Petition — Allied-General Nuclear Services v. Natural Resources Defense Council, Inc.

Supreme Court brief1977

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| Supreme Court, U §.

FILED

76-653 4 % m

IN THE

Supreme Court of the United States

OctToBER TERM, 1976

ALLIED-GENERAL NUCLEAR SERVICES, ET AL.,

Petitioners

NaTURAL Resources Derznse Co NC, INC., ET AL.,

and

TRE State or New York

PETITION OF ALLIED-GENERAL NUCLEAR

SERVICES, ET AL. FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Bennett BoskET

Volpe, Boskey and Lyons

918 16th Street, N.W.

Washington, D. C. 20006

Telephone: (202) 737-6580

Counsel for Allied-General

Nuclear Services, et al.

November 1976

Pu or Bron S. Ab Pr, Inc., Wasuuvorom, D. C.

Page

K ů 2

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„nnn 2c ccc ccccccccccccccccees 3

. cccccccdeccccccccecsoceesceseses +

Dran OW THB CAG ..c cc cccccccccccccccccceses +

Reasons ron GRANTING THE War 11

1. National Importance of the Case 11

2. Conflict With This Court’s Recent Decision in

BD ccccvcccccscececcocesqneaescesessese 11

3. Conflict With Other Appellate Decisions ...... 14

4. Prematurity of the Second Cireuit's Making a

Decision, At Least With Respect to Licensing

the Barnwell Separations Facility ........... 16

PT. TVT 18

Aprenprxx A—Nuclear Regulatory Commission's Inter-

im Policy Announcement published November 14,

1975 (40 F.R. 53056) as corrected December 24,

ü A-l

Apprenpix B—Second Circuit’s Opinion, May 26, 1976. A-34

Appenprx C—Second Circuit’s Supplemental Opinion

Denying Rehearing, September 8, 1976 ......... A-74

Arr Exo D

Second Circuit 's Judgment, May 26, 1976 ....... A-78

Second Cireuit’s Order Denying Rehearing In

Banc, September 8, 197 A-80

Appenpix E—Statutes Involved

42 U.S.C. § 4332 (Section 102 of the National En-

vironmental Policy Actꝰtꝛꝛꝛ A-81

42 U.S.C. § 2133 (Section 103 of the Atomic En-

_ £ 5 | „ A-83

42 U.S.C. § 2201 (b) (Section 161b of the Atomic

Energy Act as amended) ................... A-84

4 CITATIONS

Page

Cases:

Aberdeen & Rockfish R. Co. v. SCRAP, 422 U.S. 289

(1970)jꝙ::ꝝi 15

Allied-General Nuclear Services (Barnwell Nuclear

Fuel Plant Separations Facility), ALAB-296,

NRCI-75/10, p. 671 (19790))) iů ß 17

Allied-Gulf Nuclear Services, et al., 4 AEC 483 (1970),

modified by the Appeal Board, 4 AEC 523 (1971) 5

Coalition for Safe Nuclear Power v. United States

A. E. C., 463 F.2d 954 (D.C. Cir. 1972. 15

Federal Communications Commission v. Station WIR,

aneh 14

Kleppe v. Sierra Club, 96 S.Ct. 2718 (1976) 10, 11, 12,

13, 14, 17

Nader v. Nuclear Regulatory Commission, 513 F. 2d

Ie 15

NLRB v. Bell Aerospace Co., 416 U.S. 267 (1974) ... 14

Niagara Mohawk Power Corporation (Nine Mile Point

Nuclear Station Unit 2), ALAB-264, NRCI-75/4R,

L 17

Pacific Gas & Electric Co. v. Federal Power Commis-

sion, 506 F.2d 33 (D.C. Cir. 197)39yũ97e 17

Pikes Peak Broadcasting Company v. F. C. C., 422 F.2d

671 (1969), certiorari denied, 395 U.S. 979 (1969) 14

Power Reactor Co. v. Electricians, 367 U.S. 396 (1961) 16

Regional Rail Reorganization Act Cases, 419 U.S. 102

1 17

Scientists’ Institute for Public Information, Inc. v.

Atomic Energy Commission, 481 F.2d 1079 (D.C.

J ——A . tenecee 15

Toilet Goods Association v. Gardner, 387 U.S. 158

Dessen 00660 16

Union of Concerned Scientists v. Atomie Energy Com-

mission, 499 F. 2d 1069 (D.C. Cir. 1974) ......... 15

WJR, The Goodwill Station v. Federal Communica-

tions Commission, 174 F.2d 226 (D.C. Cir. 1948).. 14

Citations Continued iii

STaTures: *

r 3

r a NT 10

ro 2 nr. 3

S. C. § 2133 (Section 103 of th ie Energy

Act as amended) ........ ” 5 - one = 4

e ̃ . 3, 10

42 U.S.C. § 4332 (Section 102 of the National Environ-

neee eee eee 4

MISCELLANEOUS:

40 F. R. 53056 (November 14, 1975) as amended i

F. R. 59497 (December 24, 1978) stmt - ; _ 2

ERDA Report No. ERDA 76-25, ‘1976-1985 L

A 4 , WR

Spent Fuel Dispositi iliti i

tion’? (May 1976) — — a bead 6

IN THE

Supreme Court of the United States

. Ocroser TERM, 1976

No. 76-

ALLIED-GENERAL NUCLEAR SERVICES, ET AL.,

Petitioners

NaArunal Resources Derense Co UN, INC., Fr AL.,

and

Tue State or New York

PETITION OF ALLIED-GENERAL NUCLEAR

SERVICES, ET AL. FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

This petition for certiorari arises out of the Second

Circuit’s reversal of an important Nuclear Regulatory

Commission policy announcement concerning interim

standards under which the Commission left open the

possibility that, in individual licensing proceedings

based on a full record, the Commission might grant

licenses for certain plutonium-related facilities during

the interim period prior to completion of a generic

rulemaking proceeding known as GESMO. The peti-

tion is filed on behalf of Allied-General Nuclear Serv-

ices, Allied Chemical Nuclear Products, Ine. and Gen-

eral Atomic Company (these three parties being herein

referred to as Allied-General Nuclear Services, et al.).

The subject of this proceeding is the Nuclear Regu-

latory Commission interim policy announcement dated

November 11, 1975, published in the Federal Register

on November 14, 1975 (40 F.R. 53056). As corrected

in the Federal Register for December 24, 1975 (40 F. R.

59497), it is set forth in Appendix A hereto (begin-

ning at p. A-1).

The Second Cireuit’s opinion (by District Judge

Pierce; concurred in by Associate Justice Clark and

District Judge Owen) as issued May 26, 1976, and

amended August 12, 1976, which reversed the Commis-

sion in major part, is reported at 539 F.2d 824 and is

set forth in Appendix B (beginning at p. A-34). The

Second Cireuit’s per curiam supplemental opinion, is-

sued September 8, 1976, denying rehearing, is not yet

reported and is set forth in Appendix C (beginning at

p. A-74).

The Second Cireuit’s judgment of May 26, 1976, re-

versing the Commission in part, is set forth in Appen-

dix D (p. A-78). Its order of September 8, 1976, de-

nying timely petitions for rehearing, is incorporated in

its supplemental opinion of that date (Appendix C).

Its orders of September 8, 1976, denying timely sug-

gestions for rehearing in bane, are set forth in Appen-

dix D (p. A-80). This petition for certiorari is being

filed within the prescribed period of 90 days after Sep-

tember 8, 1976. Jurisdiction is conferred on this Court

by 28 U.S.C. § 1254(1) and § 2350(a), and 42 U.S.C.

§ 2239(b). :

QUESTIONS PRESENTED

The Nuclear Regulatory Commission in November

1975—after preliminary proceedings covering a period

of over six months and the consideration of views re-

ceived from over 200 sources—announced an interim

policy for determining whether licenses should be

granted for various facilities, including nuclear fuel

reprocessing facilities, which might be related to the

wide-seale use of Mixed Oxide Fuel (that is, a mixture

of uranium oxide and plutonium oxide) in nuclear

reactors. Any such licenses would be granted, how-

ever, only if the Commission determines, on the basis

of the record to be developed in the individual facil-

ity’s licensing proceeding, that granting the license is

justified pursuant to the published interim standards

which the Commission specified in the interim policy.

The questions presented are:

1. Whether, as the Second Cireuit held, the Na-

tional Environmental Policy Act (NEPA) totally pro-

hibits the Commission from determining whether to

grant and from granting any such licenses during the

entire interim period before the Commission has com-

pleted a generic rulemaking proceeding known by the

acronym GESMO (Generic Environmental Statement

—Mixed Oxide Fuel), which has been pending since

1974 and which may well take several additional years

to complete.

2. Whether the Second Circuit acted prematurely

in deciding, in this judicial review proceeding involv-

ing only the Commission's November 1975 interim pol-

icy announcement, that under no circumstances may

the Commission, during the entire interim period be-

fore GESMO is completed, issue a license to Allied-

General Nuclear Services, et al., for operating the now-

completed commercial-scale Separations Facility at

Barnwell, South Carolina—such prohibition to be ap-

plicable (i) no matter how strongly the record to be

developed in the Separations Facility’s pending indi-

vidual licensing proceeding may show that the public

interest calls for the license to be issued during the

interim and pursuant to the Commission’s published

interim criteria, and (ii) despite the fact that any ac-

tion granting a license under the interim policy would

at that time be subject to court review on a full record.

STATUTES INVOLVED

The statutes involved are set forth in Appendix E

(beginning at p. A-81). They are:

42 U.S.C. § 4332 (being Section 102 of the National

Environmental Policy Act) ;

42 U.S.C. § 2133 and § 2201(b) (being Section 103

and Section 161b of the Atomic Energy Act as

amended ).

STATEMENT OF THE CASE

Allied-General Nuclear Services, et al., hold the con-

struction permit issued in 1970, after public hearing,

For the Court's information, Allied-General Nuclear Services

is a partnership in which Allied Chemical Nuclear Products, Ine.

has a 50% interest and General Atomic Company has a 50% inter-

est. Allied Chemical Nuclear Products, Inc. is a wholly-owned sub-

sidiary of Allied Chemical Corporation. General Atomic Company

is a partnership in which Gulf Oil Corporation has a 50% interest

and Scallop Nuclear, Inc. (which is part of the Royal Dutch/Shell

Group) has a 50% interest.

by the Atomic Energy Commission (predecessor of the

Nuclear Regulatory Commission) for the Separations

Facility of the Barnwell Nuclear Fuel Plant at Barn-

well, South Carolina. See Allied-Gulf Nuclear Serv-

ices, et al., 4 AEC 483 (1970), modified by the Appeal

Board, 4 AEC 523 (1971). Despite the Seeond Cir-

cuit’s characterizations suggesting great novelty in the

technology, it is a fact that in 1968, when the applica-

tion for Barnwell was filed, the first nuclear fuel re-

processing plant to be owned by private enterprise—

that of Nuclear Fuel Services, Inc., at West Valley,

New York—had already been operating for more than

two years? and that considerable (more than 20 years)

governmental experience with reprocessing of spent

nuclear fuel elements exists in the United States and

elsewhere in at least 13 such plants using the same

basic technology.

The Barnwell Separations Facility is the subject of

an extensive licensing proceeding—involving both the

construction permit and then an operating license ap-

plication—which has been pending for a number of

years (NRC Docket No. 50-332). Pursuant to the 1970

construction permit, construction of the Separations

Facility has been completed. Allied-General Nuclear

Services owns the site and the present projects at the

Barnwell Nuclear Fuel Plant; total expenditures

therefor to date (including more than $175,000,000 for

the Separations Facility) are about $250,000,000.

— ——

»The Nuclear Fuel Services reprocessing plant was not large

enough to be considered commercial-scale. It closed down in 1972

to be in a position to undergo major modification and enlargement.

Recently, in September 1976, Nuclear Fuel Services announced

its withdrawal from the reprocessing business.

The Barnwell Separations Facility is a facility

planned to meet important and essential needs in the

proper utilization of scarce energy resources in the nu-

clear fuel cycle. The Separations Facility will receive

spent fuel elements from light-water nuclear power

reactors and will have the capacity to accommodate the

spent fuel discharges from some 50 such reactors of

1,000,000 kilowatts each. Barnwell is the only com-

mercial-seale nuclear fuel reprocessing: facility now

projected to be available for operation in the United

States at least until the mid-1980’s. A recent govern-

ment report projects that by the end of 1977 there will

be, in temporary storage, a backlog of spent fuel from

the United States power reactor program equal to about

twice the annual capacity of Barnwell and that the ad-

ditional amount of spent fuel discharged from power

reactors during 1978 will be about equal to another

year’s annual capacity of Barnwell.’

xeral nature of the nuclear fuel cycle is de-

cathode the Commission’s November 1975 announee-

ment of interim policy which is the subject of this case

(see particularly pp. A-11 through A-15). The Novem-

ber 1975 announcement is an interim stage in the for-

mal GESMO rulemaking proceeding the Atomie En-

ergy Commission had initiated in 1974; the Nuclear

Regulatory Commission, upon succeeding to the respon-

sibility, determined early in 1975 that the matter should

be given certain additional study, which was accord-

ingly begun. By early 1975, the construction of the

Barnwell Separations Facility was already about 85%

complete.

*ERDA Report No. ERDA 76-25, 1976-1985, LWR Spent

Fuel Disposition Capabilities—1976 Edition’’ (May 1976), p. 22.

At the Barnwell Separations Facility the spent fuel

elements will be sheared and the fuel materials dis-

solved. The plutonium nitrate solutions and the uran-

ium nitrate solutions will then be separated from the

waste fission products and from each other, and puri-

fied. The uranium nitrate which has been recovered

can then be converted into uranium hexafluoride, * to

be used in the manufacture of fuel elements for nuclear

reactors. The plutonium nitrate solution can be stored

and subsequently converted into plutonium oxide. And

as we informed the Second Circuit, such plutonium ox-

ide can then either be stored or—depending on the de-

termination made by the Government as to the policy to

be followed—can be utilized, along with uranium oxide,

in the manufacture of what is referred to as Mixed

Oxide Fuel. Moreover, even if GESMO were to result

in a negative decision as to wide-scale use of Mixed Ox-

ide Fuel, it might still be determined that reprocessing

is the most environmentally-advantageous means of

dealing with spent fuel, and especially with the pluton-

ium contained in it, to minimize the waste problem.

While the subject of nuclear power is beset by various

controversies, a number of studies (including some by

Government agencies) have concluded that there are

immediate and compelling grounds to move ahead with

commercial-seale reprocessing plant operations, and to

obtain an early and complete demonstration of some as-

yet unproven aspects of the light-water fuel cycle on a

commercial scale with actual spent fuel as feed mater-

* Allied-General Nuclear Services, et al., pursuant to permission

received by Commission letter dated November 2, 1973, began

construction of a Uranium Hexafluoride Facility at the Barnwell

Nuclear Fuel Plant. This Uranium Hexaflouride Facility, which

is also now completed, is the subject of a separate pending li-

censing proceeding in NRC Docket No. 70-1327.

ial. Others have concluded it is likely to be important,

in the interests of impeding further proliferation of

nuclear weapons capabilities, for the United States at

an early date to have Barnwell available as a model of

what a multinational commercial-seale reprocessing

plant could do, possibly operated under internationally-

administered controls which the United States Govern-

ment may decide to promote on an urgent basis.

The Commission’s November 1975 announcement

does not decide any such questions as these. But it does

leave them open for timely consideration in individual

licensing proceedings during the interim period prior

to resolution of GESMO. Specifically, with respect to

proceedings such as those involving the Barnwell Sepa-

rations Facility—and it is evident that the November

1975 announcement clearly had Barnwell in mind (see

particularly pp. A-15, A-18, A-19, A-22, A-30)—the

Commission provides (pp. A-25, A-26) that the issuance

of a license during the interim period shall be deter-

mined ‘‘within the context of the individual licensing

proceedings on the basis of consideration and balancing

of the following factors:

‘“(1) Whether the activity can be justified, from a

NEPA cost-benefit standpoint, without placing

primary reliance on an anticipated favorable

Commission decision on wide-scale use of mixed

oxide fuel;

‘*(2) Whether the activity would give rise to an

irreversible and irretrievable commitment of re-

sources that would unjustifiably foreclose for the

activity substantial safeguards alternatives that

may result from the decision on wide-scale use;

(3) The effect of delay in the conduct of the ac-

tivity on overall public interest.“

From the November 1975 announcement and the ex-

tensive Commission proceedings which the record shows

preceded it, it is evident that the Commission balanced

and took into overall account the importance of the

goals of the national energy program, the need to avoid

undue delays in the regulatory process, the policy that

the environment be protected against undue encroach-

ments, the desirability of assuring that an improved

system of safeguards be developed and implemented,

the need for efficient and timely utilization of natural

resources, and the many other considerations which

have a bearing on striking a proper balance between

national progress and national paralysis. As the an-

nouncement itself states (p. A-22) :

In reaching its general conclusion that indi-

vidual interim licenses may be issued where war-

ranted, and under the specific conditions discussed

in this notice, the Commission assessed the likely

benefits of allowing such interim licensing as well

as the possible adverse impacts. Here, as in other

decisional areas, the need for careful balance was

evident. While the Commission is properly mind-

ful that certain licensing actions have the potential

for foreclosing su uent alternatives, it cannot

disregard the equally hard reality that inaction or

a blanket prohibition on fuel recyele related licens-

ing actions could also foreclose or substantially im-

pede realization of energy alternatives which may

contribute significantly to meeting national needs.

In thus making its determination that a blanket

moratorium on issuance of licenses would be wholly

unsuitable, the Commission reached a reasoned and

reasonable conclusion as to how the public interest

is to be vindicated. Nevertheless, Natural Resources

Defense Council and five other organizations jointly

filed a petition for review in the Second Circuit,

and the State of New York filed a similar petition

for review. The petitions for review asserted two

general lines of complaint against the Commission’s

November 1975 annovneement—first, a claim that

the Commission had acted unlawfully, under NEPA,

by refusing to place a blanket moratorium in ef-

fect during the interim period prior to resolving

GESMO, and second, a claim that the procedures the

Commission had laid down for resolving GESMO were

unlawful. The Commission and the Government, and

the various intervenors in the Second Circuit, in addi-

tion to opposing both lines of complaint, also raised

questions concerning whether the Commission’s an-

nouncement had the requisite finality required by 28

U.S.C. § 2342(4) and 42 U.S.C. § 2239(b) for judicial

review and, even if it did, whether the issues sought to

be posed were sufficiently ripe for judicial review.

The Second Circuit, overruling the objections con-

cerning lack of finality and lack of ripeness, held that

the Commission’s announcement violated NEPA be-

cause NEPA required a blanket licensing moratorium

until GESMO was resolved, and held further that the

procedural complaints against the Commission’s an-

nounced procedures for resolving GESMO were not

justified (Appendix B). Petitions for rehearing were

denied with a supplemental opinion (Appendix C)

primarily seeking to distinguish this Court’s interven-

ing decision in Kleppe v. Sierra Club. 96 S. Ot. 2718.

Suggestions for rehearing in banc were also denied

(Appendix D).

REASONS FOR GRANTING THE WRIT

1. National Importance of the Case. The Second

Circuit, by its far-fetched interpretation and mis-

application of NEPA, has totally blocked the use of

interim standards and interim policies in an area of

fundamental importance to the Nation. No amassing

of citations is required to establish that the Nation is

confronted by a serious energy crisis. In seeking ac-

ceptable and adequate ways of meeting this energy

crisis, a wide variety of programs—involving the pro-

duction of energy from both non-nuclear and nuclear

sources—must be explored with diligence and vigor.

Searce, sometimes irreplaceable, resources must be con-

served; the effectiveness of improved technologies must

be demonstrated on a commercial scale. In many in-

stances, as here, this involves exceptionally long lead

times; plants being designed today may not be available

to operate until 5-to-15 years later. At the same time,

generic rulemaking proceedings under way today—such

as GESMO- may take years to complete. Meanwhile,

interim standards and interim policies provide an

appropriate mechanism for determining, in individual

licensing proceedings, how a proper balance can best

be found between national progress and national pa-

ralysis.

By striking down the interim policy mechanism in

relation to such a wide area of the nuclear fuel cyele,

the Second Circuit has fundamentally departed from

sound and established principles of law in a field of

utmost importance to the national welfare.

2. Conflict with This Court’s Recent Decision in

Kleppe. The Second Circuit’s decision represents a

substantial departure from this Court’s decision on

June 28, 1976, in No. 75-552, Kleppe v. Sierra Club,

96 S.Ct. 2718. Kleppe was not available, of course, at

the time the Second Circuit’s May 26 opinion was

issued. In the May 26 opinion the Second Circuit

strongly relied (see pp. A-63, A-64, A-67) on the Dis-

trict of Columbia Circuit's very ruling which this

Court subsequently, on June 28, found it necessary to

reverse. Then in its September 8 supplemental

opinion the Second Circuit offered what surely is an

unsuccessful effort at finding distinctions from Kleppe.

This Court made clear in Kleppe that the final

formulation of an overall regional impact statement

was not a precondition, under NEPA, to proceeding on

individual mining projects supported by their individ-

ual impact statements. Thus this Court said (96 S. Ot.

at 2729, note 16):

Even had the Court of Appeals determined that

a regional impact statement was due at that

moment, it still would have erred in enjoining

approval of the four mining plans unless it had

made a finding that the impact statement covering

them inadequately analyzed the environmental

impacts of, and the alternatives to, their approval.

So long as the statement covering them was

adequate, there would have been no reason to en-

join their approval pending preparation of a

roader regional statement

Similarly, this Court in Kleppe held that even if the

four mining projects were interrelated and a compre-

hensive impact statement was required to be prepared,

it was improper under NEPA for the Judicial Branch

to impose a moratorium on related interim activities.

Thus the Court ruled that (96 S.Ct. at 2732-2733) the

„eontention as to the relationships between all pro-

posed coal-related projects in the Northern Great

Plains region does not require that petitioners prepare

one comprehensive impact statement covering all

before proceeding to approve specific pending applica-

tions,“ and (96 S.Ct. at 2733, note 26):

Nor is it necessary that petitioners always

complete a comprehensive impact statement on all

proposed actions in an appropriate region before

approving any of the projects. . [A] pproval of

one lease or mining plan does not commit the

Secretary to approval of any others.... Thus,

an agency could approve one pending project that

is fully covered by an impact state nt, then take

into consideration the environmental effects of

that existing project when preparing the compre-

hensive statement on the cumulative impact of the

remaining proposals.“

The Second Circuit’s effort to distinguish Kleppe

so that its May 26 decision might be left unchanged

simply cannot be sustained.

Indeed, the principal ground given by the Second

Cireuit for claiming a distinction—namely, its con-

clusion “that interim impact statements drafted in

accordance with presently existing Commission rules

and precedent would necessarily result in impact

analyses inadequate under NEPA” (p. A-76)—seems

to be based on totally misguided clairvoyance. The

Second Circuit did not even have before it any Com-

mission impact statement relating to any particular

facility (such as the Barnwell Separations Facility)

which is or might be subject to consideration in the

course of an individual licensing proceeding.

The secondary ground for distinction claimed by the

Second Circuit—namely, that the proposed utility is

‘clearly tied to the anticipated wide-scale use [of

Mixed Oxide Fuel] and would commit substantial re-

sources to the mixed oxide fuel technology’ (p. A-76)

—totally overlooks the fact that (see p. 7, above)

operation of the Barnwell Separations Facility, while

it would separate out plutonium, would not necessarily

be doing so for use of the plutonium in Mixed Oxide

Fuel. As we had informed the court below, operation

of the Separations Facility would make the plutonium

available either for such use or, in the alternative, for

storage—whichever the Government might determine

would be the more appropriate course.

3. Conflict With Other Appellate Decisions. The

Second Circuit’s decision likewise ignores a host of

other appellate decisions to the effect that an agency

may choose the extent to which it shall carry on its

activities by rulemaking, or by individual adjudica-

tion, or by both. E.g., NLRB v. Bell Aerospace Co.,

416 U.S. 267, 290-295 (1974), and cases cited. In so

doing the Second Circuit rode roughshod over a long

line of precedents holding that agencies need not defer

individual licensing determinations pending the ulti-

mate outcome of related rulemaking proceedings. E. g.,

Federal Communications Commission v. Station WJR,

337 U.S. 265, 272 (1949), expressly sustaining, on this

point, WJR, The Goodwill Station v. Federal Commu-

nications Commission, 174 F.2d 226, 231 (D.C. Cir.

1948) ; Pikes Peak Broadcasting Company v. F. C. C.,

422 F.2d 671, 679-680 (1969), certiorari denied, 395

U.S. 979 (1969).

Moreover—even before this Court spoke on the mat-

ter in Kleppe—recent cases under NEPA had shown

the full propriety of an agency’s determining, on the

basis of public interest considerations, that licenses

should be issued during an interim period while a

somewhat cognate rulemaking proceeding remains in

progress. See especially Union of Concerned Scien-

tists v. Atomic Energy Commission, 499 F.2d 1069

(D.C. Cir. 1974), where the District of Columbia Cir-

cuit held (499 F.2d at 1081-1082) :

If the agency could not consolidate the challenges

to its rules into rulemaking, and meanwhile pro-

ceed with adjudications, UCS and other interven-

ors in other cases would effectively be able to im-

pose a moratorium on licensing, despite the Com-

mission's judgment that it is prompt action that

is «led for.’

Other decisions under NEPA pointing in the same

direction—and hence not to be squared with the See-

ond Cireuit’s decision here—are Nader v. Nuclear

Regulatory Commission, 513 F.2d 1045, 1055 (D.C.

Cir. 1975), and Aberdeen d Rockfish N. Co. v. SCRAP,

422 U.S. 289, 326 (1975). Similarly, in Scientists’ In-

stitute for Public Information, Inc. v. Atomic Energy

Commission, 481 F.2d 1079 (D.C. Cir. 1973), the court

required that the Atomic Energy Commission, to com-

ply with NEPA, should prepare a generic environ-

mental impact statement on the breeder reactor

(LMFBR) program. The Commission thereupon

undertook to prepare such a generic statement, but

nevertheless—after a balancing of public interest con-

siderations in the spirit of Coalition for Safe Nuclear

Power v. United States A. E. C., 463 F.2d 954 (D.C. Cir.

1972)--determined that various specific breeder re-

actor research and demonstration plant project activi-

ties should be continued in the interim; and the court

then refused to halt these projects (D.C. Cir. No. 73-

1773, July 20, 1973).

The numerous court decisions show how clear it is

that here the Commission was acting well within the

mainstream of established law when the Commission

determined to leave open the possibility that some

licenses might be issued during the interim period once

there had been a balancing of factors in the individual

licensing proceeding, as specified in the interim stand-

ards.

4. Prematurity of the Second Circuit’s Making a

Decision, at Least With Respect to Licensing the Barn-

well Separations Facility. It is evident that the See-

ond Cireuit did not have before it any Commission

impact statement relating to the Barnwell Separations

Facility. Nor did it have before it such portions of

the record of the Barnwell Separations Facility indi-

vidual licensing proceeding as have already been de-

veloped (more than 7000 pages of transcript, plus

many exhibits), nor, of course, those portions yet to be

developed. In addition, the Second Cireuit had no

way of knowing how the Commission would apply its

interim standards to the Barnwell Separations Facil-

ity if and when the time came for such determination

to be made. As this Court said in the first nuclear

licensing case which it reviewed, We cannot assume

that the Commission will exceed its powers, or that

these many safeguards to protect the public interest

will not be fully effective.“ Power Reactor Co. v.

Electricians, 367 U.S. 396, 415-416 (1961).

Under the actual circumstances the question whether

it would be lawful for the Commission, on the full ree-

ord of the individual licensing proceeding, to deter-

mine during the interim period to license the Barnwell

Separations Facility for operation was a question not

yet ripe for review. Toilet Goods Association v. Gard-

ner, 387 U.S. 158 (1967); Regional Rail Reorganiza-

tion Act Cases, 419 U.S. 102, 145-148 (1974); see also

Pacific Gas & Electric Co. v. Federal Power Commis-

sion, 506 F.2d 33, 49 (D.C. Cir. 1974).

The Second Cireuit's decision nevertheless to rule

out, in advance, the possibility that such a license might

be issued during the interim period was an improper

assumption of judicial power and forecloses to the

people of the United States an interim option that

ought to remain open. The Second Cireuit's prema-

ture intervention likewise obstructs the choices which

may be available to the United States in diplomatic

initiatives relating to nuclear non-proliferation—

initiatives probably required to be taken long before

that, under established precedents, the Commission's environmental

impact statement on a facility is deemed modified by changes (in-

eluding Licensing Board changes) arising in the course of the

licensing proceedings and hence is not completed until the adjudi-

eat ion occurs in the individual proceeding See Allsed-

Separa-

tions Facility), ALAB-296, NRCI-75/10, p. 671 at and

eited (1975); Niagara Mohawk Power Corporation (Nine

Point Nuclear Station Unit 2), ALAB-264, NRCI-75/4R,

at 371 (1975).

—

8 1

Unless settled principles of judicial self-restraint are

to be disregarded, this serious error of the Second Cir-

cuit ought not to go uncorrected by this Court.

For the foregoing reasons—as well as any additional

reasons presented by other parties who may seek cer-

tiorari to review these portions of the Second Circuit’s

decision—the petition for certiorari should be granted.

Respectfully submitted,

Bennett Boskey

Volpe, Boskey and Lyons

918 16th Street, N.W.

Washington, D. C. 20006

Telephone : (202) 737-6580

Counsel for Allied-General

Nuclear Services, et al.

November 1976

APPENDIX

A-l

APPENDIX A

Nuclear Regulatory Commission's Interim Policy Announce-

ment Published November 14, 1975 (40 F. R. 53056) As

Corrected December 24, 1975 (40 F.R. 59497)

Nucrear Reovtatory CoMMIssIoNn

Mixed Oride Fuel

Scope, Procedures and Schedule for Generic Environmen-

tal Impact Statement and Criteria for Interim Licensing

Actions

In the May 8, 1975 Fepvera. Rratsrzn (40 FR 20142), the

Nuclear Regulatory Commission requested public comment

on the subject of procedures for decisions relating to wide-

seule use of mixed oxide fuel“ in light water nuclear power

reactors, In order to focus attention on the major elements

of the decisions it would have to make, the Commission

stated its provisional views in that notice. The present

notice states the Commission’s conclusions, reached in

light of the extensive public comments received by the

Commission and the Commission’s further deliberations. In

particular, this notice:

Sets forth the Comm'ssion’s determination that the sub-

ject of wide-scale use of mixed oxide fuel in the light water

power reactor fuel cycle requires a full assessment of safe-

guards issues before the Commi. ion’s decision is made;

Specifies the procedures and schedule to be followed

for completion of the environmental impact statement on

wide-scale use of mixed oxide fuel and for the conduct of

the associated hearings; and

Sets forth eriteria under which certain licensing actions

can proceed in the interim prior to the Commission’s deci-

sion on the wide-scale use of mixed oxide fuel.

Fuels containing both plutonium oxide and uranium oxide.

2323

A- 2

SuMMARY

After a careful review of all comments received on its

May 8th provisional views, the Commission has determined

that the subject of wide-scale use of mixed oxide fuel in the

light water power reactor fuel cycle requires a full assess-

ment of safeguards issues before its decision is made. At

the same time, the Commission firmly believes that it is in

the national interest to expedite the decision-making proc-

ess to the extent consistent with sound and full examination

of the issues.

Safeguards measures are those measures employed to

prevent the theft or diversion of special nuclear materials

and to prevent the sabotage of nuclear facilities. The Com-

mission has directed its Staff to prepare, on an accelerated

schedule, and then to circulate for written comment, a safe-

guard supplement to the draft environmental statement

which was issued by the Atomic Energy Commission Staff

in August, 1974. The supplement will include an analysis

of the costs and benefits of alternative safeguards pro-

grams, and a recommendation as to safeguards programs

associated with wide-scale use of mixed oxide fuel. The

Commission has also directed its Staff to expedite prepar-

ation of all aspects of the final environmental statement, in-

eluding safety and environmental matters as well as safe-

guards matters. Propesed rules reflecting the final state-

ment’s analysis of those matters will be published for public

comment by the Commission.

In issuing its provisional views on May 8, the Commis-

sion contemplated that a final environmental statement

would not be completed until late 1976. It now appears

possible to complete the draft safeguards supplement in

early 1976, and to complete all aspects of the final environ-

mental statement in mid-1976.

The Commission has determined that, in the interest of

informed decisionmaking, public hearings will be held on

A-3

the final statement and the proposed rules relating to wide-

scale use. The Commission regards a decision-making

process that is both sound and expeditious to be of crucial

importance, and believes that both considerations can be

compatibly accommodated in its public hearing procedures.

Such an accommodation will be fostered by a legislative-

type hearing using a mixture of written and oral presenta-

tions, in which participants can be examined by the presid-

ing board on relevant policy, factual and technical issues.

The legislative-type hearings will begin as soon as that

L the final statement dealing with health, safety,

and environmental matters is published. Legislative-type

hearings will also be held on safeguards matters when that

aspect of the final statement is completed. The Commis-

sion expects that these hearings will be concluded by the

end of 1976. The legislative-type hearings may be followed

by adjudicatory-type hearings on particular issues if need

for further hearings on such issues is demonstrated to the

Commission. If there is no demonstrated need for adjudi-

catory-type hearings, the Commission expects that its own

final decision will be rendered in early 1977. The Commis-

sion cannot say at this time whether adjudicatory-type

hearings will be in order, or how long they would take if

held—their actual duration being dependent on the number

and complexity of the issues found by the Commission to

need adjudicatory treatment.

The Commission has reappraised the guidelines it set

forth in its provisional views for determining what related

activities could be permitted pending its final decision. The

resulting Commission determinations are summarized be-

low.

Staff Review and Hearings. The Commission has de-

cided that Staff Reviews and hearings relating to fuel re-

cycle activities should continue up to the point of actual

licensing.

A-4

Interim Licensing of Fuel Cycle Facilities. On the mat-

ter of actual licensing, in addition to the eligibility criteria

set forth below, a primary concern of the Commission is to

assure that any license granted in the interim prior to a

final Commission decision on wide-scale use of mixed oxide

fuel is (1) consistent with the Commission’s responsibilities

to protect the public health and safety and the common de-

fense and security, and (2) compatible with environmental

values. Licenses for individual fuel cycle facilities will be

issued in the interim, where warranted, consistent with the

— only after analysis and balaneing of the following

rs:

Whether the activity can be justified from a cost-benefit

standpoint under the National Environmental Policy Act of

1969, without placing primary reliance on an anticipated

favorable decision on wide-scale use of mixed oxide fuel;

Whether the activity would give rise to an irreversible

and irretrievable commitment of resources that would un-

— 1 for the activity substantial safeguards

rnatives t may result from t isi i

. he decision on wide-

The effect of delay in the conduct of th ivi

ä 4 of the activity on the

The individual impact statement or appraisa

propriate, for eack individual fuel reeycle related 32

action subject to the foregoing eligibility criteria will de-

scribe the relationship between the licensing action at issue

and the environmental impact statement on wide-scale use,

— discuss the application of the eriteria to the facts of the

Interim Licensing for Use of Mixed Oxid

actors. With respect to . licensing of 2

fuel in light water nuclear power reactors, the Commission

helieves that use of such fuel could produce useful addi-

tional economic and technical data. Such use would neither

— 2»

— —

_ —— — — ee

A-5

constitute nor markedly contribute to ‘‘wide-seale use’’ be-

cause of the limited mixed oxide fuel fabrication capacity

that will be available. Such licensing will accordingly be

permitted.

Safeguards for Interim Licensing. With regard to exist-

ing licensed activities, while experience and continuing

study may indicate areas where revisions in its regulations

should be made, the Commission is confident that, in light

of the types and numbers of facilities and amounts of ma-

terials involved, the safeguards framework described below

is adequate to enab'e the Commission to carry out its re-

eponsibilities to protect the public health and safety and the

common defense and security.

The Commission is of the same view as regards the in-

terim use of mixed oxide fuel in light water power reactors,

and the associated transportation of reactor fuel. The

Commission believes that those activities, so regulated, im-

nose little or no increase in current leve's of risk associated

with loss or diversion of plutonium, and that current safe-

euarJs will provide adequate protection for interim lieens-

ing of its use. Interim licensing of initial process'ng of

spent fuel to separate its uranium and plutonium constitu-

ents, of conversion of the uranium constituent to uranium

hexafloride, and associated transportation links, can also

proceed on the basis of current safeguards regulations.

With respect to interim licensing of other fuel eycle activi-

ties which may demonstrate eligibility (i.e., plutonium ni-

trate-to-oxide conversion and mixed oxide fuel fabrication,

and associated transportation links), the Commission ex-

pects to publish proposed safeguards rules for the interim

in the Feperat Rectster at the same time as issuance of the

draft safeguards supplement in early 1976. Final safe-

rules for licensing such fuel exele activities in the

interim will be adopted after public comment procedures,

at the time the Final Environmental Statement is issued

(mid-1976).

— — —

A-6

. . — to this Notice sets forth, in sequential

— — projected times for completion of the draft and

mn er gm impact statements ; for publication of

— rules relating to interim licensing and rules re-

garding wide-scale use of mixed oxide fuel; for issuance of

notice of hearing; issi

me por — and for the final Commission decision on

BackdnouN D

3 poten — 1974, the Atomic Energy Commission

— oy that a generic environmental impact

— = be prepared prior to an AEC decision on

hg e use of mixed oxide fuel (aiso referred to as

— — pond fuel) in light water nuclear power re-

—— 12 — On — 1 1974, notice was pub-

imp.ct statement on this matter * fon aan —

suant to the National Environmental Act of 1969 (N EPA),

by the AEC Staff (39 FR 30186). g

The principal conclusion in the draft environm i

ental im-

ne — issued by the AEC Staff was that utilization

plutonium resources as recycle fuel in light water nuclear

power reactors should be approved. The AEC Staff

— — favorable conclusions with respect to matters of

ne and safety, and the environment. The AEC

; 1 in this connection that the total environmental

„ 1. 8 nuclear fuel cycle, using mixed oxide

— slightly reduced, and that the safety of

water power reactor operations would not be ad-

— * affected. The draft statement further reflected

uranium reserves would be extended, and that

a for uranium enrichment vould be reduced. AL

— ——— environmental impact statement did not

- 41 — developed and detailed cost-benefit analysis

— ve safeguards programs, it did review the then

eguards program, presented some cost estimates

— — 2 —

—

—— —

for safeguards, and noted numerous measures that could

contribute to upgrading of that program. The Staff con-

cluded that the safeguards problems would be manageable

and that there did not appear to be any safeguards related

rationale sufficient to delay a decision to permit the use of

mixed oxide fuel for light water power reactors or associ-

ated production activities.

The AEC Staff stated in the draft statement that indica-

tions at that time pointed to decisions on safeguards up-

grading within about one year after issuance of the final

environmental statement. At the time, the AEC Staff ex-

pected that this separate decision on the safeguards meas-

ures necessary for wide-scale use would be made by mid-

1976. However, this estimate did not include any time for

preparation and issuance of draft and final environmental

impact statements on the safeguards measures or any pub-

lie proceeding.

In a January 20, 1975 letter to the Nuclear Regulatory

Commission, the President’s Council on Environmental

Quality expressed the view that, although the draft en-

vironmental statement was well done and reflected a high

quality effort, it was incomplete because it failed to pre-

sent a detailed and comprehensive analysis of the environ-

mental impacts of potential diversio.. ef special nuclear

materials and of alternative safeguards programs to pro-

tect the public from such a threat. The Council believed

that such a presentation should be made by the Nuclear

Regulatory Commission before its final decisions on plu-

tonium recycle. The Council also expressed the view that

the Nuclear Regulatory Commission should take care to

avoid actions which would foreclose safeguards alterna-

tives or which would result in unnecessary „grandfather-

ing“ during the period in which the safeguards issue is

being resolved.

On May 8, 1975, following its consideration of the rele-

vant issues, the Commission published in the Fenerat Reo-

A-8

ISTER its provisional views regarding the decisional course

it would follow on wide-scale use of mixed oxide fuel (40

FR 20142), The Commission’s provisional views were

that, subject to consideration of comments to be received:

(1) A cost-benefit analysis of alternative safeguards

programs should be prepared and set forth in draft and

final environmental impact statements before a Commis-

sion decision is reached on wide-scale use of mixed oxide

fuels in light water nuclear power reactors.

(2) There should be no additional licenses granted for

use of mixed oxide fuel in light water nuclear power reac-

tors in the interim prior to the decision on wide-scale use

except for experimental purposes; and

(3) With respect to light water nuclear power reactor

fuel cycle activities (activities other than nuclear power

reactor construction and operation) which depend for their

justification on wide-scale use of mixed oxide fuel in light

water nuclear power reactors, there should be no additional

licenses granted in the interim which would foreclose fu-

ture safeguards options or result in unnecessary ‘‘grand-

fathering’. This would not preclude the granting of li-

censes in the interim for experimental and/or technical

feasibility purposes.

The Commission indicated in the May 8th Notice that,

in developing its provisional position on these issues, it

took due account of the views of the President’s Council

on Environmental Quality, both in terms of the substance

of those views, and in recognition of the Council’s role in

reviewing Federal activities for consistency with the poli-

cies of NEPA and in formulating guidelines for the prepa-

ration of environmental impact statements.

In the May 8th Notice the Commission requested the

views of interested persons on these provisional views.

Comments were requested in particular on (1) the relative

merits of the Commission’s provisional approach to prepa-

A-9

ration of the generic environmental impact — 1 — =

of the earlier approach adopted by the AEC —

other alternatives, from the standpoint of the — —

policy, factual, and legal considerations ; (2) — — —

question of deferring future licensing actions rela : 0 —

use of mixed oxide fuels should be left for —— 22

individual — — 7 oy saan —

ical — * 7 2

ot ten Commutation guidelines for resolving the individual

licensing actions set forth above. Comments were re-

quested by June 9, 1975.

ay 27, 1975, before the expiration of the original

1 aie the Commission held public meetings with

industry groups an! other interested persons * —

to questions seeking clarification of the May St —

The comment period later was extended until July 24,

ived in response

Over two hundred comments were rece!

to the May 8th Notice. These comments have been —

in the Commission's public document room and are avail-

able for review by the public.“

The comments focused to a major extent on four general

issues:

(1) The desirability of completing a —— 7

is of alternative safeguards programs as

—— decision on the wide-seale use of mixed oxide

fuel in light water nuclear power reactors ;

(2) The desirability of permitting various related li-

censing actions to be taken pending a Commission decision

on wide-scale use;

statements received in response to a Staff

252 —— contained a request that certain

information cubsmitted be withheld from public Atte a piv

prietary information. None of this information is included is

Novice and none of this information has been relied on in reaching

any conclusions in this Notice.

—

A-10

(3) The adequacy of present Commission regulations

to protect against loss or diversion of plutonium associated

with related licensing actions in the interim period; and

(4) The procedures to be utilized by the Commission

in reaching a decision on wide-scale use of mixed oxide

fuel, including hearing procedures.

With respect to those comments which specifically ad-

dressed the first issue noted above, comments from five

utilities, nine environmental groups, four state or local

government agencies, two Senators, one Congressman, one

vendor, and two private law firms indicated that a cost-

benefit analysis of alternative safeguards programs should

be included as part of the Commission decision on wide-

Sale use. Comments from twenty-eight utilities, five ven

dors, two industry/trade associations, one state govern-

ment agency, one federal agency, one engineering company,

one university department, and ten private citizens indi-

cated a belief that such a cost-benefit analysis was not

needed. Comments from five utilities contained a proposal

that the decision on wide-scale use include an analysis that

would place an upper limit on safeguards costs, but that

the detailed cost-benefit analysis be postponed until some

time subsequent to the decision on wide-scale use.

Of those comments specifically addressing the second

issue (the matter of interim licensing), eighteen utilities,

two vendors, one trade association, one state government

agency, and one engineering firm did not believe that any

restrictions on interim licensing were necessary. Thirty-

two utilities, six envirionmental groups, eight vendors

three industry / trade associations, four state and local gov.

ernment agencies, two federal agencies, and five private

citizens indicated that some related licensing actions should

be taken in the interim, subject to certain restrictions and

limitations. Comments from eight private citizens, one

Congressman, one envirionmental group, and one county

A-ll

government urged that no related licensing action be taken

in the interim period. a

Of those who specifically addressed the third issue (a

quacy of present safeguards requirements), thirty utilities,

fifteen vendors and processors, eight private citizens, two

federal agencies, and one state government agency believed

that present safeguards requirements were adequate for

interim licensing; while eight private citizens, one Con-

gressman, one envirionmental group and one county gov-

ernment believed that present regulations were inadequate

for this purpose in the absence of further analysis. On

the final issue (procedures for reaching the ultimate deci-

sion), while there was general agreement on the desira-

bility and feasibility of a prompt decision on the widescale

use of mixed oxide fuel, a wide variety of procedures were

suggested for accomplishing this objective.

The comments received contributed greatly to the Com-

mission’s informed consideration of the issues involved.

Present Uses or Pivtrontem oy tHe Licnt Water

Reactor Furl. Cyrcie

Light water nuclear power reactors (LWRs) have char-

acteristically been fueled with slightly enriched uranium,

i.e., uranium in which the naturally occuring fissile isotope

uranium-235 has been concentrated from — natural abun-

dance percent to about 3 percent through a process

— — Essentially all of the other 97

percent of the uranium in the fuel is the isotope uranium-

A-12

half of that plutonium subsequently fissions ji

contributing about — — — 1—

power plant. In fact, just before expended fuel is dis-

charged from the reactor, more than half the fissions oc-

curing in that fuei are fissions of plutonium rather than

uranium. Thus, all operating uranium-fueled light water

power reactors generate plutonium, some of which is con-

sumed in the reactor without external recycle.

From the early days of the nuclear power j i

this country, electric utilities — 1

operate light water nuclear power reactors contemplated

that the used, or spent fuel discharged from the reactors

would be chemically reprocessed to recover the quantities

of plutonium and uranium that escaped fission in the re

actor, and that the plutonium and uranium so recovered

would be recycled back into fresh reactor fuel. From 1957

until 1972 the AEC carried out an extensive program of

spent fuel recycle research and development at a total cost

of over one hundred million dollars. Direct support bv

' — of this research terminated in mid. 1972. although in-

irect support by the AEC continued through cooperative

efforts with industry whereby AEC supplied plutonium at

reduced cost for demonstration of mixed oxide fuel use.

Industry plans are to carry out the

process in the following — spent fuel recycle

(1) Store the tf

activity ; spent fuel to allow some decay of radio-

(2) Separate plutonium and urani Gestion

product wastes as nitrate solutions; *

(3) Convert the uranium to i :

which is then enriched to increase — —

fissile isotope uranium-235 ; concentration of the

— Convert the uranium hexafluoride to uranium di-

A-13

(5) Convert the plutonium nitrate to plutonium ox-

ide;

(6) Manufacture fuel rods with pellets containing

mixed plutonium and uranium oxides ;

(7) Fabricate fuel elements containing fuel rods of

mixed oxide fuel;

(8) Convert the fission product wastes into forms suit-

able for long term storage;

(9) Transport materials as required by the above

processing, production, or storage operations.

The spent fuel which is the starting point of the overall

recycle process produces highly penetrating radiation and

thus is very hazardous to anyone exposed to it. Accord-

ingly, the separations step, the second of the above steps,

must be earried out behind massive shielding and with the

use of remote operating technology. In the separations

processes the fuel elements are sheared and the fuel mate-

rials dissolved prior to the separation of the constituents.

After the plutonium and uranium nitrate solutions have

been separated from the fission products and purified, the

purified materials no longer contain the highly penetrating

radiation which is inherent to the fission products. Thus,

after the separations step, the plutonium and uranium

products are significantly less radioactive.

The conversion of recovered uranium to uranium hexa-

fluoride, subsequent isotopic enrichment and manufacture

of low enriched uranium oxide fuel would be carried out

in essentially the same type facilities and operations that

are utilized when starting from naturally occurring urani-

um. The basic technology for conversion of plutonium

nitrate to its oxide and for carrying out the manufacture

of mixed oxide fuel has been developed in both government

and industrial plutonium utilization programs. However,

the capacity of the facilities presently licensed for this use

and the quantities of material that have been handled to

— —

A-14

date are of a magnitude far below that whi :

volved in wide-scale use. which would be in-

The conversion of limited quantities of i

wastes into forms suitable 3 long term —

performed by a variety of methods in research and devel-

opment programs. However, only small quantities of

fission product wastes from commercial recycle of spent

—— — gene to date and no commercial scale

8 for the conversion

— pth hy of such wastes have been de-

Mixed oxide fuel and the materials involved i i

cation of the fuel are being transported a te —

erable experience exists with the factors involved in these

transportation arrangements. Wide-scale use of mixed

oxide fuel in light water reactors will require transport of

larger amounts of commercial fuel materials in their vari-

ous forms than are being transported today, but no othe

transportation factors of significance are introduced To

date fission product wastes have not been shipped to facili-

— for long term storage; thus, such shipment, while not

- ged to be markedly different from the shipment of spent

uel itself with regard to health and safety, environmental

and saf i :

hers oe considerations, has not been performed by

At present, three light water n

(Big Rock Point in Michigan, — — mene

1 in Illinois) are licensed to operate with mixed oxide fuel.

The number of mixed oxide fuel rods in these reactors

ranges from less than 0.1 percent in a commercial size

(800 megawatts of electricity) reactor, Quad-Cities 1, to

about eleven percent in a very small (70 megawatts of le-

tricity) reactor, Big Rock Point. .

There are in operation toda

y no plants for reprocessi

— light water reactor spent fuel or mixed oxide fabrics,

on plants of the size contemplated for wide-scale use

—

A-15

However, the Nuclear Fuel Services reprocessing plant at

West Valley, New York, which is presently shut down,

operated between 1966 and 1971, during which period this

plant processed about 640 metric tons of spent fuel of which

about one-half was uranium oxide fuel. Also, there are a

number of small mixed oxide fuel fabrication plants in op-

eration licensed to produce limited quantities of mixed

oxide fuel. Their capacity is a small proportion of the

capacity required to produce mixed oxide fuel for commer-

cial reloads of the nation’s existing light water reactors.

The Commission has pending before it several related

licensing actions. One is Nuclear Fuel Services’ applica-

tion for a permit to construct alterations and expansions

(Docket No. 50-201) at their existing plant. Allied General

Nuclear Services’ proposed separations and uranium con-

version facilities in Barnwell, South Carolina, the construc-

tion of which began in 1970 and 1973, respectively, are near-

ing completion. The separations facility is the subject of

a pending licensing proceeding before the Commission

(Docket No. 50-332, together with a related matter, Docket

No. 70-1729). Allied-General Nuclear Services also has

filed an application for authority to construct and operate

at its Barnwell site a facility for conversion of plutonium

nitrate to plutonium oxide. In addition, an application by

Westinghouse Electric Corporation for a license for a pro-

posed mixed oxide fuel fabrication plant near Anderson,

South Carolina, has been received and is undergoing re-

view by the Commission’s Staff. Other firms have ex-

pressed an interest in various plutonium recycle related

activities, but have not filed any license applications.

GexeraL Pouicy Ossectives or THE COMMISSION

In considering and arriving at its various determina-

tions, the Commission was motivated by several basic pol-

icy objectives in carrying out its responsibilities under the

Atomic Energy Act and NEPA. In keeping with its gen-

oar

A-16

eral approach to regulatory matters, it sought to structure

11 decisional process which will assure thorough considera-

tion of all salient factors and achieve this as expeditiously

as practicable. It was the Commission’s companion objec-

tive that this decisional process result in determinations

that are sufficiently definitive and well-founded to allow

firm planning by the nuclear industry. Further, the Com-

mission was mindful of the need for sound guidelines to

provide for such interim licensing as is compatible with

the Commission’s decisional course and consistent with

the overall public interest.

TREATMENT OF SAFEGUARDS IN THE ENVIRONMENTAL SrarkE-

MENT AND Procepures ror Decision

In light of its review of comments received in

to the May 8th Notice and its further deliberations, and

consistent with the foregoing policy objectives, the Com-

— — — that a decision on wide-scale use of

mixed oxide fuel in light water nuclear power r

should be preceded by a full assessment 124 1

guards issues. The Commission has also concluded that a

cost-benefit analysis of alternative safeguards programs

should be included as a part of the environmental impact

statement on wide-scale use of mixed oxide fuel. It has

directed its staff to prepare a cost-benefit analysis, includ-

ing a recommendation as to the preferred requirements, in

the form of a supplement to the draft statement previously

circulated for comment. This supplement should be com-

pleted in early 1976, and will be cireulated for comment.

The comments on the non-safeguards portions of the

draft statement will be considered and that portion of

the final statement will then be prepared and issued in

early 1976. The remainder of the final environmental

impact statement, which should be completed in mid-1976,

will include a final safeguards cost-benefit analvsi

overall cost-benefit balance. *

— — — ors

A-17

The public will continue to be afforded the opportunity to

participate in the Commission’s decision on wide-scale use,

not only by submission of written comments on the supple-

ment to the draft environmental statement, but also by the

opportunity for participation in public hearings which will

be held on both portions of the final environmental impact

statement. The Commission intends that these hearings

commence following issuance of the relevant portion of the

final impact statement.

The Commission regards a decision-making process which

is both sound and expeditious to be of crucial importance

and believes that both considerations can be compatibly

accommodated in its public hearing procedure. This ac-

commodation will be fostered by legislative-type hearings

on all relevant issues. The Commission will establish a

board to preside at those hearings. The hearing board will

be expected to establish reasonable time limits for the

conduct of the proceedings. All direct testimony for the

legislative-type hearings will be filed in advance. The board

will be expected to question witnesses, and participants

will be permitted to suggest questions to the board, but there

will not be direct cross-examination of participants by other

participants. ‘

It may be that some factual issues cannot be resolved

adequately on the basis of a record developed in this

manner. Following completion of the legislative-type

hearings, participants will have the opportunity to identify

any such issues of fact for which direct cross-examination

by the participants is needed for a sound decision. The

participant requesting cross-examination on one or more

such issues will be expected to demonstrate why the legisla-

tive-type procedures have not proved adequate. After con-

sideration of any such requests and the views of the other

participants thereon, the Commission will determine wheth-

er there is any need for further hearings, with opportunity

for cross-examination, on specified issues. Following the

A-18

hearings, the board will certify the record to the Commis-

sion for use in its decision.

The procedures for hearing will be set forth in more

detail in a Notice of Hearing which will be issued by the

Commission in the near feature.

The Commission expects to publish proposed safeguards

rules governing interim licensing of plutonium conversion

and mixed oxide fuel fabrication activities when the supple-

ment to the draft statement is issued. A written comment

procedure will then be available. These interim require-

ments would be promulgated in final form when the last

= of the generic impact statement is issued in mid-

In addition, the Commission intends to issue proposed

amendments to its rules and regulations relating to the

licensing of wide-scale use of mixed oxide fuels in notices

of proposed rulemaking to be published in the Freprra.

Recister at about the time relevant portions of the impact

statement are completed. These proposed amendments will

address safety, environmental, and safeguards matters asso-

ciated with wide-scale use of mixed oxide fuel.

In addition to the usual opportunity for written public

comment on these rules, an opportunity will be afforded

for consideration of them during the hearing process. The

Commission intends to promulgate appropriate rules in final

form at the time of its final decision.

InTer™ Reviews

Only a few light water nuclear power reactors in the

United States use any mixed oxide fuel, domestic fuel

fabricators produce little mixed oxide fuel on a commercial

basis, and no domestic reprocessing of commercial light

water power reactor spent fuel occurs at present. If the

applicant schedule were met and the Commission author-

ized its operation, the fuel separations and uranium con-

3 K 2 A

— 2 ᷑ Ʒ — — —

—

4-19

version facilities at the Barnwell plant (with estimated

processing capacity of about 1500 metric tons of spent fuel

per year) could start up in late 1976 to early 1977. The

recovered uranium would then have to be chemically con-

verted, reenriched and fabricated into fuel before it could

be recycled back into light water power reactors. Allied-

General Nuclear Services has filed an application containing

preliminary design information for a plant at Barnwell in

which plutonium nitrate would be converted to plutonium

oxide. If authorization were granted by the Commission for

construction and operation of the plant, it is unlikely that

such conversion operations could commence any earlier than

mid-1979. The proposed modified and expanded NFS re-

processing plant, including plutonium and uranium con-

version facilities (with estimated reprocessing capacity of

about 750 metrie tons of spent fuel per year) is still under

design and, if authorized, is not expected to be in operation

before about 1982. No construction has commenced on the

proposed Westinghouse mixed oxide fabrication plant (200-

400 metrie tons of mixed oxide fuel per year) and it is not

likely that the plant will, if authorized, be in operation

before 1980. Other plutonium recycle related plants may be

in the planning stage ; but license applications for activities

of this type have been filed only for the three plants noted

above.

Given these practical limitations on the availibility of

mixed oxide fuel in the United States before the early to

mid-1980’s—long after the Commission’s decision will have

been made—two limited questions are presented at this

time for Commission consideration: first, whether and, if

so, to what extent Staff reviews and public hearings re-

garding related license applications should be commenced

or continued prior to the Commission decision on the wide-

Under 10 CFR § 71.42, after June 17, 1978, plutonium in ex-

cess of 20 curies per package must be shipped in a solid form (i.e.,

plutonium oxide rather than nitrate solution).

— eee + ee

= PELL ANB Hy

A-20

scale use of mixed oxide fuel; and second, whether the

Commission should, in the exercise of its regulatory respon-

sibilities, issue licenses or other approvals for fuel recycle

activities in this interim period. These issues are treated

in turn.

Staff Reviews and Public Hearings. Staff reviews of the

various license applications described above are now in

process. The Commission believes that these reviews

should continue and that Staff reviews can also com-

mence and continue with respect to any future fuel recycle

related license applications that may be filed during the

interim prior to the Commission decision on the wide-scale

use of mixed oxide fuel. Any such applications must

show compliance with detailed and stringent health and

safety and environmental requirements, independent of

generic issues regarding safeguards for the wide-scale

use of mixed oxide fuel; and it would serve no useful

purpose to deiay consideration of these factors until after

the ultimate decision. Continuation of Staff reviews in the

interim would also serve to facilitate early identification

of any significant problems, or areas in which plant design

might be improved or additional data should be obtained.

It is recognized, of course, that Staff Safety Evaluations

or Environmental Impact Statements may need to be sup-

plemented in light of the Commission’s final decision

should that decision be favorable, but this is a matter

that can be determined once that decision has been made.

The Commission also has carefully considered whether

public proceedings should be commenced or continued

short of license issuance for all related license applica-

tions in the interim period. The Commission has con-

cluded that the considerations discussed above also are

applicable to the initiation or continuation of formal public

proceedings. However, in recognition of the fact that such

proceedings entail commitments of resources by persons

~ » ae

ARE tS BN a 22 *

A-21

other than the Commission’s Staff, the Commission has

decided that no rigid requirement for proceeding on all

issues should be adopted. Rather, the Commission believes

that any required formal public proceedings should be

initiated, but that the individual Atomic Safety and Li-

censing Boards should decide, within the framework of

the guidance set forth below, when evidentiary public

hearings should be held and partial decisions rendered on

specific issues. In making such decisions, the licensing

boards should consider: (1) the degree of likelihood that

any early findings on the issue(s) would retain their valid-

ity following the Commission’s final decision on wide-scale

use of mixed oxide fuel and implementing regulations ; and

(2) the possible effect on the public interest and the liti-

gants in having an early, if not necessarily conclusive,

resolution of the issue(s).

Interm™ LICENSING

Aside from the issue of whether Staff reviews and public

hearings should be continued, the Commission also consid-

ered the question of whether, in the exercise of its regula-

{ory responsibilities, it should issne licenses or other ap-

provals for limited fuel recycle activites in the interim pe-

riod.

The Commission has concluded that interim licenses may

be issued for fuel recycle related activities; eligibility for

consideration of such licensing will depend on criteria which

call for an analysis and balancing of specified factors. These

criteria, which will be explained more fully below, deal with

whether the activity can be justified from a NEPA cost-

benefit standpoint without placing primary reliance on an

anticipated favorable Commission decision on wide-scale use

of mixed oxide fuel, whether the activity would unjustifiably

foreclose substantial safeguards alternatives for the activ-

ity, and the effect of delay in the conduct of the activity on

the overall public interest. The Commission also has con-

A-22

cluded that use of mixed oxide fuel in light water nuclear

power reactors, which is in any event limited by practical

constraints, may be permitted in the interim. For interim

licensing of certain types of fuel cycle activities augmented

safeguards requirements may be imposed as discussed be-

low.

In reaching its general conclusion that individual interim

licenses may be issued where warranted, and under the

specific conditions discussed in this notice, the Commission

assessed the likely benefits of allowing such interim licens-

ing as well as the possible adverse impacts. Here, as in

other decisional areas, the need for careful balance was evi-

dent. While the Commission is properly mindful that cer-

tain licensing actions have the potential for foreclosing sub-

sequent alternatives, it cannot disregard the equally hard

reality that inaction or a blanket prohibition on fuel re-

cycle related licensing actions could also foreclose or sub-

stantially impede realization of energy alternatives which

may contribute significantly to meeting national needs.

PRoTection oF THE Pusiic HEALTH AND Sarety, tHe Com-

MON Derense AND Security AND THE ENVIRONMENT

The Commission believes that any public health and

safety environmental issues associated with interim licens-

ing can be addressed adequately under the Commission’s

regulations within the context of the reviews of the individ-

ual license applications. The Commission is of the view

that interim licensing of a particular activity would not

foreclose for that activity significant health and safety or

environmental alternatives that may result from the final

decision on wide-scale use of mixed oxide fuel. This con-

fidence is based on the health and safety and environmental

conclusions in the August 21, 1974 draft environmental im-

pact statement, the Comments received thereon (including

the comments of the Council on Environmental Quality),

A-23

and the comments received on the Commission’s provisional

views of May 8, 1975.*

ommission is also of the view that, for the reasons

ann — and because of the limited number and type of

plants involved, interim licensing of particular projects

prior to completion of the generic environmental impact

statement would not result in the overlooking of any eumu-

lative health and safety or environmental impacts or in the

foreclosure of alternatives to other projects that could only

be addressed in the generic environmental statement.

reasons the Commission believes that in-

4— — not likely to result in such a substantial

further commitment of resources that the final decision on

the costs and benefits of the public health and safety and

environmental aspects of wide-scale use of mixed oxide

fuel would be significantly affected or that generic determin-

ations on such aspects would be foreclosed. The matter of

foreclosure of safeguards alternatives is addressed below.

Overall Public Interest. Broad public interest conisdera-

tions must be weighed in determining the appropriateness

of interim licensing. Whether the Commission decision on

wide-scale use of mixed oxide fuel is favorable or unfavor-

able, an absolute prohibition on the conduct of any related

activities in the interim could result in the disruption or

cessation of planning as well as the production of usef ul

data. Such a prohibition could result in potentially serious

delays in exploring alternatives which could contribute to

meeting the nation’s energy needs. This could impose future

economic penalties on the American public through in-

creased costs to electric utilities caused by delaying the use

of resources available in spent fuel and requiring additional

The so-called plutonium bot particle’’ matter, which is the

subject of a petition for rulemaking that is pending before the

Commission, is expected t: be resolved in the near future. Docket

No. PRM 20-5.

4-24

spent fuel storage facilities that otherwise would not be

needed.

The Commission, therefore, has concluded that it will be

in the public interest to permit interim licensing under

interim licensing eligibility criteria which are set forth

below.

Foreclosure of Safeguards Alternatives. In view of the

limited number of fuel recycle related license applications,

the Commission believes that any interim licensing is highly

unlikely to result in such a substantial further commitment

of resources that the decision on the costs and benefits of

safeguards measures appropriate for widescale use of

mixed oxide fuel would be significantly affected or that

generic safeguards determinations would be foreclosed.

It is recognized that interim licensing of a particular

project could, depending on the circumstances, have a

tendency to foreclose the later adoption of saf vuards al-

ternatives to the particular project. Of course, where sub-

stantial commitments of resources have already been made

to a particular project, additional commitments to the

project are far less likely to have this result. With respect

to the use of mixed oxide fuel in reactors, it is not likely

that significant desiga changes would be required to ac-

commodate loading of mixed oxide fuel, and the fuel can

always be removed and the reactor refueled with uranium

fuel. Thus, authorization for use of mixed oxide fuel in

light water power reactors in the interim is not likely to

foreclose safeguards alternatives significantly. The interim

licensing criteria refleet these considerations as well.

Any related licenses that may be issued by the Commis-

sion in the interim prior to the final decision on the wide-

seale use of mixed oxide fuel must also include adequate

measures to protect against loss or diversion of the quan-

tities of plutonium that may be involved. These interim

safeguards requirements are discussed later in this notice.

Dependency on Wide-Scale Use. Potentially significant

benefits associated with inte: im licensing include the pro-

A-25

duction of useful additional economic and technical data

regarding the operation of reprocessing facilities and other

fuel cycle plants and the operation of reactors with mixed

oxide, the value of the fuel that could be recovered in re-

processing and recycled into fresh reactor fuel, and amelio-

ration of a possible shortage of spent fuel storage capacity.

Major Commission actions, such as licensing the opera-

tion of commercial fuel reprocessing facilities or operation

of fuel element fabrication plants, require preparation of

an environmental impact statement under NEPA. Such an

impact statement would set forth a conclusion whether the

environmental costs that are associated with the project are

justified in light of the benefits. The benefits described

above could, depending on the cireumstances of the case, be

sufficient under NEPA to offset the environmental costs of

a particular project. However, it is possible that some

projects may be so integrally related to the wide-scale use

of mixed oxide fuel that the —— costs og

with the project could only be justi y assuming

—. — mixed oxide fuel will take place. In the

Commission's view, the degree of dependency of a parti-

cular project on a favorable decision on the wide-scale use

of mixed oxide fuel should be assessed along with other

relevant considerations, in determining whether any in-

terim license for the projects should be issued.

IxrERIM Licensine Exicremity Crarreria

The Commission has determined that whether specific

fuel recycle related activities (as defined below) should be

authorized in the interim will be determined within the

context of the individual licensing proceedings on the basis

of consideration and balancing of the following factors:

(1) Whether the activity can be justified, from a NEPA

cost-benefit standpoint, without placing primary reliance on

A-26

an anticipated favorable Commission decision on wide-scale

use of mixed oxide fuel;

(2) Whether the activity would give rise to an irrever-

sible and irretrievable commitment of resources that would

unjustifiably foreclose for the activity substantial safe-

guards alternatives that may result from the decision on

wide-scale use; and

(3) The effect of delay in the conduct of the activity on

overall public interest.

These criteria will be applied to ali applications for li-

censes or permits or amendments thereto for fuel recycle

related activities (other than reactor construction and op-

eration), such as commercial nuclear fuel reprocessing and

mixed oxide fuel fabrication, and all regular actions that

would have the effect of permitting commencement of con-

struction of any such light water nuclear power fuel cycle

plants.“

Operating licenses and amendments to operating licenses

may be issued authorizing use of mixed oxide fuel in light

water nuclear power reactors without case-by-case applica-

tion of the eligibility criteria for fuel cycle activities de-

scribed above. The Commission believes that this use of

mixed oxide fuel in the interim could produce useful addi-

tional economic and technical data. This concept was re-

* Under the Commission’s regulations, applicants for licenses to

conduct activities involving use of nuclear materials subject to

section 102(2)(C) of NEPA (such as plutonium fuel fabrication)

may commence construction of the plant within which the activities

are to be conducted upon issuance of the final Staff environmental

impact statement and Commission approval of the design bases and

quality assurance program for principal structures, systems, and

components of the plant. (10 CFR § 70.23(a)(7) and 70.23(b) ).

The Commission believes that commencement of construction of any

such related plants should be subject to the same interim licensing

eligibility criteria as apply to those fuel cycle facilities which re-

quire issuance of construction permits.

——

—— —

A-27

flected in the Commission’s provisional views as set forth in

the May 8th Notice, which favored permitting continued

use of mixed oxide fuel in reactors for experimental pur-

poses. Significant design changes in light water reactors

will not be required for likely uses of mixed oxide fuel ele-

ments, which can readily be replaced with uranium fuel

should circumstances require. As noted previously, all

operating uranium-fueled light water power reactors gen-

erate plutonium, some of which is consumed in the reactor

without external recycle. In the interest of obtaining a

broader data base, no limits will be placed on the number of

light water reactors for which such authorizations may be

granted. The Commission is mindful, however, that the use

of mixed oxide fuel in reactors during the interim will

necessarily fall far short of wide-scale use, because of the

limited mixed oxide fue) fabrication capacity that will be

available. The Commission expects to make its decision on

wide-scale use well before this situation could significantly

change.

Applications for export or import of mixed oxide fuels,

or for import of plutonium for domestic or re-export use

in mixed oxide fuels, will be similarly constrained during

the interim period by the absence of facilities here or

abroad capable of processing and fabricating mixed oxide

fuels at levels approaching wide-scale use. Accordingly,

here too, no special measures are now required.

INTERN LiIoENSIN Gd SaFEGUARDS

As is the case with all licenses issued by the Commission,

any interim license that may be issued for nuclear power

reactor fuel cycle activities will be subject (by regulation

or order) to possible additional safeguards requirements.

All interim activities that may be authorized pursuant to

the above eligibility criteria will be conducted at the risk

of the applicant, and be expressly subject“ amendment,

suspension, or revocation in light of the Commission deci-

sion on wide-scale use of mixed oxide fuel.

A-28

The Commission’s program for safeguarding nuclear fa-

cilities and materials involves continual review and regula-

tory improvements. Current safeguards regulations are set

forth in 10 CFR Parts 70 and 73. The regulations in Part

70 provide for material accounting and control require-

ments with respect to facility organization, material con-

trol arrangements, accountability measurements, statistical

controls, inventory methods, shipping and receiving pro-

cedures, material storage practices, records and reports,

and management control.

The Commission's current regulations in 10 CFR Part 73

provide requirements for the physical security and protee—

tion of fixed sites and transportation involving strategic

quantities of nuclear materials, Physical security require-

ments for protecting fixed sites include the establishment

and training of a security organization (including armed

guards), provision of physical barriers, establishment of

access controls, use of intrusion alarms, arrangements for

communication with response forces, and establishment of

response plans.

The Commission has also published a notice in the Fep-

rRAL Reotsrer that it is considering strengthening its regu-

lations in 10 CFR Part 70 by providing for explicit limits

for material balance uncertainty and by setting forth re-

quirements for prompt action when an excessive material

balance uncertainty oceurs (40 FR 30133). The Commis-

sion has further proposed amendments to its regulations in

10 CFR Part 73 which would provide for an increased level

of physical protection for shipments by licensees of special

nuclear material of high strategie value (39 FR 40036),

would identify particular measures to be taken for the pro-

tection of nuclear power reactors against industrial sabo-

tage (39 FR 40088), and would require advance notice to

the Commission of shipments involving certain quantities of

special nuclear material and notification of arrival of such

shipments at their final destinations (40 FR 15098).

A-29

The next major milestones in this process of review and

improvement in safeguards are expected to be the comple-

tion of the Federal Security Agency Study mandated by

section 204(b)(2)(C) of the Energy Reorganization Act of

1974, the completion of the Nuclear Energy Center Site

Survey mandated by section 207 of the same Act, and the

issuance of the draft safeguards supplement to the environ-

mental impact statement.

The Commission’s regulations in 10 CFR Parts 70 and 73

described briefly above are applied in the reviews of indi-

vidual license and permit applications. License conditions

then are developed and imposed which translate the regu-

lations into specific requirements and limitations which are

tailored to fit the particular type of plant or facility in-

volved.

With regard to exisiing licensed activities, while experi-

ence and continuing study may indicate areas where revi-

sions in its regulations should be made, the Commission is

confident that, in light of the types and numbers of facilities

and amounts of materials involved, the above-described

safeguards framework is adequate to enable the Commis-

sion to cary out its responsibilities to protect the public

health and safety and the common defense and security.

The Commission is of the same view as regards the in-

terim use of mixed oxide fuel in light water power reactors,

and the associated transportation of reactor fuel. The

Commission believes that those activities, so regulated, im-

pose little or no increase in current levels of risk associated

with loss or diversion of plutonium. Once irradiation has

begun in the reactor, mixed oxide fuel elements present no

considerations different from uranium elements—which, as

already indicated, immediately begin to generate and use

plutonium once loaded in the reactor core. Before that

point, the plutonium in the fresh fuel element is highly

dilute and dispersed, and encased within metal fuel rods.

Shipments are made in heavy assemblies, and recovery of

A-30

the plutonium would involve a complex and multi-stage

chemical process.

The Commission is confident that the safeguards frame-

work of existing and proposed regulations provides an ade-

quate basis for interim licensing of initial processing of

spent fuel to separate its uranium and plutonium constitu-

ents, of conversion of the uranium constituent to uranium

hexafluoride, and of the transportation links associated with

these activities. The nuclear materials in a separation

plant, until the very final processing stages, are in a chemi-

cal and physical form, and behind a containment, which

make theft or diversion both difficult and personally hazard-

ous, since they remain highly radioactive at these stages.

Even at the final stages of the process, the fissile compon-

ents are not in a form suitable for fabrication of nuclear ex-

plosives. Moreover, current regulations provide adequate

bases for security of these types of plants. Reprocessing

plants are designed and constructed with heavy barriers

which limit access to special nuclear material and thus it is

unlikely that major adjustments in protection for such

plants will be required following the Commission’s decision

on wide-scale use. Finally, while material control and ac-

counting problems will be introduced with regard to the

plutonium inventory in the separation plants, acceptable

levels of accountability can be accomplished under present

regulations by strengthcning plant-specific material balance

controls.

The Commission is of the further view that licensing of

applications for plutonium conversion and mixed oxide fuel

fabrication, and the associated transportation links, should

await requirements which can best be established in light of

the comprehensive evaluation of safeguards in the supple-

ment to the environmental impact statement. While it ap-

pears, on the basis of experience to date and information

derived from the ongoing safeguards studies, that reason-

able and adequate safeguards measures can be developed

ee me

A-31

for the interim licensing of these activities, the Commission

has decided that the particular safeguards regulations for

such activities should await completion of the additional

studies. The regulations thereafter established, in the man-

ner set forth below, will serve as the basis for licensing

reviews and for such licensing decisions on facilities of this

type as may take place during the interim period,

The particular safeguards regulations for the foregoing

will be the subject of detailed discussion in a notice that will

be published in the FEDERAL. RectsTer at about the same time

as issuance of the draft safeguards supplement to the en-

vironmental impact statement (early 1976).

Promulgation of any additional regulations for interim

use will take place only after public procedure in accordance

with section 553 of title 5 of the United States Code, and

receipt and analysis of comments on the draft supplement.

The final determination on such regulations will be made by

the Commission at about the same time (mid-1976) as is-

suance of the final portion of the environmental impact

statement, which will include the final cost-benefit analysis.

These particular safeguards regulations for licensing of

plutonium conversion and mixed oxide fuel fabrication

would be interim in nature, would apply only to reviews of

and decisions on applications for licenses for such facilities

during the limited time preceeding a Commission decision

on wide-scale use and the requirements appropriate thereto,

and would be subject to modification in light of the final

Commission decision on those matters. As reflected by the

earlier-recited status of facility applications before NRC,

any licensing that may be authorized prior to the final

Commission decision would be limited, as a practical mat-

ter to a few plants. The interim licensing eligibility criteria

are designed to assure consideration of both the justifica-

tion for such licensing, and whether the activity under

review would unjustifiably foreclose for the activity sub-

— —— —— — —

A-32

stantial safeguards alternatives that may result from the

Commission’s final decision on wideseale use of mixed oxide

fuel.

These eligibility criteria and safeguards limitations are

in addition to any other applicable Commission licensing

requirements set forth in the Commission’s regulations. In

particular, the Commission expects that individual environ-

mental impact statements or appraisals, as appropriate,

would be prepared for fuel recycle related licensing actions

subject to the eligibility criteria. The individual impact

statement or appraisal would describe the relationship be-

tween the licensing action at issue and the environmental

impact statement on wide-scale use, and discuss the applica-

tion of the criteria to the facts of the case.

The Commission believes that the determinations herein

are responsive to the need for sound and timely regulatory

decisions. The comments received in response to the May

8th Fepera Recister notice served to provide a construc-

tive focus on the complex issues requiring resolution and

contributed greatly to the Commission’s informed consid-

eration of those issues.

Dated at Washington, D.C. this 11th day of November,

1975.

For the Nuclear Regulatory Commission.

Saul. J. Cm x,

Secretary of the Commission.

———Uꝛ Sat

MO A BAL

A-33

ArrENDIxX

Prosectep Scuepute or Events Leapinc to ComMIssIon

Decision on Wipe-Scate Use or Mrxep Ox Ful.

Late 1975—Notice of hearing on issues associated with

health and safety, safeguards, and environmental matters

arising from wide-scale use of mixed oxide fuel in light

water reactors.

Early 1976—Publish proposed environmental and health

and safety rules regarding wide-scale use;

Issue draft cost-benefit analysis of alternative safeguards

programs as a supplement to the Generic Environmental

Statement on Mixed Oxide Fuel;

Publish proposed safeguards rules for interim licensing

of plutonium conversion and mixed oxide fuel fabrication

activities;

Issue portion of final environmental statement dealing

with health and safety and environmental matters.

Mid-1976— Issue final safeguards rules for interim li-

censing of plutonium conversion and mixed oxide fuel

fabrication;

Issue final safeguards supplement and overall cost-benefit

analysis to complete the final environmental statement;

Publish proposed safeguards rules regarding wide-scale

use of mixed oxide fuel.

Early 1977—Earliest possible decision on wide-scale use

and publication of final rules for wide-scale use of mixed

oxide fuel.“

! Legislative-type hearings will begin as soon as practicable after

issuance of the partial final environmental statement on health

and safety and environmental matters. Assuming adjudicatory

hearings are not required a Commission decision on wide-scale use

of recycled plutonium could be reached by early 1977. The Com-

mission cannot say at this time whether adjudicatory-type hear-

ings will be in order, or how long they will take if held—their

actual duration being dependent on the number and complexity of

the issues determined by the Commission as needing adjudicatory

treatment.

A-34

APPENDIX B

UNITED STATES COURT OF APPEALS,

SECOND CIRCUIT.

Nos. 963, 1051, Dockets 75-4276, 75-4278.

Naturau Resources Derense Counct, Ixc., ET XL.,

Petitioners,

Tue Unrrep Srates NUclzaR RrdulAronr Commission and

Tue UNITED Srates or America, Respondents,

Alp GENERAL Nuciear Services, et AL., Intervenors.

Argued April 12, 1976.

Decided May 26, 1976.

As Amended Aug. 12, 1976.

Anthony Z. Roisman, Washington, D. C. (Roisman, Kes-

ler & Cashdan, Washington, D. C., of counsel), and J. Gus-

tave Speth, Washington, D. C., for petitioners Natural Re-

sources Defense Council, Inc., and others.

Louis J. Lefkowitz, Atty. Gen. of the State of New York,

New York City (Samuel A. Hirshowitz, First Asst. Atty.

Gen., Philip Weinberg, John F. Shea, III, and Richard G.

Berger, Asst. Attys. Gen., New York City, of counsel), for

petitioner the State of New York.

Peter L. Strauss, Gen. Counsel, Nuclear Regulatory

Commission, Washington, D. C. (Stephen F. Eilperin,

Asst. Gen. Counsel, Steven P. Goldberg, Atty., “Nuclear

Regulatory Commissiom, and Peter R. Taft, Asst. Atty.

Gen., and Edmund B. Clark, Atty., U. S. Dept. of Justice,

Washington, D. C.), for respondents.

Bennett Boskey, Volpe, Boskey & Lyons, Washington,

D. C., for intervenors Allied-General Nuclear Services, and

others.

— a w

—ͤ—ũ—— — ——

** „

— 1

A-35

George C. Freeman, Jr., Donald P. Irwin, and James N.

Christman, Richmond, Va. (Hunton, Williams, Gay & Gib-

son, Richmond, Va., and Alvin G. Kalmanson, New York

City, of counsel), Henry V. Nickel, Michael B. Barr, Wash-

ington, D. C. (LeBoeuf, Lamb, Leiby & MacRae, and Arvin

E. Upton, Washington, D. C., of counsel), for intervenors

Baltimore Gas & Electric Co., and others, Commonwealth

Edison Co., and others, and The Babcock and Wilcox Co.

Robert Lowenstein, Washington, D. C. (Lowenstein,

Newman, Reis & Axeirad, Maurice Axelrad, Michael A.

Bauser and Linda L. Hodge, Washington, D. C., of coun-

sel), for intervenor Nuclear Fuel Services, Inc.

Milton Waxenfeld, New York City (Weisman, Celler,

Spett, Modlin, Wertheimer & Schlesinger, New York City,

and Elliot S. Katz, Pittsburgh, Pa., of counsel), for inter-

venor Westinghouse Electric Corp.

Before CLank, Associate Justice, and Pierce and Owen,

District Judges.*

Pierce, District Judge:

Petitioners Natural Resources Defense Council, Inc., five

other environmental groups, and the State of New York

seek review of an order of the respondent, the United

States Nuclear Regulatory Commission, dated November

11, 1975 and published at 40 Fed.Reg. 53056 on November

14, 1975. The order below sets forth procedures and sched-

ules which the Commission will follow for the completion

of its generic environmental impact statement on uranium

and plutonium mixed oxide fuel (“‘GESMO’’) and for the

conduct of associated hearings. The order also sets forth

criteria under which the Commission will proceed to grant

interim licenses for commercial utilization of mixed oxide

* Tom C. Clark, Associate Justice, United States Supreme Court,

Retired, Lawrence W. Pierce, and Richard Owen, United States

District Judges for the Southern District of New York, sitting by

designation.

A-36

fuel related activities during the period prior to the com-

pletion of the GESMO study and the Commission’s final

decision on wide-scale use of mixed oxide fuel in light water

nuclear power reactors.“ The November 11, 1975 order is

the result of comments solicited by the Commission in re-

sponse to a prior Notice on the subject of mixed oxide fuel,

published at 40 Fed.Reg. 20142 (May 8, 1975). Petitioners

seek review in this Court pursuant to 28 U.S.C. § 2342(4)

and 42 U.S.C. § 2239.

1 See 40 Fed. Reg. at 53056-57. ‘‘GESMO”’ is the Commission’s

acronym for its generic environmental statement on mixed oxide

fuel. GESMO differs from a standard environmental impact state-

ment in that it addresses the generic or overall considerations of

the undertaking rather than analyzing only the isolated impact of

the undertaking on one given area. As used herein, Draft

GESMO' is the preliminary report issued August 21, 1974, Final

GESMO’’ is the completed version of that report to be issued in

1976, and the ‘“‘GESMO supplement“ or the ‘‘safeguards supple-

ment’’ is a complementary study of questions relating to possible

sabotage, theft and diversion of plutonium, undertaken by the

Commission in response to the request of the Council on Environ-

mental Quality. Neither the Final GESMO nor the GESMO sup-

plement have yet been issued.

228 U.S.C. § 2342 provides in part as follows:

The court of appeals has exclusive jurisdiction to enjoin, set

aside, suspend (in whole or in part), or to determine the

validity of

* a 8 * 0 0

**(4) all final orders of the Atomic Energy Commission made

reviewable by section 2239 of title 42

42 U.S.C. § 2239 provides as follows:

(a) In any proceeding under this chapter, for the granting,

suspending, revoking, or amending of any license or construc-

tion permit, or application to transfer control, and in any

proceeding for the issuance or modification of rules and regu-

lations dealing with the activities of licensees, and in any pro-

int for the payment of compensation, an award or royal-

ties under sections 2183, 2187, 2236 (e) or 2238 of this title,

the Commission shall grant a hearing upon the request of any

person whose interest may be affected by the proceeding, and

ance

A-37

Petitioners ask this Court to set aside the Commission’s

November 11, 1975 order on the ground that the decision

to allow interim licensing of the use of plutonium in light

water reactors and interim licensing of related nuclear fuel

recycle activities prior to the completion of the GESMO

study, and prior to a final decision thereon, is in violation

of the National Environmental Policy Act of 1969

(‘‘NEPA’’), 42 U.S.C. §§ 4321 et seq.,® the Atomic Energy

shall admit any such person as a party to such proceeding.

The Commission shall hold a hearing after thirty days’ notice

and publication once in the Federal Register, on each applica-

tion under section 2133 or 2134(b) of this title for a construe-

tion permit for a facility, and on any application under sec-

tion 2134(c) of this title for a construction permit for a test-

ing facility. In cases where such a construction permit has

been issued following the holding of such a hearing, the Com-

mission may, in the absence of a request therefor by any person

whose interest may be affected, issue an operating license or an

amendment to a construction permit or an amendment to an

operating license without a hearing, but u thirty days’

notice and publication once in the Federal Register of its

intent to do so. The Commission may dispense with such

thirty days’ notice and publication with respect to any appli-

eation for an amendment to a construction permit or an amend-

ment to an operating license upon a determination by the

Commission that the amendn t involves no significant haz-

ards consideration.

(b) Any final order entered in any proceeding of the kind

specified in subsection (a) of this section shall be subject to

judicial review in the manner prescribed in the Act of De-

cember 29, 1950, as amended, and to the provisions of section

10 of the Administrative Procedure Act, as amended.”’

42 U.S.C. § 4332 provides in part as follows:

The Congress authorizes and directs that, to the fullest ex-

tent : (1) the policies, regulations, and public laws of

the United States shall be interpreted and administered in

accordance with the policies set forth in this chapter, and

(2) all agencies of the Federal Government shall—

„A) utilize a systematic, interdisciplinary approach which

will insure the integrated use of the natural and social sciences

and the environmental design arts in planning and in decision-

making which may have an impact on man's environment ;

„(B) identify and develop methods and procedures, in con-

sultation with the Council on Environmental Quality estab-

A-38

Act, 42 U.S.C. §§ 2201 et seq. and the Energy Reorganiza-

tion Act of 1974, 42 U.S.C. §§ 5841 et seq. Petitioners also

claim that the order violates NEPA by bifureating the on-

going environmental review, by providing that the final

impact statement will be issued in two parts at different

times, and by setting forth procedures whereby the en-

vironmental issues will be addressed in hearings which are

lished by subchapter II of this chapter, which will insure that

presently unquantified environmental amenities and values

may be given appropriate consideration in decisionmaking

along with economic and technical considerations ;

““(C) inelude in every recommendation or report on pro-

posals for legislation and other major Federal actions signifi-

cantly affecting the quality of the human environment, a de-

tailed statement by the responsible official on—

(i) the environmental impact of the proposed action,

* (ii) any adverse environmental effects which cannot be

avoided should the proposal be implemented,

(in) alternatives to the proposed action,

(iv) the relationship between local short-term uses of man's

environment and the maintenance and enhancement of long-

term productivity, and

() any irreversible and irretrievable commitments of re-

sources which would be involved in the proposed action should

it be implemented.

Prior to making any detailed statement, the responsible Fed-

eral official shall consult with and obtain the comments of any

Federal agency which has jurisdiction by law or special exper-

tise with respect to any environmental impact involved. Copies

of such statement and the comments and views of the appro-

priate Federal, State, and local agencies, which are authorized

to develop and enforce environmental standards shall be made

available to the President, the Council on Environmental

Quality and to the public as provided by section 552 of Title 5,

and shall accompany the proposal through the existing agency

review processes ;

0 0 eo 0 @ @

(E study, develop, and describe appropriate alternatives to

recommended courses of action in any proposal which involves

unresolved conflicts concerning alternative uses of available

resources;

— ᷣ —éum:-u.— T / 1%ö .

A-39

to be primarily legislative ratner than adjudicatory in

character. The Commission urges that the order under

review is not a final order’’ within the meaning of 28

U.S.C. § 2342 and 42 U.S.C. § 2239, that the decision to

allow interim licensing does not violate NEPA or the en-

ergy acts, and that its pronouncements concerning proce-

dures and schedules are matters within its diseretion. The

intervenors, representatives of the nuclear power industry,

similarly argue that the order is not final“ and that it

does not violate NEPA.

We agree with petitioners that the order below is final

and reviewable in this Court. We agree with the Commis-

sion that the procedures and schedules set forth in the

order are matters within its diseretion. However, we find

that the portion of the order which allows the Commission

to proceed to grant interim commercial licenses for the

use of mixed oxide fuel and related activities prior to the

completion of the GESMO study and the final decision on

wide-scale use would allow the commencement of major

federal action without the benefit of an adequate environ-

mental impact statement. Accordingly, we conclude that

the decision to proceed to interim licensing is in violation

of the NEPA, and that portion of the order is reversed

and remanded.

I. The Plutonium Recycle

The vast majority of nuclear power plants presently in

operation in this Nation are fueled by fissionable uranium.

These reactors start with uranium-235, and through the

fission process, release large amounts of energy which is

used to generate electrical power. The uranium fission

process produces large quantities of radioactive waste

material, or ‘‘spent fuel’’. Because of the growing quan-

tity of nuclear wastes and because of the fact that natural

resources of uranium are limited, the federal government,

in conjunction with private industry, has since 1957 inves-

tigated the potential of recycling spent fuel in order to

A-40

produce a new source of nuclear energy. The Commission

estimates that the cost of this research to the government

alone has been in excess of 100 willion dollars.

As a light water nuclear reactor operates, heat is gener-

ated from the fissioning of uranium-235 atoms in the fuel.

The fission process also creates atoms of plutonium from

uranium-238 atoms. For each gram of U-235 fuel con-

sumed in the reactor, as much as 0.9 grams of fissile plu-

tonium is formed within the fuel. Generally, more than

half of the plutonium so produced is consumed in the re-

actor process without any external recycle, before the dis-

charge of the spent fuel. Accordingly, all present light

water nuclear reactors to some extent generate and use

plutonium as fuel.

The spent fuel which remains after the completion of the

fission process contains elements of uranium and plutonium

which, if properly separated from the waste, reprocessed,

and fabricated into new nuclear fuel, would constitute a

significant new source of energy. Cognizant of the na-

tion’s pressing need for new sources of energy, as well as

of NEPA’s mandate that natural resources be recycled so

as to preserve depletable sources of energy, see 42 U.S.C.

§ 4331(b) (6), the Commission has undertaken a broad-scale

inquiry into the commercial feasibility of plutonium re-

eyele. According to the Commission, the nuclear power

industry plans to carry out the spent fuel recycle process

in a series of nine steps.*

Industry plans are to carry out the spent fuel recycle process

in the following steps:

(1) Store the spent fuel to allow some decay of radioactivity ;

(2) Separate plutonium and uranium from fission product

wastes as nitrate solutions ;

(3) Convert the uranium to uranium hexafloride which is then

enriched to inerease the concentration of the fissile isotope

uranium-235 ;

(4) Convert the uranium hexafloride to uranium dioxide ;

(5) Convert the plutonium nitrate to plutonium oxide;

A-41

The first step in the recycle is to store the spent fuel to

allow for some decay of radioactivity. Certain existing

nuclear plants have facilities for such storage, but the

Commission reports that developing forms suitable lor

long-term storage of fuel wastes are presently only experi-

mental.

Once some radioactive decay has been accomplished, the

plutonium and uranium elements of the spent fuel are sepa-

rated out as nitrate solutions. This step of the recycle

chain must be carried out through the use of remote oper-

ating technology behind massive protective shielding.

However, once the separation has been accomplished, the

purified materials no longer contain the highly penetrating

radiation which is present in fission products. Following

separation, the uranium nitrate is converted into uranium

hexafloride which is in turn enriched to increase the con-

centration of uranium-235. The enriched uranium hexa-

floride is then converted to uranium dioxide. Similarly,

the plutonium nitrate is converted to plutonium oxide. The

resulting materials are fabricated into fuel rods containing

mixed plutonium and uranium oxides; hence the term

„mixed oxide fuel“.

The mixed oxide fuel rods then are fabricated into fuel

elements for insertion into light water nuclear reactors

converted from use of uranium to use of mixed oxide fuel.

The fission wastes remaining after the separation and re-

processing must be converted to a form suitable for long-

(6) Manufacture fuel rods with pellets containing mixed plu-

tonium and uranium oxides;

(7) Fabricate fuel elements containing fuel rods of mixed

oxide fuel;

() Convert the fission product wastes into forms suitable for

long term storage ;

(9) Transport materials as required by the above processing,

production, or storage operations.

(40 Fed. Reg. at 53059)

A-42

term storage The various steps of the recycle must be

achieved thr ugh transportation of the nuclear materials

from light ‘ater reactors to separation and conversion

facilities, to fabrication plants and back to the converted

light water reactors.’

Three light water nuclear power reactors are presently

licensed to operate with limited amounts of mixed oxide

fuel. The amount of mixed oxide fuel employed ranges

from less than 0.1 percent of the total fuel core in the com-

mercial scale reactor at Quad-Cities 1, Il!inois, to approxi-

mately eleven percent in the very small reactor at Big Rock

Point in Michigan. Between 1966 and 1971, the Nuclear

Fuel Services plant at West Valley, New York, performed

separation and reprocessing of spent fuel, processing ap-

proximately 640 metric tons of spent fuel. However, that

plant is presently shut down. A few presently operating

plants produce very limited amounts of mixed oxide fuel;

the quantity involved is but a small proportion of that

which would be utilized through wide-scale use.

Presently pending before the Commission are a number

of applications to undertake different steps of the plutoui-

um recycle process. Nuclear Fuel Services has applied for

permission to alter and expand its existing plant; Allied-

General Nuclear Services seeks licensing of proposed sepa-

rations and uranium conversion facilities presently under

construction at Barnwell, South Carolina; and Westing-

house Electric Corporation has applied for a license to

undertake mixed oxide fuel fabrication at a proposed plant

near Anderson, South Carolina.“ Other firms have ex-

o The Energy Reorganization Act of 1974 requires, inter alia,

that the Commission evaluate and compare the respective environ-

mental impact of separate versus grouped siting of nuclear fuel

recycle facilities; see 42 U.S.C. § 5847. However, even if such

facilities were grouped, transportation of plutonium would be

required to converted facilities and for storage purposes.

“See Nuclear Regulatory Commission Docket Nos. 59-201,

50-332, and 70-1729; 40 Fed.Reg. at 53059.

| —

- 2B 5)

ee FP — —

A-43

pressed interest in undertaking plutonium related activi-

ties.

II. Prior Proceedings

As the nuclear power industry proceeds with plans for

the implementation of the plutonium recycle, environ-

mental concerns are properly addressed by the licensing

agency, Cognizant of its responsibilities, the Commission’s

predecessor, the Atomic Energy Commission, announced

on February 12, 1974, that a generic environmental impact

statement (GESMO) would be prepared prior to a Com-

mission decision on the wide-scale use of mixed oxide fuel;

see 39 Fed.Reg. 5356.

GESMO is intended to be a comprehensive NEPA evalu-

ation of mixed oxide fuel examining such essential issues as

nation-wide environmental impact, adverse environmental

effects, safeguards against adverse effects and alternatives

to the proposed recycle activities. On August 21, 1974,

GESMO was issued in draft form, and the draft circulated

among the various interested agencies of the federal gov-

ernment. Draft GESMO concluded that the Commis: ‘on

should proceed to license wide-scale use of mixed oxide

fuel, that environmental considerations would not be ad-

versely effected, and that the use of plutonium recycle

would serve not only to lessen the demand on limited re-

serves of uranium but would also present a partial solution

to the problems of radioactive wastes. Draft GESMO,

issued in four volumes and in excess of six hundred pages,

can be described as a massive scientific inquiry into the

question of plutonium recycle. Draft GESMO analyzes

the background of scientific experience with plutonium and

projects a wide-scale plutonium recycle industry by the

year 1990, The study analyzes the expected environmental

impact of the use of mixed oxide fuel in light water

reactors, of the fabrication of mixed oxide fuel, of repro-

cessing facilities and of the supporting uranium fuel eyele.

A-44

A significant section is devoted to the transportation of

radioactive materials and to the problems of radioactive

waste management and storage of plutonium. Draft

GESMO also undertook to evaluate the effects of radiation

on public health and to describe possible fuel and plant pro-

tection. Two chapters of the study are devoted to proba’ le

adverse environmental effects which cannot be avoided and

to methods to limit such effects. Draft GESMO investigated

alternative dispositions of plutonium, including storage,

immediate use, and a permanent ban on use, presenting a

cost-benefit analysis of each alternative disposition.

Despite this hereulean undertaking, it is immediately

apparent that Draft GESMO did not fully address alter-

natives to the plutonium recycle industry. There is no

significant discussion of any methods of energy production

other than nuclear. Further, Draft GESMO did not reach

any final conclusions on the question of safeguards. At

the time of Draft GESMO’s release, the Commission

planned to issue a supplemental statement on safeguards."

On January 20, 1975, the President’s Council on Environ-

mental Quality (‘‘CEQ’’), by letter, informed the Com-

mission that in its opinion Draft GESMO was inadequate,

particularly since it failed to address adequately the spe-

cial dangers of sabotage and theft posed by large-scale

transportation of plutonium materials. The CEQ recom-

mended that these special problems be addressed before

any final decision on wide-scale use. Further, the CEQ

directed the Commission to avoid taking any licensing

steps in the interim period which could result in the fore-

closure of alternative safeguards or which could result in

unnecessary ‘‘grandfathering’’ of existing facilities’ safe-

guards systems.

Looking toward compliance, the Commission on May 8,

1975 announced provisional decisions on certain procedures

— ä ͤ —

See 40 Fed. Reg. at 53058.

A-45

which it would employ in the ongoing inquiry into pluto-

nium related activities. The Commission invited public

comment on its provisional decisions regarding licensing

policy, which were as follows:

(1) A cost-benefit analysis of alternative safeguards

programs should be prepared and set forth in draft

and final environmenial statements before a Commis-

sion decision is reached on wide-scale use of mixed

oxide fuels in light water nuclear power reactors.

**(2) There should be no additional licenses granted

for use of mixed oxide fuel im light water nuclear

power reactors in the interim prior to the decision on

wide-scale use except for experimental purposes; and

**(3) With respect to light water nuclear power reactor

fuel cycle activities (activities other than nuclear

power reactor construction and operation) which de-

pend for their justification on wide-scale use of mixed

oxide fuel in light water nuclear reactors, there should

be no additional licenses granted in the interim which

would foreclose future safeguards options or result in

unnecessary ‘grandfathering’. This would not pre-

clude the granting of licenses in the interim for experi-

mental and-or technical feasibility purposes.’’ (40

Fed.Reg. at 20142, as quoted at 40 Fed.Reg. at 53058)

(Emphasis supplied.)

In response to its invitation in this May 8, 1975 Notice,

the Commission received in excess of two hundred com-

ments and inquiries from government agencies, public

officials, environmental groups, industry spokesmen, and

private individuals. By letter, the Environmental Protec-

tion Agency supported the proposed total ban on commer-

cial licensing until after a final decision implementing an

adequate safeguards program. (See Jnt.App. at 237).

The Federal Energy Administration recommended that the

A-46

Commission license only facilities for ‘‘commercial demon-

stration purposes in the interim period, or that the Com-

mission bar only fuel fabrication and plant use. (See /d.

at 182.)

Comments received from the nuclear power industry

recommended generally that the Commission proceed to

interim licensing of certain restricted activities prior to

the final decision on GESMO. Consumers Power Company,

a licensee of two plants, stated that a delay of plutonium

licensing until 1978 would cost it six million dollars in

additional outlays for enriched uranium and would cost the

entire nuclear industry some thirty-five to fifty million

dollars for spent fuel storage. (See Jnt.App. at 209.)

Despite the industry’s apparent desire to proceed with

plutonium activities, a number of firms expressed concern

over the problems of plutonium transportation. For

example, Northeast Nuclear Energy Co. urged that military

guards be provided for the recycle process and particular-

ly for the transportation step. (See Jnt.App. at 207.)

General Atomic Company stated that ‘‘transportation is

the weakest link of any safeguards chain’’ and set forth

reasons why the transportation of plutonium posed greater

hazards than the transportation of highly enriched ura-

nium. (See Jnt. App. at 219.)

III. The November 11, 1975 Decision

Following receipt of comments and limited hearings held

during the comments period, the Commission issued the

November 11, 1975 order which is now under review. In

essence, through that decision the Commission reversed its

earlier position of May 8, 1975 and concluded that certain

interim commercial licensing should be allowed. The order

also set forth procedures for hearings on the final version

of the GESMO study to be issued in 1976 and for hearings

on the safeguards supplement to GESMO also presently

being prepared.

A-47

The procedures set forth were geared to the Commis-

sion’s estimate that it would issue Final GESMO in early

1976’’ and the safeguards supplement in ‘‘mid-1976.’’ The

Commission had also estimated that it could conclude the

GESMO hearings by the end of 1976. However, at argu-

ment, counsel for the Commission stated that there had

been some slippage' in this time schedule.

The November 11, 1975 order provides that the Commis-

sion will proceed to hold hearings on the GESMO study in

the following manner once each segment of the study is

released in its final form:

„The Commission will establish a board to preside at

those hearings. The hearing board will be expected to

establish reasonable time limits for the conduct of the

proceedings. All direct testimony for the legislative-

type hearings will be filed in advance. The board will

be expected to question witnesses and participants will

be permitted to suggest questions to the board, but

there will. not be direct cross-examination of partici-

pants by other participants.

It may be that some factual issues cannot be resolved

adequately on the basis of a record developed in this

manner. [After the legislative-type hearings,] par-

ticipants will have the opportunity to identify any such

issues of fact for which direct cross-examination by the

participants is needed for a sound decision. [The par-

ticipant] will be expected to demonstrate why the

legislative-type procedures have not proved adequate.“

(40 Fed.Reg. at 53060.)

The November 11, 1975, order also addressed the ques-

tion of the extent to which the Commission should under-

take review of individual license applications prior to the

GESMO hearings and the final decision on mixed oxide

fuel. The Commission determined that its staff should con-

A-48

tinue to review applications but that the staff should

analyze only those questions not being addressed in

GESMO. The staff reviews will be supplemented there-

after following the final decision on wide-scale use.

Public hearings on pending license applications will be

conducted only in the Commission’s discretion, upon a con-

sideration of the following factors:

1) the degree of likelihood that any early findings

on the issue(s) would retain their validity following

the Commission’s final decision on wide-scale use of

mixed oxide fuel and implementing regulations; and

**(2) the possible effect upon the public interest and

the litigants in having an early, if not necessarily con-

clusive, resolution of the issue(s).’’ (40 Fed.Reg. at

53061.)

Such hearings, if held, would be adjudicatory in charac-

ter as are the Commission’s licensing proceedings in most

case». Further, each licensing proceeding will provide its

own local environmental impact statement; however, the

Commission in one case has ruled that those statements

need not address the environmental issues being treated in

the GESMO study.“

See 40 Fed. Reg. at 53060-63. This position was set forth

clearly by the Commission's decision In the Matter of Consumers

Power Company (Big Rock Point Nuclear Plant) Docket No.

50-155, NRCI-75/8, CLI-75-10, p. 188. The scope of the NEPA

review in this case should, of course, be tailored to the possible

environmental impact resulting from increasing the amount of

plutonium in this one reactor. Discussion of possible adverse

environmental effects and alternatives to the proposed action can

be limited accordingly. The statement need not, for example, dis-

cuss alternatives to plutonium recycle and other generic matters

properly treated in GESMO.“ Id. at 190.

A-49

In the words of the agency’s order, The Commission

has concluded that interim licensing may be issued for fuel

recycle related activities

„While the Commission is properly mindful that cer-

tain licensing actions have the potential for foreclos-

ing subsequent alternatives, it cannot disregard the

equally hard reality that inaction or a blanket prohibi-

tion on fuel recycle related licensing actions could also

foreclose or substantially impede realization of energy

alternatives which may contribute significantly to meet-

ing national needs.“ (40 Fed. Reg. at 53061.)

As bases for this reversal of its position of May 8, 1975,

the Commission set forth its belief that any environmental

or health aspects of interim activity can be adequately

addressed through interim reviews and that interim licens-

ing will not foreclose any significant health, safety or en-

vironmental alternatives.

It is important to note what is encompassed by the term

interim activity’’. The Commission will allow separa-

tion of plutonium and uranium from fuel wastes; it will

allow reprocessing of the fuel into forms suitable for use;

it will allow fabrication of mixed oxide fuel; it will permit

use of mixed oxide fuel in presently existing light water

reactors; it will license plant construction to achieve the

foregoing steps; and it will permit the transportation, in-

cluding international transportation, of mixed oxide fuel

in its various processing stages. All of the foregoing ac-

tivities will be allowed on a commercial-scale level. The

order expressly states that ‘‘no limits will be placed on

the number of light water reactors for which . . . authori-

zation [to convert from use of uranium to plutonium] may

be granted.“ (40 Fed.Reg. at 53062.) In addition, the

order does not state that there will be any limits on the

other recycle activities allowed in the period prior to the

final decision on GESMO.

A-50

Certain of the above interim activities will be permitted

upon the application of special interim eligibility criteria.

The special criteria will not be applied to the use of mixed

oxide fuel in presently existing power plants or to the

trahsportation of plutonium materials. The Commission

concluded that conversion of light water reactors to mixed

oxide fuel need not be subject to special standards because

such conversion does not require significant design changes

and because such conversion is reversible in the event that

the final decision is adverse to the wide-scale use of mixed

oxide fuel. The transportation of plutonium will be allowed

without application of special standards in light of the

Commission’s view that such transportation would be con-

strained by practical limitations and in light of the Com-

mission’s belief that such limitea transportation would not

present factors which are not already present in the exist-

ing transportation of enriched uranium.

Accordingly, the interim eligibility criteria will apply

only to individual applications for interim licenses for

commercial fuel reprocessing and mixed oxide fuel fabri-

cation. The interim standards are as follows:

‘‘(1) Whether the activity can be justified, from a

NEPA cost-benefit standpoint, without placing primary

reliance on an anticipated favorable Commission deci-

sion on wide-scale use of mixed oxide fuel;

(2) Whether the activity would give rise to an irre-

versible and irretrievable commitment of resources

that would unjustifiably foreclose for the activity sub-

stantial safeguard alternatives that may result from

the decision on wide-scale use; and

‘*(3) The effect of delay in the conduct of the activity

on the overall public interest.’’ (40 Fed.Reg. at 53062.)

—— AE te

— —

A-51

These criteria, combined with consideration of Draft

GESMO, led the Commission to conclude that interim

licensing

is not likely to result in such a substantial further

commitment of resources that the final decision on the

costs and benefits of the public health and safety and

environmental aspects of wide-scale use of mixed oxide

fuel would be significantly affected or that generic

determinations on such aspects would be foreclosed.’’

(40 Fed. Reg. at 53061.)

Finally, the Commission also concluded that a refusal to

allow interim commercial activity would result in ‘‘the dis-

ruption or cessation of planning as well as the production

of useful data,’’ and might result in ‘‘economic penalties

on the American public through increased costs to elee-

trical utilities caused by delaying the use of resources avail-

able in spent fuel (d.)

The order of the Commission also addressed safeguards

which will be required in the interim period. In essence,

only those safeguards presently required by law will be im-

posed (See 10 C. F. R. Parts 70 and 73), although the Com-

mission has stated that it is considering certain new and

additional safeguards. According to the order, final re-

quirements for safeguards in the interim period will be

announced at the same time as the issuance of Final

GESMO.

IV. Reviewability

The first question which must be addressed is whether

the November 11, 1975 decision of the Commission is a final

order reviewable in this court. Petitioners urge that jur-

isdiction to review is present pursuant to 28 U.S.C.

§ 2342(4), which grants to this court exclusive jurisdiction

to enjoin, set aside, suspend in whole or in part, or to de-

A-52

termine the validity of all final orders of the Nuclear Regu-

latory Commission made reviewable by section 2239 of

Title 42. Petitioners state that the order below is a final

order entered in a Commission proceeding for the issu-

ance or modification of rules and regulations dealing with

the activities of nuclear power licensees; see 42 U.S.C.

§ 2239(a) and (b).“ Petitioners also argue that this court

has jurisdiction to review a decision of an agency imple-

menting NEPA or refusing to refrain from licensing until

the filing of an impact statement. See Scientists’ Institute

for Public Information, Inc. v. Atomic Energy Commission,

156 U. S. App. D. C. 395, 481 F.2d 1079, 1094 (1973). Fur-

ther, it is urged that we may properly review agency cri-

teria for upcoming licensing proceedings; see Coalition for

Safe Nuclear Power v. Atomic Energy Commission, 150

U. S. App. D. C. 118, 463 F.2d 954 (1972) (per curiam).

Respondents argue that the November 11, 1975 order is

not reviewable, since it grants no licenses and simply sets

forth licensing criteria for future proceedings; see Citizens

for a Safe Environment v. Atomic Energy Commission,

489 F.2d 1018, 1021 (3d Cir. 1973). Respondents also

cite the rule that an agency’s procedural or evidentiary

rulings made in the course of a licensing proceeding are not

reviewable except in extraordinary circumstances not pres-

ent here; see Ecology Action v. Atomic Energy Commis-

sion, 492 F.2d 998, 1001 (2d Cir. 1974).

The cases relied upon by respondent for the proposition

that the order below is not reviewable relate primarily to

refusals to review agency rulings made in the course of an

individual licensing proceeding; see Ecology Action,

supra; Citizens for a Safe Environment, supra; Thermal

Ecology Must be Preserved v. Atomic Energy Commission,

139 U.S. App. D. C. 366, 433 F.2d 524, 525-26 (1970) (per

curiam). These cases are not dispositive here for two rea-

* See note 2, supra.

—

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A-53

sons. First, this court has on oceasion reviewed essentially

‘‘interlocutory’’ rulings made by an agency in a NEPA

proceeding; see Greene County Planning Board v. Federal

Power Commission (Greene 1), 455 F.2d 412, 425 (2d Cir.),

cert. denied, 409 U.S. 849, 93 S.Ct. 56, 34 L.Ed.2d 90 (1972).

More fundamentally, petitioners here do not seek review

from an order entered in the course of an individual licens-

ing proceeding; rather, the regulations challenged here will

apply to all interim licensing proceedings, as well as to

the GESMO hearings; see Harlem Valley Transportation

Association v. Stafford, 500 F.2d 328, 334-35 (2d Cir. 1974).

Initially, we note that no distinction exists for review

purposes between agency adjudications and other pro-

nouncements, such as rulemaking; see Pacific Gas d Elec-

tric v. Federal Power Commission, 164 U.S.App.D.C. 371,

506 F.2d 33, 48 (1974); Gage v. Atomic Energy Commis-

sion, 156 U.S.App.D.C. 231, 479 F.2d 1214 (1973). It is

clear that the decision below is essentially an exercise in

rulemaking.

To determine finality, the appropriate inquiry is whether

the process of adininistrative decision-making has reached

a stage where judicial review will not be disruptive of the

agency process and whether legal consequences will flow

from the action taken; see Port of Boston Marine Terminal

Association v. Rederiaktiebolaget Transatlantic, 400 U.S.

62, 71, 91 S.Ct. 203, 27 L.Ed.2d 203 (1970). This test is

satisfied here since the Commission has made a final deci-

sion, after months of consideration, to the effect that it may

proceed to interim licensing of mixed oxide fuel related

activities without awaiting the release of Final GESMO or

a final decision on wide-scale use. Further, it is clear that

NEPA legal consequences flow from that decision since the

order below sets forth rules concerning how the agency will

comply with the environmental laws. Review at such a

stage is proper; see Harlem Valley, supra; Calvert Cliffs’

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Coordinating Committee, Inc. v. Aiomme.: Energy Commis-

sion, 146 IS. App. D.C. 33, 449 F.2d 1109 (1971). Review

at this juncture will not disrupt agency proceedings:

Here there is no specific proceeding to disrupt since

we are concerned with a rule that is applied to all

[Commission] proceedings, and the [Commission] has

determined, as it views them, its obligations under

NEPA.”’ (Harlem Valley, supra, at 334.)

In this case the ageney has issued proposed rules, in-

vited and received comments, and issued finalized rules.

Review by this court is proper, even though no licenses

have been granted or denied and even though the rules

relate only to licensing standards; see United States v.

Storer Broadcasting Co., 351 U.S. 192, 198, 76 S.Ct. 763,

100 L.Ed. 1081 (1956). Agency decisions are ripe for this

court’s consideration when the issues and the record are

suitable for review and the agency decision has an imme-

diate and significant impact; see Pacific Gas & Electric

supra. This test is satisfied since the court is presented

with an administrative record of more than fifteen hundred

pages, as well as the Draft GESMO, and the May 8, 1975

and November 11, 1975 decisions of the Commission: the

NEPA issues are clear and the decision to proceed to —

mereial interim licensing has an immediate and significant

impact on the Commission's future course of action.

In urging that the controversy herein is not ripe for

judicial review respondents rely upon cases which deal with

review pursuant to the Administrative Procedure Act, 5

U.S.C. § 701 et seq. ;° however, it appears that APA stand-

ards are not applicable in a proceeding such as this one

where judicial review is sought in this court directly from

10 proceeding made reviewable by 42 U.S.C. § 2239, see note 2

supra, may be reviewed in this court under 28 U.S.C. § 2342 or in

the district court under 5 U.S.C. § 702; see 42 U.S.C. § 2239(b).

2 — a, .

—— ated «

— 1 Die «

— A-55

the agency decision, rather than initially in the district

court; see Greene County Planning Board v. Federal Power

Commission (Greene III), 528 F.2d 38, 46 (2d Cir. 1975).

But even if the APA standards for ripeness are applied,

the procedural issues are ripe for review since the sub-

stantive NEPA questions are suitable for judicial consid-

eration and since the hardship to all parties would be con-

siderable if review were denied at this time and it was

later determined that the Commission’s guidelines led to

fundamental flaws in the environmental inquiry. The Su-

preme Court has indicated that the analysis of whether

agency action is ripe for review should be a flexible one;

see Toilet Goods Association, Inc. v. Gardner, 387 U.S. 158,

162, 87 S.Ct. 1520, 18 L.Fd.2d 697 (1967); Abbott Labora-

tories v. Gardner, 387 U.S. 136, 148-50, 87 S. Ot. 1507, 18

L.Ed.2d 681 (1967), and in the past this court has noted

the problems which could result were we to take an inflex-

ible approach to review; see Greene I, supra; see also Citi-

zens for a Safe Environment, supra.

The impact of the Commission’s decision is highly sig-

nificant, for it sets the course for the commercial introdue-

tion of a new nuclear technology. Upon consideration of

all the foregoing principles, we conclude that the November

11, 1975 order is a final order which issues regulations in a

proceeding under 42 U.S.C. § 2239(a) and (b) and that this

court has jurisdiction pursuant to 28 U.S.C. § 2342(4).

V. Procedures for the GESMO and related hearings

Petitioners ask this court to declare the procedural guide-

lines set forth in the November 11, 1975 notice violative of

NEPA’s direction that federal agencies

‘‘ utilize a systematic, interdisciplinary approach which

will insure the integrated use of the natural and social

sciences and the environmental design arts in planning

and in decision-making which may have an impact on

man's environment. (42 U.S.C. § 4332(2)(A).)

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The essence of petitioners’ objection to the procedural

guidelines is that the Commission, by separating the

GESMO hearings into two parts and by separating local

from generic issues, has so fragmented the environmental

inquiry that the study will not be sufficiently integrated or

interdisciplinary. Further, petitioners claim that the deci-

sion to proceed through primarily legislative-type hearings

on GESMO and through staff reviews on individual appli-

cations, allowing hearings of an adjudicatory nature only

in limited circumstances, is contrary to NEPA and to 42

U.S.C. § 2239(a), which deals with Commission licensing

hearings.

It is a long established principle that a federal agency

has discretion whether to proceed by rulemaking or by ad-

judication; see Securities and Exchange Commission v.

Chenery Corp., 332 U.S. 194, 203, 67 S.Ct. 1575, 91 L. Ed.

1995 (1947); Morningside Renewal Council, Inc. v. Atomic

Energy Commission, 482 F.2d 234 (2d Cir. 1973), cert. de.

nied, 417 U.S. 951, 94 S. Ot. 3080, 41 L.Ed.2d 672 (1974).

An agency has broad latitude to determine in what order, in

what forum, and by what procedures it will tackle a complex

subject matter. The courts cannot direct the Commission

to decide its cases in a particular order, see Federal Com-

munications Commission v. N, 337 U.S. 265, 272, 69 S.Ct.

1097, 93 L.Ed. 1353 (1949) ; only Congress could confer such

a priority; see Federal Communications Commission v.

Pottsville Broadcasting Co., 309 U.S. 134, 145, 60 S.Ct. 437,

84 L.Ed. 656 (1940). There is no dispute that the GESMO

inquiry presents difficult and complex questions. As stated

by the Supreme Court, [wie can see no justification for

denying the Commission reasonable latitude to decide where

it will resolve these complex issues, in addition to how it

will resolve them.“ American Commercial Lines v. Louis-

ville & Nashville R. R., 392 U.S. 571, 592, 88 S.Ct. 2105, 2116,

20 L.Ed.2d 1289 (1968). This reasonable latitude extends

to the methods which the agency employs and to the scope

of proceedings which the agency will undertake ; id; see also

a Oe Gan

A-57

The Permian Basin Area Rate Cases, 390 U.S. 747, 776, 88

S.Ct. 1344, 20 L.Ed.2d 312 (1968).

NEPA does not require extensive administrative proceed-

ings; neither the Administrative Procedure Act nor the

environmenal laws compel an agency to appoint an ex-

aminer and conduct hearings ; see National Helium Corp. v.

Morton, 455 F.2d 650, 656-57 (10th Cir. 1971). Indeed, the

text of NEPA does not require agency hearings, see 42

U.S.C. §§ 4321-4347, and courts have refused to read such

a requirement into the statute; see Lathan v. Brinegar, 506

F.2d 677, 689 (9th Cir. 1974); Jicarilla Apache Tribe of In-

dians v. Morton, 471 F.2d 1275, 1286 (9th Cir. 1973).

It is true that certain decisions have expressed a con-

cern that issues of great importance be accompanied by

expanded procedural rights, and that limited cross-exam-

ination be afforded on cruciai issues raised in the agency

proceeding; see Appalachian Power Co, v. Environmental

Protection Agency, 477 F.2d 495, 503 (4th Cir. 1973);

O’Donnell v. Shaffer, 160 U. S. App. D. C. 266, 491 F.2d 59,

62 (1974); Greene I, supra, 455 F.2d at 422. The phi-

losophy of these cases is applicable herein in light of the

magnitude and the gravity of the Commission's inquiry.

„The choice is not between a full trial-type hearing and

no public proceeding at all, The goal is rather to insure

that administrators provide a ‘framework for principled

decision-making’—a framework that is appropriate for the

the issue at hand“. (O’Donnell v. Shaffer, supra, 491 F. 2d

at 62, quoting Environmental Defense Fund, Inc. v. Ruckel-

shaus, 142 U.S. App. D.C. 74, 439 F.2d 584, 598 (1971).)

In its rulemaking order below, the Commission has

determined that the GESMO hearings will be primarily

legislative in character and that adjudicatory hearings will

be held if a need for such proceedings is demonstrated.

While direct cross-examination will not be allowed in the

legislative phase, the participants will be permitted to sub-

——_— —_

A-58

mit questions for the witnesses through the hearing board.

Direct cross-examination will be permitted in the adjudi-

eatory hearings, if any, which follow. We believe that

these procedures are reasonable, and note that nearly

identical guidelines were upheld as adequate in Interna-

tional Harvester Co. v. Ruckelshaus, 155 U. S. App. D.C. 411,

478 F. 2d 615 (1973). In that decision the Court of Appeals

for the District of Columbia Circuit observed that ‘‘in a

situation where ‘general policy’ is the focal question, a

legislative-type hearing is appropriate.’’ Id. at 630. The

court assessed the procedural limitations imposed by the

Environmental Protection Agency in terms equally appli-

cable to this case:

In context, we consider that the technique, adopted

by EPA, of pre-screening written questions submitted

in advance is reasonable and comports with basic

fairness as the general procedure. This approach

permits screening by the hearing officer so as to avoid

irrelevance and repetition, permits a reasonable esti-

mate of the time required for the questioning, and

aids scheduling and allocation of available time among

various participants and interests, . [A] right of

cross-examination, consistent with time limitations,

might well extend to particular cases of need, on

critical points where the general procedure proved

inadequate to probe ‘soft’ and sensitive subjects and

witnesses.’’ (Id. at 631.)

We interpret the Commission’s rules to provide for just

such a procedure. We would expect that an opportunity

for cross-examination will be afforded upon a threshold

showing that the legislative procedures have been in-

adequate. While the Commission need not allow the

GESMO hearings to become a forum for the individual

environmental philosophies of every participant, we would

expect that it will endeavor to allow meaningful participa-

tion by the public interest groups whose limited resources

eee Gated te

A-59

often relegate them to the role of contesting the studies and

conclusions of industry participants. Cross-examination

has been described as the most effective method through

which to locate factual truth; we expect that this powerful

procedural device will be appropriately utilized in a study

as important as the GESMO.

Decisions regarding these matters of procedure repose

in the sound discretion of the Commission. Similarly, we

believe that the Commission’s decision to bifureate the

hearings between GESMO and the individual licensing

proceedings is well within its reasonable latitude to control

its docket. So long as each final decision on any major

federal action, individual or generic, comports within the

requirements of NEPA and the other regulations required

by the energy acts, it matters not whether certain issues

are addressed in the broadscale inquiry and others in

limited individual proceedings; see Scientists’ Institute,

supra, 481 F.2d at 1092-93. Because we conclude herein

that no commercial licensing will be allowed in the interim

period before the completion of the GESMO inquiry, the

Commission’s fragmentation of the environmental inquiry

will not destroy the integrated and interdisciplinary

approach envisioned by NEPA; rather, it will probably

result in considerable administrative efficiency and avoid

needless duplication. If the Commissioners have before

them all relevant considerations including GESMO and all

individual site factors when they decide whether to grant

or deny a license, NEPA’s procedures are satisfied and a

court should find itself provided with an adequate record

on appeal should there be judicial review.

Petitioners’ final dispute with the Commission over pro-

cedure is addressed to the bifurcation of the GESMO study

itself, and the decision to hold the GESMO hearings in two

phases. Petitioner Natural Resources Defense Council

argues that the safeguards issues to be considered by the

GESMO supplement should not be separated from the

——

A-60

other environmental and health considerations —

by the rest of GESM O.

The principles of agency discretion — above lead

us to the conclusion that the Commission should not be

required to withhold Final GESMO until such time as the

safeguards supplement is completed. Such a moratorium

on consideration of the mixed oxide fuel issue by the Com-

mission and the public could indeed cause needless delay

and inaction. For the same reasons, we find no error in

the Commission’s decision to proceed with hearings on

Final GESMO before the issuance of the safeguards sup-

plement.

The argument that a bifurcated impact statement vio-

lates NEPA is foreclosed by the recent decision of this

court in Natural Resources Defense Council, Inc. v. Calla-

way, 524 F.2d 79 (2d Cir. 1975). In that case Judge Mans-

field,. for the court, considered an impact statement which

had been supplemented and concluded that

the use of supplemental data and statements is per-

missible to bolster an otherwise deficient EIS or to

amend an EIS to consider changes in the proposed

federal action when the ‘supplemental’ adequately

remedies the deficiency or analyses the impact of the

proposed change and is properly circulated among the

appropriate agencies before a final decision has been

reached. (Id. at 91-92.)

Other decisions have invited or required supplements to

impact statements, and we are aware of no decision which

has held that the agency must issue the impact statement

all in one piece all at one time; see Indian Lookout Alli-

ance v. Volpe, 484 F.2d 11, 20 (8th Cir. 1973); Jicarilla

Apache Tribe of Indians v. Morton, 471 F.2d 1275, 1280-81

(9th Cir. 1973); Natural Resources Defense Council, Inc.

v. Morton, 148 U.S.App.D.C. 5, 458 F.2d 827, 837 (1972).

A-61

The court assumes that the implementation of these rules

will ocenr in a manner which will strike a proper balance

between administrative efficiency and the need for a full

public discussion of the complex and far-reaching question

of commercial implementation of the uranium and plutoni-

um mixed oxide fuel recycle. We conclude that the pro-

cedural guidelines set forth for the GESMO and the indi-

vidual licensing hearings, the allocation of issues between

generic and local inquiries, and the issuance of the GESMO

in two segments, as well as the bifurcation of the GESMO

hearings, are all matters within the Commission’s discre-

tion. We pass now to a review of the Commission’s deter-

mination to allow interim commercial licensing.

VI. Interim Licensing

In its January 20, 1975 letter to the Nuclear Regulatory

Commission, the President’s Council on Environmental

Quality made the following observation:

The potential impact of the diversion and illicit use

of special nuclear materials are well recognized. This

threat is so grave that it could determine the accepta

bility of plutonium recycle as a viable component of

this Nation’s nuclear electric power system. Thus, we

believe that the NRC, the Executive Branch, the Con-

gress, and the American people should have the benefit

of a full discussion of the diversion and safeguards

problem, its impacts, and potential mitigating meas-

ures, before any final decisions are made on plutonium

recycle.

„The National Environmental Policy Act requires

that, in preparing an environmental impact statement,

the agency develop and describe appropriate alterna-

tives where unresolved conflicts exist. Alternative

safeguards programs for dealing with the threat of

diversion of special nuclear materials have not yet

been developed. As such, the information necessary

a i ] ⁰AbÄ . i i le

A-62

to make sound and reasoned decisions on plutonium

recycle was not available for governmental and public

consideration in the draft GESMO. Because of this,

the Council believes that the draft environmental im-

pact statement does not meet the requirements of the

National Environmental Policy Act.’’ (Attachment C

to NRDC brief.)

Despite the foregoing opinion of the CEQ, the Commis-

sion has determined that Draft GESMO is an adequate

statement to support its decision to license what it has re-

ferred to as interim“ activity. Petitioners urge that,

despite its breadth of inquiry, Draft GESMO is as inade-

quate a basis for the activity envisioned as it would be for

a decision on wide-scale use.

The requirements of the NEPA apply to the develop-

ment of a new technology as forcefully as they apply to the

construction of a single nuclear power plant. It cannot be

doubted that the Congress, in enacting NEPA, intended

that agencies apply its standards ‘o the decision to intro-

duce a new technology as well as to the decision to license

related activity; see 42 U.S.C. § 4331(a) (1970); S. Rep.

No. 91-296, 91st Cong., Ist Sess., 20 (1969)." The fact that

the environmental effects of such a decision about a new

technology will not emerge for years does not mean that

the program does not affect the environment or that an

impact statement is unnecessary; see Scientists’ Institute,

supra, 481 F. 2d 1079, 1089-90 (discussing the technology of

the uranium breeder reactor). In numerous cases involv-

ing the commercial introduction of a new technology, as

„The legislative history of the Act indicates that the term

‘actions’ refers not only to construction of particular facilities, but

ineludes ‘project proposals, proposals for new legislation, regula-

tions, policy statements, or expansion or revision of ongoing pro-

grams ...’’’ Scientists’ Institute, supra, 481 F.2d at 1088, quot-

ing 8.Rep. No. 91-296, 91st Cong., Ist Sess., 20 (1969), U.S.Code

Cong. & Admin. News 1969, p. 2751.

A-63 —

well as in cases where the agency has undertaken isolated

activity which the courts found to be in actuality part

of a larger program, the courts have not hesitated to

identify major federal action on the broader scale and to

require the preparation of a regional or generic impact

statement before allowing major federal action to proceed.

See Sierra Club v. Morton, 169 U.S. App. D.C. 20, 514 F.2d

856 (1975), cert. granted, 423 U.S. 1047, 96 S.Ct. 772, 46

L.Ed.2d 635, 44 U.S.L.W. 3397 (1976) (requiring a

regional impact statement for coal mining in the Northern

Great Plains area); Conservation Society of Southern

Vermont, Inc. v. Secretary of Transportation, (Conserva-

tion Society I), 508 F.2d 927 (2d Cir. 1974), vacated and

remanded, 423 U.S. 809, 96 S.Ct. 19, 46 L.Ed.2d 29,

44 U.S.L.W. 3199 (1975);™ Scientists’ Institute, supra,

(declaratory judgment that the AEC must prepare a generic

impact statement for the new technology of the breeder

reactor); see also Indian Lookout Alliance v. Volpe, 484

2 In vacating the order of this court in Conservation Society I,

the Supreme Court, in a summary order, wrote that the case is

remanded to the United States Court of Appeals for the Second

Cireuit for further consideration in light of Pub.L. 94-83 and

Aberdeen & Rockfish R. R. v. SCRAP, 422 U.S. 289, 95 S.Ct. 2336,

45 L.Ed.2d 191 (1975). 423 U.S. at 809, 96 S.Ct. at 19, 46

L.Ed.2d 29, 44 U.S.L.W. at 3199. Pub.L. 94-83 amends § 102 of

the NEPA and provides that an impact statement is not inade-

quate solely because it is prepared by the federal agency in con-

junction with preparation by state authorities; see 42 U.S.C.

§ 4332(D). The amendment is not relevant to this appeal, there

being no issue concerning the party preparing the impact state-

ment. On remand in Conservation Society of Southern Vermont,

Inc. v. Secretary of Transportation, 531 F.2d 637 (2d Cir. 1976)

(Conservation Society II), this court interpreted the decision in

Aberdeen & Rockfish R. R. v. SCRAP, 422 U.S. 289, 95 S.Ct. 2226,

45 L.Ed.2d 191 (1975) to hold that a broad scale impact statement

is not required where the activity under review presents no

irreversible or irretrievable commitment of resources. See Conser-

vation Society II, infra, 531 F.2d 637, at 639. The applicability of

SCRAP to this appeal is discussed, infra.

— —

A-64

F.2d 11 (8th Cir. 1973). Such broad-scale impact state-

ments may be required for a series of major federal actions,

even though individual impact statements are to be pre-

pared for each isolated project; see Sierra Club, supra, at

871; Scientists’ Institute, supra. Otherwise, agencies

could take an approach ‘‘akin to equating an appraisal of

each tree to one of the forest.’’ Jones v. Lynn, 477 F.2d

885, 891 (1st Cir. 1973).

In both Sierra Club and Scientists’ Institute, supra, the

Court of Appeals for the District of Columbia Circuit em-

ployed a four-prong test to determine whether the action

under review required a broad-scale impact statement.

That test is as follows:

1] How likely is the program to come to fruition,

and how soon will that occur?

2] To what extent is meaningful information pre-

sently available on the effects of implementation of

the program, and of alternatives and their effects?

3] To what extent are irretrievable commitments

being made and options precluded as refinement of

the proposal progresses?

4] How severe will be the environmental effects if

the proposal is implemented?’’ (Sierra Club, supra,

at 880.)

Under these guidelines, the Commission’s decision to

initiate the GESMO study was a decision clearly man-

dated by NEPA. The growth of plutonium-related ac-

tivities in recent years makes it clear that the nuclear

power industry as a whole is steadily progressing to-

wards the launching of a new era of commercial nuclear

technology. Important environmental questions are in-

volved in the utilization of plutonium recycle. These ques-

tions are common to the industry and transcend issues

relative to the local impact of any one nuclear power plant.

A-65

The existence of Draft GESMO and the preparation of

the supplement demonstrate that meaningful information

on the effects of implementation is available. The

GESMO’s limited consideration of alternatives (use

plutonium now; use plutonium later; never use plutonium)

demonstrates that refinement of the proposal may have

already precluded other options. Finally, the record is

replete with assessments of the possible adverse environ-

mental effects, as well as the clearly hazardous conse-

quences of theft, diversion or sabotage of plutonium.

Thus, NEPA clearly required the GESMO study; the

principal question on this appeal is whether NEPA re-

quires the agency to refrain from commercial implementa-

tion until that study is complete and a final agency decision

is made.

Many of the underlying questions in this inquiry are

easily resolved. It is apparent that draft GESMO did not

fully address alternatives to plutonium recycle or the spe-

cial problems of theft, diversion and sabotage. Thus, a

totally neutral application of the literal language of NEPA,

specifically § 4332(C) (ii) & (iii) and § 4332( BE), lead to the

inescapable conclusion that Draft GESMO is a legally in.

sufficient environmental impact statement. Previous deci-

sions support this conclusion; the consideration of alterna-

tives and of special hazards to the public health, safety and

welfare are vital to any impact statement, and numerous

statements have been overturned for their failure to ad-

dress these questions. See, e.g., Natural Resources De-

fense Council v. Callaway, 524 F.2d 79, 92-94 (2d Cir. 1975) ;

Natural Resources Defense Council, Inc. v. Morton, 148

U.S. App. D.C. 5, 458 F.2d 827, 833-34 (1972). In fact, this

court has held that a consideration of alternatives is re-

quired under NEPA whenever the agency action has an

environmental impact, even if no formal impact statement

is filed; see Trinity Episcopal School Corp. v. Romney,

F ttt te — a ee ii

— —

A-66

523 F.2d 88, 93 (2d Cir. 1975) (requiring compliance with

NEPA for federal funding of urban renewal).

The Commission has conceded that draft GESMO is not

an adequate impact statement for wide-scale use. At the

very least, the discussion of safeguards must be completed.

However, the Commission proposes to proceed to commer-

cial-scale licensing without the benefit of the safeguards

t. The Commission has concluded that Draft

GESMO, and the individual impact statements which will

address issues other than those being covered by GESMO,

combined with a consideration of its special eligibility eri-

teria, will form an adequate NEPA basis for licensing

decisions.

First, we note that the interim criteria’’ will not be

to the use of mixed oxide fuel or to its transporta-

tion. Thus, the Commission will allow the nuclear power

industry to create a market for mixed oxide fuel which is

as large as the industry desires. Further, transportation

will be unrestricted and therefore the widest possible num-

ber of persons will be exposed to the possibility of a nuclear

incident before the release of the suppiement on safeguards.

Because the impact statements which will accompany fuel

use and transportation will not consider GESMO issues,

those statements cannot be adequate under NEPA.

The interim criteria which will be applied to mixed oxide

fuel separation and fabrication require Commission inquiry

as to whether the activity will place primary reliance on a

favorable final decision in GESMO, whether the activity

would foreclose safeguards alternatives by committing re-

sources, and whether delay in the condu

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