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

er

v.

Natura. Resources Derense Councit, INC., BT AL,

CoMMONWEALTH Epison CoMPANY, ET AL., PETITIONERS

v.

Natura Resources Derense Councit, INC., BT AL.

WesTINGHoUsE ELecTRic CORPORATION, PETITIONER

v.

Natura. Resources Derense Councit, INC., BT AL.

Bautimore Gas AND Evecrric COMPANY, ET AL.,

PETITIONERS

V.

Naturat Resources Derense Councit, INC., Bf AL.

ON PRTITIONS FOR A WRIT OF CERTIORARI TO THE UNITED

rares COURT OF APPEALS FOR THE SECOND CIRCUIT

MEMORANDUM FOR THE UNITED STATES AND THE NUCLEAR

REGULATORY COMMISSION

DANIEL M. FRIEDMAN,

Acting Solicitor General,

Department of Justice,

Washington, D.C. 20630.

INDEX

CITATIONS

Cases :

Aberdeen and Rockfish N. Co. v. SCRAP, page

—ñ ͤ ͤ— 9, 12

Coleman v. Conservation Society of South-

ern Vermont, Inc., 423 U.S. 809 — 14

Ecology Action v. Atomic Energy Commis-

20900. 13

Kleppe v. Sierra Club, No. 75-552, decided

I 8, 9, 10, 11, 12

Northern Indiana Public Service Co. v.

Porter County Chapter of the Izaak

Walton League, 423 U.S, 12222 14

Union of Concerned Scientists v. Atomic

Energy Commission, 499 F. 2d 1069___- 9

Statutes:

Atomie Energy Act of 1954, 68 Stat. 948,

as amended, 42 U.S.C. (and Supp. V)

See @ Oieeeneeesensenessenecsnsss 5, 10

Energy Reorganization Act of 1974, 88

11 ————— — — 2

National Environmental Policy Act of

1969, 83 Stat. 852, 42 U.S.C. 4321 et seq. 5,10

Section (2)(C), 42 U.S.C. 43322) (C) — 11

125 6, 7, 12

3 ñ—ñ— 6, 7, 12

Miscellaneous:

.. ....—ʃ— 2

1 /a 2

OS —— 2

. .. —, 2

40 Fed. Reg. 20142 — — 2

40 Fed. Reg. 53066..................... 2,3

OO 3

Gn the Supreme Gourt of the United States

OctToBerR TERM, 1976

No. 76-653

ALLIED-GENERAL NUCLEAR SERVICES, ET AL., PETITIONERS

V.

NaturaL Resources Derense CounciL, INC., ET AL.

No. 76-762

CoMMONWEALTH Epison COMPANY, ET AL., PETITIONERS.

V.

NaturRaL Resources DENN CouNciL, INC., ET AL.

No. 76-769

WESTINGHOUSE ELECTRIC CORPORATION, PETITIONER

V.

NaturaL Resources Derense Couxcn,, INC., Er AL.

No. 76-774

Bavtimore Gas AND ELECTRIC COMPANY, ET AL.,

PETITIONERS

V.

NaturaL Resources Derense Couxcn,, INc., Er AL.

ON PBTITIONS FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

MEMORANDUM FOR THE UNITED STATES AND THE NUCLEAR

REGULATORY COMMISSION

(1)

2

1. On May 8, 1975, the Nuclear Regulatory Com-

mission published in the Federal Register a notice

setting forth its provisional views on a variety of

issues relating to the issuance of licenses for activities

associated with the production and use of mixed oxide

fuel.“ At the same time, the Commission requested

public comment on the issues discussed in the notice.’

40 Fed. Reg. 20142. Following consideration of the

extensive comments received in response to the May

8th notice, the Commission published on November 14,

1975, an “interim policy statement” setting forth the

conclusions it had reached on the issues covered in

The Nuclear Regulatory Commission succeeded to the licens-

ing powers of the Atomic Energy Commission on January 19,

1975 Energy Reorganization Act of 1974, 88 Stat. 1233-1254. See

40 Fed. Reg. 3242, 3520.

Mixed oxide fuel (ie,, fuel containing both plutonium oxide

and uranium oxide) has been used on a limited basis for many

years. The characteristics of this fuel, as well as its production and

use, are described in the “interim policy statement” published by

the Commission on November 14, 1975, 40 Fed. Reg. 53056. The

text of the interim policy statement is set forth in Appendix A to

the petition in No, 76-653 (hereafter “Pet. App.”).

Nuclear reactors are typically fueled with uranium. After opera-

tion, the reactor’s spent fuel contains uranium and plutonium, both

of which can be extracted and used as fuel, thus extending energy

supplies. This recycling is done by reprocessing and fuel fabrica-

tion plants, which convert the spent fuel into a form suitable for

use by current reactors.

The notice published by the Commission on May 8, 1975, fol-

lowed an earlier policy statement published by the Atomic En-

ergy Commission (AEC). 39 Fed. Reg. 5356 (February 12, 1974).

The AEC had announced in the earlier notice that it intended to

prepare a generic environmental impact statement dealing with

the wide-scale use of mixed oxide fuel. See 39 Fed. Reg. 30186.

3

the earlier notice. In particular, the Commission’s

interim policy statement (1) announced that the wide-

scale use of mixed oxide fuel in light water nuclear

reactors “requires a full assessment of safeguards

issues,“ (2) set forth the procedure and schedule to

be followed in the preparation of a generic environ-

mental impact statement on such wide-scale use, and

(3) announced that it would entertain applications

for licenses to permit, on several bases, certain activ-

ities related to the production and use of mixed oxide

fuel during the period preceding a final decision on

the wide-scale use of such fuel. 40 Fed. Reg. 53056, as

corrected, 40 Fed. Reg. 59497 (December 24, 1975).

The Commission explained in the interim policy

statement that its decision to entertain applications

for interim commercial licenses relating to mixed ox-

ide fuel, while delaying formulation of a general li-

censing policy governing the wide-scale commercial

use of such fuel, was the product of a number of con-

siderations. The Commission noted, inter alia, that

“any public health and safety environmental issues as-

sociated with interim licensing can be addressed ade-

quately under the Commission’s regulations within the

context of the reviews of the individual license appli-

cations” (Pet. App. A-22). The Commission also

noted that, on the basis of previous environmental

analysis of mixed oxide fuel and because of the limited

*“Safeguards” refer to measures designed to prevent improper

use of plutonium, a toxic substance which can be used in the fabri-

cation of atomic weapons (see Pet. App. A-2).

4

number and types of plants likely to qualify for in-

terim licenses, the granting of interim licenses to

particular projects prior to completion of the generic

impact statement ‘‘would not result in the overlooking

of any cumulative 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” (Pet. App. A-23). For the

same reasons, the Commission concluded that interim

licensing could go forward, under specified conditions,

without resulting in such a substantial commitment

of private resources so as to affect significantly the

Commission’s final decision on the wide-scale commer-

cial use of mixed oxide fuel (ibid.).

The Commission also pointed out that a blanket

moratorium on licensing commercial mixed oxide

fuel activities, pending completion of a generic en-

vironmental impact statement,’ could adversely affect

the public interest in the development of alternative

energy resources. According to the Commission (Pet.

App. A-23 through A-24) :

Whether the 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 re-

sult in the disruption or cessation of planning

as well as the production of useful data. Such

A portion of the generic environmental impact statement was

issued in final form in August 1976; hearings have begun on that

portion. The remainder of the impact statement has not yet been

issued in draft form.

5

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 inereased

costs to.electric utilities caused by delaying the

use of resources available in spent fuel and

requiring additional spent fuel storage facili-

ties that otherwise would not be needed.

The Commission accordingly announced in the in-

terim policy statement that it would entertain applica-

tions for licenses for the commercial use of mixed

oxide fuel during the period prior to completion of

the generic environmental impact statement. It also

advised potential applicants that whether specific fuel

recycle activities, involving mixed oxide fuel, would

be authorized in the interim period would be deter-

mined within the context of individual licensing

proceedings.

In addition to the criteria established by the Atomic

Energy Act of 1954, 68 Stat. 948, as amended, 42

U.S.C. (and Supp. V) 2201 et seq., and the National

Environmental Policy Act of 1969 (NEPA), 83 Stat.

852, 42 U.S.C. 4321 et seq., the Commission stated

that for mixed oxide fuel facilities, such as reprocess-

ing and fuel fabrication plants, applications for

interna livenses would be considered in light of the

following factors (Pet. App. A-25 through A-26):

(1) Whether the activity can be justified,

from a NEPA cost-benefit standpoint, without

placing primary reliance on an anticipated fa-

vorable Commission decision on wide-scale use

of mixed oxide fuel;

6

(2) Whether the activity would give rise to

an irreversible and irretrievable commitment of

resources that would unjustifiably foreclose for

the activity substantial safeguards 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.“

2. After publication of the Commission’s interim

policy statement on the use of mixed oxide fuel, the

Natural Resources Defense Council (NRDC) and

the State of New York filed similar petitions for re-

view in the court of appeals.* The petitions sought,

inter alia, reversal of the Commission’s decision to en-

tertain applications for interim licenses on the ground

that the granting of any such licenses prior to com-

pletion of the generic impact statement would violate

»The Commission exempted from application of these criteria

the use of mixed oxide fuel in existing reactors. The Commission

noted that such use required little capital investment, was reversi-

ble and could not reach wide-scale dimensions in the interim

period because of the limited availability of mixed oxide fuel

(Pet. App. A-26 through A-27). For similar reasons, the Com-

mission indicated that it would not apply the additional criteria

to import and export of mixed oxide fuel (cl.). But for those

activities not subject to the additional criteria, as for the construc-

tion and operation of reprocessing and fuel fabrication plants, any

interim license would have to comply with the Atomic Energy

Act and NEPA.

The petition for review filed by NRDC was joined by Sierra

Club, Inc., Environmentalists, Inc., West Michigan Environ-

mental Action Council, Inc., National Intervenors, Inc., and

Businessmen for the Public Interest, Inc. (see Pet. App. A-35).

»The petitions asserted jurisdiction under 28 U.S.C. 2342(4)

and 42 U.S.C. 2239 (see n. 13, infra).

— ~~

1 7

NEPA.’ The Commission contended that the interim

policy statement did not constitute or involve a “final

order,” within the meaning of 28 U.S.C. 2342(4) and

42 U.S.C. 2239, and that its decision to consider appli-

cations for interim licenses did not violate NEPA or

any other federal statute.

The court of appeals held that review of the Com-

mission’s interim policy statement was proper “since

the Commission has made a final decision, after

months of consideration, to the effect that it may pro-

ceed to interim licensing of mixed oxide fuel related

activities without awaiting the release of [a generic

environmental impact statement! or a final decision

on wide-seale use“ (Pet. App. A-53). The court also

held that the Commission’s policy on interim licensing

would “cireumvent the mandates of NEPA by grant-

ing interim licenses on the basis of records which

exclude the generic aspects“ (Pet. App. A-71). The

cou’ c therefore “reversed’’ the interim policy state-

ment, “insofar as it allows the granting of interim

commercial licenses for mixed oxide fuel related activ-

ities” (Pet. App. A-73), and remanded the matter to

the Commission.

The court subsequently issued a per curiam opinion

on rehearing, seeking to distinguish this Court’s inter-

The petitions filed by NRDC and the State of New York also

complained of the procedures specified in the interim policy state-

ment for preparation of the generic impact statement. The court

of appeals rejected the contention that the procedural guidelines

set forth in the interim policy statement were deficient (Pet. App.

A-55 through A-61). No party has sought review of that aspect

of the court’s decision.

vening decision in Kleppe v. Sierra Club, No. 75-552

(decided June 28, 1976). In its original opinion, the

court had relied extensively on the court of appeals’

decision in that case (Pet. App. A-63, A-64, A-68).

On rehearing, the court stated that this Court’s deci-

sion in Kleppe was not inconsistent with the decision

in this ease because “interim impact statements

drafted in accordance with presently existing Com-

mission rules and precedent would necessarily result

in impact analyses inadequate under NEPA” (Pet.

App. A-76). The court also noted that approval of the

leases at issue in Kleppe did not commit the agency to

issue other leases, but stated that in the present case

“the proposed activity is ‘clearly tied to the antici-

pated wide-scale use and would commit substantial

resources to the mixed oxide fuel technology (ibid.,

quoting from original opinion).

3. We agree with petitioners that the court of ap-

peals’ decision cannot be reconciled with this Court’s

decision in Kleppe v. Sierra Club, supra. This Court

concluded in Kleppe that approval of “interim’’ min-

ing plans could not be enjoined pending completion of

a regional impact statement—unless the court found

that the impact statements for the interim plans in-

adequately analyzed the environmental impacts of,

and alternatives to, their approval (slip op. 15 n.

16). This Court also rejected respondents’ contention

*° Specifically, this Court stated that (slip op. 15 n. 16)—“[e]ven

had the Court of Appeals determined that a regional impact state-

ment was due at that moment, it still would have erred in enjoin-

ing approval of the four mining plans unless it had made a finding

9

that a regional impact statement was required because

the plans or projects in question were ‘‘intimately

related”’ (slip op. 15). At base, the latter contention

amounted both to an attack on the sufficiency of the

impact statements that petitioners had already pre-

pared on the mining projects they had approved, or

were about to approve, and upon petitioners’ decision

not to prepare a comprehensive impact statement on

all proposed projects in the region. This Court re-

jected both lines of attack since, with respect to the

first, the case had not been brought as a challenge to a

particular impact statement and there was no impact

statement in the record and, as to the second, respond-

ents had not demonstrated that petitioners had acted

arbitrarily in refusing to prepare a comprehensive

impact statement (slip op. 15-22).

As in Kleppe, the court of appeals did not in the

present case have before it an environmental impact

statement alleged to be deficient in some respect under

NEPA or another federal statute. Although the Com-

mission had received three applications for interim

commercial licenses for mixed oxide fuel facilities,

Commission review of those applications—including

that the impact statement covering them inadequately analyzed

the environmental impacts of, and the alternatives to, their ap-

proval. So long as the statement covering them was adequate, there

would have been no reason to enjoin their approval pending prep-

aration of a broader regional statement * * *.” See, e. g., id. at 22 n.

26; Aberdeen and Rockfish R. Co. v. SCRAP, 422 U.S. 289, 325-

326; Union of Concerned Scientists v. Atomic Energy Cc.amission,

499 F. 2d 1069, 1081-1082 (C. A. D. C.).

10

preparation of environmental impact statements—has

not been completed (see Pet. App. A-19). Moreover,

the Commission acknowledged in its interim policy

statement the danger that certain licenses granted

pending completion of the generic impact statement

might prejudice the Commission’s decision whether,

and under what circumstances, to authorize the wide-

scale commercial use of mixed oxide fuel. But the

Commission provided in its interim policy statement

that no such license applications would be granted

pending completion of the generic environmental im-

pact statement unless the criteria established by the

Atomie Energy Act of 1954 and NEPA were met and,

in addition, it was satisfied that (1) approval of the

application was 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” and (2) the activity

would not involve “an irreversible and irretrievable

commitment of resources that would unjustifiably

foreclose for the activity substantial safeguards alter-

natives that may result from the decision on wide-

scale use” (Pet. App. A-25 through A-26). Under

these circumstances, Kleppe clearly required the court

of appeals to reject the claims made in the petitions

for review of the Commission’s interim policy

statement.”

The court of appeals believed that interim activities inevita-

bly would be tied to the generic inquiry and would be accompa-

11

The court of appeals also erred in holding that the

provisions of the Commission’s policy statement deal-

ing with interim licenses were reviewable. The Com-

mission has not granted—indeed, may never grant—

an interim license relating to the commercial use of

mixed oxide fuel.“ All the Commission has done is to

inform the publie that it will proceed to consider

applications for such licenses, under specified criteria,

prior to completion of the generic impact statement.

In considering applications for interim licenses, and

preparing the environmental impact statement that

must accompany any decision to grant such a license,

the Commission must “consult with and obtain the

comments of any Federal ageney which has jurisdic-

tion by law or special expertise with respect to any

environmental impact” entailed by the licensing de-

cision. Section 102(2)(C) of NEPA, 42 U.S.C. 4332

(2)(C). But judicial review of the adequacy of the

Commission’s consideration of environmental impact

would be appropriate only when, and if, the Commis-

sion decided to grant an interim license. Before that

point there is no “report or recommendation” within

the meaning of NEPA even if there is a “proposal.”

nied by defective impact statements, Those beliefs cannot be

tested rationally——and judicial intervention cannot properly take

place—unless and until an interim license is granted and the

accompanying final impact statement is challenged in court.

Even if it could be said that the Commission “contemplates”

granting one or more interim licenses (but see discussion at page

13, infra), “the mere ‘contemplation’ of certain action is not suffi-

cient to require an impact statement” (Aleppe v. Sierra Club,

supra, slip op. 11-12).

12

As this Court pointed out in Kleppe (slip op. 14 n.

15):

[T]he time at which a court enters the process is

when the report or recommendation on the pro-

posal is made, and someone protests either the

absence or the adequacy of the final impact state-

ment. This is the point at which an agency's

action has reached sufficient maturity to assure

that judicial intervention will not hazard un-

necessary disruption.

Accord, e. ., Aberdeen and Rockfish R. Co. v. SCRAP,

422 U.S. 289, 320.

The Commission’s decision to entertain applications

for interim licenses permitting the use of mixed oxide

fuel at particular facilities was thus a necessary first

step in the licensing process. But it did not commit

the Commission actually to make a “report or recom-

mendation”’ on a proposal, in the form of a decision

to grant an interim license. Thus, the court of appeals

erred in reviewing that portion of the interim policy

statement dealing with interim licensing since it did

not have before it a “final order,” within the meaning

of 42 U.S.C. 2239 and 28 U.S.C. 2342(4).”

Under 28 U.S.C. 2342, the courts of appeals have exclusive

jurisdiction “to enjoin, set aside, suspend (in whole or in part),

or to determine the validity of * * * (4) all final orders of the [Nu-

clear Regulatory Commission] made reviewable by section 2239

of title 42.” The “final orders” made reviewable by 42 U.S.C.

2239 are those entered in proceedings “for the granting, suspend-

ing, revoking, or amending of any license or construction permit,

or application to transfer control, and in any proceeding for the

issuance or modification of rules and regulations dealing with the

13

4. For the reasons stated, we believed that the court

of appeals’ decision is wrong. We have not petitioned

for certiorari, however, because it is not clear that

any applicants will be able to satisfy the criteria

established by the Commission for the granting of

interim licenses. Indeed, it is the prematurity of the

court of appeals’ decision that makes it impossible

confidently to assess its impact. We therefore cannot

say that this case is sufficiently important to warrant

plenary review under this Court’s rules. Nevertheless,

we believe that there are substantial grounds support-

ing the petitions that have been filed. As petitioners

have pointed out (Pet. No. 76-653, pp. 11, 17; Pet. No.

76-762, pp. 10-11; Pet. No. 76-769, pp. 8-10; Pet. No.

76-774, pp. 10-11), should national policy make in-

terim licensing desirable, a compelled moratorium on

such licensing pending completion of the generic im-

pact study would preclude this course. In the current

climate of concern regarding energy, it is important

that the flexibility to take this course be preserved.

activities of licensees, and in any proceeding for the payment of

compensation, [or] an award (of] royalties under [specified sec-

tions of Title 42].” See, ¢.g., Ecology Action v. Atomic Energy

Commission, 492 F. 2d 998, 1000 (C.A. 2).

In the event the Commission were to grant an interim license,

that action would of course be subject to judicial review. One of

the issues which could properly be considered in the context of

such a review proceeding would be the adequacy of the environ-

„ The court of appeals’ decision may also discourage federal

agencies from undertaking generic or regional environmental

impact studies. Agencies may be reluctant to initiate such studies

if by doing so they risk a judicial prohibition on related interim

activities.

14

5. We therefore concur in the suggestion (Pet. No.

76-762, p. 19 n. 12) that it would be appropriate for

this Court summarily to reverse the court of appeals’

decision. See, e. g., Coleman v. Conservation Society of

Southern Vermont, Inc., 423 U.S. 809; Northern Indi-

ana Public Service Co. v. Porter County Chapter of

the Izaak Walton League, 423 U.S. 12. Such action

would simply preserve for the Commission the option

of granting an interim license subject to full judicial

review at thee proper time.

Respectfully submitted.

DanteL M. FRiepMan,

Acting Solicitor General.

Perer L. Stravss,

General Counsel,

Nuclear Regulatory Commission.

Fesrvary 1977.

US GOVERNMENT PRINTING OFFICE 1977

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