[Federal Register Volume 82, Number 142 (Wednesday, July 26, 2017)]
[Notices]
[Pages 34707-34711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15367]
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NUCLEAR REGULATORY COMMISSION
[Docket No. 040-7580; EA-17-102; NRC-2017-0165]
License Modification Order: Fansteel, Inc. and FMRI (a Subsidiary
of Reorganized Fansteel)
AGENCY: Nuclear Regulatory Commission.
ACTION: Order; issuance.
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SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) is issuing an
Immediately Effective Order to Fansteel, Inc. and FMRI (a subsidiary of
Reorganized Fansteel). The Order modifies License No. SMB-911 to
include ``Fansteel, Inc.'' as a co-Licensee with ``FMRI (a subsidiary
of Fansteel)'' for the complex decommissioning site in Muskogee,
Oklahoma. The Order also requires amendment of the Decommissioning Plan
to reflect ``Fansteel'' as a co-licensee and requires Fansteel and FMRI
to take any and all actions necessary at the Muskogee site to ensure
adequate protection of public health and safety. The NRC issued the
Order in response to the imminent risk that FMRI will abandon the
Muskogee site.
DATES: The Order was issued on July 14, 2017.
ADDRESSES: Please refer to Docket ID NRC-2017-0165 when contacting the
NRC about the availability of information regarding this document. You
may obtain publicly-available information related to this document
using any of the following methods:
Federal Rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2017-0165. Address
questions about NRC dockets to Carol Gallagher; telephone: 301-415-
3463; email: [email protected]. For questions about this Order,
contact the individual listed in the FOR FURTHER INFORMATION CONTACT
section of this document.
NRC's Agencywide Documents Access and Management System
(ADAMS): You may obtain publicly-available documents online in the
ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select ``ADAMS Public Documents'' and
then select ``Begin Web-based ADAMS Search.'' For problems with ADAMS,
please contact the NRC's Public Document Room (PDR) reference staff at
1-800-397-4209, 301-415-4737, or by email to [email protected]. The
ADAMS accession number for each document referenced (if it is available
in ADAMS) is provided the first time that it is mentioned in this
document.
NRC's PDR: You may examine and purchase copies of public
documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555
Rockville Pike, Rockville, Maryland 20852.
FOR FURTHER INFORMATION CONTACT: Greg Chapman, Office of Nuclear
Material Safety and Safeguards, U.S. Nuclear Regulatory Commission,
Washington, DC 20555-0001; telephone: 301-415-8718; email:
[email protected].
SUPPLEMENTARY INFORMATION: The text of the Order is attached.
Dated at Rockville, Maryland, this July 17, 2017.
For the Nuclear Regulatory Commission.
John R. Tappert,
Director, Division of Decommissioning, Uranium Recovery, and Waste
Programs Office of Nuclear Material Safety and Safeguards.
[[Page 34708]]
UNITED STATES OF AMERICA
NUCLEAR REGULATORY COMMISSION
In the Matter of FMRI (a subsidiary of Reorganized Fansteel) and
Fansteel, Inc.
Muskogee, Oklahoma
Docket No. 040-7580
License No. SMB-911
EA-17-102
ORDER MODIFYING LICENSE
(IMMEDIATELY EFFECTIVE)
I
FMRI, a subsidiary of Reorganized Fansteel, Inc. (``Fansteel'')
(``Licensee'') is the current holder of Byproduct/Source/Special
Nuclear Material License No. SMB-911 (``License'') issued by the
Nuclear Regulatory Commission (``NRC'') pursuant to 10 CFR part 40,
``Domestic Licensing of Source Material.'' The License authorizes
possession of source material consisting of up to 400 tons of natural
uranium and thorium in any form at the Muskogee, Oklahoma site, where
Fansteel operated a rare metal extraction facility until December 1989.
The License further authorizes activities related to decommissioning
and characterization of contaminated facilities, equipment, and land,
and maintenance of control over licensed materials in accordance with
statements, representations, and conditions contained in the
application submitted by letter dated January 14, 2003 (ML030280438),
and supplemented by letters dated May 8, 2003 (ML031340606), July 24,
2003 (ML032100533, re: Decommissioning Plan), July 24, 2003
(ML032100585, re: license transfer); and by letter dated July 6, 2006
(ML061930111), and supplemented by letters dated August 31, 2006
(ML070740112) and May 24, 2007 (ML071560249). The License, originally
issued in 1967, expired on September 30, 2002 although it has
continued, in effect, in accordance with 10 CFR 40.42(c).
II
The Muskogee site currently contains contaminated material in the
form of uranium, thorium, and their decay-chain progeny. This
contamination is located in process equipment and buildings, soil,
sludge, and groundwater. As the holder of License No. SMB-911, FMRI is
responsible for decontaminating the Muskogee site by conducting
characterization, remediation, and other decommissioning activities in
accordance with both the NRC-approved 2003 Decommissioning Plan
(``Decommissioning Plan'') and supplemental correspondence with the NRC
staff relating to the Decommissioning Plan. Fansteel is the current
record owner of approximately 80 acres of the Muskogee site, including
the contaminated portion of the site. Currently, the only Director and
the President, Secretary, and Treasurer of FMRI is Mr. Robert
Compernolle, the Vice President and Corporate Controller of Fansteel.
In a letter dated July 6, 2017 from Mr. Robert Compernolle (FMRI)
to the NRC (``Compernolle Letter'') (ML17193A341), FMRI stated that it
has not received compliance funding \1\ from Fansteel in three months.
The letter states that ``FMRI has no money to pay for the continued
monthly health and safety costs for the site . . .'' FMRI also stated
that in the near future ``ground water and surface water will no longer
be collected and treated in accordance with the NRC License . . .''
FMRI further indicated that ``surface water will likely overflow from
the ponds and untreated ground water will contaminate the Arkansas
River.'' The Compernolle Letter states that there will be no site
security ``which may result in . . . potential exposure to radiation in
excess of acceptable standards.'' The abandonment of the Muskogee site
creates an exigency that would likely include unacceptable health and
safety risks to the public and therefore requires immediate regulatory
action by the NRC.
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\1\ Previously Fansteel was providing compliance funding
(funding necessary to comply with applicable regulatory
requirements) pursuant to certain financial instruments. When
Fansteel experienced financial challenges in 2013, it entered into a
series of agreements with the NRC for reduced compliance funding
while still maintaining the health and safety of the site. Fansteel
is no longer providing compliance funding.
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Reasonable assurance of adequate protection of the public health
and safety and common defense and security are the NRC's fundamental
regulatory mandates under the Atomic Energy Act of 1954, as amended.
Compliance with NRC requirements plays a critical role in giving the
NRC confidence that licensees are maintaining an adequate level of
public health and safety and common defense and security. In situations
where licensees cannot demonstrate adequate compliance with NRC
regulations, the Commission may act in accordance with its statutory
authority under Section 161 of the Atomic Energy Act of 1954, as
amended, to require licensees to take action in order to protect health
and safety and common defense and security. In addition, the Commission
may institute a proceeding to modify, suspend, or revoke a license or
to take such action as may be proper by serving on the licensee or
other person subject to the jurisdiction of the Commission an
immediately effective order pursuant to 10 CFR 2.202(a).
FMRI's sampling data indicates that the Muskogee site has
groundwater contamination that exceeds the effluent concentration
limits in Appendix B of 10 CFR part 20, ``Standards for Protection
Against Radiation.'' The 2016 sampling data showed concentrations in
some wells being almost double the Appendix B limits, which are based
on a 50 mrem/y estimated dose. This contamination is currently
collected, treated, and monitored by a water treatment system operated
by FMRI staff. The water is then released to the Arkansas River in
accordance with Oklahoma Pollutant Discharge Elimination System (OPDES)
Permit No. OK0001643. As indicated by the Compernolle Letter, if the
site is abandoned, any contaminated groundwater, or surface water
runoff, will flow unimpeded, untreated, and unmonitored into the
Arkansas River, which is immediately adjacent to the site. The nearest
surface water intake from the river is approximately 15 miles
downstream of the site.
The site also contains several process impoundments (ponds), which
contain treated water and radiologically contaminated calcium fluoride
(CaF2) material. These ponds need to be maintained because
potential liner tears or other occurrences may lead to impoundment
failures resulting in a release of radiologically contaminated
materials to the environment. Further, the site has radiological
contamination in open excavations, equipment, and buildings for which
access control is needed to ensure that the public does not
inadvertently receive exposures in excess of regulatory limits for the
public due to being in close proximity or contact with the materials.
Continued staffing at the Muskogee site is needed by personnel who can
operate and maintain the water treatment system, maintain the surface
impoundments, and otherwise provide site monitoring, maintenance, and
security as needed to meet statutory, regulatory, and license
requirements.
III
Fansteel was the original holder of the License. In January 2002,
Fansteel filed a petition for bankruptcy in the U.S. Bankruptcy Court
for the District of Delaware pursuant to Chapter 11 of the
[[Page 34709]]
U.S. Bankruptcy Code (ML020290385). By application to the NRC
(ML032100585), Fansteel requested a transfer of the License for the
Muskogee site to a subsidiary, FMRI. As part of its Reorganization Plan
under Chapter 11, Fansteel proposed to create FMRI to assume the
License and complete decommissioning. In its application, Fansteel
committed to provide compliance funding mechanisms for FMRI to ensure
that FMRI would be qualified to hold the License and be capable of
complying with all NRC requirements. The NRC conducted a safety
evaluation of Fansteel's application. The NRC verified that Fansteel
had established all necessary compliance funding mechanisms and
established FMRI as a separate entity capable of fulfilling the license
requirements. The NRC concluded that, based on Fansteel's commitments,
FMRI ``is qualified to be the license holder'' and that ``transfer of
the license to FMRI is otherwise consistent with the applicable
provisions of law, regulations, and orders issued by the Commission''
(ML033080188). Based on this finding, as well as confirmation of
Fansteel's Reorganization Plan, the NRC consented to the license
transfer and modified the License to replace Fansteel with FMRI (a
subsidiary of Reorganized Fansteel) as the licensee on December 4, 2003
(ML033240133). Pursuant to the Reorganization Plan confirmed by the
Bankruptcy Court on December 23, 2003, Fansteel reorganized and created
FMRI to fulfill all obligations of the License and the Decommissioning
Plan for the Muskogee site.
Subsequent to the NRC's approval of the license transfer and the
effective date of the Reorganization Plan, Fansteel has exercised de
facto control over radiological substances and thus is subject to the
requirements of the Atomic Energy Act. Fansteel has maintained--and
currently maintains--de facto control over the day-to-day business of
FMRI. As noted above, Fansteel is the current record owner of the
contaminated portion of the Muskogee site. Additionally, FMRI had no
Board of Directors from 2009 to 2014, and currently Mr. Robert
Compernolle, the Vice President and Corporate Controller of Fansteel,
is the only director and the President, Secretary, and Treasurer of
FMRI. Mr. Compernolle receives compensation from Fansteel, not FMRI.
Mr. Compernolle and his predecessor, Mr. E. Jonathan Jackson, have
directly controlled and been involved with environmental and regulatory
matters with the NRC at the Muskogee site. Further, Fansteel has failed
to deposit all insurance proceeds for use in decommissioning as
required by the Reorganization Plan. Specifically, in 2010 Fansteel
failed to deposit into the Decommissioning Trust an approximately $1.25
million insurance settlement related to the Muskogee site. Instead,
Fansteel used this insurance settlement to fund its independent
operations. In addition, Fansteel siphoned compliance funding from FMRI
as numerous payments made by Fansteel to FMRI were rapidly returned by
FMRI to Fansteel instead of being used for site remediation activities.
In numerous reports submitted to the NRC, FMRI reported that Fansteel
had made compliance funding to it when, in fact, Fansteel had not. For
all these reasons, Fansteel's actions following confirmation of the
Reorganization Plan (``post confirmation actions'') have created
obligations for Fansteel under the Atomic Energy Act.
Fansteel has also failed to fulfill the commitments it made in
support of the license transfer. As previously noted, Fansteel failed
to deposit all insurance proceeds into the Decommissioning Trust,
failed to provide minimum required compliance funding to FMRI, and
siphoned compliance funding from FMRI. In 2006 and again in 2007, FMRI
applied for withdrawal of funds from the Decommissioning Trust and
certified that all funds due to FMRI from Fansteel had been paid when
in fact they had not. FMRI was required to replenish the
Decommissioning Trust within 30 days of making such withdrawals, yet
FMRI did not replenish the Decommissioning Trust. In 2011, 2012, and
2013, Fansteel failed to provide minimum required compliance funding to
FMRI, yet in annual reports submitted to the NRC in 2012, 2013, and
2014, FMRI inaccurately stated that such funding had been provided.
Fansteel's post-confirmation conduct has rendered FMRI incapable of
compliance with NRC requirements, made FMRI unqualified to be sole
Licensee, has put the Muskogee site at imminent risk of abandonment,
and requires modification of the License. NRC staff has determined that
the protection of public health and safety requires the issuance of
this Order adding Fansteel as a co-Licensee of the License.
Accordingly, the NRC hereby modifies SMB-911 via this Order to add
Fansteel as a co-Licensee for SMB-911. In addition, pursuant to 10 CFR
2.202, ``Orders,'' the NRC finds that--in light of the likelihood of
imminent site abandonment and the associated risks of further
radiological contamination--the public health, safety, and interest
require that this Order be made immediately effective subject to the
conditions provided below.
IV
Fansteel again filed for bankruptcy pursuant to Chapter 11 of the
U.S. Bankruptcy Code in September 2016, this time in the U.S.
Bankruptcy Court for the Southern District of Iowa. In re Fansteel,
Inc., No. 16-01823-ALS (Bankr. S.D. Iowa) (``Second Bankruptcy'').
Nothing in this Order should be construed to seek collection of any
claim or debt or monetary judgment. Rather, the actions required by the
NRC under this Order are solely to enforce the NRC's police or
regulatory power as permitted by the police or regulatory exception to
the automatic stay, 11 U.S.C. 362(b)(4), and are designed to provide
reasonable assurance of adequate protection of public health and
safety.
The United States on behalf of the NRC has filed a motion in the
Second Bankruptcy that is pending and which seeks continued compliance
funding by Fansteel of FMRI. If granted and complied with, such
compliance funding would allow Fansteel and FMRI to address the most
immediate health and safety exigencies at the Muskogee site. This would
likely alter the situation reported to the NRC in the Compernolle
Letter as described above. However, according to the Compernolle
Letter, FMRI's compliance activities will expire imminently. Therefore,
the NRC has lost reasonable assurance of adequate protection of public
health and safety with respect to the Muskogee site and finds issuance
of this Order necessary.
The NRC recognizes that an order of the Second Bankruptcy Court,
either on the United States' pending motion or another motion, may be
necessary for Fansteel to use cash collateral to comply with this
Order. The NRC further recognizes that additional modifications of this
Order may be appropriate in light of any future orders of the Court.
V
Accordingly, pursuant to Sections 61, 62, 161, 184, 186, and 187 of
the Atomic Energy Act of 1954, as amended, and the Commission's
regulations in 10 CFR 2.202 and 10 CFR part 40, IT IS HEREBY ORDERED,
EFFECTIVE UPON ISSUANCE, AS FOLLOWS:
A. License No. SMB-911 is modified to add Fansteel, Inc. as a co-
Licensee.
B. All relevant references to ``FMRI'' in License No. SMB-911 shall
be changed to ``Fansteel and FMRI.''
C. Fansteel and FMRI shall:
[[Page 34710]]
1. Take any and all actions necessary at the Muskogee site to: (1)
Prevent the unauthorized release of radiological contamination into the
Arkansas River; (2) collect and treat groundwater and surface water in
accordance with all regulatory requirements; (3) secure the Muskogee
site to prevent any unintended public exposure to radiation in excess
of NRC regulatory requirements; and (4) take any additional actions to
ensure the public health and safety. Fansteel's obligation under this
subparagraph during the pendency of the Second Bankruptcy will not
become effective if the Second Bankruptcy Court grants the United
States' outstanding motion to comply with environmental health and
safety laws and regulations on or before July 18, 2017. In such
circumstance, during the pendency of the Second Bankruptcy, Fansteel's
obligations will be governed by the Court's order.
2. Within 5 days of the issuance of this Order, submit a written
report to the NRC describing all steps taken by Fansteel and FMRI to
comply with this Order and how they have protected public health and
safety.
3. Within 45 days of the issuance of this Order, submit to the NRC
an amended Decommissioning Plan that reflects Fansteel as co-Licensee.
The Director, Office of Nuclear Material Safety and Safeguards may,
in writing, relax or rescind any of the above conditions upon
demonstration by the Licensees 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 30 days of issuance. In addition, the licensee and any
other person adversely affected by this Order may request a hearing on
this Order within 30 days of issuance. Where good cause is shown,
consideration will be given to extending the time to answer or request
a hearing. A request for extension of time must be made in writing to
the Director, Office of Nuclear Material Safety and Safeguards, U.S.
Nuclear Regulatory Commission, Washington, DC 20555-001, 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 (hereinafter
``petition''), 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, as amended at 77
FR 46562, August 3, 2012). 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. Detailed
guidance on making electronic submissions may be found in the Guidance
for Electronic Submissions to the NRC and on the NRC's Web site at
http://www.nrc.gov/site-help/esubmittals.html. 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 email at [email protected],
or by telephone at 301-415-1677, to (1) request a digital
identification (ID) certificate, which allows the participant (or its
counsel or representative) to digitally sign submissions and access the
E-Filing system for any proceeding in which it is participating; and
(2) advise the Secretary that the participant will be submitting a
petition or other adjudicatory document (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 the NRC's Public Web site at http://www.nrc.gov/site-help/e-submittals/getting-started.html. Once a participant has obtained a
digital ID certificate and a docket has been created, the participant
can then submit adjudicatory documents. Submissions must be in Portable
Document Format (PDF). Additional guidance on PDF submissions is
available on the NRC's Public Web site at http://www.nrc.gov/site-help/electronic-sub-ref-mat.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 time-stamps the document
and sends the submitter an email notice confirming receipt of the
document. The E-Filing system also distributes an email notice that
provides access to the document to the NRC's 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 document on those participants separately. Therefore,
applicants and other participants (or their counsel or representative)
must apply for and receive a digital ID certificate before adjudicatory
documents are filed so that they can obtain access to the documents via
the E-Filing system.
A person filing electronically using the NRC's adjudicatory E-
Filing system may seek assistance by contacting the NRC's Electronic
Filing Help Desk through the ``Contact Us'' link located on the NRC's
Public Web site at http://www.nrc.gov/site-help/e-submittals.html, by
email to [email protected], or by a toll-free call to 1-866-672-
7640. The NRC Electronic Filing Help Desk is available between 9 a.m.
and 6 p.m., Eastern Time, Monday through Friday, excluding government
holidays.
Participants who believe that they have 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
stating why there is good cause for not filing electronically and
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, 11555
Rockville Pike, Rockville, Maryland, 20852, Attention: Rulemaking and
Adjudications Staff. Participants filing adjudicatory documents in this
manner are responsible for serving the documents 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 the
NRC's electronic hearing docket, which is available to the public at
https://adams.nrc.gov/ehd/, unless excluded pursuant to an Order of the
Commission
[[Page 34711]]
or the presiding officer. If you do not have an NRC-issued digital ID
certificate as described above, click ``Cancel'' when the link requests
certificates and you will be automatically directed to the NRC's
electronic hearing dockets where you will be able to access any
publicly available documents in a particular hearing docket.
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. For example, in some instances,
individuals provide home addresses in order to demonstrate proximity to
a facility or site. 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 the licensee requests a hearing, that person
shall set forth with particularity the manner in which their interest
is adversely affected by this Order and shall address the criteria set
forth in 10 CFR 2.309(d) and (f). If a hearing is requested by the
licensee or a person whose interest is adversely affected, the
Commission will issue an Order designating the time and place of any
hearings. If a hearing is held, the issue to be considered at such
hearing shall be whether this Order should be sustained. Pursuant to 10
CFR 2.202(c)(2)(i), the licensee or any other person adversely affected
by this Order, may, in addition to demanding a hearing, at the time the
answer is filed or sooner, move the presiding officer to set aside the
immediate effectiveness of the Order on the ground that the Order,
including the need for immediate effectiveness, is not based on
adequate evidence but on mere suspicion, unfounded allegations, or
error. 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 30 days from the date this
Order is issued 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. AN ANSWER OR A REQUEST FOR
HEARING SHALL NOT STAY THE IMMEDIATE EFFECTIVENESS OF THIS ORDER.
FOR THE NUCLEAR REGULATORY COMMISSION
Dated this July 14, 2017.
Marc L. Dapas,
Director, Office of Nuclear Material Safety and Safeguards.
[FR Doc. 2017-15367 Filed 7-25-17; 8:45 am]
BILLING CODE 7590-01-P