NRC plans second on-site inspector for NFS

By Thomas Wilson
ERWIN -- Officials with Nuclear Fuel Services Inc. touted an "improved" system of performance enhancements during a meeting with officials of the U.S. Nuclear Regulatory Commission held here Thursday morning.
Officials from NRC's Region II office in Atlanta were at NFS to hear NFS officials discuss the company's performance enhancements created since it last met with the NRC in October. A new regulatory wrinkle NRC officials said they plan to add at NFS is a second on-site regulatory inspector at the NFS site since the company expanded its operation.
"Our processes deal with safety first," said Luis Reyes, regional administrator for Region II.
Presently, one on-site inspector has the run of the NFS facility to examine compliance with NRC regulations pertaining to nuclear materials facilities. While neither NRC nor NFS officials openly discussed the controversial Blended Low Enriched Uranium (BLEU) Project during the public meeting, the NRC acknowledged the company's growing operations were an impetus to add the second inspector.
During its presentation, company officials explained efforts to improve both safety and regulatory compliance at its facility with a greater emphasis on self-assessment procedures.
"I think we've improved," Marie Moore of NFS told NRC officials at the meeting held at the company's employee training center on Banner Hill Road.
An NRC response to a violation by NFS that occurred in January 2003 has moved to the "enforcement" stage according to NRC officials. The NRC's Office of Investigations for Region II initiated an investigation on April 11, 2003, to determine if an NFS decommissioning supervisor deliberately falsified records documenting the transfer of low-enriched uranium (LEU) solution.
In a letter from NRC's Division of Fuel Facilities Inspection dated Jan. 16, 2004, Region II's Office of Investigations substantiated that the decommissioning supervisor willfully authorized the transfer of LEU solution without conducting required verifications and reviews prior to and/or during the transfer.
Based on the evidence, documentation, and testimony during the investigation, NRC staff reported that they found insufficient evidence to substantiate that a decommissioning supervisor with NFS deliberately falsified records pertaining to the transfer of LEU. The decommissioning supervisor's documentation of the transfer resulted in the recording of inaccurate information pertaining to the transfer, according to an NRC investigation document. The incident occurred during decommissioning of a building at the Erwin site that has since been demolished.
NFS spokesman Tony Treadway said the company would not comment on specifics of the employee's actions, but he did say the matter was handled immediately after it occurred. "The matter was promptly and thoroughly reviewed by the NRC and NFS in January of last year," he said.
Reyes said the violation status has moved into consideration for escalated enforcement action and was turned over to the U.S. Department of Justice to determine whether additional actions would be pursued regarding the violation, as was NRC policy.
Trudy Wallack, a representative of the Friends of the Nolichchuky River Valley, questioned the difference between the terms "willful action" and "deliberate falsification".
"I would like to think that at this point the ongoing violation has to raise questions in the NRC like what qualifications and connections you have in place," Wallack said. "This is a chief concern, that we understand that no one is above error."
Wallack said she had trouble understanding what would motivate a decommissioning supervisor by making such an error. She and Modica are members of a consortium of environmental groups requesting a public hearing on the BLEU Project.
Wallack also asked if NRC were aware of information about an incident involving individuals of "middle Eastern" appearance that rented a hotel room near NFS and on Sept. 11 vacated the hotel room leaving all their belongings behind.
Reyes responded that NRC received a variety of information similar to that from the Department of Homeland Security and the FBI.
"Information such as that comes to our attention ... we can't go into details," he said. "We have had similar information, not only here but in other places.
"I can tell you we daily receive intelligence and information."
In total, the three related license amendment requests seeking to amend the Special Nuclear Materials license held by NFS have been submitted to the NRC for approval pertaining to the BLEU Project. The license amendments involve the construction of three new buildings -- the Uranyl Nitrate Building, the Oxide Conversion Building, and the Effluent Processing Building -- on a site referred to as the "BLEU Complex" at the company's site in Erwin.
The BLEU Project is a U.S. Department of Energy initiative to convert stockpiles of surplus weapons-grade uranium into a low-enriched uranium for use in nuclear reactors of the Tennessee Valley Authority. The project will bring more than 33 tons of weapons-grade uranium into Erwin for down blending.
NRC staff have already approved two of three license amendment requests to NFS Special Nuclear Materials license. The first license amendment application, approved by NRC in June 2003, grants NFS the ability to store LEU-bearing material in its Uranyl Nitrate Building. The second amendment enables NFS to process approximately half of the BLEU Project's 33 metric tons of surplus highly enriched uranium. A third license amendment, submitted by NFS in October 2003 seeks authority to construct and operate an Oxide Conversion Facility and related Effluent Processing Building, which is currently under review by the NRC.
These facilities will use a process developed by NFS, partner Framatome ANP. The facilities will convert the liquid uranyl nitrate solution into a uranium oxide powder, which will be further processed at Richland, Wash., into uranium fuel pellets for loading into fuel rods and assemblies for use in commercial nuclear reactors of the Tennessee Valley Authority.
Environmental groups including Friends of the Nolichucky River Valley, the State of Franklin Group of the Sierra Club, Oak Ridge Environmental Peace Alliance, and Tennessee Environmental Council along with a private citizen have filed petitions with the NRC seeking standing to have a public hearing regarding the BLEU Project. Fifteen Northeast Tennessee citizens represented by a Greeneville attorney have also filed separate petitions. Attorneys for NFS have asked the NRC to deny petitioners' requests for a hearing, stating that none of them had demonstrated "standing" or "injury in fact".