DRC-2013-005742 - 0901a068807b30ce

1See 42 U.S.C. § 2014e(2).
2See Sequoyah Fuels Corporation (Gore, Oklahoma Site), CLI-03-06, 57 NRC 547, 548-
49 (2003).
UNITED STATES OF AMERICA
NUCLEAR REGULATORY COMMISSION
DOCKETED 11/13/03
COMMISSIONERS
SERVED 11/13/03
Nils J. Diaz, Chairman RE-SERVED 11/24/03
Edward McGaffigan, Jr.
Jeffrey S. Merrifield
___________________________________
In the Matter of )
)
SEQUOYAH FUELS CORPORATION ) Docket No. 40-8027-MLA-5
)
(Gore, Oklahoma Site) )
___________________________________)
CLI-03-15
MEMORANDUM AND ORDER
This case arises from the application of Sequoyah Fuels Corporation (“SFC”) for a
materials license amendment to possess byproduct material at its site near Gore, Oklahoma.
In response to the Presiding Officer’s certified question, the Commission decides today that
SFC’s front-end waste may be considered byproduct material under section 11e(2) of the
Atomic Energy Act (“AEA”), a provision added to the AEA in 1978 as part of the Uranium Mill
Tailings Radiation Control Act (“UMTRCA”).1
I. BACKGROUND
We recently described the background of the Presiding Officer’s certified question to
the Commission in some detail.2 From 1970 until 1992, SFC’s Oklahoma facility produced
uranium hexafluoride (UF6) from yellowcake (a mixture of solid uranium oxides, primarily U3O8)
and, for a portion of this time, the facility converted depleted uranium hexafluoride to uranium
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342 U.S.C. § 2014e(2); AEA § 11e.
4See SECY-02-0095, “Applicability of Section 11e.(2) of the Atomic Energy Act to
Material at the Sequoyah Fuels Corporation Uranium Conversion Facility” (June 4, 2002).
5See 67 Fed. Reg. 69,048 (Nov. 14, 2002).
tetrafluoride. Various phases of SFC’s operations produced radioactive waste streams. In
2001, in conjunction with decommissioning planning, SFC requested that the NRC determine if
some of the waste from SFC’s yellowcake solvent extraction process could be classified as
byproduct material under section 11e(2) of the AEA. The term “byproduct material” means
(1) any radioactive material (except special nuclear material) yielded in or made
radioactive by exposure to the radiation incident to the process of producing or
utilizing special nuclear material, and (2) the tailings or wastes produced by the
extraction or concentration of uranium or thorium from any ore processed
primarily for its source material content.”3
Only the second part – AEA § 11e(2) – of the definition is at issue in this proceeding.
In 2002, the NRC Staff recommended that the Commission approve SFC’s request to
classify its waste as 11e(2) material.4 Subsequently, the Commission issued a Staff
Requirements Memorandum (“SRM”) responding to the Staff’s recommendation. The
Commission SRM concluded that most of the waste at the SFC site could be classified as
11e(2) byproduct material.
Following the Commission’s SRM, SFC requested a materials license amendment to
possess 11e(2) byproduct material. After publication of notice of the amendment request and
opportunity for a hearing under 10 C.F.R. Part 2, Subpart L,5 the State of Oklahoma, among
others, submitted hearing requests.
The Presiding Officer concluded that the viability of Oklahoma’s claim rests on whether
the SRM precludes Oklahoma from “insisting that the waste on the Licensee’s site in question
-3-
6See LBP-03-07, 56 NRC 287, 288 (2003).
7See CLI-03-06, 57 NRC 547.
8“Initial processing” at SFC includes the steps from solvent extraction of the feedstock to
formation of uranium trioxide, UO3.
9The standards for decommissioning inactive mill tailings sites (i.e., 11e(2) sites) allow,
in effect, “restricted use” decommissioning of the stabilized tailings disposal cell under
government ownership. See 10 C.F.R. Part 40, Appendix A. Until December 11, 2002, when
the NRC Staff issued SFC’s requested license amendment, the SFC license contained a
condition for “unrestricted use” decommissioning of the entire site, as Oklahoma prefers. The
unrestricted use standard will govern if Oklahoma successfully contests the SFC license
amendment. See 10 C.F.R. § 20.1402.
Separate adjudicatory proceedings are underway with respect to SFC’s proposed site
decommissioning plan, its ground water corrective action plan, and its ground water monitoring
plan under Part 40, Appendix A. See Docket Numbers 40-8027-MLA-6, 40-8027-MLA-7, and
40-8027-MLA-8, respectively. Oklahoma has already established standing with respect to the
site decommissioning plan that SFC proposed earlier for the Gore, Oklahoma, facility under the
10 C.F.R. Part 20 regulations. See CLI-01-02, 53 NRC 9 (2001).
does not qualify as section 11e.(2) byproduct material.”6 Because Oklahoma’s position (in
effect) challenges the Commission’s SRM, the Presiding Officer certified two preliminary
questions to the Commission. The Presiding Officer asked the Commission to decide whether
Oklahoma could raise the 11e(2) issue in this adjudication and, if so, whether the Presiding
Officer or the Commission itself should originally consider the issue.
We agreed to decide the classification issue ourselves.7 We asked the parties to brief
directly to us the question whether, in view of initial processing of yellowcake8 at the SFC
uranium conversion facility, any portion of the SFC waste can be considered as 11e(2)
byproduct material. The 11e(2) classification has implications for the type of decommissioning
plan necessary to remediate the Gore site and terminate SFC’s license.9
In briefs addressing the certified question, SFC and the NRC Staff argue that SFC’s
preliminary solvent extraction process is merely a continuation of uranium milling; thus, they
maintain, the waste materials generated in this step are 11e(2) byproduct material. Oklahoma
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10Because Oklahoma’s other arguments are not relevant to the certified question, we
leave them for the Presiding Officer’s consideration.
11See 42 U.S.C. §§ 7901 et seq.
12Mill tailings are potentially hazardous because they are a source of uranium daughter
isotopes, especially radon, a radioactive gas with a short half-life. The tailings pile can release
radon into the atmosphere, where it and its radioactive daughter isotopes can be inhaled. See
Uranium Mill Tailings Radiation Control Act of 1978; Hearings on H.R. 11698, H.R. 12229, H.R.
12938, H.R. 12535, H.R. 13049, and H.R. 13650 (“UMTRCA Hearings”) before the Subcomm.
(continued...)
argues, among other things,10 that SFC was never licensed or operated as a uranium mill and
that classifying SFC’s waste as 11e(2) byproduct material is contrary to UMTRCA.11 We agree
with the NRC Staff and SFC, for the reasons stated below.
II. DISCUSSION
To answer the Presiding Officer’s certified question, we must examine the relevant
portion of the section 11e(2) definition; i.e., we must ask whether SFC produced wastes by the
concentration of uranium from “ore processed primarily for its source material content.” We find
that section 11e(2) covers the SFC material. Section 11e(2) provides that the waste output of
the processing of uranium ore is byproduct material. While nominally part of the fuel production
phase of the nuclear fuel cycle, SFC’s front-end process is functionally the same as uranium
milling -- i.e., it uses solvent extraction to refine uranium ore. Hence, the waste from that
process can legitimately be characterized as 11e(2) material.
Before examining in further detail how the SFC material fits into the nuclear fuel cycle
and into the section 11e(2) definition, we turn first to the legislative history of UMTRCA.
A. History of UMTRCA
Classification of the SFC wastes is best understood in the context of UMTRCA and its
legislative history. UMTRCA had two general goals -- to remediate contamination at inactive
mill sites and to provide for NRC regulation of mill tailings at active sites.12 To accomplish these
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12(...continued)
on Energy and Power of the House Comm. On Interstate and Foreign Commerce, 95th Cong.
at 227 (1978) (statement of Victor Gilinsky, NRC Commissioner).
13International Uranium (USA) Corp. (Request for Materials License Amendment), CLI-
00-01, 51 NRC 9, 16 (2000).
14See UMTRCA Hearings at 341 (statement of Joseph M. Hendrie, Chairman, NRC).
15See id. at 342-43.
16See id. at 342. These wastes contain small amounts of uranium.
goals, it was necessary to broaden the definition of “byproduct material” within NRC authority.
NRC’s then Chairman Joseph M. Hendrie explained to Congress that the NRC lacked the
requisite authority over mill tailings:
[The NRC] at the time did not have direct regulatory control over uranium mill
tailings. The tailings themselves were not source material and did not fall into
any other category of NRC-licensable material. The NRC exercised some
control over tailings, but only indirectly as part of the Commission’s licensing of
ongoing milling operations. Once operations ceased, however, the NRC had no
further jurisdiction over tailings. This resulted in dozens of abandoned or
“orphaned” mill tailings piles.13
Because prior to UMTRCA mill tailings were unregulated, Congress expanded the 11e definition
to bring this additional waste within the definition of byproduct material. The new 11e(2)
definition labeled mill tailings -- earlier regarded as waste materials -- as byproduct material.
NRC Chairman Hendrie testified in favor of the broadened definition, as it would make mill
tailings licensable under the AEA.14 The change also prevented dual regulation by the NRC
and the Environmental Protection Agency by removing mill tailings from coverage under the
Resource Conservation and Recovery Act.15
At the same time, Chairman Hendrie did not want to extend NRC’s authority to areas
outside the nuclear fuel cycle, such as wastes from phosphate ore processing.16 Thus, he
urged Congress to modify its definition of byproduct material. In his testimony before
Congress, Chairman Hendrie faulted the byproduct material definition included in H.R. 13382,
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17See UMTRCA Hearings at 343.
18See id. at 345. Source material includes uranium that has not been enriched in the
235U isotope and ores that contain by weight 0.05% or more of uranium or thorium. See 10
C.F.R. § 40.4.
19International Uranium, CLI-00-1, 51 NRC at 18.
20Id. at 16.
one of the House bills that preceded enactment of UMTRCA, and proposed that the definition of
byproduct material be expanded to include tailings produced by extraction of uranium or
thorium from any ore processed primarily for its source material content.17 The italicized phrase
was to replace the phrase, “source material as defined in Section 11z.(2).”18 The definition thus
“focused upon whether the process generating the wastes was uranium milling within the
course of the nuclear fuel cycle”19 and sought, in effect, to expand “the types of materials that
properly could be classified as byproduct material.”20 Chairman Hendrie’s proposed broad
definition of byproduct material received Congressional approval and appeared in the final
version of UMTRCA.
We turn now to the stages of the nuclear fuel cycle, SFC’s role in it, and the relationship
of the section 11e(2) definition to the fuel cycle. As we explain below, we find the SFC material
-- i.e., the residue of SFC’s front-end processing of uranium ore -- to fit within the section 11e(2)
definition of byproduct material.
B. The Nuclear Fuel Cycle and SFC’s Role
The nuclear fuel cycle consists of uranium recovery (mining and milling); fuel production
(conversion of uranium concentrates to uranium hexafluoride, uranium enrichment, and nuclear
fuel fabrication); use in nuclear reactors; reprocessing irradiated fuel; and management and
-7-
21See Georgia Power Co. (Alvin W. Vogtle Nuclear Plant, Units 1 and 2), LBP-77-2, 5
NRC 261, 289 (1977). At this time, reprocessing spent fuel does not occur in the United States.
22SFC also converted depleted uranium hexafluoride to uranium tetrafluoride, a process
not relevant to the certified question.
23See Sequoyah Fuels Corp., Reclamation Plan Sequoyah Facility, Appendix D at 4-7
(Jan. 2003).
disposal of high-level radioactive wastes.21 Only uranium milling and conversion are relevant
here.
So-called nuclear fuel facilities are divided into three groups: those that convert
yellowcake into uranium hexafluoride; those that enrich the uranium hexafluoride in the
fissionable 235U isotope; and those that fabricate enriched uranium into nuclear reactor fuel.
SFC has been licensed to possess source material and to convert it to uranium hexafluoride.22
When it was an active facility, SFC produced uranium hexafluoride from uranium ore
concentrate, predominantly yellowcake. SFC initially dissolved the yellowcake feedstock in an
aqueous solution of nitric acid, forming uranyl nitrate, and purified it in a solvent extraction
process. After purification, SFC concentrated the uranyl nitrate and thermally denitrated it to
uranium trioxide, UO3. In the next several process steps, SFC converted the uranium trioxide to
uranium hexafluoride, the final product.23
Because the solvent extraction process is similar to a process used at conventional
uranium mills, SFC and the NRC Staff maintain that SFC’s front-end processes -- from
yellowcake to uranium trioxide -- are a continuation of the milling process. Thus, they say,
wastes from the solvent extraction process are 11e(2) byproduct material. As UMTRCA’s
definition of byproduct material is process-oriented, the location of the milling, according to SFC
and the NRC Staff, is inconsequential. The NRC Staff points out that UMTRCA does not
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24See generally “NRC Staff’s Position on Classification of a Portion of Sequoyah Fuels
Corporation’s Waste as § 11e.(2) Byproduct Material” (July 3, 2003).
25See generally “Sequoyah Fuels Corporation’s Brief on Whether Any Portion of the
SFC Waste Can Be Considered as 11E.(2) Byproduct Material” (July 3, 2003).
26See generally “State of Oklahoma’s Brief in Opposition to Reclassification of Sequoyah
Fuels Corporation’s Waste as Mill Tailings” (July 8, 2003).
address location at all.24 SFC reasons that its front-end wastes literally satisfy all three prongs
of the section 11e(2) definition because: (1) they are produced by extraction or concentration of
uranium; (2) the feedstock material is ore; and (3) the primary purpose of processing the ore is
to recover source material. SFC states that UMTRCA is not limited to previously unregulated
materials (i.e., tailings that would still be “orphaned” without UMTRCA), and that Congress, by
not identifying which types of facilities conducted milling, left it to the Commission to make that
determination.25
Oklahoma, on the other hand, finds SFC’s interpretation flawed. According to
Oklahoma, SFC did not mill uranium ore to produce yellowcake; rather, it conducted a multi-
staged conversion sequence to form chemically distinct products. Oklahoma maintains that
using solvent extraction as one of the steps does not mean that SFC conducted a milling
operation and does not justify decommissioning the entire facility as a uranium mill.26 Rather,
the front-end steps are requirements of the complete UF6 conversion process. Oklahoma also
states that the radiological characteristics of the SFC wastes are different from conventional
uranium mill tailings. Further, Oklahoma asserts that the SFC facility was never licensed or
operated as a uranium mill -- it was always considered a uranium conversion facility and has
been regulated under a source materials license. Oklahoma believes that, to justify
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27Id. at 17.
28The SFC material indisputably fits the other two elements of the section 11e(2)
definition. SFC generated the wastes in question “by the extraction or concentration of
uranium.” And the Commission has previously determined that the phrase “‘processed primarily
for its source material content’ most logically refers to the actual act of processing for uranium
or thorium within the course of the nuclear fuel cycle, and does not bear upon any other
underlying or ‘hidden’ issues that might be driving the overall transaction.” International
Uranium, CLI-00-1, 51 NRC at 15 (emphasis in original). The only remaining element of the
section 11e(2) definition is the term “ore.”
29NRC Regulatory Issues Summary 2000-23, “Recent Changes to Uranium Recovery
Policy” (Nov. 30, 2000) (“RIS”).
30Oklahoma notes that one federal court has stated that “[t]he final product of the milling
process for uranium ore is uranium-rich ‘yellowcake,’ U3O8.” American Mining Congress v.
Thomas, 772 F.2d 617, 621 (10th Cir. 1985). We find this statement unpersuasive, for the
divisions of the nuclear fuel cycle were not at issue in the cited case.
classification of SFC’s wastes as mill tailings, SFC has resorted to “tortured interpretations of
individual words in UMTRCA” that are contrary to the unambiguous intent of Congress.27
The key question here is whether yellowcake may be considered “ore” under section
11e(2).28 Uranium milling involves treatment (physical and/or chemical) of ore. A traditional mill
starts with mined uranium ore and refines it into yellowcake. A uranium conversion fuel facility
starts with yellowcake and processes it into uranium hexafluoride. Because the NRC has
broadly defined “ore” to include “any . . . matter from which source material is extracted,”29 ore
actually has a place in both the (traditional) milling and the conversion segments of the fuel
cycle. Until recently, the NRC had considered the yellowcake arriving at SFC’s front door to be
refined source material, for by that point the yellowcake -- at least formally -- had left the
uranium recovery portion of the fuel cycle and started on the chemical pathway to uranium
hexafluoride.30 But “yellowcake” is an indefinite term. At the SFC facility, the yellowcake
functioned precisely as ore during its treatment with acid and subsequent solvent extraction --
i.e., it was a mixture of uranium compounds and impurities being transformed (or “milled”) into a
more usable form. Neither UMTRCA nor its legislative history explicitly addressed what
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31International Uranium, CLI-00-01, 51 NRC at 18, citing Kerr-McGee Chemical Corp. v.
NRC, 903 F.2d 1, 7 (D.C. Cir. 1990) (emphasis in original).
32Kerr-McGee Chemical Corp. at 7 (emphasis in original).
33See generally, International Uranium, CLI-00-01, 51 NRC 9. We have also stated that
purely economic factors should not determine how radioactive material is defined. See id. at
(continued...)
constitutes milling. Indeed, the statute used the term “processing,” not “milling;” thus, Congress
left this subject open for interpretation.
Because of the similarity of the SFC front-end process to purification processes at
conventional uranium mills, we find that labeling the SFC process as “milling” comports with
both the letter of the section 11e(2) definition and with physical and chemical reality. We see no
reason to perpetuate the traditional -- and somewhat artificial -- divisions of the nuclear fuel
cycle or to rely solely on the name given to a facility to determine where an activity fits in the
cycle. As the NRC Staff has argued, location of the activity (i.e., at a conventional “mill” or a
conversion facility) simply doesn’t matter under UMTRCA. The Commission agrees that “the
section 11e(2) definition focuses on the process that generated the radioactive wastes -- the
removal of uranium or thorium as part of the nuclear fuel cycle.”31 The definition is thus
adaptable to situations other than conventional uranium milling. Indeed, the only federal court
to address the byproduct material definition directly stated that the definition “adopted by
Congress was designed to extend the NRC’s regulatory authority over all wastes resulting from
the extraction or concentration of source materials in the course of the nuclear fuel cycle.”32
It is true, as Oklahoma points out, that the goal of SFC’s front-end processing was to
achieve a specific chemical form of uranium needed to match the requirements of the
hexafluoride conversion process. But so long as the processing identified in section 11e(2)
actually took place, the NRC need not examine the motivation or ultimate goals behind the
process.33 The Commission need not draw a line between milling and conversion at SFC’s
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33(...continued)
20. Further, the Commission has rejected “ultimate business motivations as irrelevant to the
section 11e(2) definition.” Id. at 24, note 8. “UMTRCA does not require the NRC to ensure that
no other incentives lie behind the licensee’s interest in processing material for uranium.” Id. at
18.
34It does indicate, however, that the NRC Staff will have to consider the specific
characteristics of the wastes in imposing regulatory requirements to assure protection of public
health and safety.
front door, for we recognize that purification of uranium ore has a role in two overlapping stages
of the uranium fuel cycle.
That the wastes arising from processing at SFC have different concentrations of the
radioactive constituents than the wastes typically produced at uranium mills does not alter the
Commission’s view. These differences are expected because the feed material has different
characteristics. The 11e(2) definition focuses on the nature of the processing, not the
characteristics of the wastes. Thus, the differences in concentrations do not bear on the
classification issue we consider here.34
We are mindful that our initial approval of the NRC Staff’s recommendation to reclassify
SFC’s front-end wastes as 11e(2) byproduct material was quite recent (just last year).
Previously, the NRC had considered SFC’s waste to be source material. But our view of the
nuclear fuel cycle must be flexible enough to accommodate practical reality. The fact is, there
is no meaningful safety-related distinction between what SFC does at the front end of its
conversion process and what ordinary uranium mills do. Both work with uranium ore to refine it
into more useful forms. As the SFC situation illustrates, ore is both a product (of mining and
traditional milling) and a feedstock (for further processing into UF6). Thus, because SFC
extracted and concentrated uranium ore for its source material content, SFC’s waste qualifies
as section 11e(2) byproduct material under the specific terms of that provision.
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35In situ leach facilities, e.g., are covered under 10 C.F.R., Part 40, Appendix A.
36Indeed, uranium mills, like conversion facilities, operate under source material
licenses. Ore that has received minimal processing -- such as crushing and sorting by size -- is
source material. The resultant tailings are 11e(2) material, but they also retain their character
as “ore” if they receive additional processing to recover uranium.
37See New York v. Federal Energy Regulatory Commission, 535 U.S. 1, 21, 122 S. Ct.
1012, 1024 (2002) (Where Congress used broad language in the Federal Power Act of 1935,
evidence of a specific “cataly[st]” for enactment of the statute “does not define the outer limits of
the statute’s coverage.”)
38See PGA Tour, Inc. v. Martin, 532 U.S. 661, 689, 121 S. Ct. 1879, 1897 (2002) (“[T]he
fact that a statute can be applied in situations not expressly anticipated by Congress does not
demonstrate ambiguity. It demonstrates breadth.”) (Citation and internal quotation marks
omitted).
39See International Uranium, CLI-00-01, 51 NRC 9, and Kerr-McGee Chemical Corp.
40See International Uranium, CLI-00-01, 51 NRC at 16-19.
The intent of UMTRCA supports today’s decision. UMTRCA nowhere says that it covers
only traditional mills.35 Nor does it say that source material cannot also be 11e(2) material.36 It
is true, as Oklahoma stresses, that UMTRCA’s chief purpose was to protect the public health
and safety by closing a regulatory “gap” -- unregulated mill tailings at defunct uranium mills --
and that particular gap does not exist here. But this is not decisive.37 UMTRCA’s byproduct
material definition was, by design, broadly phrased, and it readily encompasses the SFC
material.38 Both the Commission and the federal courts have previously held that the section
11e(2) definition is not confined to the sites that originally concerned Congress.39
Congress wrote section 11e(2) with room to construe it pragmatically. The language in
section 11e(2) about processing ore for its source material content was specifically intended to
broaden the definition of byproduct material to facilitate control of wastes that resulted from
processing within the nuclear fuel cycle and which ultimately may be left orphaned.40 Like
conventional mill tailings at sites lacking funds for decommissioning, the SFC wastes are a
legacy problem. The reclassification of SFC’s waste harmonizes with the AEA, for the
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41See 42 U.S.C. § 2111; UMTRCA § 202. By contrast, we note that under § 151 of the
Nuclear Waste Policy Act the Department of Energy has discretion whether to accept title to
and custody of AEA wastes other than 11e(2) byproduct material. See 42 U.S.C. § 10171.
reclassification serves a practical purpose and protects the public health and safety. Absent
reclassification, the Commission has significant concerns about funding to stabilize and
decommission the SFC site in light of the dire financial status of the licensee. The
reclassification simplifies SFC’s decommissioning task and makes it more likely that
decommissioning will take place reasonably soon because UMTRCA mandates a long-term
government custodian, either the State of Oklahoma or the U.S. Department of Energy, for
stabilized inactive 11e(2) mill tailings piles.41
Accordingly, we decide today that SFC’s front-end waste may be considered byproduct
material under section 11e(2) of the AEA. The Commission appreciates Oklahoma’s articulate
and thought-provoking contribution of its views and concerns regarding reclassification of SFC’s
waste.
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III. CONCLUSION
For the foregoing reasons, the Commission (1) answers the Presiding Officer’s certified
question and states that SFC’s front-end waste can be considered as AEA § 11e(2) byproduct
material; and (2) remands this matter to the Presiding Officer for action consistent with this
decision.
IT IS SO ORDERED.
For the Commission
/RA/
_____________________________
Annette L. Vietti-Cook
Secretary of the Commission
Dated at Rockville, Maryland,
this 13th day of November, 2003