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CR: 92- 025Cn ?- i25-

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COMMISSION CORRESPONDENCE4

Correspondence Response Sheet

Date: January 31, 1992-

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| To: Chairman selin-

Comissioner Rogersi Commissioner Curtiss'

Comissioner Remick<

i Comissioner de P1anquej OCA OGC

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From: Samuel J. Chilk, Secretary-

Letter to Representative Kostmayer responds to questions concerningS*:t' ''a Petition filed by Native Americans for a Clean Environment and-

g{ the Cherokee Nation for revocation of-the operating license for1

Sequoyah Fuels

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ACDOF Please coment/ concur and respond to the Office of the Secretary

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- - .fime: c.o.b.1 Day: Friday,

P*' January 31, 1992i

COMMENT:Response is due to Representative Kostmayer no later thanFebruary 4, 1992

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504-2606Entered i. Vote Tracking System: Yes O No $

|9212170158 920603PDR FOIACURRAN 92-204 PDR

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comparative text Curtiss staff revision of cover letter toXostmayer (CR-92-025):

I am responding to your January 21, 1992 letter to the Commissionin which you pose four questions concerning a Petition filed withthe Commission by Native Americans for a Clean Environment andthe Cherokee Nation. The Petitioners seek the immediaterevocation of the operating license for the General Atomicssequoyah Fuels Corporation's uranium processing plant in Gore,Oklahoma. Your letter was received at a' time when the Commissionhas not been briefed by the staff and g eeee4ved commentsfrom the licensee and the Petitioners regarding21s#1;tes.tralsegM

pE.gKincipars m-mwer disevity :::t:Fte FtS..ty. Wf hat caution in mind, answers to your questions.

are provided in the enclosure to this letter.

El MEIRKE58JT8Fg -- M HWW W a 155-

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SL'4N beK9 Egg [EM wan oemp asize tihatget-

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General Atomicia Sequoya La plant w;.ll no para tted torestart unless and until the licensee demonstrates'to theA - ~.crg " 10 r ";g 1:tery 0:0..i :icn' satisfaction that the

i p' ant will be operated safely ___and in compliance with ap^ licablerequirenents. I *aasurWNostrJtJingweTereTtaKi W ppyery2seFionally trErtri:"ET"F:sff*FE*$ Erg't? y:ur*Encern:.a

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Some of the matters raised in the Petition may relate to safetyor-environmental issues associated with the facility that donot pose any imediate threat to the public _ health and safety.Such issues would be appropriate for consideration in theongoing license renewal proceeding to which Petitioners areparties.

! Question 3. As NACE and the Cherokee Nation document in the petition, ini 1986 SFC made a comitment to Congress that it would operatei its plant safely. In particular, SFC stated that its management -

; and operating procedures had been reviewed and were adequate toj assure safety. The U.S. Nuclear Regulatcry Commission (NRC)-; staff also relied on these comitments in permitting SFC to! reopen. It now appears that SFC did not adhere to those-

comitments. That action will the Cosmission take to assurethat the consnitments that are currently being made to the NRC,

! are not also empty?

Answer 3. Before the staff makes any decision to allow restart, followingi the public meeting of the Comission, SFC will have toi demonstrate to the satisfaction of the NRC that the company| will keep .its comitments, operate the plant safely, and complyj with applicable requirements. SFC has made management changes

h2 g[g, -

j and is making changes to its program that address the operational;nroblems that have axhtad at the site.Wri,4 4 start-

readiness team inspection-(scheduled f6i January 27-31 92);the NRC staff will be evaluating the cha(ngn ia n, arc ma king.'

Additionally, as part of the ongoing inspection program, thej staff will inspect the facility for compliance with regulations-

and license requirements.jI Question 4 NACE and the Cherokee Nation have made the serious chargeI that SFC's 1990 license renewal: application contains material| false' statements in that it omits critical data regardingj serious levels of uranium. contamination on the SFC plant site.| If these charges are verified, do you share petitioners' ;iew!- that the omission of this-information constitutes grounds for! revoking-SFC's license? Please explain the reasons for your

[ answer.

I Answer 4. The omission =of-information from SFC's application for-license- renewal may or may not warrant revoking SFC's operating license.:

The. staff is currently reviewing the facts alleged-in the- -:

i_- Petition to determine whether they' provide a basis for enforce-= ment or other regulatory action. If there was an omission, the

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appropriate action would depend _ upon such considerations as thee; materiality and significance of3 the omitted information and the

circumstances and| reasons for.the omission. It should-be noted4

; .that''the staff issued the shutdown order on October 3 1991, in:

part because a licensee employee-made: false. statements to, and!' withheld _ information- from, _ the NRC staff, and in part because

of- the failure by'other SFC managers to advise the NRC of someof the .same information that is recited in the Petition.

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j James J. (Joe) sheppard

! Education:

| BS Aerospace Engineering, U.S. Naval Academy.| MBA Fuqua School of Business, Duke University.

Licensed by the U.S. Nuclear Regulatory Commission as a SeniorReactor operator..

! Senior Nuclear Plant Managers Course, Institute of Nuolear Poweroperations.

nuperienes;

j 9/91- President, sequoyah Puels Corporation.

| 9/90-9/91 Plant General Manager, Robinson Nuclear Project,'

Hartsville, South Carolina, Carolina Power and Light| Company. Reported to the Manager - Robinsen Muclear| Project,. with direct reports of operations,

maintenance, engineering support,. radiological.

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controls, security, amargency preparedness, andi regulatory compliance of the nuclear power plant (420! company personnel)..

! 1988-1990 Manager of Operations, Robinson Nuclear Project,

|carolina Power and Light Compan{bilitiesReported to the.

Plant General Manager. Respons includedi

I management and direct supervision of the operation ofthe Reactor Plant and Power Generation Equipment (80professionals and technicians).

1986-1988 senior Reactor operator Training, Robinson NuclearProject, Carolina Power and-Light company.

1984-1986 Manager of Planning and Scheduling, Robinson NuclearProject, carolina Power and Light' company. Reportedto the Vice Presidentoutage planning and execution, ject.Robinson Nuclear Pro-

Responsible for longrange planning, industrial engineering and businessplanning (40 professionale and technicians).

1/79-3/84 Licensing Engineer, Carolina Power and Light company,'

Raleigh, North Carolina. Reported to Manager -

Nuclear Licensing and Siting. Responsible forcompany's interface with the NRC for 2 power pidnts.

| 1977-1979 Project Engineer, Union Carbide Corporation, Nuclear' Division, oak Ridge, Tennessee. Reported to an

Engineering Manager. Responsible for managing ,

j _ general plant and congressional line item projects.,

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!. 1971-1977- United States Navy, Nuclear Power Program. Officer ILt. U8N. Certified as a chief li - Senior rank -

Engineer by the Office of Naval Reactors. Awarded' ;;'

j. the Navy Achievement Medal.

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!i NEWMAN & MOLT!INGER, P.C.

1 Facsimile Numbers' 1615 L STREET, N.W.WASHINGTON, D.C. 20036 (202) 872-0581

: (202) 872-0302(202) 955-6600 (202) 785-8517

THIS M185Act is INTEWDED ONLY FOR TR L'88 0F TMI IND171DL'A1,01 IF ITT 70 WHICI 1T IS ADDRESSED AND mYI CONTAIN IN10RmT10W TBAT IS PRIVILEGID. CONTIDIlrMAL AND ERIMPT T10K DISCLASURE talDIA AFFL1 CABLE LAW. 11

the reader of this asees8e La not the intended escipiams you are hereby settised that any dieseminattes.-f

distribustaa. ee aspytas et th&e sommentaaties Le serteely peekthtood. If you have resetved thaesensuaitaties in errer, pLesee notify us immediately by telephone f eelleeth and return the ertstaal assoage

|s. .e et o .he,e .u e.ee ,ta the U.s. Feetat ser,see. Th a yo..

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| FACSIMILE COVER SHEET4

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Date: March 8, 1992:i.

To: Evelyn Willi ===!

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I Company Names NRC

! Facsimile Numbers 301-504-1672 Main No.: 301-504-1900

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From: Maurice Ameirad;

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|

| Comments: In accordance with our discussion, enclosedi

| 1s the biocraphy of James J, IJoei Sheenard.,

i -President of Secuevah _ Fttels Corperation.

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We are beginning_to send a communication of_ 2.-

pages(including this cover page),

i If this transmission is interrupted or of poor quality,-please; notify us immediately by telephone at-(202) 955-6731.

N&H FORM 26.(2/4/91).

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| UNDERLYING CAUSES OF PAST PROBLEMSi

Underlying Causes:-

! Failure to Instill a Strong Nuclear Safety and Regulatory-

; Compliance Culture

; Lack of a Disciplined / Formal Management Process-

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: Contributing Factors:-

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| Particular Background and Experience of SFC Senior-

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Managers!

Weaknesses in Organizational Structure| -

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Insufficient Sensitivity to Radiological Aspects-

[ - Inadequate Communications Internally and With theNRCi

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: MANAGEMENT CHANGES,

f' President J.J. Sheppard (9/91)Senior Vice President J.K. Martin (12/91, interim)

i V. P., Regulatory Affairs J.D. Richardson (11/91, interim)Manager, Human Resources J.M. Dunn (12/91)

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i Manager, Health & Safety S.C. Munson (4/91)! Manager, Maint. & Engineering LJ. Silverstein (4/91)| Manager, Environmental T.R. Blachly (1/92)! Manager, Waste Managerhent P. Frost (9/91)

Supervisor, Health & Safety R. Foster (11/91)I Supervisor, Health & Safety D.A. Lewis (3/92)| Director, Corp. Communications P. Bennett (3/92)

Chairman R. A. Dean (1/92)Chief Executive Officer M.D. Kemp (1/92)

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SENIOR NUCLEAR CONSULTANTS

Murray SelmanPaul Check

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|STAFFING ADDITIONS IN HEALTH & SAFETY

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Augmented Permanent H&S Technician Staff from 6.

to 9i

Currently Adding Permanent H&S Technician'

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Positions to 20.

Added Second H&S Supervisor Position-

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Permanent H&S Supervisor Starts 3/92.

Filled New Staff Health Physicist Position.

Added 2 Experienced Health Physics Consultants.

!Supplemented Staff With 18 Experienced Contract'

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| H&S Technicians;

| Currently Adding 5 Experienced GA HP Technicians.

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FACILITY CHANGES'

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: New Warehouse.

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- Improve Storage of Critical Materials- Provide for Needed Administrative Offices

| - Allow Refurbishment and Improvement of the; Change Rooms and H&S Facilities;

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! New Laundry-

f - Provide Increased Laundry Capacityj - Stop Discharge of Uranium into the Sanitary Lagoon

Retirement of Pond 2-

- Stop Continued Need to Process Water and Deal withLeaching From This Unlined Pond

Diversion of Stormwater-

- Stopped Uncontrolled Release of Uranium BearingStormwater From Emergency Basin and North DitchArea

- New Stormwater Reservoir Constructed to ControlStormwater and Manage It Prior to Release(Awaiting Permit)

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FACILITY CHANGES (Continued)

Three Recovery Wells Installed-

Designed to Assure That Groundwater Moves to-

the Facility, Not Away,

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More Than 170 Groundwater Monitoring Wells.

Installed'

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Provides Data for Site Characterization-

Revised Groundwater Monitoring Program Being-

Finalized'

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Installed in October 1991 to Minimize Airborne-

Release of Uranium

Additional Projects in Environmental Action Plan-

Water Treatment System for Uranium Bearing|

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PipingSoil Remediation Studies. -

Developing Nitric Acid Recovery System-;

Would Eliminate Need for Clarifiers and for-

Fertilizer Program

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SFC EXPENDITURES

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Expenditures of Over $10 Million in 1988-91 to Resolve |.

Old Problems, Incitd.ng - !.

' Sludge Disposal 1-

| FertilizerInventory Management ;-

Groundwater Monitoring- -

Facility Cleanup4-

j Solid Waste Disposal-

Capital Expenditures in 1988-9 f of $5.6 Million (61% of.

| Net Profit Before Taxes)

Capital Budget of $6 Million for 1992-94.

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1991 Operating Budget Included $5.7 Million for'.

| Maintenance of UF6 and UF4 Facilities!

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i READINESS FOR RESTART:

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Completed Independent Review and Revision of-

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i Pre-Restart Health and Safety and Environmental| Procedures|

| Completed Training on Revised Procedures-

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; Formalized Policies-

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Assessment of Readiness! -

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|- Advice of Readiness Review Committee

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Senior Management Walkdowns! -

Restart Readiness SelfInspection-

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DISCIPLINED APPROACH TO RESTART AND: FEEDBACK MECHANISMS|

Lj . Careful Preparation and Additional Staffingi

: - Use of Prestart and Start-up Checklists byj Operationsj - Interdepartmental Review Prior to Non-routine

! Activity; - Additional Experienced Health Physics Oversight:s.

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| . Increased Management Coverage

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| - Manager-On-Shift Program| - Frequent Visits by Managers to Work Areas

- Frequent Meetings Between SFC Management and!

| Personnel! - Senior Management Inspections and Walkthroughs

-- Inspections Approximately Every 8 Weeks'

During First 6 Months-- Walkthroughs Monthly During First 6 Months

Independent Feedback.

- Continued Review by Experienced Consultants- Focus by Sequoyah Oversight Team on Critical'

Procedures and Activities .

- Return of Readiness Review Committee in 4-6,

' Months!- - Early Annual Audits by GA

-- QA Program-- Nuclear Licensing Program-- - Management

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