DRC-2023-078486 - 0901a068812d314f

Energy Fuels Resources (USA) Inc. 225 Union Blvd. Suite 600 Lakewood, CO, US, 80228 303 974 2140 www.energyfuels.com
December 14, 2023
SENT VIA E-MAIL AND EXPEDITED DELIVERY
Mr. Douglas Hansen Director
Division of Waste Management and Radiation Control
Utah Department of Environmental Quality 195 North 1950 West Salt Lake City, UT 84116
Re: Opportunity to Respond to SERP Process Comments
Dear Mr. Hansen:
Thank you for your October 5, 2023 letter in which you provided Energy Fuels Resources (USA)
Inc. (“Energy Fuels”) an opportunity to provide the Division of Waste Management and Radiation
Control (“DWMRC”) with responses on comments made by Uranium Watch in a letter dated August 22, 2023 from Uranium Watch to DWMRC.
Our responses are set out below (the questions raised by Uranium Watch are in italics, and Energy
Fuels’ suggested responses are in normal font):
Uranium Watch Comment 1
Uranium Watch’s June 20, 2023, Comments discussed the use of the Safety and Environmental Review Panel (SERP) process in place of a License Amendment Process: The License Amendment Process includes license amendment applications, Environmental Reports, Environmental Impact
Analyses, public comments and hearings, and amendments to existing licenses and license
conditions. The June 20 Comments stated: “The SERP process is conducted outside of the
DWMRC statutory and regulatory requirements.” The comments herein provide additional support for that assertion.
EFRI Response:
First, as will be discussed in more detail below, there can be no dispute that the Safety and
Environmental Review Panel (“SERP”) process is an established part of the Nuclear Regulatory Commission’s (“NRC’s”) performance-based regulatory program generally, and in particular for the regulation of uranium recovery facilities. In the case of uranium recovery programs, the NRC SERP process is implemented under NUREG 6733, “A Baseline Risk-Informed, Performance-
Based Approach for In Situ Leach Extraction Licensees” (NRC, 2001), NUREG-1569, “Standard
Review Plan for In Situ Leach Uranium Extraction License Applications” (NRC, 2003) and NUREG-2126 “Standard Review Plan for Conventional Uranium Mill and Heap Leach Facilities
DRC-2023-078486
Letter to Mr. Doug Hansen December 14, 2023 Page 2 - Draft Report for Comment,” (NRC, 2014). NUREG-1569 and NUREG-2126 were subject to public comment and hearings.
There can also be no dispute that regulatory guidance is an integral part of the NRC program, as
regulatory guidance is an integral part of most, if not all, regulatory programs. The fact that the NRC has included a comparable performance-based process for nuclear power reactor licensees in 10 C.F.R. 50.59 but has not published a similar rule for uranium mills does not somehow make the SERP process unavailable for uranium mills. The NRC and DWMRC both have authority to
give guidance, as the NRC has done on how a licensee should document, through the SERP
process, decisions that a particular activity does not rise to the level of triggering a required license amendment.
In its approval of Utah’s agreement state application (69 Fed. Reg. 7026 (Feb. 12, 2004), NRC noted that:
“Utah has adopted regulations compatible with the NRC regulations that specify
requirements which a person must meet to possess or use 11e.(2) byproduct material. Utah will use its general licensing procedures, along with additional requirements in R313-24 specific to 11e.(2) byproduct material. Utah will use the NRC regulatory guides as guidance in conducting its licensing reviews.” (emphasis
added)
Further, as explained below, the SERP process for the White Mesa Mill (the “Mill”) has been formally included in the Mill’s license since 1997 and subsequently retained in the subsequent renewal of the license, in each case after public comment and hearings. The SERP process has thus moved from guidance to an enforceable license requirement.
The SERP process at the Mill is therefore not “conducted outside of the DWMRC statutory and
regulatory program,” as Ms. Fields suggests. There is nothing improper about this process whatsoever.
Second, the comments directed at the SERP process fundamentally misunderstand it. As explained in more detail below, the SERP process does not create an exception to a regulatory requirement
to obtain a license amendment, when such amendment is otherwise required under relevant
regulations. Rather, the SERP process sets forth a clear procedure for documenting why, in some instances, changes at a licensed facility do not trigger the requirement to seek a license amendment. In all licensing scenarios, there will always be activities by the licensee that do not rise to the level of requiring a license amendment. The SERP process simply provides a clear performance-based
process available to the licensee to document decisions that an amendment is not required and
allow the regulatory authority to review these decisions based upon specific, documented showings by the licensee. As NRC has stated in NUREG/BR-0303 “Guidance for Performance-Based Regulation” (NRC, 2002):
“A performance-based regulatory action achieves defined objectives and focuses on
results. It differs significantly from a prescriptive action in which licensees are
provided detailed direction on how those results are to be obtained. . . . Performance-based regulatory approaches possess inherent strengths that can lead to more effective regulation . . . promoting licensee flexibility in response to regulatory requirements that can reduce licensee burden and promoting safety by focusing on
safety-successful outcomes.
Letter to Mr. Doug Hansen December 14, 2023 Page 3 . . .
Performance-based regulatory approaches are considered for policy and
effectiveness reasons . . . Regulatory effectiveness has been found to improve when
such approaches are used appropriately.”
In NUREG/BR-0303, NRC uses As Low as Reasonably Achievable (“ALARA”) programs as good examples of the effectiveness of performance-based regulations:
“Similarly, the as low as reasonably achievable (ALARA) provisions of Title 10,
Part 20, of the Code of Federal Regulations (10 CFR Part 20), which impact both
materials and reactor licensees, are performance-based in that they allow licensees to meet the specified dose limits in a manner that they deem most appropriate. If the NRC had written a prescriptive Part 20, it might have included specific time limits in specific radiation areas and required rigid rules concerning the use of respirators
and protective suits under defined conditions.”
A SERP performance-based license condition achieves the same objectives. It allows the licensee to make certain changes provided the criteria in the license condition are satisfied, thereby providing the licensee with flexibility in response to regulatory requirements that can reduce licensee burden and promote safety by focusing on safety-successful outcomes.
Uranium Watch Comment 2
The DWMRC does not have any regulations related to the SERP process. The SERP process is not
based on any Nuclear Regulatory Commission (NRC) regulations applicable to uranium mills and other uranium recovery operations under 10 C.F.R Part 40.
EFRI Response:
As mentioned above, the SERP process is based on the NRC program, which includes guidance,
and is not required to be based on any specific NRC regulations. In 1995, the NRC initiated its Strategic Reassessment and Rebaselining initiative that identified broad direction-setting issues that would influence NRC activities going forward (Fed. Reg., Vol 60, No 158, Wednesday August 16, 1995), which was subject to a public review process. As a result of this initiative, NRC
commenced a four-phased approach to completion of the Final Policy statement. The four phases
are as follows: 1. Strategic Assessment 2. Rebaselining and Issue Papers 3. Development of a Strategic Plan
4. Implementation [sic of the Strategic Plan]
During this initiative the NRC contemplated a risk-informed performance-based approach allowing licensees to make changes without a license amendment in certain circumstances, which would ultimately apply to materials and reactor licensees alike. In 2001, the NRC implemented what it called Direction Setting Issue 12 of its Strategic Reassessment and Rebaselining initiative
to employ risk-informed, performance-based (“RIPB”) regulatory programs that consider, among
other factors, the degree of risk associated with operations in defining the nature of the applicable regulatory requirements. These programs typically identify performance measures as the basis for regulatory requirements. As described in an NRC white paper on risk-informed, performance-based regulation (SECY–98–144), by utilizing a RIPB process the licensee has the flexibility to
Letter to Mr. Doug Hansen December 14, 2023 Page 4 follow other methods as long as it demonstrates how it will meet regulatory requirements. In that white paper NRC states:
“Performance-Based Approach”: A regulation can be either prescriptive or
performance-based. A prescriptive requirement specifies particular features, actions, or programmatic elements to be included in the design or process, as the means for achieving a desired objective. A performance-based requirement relies upon measurable (or calculable) outcomes (i.e., performance results) to be met,
but provides more flexibility to the licensee as to the means of meeting those
outcomes. . . .licensees have the flexibility to determine how to meet the established performance criteria in ways that will encourage and reward improved outcomes . . .’
To that end, in September 2001 the NRC published NUREG 6733, A Baseline Risk-Informed,
Performance-Based Approach for In Situ Leach Extraction Licensees. NUREG 6733, Section 2.7,
establishes the criteria for a SERP. In that Section, NRC explained that “[t]he purpose of this panel [SERP panel] is to review the proposed changes, tests or experiments to determine whether they require a license amendment.” The SERP process is performance-based, rather than prescriptive, in that it allows the licensee to make certain changes provided the SERP performance criteria are
satisfied, without the need for a license amendment. For in situ recovery facilities, the NRC SERP
process was further implemented under NUREG-1569, “Standard Review Plan for In Situ Leach
Uranium Extraction License Applications” (NRC, 2003). Sections 5.1 and 5.2 of that document provide guidance to NRC staff on how to review and approve administrative procedures, specifically the SERP. Likewise, NUREG 2126, Standard Review Plan for Conventional Uranium
Mill and Heap Leach Facilities – Draft Report for Comment (2014) Sections 4.1 and 4.2 provide
guidance to NRC staff on how to review and approve administrative procedures relating to the SERP. It is important to note that prior to the publication of SECY–98–144, NUREG 6733, NUREG 1569
and NUREG 2126, NRC approved, by letter dated March 14, 1997, the renewal of the Energy
Fuels Resources (Previously Energy Fuels Nuclear) Source Material License SUA-1358 for the continued operation of the Mill. The letter states “With this licensing action, the NRC staff will be authorizing continued mill operations under the Performance-Based License Condition (PBLC) format. However, EFN is required, under License Condition 9.4 of the renewal license, to submit
its standard operating procedures (SOPs) for implementing the Safety and Environmental Review
Panel (SERP) by April 30, 1997.” Pursuant to the stated license condition, Energy Fuels submitted a Standard Operating Procedure for SERPs, which was subsequently approved by NRC by letter dated June 13, 1997. The June 13, 1997 letter included a revised License, Amendment 3 incorporating the approved SERP SOP and approving the use of the SERP process.
Uranium Watch Comment 3
A recent NRC document, “Safety Evaluation Report for Rare Element Resources Inc. Proposed
Demonstration Plant, Upton, Wyoming,”1 discusses the use of the SERP process for source material licenses:
7.5 Safety and Environmental Review Panel (SERP) (page 24) Regulatory Requirements
Letter to Mr. Doug Hansen December 14, 2023 Page 5 There are no regulatory requirements specifically related to source material licensees using SERP to review and determine whether or not a license amendment is required to change a process or
procedure or conduct a test or experiment in Title 10 of the Code of Federal Regulations. However,
SERPs for making these types of evaluations are based on the language in 10 CFR 50.59 (used by
nuclear power reactor licensees) to perform evaluations for the conduct of tests, changes to processes or procedures, or experiments to determine if those activities can be conducted without the need for an NRC license amendment. As part of the NRC’s initiative to transition to a
performance based, risk-informed inspection and licensing model detailed in SECY-98-144
(NRC,1998), the NRC staff has adopted sections of 10 CFR 50.59 language for source and special
nuclear materials users and incorporated this flexibility to evaluate the need for license amendments into source and special nuclear material licenses using license condition language.
EFRI Response:
In the citation provided, the NRC acknowledges that while there is no specific language in 10 CFR
Part 40, there is precedent for the use of SERPs as described in 10 CFR 50.59 for that particular facility, based on the guidance documents referred to above, and speaks to how NRC staff are able to review and approve the use of a SERP in that application. Reading further in the same section of the above referenced document provides the criteria for how the NRC approved the SERP in
the license as well as an analysis of its implementation as follows:
“Regulatory Acceptance Criteria
Standard SERP language mirrors the requirements of 10 CFR 50.59 (Changes, Tests and Experiments) and can be used or modified to represent site conditions, provided the modifications do not change the intent of the requirements. Additional
guidance related to SERPs at facilities processing uranium ore is provided in
NUREG-2126 “Standard Review Plan for Conventional Uranium Mill and Heap Leach Facilities - Draft Report for Comment,” (NRC, 2003) and NUREG-1569, “Standard Review Plan for In Situ Leach Uranium Extraction License Applications” (NRC, 2014).
Staff Review and Analysis
The NRC staff reviewed the applicant’s request to implement the use of a SERP using both the NRC guidance found in NUREG-2126 (NRC, 2014) and NUREG-1569 (NRC, 2003). While the guidance in NUREG-1569 is for In Situ Leach facilities, the guidance can be used to inform this review for the use of a SERP at
this rare earth elements (“REE”) processing facility. The SERP guidance in
NUREG-1569 is found in Section 5 of that document. The SERP guidance in NUREG-2126 is found in Section 4 of that document. Although neither document is specifically written for a REE processing facility, the NRC staff has determined that the guidance provided in each document is appropriate because of the detailed
information in both documents related to issues to consider when reviewing a
license application where the radiological hazards are due to the presence of natural uranium and/or thorium and their associated daughter products.

Letter to Mr. Doug Hansen December 14, 2023 Page 6 Based upon this review, the NRC staff determined the description of the SERP membership, evaluation criteria, record keeping, and use of SOPs and a radiation
protection plan to support the SERP to be adequate. The NRC staff concludes that
the applicant’s proposed program utilizing a SERP meets the requirements of 10 CFR 40.32(b) and (c) as they relate to the acceptability of management programs and audits to ensure protection of health and minimize danger to life and property. The SERP language was incorporated into the license as LCs 15 and 16.”
Uranium Watch Comment 4
The requirements of 10 C.F.R. § 50.59 (Changes, Tests and Experiments) apply to nuclear reactors
and independent spent fuel storage facilities; they do not apply to NRC 10 C.F.R. Part 40 licensees, or Agreement State uranium mill licensees. The Rule only references Parts 50 and 72.2
When the NRC adopted 10 C.F.R. 50.59, there was no mention of possible application of the rule
to Part 40 licensees. The Final Rule states: “The Nuclear Regulatory Commission (NRC) is
amending its regulations concerning the authority for licensees of production or utilization
facilities, such as nuclear reactors, and independent spent fuel storage facilities, and for certificate holders for spent fuel storage casks, to make changes to the facility or procedures, or to conduct tests or experiments, without prior NRC approval.” The Rule was meant to apply to types of
nuclear fuel chain operations that are very different from the processing of ore at licensed uranium
mills and the disposal and long-term care of the wastes from that processing.
The public was never given an opportunity to comment on the applicability of the provisions of 10 C.F.R. § 50.59 to source material licensees, including uranium mill licensees.
EFRI Response:
The statement that the public was not given the opportunity to comment on the applicability of the provisions of 10 C.F.R. § 50.59 to source material licensees, including uranium mill licensees is essentially incorrect.
NUREG-1569, “Standard Review Plan for In Situ Leach Uranium Extraction License
Applications” (NRC, 2003) and NUREG-2126 “Standard Review Plan for Conventional Uranium
Mill and Heap Leach Facilities - Draft Report for Comment,” (NRC, 2014) were subject to public comment and hearings, as was the NRC’s Strategic Reassessment and Rebaselining initiative (Fed. Reg., Vol 60, No 158, Wednesday August 16, 1995).

In addition, as previously mentioned, the NRC approved a Performance-Based License Condition (“PBLC”) format license for the Mill in 1997. The March 14, 1997 letter stated “A final finding of no significant impact (FONSI) was prepared in accordance with 10 CFR 51.32, and, on March 5, 1997, published in the Federal Register (Enclosure 2), providing notice of (1) the NRC's intent
to issue the proposed license amendment, (2) the availability of the EA to the public, and (3) an
opportunity for hearing for affected individuals.” As stated, the Federal Register publication provided for an opportunity for hearing. The Mill license was renewed in January 2018, prior to which it was put out for public comment several times. For both the 1997 amendment and the 2018 renewal, the SERP license conditions were open for public comment.

Letter to Mr. Doug Hansen December 14, 2023 Page 7 Uranium Watch Comment 5
The Final Rule contains important definitions and applicability information, yet those provisions
only apply to Part 50 and Part 72 Licensees, not Part 40 licensees. The State of Utah did not adopt
10 C.F.R. § 50.59 or changes to Part 72 into its regulations, because the State does not, and
cannot, have regulatory oversight of Part 50 or Part 72 facilities. The SERP language used by the DWMRC and Utah Uranium Mill licensees does not include some of the important definitions in the NRC Final Rule, thereby twisting the purpose and intent of the NRC Rule.
EFRI Response:
As mentioned above, in its approval of Utah’s agreement state application (69 Fed. Reg. 7026 (Feb. 12, 2004), NRC noted that Utah had adopted all the required regulations to become an agreement state and that Utah would follow all applicable NRC guidance in conducting its licensing reviews:
“Utah has adopted regulations compatible with the NRC regulations that specify
requirements which a person must meet to possess or use 11e.(2) byproduct material. Utah will use its general licensing procedures, along with additional requirements in R313-24 specific to 11e.(2) byproduct material. Utah will use the NRC regulatory guides as guidance in conducting its licensing reviews.” (emphasis
added)
No further NRC regulations were required to be adopted by the state. NRC guidance on these matters is considered to be adequate by NRC. In preparing the relevant guidance, NRC tailored the requirements set out in 10 C.F.R. § 50.59, which are specific to nuclear reactors, to a simpler set of performance criteria applicable to uranium recovery operations, using a risk-based approach.
Accordingly, to the extent not included in the applicable guidance, the definitions and applicability
information in 10 C.F.R. § 50.59 are not relevant to uranium recovery facilities.
Further, as previously stated, NRC approved, by letter dated March 14, 1997, the renewal of the Energy Fuels Resources Source Material License SUA-1358 for the continued operation of the Mill. The NRC approval letter stated that “With this licensing action, the NRC staff will be
authorizing continued mill operations under the Performance-Based License Condition (PBLC)
format.” The inclusion of the PBLC format into an NRC-approved Part 40 license specified the purpose and intent of the rule as applicable to a part 40 license; therefore it is not relevant what rules and procedures were published for a Part 50 or Part 72 license.
Uranium Watch Comment 6
The NRC developed specific Guidance to implement 10 C.F.R. § 50.59: “Guidance for
Implementation of 10 CFR 50.59, “Changes, Tests, and Experiments;” Regulatory Guide 1.187,
Rev. 3.3 This Reg. Guide applies to:
This RG applies to each holder of an operating license issued under 10 CFR Part 50,
“Domestic Licensing of Production and Utilization Facilities” (Ref. 1), or a combined
license issued under 10 CFR Part 52, “Licenses, Certifications, and Approvals for Nuclear Power Plants” (Ref. 2), including the holder of a license authorizing operation of a nuclear power reactor that has submitted the certification of permanent cessation of operations
required under 10 CFR 50.82(a)(1) or 10 CFR 50.110 or a reactor licensee whose license
has been amended to allow possession of nuclear fuel but not operation of the facility.
Letter to Mr. Doug Hansen December 14, 2023 Page 8 The public did not have an opportunity to comment on the use of the Guidance for facilities other than Part 50, 52, and 72 Production and Utilization Facilities. There is no NRC Regulatory Guide
regarding “Changes, Tests, and Experiments,” that applies to Part 40 uranium recovery or source
material licensees.
EFRI Response:
This statement is incorrect. As mentioned above, in the case of uranium recovery programs, the NRC SERP process is implemented under NUREG 6733, “A Baseline Risk-Informed,
Performance-Based Approach for In Situ Leach Extraction Licensees,” (NRC, 2001), NUREG-
1569, “Standard Review Plan for In Situ Leach Uranium Extraction License Applications” (NRC, 2003) and NUREG-2126 “Standard Review Plan for Conventional Uranium Mill and Heap Leach Facilities - Draft Report for Comment,” (NRC, 2014). NUREG-1569 and NUREG-2126 were subject to public comment and hearings, as was the NRC’s Strategic Reassessment and
Rebaselining initiative (Fed. Reg., Vol 60, No 158, Wednesday August 16, 1995).
Further, as previously mentioned, the NRC approved a Performance-Based License Condition (PBLC) format license for the Mill in 1997 which provided for an opportunity for public comment and hearing. In addition, the Mill license was renewed in January 2018 prior to which it was put
out for public comment several times. For both the 1997 renewal and the 2018 renewal, the SERP
license conditions were open for public comment.
Uranium Watch Comment 7
In sum, there is no statutory or regulatory basis for the DWMRC’s use of the SERP Process in place of a license amendment process for uranium mill and 11e.(2) byproduct material licensees.
EFRI Response:
This statement is incorrect for the reasons stated above.

If you should have any questions, please contact me.
Yours very truly,

ENERGY FUELS RESOURCES (USA) INC. David C. Frydenlund Executive Vice President, Chief Legal Officer and Corporate Secretary

cc: Scott Bakken Mark Chalmers Dawn Kolkman Kathy Weinel