# Petition — Allied-General Nuclear Services v. Natural Resources Defense Council, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_1674%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1977 - **Citation:** 430 U.S. 944 ## Text | 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 v. 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 J krßT—2v 2 „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 v. 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- 4 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. ee 5 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. 7 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; an (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 10 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). 11 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 12 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- 13 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 14 ‘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 15 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). EE 16 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- 17 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 — — —— — A7 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 — 33 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, V. 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 b [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_1674%3A1. Public record. Not legal advice.