[Federal Register Volume 76, Number 35 (Tuesday, February 22, 2011)]
[Notices]
[Pages 9832-9835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-3851]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 03034542; License No: 37-30412-01; EA-10-077; NRC-2011-
0041]


In the Matter of Superior Well Services, Ltd. Indiana, PA; 
Confirmatory Order Modifying License (Effective Immediately)

I

    Superior Well Services, Ltd. (SWS or Licensee) is the holder of 
radioactive material License No. 37-30412-01 issued by the U.S. Nuclear 
Regulatory Commission (NRC or agency) pursuant to 10 CFR Part 30. The 
license authorizes the possession, storage, and use of radioactive 
sources for oil and gas well logging at the Licensee's facilities in 
Buckhannon, West Virginia, Sophia, West Virginia, and Gaylord, 
Michigan, and at temporary jobsites within the NRC's jurisdiction, in 
accordance with conditions specified therein.

II

    On October 21, 2010, the NRC issued a Notice of Violation (Notice) 
and Proposed Imposition of Civil Penalty (CP) in the amount of $34,000 
for five violations that were categorized into two severity level (SL) 
III problems. The violations were identified during an NRC inspection 
as well as an investigation conducted by the NRC Office of 
Investigations (OI). (Reference: NRC Inspection Report No. 03034542/
2009001 and OI Investigation Report No. 1-2009-035). The violations 
were also discussed at a predecisional enforcement conference (PEC) on 
September 2, 2010.
    The first SL III problem described in the Notice related to an 
event that occurred on September 20, 2008, when two well-logging sealed 
sources fell off of a company truck during transport. One violation 
involved the failure to secure the packages containing the licensed 
material from shifting during transport. On September 20, 2008, when 
the truck transporting these sources reportedly hit a large pothole, 
the weld securing the source plate to the truck broke, and the sources 
fell off of the truck and remained unattended by the side of a public 
highway. The second violation involved the failure to control and 
maintain constant surveillance of the sources while they were on the 
highway (an unrestricted area). Since SWS did not recognize that the 
sources had fallen out of the truck until the truck reached its 
destination at the SWS facility in Buckhannon, WV, the sources remained 
unattended for approximately ninety minutes until SWS personnel located 
and retrieved the sources. The third violation involved the failure to 
immediately report this occurrence by telephone to the NRC Operations 
Center. The involved SWS employees, including the site Radiation Safety 
Officer (RSO) for the associated SWS facility, did not recognize the 
need to report this event to the NRC. As a result, SWS did not provide 
the required immediate telephone notification of this event to the NRC 
Operations Center until July 23, 2009, after an NRC inspector informed 
SWS of the reportability requirement while conducting a routine 
inspection.
    The second SL III problem described in the Notice involved SWS's 
failure to conduct required radiological surveys of vehicles before 
transporting licensed material and the deliberate falsification of 
survey records for these vehicles. Specifically, former SWS employees 
informed the NRC inspector and investigator that on numerous occasions, 
they did not perform the surveys and they instead completed the survey 
forms by copying data from previously completed forms. The employees' 
failure to perform the required radiological surveys of vehicles 
prevented SWS from assuring that the dose rates inside and outside the 
trucks did not exceed limits set by the NRC and the U.S. Department of 
Transportation. The employees who admitted to the NRC that they had 
falsified survey records indicated that they did so because they did 
not know how to use the survey instruments.

III

    In response to the October 21, 2010, NRC letter, SWS requested the 
use of the NRC's Alternative Dispute Resolution (ADR) process to 
resolve differences it had with the NRC regarding the Notice. ADR is a 
process in which a neutral professional mediator with no decision-
making authority assists the parties in reaching an agreement to 
resolve any differences regarding the enforcement action. On January 4, 
2011, the NRC and SWS met in an ADR mediation session, arranged through 
Cornell University's Scheinman Institute on Conflict Resolution. During 
that ADR mediation session, an agreement in principle was reached. This 
Confirmatory Order is the result of that agreement, the elements of 
which consisted of the following:
    1. SWS did not take issue with the NRC conclusion set forth in the 
October 21, 2010, letter and enclosed Notice that the subject 
violations regarding the temporary loss of two well-logging sources 
occurred as identified. Further, SWS did not take issue with the NRC

[[Page 9833]]

conclusion that the violations collectively warranted classification as 
an SL III problem and that SWS was subject to a civil penalty in 
accordance with the NRC Enforcement Policy, since the violations 
involved the loss of sealed sources.
    2. Regarding the subject violations related to the failure to 
conduct radiological surveys, however, SWS maintained that the surveys 
were performed and that the employees who admitted to the NRC that they 
had falsified survey records did so because they were disgruntled after 
they had lost their jobs with SWS. Based upon the sworn testimony of 
the involved individuals, the NRC maintained that the former employees 
did not perform the surveys and that they created records indicating 
that the surveys had been performed when, in fact, they knew the 
surveys had not been performed. Although the NRC acknowledged that SWS 
management did not encourage or condone this practice, the NRC 
maintained that SWS was accountable because licensees are responsible 
for the actions of their employees. The NRC and SWS agreed to disagree 
on this violation.
    3. The NRC acknowledged that SWS had taken several corrective 
actions in response to the violations, so as to preclude the occurrence 
of similar violations in the future. These actions include:
    a. For the SL III Problem involving violations associated with the 
loss of radioactive material (RAM), SWS has:
    i. Enhanced how the material is secured in company trucks during 
transport by welding the plate with the source holders to the truck 
frame, repairing the lock, and installing a heavy hasp lock to secure 
the door from opening during transport;
    ii. Provided training on NRC notification requirements;
    iii. Scheduled monthly conference calls with available site RSOs, 
Regional managers, and the Corporate RSO to discuss issues; and
    iv. Replaced the Corporate RSO.
    b. For the SL III Problem involving two violations associated with 
the failure to perform surveys, SWS has:
    i. Increased focus on vehicle radiological surveys during initial 
and annual employee training, and required documentation of the 
completion of this training;
    ii. Implemented random audits and observations of vehicle radiation 
surveys by SWS management;
    iii. Developed job aids for SWS employees on the use of radiation 
survey meters; and
    iv. Reinforced to staff that falsification of survey readings would 
not be tolerated.
    4. The NRC also acknowledged that since the October 21, 2010, 
letter, SWS has independently taken additional actions to enhance 
safety both within the company and the industry. Those actions include
    a. For the SL III Problem involving violations associated with the 
loss of RAM, SWS has:
    i. Discussed this event, and the lessons learned, with management 
representatives from other oilfield services companies;
    ii. Provided the details of this event to its radiological training 
contractors, Applied Health Physics (AHP), for inclusion as an example 
in its radiological training programs;
    iii. Instituted the corrective actions implemented at SWS's 
Buckhannon, WV facility at its other locations (within both NRC and 
Agreement State jurisdictions) that utilize similar sources, as well as 
enhanced security measures at those sites that use only portable 
moisture density gauges;
    iv. Instituted an audit protocol to be employed by the SWS Local 
Radiation Safety Officers (LRSOs), with oversight by the Health and 
Safety Engineers, to review the radiological safety programs and 
prevent recurrence of this type of violation;
    v. Provided training to the LRSOs on the audit protocol described 
in Item III.4.a.iv; and
    vi. Instituted a practice that the Facility Operations Managers at 
the SWS wireline locations will also fulfill the role of the LRSOs.
    b. For the SL III Problem involving two violations associated with 
the failure to perform surveys, SWS has:
    i. Instituted the practice of the LRSOs conducting random audits of 
completed surveys to verify the recorded values are reasonable.
    5. SWS has also agreed to take additional actions to address the 
violations, to further enhance safety both within the company and the 
industry. These actions consist of:
    a. For the SL III Problem involving violations associated with the 
loss of RAM, SWS agreed to:
    i. Provide presentations that discuss this event and SWS's lessons 
learned and corrective actions at the following forums:
    1. Pennsylvania Independent Oil and Gas Association;
    2. Oilfield Safety Alliance;
    3. Society of Petroleum Engineers;
    ii. Submit an article discussing this event and SWS's lessons 
learned and corrective actions for consideration for publication in an 
Association of Energy Services Companies publication, a North American 
Transportation Management Institute publication, and the Applied Health 
Physics (AHP) newsletter; and
    iii. Provide the details of this event to AHP for inclusion as an 
example in its training program, which is provided to AHP's other 
related clients.
    b. For the SL III Problem involving two violations associated with 
the failure to perform surveys, SWS agreed to:
    i. Modify its annual radiation training to emphasize that 
regulations and license conditions must be properly followed, including 
the requirements of providing complete and accurate information to the 
NRC (10 CFR 30.9) and the potential consequences that can occur to the 
company and to individuals who fail to comply; and
    ii. Enhance the practice of the LSROs conducting random audits of 
completed surveys to verify the recorded values are reasonable (as 
discussed in Item III.4.b.i) by also periodically reviewing video 
footage of surveys being conducted.
    6. SWS agreed to complete these actions within 90 days of the date 
of the Confirmatory Order confirming these commitments, and send the 
NRC Region I Regional Administrator a letter informing the NRC that the 
actions are complete, within 30 days of the completion of these 
actions.
    7. In addition to the actions described above, SWS has instituted 
actions to enhance corporate safety culture. These include the 
implementation of anonymous employee safety concern feedback programs, 
routine employee observation tools, and other tools that promote 
employee responsibility for safety and empower employees to raise 
safety concerns on the jobsite.
    8. In light of the actions that SWS has taken as described in Items 
3, 4, and 6, as well as the additional actions SWS committed to take as 
described in Item 5, the NRC agreed to reduce the amount of the civil 
penalty to $17,000. SWS agreed to pay this amount within 30 days of the 
date of the Confirmatory Order confirming these commitments.
    9. In accordance with NRC practice, the Confirmatory Order and the 
letter forwarding it to SWS will be publicly available and accompanied 
by a press release.
    On February 4, 2011, SWS consented to issuance of this Order with 
the commitments, which are described in Section V below. The Licensee 
further agreed that this Order is to be effective upon issuance and 
that it has waived its right to a hearing.

[[Page 9834]]

IV

    Since SWS has agreed to take additional actions to address NRC 
concerns, as set forth in Section III, the NRC has concluded that its 
concerns can be resolved through issuance of this Confirmatory Order.
    I find that SWS's commitments, as set forth in Section V, are 
acceptable and necessary and conclude that with these commitments the 
public health and safety are reasonably assured. In view of the 
foregoing, I have also determined that public health and safety require 
that the Licensee's commitments be confirmed by this Order. Based on 
the above and SWS's consent, this Order is immediately effective upon 
issuance.

V

    Accordingly, pursuant to Sections 81, 161b, 161i, 161o, 182, and 
186 of the Atomic Energy Act of 1954, as amended, and the Commission's 
regulations in 10 CFR 2.202 and 10 CFR Part 30, It is hereby ordered, 
effective immediately that SWS shall:
    A. Within 30 days of the date of this order, pay a civil penalty of 
$17,000, utilizing one of the payment methods described in NUREG/BR-
0254, ``Payment Methods.''
    B. Within 90 days of the date of this order, complete the following 
actions:
    1. For the SL III Problem involving violations associated with the 
loss of RAM, SWS will:
    a. Provide presentations that discuss this event and SWS's lessons 
learned and corrective actions at the following forums:
    i. Pennsylvania Independent Oil and Gas Association;
    ii. Oilfield Safety Alliance;
    iii. Society of Petroleum Engineers;
    b. Submit an article discussing this event and SWS's lessons 
learned and corrective actions for consideration for publication in an 
Association of Energy Services Companies publication, a North American 
Transportation Management Institute publication, and the Applied Health 
Physics newsletter; and
    c. Provide the details of this event to AHP for inclusion as an 
example in its training program, which is provided to AHP's other 
related clients.
    2. For the SL III Problem involving two violations associated with 
the failure to perform surveys and creation of inaccurate survey 
records, SWS will:
    a. Modify its annual radiation training to emphasize that 
regulations and license conditions must be properly followed, including 
the requirements of providing complete and accurate information to the 
NRC and maintaining records that are complete and accurate in all 
material respects (10 CFR 30.9) and the potential consequences that can 
occur to the company and to individuals who fail to comply; and
    b. Enhance the practice of the LSROs conducting random audits of 
completed surveys to verify the recorded values are reasonable (as 
discussed in Item III.4.b.i) by also periodically reviewing video 
footage of surveys being conducted.
    C. Within 30 days of completion of all of the actions described in 
Section V.B. of this Order, send the Regional Administrator, NRC Region 
I, a letter confirming that all actions are completed and describe 
details of their completion.
    The Director, Office of Enforcement, may relax or rescind, in 
writing, any of the above conditions upon demonstration by SWS of good 
cause.

VI

    In accordance with 10 CFR 2.202, the licensee must, and any other 
person adversely affected by this Order may, submit an answer to this 
Order within 20 days of its publication in the Federal Register. In 
addition, any other person adversely affected by this Order may request 
a hearing on this Order within 20 days of its publication in the 
Federal Register. Where good cause is shown, consideration will be 
given to extending the time to request a hearing. A request for 
extension of time must be directed to the Director, Office of 
Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, 
and include a statement of good cause for the extension.
    All documents filed in NRC adjudicatory proceedings, including a 
request for hearing, a petition for leave to intervene, any motion or 
other document filed in the proceeding prior to the submission of a 
request for hearing or petition to intervene, and documents filed by 
interested governmental entities participating under 10 CFR 2.315(c), 
must be filed in accordance with the NRC E-Filing rule (72 FR 49139, 
August 28, 2007). The E-Filing process requires participants to submit 
and serve all adjudicatory documents over the internet, or in some 
cases to mail copies on electronic storage media. Participants may not 
submit paper copies of their filings unless they seek an exemption in 
accordance with the procedures described below.
    To comply with the procedural requirements of E-Filing, at least 
ten (10) days prior to the filing deadline, the participant should 
contact the Office of the Secretary by e-mail at 
[email protected], or by telephone at 301-415-1677, to request (1) 
a digital ID certificate, which allows the participant (or its counsel 
or representative) to digitally sign documents and access the E-
Submittal server for any proceeding in which it is participating; and 
(2) advise the Secretary that the participant will be submitting a 
request or petition for hearing (even in instances in which the 
participant, or its counsel or representative, already holds an NRC-
issued digital ID certificate). Based upon this information, the 
Secretary will establish an electronic docket for the hearing in this 
proceeding if the Secretary has not already established an electronic 
docket.
    Information about applying for a digital ID certificate is 
available on NRC's public Web site at http://www.nrc.gov/site-help/e-submittals/apply-certificates.html. System requirements for accessing 
the E-Submittal server are detailed in NRC's ``Guidance for Electronic 
Submission,'' which is available on the agency's public Web site at 
http://www.nrc.gov/site-help/e-submittals.html. Participants may 
attempt to use other software not listed on the Web site, but should 
note that the NRC's E-Filing system does not support unlisted software, 
and the NRC Meta System Help Desk will not be able to offer assistance 
in using unlisted software.
    If a participant is electronically submitting a document to the NRC 
in accordance with the E-Filing rule, the participant must file the 
document using the NRC's online, Web-based submission form. In order to 
serve documents through the Electronic Information Exchange (EIE), 
users will be required to install a Web browser plug-in from the NRC 
Web site. Further information on the Web-based submission form, 
including the installation of the Web browser plug-in, is available on 
the NRC's public Web site at http://www.nrc.gov/site-help/e-submittals.html.
    Once a participant has obtained a digital ID certificate and a 
docket has been created, the participant can then submit a request for 
hearing or petition for leave to intervene. Submissions should be in 
Portable Document Format (PDF) in accordance with NRC guidance 
available on the NRC public Web site at http://www.nrc.gov/site-help/e-submittals.html. A filing is considered complete at the time the 
documents are submitted through the NRC's E-Filing system. To be 
timely, an electronic filing must be submitted to the E-Filing system 
no later than 11:59 p.m. Eastern Time on the due date. Upon receipt of 
a transmission, the E-Filing system

[[Page 9835]]

time-stamps the document and sends the submitter an e-mail notice 
confirming receipt of the document. The E-Filing system also 
distributes an e-mail notice that provides access to the document to 
the NRC Office of the General Counsel and any others who have advised 
the Office of the Secretary that they wish to participate in the 
proceeding, so that the filer need not serve the documents on those 
participants separately. Therefore, applicants and other participants 
(or their counsel or representative) must apply for and receive a 
digital ID certificate before a hearing request/petition to intervene 
is filed so that they can obtain access to the document via the E-
Filing system.
    A person filing electronically using the agency's adjudicatory E-
Filing system may seek assistance by contacting the NRC Meta System 
Help Desk through the ``Contact Us'' link located on the NRC Web site 
at http://www.nrc.gov/site-help/e-submittals.html, by e-mail at 
[email protected], or by a toll-free call at 866-672-7640. The NRC 
Meta System Help Desk is available between 8 a.m. and 8 p.m., Eastern 
Time, Monday through Friday, excluding government holidays.
    Participants who believe that they have a good cause for not 
submitting documents electronically must file an exemption request, in 
accordance with 10 CFR 2.302(g), with their initial paper filing 
requesting authorization to continue to submit documents in paper 
format. Such filings must be submitted by: (1) First class mail 
addressed to the Office of the Secretary of the Commission, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: 
Rulemaking and Adjudications Staff; or (2) courier, express mail, or 
expedited delivery service to the Office of the Secretary, Sixteenth 
Floor, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 
20852, Attention: Rulemaking and Adjudications Staff. Participants 
filing a document in this manner are responsible for serving the 
document on all other participants. Filing is considered complete by 
first-class mail as of the time of deposit in the mail, or by courier, 
express mail, or expedited delivery service upon depositing the 
document with the provider of the service. A presiding officer, having 
granted an exemption request from using E-Filing, may require a 
participant or party to use E-Filing if the presiding officer 
subsequently determines that the reason for granting the exemption from 
use of E-Filing no longer exists.
    Documents submitted in adjudicatory proceedings will appear in 
NRC's electronic hearing docket which is available to the public at 
http://ehd.nrc.gov/EHD_Proceeding/home.asp, unless excluded pursuant 
to an order of the Commission, or the presiding officer. Participants 
are requested not to include personal privacy information, such as 
social security numbers, home addresses, or home phone numbers in their 
filings, unless an NRC regulation or other law requires submission of 
such information. With respect to copyrighted works, except for limited 
excerpts that serve the purpose of the adjudicatory filings and would 
constitute a Fair Use application, participants are requested not to 
include copyrighted materials in their submission.
    If a person (other than SWS) requests a hearing, that person shall 
set forth with particularity the manner in which his interest is 
adversely affected by this Confirmatory Order and shall address the 
criteria set forth in 10 CFR 2.309(d) and (f).
    If a hearing is requested by a person whose interest is adversely 
affected, the Commission will issue an order designating the time and 
place of any hearing. If a hearing is held, the issue to be considered 
at such hearing shall be whether this Confirmatory Order should be 
sustained.
    In the absence of any request for hearing, or written approval of 
an extension of time in which to request a hearing, the provisions 
specified in Section V above shall be final 20 days from the date this 
Confirmatory Order is published in the Federal Register without further 
order or proceedings. If an extension of time for requesting a hearing 
has been approved, the provisions specified in Section V shall be final 
when the extension expires if a hearing request has not been received.
    A request for a hearing shall not stay the immediate effectiveness 
of this order.

    Dated this the 8th day of February 2011.

    For the Nuclear Regulatory Commission.
William M. Dean,
Regional Administrator, NRC Region I.
[FR Doc. 2011-3851 Filed 2-18-11; 8:45 am]
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