# Petition — WESTINGHOUSE ELECTRIC CORP. v. NATURAL RESOURCES DEFENSE COUNCIL, INC. (Nos. 76-769, 76-653, 762, 774) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_1685%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1976 ## Text DFC MICHAEL RODAK, J., CLERK 1976 — IN THE Supreme Court of the United States Octrosper Term—1976 178769 WESTINGHOUSE ELECTRIC CORPORATION, Petitioner, V. NATURAL RESOURCES DEFENSE COUNCIL, INC., ET AL., and THE STATE OF NEW YORK PETITION OF WESTINGHOUSE ELECTRIC CORPORATION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT Murox WaxENFELD Weisman, Cevier, Sprett, Mobtux, WertHermmer & SCHLESINGER 425 Park Avenue New York, New York 10022 Telephone: (212) 371-5400 Counsel for Westinghouse Electric Corporation December 1976. — TABLE OF CONTENTS Oprxions Below 2 JURISDICTION 3 QuEsTION PRESENTED 3 Statutes INvoLvep 4 + 8 8 STATEMENT OF THE CasE Reasons ror GRANTING THE Writ 1. National Importance of the Case 2. Conflict With This Court’s Recent Decision in Kleppe 10 ConcLUSION 15 Aprenpix A—Nuclear Regulatory Commission’s In- terim Policy Announcement published November 14, 1975 (40 F. R. 53056) as corrected December 24, 1975 (40 F. R. 59497) A-l Apprenpix B—Second Circuit’s Opinion, May 26, 1976 A-34 Appenpix C—Second Circuit’s Supplemental Opinion Denying Rehearing, September 8, 1978 4-74 Aprenprx D Second Cireuit's Judgment, May 26, 1978 A-78 Second Cireuit’s Order Denying Rehearing In Bane, September 8, 1976 A-80 Arr Exp E—Statutes Involved 42 U.S.C. 5 4332 (Section 102 of the National Environmental Policy Act) A381 ii TABLE OF CONTENTS PAGE 42 U.S.C. 4 2133 (Section 103 of the Atomic En- ergy Act as amended) A-83 42 U.S.C. § 2201 (b) (Section 161b of the Atomic Energy Act as amended) A-84 Citations Cases: Citizens for a Safe Environment v. AEC, 489 F. 2d 1018 (3rd Cir. 1974) 14 Ecology Action v. United States Atomic Energy Comm., 492 F. 2d 998 (2nd Cir. 1974 14 Kleppe v. Sierra Club, 96 S.Ct. 2718 (1976) 10, 13, 14 Port of Boston Marine Terminal Ass’n. v. Rederiak- tiebolaget, 400 U.S. 62 (1970) 14 STaTurss: 28 U.S.C. See. 1254(1) 3 28 U.S.C. See. 2342(4) 14 28 U.S.C. Sec. 2350(a) 3 42 U.S.C. Sec. 2133 (Section 103 of the Atomic En- ergy Act as amended) 4 42 U.S.C. See. 2201(b) (Section 161b of the Atomic Energy Act as amended) + 42 U.S.C. See. 2239(b) 3, 14 42 U.S.C. Sec. 4331(b)(6) . 7 42 U.S.C. See. 4332 (Section 102 of the National Environmental Policy Act) 3,4 TABLE OF CONTENTS iii PAGE MISCELLANEOUS: 39 Fed. Reg. 5356 5 39 Fed. Reg. 30186 5 39 Fed. Red. 43101 5 40 Fed. Reg. 20142 5 40 Fed. Reg. 53056 as corrected in 40 Fed. Reg. 59497 2,6 40 Fed. Reg. 53061 7 40 Fed. Reg. 53062 6 AEC, Draft Generic Environmental Statement On Mixed Oxide Fuel, Wash—i327 (August 1974) — 10 Petition of Allied-General Nuclear Services, Et Al. for Writ of Certiorari (No. 76-653) 15 The Wall Street Journal, Nov. 11, 1976, page 1, col. 6 8 i Ix THE Supreme Court of the United States Octrosper Term—1976 No. 76- — WESTINGHOUSE ELECTRIC CORPORATION, Petitioner, v. NATURAL RESOURCES DEFENSE COUNCIL, INC, ET AL., and THE STATE OF NEW YORK ——— PETITION OF WESTINGHOUSE ELECTRIC CORPORATION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT This petition for certiorari is occasioned by the Second Circuit’s blanket injunction against the issuance by the Nuclear Regulatory Commission (Commission) of any individual commercial licenses for certain mixed oxide fuel related activities during the interim period prior to license to construct and operate a mixed oxide fuel fabri- eating facility, a participant in the aforesaid rulemaking proceeding, and an intervenor in the proceedings before The subject of this proceeding is the Commission’s in- terim policy announcement dated November 11, 1975, pub- lished in the Federal Register on November 14, 1975 (40 F. R. 53056), as corrected in the Federal Register for De- cember 24, 1975 (40 F. R. 59497). It is set forth in Ap pendix A hereto. The Second Circuit’s opinion (by District Judge Pierce; concurred in by Associate Justice Clark and District Jurisdiction The Second Circuit’s judgment of May 26, 1976, re- versing the Commission in part, is set forth in Appen- dix D. Its erder of September 8, 1976, denying timely petitions f rehearing, is incorporated in its supplemental opinion of that date (Appendix C). Its orders of Septem- ber 8, 1976, denying timely suggestions for rehearing in bane, are set forth in Appendix D. This petition for cer- tiorari is being filed within the prescribed period of 90 days after September 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). Question Presented Section 102 (2) (C) of the National Environmental Policy Act of 1969 (NEPA) requires that all federal agencies include an environmental impact statement (EIS) “in every recommendation or report on proposals for legis- lation or other major federal actions significantly affect- ing the quality of the human environment”. Pursuant to this requirement, the Atomic Energy Commission (AEC), the predecessor of the Commission, commenced the prepa- ration of a generic EIS prior to expanding present use of mixed oxide fuel to wide-scale use in light-water cooled nuclear power reactors (GESMO). The Commission there- after announced that individual interim licenses could be issued where warranted under certain specific conditions based on the Commission’s assessment of the likely bene- fits of allowing such interim licensing as well as the pos- sible adverse impacts. The Second Circuit restrained the Commission from issuing any commercial licenses for certain mixed oxide fuel related activities until after the Commission makes The question presented is whether the Second Circuit’s blanket injunction against such interim licensing was erro- neous because it (1) failed to give due regard to the sub- lar activity was before the Court and any interim license which the Commission might grant thereon would be sub- ject 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. 4 4332 (being Section 102 of the National Environmental Policy Act) ; 42 U.S.C. § 2133 and 4 2201 (b) (being Section 103 and Section 161b of the Atomic Energy Act as amended). Statement of the Case On February 12, 1974, the AEC publicly announced that in accordance with NEPA and the Council on Environ- mental Quality’s Guidelines of August 1, 1973, the AEC had commenced the preparation of the draft GESMO and, on the completion thereof, would, as appropriate, publish for comment proposed rule changes governing recycle of plutonium in light-water cooled nuclear power reactors (39 Fed. Reg. 5356). The availability of the draft GESMO was announced by the AEC on August 21, 1974 (39 Fed. Reg. 30186). Subsequent thereto, on December 10, 1974, the AEC announced that a public hearing would be held on the GESMO (39 Fed. Reg. 43101). On May 8, 1975, the Commission announced its pro- visional view with respect to the possible deferral of fu- ture licensing actions related to mixed oxide fuel, based on its consideration of relevant factors and subject to the consideration of public comments. (40 Fed. Reg. 20142). The Commission set forth the following guide- lines to be observed in resolving the deferral issue in such proceedings : “1. there should be no additional licenses granted to use of mixed oxide fuel in light water nuclear power reactors except for experimental purposes; and 2. with respect to light water nuclear power re- actor fuel cycle activities (activities other than nu- clear 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 which would foreclose future safeguards option or result in an unnecessary ‘grandfathering’. This would not preclude the granting of licenses for experimental and/or technical feasibility pur- poses.” Over 200 comments from the general public, environ- mental groups, utilities and the nuclear industry were filed in response to the Commission’s invitation. Although the environmental groups favored the licensing ban, the utili- ties and the companies in the nuclear industry urged the Commission to retrench from its provisional view because of the staggering costs associated with a delay in the orderly development of mixed oxide fuel technology, costs which ultimately would have to be passed on to the rate- paying public.’ After consideration of all the comments submitted, the Commission reconsidered its prior proposed blanket ban on licensing of mixed oxide fuel related activities, and in its public policy announcement of November 14, 1975 (40 Fed. Reg. 53056) concluded that interim licenses could be issued for fuel recycle related activities, the eligibility of which would depend on criteria calling for the analysis and balancing of specified factors. These criteria were stated to be (40 Fed. Reg. at 53062): “(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 irre- versible and irretrievable commitment of re- sources that would unjustifiably foreclose for the activity substantial safeguard alternatives that may result from the decision on wide-scale use; and (3) The effect of delay in the conduct of the activity on the overall public interest.” The Commission also concluded that use of mixed oxide fuel in light-water nuclear power reactors, which in any Comments by many utilities and companies in the nuclear indus- try, including Westinghouse, set forth evaluations and calculations on the resultant cost increase in uranium ore requirements, enrichment requirements, carrying charges on spent fuel inventories, and expan- dived caatier 7 Camu Ga which would result from a delay in plutonium recycle. 7 event could not become wide-scale use because of practical constraints, may be continued in the interim. The basis of the Commission’s general conclusion that individual interim licenses may be issued where warranted, and under the conditions disclosed in the notice, was plainly set forth in the notice (40 Fed. Reg. at 53061): “While the Commission is properly mindful that certain licensing actions have the potential for fore- closing subsequent alternatives, it cannot disregard the equally hard reality that inaction or a blanket prohibition on fuel recycle related actions could also foreclose or substantially impede realization of energy alternatives which may contribute signifi- cantly to meeting national needs.” (Emphasis sup- plied. ) Disagreeing with the Commission’s expert judgment in a highly technical and specialized field, the Second Circuit, in enjoining all interim commercial licensing, took the position that the critical national need to develop new sources of energy and to recycle dwindling uranium re- “can eigh the far-reaching national concerns t tock this position despite NEPA’s clearly enun- ated policy that “it is the continuing responsibility of the Federal Government to use all practicable means, con- sistent with other essential considerations of national pol- icy, to improve and coordinate Federal plans, functions, programs and resources to the end that the Nation may . . . enhance the quality of renewable resources and ap- proach the maximum attainable recycling of depletable resources.” (42 U.S.C. Sec. 4331 (b) (6)). Reasons for Granting the Writ 1. National Importance of the Case. It is no secret to this Court that the United States is presently grappling with serious energy problems which, unless appropriate action is taken thereon, can have po- tentially disasterous economic consequences. Notwithstand- ing the Arab oil embargo which occurred at the end of 1973, this country has been unable to mobilize the re- sources and talent necessary to put together a long-term program for energy self-sufficiency in order to forestall disruption of the domestic economy by the whims of for- eign forces. Despite both Presidents Nixon and Ford hailing pro- grams calling for energy self-sufficiency and independence, it would be an overstatement to say that this country is not in any better condition in this respect than it was im- mediately prior to the Arab oil embargo. Indeed, a re- cent Wall Street Journal article laid the situation out quite frankly and unabasiiedly.* It noted that in the pass- ing of the economic “pause” of recent months, the econ- omy is beginning to show signs of increased growth which will depend upon a larger supply of energy resources, par- ticularly of petroleum. One of the major uses for such petroleum is the burning of oil in power generating sta- tions for the purpose of producing electricity. In dis- cussing the upeoming meeting of the Organization of Petroleum Exporting Countries (OPEC) scheduled for December 15, 1976, at which price increases of 10% to 20% are expected, the article stated: “The OPEC members are closely watching the de- mand for petroleum products in the oil-consuming * The Wall Street Journal, November 11, 1976, p. 1, 6th Col. markets of the U.S. and Western Europe for this is the key factor determining the size of the price increase. Of course, as demand rises at home, the U.S. must import ever more of the costlier foreign oil because domestic oil output has been declining since reaching a peak in 1970. The U.S. currently imports more than 40% of its oil, compared with only 29% in 1973, the year of the oil embargo.” (Emphasis added). and further: “A major reason for the increase in demand for residual oil is the rapidly increasing use of oil by US. electric utilities. The Edison Electric Institute estimates that utilities will burn 597 million barrels of oil this year, up from 507 million barrels in 1973. This is despite an increase in the use of coal and the starting up of nuclear power plants. Until the oil embargo, electricity output was growing at the rate of about 7% a year. But in 1974 there was no growth in output, and last year it was up by only 4%. But this year’s growth is expected to be 6%.” It is not necessary to recite in detail in this petition the dislocating consequences that resulted from the Arab oil embargo of 1973. To be recollected are the long lines at the gasoline stations, the disruptions in orderly business planning, the impacts on the contractual relationships be- tween companies because of the triplefold or quadrafold increase in prices for raw and unfinished materials, re- sultant substantial increase in prices for finished goods, and the abnormal increase in the number of bankruptcies and insolvencies. It is against this backdrop that a delay in the recycling of plutonium, however brief, must be viewed. One of the 10 most significant aspects of plutonium recycle is the re- sulting preservation of this country’s natural energy re- source of uranium. Immediate recycle of plutonium re- covered from spent fuel has been projected to save about 130,000 tons of uranium trioxide through the year 1995, which savings is equivalent to 10 billion barrels of oil or 2 billion tons of coal.“ Clearly the decision of the Second Cireuit to declare a moratorium on the granting of com- mercial licenses for mixed oxide fuel recyele activities is one of the utmost national importance that should be con- sidered by this Court. 2. Conflict with This Court’s Recent Decision in Kleppe. As will be shown hereafter, the Second Cireuit’s deci- sion is squarely and directly contra to this Court’s deci- sion on June 28, 1976, in No. 75-552, Kleppe v. Sierra Club, 96 S. Ct. 2718. In Kleppe, this Court was faced with the issue of whether NEPA required the Department of the Interior and other Federal agencies to prepare a comprehensive environmental impact statement prior to allowing the fur- ther development of coal reserves on federally owned or controlled land in the Northern Great Plains region. This Court held that NEPA did not require the preparation of such a statement in the absence of an existing proposal for region-wide action, and in view of the existence of individual environmental impact statements for the four mining plans in a particular geographical section of that region, which plans had been submitted for approval by the Secretary of the Interior. The following views expressed by this Court in Kleppe (96 S.Ct. at p. 2729), in reversing an injunction restrain- I Draft GESMO, pp. S 8-10. 11 ing approval of the plans, clearly demonstrate the error of the, Second Circuit in enjoining interim commercial licensing herein: “Assuming that the Court of Appeals’ theory about ‘contemplation’ of regional action would permit a court to require preproposal preparation of an im- pact statement, the court’s injunction against the Secretary’s approval of the four mining plans in the Powder River Basin nevertheless would have been error. The District Court had found that re- spondents would not have been entitled to an in- junction against any individual projects even if their claim of the need for a regional impact state- ment had been valid, because they had shown no irreparable harm that would result absent such an injunction and the record disclosed that irreparable harm would result to the intervenors who sought to carry out their business ventures and to the pub- lie who depended upon their operations. (Emphasis by the Court) The Court of Appeals made no find- ing as to the equities at the time it originally en- tered the injunction; when it continued the injune- tion following its decision on the merits, it stated only that the ‘harm’ justifying an injunction ‘ma- tured’ whenever an impact statement is due and not filed. But on the Court of Appeals’ own terms there was in fact no harm. First, the Court of Appeals itself held that no regional impact state- ment was due at that moment, and it was uncertain whether one ever would be due. Second, there had been filed a comprehensive impact statement on the proposed Powder River Basin mining plans themselves, and its adequacy had not been chal- lenged either before the District Court or the Court of Appeals in this case, or anywhere else. Thus, in simple equitable terms there was no grownds for 12 the injunction: the District Court’s finding of irre- parable injury to the intervenors and to the public still stood, and there were—on the Court of Ap- peals’ own terms—no countervailing equities.” (Em- phasis added) The Second Circuit’s injunction against the Commis- sion’s announced policy of allowing individual interim li- censing of mixed oxide fuel recycle activities was errone- ous because it utterly lacked any factual foundation or basis that would justify the grant of such drastic and ex- traordinary relief. The record clearly established that a delay in interim licensing would occasion substantial and irreparable harm to the utilities, the nuclear industry and the public who depend upon them for electricity gener- ated to a large extent by nuclear energy.“ On the other hand, the mere announcement by the Commission of its interim licensing policy that certain activities may be li- censed upon subsequent compliance with the Commission’s licensing requirements could not in any fashion occasion harm to the petitioners below or to the environment. Quite to the contrary, harm, if any, could only mature, at the earliest, if and when a license is issued and action taken thereon, but not before then. By restraining the Commission from proceeding with allowance of interim licensing, the Second Cireuit effectively foreclosed any person from even being able to demonstrate what harm, 5 At 539 F.2d 833, the Second Circuit noted: “Comments received from i : nuclear power industry recommended generally that the Commission proceed to interim licensing of certain restricted activi- ties prior to the final decision on GESMO. Consumers Power Com- pany, a licensee of two plants, stated that a delay of plutonium licens- ing 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).” 13 if any, could result from the grant of a particular license, applying the NEPA procedural requirements of the Com- mission, including the analysis and balancing of the in- terim licensing eligibility criteria enunciated in the Com- mission’s policy announcement. Moreover, in the posture of the case before the Second Circuit, its determination that interim impact statements for interim licenses would necessarily be inadequate under NEPA (Supplemental Opinion Denying Rehearing, A-76) was premature. As this Court emphasized in Kleppe: “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 im- pacts of, and the alternatives to, their approval. So long as the statement covering them was ade- quate, there would have been no reason to enjoin their approval pending preparation of a broader regional statement... (96 S.Ct. at 2729, Note 16) * * Nor is it necessary that petitioners always com- plete a comprehensive impact statement on all pro- posed actions in an appropriate region before ap- proving any of the projects. [Approval of one lease or mining plan does not commit the Secre- tary to approval of any others.. Thus, an agency could approve one pending project that is fully covered by an impact statement, then take into consideration the environmental effects of that existing project when preparing the comprehensive statement on the cumulative impact of the remain- ing proposals.” (96 S.Ct. at 2733, Note 26) 14 In the instant case, no individual impact statements with respect to any licensing actions were before the Sec- ond Circuit. Therefore, the Second Circuit prematurely judged that all such environmental impact statements at whatever stage of preparation in connection with indi- vidual licensing actions could never be adequate merely because of the pendency of a broader, programmatic im- pact statement on the wide-scale use of mixed oxide fuels. Furthermore, until such time as an interim license is is- sued supported by a final environmental impact statement, the mere announcement by the Commission of the cireum- stances under which interim licenses would be issued can- not be deemed a “final order” within 42 U.S.C. 2239(b) and 28 U.S.C. 2342(4), which is a requisite for the Second Cireuit’s exercise of direct appellate jurisdiction herein. See: Citizens for a Safe Environment v. AEC, 489 F. 2d 1018, 1021-22 (3rd Cir. 1974); Ecology Action v. United States Atomic Energy Commission, 492 F. 2d. 998, 1001 (2nd Cir. 1974). In Kleppe, this Court emphasized (96 S. Ct. at 2729, Note 15): “. .. But the time at which a court enters the process is when the report or recommendation on the proposal is made, and someone protests either the absence or adequacy of the final impact state- ment. This is the point at which an agency’s ac- tion has reached sufficient maturity to assure that judicial intervention will not hazard unnecessary disruption.” (Emphasis supplied) See also: Port of Boston Marine Terminal Ass’n. v. Rederiaktiebolaget, 400 U.S. 62, 71 (1970). Respectfully submitted, Murox WaxenreLp Weisman, Cann, Srertr, Momax, Wertnemer & ScHLesincer 425 Park Avenue New York, New York 10022 Telephone: (212) 371-5400 Counsel for Westinghouse Electric Corporation December 1976. APPENDIX — Ss 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) Nucl Recvutatory CoMMIssion Mized Oxide Fuel Scope, Procedures and Schedule for Generic Environmen- tal Impact Statement and Criteria for Interim Licensing Actions In the May 8, 1975 Feperat Reoister (40 FR 20142), the Nuclear Regulatory Commission requested public comment on the subject of procedures for decisions relating to wide- scale 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 Commission’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 Commis sion'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 criteria 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. A-2 SuMMARY After a careful review of all comments received on iis 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 materia's 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- cluding safety and environmental matters as well as safe- guards matters. Proposed rules reflecting the final state- ment’s analysis of those matters will be published for publie 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, publie 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 technica! issues. The legislative-type hearings will begin as soon as that™ portion of 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 fina] 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- eycle 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 ériteria 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, cons'stent with the above, only after analysis and balancing of the fo''owing factors: 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- justifiably foreclose for the activity substantia! safeguards alternatives that may resu't from the decision on wide- scale use; and The effect of delay in the conduct of the activity on the overall public interest. The individual impact statement or appraisal, as ap- propriate, for each individual fuel reeycle related licensing action subject to the foregoing eligibility criteria will de- seribe the relationship between the licensing action at issue and the environmental impact statement on wide-scale use, and discuss the application of the criteria to the facts of the case. Interim Licensing for Use of Mixed Oxide Fuel in Re- actors. With respect to interim licensing of mixed oxide fuel in light water nuclear power reactors, the Commission believes that use of such fuel could produce useful addi- tional economic and technical data. Such use wou!d neither A-5 constitute nor markedly contribute to ‘‘wide-scale 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 enable the Commission to carry out its re- sponsibilities to protect the public hea'th 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 leve's of risk associated with loss or diversion of plutonium, and that current safe- guards will provide adequate protection for interim licens- ing of its use. Interim licensing of initia’ 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 cycle activi- ties which may demonstrate eligibility (i.e. plutonium ni- trate-to-ox'de 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 Reorsrer at the same time as issuance of the draft safeguards supplement in early 1976. Final safe- guards rules for licensing such fuel cycle activities in the interim will be adopted after public comment procedures, at the time the Final Environmental Statement is issued (mid-1976). A-6 The Appendix to this Notice sets forth, in sequential manner, the projected times for completion of the draft and final environmental impact statements; for publication of safeguards rules relating to interim licensing and rules re- garding wide-scale use of mixed oxide fuel; for issuance of notice of hearing; and for the final Commission decision on wide-scale use. Backcrounp On February 12, 1974, the Atomic Energy Commission (AEC) announced that a generic environmental impact statement would be prepared prior to an AEC decision on the wide-scale use of mixed oxide fuel (also referred to as plutonium recycle fuel) in light water nuclear power re- actors (39 FR 5356). On August 21, 1974, notice was pub- lished in the Feverat Reeorster that a draft environmenta, impact statement on this matter had been prepared, pur- suant to the National Environmental Act of 1969 (NEPA), by the AEC Staff (39 FR 30186). The principal conclusion in the draft environmental im- pact statement issued by the AEC Staff was that utilization of plutonium resources as recycle fuel in light water nuclear power reactors should be approved. The AEC Staff reached favorable conclusions with respect to matters of public health and safety, and the environment. The AEC Staff found in this connection that the total environmental impact from the nuclear fuel cycle, using mixed oxide fuel, would be slightly reduced, and that the safety of light water power reactor operations would not be ad- versely affected. The draft statement further reflected that uranium reserves would be extended, and that re- quirements for uranium enrichment would be reduced. Al. though the draft environmental impact statement did not set forth a fully developed and detailed cost-benefit analysis of alternative safeguards programs, it did review the then current safeguards program, presented some cost estimates A-7 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 AKC 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 draf en- vironmental statement was well done and reflected a hig’ quality effort, it was incomplete because it fa‘led to pre- sent a detailed and comprehensive analysis of the environ- mental impacts of potential diversion of 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 dung 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 Fevenat 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 ('ommis- 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 statement and of the earlier approach adopted by the AEC Staff, or other alternatives, from the standpoint of the relevant policy, factual, and legal considerations; (2) whether the question of deferring future licensing actions related to the use of mixed oxide fuels should be left for resolution in individual licensing proceedings, or addressed by the Com- mission as a gencric matter; and (3) the appropriateness of the Commission’s guidelines for resolving the individual licensing actions set forth above. Comments were re- quested by June 9, 1975. On May 27, 1975, before the expiration of the original comment period, the Commission held public meetings with industry groups and other interested persons to respond to questions seeking clarification of the May 8th Notice. The comment period later was extended until July 24, 1975. Over two hundred comments were received in response to the May 8th Notice. These comments have been placed 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 cost-benefit anal- ysis of alternative safeguards programs as a part of the Commission decision on the wide-scale 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 ; 2 Three supplementary statements received in response to a Staff request for additional information contained a request that certain information submitted be withheld from public disclosure as pro- prietary information. None of this information is included in this Notice 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- scale 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. Of those who specifically addressed the third issue (ade- 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- crnment believed that present regulations were inadequate for this purpose in the absence of further analysis. On the final issue (procedures for reaching the ultimate deei- 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 Pivrowtum m ree Licnt Warn Reactor Furt, Cy 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 its natural abun- dance of 0.7 percent to about 3 percent through a process called isotopic enrichment. Essentially al! ef the other 97 percent of the uranium in the fuel is the isotope uranium- 238. The heat energy produced during the operation of newly fueled light water reactors comes almost entirely from the fissioning of the uranium-235 atoms in the fuel. As the reactor operates, atoms of plutonium are produced from uranium-238 atoms. For each gram of uranium-235 con- sumed in LWR fuel, as much as 0.9 grams of fissile plu- tonium is formed within the fuel. Generally, more than A-12 half of that plutonium subsequently fissions in place, thus contributing about one-third of the energy produced in the power plant. In fact, just before expended fuel is dix charged from the reactor, more than half the fixsions oc curing in that fuel are fissions of plutonium rather than uranium. Thus, all operating uranium-fueled light water power reactors generate plutonium, some of which ix con sumed in the reactor without external recyele. From the early days of the nuclear power industry in this country, electric utilities planning to construct and 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 by AEC of this research terminated in mid-1972, although in- direct 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 spent fuel reevele process in the following steps: (1) Store the spent fuel to allow some decay of radio activity ; (2) Separate plutonium and uranium from fission product wastes as nitrate solutions; (3) Convert the uranium to uranium hexafluoride which is then enriched to increase the concentration of the fissile isotope uranium-235 ; (4) Convert the uranium hexafluoride to uranium Ji oxide ; 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 carried out behind massive shielding and with the use of remote operating technology. In the separations processes the fuel elements are sheared and the fuel matc- 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 heen handled to A-14 date are of a magnitude far below that which would be in volved in wide-scale use. The conversion of limited quantities of fission product wastes into forms suitable for long term storage has been 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 fuel have been generated to date and no commercial seal. facilities for the conversion of such wastes have been de signed or licensed to date. Mixed oxide fuel and the materials involved in the fabri cation of the fuel are being transported today and consid erable experience exists with the factors involved in these transportation arrangements. Wide-scale use of mixe«| 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 other transportation factors of significance are introduced. To date fission product wastes have not been shipped to facili- ties for long term storage; thus, such shipment, while not judged to be markedly different from the shipment of spent fuel itself with regard to health and safety, environmental and safeguards considerations, has not been performed by industry. At present, three light water nuclear power reactors (Big Rock Point in Michigan, Quad-Cities 1, and Dresden 1 in Illinois) are licensed to operate with mixed oxide fucl The number of mixed oxide fuel rods in these reactor 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 clec- tricity) reactor, Big Rock Point. There are in operation today no plants for reprocessing of light water reactor spent fuel or mixed oxide fabrica tion plants of the size contemplated for wide-scale use. rr A-15 Ilowever, 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. GewveraL Pourcy Ossectives or THE COMMISSION In considering and arriving at its various determina- tions, the Commission was motivated by several basic pol- iev objectives in carrying out its responsibilities under the Atomie Energy Act and NEPA. In keeping with its gen- A-16 eral approach to regulatory matters, it sought to structure a 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 Or SAFEGUARDS IN THE ENVIRONMENTAL STATE- MENT AND Procepures ror Decision In light of its review of comments received in response to the May 8th Notice and its further deliberations, and consistent with the foregoing policy objectives, the Com- mission has concluded that a decision on wide-seale use of mixed oxide fuel in light water nuclear power reactors should be preceded by a full assessment of relevant safe- 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 circulated 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 analysis and an overall cost-benefit balance. Te 417 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 boerd 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 portion of the generic impact statement is issued in mid- 1976. 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 Froernat. Reoister 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. Inrenm™ 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 oceurs at present. If the applicant's schedule were met and the Commission author- ized its operation, the fuel separations and uranium con- A-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 metric 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 metric 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 80, to what extent Staff reviews and publie-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 (Le., plutonium oxide rather than nitrate solution). A-20 seale 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 delay 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 thai 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- eluded 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 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). I~trerm™ Licensixne 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- tory responsibilities, it should issue 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- eyele related licensing actions could also foreclose or sub- stantially impede realization of energy alternatives which may contribute significantly to meeting national needs. Protection or THE Puste HU anv Sarety, tue Cou- mon Derense anv Security anp THE ExvrroxMeENT 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-seale 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 Counci] on Environmental Quality), A-23 and the comments received on the Commission’s provisional views of May 8, 1975.* The Commission is also of the view that, for the reasons given above 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 cumu- 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. For the same reasons the Commission believes that in- terim licensing is not likely to result in such a substantial further commitment of resources that the final decision on the costs and benefits of the public health and safety and environmental aspects of wide-scale use of mixed oxide fuel would be significantly affected or that ge: ric determin- ations on such aspects would be foreclosed. The matter of foreclosure uf 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 useful 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 coats 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 to be resolved in the near future. Docket No. PRM 20-5. A-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 safeguards 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 design changes would be required to ac- commodate loading of mixed oxide fuel, and the fuel ean 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 reflect 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 interim 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 circumstances of the case, be cufficient 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 environmental costs associated with the project could only be justified by assuming that wide-scale use of 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. Iwrerm Licenstno Exiorsriry 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 all 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- crate 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. Iyterm Licensine Sarecuarps 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 to 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 protec- tion of fixed sites and transportation involving strategic quantities of nuclear materials. Physical security reqnire- 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 Frp- ERAL Reoister 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 occurs (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 strategic 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 40038), 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 Agengy 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 arc 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 meta] 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- eal 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. Finelly, 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 strengthening 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 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 Feperat Recrsrer 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 widescale use of mixed oxide fuel. These eligibility criteria and safeguards limitations are in addition to any other applicable Commission licensing irements 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 individua! impact statement or appraisa! 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 Feoerat Reowrer 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. Samus. J. CMX. Secretary of the Commission. A-33 APPENDIX Prosyecrep Scueputz or Everts Leaprsc to Commission Decision on Wine-Scatze Use or Mrxep Ox Font. Late 1975—Notice of hearing on issues associated with health and safety, safeguards, and environmental matiers 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.“ of recycled plutonium could be reached by early 1977. The Com- mission cannot say at this time whether adjudicatorytype bear- 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 CIRCUTT. Nos. 963, 1051, Dockets 75-4276, 75-4278. Naturat Resources Derense Councn., Inc., eT L., Petitioners, v. Tue Unsrrep States Nuciear Recvutatory Commission and Tur Unrrep Srates or America, Respondents, Aund Generar Nucrear Services, et AL., /ntervenors. 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 Commission, 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-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 & Electr o,, and others, Commonwealth Edison Co., and others, and The Babeock and Wilcox Co. Robert Lowenstein, Washington, D. C. (Lowenstein, Newman, Reis & Axelrad, 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 Crank, Associate Justice, and Prernce and Owe, District Judges.“ Prerce, 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 eriteria 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 1 a ti 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 fucl, 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. 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. 28 U.S.C. § 2342 provides in part as follows: _ court of appeals has exclusive jurisdiction to enjoin, set validity of — > > >. > 7 * (4) all final orders of the Atomie Energy Commission made reviewable by section 2239 of title 2 (a4) 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 issnance or modification of rules and regu- lations dealing with the activities of licensees, and in any pro- A-37 Petitioners ask this Court to set aside the Commission’s November 11, 1975 order on the ground that the decision 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 se.,“ the Atomic Energy shall admit any such person as a party to such ing. 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 construc- tion permit for a facility, and on any application under ing facility. In cases where such a construction permit has been issued following the holding of such a hearing, the Com- whose interest may be affected, issue an operating license or amendment to a construction permit or an amendment to operating license without a hearing, but upon thirty days’ notice and publication once in the Federal Register of intent to do so. The Commission may dispense with thirty days’ notice and publication with respect to any cation for an amendment to a construction permit or ment to an operating license upon a determination by the Commission that the amendment involves no significant haz- kind ards consideration. (b Any final order entered in any proceeding of the ki specified in subsection (a) of this section shall be subject to judicial review in the manner prescribed in the Act 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. accordance with the policies set forth in this chapter, and (2) all agencies of the Federal Government shall meking 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, (iii) alternatives to the proposed action, (ir) the relationship between local short-term uses of man’s environment and the maintenance and enhancement of long- term productivity, and (v) 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 — involved. Copies of such statement and the comments 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 ; * * * — * (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 ;"’ A-39 to be primarily legislative rather 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 discretion. 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 discretion. 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 million 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.“ Ind plans are to carry out the spent fuel ree cle process in the following steps: N (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 increase the concentration of the fissile isotope uranium-235 ; (4) Convert the uranium hexafloride to uranium dioxide ; (5) Convert the plutonium nitrate to plutonium oxide; 441 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 for 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 ; (8) 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 through transportation of the nuclear materials from light water reactors to separation and conversion facilities, to fabrication plants and back to the converted light water readtors.® 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, Illinois, 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 plutoni- 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- 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 nucle: 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. 50-201, 50-332, and 70-1729; 40 Fed. Reg. at 53059. 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. GESM0O 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 Commission 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, ean 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 cycle. 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 probable 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 reeycle 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 facilitics’ safe- guards systems. Looking toward compliance, the Commission on May 8, 1975 announced provisional decisions on certain procedures 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 environmental statements before a Commis- sion decision is reached on wide-scale use of mixed oxide fucls in light water nuclear power reactors. ‘*(2) There should be no additional licenses granted for use of mixed orie fuel in 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 Int. 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 1d. 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 20.) 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.) Ill. The November 11, 1975 Decision Following receipt of comments and limited hearings held during the comments period, the Commission i§sned 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. 447 The procedures set forth were geared to the Commis- sion’s estimate that it would issue Final GESMO in “‘early 1976“ and the safeguards supplement in ‘‘mid-1976.’’ The Commission had also estimated that it could conclude the GESMO hearings by the end of 1976. However, at argu- ment, counsel for the Commission stated that there had been some slippage in this time schedule. The November 11, 1975 order provides that the Commis- sion will proceed to hold hearings on the GESMO study in the following manner once each segment of the study is released in its final form: The Commission will establish a board to preside at those hearings. The hearing board will be expected to establish reasonable time limits for the conduct of the proceedings. All direct testimony for the legislative- type hearings will be filed in advance. The board will be expected to question witnesses and participants will be permitted to suggest questions to the board, but there will not be direct cross-examination of partici- pants by other participants. It may be that some factual issues cannot be resolved adequately on the basis of a record developed in this manner. [After the legislative-type hearings,] par- ticipants will have the opportunity to identify any such issues of fact for which direct cross-examination by the participants is needed for a sound decision. [The par- tieipant] will be expected to demonstrate why the legislative-type procedures have not proved adequate. (40 Fed.Reg. at 53060.) The November 11, 1975, order also addressed the ques- tion of the extent to which the Commission should under- take review of individual license applications prior to the GESMO hearings and the final decision on mixed oxide fuel. The Commission determined that its staff should con- A-48 tinue to review applications but that the staff should analyze only those questions not being addressed in GESMO. The staff reviews will be ¢ nted there- after following the final decision on wide-scale use. Public hearings on pending license applications will be conducted only in the Commission’s discretion, upon a con- sideration of the following factors: (I) the degree of likelihood that any early findings on the issue(s) would retain their validity following the Commission’s final decision on wide-scale use of mixed oxide fuel and implementing regulations; and **(2) the possible effect upon the public interest and the litigants in having an early, if not necessarily con- elusive, resolution of the issue(s).’’ (40 Fed Reg. at 53061.) Such hearings, if held, would be adjudicatory in charac- ter as are the Commission's licensing proceedings in most own local environmental impact statement; however, the 40 Fed Reg. at 53060-63. This position was set forth clearly by the Commission's decision In the Matter of Consumers Power Company (Big Rock Point Nuclear Plant) Docket No. 50-155, NRCI-75/8, CLI-75-10, p. 188. The scope of the NEPA , EF f . 1 g i = A-49 In the words of the agency’s order, The Commission has concluded that interim licensing may be issued for fuel recycle related activities While the Commission is properly mindful that cer- tain licensing actions have the potential for foreclos- ing subsequent alternatives, it cannot disregard the equally hard reality that inaction or a blanket prohibi- tion on fuel recycle related licensing actions could also foreclose or substantially impede realization of energy alternatives which may contribute significantly to meet- ing national needs. (40 Fed.Reg. at 53061.) As bases for this reversal of its position of May 8, 1975, the Commission set forth its belief that any environmental or health aspects of interim activity can be adequately addressed through interim reviews and that interim licens- ing will not foreclose any significant health, safety or en- vironmental alternatives. It is important to note what is encompassed by “in term interim activity’’. The Commission will allow separa- tion of plutonium and uranium from fuel wastes; it will allow reprocessing of the fuel into forms suitable for use; it will allow fabrication of mixed oxide fuel; it will permit use of mixed oxide fuel in presently existing light water reactors; it will license plant construction to achieve the foregoing steps; and it will permit the transportation, in- eluding international transportation, of mixed oxide fuel in its various processing stages. All of the foregoing ac- tivities will be allowed on a commercial-scale level. The order expressly states that no limits will be placed on the number of light water reactors for which . . . authori- zation [to convert from use of uranium to plutonium) may be granted. (40 Fed.Reg. at 53062.) In addition, the order does not state that there will be any limits on the other recycle activities allowed in the period prior to the final decision on GESMO. ae —tipeom- § 4 : 450 Certain of the above interim activities will be permitted upon the application of special interim eligibility criteria. The special criteria will not be applied to the use of mixed oxide fuel in presently existing power plants or to the transportation of plutonium materials. The Commission concluded that conversion of light water reactors to mixed oxide fuel need not be subject to special standards because such conversion does not require significant design changes and because such conversion is reversible in the event that the final decision is adverse to the wide-scale use of mixed oxide fuel. The transportation of plutonium will be allowed without application of special standards in light of the Commission's view that such transportation would hu con- strained by practical limitations and in light of the Com- mission's belief that such limited transportation would not present factors which are not already present in the exist- ing transportation of enriched uranium. Accordingly, the interim eligibility criteria will apply only to individual applications for interim licenses for commercial fuel reprocessing and mixed oxide fuel fabri- cation. The interim standards are as follows: **(1) Whether the activity can be justified, from a NEPA cost-benefit standpoint, without placing primary reliance on an anticipated favorable Commission deci- sion on wide-scale use of mixed oxide fuel; **(2) Whether the activity would give rise to an irre- versible and irretrievable commitment of resources that would unjustifiably foreclose for the activity sub- stantial safeguard alternatives that may result from the decision on wide-scale use; and 3) The effect of delay in the conduct of the activity on the overall public interest. (40 Fed Reg. at 53062.) 451 These criteria, combined with consideration of Draft (;ESMO, led the Commission to conclude that interim licensing „is not likely to result in such a substantial further commitment of resources that the final decision on the costs and benefits of the public health and safety and environmental aspects of wide-scale use of mixed oxide fuel would be significantly affected or that generic determinations on such aspects would be foreclosed.’’ (40 Fed.Reg. at 53061.) Finally, the Commission also concluded that a refusal to allow interim commercial activity would result in ‘‘the dis- ruption or cessation of planning as well as the production of useful data, and might result in ‘‘economic penalties on the American public through increased costs to elec- trical utilities caused by delaying the use of resources avail- able in spent fuel (Id.) The order of the Commission also addressed safeguards which will be required in the interim period. In essence, only those safeguards presently required by law will be im- posed (See 10 C. F. R. Parts 70 and 73), although the Com- mission has stated that it is considering certain new and additional safeguards. According to the order, final re- quirements for safeguards in the interim period will be announced at the same time as the issuance of Final GESMO. IV. Reviewability The first question which must be addressed is whether the November 11, 1975 decision of the Commission is a final order reviewable in this court. Petitioners urge that jur- isdiction to review is present pursuant to 28 U.S.C. § 2342(4), which grants to this court exclusive jurisdiction to enjoin, set aside, suspend in whole or in part, or to de- A-52 termine the validity of all final orders of the Nuclear Regu- latory Commission made reviewable by section 2239 of Title 42. Petitioners state that the order below is a final order entered in a Commission proceeding for the issu- ance or modification of rules and regulations dealing with the activities of nuclear power licensees; see 42 U.S.C. § 2239(a) and (b).“ Petitioners also argue that this court has jurisdiction to review a decision of an agency imple- menting NEPA or refusing to refrain from licensing until the filing of an impact statement. See Scientists’ Institute for Public Information, Inc. v. Atomic Energy Commission, 156 U.S. App. D.C. 395, 481 F [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_1685%3A1. Public record. Not legal advice.