Nuclear Information & Resource Service v. Nuclear Regulatory Commission

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 7, 2007 Decided December 11, 2007

No. 06-1301

NUCLEAR INFORMATION AND RESOURCE SERVICE AND

PUBLIC CITIZEN,

PETITIONERS

v.

NUCLEAR REGULATORY COMMISSION AND

UNITED STATES OF AMERICA,

RESPONDENTS

LOUISIANA ENERGY SERVICES, L.P.,

INTERVENOR

Consolidated with

06-1310

On Petitions for Review of an Order of the

Nuclear Regulatory Commission

Lindsay A. Lovejoy, Jr. argued the cause and filed the

briefs for petitioners.

2

Darani Reddick, Attorney, U.S. Nuclear Regulatory

Commission, argued the cause for respondents. With her on

the brief were John A. Bryson, Attorney, U.S. Department of

Justice, Karen D. Cyr, General Counsel, U.S. Nuclear

Regulatory Commission, John F. Cordes, Jr., Solicitor, E.

Leo Slaggie, Deputy Solicitor, and Molly Barkman and

Geraldine R. Fehst, Attorneys.

Michael F. McBride argued the cause for intervenor

Louisiana Energy Services, L.P. in support of respondent.

With him on the brief were David A. Repka and John W.

Lawrence.

Before: GINSBURG, Chief Judge, and ROGERS and

KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge

KAVANAUGH.

KAVANAUGH, Circuit Judge: More than 100 nuclear

reactors in the United States produce electricity to power

American homes and businesses. Those reactors provide

about 20 percent of the Nation’s electricity.

In this case, the Nuclear Regulatory Commission granted

a license for a new, privately owned facility in New Mexico

to produce enriched uranium as fuel for nuclear reactors.

Individuals who live near the facility objected to the license,

and they filed petitions for review in this Court. Petitioners

contend that the NRC violated the National Environmental

Policy Act and the Atomic Energy Act in granting the license.

We deny the petitions and uphold the NRC’s decision to grant

the license.

3

I

For several decades after the development of nuclear

power in the 1950s, the Federal Government produced all of

the enriched uranium used to fuel America’s nuclear reactors.

In the early 1990s, Congress privatized the uranium

enrichment operations; it formed the United States

Enrichment Corporation and later approved the sale of that

company. See USEC Privatization Act, Pub. L. No. 104-134,

§§ 3101-17, 110 Stat. 1321, 1321-335 to -350 (1996); Energy

Policy Act of 1992, Pub. L. No. 102-486, Title IX, 106 Stat.

2776, 2923. Today, USEC operates the country’s only

uranium enrichment plant, which is in Kentucky.

In 1990, Congress also amended the Atomic Energy Act

so that the Nuclear Regulatory Commission could license the

construction and operation of additional uranium enrichment

plants that would be privately owned and operated. See Solar,

Wind, Waste, and Geothermal Power Production Incentives

Act of 1990, Pub. L. No. 101-575, § 5, 104 Stat. 2834, 2835-

36 (codified as amended at 42 U.S.C. § 2243). During the

next 13 years, the NRC received two such applications for

uranium enrichment facilities, both filed by Louisiana Energy

Services, L.P. (LES). In 1991, LES applied to build the

“Claiborne” enrichment facility near Homer, Louisiana; LES

later withdrew that application. See In re La. Energy Servs.

L.P., 47 N.R.C. 113, 114-15 (1998). In December 2003, LES

sought a license for the so-called National Enrichment

Facility near Eunice, New Mexico. That second application

is at issue in this case.

Among other things, an applicant for a private-sector

enrichment facility must present a “plausible strategy” for

disposing of the nuclear waste that the facility will generate.

An applicant must provide a reasonable cost estimate to

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accompany the disposal strategy and give the NRC adequate

assurance that the applicant can pay for disposal. 42 U.S.C.

§ 2243(d)(2); 10 C.F.R. § 70.25; In re La. Energy Servs.,

L.P., 34 N.R.C. 332, 337 (1990). The NRC must conduct an

“adjudicatory hearing on the record” to ensure the applicant

has met all the requirements for licensure, and it must prepare

an environmental impact statement under the National

Environmental Policy Act “before the hearing . . . is

completed.” 42 U.S.C. § 2243(a)(1), (b)(1), (2); see also 42

U.S.C. § 4332(2)(C).

After LES’s application in this case, the NRC issued a

notice of hearing and opportunity for interested parties to

intervene in the licensure proceeding. Notice of Receipt of

Application for License, 69 Fed. Reg. 5873, 5874 (Feb. 6,

2004). Two organizations – Public Citizen and the Nuclear

Information and Resource Service – jointly filed a petition to

intervene. Pursuant to NRC regulations, they challenged

several aspects of LES’s application. See 10 C.F.R.

§ 2.309(a) (requiring that parties specify “contentions which

[they] seek[] to have litigated in the hearing”). The NRC

assigned the conduct of the licensure proceeding to a three-

member Atomic Safety and Licensing Board, which

considered petitioners’ contentions in a series of on-the-

record hearings. The NRC then heard appeals from the

Licensing Board’s decisions.

At the Licensing Board, petitioners alleged that the

NRC’s environmental impact statement had not adequately

assessed the environmental impact of the proposed facility –

particularly the environmental hazards associated with

uranium waste disposal. The Licensing Board issued written

rulings examining the environmental effects of the facility

and denying petitioners’ claims. The NRC upheld the

5

Licensing Board’s determinations in written rulings that

further analyzed the environmental issues.

Petitioners also alleged that LES had not articulated a

plausible strategy to dispose of the waste generated by the

facility, and that it had not provided a reasonable estimate of

disposal costs. The Licensing Board considered LES’s two

alternative disposal strategies and the related cost estimates.

First, the Licensing Board evaluated LES’s “private-sector

strategy” and cost estimate for disposal at a private facility

outside of New Mexico. On this point, the Licensing Board

ruled for petitioners, holding that LES had not met its

evidentiary burden to establish that the cost estimate for the

private-sector strategy was reasonable. The NRC affirmed

that conclusion.

The Licensing Board also analyzed LES’s alternative,

“public-sector strategy.” To support that strategy, LES relied

on a law that requires the Department of Energy to take title

to and dispose of “low-level radioactive waste” generated by

uranium enrichment facilities. See 42 U.S.C. § 2297h-11.

The Licensing Board found the strategy plausible and rejected

petitioners’ challenge to the cost estimate for the strategy.

The NRC upheld the Licensing Board’s decision, thus basing

its ultimate approval of the license on LES’s public-sector

strategy and cost estimate, rather than on LES’s private-sector

plan.

In March 2006, as it was considering petitioners’

contentions, the Licensing Board held a public hearing on the

remaining issues associated with the enrichment facility. The

Board held this hearing to meet the mandatory hearing

requirement of 42 U.S.C. § 2243(b). In June 2006, the

Licensing Board completed its review and authorized a 30-

year license for construction and operation of the facility.

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The NRC declined to disturb the Licensing Board’s

authorization of the license, and the decision became final in

early August 2006. Construction has now begun.

Petitioners filed timely petitions for review in this Court.

They raise several objections to the NRC’s licensing decision:

(1) the NRC violated the Atomic Energy Act by

“supplementing” the environmental impact statement during

the hearing process; (2) the NRC violated the National

Environmental Policy Act by failing to adequately address the

environmental consequences of disposing of the facility’s

uranium waste; (3) the NRC violated the Atomic Energy Act

by accepting LES’s waste disposal strategy and cost estimate;

and (4) NRC Commissioner McGaffigan should have

disqualified himself from the licensure proceeding. We

address each issue in turn.

II

Before deciding petitioners’ claims, we first must

determine whether they have standing.

Under Article III of the Constitution, federal courts have

jurisdiction only to decide cases or controversies. One aspect

of the case-or-controversy requirement is that a party must

demonstrate standing to sue – that it has suffered a “concrete

and particularized” injury that is “actual or imminent”;

“caused by, or fairly traceable to, an act that the litigant

challenges in the instant litigation”; and “redressable by the

court.” Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658, 663

(D.C. Cir. 1996) (en banc) (internal quotation marks omitted).

An organization may establish Article III standing by

showing, among other things, that at least one of its members

would have standing to sue in his or her own right. Nuclear

Energy Inst., Inc. v. EPA, 373 F.3d 1251, 1265 (D.C. Cir.

2004).

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This is a “procedural rights” case in which a party “has

been accorded a procedural right to protect his concrete

interests.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 572

n.7 (1992). A party has standing to challenge an agency’s

failure to follow a procedural requirement “so long as the

procedures in question are designed to protect some

threatened concrete interest of” the party. Id. at 573 n.8. The

Supreme Court and this Court have repeatedly held that

individuals who live near a proposed federal project and

allege that they will suffer concrete injury from the project

have standing in NEPA and other procedural rights cases.

See, e.g., id. at 572 n.7 (standing for “one living adjacent to

the site for proposed construction of a federally licensed”

project, even where party “cannot establish with any

certainty” that remedying procedural defect “will cause the

license to be withheld or altered”); Cmtys. Against Runway

Expansion, Inc. v. FAA, 355 F.3d 678, 684-85 (D.C. Cir.

2004) (standing where parties’ neighborhoods would “be

subjected to increased noise”); Nuclear Energy Inst., 373 F.3d

at 1265-66 (standing where member alleged hazardous waste

would “contaminate his community’s ground-water

supplies”); cf. Fla. Audubon Soc’y, 94 F.3d at 667-68 (no

standing where parties alleged only a “general risk” of harm

and did not demonstrate a “geographic nexus to any asserted

environmental injury”).

Petitioners here live near the proposed uranium

enrichment facility. They allege a risk of injury from

radiation generated by the facility; in particular, they allege

that because the NRC has not identified a suitable disposal

strategy for the waste the facility will produce, the waste will

be stored at the facility site and will emit harmful radiation.

See, e.g., Declaration of Phillip C. Barr, at ¶¶ 3, 6-10, 13-16.

They assert claims that, if successful, would require the NRC

to take additional procedural steps before granting the license

8

and would at least temporarily prevent construction and

operation of the facility near their homes. Petitioners’ claims

suffice to give them standing under the precedents of the

Supreme Court and this Court.

III

Under the National Environmental Policy Act, a federal

agency proposing a major federal action significantly

affecting the quality of the human environment must first

prepare an “environmental impact statement” that includes a

“detailed statement” on “(i) the environmental impact of the

proposed action, (ii) any adverse environmental effects which

cannot be avoided should the proposal be implemented,” and

“(iii) alternatives to the proposed action.” 42 U.S.C.

§ 4332(2)(C)(i)-(iii). Section 193 of the Atomic Energy Act

specifically requires the NRC to prepare an EIS in connection

with uranium enrichment facility applications before the

hearing on the license is completed. See 42 U.S.C.

§ 2243(a)(1), (2).

Petitioners allege that the NRC violated the Atomic

Energy Act by “supplementing” the EIS after the hearings on

the license application. They also contend that, under NEPA,

the EIS did not adequately address the environmental impact

of disposing of the waste generated by the facility.

A

We first consider petitioners’ claim that the NRC

violated the Atomic Energy Act by “supplementing” the EIS

after the close of hearings on the license application.

Section 193 of the Atomic Energy Act requires the NRC

to conduct a “single adjudicatory hearing on the record”

before issuing a license for constructing and operating a

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uranium enrichment facility. 42 U.S.C. § 2243(b)(1), (2); see

also 10 C.F.R. §§ 70.23a, 70.31. It also sets the deadline for

preparing the EIS:

An environmental impact statement . . . shall be

prepared before the hearing on the issuance of a

license for the construction and operation of a uranium

enrichment facility is completed.

§ 2243(a)(2) (emphases added). NRC staff released the draft

EIS for public review in September 2004 and then issued the

final EIS in July 2005 – well before both the NRC’s principal

rulings on petitioners’ contentions and the “mandatory

hearing” in March 2006 on the remaining, uncontested issues.

As this timeline demonstrates, the NRC satisfied the Section

193 requirement that an EIS “be prepared before the hearing

. . . is completed.” § 2243(a)(2) (emphases added).

Petitioners nonetheless claim that the EIS was not

“prepared” before the hearing was completed because the

written opinions of the Licensing Board and the NRC

“supplemented” the EIS. In its ruling after the mandatory

hearing, the Licensing Board considered the EIS and stated

that a staff document and the related discussion in the Board’s

opinion were intended to “supplement[]” the EIS. 63 N.R.C.

747, 819 (2006). Similarly, when ruling on one of

petitioner’s environmental contentions, the NRC included a

detailed analysis of various waste disposal options and stated

that the passage “amplified” the related discussion in the final

EIS. 63 N.R.C. 687, 700 (2006). Those points are irrelevant

to the statutory question here, however, because the agency

still “prepared” an EIS before the hearing was completed,

10

which is all that this provision of the Atomic Energy Act

requires.1

B

We next address petitioners’ claim that the NRC’s NEPA

review was deficient.

Judicial review of an environmental impact statement

ensures that the agency “has adequately considered and

disclosed the environmental impact of its actions and that its

decision is not arbitrary or capricious.” Baltimore Gas &

Elec. Co. v. Natural Res. Def. Council, 462 U.S. 87, 97-98

(1983). A court reviewing an EIS considers whether an

“agency took a ‘hard look’ at the environmental consequences

of its decision to go forward with the project.” Cmtys.

Against Runway Expansion, Inc. v. FAA, 355 F.3d 678, 685

(D.C. Cir. 2004) (internal quotation marks omitted). We bear

in mind, of course, “that NEPA itself does not mandate

particular results, but simply prescribes the necessary

process.” Robertson v. Methow Valley Citizens Council, 490

U.S. 332, 350 (1989).

Petitioners argue that the NRC’s NEPA review was

deficient because the NRC did not sufficiently analyze the

impact of disposal of uranium waste from the enrichment

facility. Petitioners are incorrect: The NRC thoroughly

examined the environmental consequences of waste disposal.

Multiple sections of the EIS discussed the waste that the

enrichment facility would generate and the environmental

impact of various waste disposal alternatives. See EIS

1

Petitioners have not argued that the NRC’s method of

supplementing the EIS violated its regulations implementing

NEPA. See 10 C.F.R. § 51.92.

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Excerpts, Joint Appendix (“J.A.”) 1907-11 (discussing

“Waste-Management Options” for the facility and “Disposal

Options” for waste); J.A. 1907 (outlining “near-surface

emplacement” alternatives). The EIS described potential

private- and public-sector disposal facilities that are licensed

to accept various types of low-level waste; it described

different scenarios for converting and transporting the waste;

and it analyzed the environmental effects of the various

options. In addition to the EIS document, the Licensing

Board and the NRC subsequently developed an exhaustive

record as they considered petitioners’ environmental

contentions and supplemented the EIS. Among other things,

the NRC further analyzed the “long-term effects from

disposing of depleted uranium,” concluding that the potential

environmental effects of disposal at one proposed disposal

site in Utah “appear to be small,” and describing various

alternative disposal options. 63 N.R.C. 687, 690, 700

(2006).2

In short, the record makes clear that the NRC thoroughly

considered the environmental issues surrounding uranium

waste disposal. The agency plainly met its NEPA obligation

to take a “hard look” at the environmental consequences of

approving the license.

IV

Petitioners strenuously argue that the NRC erred in

approving the license because, in petitioners’ view, LES

failed to present a reasonable cost estimate for disposing of

radioactive waste from the facility.

2

Contrary to petitioners’ claims, NRC staff independently analyzed

the characteristics of the “reference site” in Utah and the potential

effects of storing the facility’s waste there. 63 N.R.C. 687, 693

(2006).

12

A license applicant need not present a “concrete plan” to

dispose of waste generated by a proposed uranium enrichment

facility. In re La. Energy Servs., L.P., 34 N.R.C. 332, 337

(1991). Rather, an applicant must present “a plausible

strategy for the disposition of depleted uranium” waste. Id.

(emphasis added).3 An applicant also must present a

reasonable estimate of the costs of disposal and give adequate

assurance it can pay those costs. 42 U.S.C. § 2243(d)(2); 10

C.F.R. § 70.25(a), (e).

The NRC granted the license here based on LES’s

“public-sector strategy,” in which the Department of Energy

would take title to and dispose of the facility’s waste.4

Petitioners do not challenge the plausibility of giving the

waste to the Department of Energy; they acknowledge that

the Department is legally required to take title to the waste at

LES’s request, with LES bearing the disposal costs. See 42

U.S.C. § 2297h-11(a)(1), (2). Instead, petitioners contend

that LES’s cost estimate for waste disposal understates the

likely costs.

LES’s cost estimate started with the Department of

Energy’s estimate of the cost of waste disposal. To guard

against unforeseen costs, LES then added a 25-percent

contingency factor on top of the Department’s estimate.

Petitioners contend, however, that LES should have used a

contingency factor far greater than 25 percent because of the

3

Petitioners accept the “plausible strategy” requirement as the

governing standard for disposition of depleted uranium waste.

4

The bulk of petitioners’ objections in this Court are to the private-

sector strategy. We need not consider those arguments, however,

because the NRC approved the license based solely on the public-

sector strategy. See 10 C.F.R. § 70.25(a) (requiring only one plan

to pay disposal and other costs).

13

Department’s alleged history of underestimating costs on

other projects.

To be sure, cost overruns are not uncommon for this kind

of massive project. See GOV’T ACCOUNTABILITY OFFICE,

DEPARTMENT OF ENERGY: MAJOR CONSTRUCTION PROJECTS

NEED A CONSISTENT APPROACH FOR ASSESSING TECHNOLOGY

READINESS TO HELP AVOID COST INCREASES AND DELAYS 9

(2007) (cost of “many” Department projects has

“significantly exceeded original estimates”). The NRC found

petitioners’ evidence on this point unpersuasive, however,

because it concerned only the Department of Energy’s “cost

overruns on unrelated prior projects.” 64 N.R.C. 37, 46 n.38

(2006). The NRC explained that it has previously rejected

such past-misbehavior arguments unless parties show a

“‘direct and obvious relationship between the character issues

and the licensing action in dispute.’” Id. (quoting In re

Dominion Nuclear Conn., Inc., 54 N.R.C. 349, 365 (2001)).

Petitioners present no basis for us to upset the NRC’s

conclusion that this particular estimate, with the 25-percent

contingency included, was reasonable.5

At oral argument, petitioners expressed particular

concern with the cost estimate for the public-sector strategy

because it was based on “near-surface disposal” of the

facility’s waste relatively near the surface of the earth – as

opposed to “deep disposal” hundreds or thousands of feet

underground. Petitioners contend that deep disposal will be

5

Petitioners also have asked for a Licensing Board hearing on

whether the 25-percent contingency factor was sufficient. The

NRC examined petitioners’ challenge on the merits, however, and

reasonably determined that the 25-percent contingency factor was

sufficient and that evidence of overruns on other Department of

Energy projects did not merit further Licensing Board proceedings.

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necessary because of the nature of the waste the facility will

generate; that deep disposal will cost significantly more than

near-surface disposal; and that LES will not have the funds to

pay for the higher costs of deep disposal. This is a weighty

argument, and we assume the NRC legally could have

required LES to demonstrate it could pay for deep disposal.

But the NRC instead required only a showing that LES could

pay for near-surface disposal; the NRC concluded that near-

surface disposal of the waste from this facility is permissible

under current federal regulations. As a reviewing court, our

role here is necessarily limited: We are not authorized to

micromanage the NRC’s licensure proceeding, or to second-

guess its acceptance of reasonable cost estimates. We

examine only whether the NRC reasonably concluded that

LES presented a plausible strategy for waste disposal and a

reasonable cost estimate to accompany that strategy – the

plausible strategy being disposal by the Department of

Energy, and the cost estimate including a 25-percent

contingency above the Department’s estimate for the costs of

near-surface disposal. We have no basis on this record,

particularly given our deferential review, to disturb the

NRC’s determination that LES’s cost estimate based on near-

surface disposal was reasonable.

V

Finally, petitioners contend that NRC Commissioner

McGaffigan (who has since passed away) should have

disqualified himself from considering the license application.

Petitioners moved to disqualify Commissioner McGaffigan

because, in an unrelated proceeding, he stated that the

Nuclear Information and Resource Service had used “factoids

or made-up facts or irrelevant facts” to support its positions,

and that one of its expert witnesses was a “person who

doesn’t know anything about radiation.” Motion at 2-3, J.A.

15

1167-68. In that same proceeding, Commissioner

McGaffigan characterized the group as the “Nuclear

Disinformation Resource Service.” Id. at 3, J.A. 1168.

Petitioners argue that the licensure decision should be vacated

so that the proceeding can be conducted anew by an impartial

panel. We review Commissioner McGaffigan’s denial of

petitioners’ disqualification motion for abuse of discretion.

Metro. Council of NAACP Branches v. FCC, 46 F.3d 1154,

1164 (D.C. Cir. 1995).

Given the roles that agency officials must play in the

give-and-take of sometimes rough-and-tumble policy debates,

courts must tread lightly when presented with this kind of

challenge. Administrative officers are presumed objective

and “capable of judging a particular controversy fairly on the

basis of its own circumstances.” United States v. Morgan,

313 U.S. 409, 421 (1941). A party cannot overcome this

presumption with a mere showing that an official “has taken a

public position, or has expressed strong views, or holds an

underlying philosophy with respect to an issue in dispute.”

United Steelworkers of Am. v. Marshall, 647 F.2d 1189, 1208

(D.C. Cir. 1981) (citing Hortonville Joint Sch. Dist. No. 1 v.

Hortonville Educ. Ass’n, 426 U.S. 482, 493 (1976) and

Morgan, 313 U.S. at 421). Instead, an agency official should

be disqualified only where “a disinterested observer may

conclude” that the official “has in some measure adjudged the

facts as well as the law of a particular case in advance of

hearing it.” Cinderella Career & Finishing Sch., Inc. v. FTC,

425 F.2d 583, 591 (D.C. Cir. 1970) (internal quotation marks

omitted); Metro. Council, 46 F.3d at 1164-65.

Here, as the Commissioner noted, his “personal style”

was to “speak vigorously, sometimes colorfully,” to “spark

debate.” Decision on Motion at 3, J.A. 1311. Such

comments, particularly when made in an entirely separate

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proceeding, do not support the conclusion that Commissioner

McGaffigan had “adjudged the facts as well as the law”

regarding the particular license application at issue here.

Commissioner McGaffigan did not abuse his discretion in

denying petitioners’ motion.

* * *

We deny the petitions for review and uphold the NRC’s

decision to grant the license.

So ordered.