning and reclamation activities, and the number of activities
executed simultaneously, will provide valuable data for use in resource leveling and in evaluating the
DRC's oversight requirement.
Recommendation: I recommend requiring EFR to present the work breakdown structure in the Surety
Estimate in a graphical format in which relationships between tasks become easier to identify and
deployment of the workforce and equipment can be managed to eliminate double scheduling. This supports
the request already made twice above for preparation of a PERT or Gantt chart
Monitorins Wells - s
The current Surety estimate did not appear to account for decommissioning/abandonment of monitoring
wells.
Recommendation: I recommend requesting coordinates and maps to locate all monitoring wells, and
inclusion in the Surety Estimate offunding for abandonment for those wells.
4.0 Surety adequacy
Unit cost basis
EFR has used two data sources for most of its labor cost basis for the Surety Estimate. These included the
current Energy Fuel Resources corporate pay scale and White Mesa, Inc., a regional employment agency.
For comparison purposes, EFR also included a copy of General decision UTl 200043 for heavy
constmction in San Juan County dated January 4, 2013. In keeping with the agreement reached during
negotiations over the 2012 Surety Estimate, these data sources are appropriate. EFR used the higher ofthe
two sources in the Surety Estimate. Certain specialties, e.g. Health Physicist, do not appear in 3'''-party
databases. Therefore, reliance on EFR data is required in these cases.
For equipment, EFR used 3"^-party quotations, as was agreed during negotiations over the 2012 Surety
Estimate.
Finding: The unit costs employed to assemble the Surety Estimate refiect a reasonable approximation of
the rates the DRC can expect to pay.
Continsencv
EFR has increased the Contingency line item to 20 percent as agreed during negotiations over the 2012
Surety Estimate. The ultimate agreement was to boost the Contingency to 25 percent over 2 years.
Finding: EFR has complied with the agreement to increase the Contingency line item to 20 percent for
2013.