1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NUCLEAR REGULATORY COMMISSION DALE E. KLEIN, CHAIRMAN GREGORY B. JACZKO, COMMISSIONER PETER B. LYONS, COMMISSIONER KRISTINE L. SVINICKI, COMMISSIONER UNITED STATES NUCLEAR REGULATORY COMMISSION BRIEFING ON THE STATE OF THE NUCLEAR MATERIALS AND WASTE SAFETY PROGRAMS +++++ MONDAY March 16, 2009 +++++ The Commission convened at 9:30 a.m., the Honorable Dale E. Klein, Chairman presiding.
2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Safeguards CHARLES MILLER, Director, Office of Federal and State Materials and Environmental Management Programs NRC STAFF WILLIAM BORCHARDT, Executive Director for Operations MARTIN VIRGILIO, Deputy Executive Director for Materials, Waste, Research, State, Tribal, and Compliance Programs MICHAEL WEBER, Director, Office of Nuclear Material Safety and
3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 P-R-O-C-E-E-D-I-N-G-S CHAIRMAN KLEIN: Good morning. We have an exciting briefing today about fairly major programs. This is always good to remind a lot of individuals that the NRC does things other than just nuclear power reactors. We have another activity. It's always great to be on a program with Marty. I think Marty wins the award for having the longest title that anybody can have. We will be going through some very important programs today and we just finished a hearing on uranium and mining and recovery. We will have some upcoming meetings on low-level waste and also on source security. So, as you go through your presentation it would be nice to take that into consideration. Obviously, what these hearings help us is it gives us a good high level view of some budgetary decisions we'll be making in the future as well as learning about the programs. Any comments before we start? Bill, would you like to start? MR. BORCHARDT: Good morning. This is really the first of three program overview briefings that the staff will be presenting over the next several weeks. If I can go to slide two. The briefings are being structured using the 2011 budget structure. I just have two slides to introduce this new structure. There are three major programs that are shown in the middle of this slide and then nine business lines that fall under those three programs. You can see that today's discussion will discuss six of those business lines.
4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 If you go to the next slide, under each business line are activities that provide much more detail into the activities that are going to be conducted under each of these business lines and that line is called product lines. And that is the organization by which today's briefing and all the rest of the briefings will be discussed. So, it's our intent to discuss some of the major activities, some of the major accomplishments and the challenges and potential policy issues over the next year that we foresee. So, I'll turn to Marty now, who will begin the briefing. MR. VIRGILIO: Thank you, Bill. Good morning, Commission. Just to add on to what Bill said, one of the things I like about this new structure is how it integrates all the activities and particularly the way we look at our international program activities now integrated right within the structure. Slide four, as Bill had mentioned today, will focus on the six business lines shown on slides four and five. As the Chairman has pointed out, we will move quickly through those areas where we've had Commission meetings in the recent past and when we look ahead to the next several months we've got a couple of Commission meetings coming up. So, we're not going to focus a lot of attention on those areas. Slide six. As we address each of the business lines included within the Nuclear Materials and Waste Safety Program what we're going to focus on is our accomplishments, our priorities and our priorities looking ahead for the next couple years and then we're also going to highlight potential policy issues.
5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Again, I think what we're going to be looking at is out toward 2011 as best we can those issues for which we're going to need support from the Commission. The background material that we provided before the meeting is organized in a way that follows the presentation slide by slide and identifies the applicable business line and product lines. On slide seven we're going to be hearing primarily from Mike Weber for NMSS and Charlie Miller for the FSME programs, but it's important to emphasize all the work done by us is supported by many other offices, the regions and the Agreement States. We're really pleased today to have with us Julia Schmidt from OAS and John Winston from CRCPD. We have Victor McCree from Region II, John Kinneman from Region I and we have a number of staff and management from both FSME and NMSS in the audience. They are our lifelines when the Q's and A's start and you get to a level of detail through the second level well below us. So, they'll be available to support the questions and answers. So, with that, let me go to Mike Weber. Mike will start with the discussion of the NMSS related activities. Michael? MR. WEBER: Thanks, Marty. Good morning, Chairman, Commissioners. It's always a pleasure to appear before the Commission especially when we get to do a high level overview of our programs because we're particularly proud of those programs and the accomplishments that they have been able to achieve. As Marty and Bill have stated I'm going to cover these quickly at a high
6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 level to reserve time for the Commission for questions and comments because I know that's often a priority of yours in these briefings. I'm on slide nine, so if I could have slide nine come up. In the new fuel facilities it's a growing business line for the Commission with several new facilities either being developed, planned, under review or under construction. The Commission was briefed on the enrichment program back on February 5th, so I'll not dwell on those activities, but the Commission got a good overview of the status and the challenges in the uranium enrichment area as well as the accomplishments. Now, as you heard at that briefing the staff is applying a risk informed performance based approach to licensing and oversight to ensure the safe development in thorough and timely licensing and oversight of the new fuel facilities. We're taking that same approach on other new facilities, such as the mixed oxide fuel fabrication facility in South Carolina and, of course, we took that same approach for the Congressional review of the Hanford Waste Treatment Plant Report to Congress that we provided to the Congress last year. We've implemented lessons learned so that they're not just learned, but they're also implemented to improve our regulatory process including the identification and development of new infrastructures and capabilities, such as enhancing our information security program, reviewing the classified computer networks and revising pertinent standard review plans and other guidance documents.
7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 I point out that the infrastructure that we put in place for the new fuel facilities also applies to the operating facilities. So, we're applying and leveraging the efforts in both of those program areas. If I could have the next slide please. Looking forward, our priorities in this area for both current and upcoming fiscal years include the licensing reviews for the proposed AREVA and GE laser enrichment facilities, the oversight of the test loop enrichment facility that's under construction at GE, as well as continued licensing and oversight of the construction of the LES and USEC enrichment facilities including the operational readiness reviews that have to be completed before those facilities come on line. We're exchanging lessons learned with our reactor counterparts through the Region and through headquarters offices. We're completing the request for additional information for the MOX fuel fabrication facility. They should be completed this month, March of 2009, and that should pave the way for the completion of the safety evaluation report for that facility by the end of 2010. And if the Commission receives an application for a proposed deconversion facility, that would also be addressed as part of this business line. Now, all of these efforts are contingent on the receipt of sufficient resources to support these overviews and oversight and licensing of the new fuel facilities. Next slide, please. By way of potential policy issues that may be forwarded to the Commission over the next several years, of course, there are the agreements to share and protect sensitive nuclear technologies such as centrifuge enrichment, new requirements for information security programs. I think we gave the Commission a
8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 good overview of those activities as part of the uranium enrichment briefing. There's adjudicatory oversight that's provided by the Commission through the licensing process. And then there are the enhancements to the existing regulatory framework for reprocessing, which has been a big focus of ours through the media reporting and through various inquiries that we received from our stakeholders. This area poses a variety of potential significant issues that the Commission may have to deal with over the next several years and they range from safety, environmental, waste management, safeguards issues, non-proliferation, physical protection, and material control and accounting. So, that pretty much spans the gamut of the kinds of activities and issues that the Commission routinely deals with. We've actively engaged our stakeholders including the review of the NEI, Nuclear Energy Institute white paper on reprocessing. We had a very successful meeting with the industry and other stakeholders last month. And we see that as we go forward this is going to be a significant focus area of ours. We plan to complete the regulatory gap analysis this month and then inform the Commission of the results of that gap analysis and the path forward with a paper in May. And as we proceed we would be developing the technical basis for a rulemaking in this area. Next slide, please. Now, the staff assigns the highest priority on the continued safety and security of the operating facilities. So, as we make the transition from new fuel facilities to operating fuel facilities it's important to point that out.
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9 Over the last year we've continued to accomplish the mission of the agency through quality and timely licensing decisions, such as two significant license transfers for the operating fuel facilities, as well as numerous license amendments, a number of license performance reviews where we provide an integrated assessment of licensee performance during operations and construction. We completed the review of the integrated safety analysis for all the fuel facilities last year, which is a significant milestone in the implementation of the agency's what we call New Part 70 requirements, which, of course, were put in place almost a decade ago now in the year 2000. We recertified the Paducah and Portsmouth gas diffusion plants for continued operation. We completed the redaction and release for a large amount of information once we concluded it was no longer sensitive for the Category 1 fuel facilities. We worked to enhance security through a variety of upgrades that comprised the Commission's response to the 9/11 events as well as the Energy Policy Act of 2005 and we actively involve stakeholders all the way from individual licensing actions up to the program level through such initiatives as the fuel cycle information exchange. I point out for the Commission's benefit the week after the Regulatory Information Conference concluded that our RIC -- so to speak -- will be held on June 23rd to the 25th here in Rockville. It's not the same scale as the Regulatory Information Conference, but I think you'll find that it's become one of the more important regulatory interactions both domestically and internationally. Let's go to
10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 the next slide, please. Priorities for the next several years. We will continue to implement a risk informed performance based approach in our licensing and our oversight of the facilities including the transition of the new fuel facilities into the operating fuel facility base. If we approve the operational readiness reviews for the Louisiana Energy Services facility, which Commissioner Lyons was just at most recently and Commissioner Jaczko as well, then that facility will transition to the operating base and will become part of the routine oversight that the NRC provides. Our regulatory framework, of course, is based on regulations and so we will also be working during this same period to establish in the regulations various post-9/11 security enhancements, material control and accounting requirements, and risk controls for uranium conversion and deconversion facilities. These would be patterned after the risk controls that we put in place in the revised Part 70 requirements. We're working on enhancements to our oversight program for the operating fuel facilities and that's underway to provide for more risk informed performance based approach and increase the predictability, the transparency and the objectivity that's reflected in that program. We're also working to implement other infrastructure upgrades, such as upgrades to our Standard Review Plans and Regulatory Guides, enhancements that are applicable to the fuel facilities in the enforcement policy, and the fuel cycle project managers handbook and qualification programs for both license reviewers
11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 and inspectors. I would like to highlight an area that we've made progress in over the last year and that's to enhancing our incident response capabilities. We will continue those enhancements as we work to ensure a high state of readiness to respond to incidents that involve the fuel facilities as well as other non-reactor incidents. Could I have the next slide, please? I've already mentioned two potential policy issues that may come before the Commission over the next several years, the security and the conversion/deconversion rulemakings. We're also working with the Department of Homeland Security and would expect to present to the Commission in the near term a coordinated approach for implementing the chemical security requirements to ensure public safety while minimizing any unnecessary or duplicative regulation in this area. The Commission will also be involved in establishing agency positions with respect to external and internal safety culture and as we've seen over the last several years safety and security culture is as important at the fuel facilities as it is at the operating nuclear power plants. Other issues which also could emerge during the foreseeable future might include the implementation issues associated with the additional protocol to the U.S. IAEA safeguards agreement for Commission consideration and decision. Next slide, please. Turning now to our third business line, that of transportation of radioactive material and spent fuel storage. We've made a number of accomplishments over
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12 the last year in this area including licensing seven independent spent fuel storage installations since the last briefing. Fifty-four spent fuel storage facilities are now located in 33 states. So, almost every operating nuclear power plant in the country will soon have an independent spent fuel storage installation. In addition, we've completed a variety of transportation package reviews and storage cask designs and ISFSI licensing reviews, as well as comparable accomplishments in the inspection and oversight area. As you may know the inspections in this program are carried out through a cooperative effort between headquarters and regional inspectors. Both of the vendors and licensee programs to ensure safety and security of spent fuel storage and of transportation. Now as under the other business lines we work every day to ensure the openness and the engagement of stakeholders in our regulatory process. This includes a variety of fora such as the Dry Storage Information Forum, which is coming up in a month or so, the PATRAM International conference, numerous public meetings and then there's outreach with our state and local counterparts. Other stakeholder interactions include the development of a joint Canadian/U.S. guide on the approval of Type B packages and that guide will soon be published as a final document. We testified last September before the Senate Science, Commerce and Transportation Committee on the safety and security of spent nuclear fuel transport and the Commission paper we've provided on how to improve risk communication associated with transportation of radioactive materials. Can I have the next slide, please?
13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 In terms of priorities for the next several years, we're facing in this area something that we're seeing in other areas and that's bundling together of individual case work items as licensees and vendors seek to enhance the efficiency and the effectiveness of the regulatory review process. That also adds increased technical complexity as margins reduced and as the complexity of the applications, the license submittals with certification reviews increases. We're dealing with turnover of our staff members, so we have a large number of new staff members in this program area. We've had resource reductions to accommodate agency priorities in this area. All these things conspire to make it more challenging to ensure continued quality and timeliness of those certification reviews, but that is absolutely essential to delivering on the security and safety of the American public so it receives our highest priority. That does mean that it's going to be more challenging for us over the next several years to continue to meet our licensing or certification performance metrics. We're also increasing the number of independent spent fuel storage installation inspections over the next several years. Some of that is due to the growth in the number of facilities. That's not a negative performance trend it's just you have more facilities to go and inspect and we want to make certain that the licensees continue to do what they need to do to ensure safety and security. We're working to enhance the regulatory framework in this area, such as the Part 71 rulemaking to harmonize the U.S. transportation requirements with those of the IAEA; the Part 72 rulemaking to enhance the efficiency and
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14 effectiveness of our certification reviews for spent fuel casks; various rulemakings upgrading the requirements for the independent spent fuel storage installation securities. We're refining the technical basis through a variety of guidance documents including addressing burn up credit and how to handle high burn up fuel. And, of course, we're conducting outreach with stakeholders to ensure that we understand their ideas and their suggestions for how we can work to improve the effectiveness and efficiency of our regulatory process. We held, for example a workshop last fall with NEI industry and other stakeholder groups and we're working to plan more of those in the future because we find them beneficial in soliciting ideas on how we can improve our regulatory program. Next slide, please. In terms of potential policy issues the first issue I'll mention is one that the Office of Nuclear Regulatory Research has the lead on and that's the Package Performance Study. This program has been delayed somewhat since the Commission last rendered its policy direction and that's both through changes in the program for the high-level waste program as well as to accommodate funding constraints. I'm happy to report that in the interim we continue to make progress in this area by leveraging the testing and analysis work that's being done overseas by our regulatory counterparts so that we learn from their experience and they benefit by us sharing our analytical capabilities at the same time. We're also closely monitoring industry, Congress and the Administration for
15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 changes that you may have heard about that may affect the high-level waste program. Any of those changes and the alternatives we would anticipate would, to some extent, involve continued reliance on interim spent fuel storage for some foreseeable future. So, it's important that as we go forward considering those alternatives we continue to ensure the safety and security of spent fuel that's being stored. Next slide, please. As I turn to the high-level waste business line I'd point out, of course, this is an active adjudicatory matter pending before the Commission, so I'll keep my remarks at a high level. We formally docketed the license application from the Department of Energy for the proposed repository at Yucca Mountain last September and that was done on schedule. We also adopted the Environmental Impact Statement with supplementation on schedule. We placed priority before we received the application on ensuring the infrastructure was in place to deliver on our requirements in the Nuclear Waste Policy Act. That's become more challenging with the funding constraints that we've operated under this program for the last couple of years and for the foreseeable future, but we're endeavoring to do our best with the resources that we have to keep our program moving forward. On infrastructure development I'm happy to report was the completion of the final requirements in Part 63. The Commission affirmed those requirements back in February and last Friday they were published in the Federal Register. So, we continue to make the progress needed there to do what we can.
16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Turning to the next slide our priorities for the foreseeable future include continuing forward with the licensing review, supporting the hearing process which, of course, goes on concurrent with our technical review. Should we receive applications for transportation, aging and disposal canisters we would support those reviews to the extent that we can afford. And we're also striving to maintain the viability of the program despite some of the funding constraints that we're operating under. And my last slide on potential policy issues, I've already alluded to the potential changes and the consideration of alternatives in the nuclear waste field. If the Congress changes the national policy with respect to disposal of spent nuclear fuel and high-level radioactive waste the NRC will make the changes necessary to implement the law and we're anxious to learn about the details of some of those efforts. So we know Secretary Chu and Senate Majority Leader Senator Reid reported out last week their expectations for how this high level review would be conducted. We're learning those details and preparing to support the Commission should any of those activities require the regulatory advice from the Commission. Not that we would be in position to select the technology, but we might be able to opine on some of the ramifications of the different decisions from a regulator's perspective. And related to this is, of course, the waste confidence rulemaking. Public comment period on that closed on February 6th and so now we're working with the Office of General Counsel and with the other staff offices to analyze the comments
17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 and prepare recommendations on an expeditious basis to come back to the Commission for consideration. With that, let me turn it over to Charlie Miller. MR. MILLER: Thank you, Mike. Good morning. Before I delve into the specific business lines that FSME deals with, which are material users and low-level waste and decommissioning, I'd like to spend a few moments discussing two items which crosscut everything that FSME does. The first is Tribal interactions. We will continue our efforts to implement a comprehensive approach to interacting with Native American Tribes. To that end we intend to develop an internal agency protocol and provide the Commission with the results of our assessment of what other federal agencies are doing. The second crosscutting area deals with our international activities. We must continue to influence the development of the IAEA standards in waste management, environmental radiation safety standards to serve the U.S. interests and to establish harmony with NRC policies and safety requirements. May I have the next slide, please? With regard to our accomplishments, the NRC has met its safety and security goals in the nuclear materials program in the past year through a collaborative partnership between numerous headquarters offices, the Regions and Agreement States and over 20,000 materials licensees. A large quantity of the completed and timely licensing and inspection work in the Agreement States and in the Regions was a major contributor to our success.
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18 Pennsylvania became an Agreement State last March. Virginia is on track to become an Agreement State at the end of this month, and New Jersey is right behind hopefully to become an Agreement State by the fall of this year. The staff has completed a number of proposed rules in the past year: Part 35 as it relates to the definition of a medical event, decommissioning planning, categorical exclusion environmental review, general license restrictions and expansion of the National Source Tracking System. Staff has also completed the following final rules: regulatory changes to implement the additional protocol for the U.S. International Atomic Energy Agency safeguards agreement, lower reporting thresholds for special nuclear material and source material, and the Nuclear Materials Management and Safeguards System otherwise known as NMMSS. Next slide, please. We've also made significant strides to improve our materials and waste infrastructure. The deployment of the National Source Tracking System in December of 2008 was a major milestone. The system will provide a greatly enhanced accountability for the IAEA Code of Conduct category I and II sealed sources held by the NRC, Agreement State licensees and the Department of Energy. Following the Commission approval of SECY-07-0144 in September of 2007 NRC resumed funding for the Agreement State staff training and associated travel to attend NRC sponsored courses for materials licensing and inspection. In the past 12 months the NRC will have sponsored 43 training courses and trained over 487 Agreement State attendees. Next slide, please.
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19 Our priorities continue to evolve as operational events and external factors demonstrate the need for regulatory flexibility. The next three slides will highlight some of our highest material program priorities. The proposed rule that we developed on generally licensed devices would improve accountability and control of the devices. In its May 30th, 2008 SRM, the Commission instructed the staff to make improvements in the security of cesium chloride sources a priority and to that end consider the efficacy of existing technical alternatives. We've recently developed a SECY paper and will be implementing the Commission's decisions once made. The Commission and the staff are well aware of the international and domestic production issues associated with medical isotopes. Our staff is working to consider the licensing issues and is working to identify and address regulatory changes. May I have slide 25, please? Our other priorities include -- we are currently leading a multi-organizational, which comprises of 13 agency task force, which is legislatively mandated by the Energy Policy Act of 2005 and is chaired by the NRC and it's working to advance source security issues across the federal government as it evaluates the inputs it receives from various subgroups and working groups. The next report is due to Congress and the President in August of 2010. Continuing need to maintain the materials programs focus on the materials security issues, including issues such as fingerprinting, increased controls, enhanced security rulemaking, pre-licensing guidance, cesium chloride security enhancements are also high on our radar screen.
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20 A number of security rulemakings including the creation of a new Part 37 as well as spent fuel transportation fuel cycle facilities security of decommissioning plants and others need to proceed in their development. Next slide, please. In addition, staff efforts to eliminate any potential or perceived vulnerabilities in the materials program through timely implementation of the U.S. Government Accountability Office action plan recommendations will continue. With regard to the deployment of web based licensing system we need to modernize the existing legacy system that is used in the materials program to provide integrated comprehensive license information system for the byproduct material area. Although the NRC funding of the assistance to the Agreement States helping immensely to meet their training and qualification requirements there's still a significant need for us to focus on the efforts of staff turnover and retention in the Agreement State programs. Next slide, please. With regard to potential policy issues, as we move forward there are some key areas which need or may need the Commission's policy guidance. I'd like to mention three in particular. The staff's recommendation to defer the National Source Tracking System rule expansion. The second is with regard to the staff proposal for options to revise radiation protection regulations and guidance with respect to the 2007 recommendations of the International Commission on Radiological Protection and where we go with this for ultimate changing of Part 20.
21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 The third area is one that's currently in progress. What lessons from the Wal-Mart incident tell us with respect to the adequacy of our regulatory treatment of tritium exit signs? For example, does the general license rule work, especially for licensees with a significant number of signs? Are regulations adequate in light of the number of signs and properly disposed of? These are issues that we'll likely be bringing to the Commission for your attention. Next slide, please. Let me shift gears now to the low-level waste and decommissioning area. In the waste management program it's also been a very busy and productive year. Our monitoring activities and our infrastructure improvements have been very important regulatory advances that enhance the safety and protect the environment. As examples I'd like to cite the Draft Generic Environmental Impact Statement for In-Situ Leach Uranium Milling Facilities, our Saltstone monitoring activities at the Savannah River site, and progress made by DOE and NRC at West Valley. We continue to engage licensees early in the decommissioning process and license termination process and this has led to a completion of at least eight sites decommissioned each year since 2005. Of course, the Regions play a major role in what we do in this area. Slide 29, please. In the next several years we've identified a number of projects that will require our highest degree of attention. As you heard in our December 2008 Commission briefing we have a number of uranium recovery licensing challenges and a heavy anticipated workload.
22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 We plan to implement the low-level waste strategic plan tasks and initiate revisions to Part 61 in accordance with Commission direction in a forthcoming SRM. We also plan to maintain a role as the U.S. regulatory body for the purposes of the Joint Convention, while also looking for opportunities to transfer our skills of working effectively within the international community to a new generation of our staff. Next slide, please. We will be looking forward to presenting to the Commission a range of issues for important Commission policy decisions. Some of these include low-level waste blending. A paper that will soon reach the Commission analyzes the policy, regulatory and safety issues associated with blending and will provide options and a recommendation. Remediation of radium at non-national priority list sites. Staff is preparing a paper that is scheduled to come to the Commission this summer. The paper will evaluate issues associated with the NRC jurisdiction and involvement with military remediation of radium 226 at non-NPL sites. Next, a draft rule is expected to reach the Commission by the end of calendar year 2009 on the applicability of the 2007 Part 50 and 51 Limited Work Authorizations rulemaking as it pertains to Part 40 licensees. These are primarily the In-Situ leach facilities. The decision will generate considerable interest especially within the uranium recovery community. On the previous slide I mentioned Part 61 as a priority. It's also a potential
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23 policy issue. Staff will evaluate the West Valley Environmental Impact Statement in terms of the ability of the preferred alternative to meet the Commission-defined criteria for decommissioning. Given that the preferred alternative contemplates a phased approach with the ultimate end state unknown at this time until the later phases are defined, the NRC staff may consult with the Commission on the results of its review of the preliminary final EIS. With that, I'll turn it to Marty. MR. VIRGILIO: Thank you, Charlie. Run down the clock here. In view of the time period that we had available we didn't talk about all of the product lines, but there are a lot of additional information that we provided in the background. Nor did we talk about things that are not directly spoken to in the product line, such as investigations, enforcement and some of the security work. What I would like to do is talk for a few minutes in concluding about some of our efforts toward continuous improvement. One of the things that we've been working on is the implementation of a methodology called Lean Six Sigma. I think we've provided some information to the Commission about that back in time. What we're looking for is are there opportunities to improve the way we conduct our business? Are there opportunities to streamline our processes to save resources, to save time? We adopted the Lean Six Sigma -- there are many methods out there -- we adopted Lean Six Sigma as one method that we thought would work and we've
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24 applied it to a number of our processes and we've actually had some noteworthy improvements as a result. If you step back and look we've applied it to 11 processes. We've finished two. Those two that we finished, one was just basically halfway into the program we realized that we didn't have enough data in order to support the kind of analysis that we wanted to do. And the other one we realized that the impressions that we had that the system was not optimized were false impressions and that the system is operating pretty well near as well as we could operate it. If we look at two others, the next two in-line, one is placing NRO task order contracts. What we find, although this is not finished yet, we can save about 20 hours per task order and contract. That might seem like a small amount, but once you look at that across a year's time we're talking about saving in excess of an FTE, which I think is pretty noteworthy. The hiring process is another example where although we haven't finished the assessment, we realize that we can save about 30 hours per vacancy on the internal hires that we do. This has got a tremendous benefit to us if you think about the number of internal transfers. I know Bill has talked about that number at the RIC and we're dealing with about 900, 960 people changing jobs in one way or another over the course of the last year and the year before that. The statistics weren't that much different. So, it's a great opportunity to save resources. We have seven more in the process -- seven more systems under review right now and we hope to achieve some significant resource savings there as well. It's not just the resource savings that we're realizing. We're realizing closer
25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 cooperation among staff across organizational lines. There are many intangible benefits associated with the Lean Six Sigma process, but I think the ones that you tend to focus on is does it save resources and does it save time? I think we're doing both of that and I just wanted to make sure that we conveyed that to you; that we are striving for continuous improvement. With that, let me turn it back over to Bill. MR. BORCHARDT: Thanks, Marty. I'd like to simply acknowledge the leadership role that Marty and the two other colleagues at this side of the table play in implementing this program. I think they've done a really tremendous job. Their leadership is only recognized because of the hard work of not only the individual offices that they represent, but the many other offices that all play very important roles in supporting the program objectives of the agency in these two areas. It's a very challenging area as you heard from this overview because there's so many separate little programs and business lines, product lines. It's in some respects more challenging than the reactor area that gets the majority of our attention and the majority of our budget. But today's discussions are no less important than the reactor program area. This concludes the staff's briefing and we're ready for questions. CHAIRMAN KLEIN: Well, thanks, Bill and all of the presenters. That really gave a good overview. These are very dynamic and certainly very important programs. I'd also like to thank and acknowledge those in attendance that are
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26 representing other organizations in the states because it's very important that we keep those close ties. So, thank you for your attendance today. We'll begin our questioning with Commissioner Jaczko. COMMISSIONER JACZKO: Thank you, Mr. Chairman. I probably thought I'd start with National Source Tracking. I was just reviewing -- we got the latest update of the credentialing on Friday. And it looks like we're getting there, but we still have a lot of -- I shouldn't say -- we still have several Agreement States that do not yet have certifications downloaded and then we have really very few of the manufacturing distributors who are there. What's your sense, I guess Charlie, of where we are and when we'll likely see more of that filled out? MR. MILLER: We continue to find that this is a challenging task and I can -- since you identified two areas let me address those. With regard to the Agreement States I think what Agreement States are experiencing is the same kinds of things that we see internally and that is they have IT security aspects within their state government. And in order for them to be able to download certificates in some cases what they're finding is that their IT people have to be collaborative and give them permission to be able do that because of the IT security of their computers. I think that that was probably something that we didn't fully anticipate as we set out. My staff continues to try to keep -- if you don't mind a basketball analogy -- a full-court press on this with regard to the Agreement States. The leadership of the Agreement States is here today and I know that they fully support
27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 us trying to get this stood up. With regard to the licensees, we really try to pay first order priority attention to the manufacturers and distributors because it's a smaller population of licensees and they're the ones that are making multiple transactions. So, it's important since they're going to be making many transactions to get them into the system. They experience some of what I talked about with the IT security aspects depending upon the size of the company, but also we have to continue to make sure that we encourage them to report electronically. Currently, they're reporting, but they're reporting through paper. And I think what they really want to get is the opportunity for batch uploading. We're working with our contractor to try to allow for an interface that gives batch loading. We're pretty close, I think, to getting something done on that. I think that will go a long way to continue to encourage them. We have to bring them in to realizing that electronic reporting is the wave that we need to get to for the future. I think, quite frankly, if it's going to be paper reporting at some point in time we're going to be overwhelmed. COMMISSIONER JACZKO: I guess I thought we were closer on the batch processing then I guess you're saying now. So, that's a little bit of a step backwards. As it is right now we have, I guess, 20% of the M&D -- the manufacturing and distributors have certifications downloaded. Do we know that those that have certifications downloaded are actually reporting electronically? There should be four companies. It's Halliburton, Probe
28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Technology -MR. MILLER: I don't know that off the top of my head if they've reported electronically or not. We can get that information. COMMISSIONER JACZKO: If you could get that to us so at least those people that have certificates we know that they are reporting. MR. MILLER: And we want them to use them. We know that they've got them, but we want them to use them once they have them. It has been a challenge to get them to get on board. We have to keep our eye on the ball in that regard. COMMISSIONER JACZKO: You mentioned, then, that it will be a challenge if we have to do all paper reporting. Currently, we are able to keep up with the pace of paperwork. MR. MILLER: The contractor has been able to keep up with the pace, but to be quite frank this is not something we anticipated at this magnitude for a long time. So, if we continue on this for a long time contractor's resources are going to be eaten up a lot faster than what we thought. COMMISSIONER JACZKO: Okay. Well, I appreciate that. Another aspect on National Source Tracking, back in June of 2006 the Commission did ask the staff to move forward on including Category III into the National Source Tracking within three years. I know the staff as you alluded to in your presentation has sent up a paper on that. I think, as we've talked about, Charlie, until or if the Commission makes any changes in policy the previous Commission direction was for the staff to move
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29 forward on a rule within three years. So, we're getting close to that three year time period and I would hope to see certainly a rule package being prepared and ready to go if the Commission doesn't make any changes in direction. I think that was the original intention. I'm not sure that anything has changed dramatically from that at this point. MR. MILLER: We're anxiously awaiting a Commission policy decision on our proposal, but absent that, we've had to continue on with working on the rule and we have been. COMMISSIONER JACZKO: Do you think it's possible to beat that June date for having a rule? MR. MILLER: I wouldn't sit here and say it's possible to beat it, Commissioner, no. I wouldn't make that commitment. COMMISSIONER JACZKO: It's not possible to beat it? MR. MILLER: I would not be confident in saying we can beat that date, no. COMMISSIONER JACZKO: But you can meet that date, though? MR. MILLER: We're working towards trying to do that should the Commission not change its policy. COMMISSIONER JACZKO: What would be the challenges to meeting that date? MR. MILLER: I think the challenges to meeting that date would be continued focus on getting all of the rulemaking package together, what's in the package. Without getting too much into the details of the staff views on that
30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 because we are going to have a forthcoming Commission meeting on material security, I think the staff feels pretty strongly that we want to make sure that the lessons that we learned from the stand up of the first system are reflected in any expansion that we do so that a rulemaking is fully informed. If we need to make some changes in our rulemaking that weren't reflected in the first rule or weren't reflected in the proposed rule as a result of the lessons that we've learned we want to be able to capture that so we're not in a continuous rulemaking process with regard to that. COMMISSIONER JACZKO: What kinds of changes then would you suggest -- as I understand the process of National Source Tracking right now it's generally with the credentialing process? MR. MILLER: For example, I think when we originally promulgated the first rule we allowed for paper reporting. COMMISSIONER JACZKO: So would you say that the suggestion is to eliminate paper reporting? MR. MILLER: No, not necessarily. Because I think there's always going to be licensees who don't have the wherewithal to report electronically. But at that time the materials security IT aspects of that were completely unknown. Unknown is probably a reasonable word. We just didn't anticipate the magnitude of that. So the question becomes as we go down further in categories if the Commission wants us to go there, then -COMMISSIONER JACZKO: The Commission in the past does want you to go there.
31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 MR. MILLER: Currently, guidance is to go there. So the question then becomes is it practical to force the same level of security on that family of licensees? I think that's an issue that we're trying to wrestle with right now given where we are and given the challenges that we've had in getting the category 1 and 2 licensees to report. Remember when we get to this next set of licensees -- and I don't mean this in a derogatory manner whatsoever to those licensees -- but it's a less sophisticated audience and a smaller size company audience that we're dealing with. Some of them don't have the infrastructure that larger companies do. So, we're trying to reflect on all of that and trying to do something reasonable and realistic so that we get support for this from our licensing community. COMMISSIONER JACZKO: Well, I do hope that if you have ideas about how to fix it I would rather see those sooner rather than later. I think we've maybe hit a bit of a roadblock. MR. MILLER: I wish I was omniscient, but I'm not. I think the last couple of years have really shown sometimes we didn't know what we didn't know. We're really trying to work hard to get our arms around that on a continuing basis. My staff spends an enormous amount of time and resources towards the National Source Tracking System. I dream about it. [LAUGHTER] COMMISSIONER JACZKO: That's never a good thing. I guess I'm over my time. I certainly have more questions. CHAIRMAN KLEIN: Commissioner Lyons?
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32 COMMISSIONER LYONS: First, my thanks to you folks for excellent presentations and representing the work of I know of a lot of your staff and also my thanks to Julia and John for being here representing the states. Very, very pleased to see the state's continued very active participation in these issues. Maybe starting with a question for Bill. I think I'm right that this is the first meeting where we've tried the new layout of business and product lines. Marty, you made a positive comment on it and from my perspective it's seems like a good way of proceeding. But I'm just curious, Bill if you would add any comments from your perspective about how you see this as a way of organizing such presentations? MR. BORCHARDT: Well, this new budget structure was the result of, I think, unprecedented cooperative effort between the CFO’s office and all the offices that report through the EDO’s office. We think this lays out a much more orderly transparent way of looking at all of our activities. I think this is a dramatic improvement, especially when you get down to the product line area. A lot of those areas, international programs being one that has been an important activity, but it was very hard to be able to look at the budget and our activities and really be able to add it up in a way that you understood what the total cost of those activities were at the office level. We knew for the Office of International Programs, but we didn't know for each of the individual offices how much effort was going into that. So, we didn't have an integrated view at an agency basis, at least not as easily as this new structure allows.
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33 I think today's briefing illustrates how when we have these three groupings of these three business lines that it really lays out a very organized and structured way of overseeing our activities. I think it holds great promise. COMMISSIONER LYONS: Thank you and I share your optimism. Mike, you mentioned that I had recently been out to LES. In fact, I had the privilege of traveling with Marty and several others on that visit. This isn't really a question, but just a comment that it brought home to me the challenge that you face in terms of the situation where parts of the facility are being dedicated and evaluated from a security standpoint. At the same time that other parts of the same facility, sometimes separated only by a thin wall, are starting to move towards operation. It just brought home to me as I hadn't understood before how complex that can be when you've got that range of activities within a relatively small facility. By way of a question, page 10, I guess, referred to the MOX facility. There has been some discussion lately about Duke no longer being interested in burning the MOX fuel. Are you having an opportunity for discussions with DOE sort of on the subject of now what? Where do they go from here? I assume that influence is potentially where the MOX facility goes. MR. WEBER: We are -- every indication we've had from DOE is it's full speed ahead. They're anxious to complete the licensing for the facility using their contractor, of course. We're informed that they are looking for additional potential users of that material, but many of those discussions take place, of course, between the Department and the prospective utility that might use that fuel
34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 and are held as proprietary information until such time as an announcement is made. COMMISSIONER LYONS: Okay. I hope that they do keep you as informed as possible as this develops. And then just a comment on your slide 11 about the regulatory framework for reprocessing. I just wanted to add my encouragement that, yes, that's a very appropriate area for the agency to be moving forward. I think it's well recognized that we need significant work in terms of updating the regulatory framework there and I think the handwriting is on the wall that in some form, some way there's going to be activity interest from companies in moving in that direction. And then a question on slide 14 where you talk about the chemical security. I'm just curious if cooperation and coordination with Homeland Security is going reasonably well in that area and if you're getting a better feeling as to how our approaches in this area will complement or at least not clash with DHS interest in chemical security? MR. WEBER: We are having good conversations with the Department of Homeland Security. Their staff and management are certainly committed to trying to avail themselves of existing security framework that's in place for NRC licensees and to implement the legislation as enacted by the Congress. Roy is here and might want to comment on this, but we continue to make progress forward on delineating the extent to which NRC licensees are excluded
35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 from the application because they already have in place the significant security programs to ensure protection of the public. COMMISSIONER LYONS: Thank you. I don't know if you need to add to that, Roy, or not. MR. ZIMMERMAN: Good morning, Commissioner. Roy Zimmerman, Director of Office of Nuclear Security Incident Response. The only thing that I would add is that we are working on a regulatory information summary that will put in writing and help clarify for the recipients what is expected in their interactions with DHS. This is well coordinated with DHS so that we make sure that we don't put them in a situation of potential dual regulation. So, there's only a number of cases like that, but I think the generic communication will go a long way. Again, as Mike indicated the communication and coordination with DHS is very good. COMMISSIONER LYONS: Thank you, Roy. I too will have more questions for another round, but if I can cram in one more for Charlie. You noted the increased interest to add additional Agreement States and as the number of Agreements States continues to grow certainly the balance, the perspective of the National Materials Program between our agency and the states I would think needs to continue to evolve. I was just curious if you could comment on any long range planning activities that you're undertaking perhaps in coordination with the states, I'd say ideally in coordination with the states, as to how the National Materials Program will evolve as the number of Agreements States appears to continue to increase?
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36 MR. MILLER: First of all, as it continues to increase as you know as you've pointed out our number of licensees get smaller and the states number of licensees get larger. So, one of the things that I think that we have to do in the National Materials Program is to make sure that as states do become Agreement States that we keep a close eye on the state budgets and the resources that are in those states. Budgets are very tight right now. I don't think I need to tell anyone that. And so, to try to do everything that we can do to make sure that the states have the resources that they need. And that includes as new states become Agreement States as part of the National Program providing them the training that they need. I mentioned the support that the Commission agreed to give us in the budget area with regard to that, but we have to keep a watchful eye on that because state staff is constantly turning over also. So, we have to make sure that the focus isn't all on getting new Agreement States trained at the expense of getting new people in existing Agreement States trained. So, that's one aspect. The second thing is expanding into the other areas of the program. You heard me talk about our business lines here. The low level waste area is an area that we're getting more and more cooperation and work with the states on. It's so that we get better information and sharing information on what's going on in the states in that regard, especially in the materials area where, of course, they have the licensees. And as you well know, there are no low-level waste sites regulated by the NRC at this time, but we still have programmatic responsibility for policy and
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37 oversight of this. So, that's something we need to keep a close eye on in the near future with the states. Thirdly, getting the states to continue to support and cooperate on our initiatives as they relate to the National Source Tracking System and web based licensing. As we get more and more Agreement States, that's going to bring new people into the fold who haven't been dealing with this. Their cooperation and sharing that information with us is critical to have a National program. So, there are just some thoughts of some initiatives in the near term that we're trying to think about. COMMISSIONER LYONS: Well, I certainly agree with all the points you made and certainly strongly support the training activities. But I can't help thinking that, again, in coordination with the states that it is worth asking how this program will evolve over significant numbers of years because very clear trends as decreasing number of licensees within the NRC and it may be appropriate to look at some different models of how the agency’s contributions relative to the state's contributions are all coordinated. I would just encourage that there be that kind of plan. MR. MILLER: And we do. And I think one area that we've looked at some increasing models is, of course, making sure that the states are involved in our working groups as we contemplate policy decisions. They're very active in that. This puts an extra resource burden on them, too. And so, it's continual encouragement to not have just a few states participate in this, but have all the Agreement States involved so that their
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38 resources can be shared and used efficiently. And that brings more of a National focus rather than just having a few states who have large programs necessarily be the ones that always step up to support us. So, we try to continue to encourage the Agreement States to have people participate. That also helps towards a National program and perspective. COMMISSIONER LYONS: Thanks, Charlie. CHAIRMAN KLEIN: Commissioner Svinicki? COMMISSIONER SVINICKI: Thank you. Well, I add my welcome to our state partners who are here today. Thank you for coming. And I add my thanks for the staff presentations. I think there had been some debate about perhaps trying to have these State of the Program Briefings the week before the RIC and now I'm realizing that maybe having it the week after the RIC was just as difficult for staff because they provide a tremendous amount of information to the Commission in preparation for this. So, I thank them. I'm not sure if we made it more painful or less painful, but we had good intentions in any event. Some of the topics have been covered, so I'll start maybe with a comment. On the new budget structure Marty used the example of international program support as a benefit of where we can see that spread across the different programs. I would say -- I would pick out rulemaking as my favorite. It's that in years past I understand the agency couldn't indicate a resource amount affixed to our rulemaking activities. I think that kind of fidelity will serve us well going forward; however, someone has to then split the budget out with that level of fidelity.
39 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Mike, you and I participated in the Chairman's Advisory Group on the budget. You were one of the participants representing a larger program. I know that Bill responded of the benefits of the new budget structure, but how is it going in terms of all of your folks who have to try to split the budget out? Is that going pretty smoothly? I'm assuming we'll get better at our estimating over time? MR. WEBER: I would say it's going well, Commissioner. We're still learning the new process, so when we apply the new structure that raises new definitional issues about what exactly do you mean by international activities, for example, or rulemaking? Where does rulemaking end and guidance development begin? How do you draw that line between the programs? In my particular case being the responsible manager for both -- or two of the business lines, the new fuel facilities and operating fuel facilities, how do you split between those two business lines the work that we do on upgrading the Standard Review Plan that applies to both? So, these are some of the implementation challenges, but I would say a challenge for the agency -- and you'll have the opportunity to grapple with this as you formulate the budget for 2011 -- is to control the creep because what's happening is as you make the budget more granular you start realizing, "Wow, we really don't have many resources on some of these line items or some of the product lines." And then that's going to fuel the question, don't you need more? But at the same time we're trying to be fiscally responsible, so we're trying to maintain a level. I think we're going to have a lot of back-and-forth on that as the staff
40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 formulates the budget. COMMISSIONER SVINICKI: Bill had closed with a comment about all of the organizations and support not represented at the table today. I'm struggling. I know that these briefings are done in preparation for receipt of the 2011 budget and the Commission's consideration of the staff's proposal on that, but I'm working hard to understand how some of these essential elements like OGC, other elements of all of these initiatives are spread. And certainly, I don't think -- it's not an objective of the new budget structure to hamper some fungibility where it's appropriate, but I think it will give us a lot more transparency into all of these elements of all of this, say a rulemaking, that requires so much support outside of a programmatic office to get a better understanding of how we're going about that. And so, I appreciate that it won't be probably pretty in the beginning and we'll do the best that we can. This is in preparation for the budget and so I appreciate you've mentioned the adjudication on high-level waste. These are all budget oriented questions and not substantive. For example, you've mentioned the potential for budget challenges of moving forward on the high level waste proceedings and there is significant involvement, you mentioned the hearing process that runs parallel to the staff's technical review. As we look at budget constraints there can you share any sense of how staff would propose we look at reduced budget scenarios between say Commission appellate adjudication, OGC, other offices that would have a strong --
41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 they would have a lot of resources they would need to dedicate to the hearing process versus the technical review? Is staff beginning -- obviously, we're moving forward on FY-11 so you're having to work your way through that. Is there any kind of overall guideline that you could share? MR. WEBER: Absolutely. We've been working to respond to the most recent February SRM that we received from the Commission, so we're formulating that comprehensive plan that was requested of us. We get great cooperation from all the offices and under Lawrence Kokajko's leadership. Lawrence serves as the group that pulls the different offices together to formulate the budget. There are very clear ground rules for those discussions. They don't get into substantive technical discussions about any of the issues that are under adjudication. It's clearly from a program resources perspective. And at the same time a number of those offices maintain their own reporting lines to the Commission so that if they have substantive issues to discuss with the Commission they can avail themselves to those channels. But by and large the cooperation has been very good. Lawrence puts the core group through their paces on a fairly frequent basis as we plan for different contingencies with more or fewer resources depending on how the case plays out. COMMISSIONER SVINICKI: Okay. Thank you. That's helpful for me to kind of peer into that process. We just see the final product, but I know that there's a lot of work that goes on. I would ask you we're to a point now where the CR is in its very final steps
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42 here. I think soon we will have coordinated with OMB and we can have our final '09 number and move forward. There were some applicants, Mike, in your area, say AREVA for the Idaho Enrichment Facility where the applicant was notified that the CR as long as that was pending we couldn't really work on a definitive schedule for them. Are you to the point now where you should be able to communicate to applicants in that circumstance how we might move forward? MR. WEBER: Yes and we did so for AREVA last week. We accepted their application for review and we also communicated with another licensee that we've accepted their environmental report for review. So, we're making progress. I'll count on Jim Dyer to deliver the resources once he gets them from the Office of Management and Budget, but we should be good to go on those two particular cases. Thanks. COMMISSIONER SVINICKI: Okay. Charlie, I want to acknowledge since this is the first time I think that you've been in a briefing like this since I had an opportunity to attend one of the Chairman's task force on radiation source protection and security. I have to read it every time. It's so long; I can never get it right. You have a really significant co-lateral duty there as the Agency's lead and I came away from the meeting that I participated in recently so impressed with the work of you and your staff and all the other individuals that you draw on; that is, I think you said 13 agency participants. It's a significant undertaking.
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43 Your presentation talked about gearing up for the 2010 report to Congress that will be due and I appreciate it. I know that others built a solid foundation for you prior to getting that responsibility of being the lead. I just wanted to publicly compliment you and your folks. I came away from that with a much greater appreciation of all the moving pieces that you have in play and when it's interagency it's always that much harder because we've got to move things through concurrence. And I look forward to being a part of those activities with the Chairman's indulgence moving forward. Is there anything you'd share as far as challenges moving forward on that? MR. MILLER: Yes, I think our challenge is going to be we've had a lot of good work from some of the subgroups and I think one of the things that it's done is really moved the ball forward in this area. It's got the federal agencies working together on this and trying to head in one direction. I think when we started out a few years ago everybody was kind of siloed. It's gone a long way. The big challenge I'm going to see is getting that report written in a form that satisfies everyone and where I'm going to need your help is when we get to the signature time and getting -- especially in some agencies -- the heads of those agencies would be the signatory to endorsing the report. And in large Cabinet agencies those heads have changed and may not have been intimately involved up until almost the time of the report writing and knowing what's in the report. So, it's important that we -COMMISSIONER SVINICKI: And I acknowledge that while that's
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44 painful and I know you raised this at the meeting I attended that some of our other federal partners indicated that there is also a plus side of having the concurrence and buy-in at that level for moving forward. So, I look forward to working with you on that. MR. MILLER: It's a very important step. COMMISSIONER SVINICKI: Thank you, Mr. Chairman. CHAIRMAN KLEIN: Thank you. Well, Mike, since we're looking towards budgets we noticed that in the area of ISR activities there was a huge increase as the price of uranium went up. Are you in close consultation with those individuals as the price is coming down? Is the workload changing? MR. WEBER: I'm in close consultation with Charlie Miller -MR. MILLER: I have the lead for that, Chairman. MR. WEBER: -- who's responsible for that business line. MR. MILLER: Yes, as you mentioned it's a dynamic situation. What we've done this year in preparation for the budget is we've gone back out as we did last year and asked for the prospective licensees to state their intentions again and give us letters of intent, inform us as to what's gone on. We found some changes. We found some companies that are going to hold off for a bit. So, it gives us more current information as to what to expect on the near-term horizon. CHAIRMAN KLEIN: I think it's good just to keep track of that to see where the real work load needs to be accomplished. MR. MILLER: Right. One of the things that I have to continue to focus on is what's the work that's before me currently? And when those
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45 applications come in and then it puts the work on my staff's laps. So, I try to really make sure they have good intelligence on what's coming in in the near-term because if everything did come in on time it's more work than we could possibly handle in this budget time. MR. WEBER: There are similar but smaller magnitude increases for the fuel cycle facilities, too, in the proposed fee rule. So, yes, we work with licensees on that. I think another related issue that the Commission frequently has to deal with is how far do we go in planning and preparing for the receipt of new applications when perhaps some of those applications might be a little less certain? Because it does have fee ramifications as the agency prepares for taking on that work. As you know with the funding constraints that we operate under sometimes we actually will take resources from established programs, again assuring continued safety and security to prepare for the new operations. So, it's a tough balancing act and I'm sure through the EDO we will keep the Commission informed through the budget process. CHAIRMAN KLEIN: You had indicated, Mike, that NEI had submitted a white paper and they had talked about a Part 7X. Could you comment on how those meetings have gone and where we're headed? MR. WEBER: We've had one open meeting so far and that was last month. I would characterize it as a very constructive discussion. I attended part of it and my staff attended all of the meeting. The white paper itself has been helpful to the Agency because it brought
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46 together a number of different private concerns who were actively working on this issue. And so, they pooled their resources and helps give the NRC a jump-start by allowing us to know what their perspectives are. I would also say that their introducing that white paper has stimulated other stakeholders in coming forward and sharing their views. Just last week at the Regulatory Information Conference I know Dr. Ed Lyman from the Union of Concerned Scientists shared his perspectives or the Union's perspective with respect to some of the challenges associated with reprocessing. So, that puts it all on the table. And knowing what the issues and concerns are in advance puts the agency in a much better position to thoughtfully consider that information as we go forward wherever we go in that area in formulating the rulemaking process. The 70X question -- this has been debated for a long time and I think we're far from resolving that issue. There are clear benefits to making the reprocessing safety rule part of the 70 series, but it's again something that the Commission needs to thoughtfully approach and that's what we're trying to do through the regulatory gap analysis and the development of the technical basis. But if other stakeholders have views as well it's beneficial to know those. I will say on behalf of the participants in that last meeting we also heard that even the industry recognizes there are other areas that need to be addressed. So, we were informed that they plan to come forward with additional white papers or other submittals to the Agency to have us have the benefit of their thinking early on in the rulemaking process.
47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 CHAIRMAN KLEIN: Thanks, good. Well, Charlie, you had talked about you had some good interactions with a lot of trainings with the states. I'd like to compliment you on those activities. In terms of training and interactions between the NRC and the Agreement States are there any more things we should be doing in terms of training and meetings and coordination? MR. MILLER: I think one of our challenges is how to supply the most training with the money that's available. I think one of the things that the states would like to see is the opportunity to attend a five-week health physics course. But the five-week health physics course is a very resource intensive endeavor, so we are constantly trying to think of ways that we can get the benefits to the states for that training without having to have too many people attend that course. Because if one person attends that course it kind of takes away from three people's chances to get a one-week training course or four people's chances. It's pretty resource intensive. So, that's one area. If we had more resources to devote to that that would be one area that I think the states would be very active in. And continue to try to be fair and equitable with regard to providing the states the opportunities to take those courses. I think if resources were unlimited, of course, the states would love to have all the training needs met that they could. They recognize that that's not the case. So, they work very well with us in trying to make sure that their needs are met as best they can with the people that have those training needs the most.
48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 CHAIRMAN KLEIN: Thanks. Well, obviously, we've all been watching with great anticipation the implementation of the NSTS and the challenges that have occurred. I guess as you indicated there were unknown unknowns in that process. Are you hopefully taking some of those lessons learned and implementing that into the web based licensing? MR. MILLER: Yes, sir. That's probably one of the biggest insights we have as we're going forward with web based licensing to make sure that we know what we know. I think one of the things that we're really taking is really taking a strong look at what level of security do we need to have there, recognizing that the higher the level of security the more daunting it becomes for a large number of users. I think that's the big lesson. It's a large number of users that are going to be using this, not a small number of users. And getting a large number of users that have very high credentials for security is part of the daunting task. A lot with the web based licensing may not need that level of security hopefully in order to be able to interface with the system. I think that will help a lot. That's one of the bigger lessons. The other lesson learned is hindsight is 20/20, but if I knew what I knew now I think we would have got the credentialing in place well ahead of the stand-up of the system. So, that's something that I'm looking for. What kind of security measures are we going to need in trying to work with the potential users and making sure we have those in place well ahead of the implementation of the
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49 system so that we're not fighting one against the other when the system is stood up? Those are two big insights I think that we've gained. CHAIRMAN KLEIN: Based on the number of sites that we cannot access through the NRC's computer, I find it fascinating that some of the states might not have been able to access ours. I could definitely relate to that one. Commissioner Jaczko? COMMISSIONER JACZKO: I guess I'll follow up on the issue we talked a little bit about the development or really the response to the white paper on reprocessing facilities in the regulatory infrastructure for that. We did get a paper from the staff in September and since, I guess, we are dealing with budgets a little bit here I thought I would touch on some of the issues with that. Mike, maybe you can talk a little bit about -- I think one of the things the staff indicated in that paper and as we know I think we haven't budgeted resources for that activity right now, partially I think because at the time there wasn't a clear understanding that we had somebody coming forward with a clear intent to build a facility. I'm not quite sure that we actually have that yet. We do have a letter. I'm not sure that the letter -- I think if we take lessons learned we can probably learn from the reactor as well as the uranium recovery industry that letters are not always the best indicator of true level of commitment. I think as part of that the staff indicates several FTE and a significant amount of resources that will be needed. Maybe you can talk a little bit about where you intend to find those resources and what you think -- what other work won't get done that was budgeted and then we would have resources for that.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 those were?
50 MR. WEBER: To date, Commissioner, we've been reprogramming those resources from a variety of sources including work that did not materialize because there were delays in the applicant's schedules. COMMISSIONER JACZKO: What was some of that work? MR. WEBER: Proposals to construct new parts of the operating facilities and then the licensee deferred it. It was also some new work that didn't materialize. COMMISSIONER JACZKO: Can you give me specifics on what
MR. WEBER: There was a proposal to change a conversion facility, not at the conversion facility, but at an operating fuel fabrication facility. So, we budgeted resources for that work because it was a major amendment and we were prepared for it. We had a high confidence it was going to come in. And then the licensee decided to defer that submittal for their own reasons. I'm not privy to all their reasons, but if it results in a higher quality license application that better withstands our regulatory scrutiny I'm all for that. COMMISSIONER JACZKO: Is that new work in the budget? Will that show up in the '11 budget? MR. WEBER: I think it shows up in the '10 budget, but that's presuming the '10 budget comes out in a way that supports that work, which is still at play through the Office of Management and Budget Review. So, it's efficiency improvements that we were able to achieve in other ongoing fuel facility licensing work. To some extent, we have an overage in that
51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 program area, so we've been using those resources. We're not talking about a large number of resources; it all on the order of less than an a FTE to support that work. As we go forward with the development of the technical basis document the resources required for that work will increase. I think it's on the order of four FTEs over a year-and-a-half timeframe between now and March of 2010. That's not just NMSS. That's also the Office of Nuclear Regulatory Research. COMMISSIONER JACZKO: Where are we anticipating finding the resources for those four FTE? MR. WEBER: Out of efficiency improvements, out of work that doesn't materialize. COMMISSIONER JACZKO: That's not been identified yet? MR. WEBER: Right. COMMISSIONER JACZKO: We're just talking about the '09 resources that have been identified? MR. WEBER: '09 and into '10 based on however '10 comes out through the congressional appropriations process. COMMISSIONER JACZKO: Okay. Thanks. MR. WEBER: I would point out, of course, and this should come as no surprise, but should the Commission ultimately elect to go forward with the rulemaking that's when the resources will really kick in due to the complexity and the breadth of that rulemaking. And instead of talking one or two FTEs we're probably talking tens of FTEs.
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52 So, that will be a significant step and I think the Commission will have its first view of that in the 2011 budget process. COMMISSIONER JACZKO: Thanks. Charlie, maybe I'll go back to Charlie and then I'll come back to you, Mike. The Chairman did bring up web based licensing. Whenever I think of web based licensing one of my favorite operas is "The Flying Dutchman". It's about this ghost ship that constantly appears and reappears out of the mist. I'm not sure how much -- for the life of me I can't remember the name of the ship. I can't remember what it is. Do you know what it is? I don't know what it is. Well, it's a German opera. COMMISSIONER LYONS: De Vliegende Hollander? COMMISSIONER JACZKO: Well, the De Vliegende Hollander is the German word for Flying Dutchman, but I don't think that's the name of the ship. I can't remember the name of the ship. MR. MILLER: We can look it up for you, Commissioner. [LAUGHTER] COMMISSIONER JACZKO: That will not be a necessary item. The point of my question -- where are we with web based licensing? The Chairman asked some questions about it as if it was a fait de compli and I'm not sure that we're anywhere close to having even a plan for web based licensing at this point. Is that a fair assessment? MR. MILLER: No, I think we do have a plan and I'm going to say some of what I'm going to say carefully in a public forum because I have to
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53 because we are trying to get to a point where we can initiate a procurement. One of the things that we've gone out -COMMISSIONER JACZKO: Again, to the extent we can talk about it, maybe the most important question I'm looking for an answer to because I do want to get back to a question to Mike is when do you think we'll have a web base licensing system that can interface with National Source Tracking? Rough approximation. Five years? Ten years? MR. MILLER: No, no. Certainly, I think it will be less than five years. COMMISSIONER JACZKO: Less than five years? MR. MILLER: Yes. COMMISSIONER JACZKO: Thanks. That's fine. MR. MILLER: Yes. I'm confident of that. COMMISSIONER JACZKO: Okay. Good. Thank you. Mike, this is an issue that's kind of been festering for a long time. Back about four or five years ago the Commission changed Part 71 and as a result phased down a series of transportation certificates. I think we've done a lot of effort to communicate to licensees or certificate holders that these certain classes of certificates are no longer usable from a transportation perspective. Periodically, I see that we are approving -- I don't know that they're necessarily exemptions or what it is that we're doing. Where do see that issue? Are we going to move forward to the point where we will phase out all of those certificates? How do you see that issue going forward in the next couple years? MR. WEBER: Yes, I do Commissioner. I understand that about 45
54 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 add to that? MR. BRACH: Bill Brach, NMSS. We don't have specific confirmation on their non-use, but as you've noted we did make over a quite a few years now notification to licensees and to certificate holders on the expiration of packages were expired on October 1st of 2008. And out of the 45 we received applications based on our regulatory information summary for 15 to extend the operating lifetime of those packages provided that the necessary safety controls are in place to safely use those packages. We've approved those 15. So, roughly a third were allowed to continue use for very limited applications, in a variety of settings it was a function of the package. There wasn't any safety issue with the package and therefore there was no reason to cease its use. The licensees did come forward or the vendors and submit additional measures that they would take to ensure the safe use of those packages. We heard hardship cases that this is the only package that can be used and if we can't use this package, then that's going to disrupt commerce or cause untoward circumstances. We took all of that into account and we just approved the last one, I think within the last week or so. COMMISSIONER JACZKO: Now, of those other 30 do we know that they're not being used? MR. WEBER: They can't be used. COMMISSIONER JACZKO: We know that they're not being used? MR. WEBER: As far as I know. I don't know if Bill Brach wants to
55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 those certificates October of 2008. I have reasonably that the licensees and certificate holders are respective of the end of life, if you will, for those packages and are no longer using them. As Mike had noted we have with special exceptions on 15 requests looking at the expediency issues involved as well as the additional measures to be put in place, authorize limited use so the few packages for a near-term period of time. COMMISSIONER JACZKO: As we provided information, I think the licensees, one of the things we indicated was that this was not to be considered as a renewal of any way, shape, or form. Will these packages then be phased out within the next two years completely? MR. BRACH: Yes. The packages have expired so there's no -beyond the specific 15 cases that we have authorized the limited use, but there's no -COMMISSIONER JACZKO: Of the 15, what's happening with those 15? Are they permanently in use? MR. BRACH: No, these are for limited use limited periods of time. Some of these were one time only exclusive use. Others were over a very specified period of time. For a number of these packages vendors are coming in to us with requests for new applications, new certificates to take the place of those packages for which the use has expired. COMMISSIONER JACZKO: For those that are coming in how come they didn't do that three years ago? MR. BRACH: Very good question. The notice to the licensee
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56 certificate holders has been over about the last eight years. So, there was really ample notice. Clearly, a vendor in coming to the NRC has market, if you will, interest that guide many of their decisions. So, I suspect it was deliberations between the vendors and potential users with regard to timing and need for such new packages. COMMISSIONER JACZKO: What was the original purpose of the rule change that we made? MR. BRACH: Two reasons, sir. One, our 10 Part 71 regulations and DOT's regulations that regulate the U.S. transport activities are based on the international standard IAEA document standard TSR-1. That's the international standard adopted worldwide to facilitate international commerce in the area of radioactive material transportation. The other aspect -- the international regulation includes the phasing out of packages to old -- what we refer to as previous issuance of the standards and regulations. There were some significant changes that occurred to the transportation standard back in the 1960's, the late '60s, early '70s that enhanced the testing requirements and quality assurance requirements necessary in the design and certification of transportation packages. These packages that were phased out had been previously certified and approved to the previously older standards and not the more -- I'll say -contemporary standards we have in place now. COMMISSIONER JACZKO: Well, I guess at some point hopefully
57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 we'll bring this to closure. Just one final follow-up question on this. Is this an exemption or how do they come in for these requests? What's the regulatory basis for this? MR. BRACH: We issued you -- you may recall, Commissioner, a regulatory information summary back in late summer of last year that laid a process out for licensees or vendors to come into us and request a limited use. We were looking at these as a limited use authorization. The packages have expired. So, based on the request and the justification by the submitter, the licensee or certificate holder, we made a determination based on the basis of their request coupled with the additional compensatory measures that the licensee or vendor putting in place with regard to assure the safe transport and use of these packages we issued what I'll refer to as a limited use or limited authorization for a very defined specific use of the package. As I mentioned many of these were for a one-time exclusive use only at a certain point in time to ship material from Point A to Point B. COMMISSIONER JACZKO: Does the licensee that actually uses -do they get some kind of license amendment to do that? MR. BRACH: They have a letter authorization from us, which is authorized under Part 71 to provide that authorization for that limited one-time -- in many cases one-time -- the limited use of that package. COMMISSIONER JACZKO: I guess I don't know what a letter of authorization is. Maybe we can talk about that off line. Thanks. MR. WEBER: If I could, Commissioner, just briefly. We're sensitive
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58 to this as well and Bill Brach and his leadership role on the TRANSSC Committee briefed me recently that they are looking at this transition process as well because this isn't just an issue that we face in the United States. It's an issue that's faced around the world every time the transportation safety requirements are upgraded. And the second compound to that is fair warning for those vendors and licensees that are out there using packages that, as the Commission is aware, we've also embarked now on the next phase of revisions to the transportation safety requirements through the IAEA process. While that's not imminent, it is in progress. So, just like we face it this time there will be future opportunities like this to ensure that we provide ample warning to the people who -COMMISSIONER JACZKO: Do you think four years was ample warning? MR. WEBER: Four years is ample warning. COMMISSIONER JACZKO: At the end of four years we have 15 of the 45 that didn't know or didn't want it. MR. WEBER: Weren't in a position to rely on a new package. COMMISSIONER JACZKO: I guess I would just have to say maybe four years isn't ample warning, then. I don't know. We probably can't have it both ways. Well, thanks. I appreciate your explanation. And as I said I think perhaps I'll follow up with a briefing on this afterwards just to get some more detail. Thank you. CHAIRMAN KLEIN: Commissioner Lyons?
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59 COMMISSIONER LYONS: I think with all the discussion I'm down to only one question, but at least a few other comments that I'd like to make, too. Mike, I appreciated your reference to the high level commission on high-level waste, I guess. Senator Reid's introduction of a bill; Secretary Chu has made a number of comments. I have no idea, of course, what this Commission will eventually turn out to be, but I do think that just as you said it's very, very appropriate for your offices to be planning ahead as to how it's going to be necessary to support whatever form this Commission takes because I can't imagine that such a Commission could proceed without significant input from the regulatory perspective. I'm glad you're folding that into your thinking. Along that same line, since at least any long-term solution on high-level waste that I know of will involve at least some form of geologic repository, I just wanted to again add my comment that depending on how resources from Congress are allocated I remain concerned and interested that we support the excellent staff we have in the area of evaluation of repositories and that includes the staff at the Center. And we've talked in the past about depending on workload at the Center, perhaps looking at other funding sources to the Center and just in general I think we are very much going to need those resources in the future. Another subject that's already had a lot of discussion, so I don't want to add questions to it, but Charlie, you're well aware of my interest in the credentialing process. Greg delved into that, the Chairman did. I, too, share a very, very strong interest, again, as you know in how the credentialing is moving ahead.
60 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 And I was particularly interested in your comment, Charlie, that based on this experience there will be certainly lessons learned applied to web based licensing. I think that's very appropriate. Exactly what those lessons will be I'm sure can be talked about in future meetings. I think your suggestion of perhaps relooking at the impact of different security levels on web based licensing or looking at different aspects of web based licensing that you at least hinted might require different levels of security. I think all those approaches would be very solid lessons learned coming out of the credentialing process. And then by way of a question and maybe start with Charlie, but I think this probably will go to Bill, too. On your slide 24, Charlie, you referred to facilitate medical isotope production and use. I -- and I think all of us -- have been very, very concerned by what we see as a very fragile supply chain and certainly I think we're all very interested, too, in ways to render that supply chain far more robust and effective. But I am curious as to how you see -- and maybe Bill can add, too -- how far we should go in facilitating -- which is the word you used -- I can see a very, very strong role for us in certainly the safety and security of anything that's proposed. I see a strong role for us in efficiently moving ahead with regulatory actions that may result from proposals. But I'm not sure how we go much further. I was just curious whether, Charlie, you had ideas for how one goes further with that comment on your slide and then it may come back to you, Bill. I don't know.
61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 MR. MILLER: Yes, I'd be happy to answer that, Commissioner. It gets to the issue of this. What is the role of the regulator in all of this? I've had the opportunity to represent the Agency at a big meeting in France that the French regulator put together where it drew in the regulators from the countries who have medical isotope production capabilities as well as the United States. Secondly, I've had the opportunity to have some extensive collaboration with the Nuclear Energy Agency who is now picking up a role in this respect. Thirdly, I've had the opportunity to discuss with both French regulator and Canadian regulator quite extensively last week at the RIC how we move forward. And again, it's an issue I think it's the regulator has -- right now it's the regulators that are driving this to some degree in these countries. I think we have to continue to make sure that awareness is out there. From our perspective I think as far as we can go is to make sure that we are prepared to take any regulatory action that's necessary and not be a regulatory impediment should some situation change in the United States where we're called upon to have to license or an Agreement State is called upon to have to license some kind of production facility. Of course, if it's a reactor facility the NRC would license it. If it's an associated materials facility to process the targets it could either be an NRC regulatory responsibility or the Agreement States. We just have to be in a position to stay abreast of everything that's going on, stay close to everything that's going on and make sure that we don't provide any regulatory impediments in this regard.
62 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 COMMISSIONER LYONS: I very much agree with the way you phrased it. I will admit that I was slightly surprised at some of the recent meetings which seemed to look like it was a regulatory drive in this direction. And it seems to me that there are other agencies from the medical side and the patient interest side that should be perhaps driving the proposals that then come to us for hopefully very efficient review. Anyway, the way you said it I was very comfortable. MR. MILLER: I think also to leverage a little bit farther one of the challenges that we're going to face especially if we move towards domestic production is the challenge that some of our federal or international counterparts are facing who have these facilities is the need to have to balance the safety of those facilities with the need for the medical production of the isotopes. As you all well know the reactors around the world are aging. And so, there is that continued need. I think it's no surprise to anyone as to what happened up in Canada the last year or two, but we can't abdicate our safety responsibilities and making sure that whatever facilities that we regulate are regulated and are producing these materials in a safe manner. So, that's something that will be the constant challenge I think as the regulator to make sure that it's done safely, but to make sure that we're not any unnecessary impediment to the production of these facilities. COMMISSIONER LYONS: Bill, would you want to add to that? I think Charlie said it very, very well. MR. BORCHARDT: Only that in my discussions last week with my
63 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 international colleagues that although the regulators served as the catalyst for addressing or beginning the discussion of this important topic I think there's a united view that someone else needs to take the ownership of the issue for bringing new facilities online. I agree with all the comments Charlie made about maintaining our focus on safety and having an efficient and effective regulatory process, but that we ought not to become the promoters of these new facilities. COMMISSIONER LYONS: And that's my concern. MR. BORCHARDT: And that's well agreed to by all the other international regulators, but unfortunately because especially what happened in Canada not too long ago, they felt obliged to be the catalyst to generate this discussion. COMMISSIONER LYONS: I hope that out of this discussion comes a sufficiently robust international production capability that we never get into a situation of having to juggle safety with production. Our focus has to be on the safety side. Any case, thank you for the discussion on that. CHAIRMAN KLEIN: Commissioner Svinicki? COMMISSIONER SVINICKI: Thank you. Charlie, you've been willing to give some estimates at various confidence levels on some specific activity, so I'll ask you now that again we're out of the CR is, in your opinion as you sit here today, is the draft GEIS on In-Situ Leach still on track for issuance in June of 2009? MR. MILLER: Yes, it is. We're confident that we'll be able to finalize
64 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 that by June of 2009. The staff has worked very hard at trying to analyze the comments. We've had the support from the Center in San Antonio who is working with us on this and I think we're getting pretty close to having the final EIS drafted and then it will go through, of course, the concurrence process. But we're confident we're going to meet the June deadline. COMMISSIONER SVINICKI: Okay. Thank you. We've talked quite a bit about Agreement States and Agreement States to be added and others who may be interested. An interesting aspect, though, is that I think by some estimates that your office provided soon as much as 85% of the total number of materials licensees would be regulated by the Agreement States. Are you working with the CFO at all in terms of what it means for that remaining 15% to support the regulatory framework and how we work on fee-related issues? Is that something at least that you've -- you're forward-looking on that? MR. MILLER: The CFO and I had a discussion on this briefly last week and this is something we're going to have to face for the future budget years. As we get fewer and fewer licensees, of course, the way our fee structure works those licensees bear the burden of the cost. We're always going to have infrastructure costs that are going to add to that. Jim Dyer and myself agreed that we need to take a hard look at how do we do fees for the future. Historically, I think fees are done -- who's the benefactor of the work that we do? The materials licensees being the benefactor it's fallen on them.
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65 So, we're going to have to look for some unique ways that we can look for a fee structure to possibly deal with this so that the fewer and fewer licensees we have don't get a bigger and bigger and bigger burden. COMMISSIONER SVINICKI: I think I asked this in my question as the future impact, but actually if we look at the latest promulgated fee role some of the materials users are looking at a rather significant increase in that area. I know that Jim works to look across the fee rule and do make the appropriate adjustments, but still in all for some of those smaller licensees it will be a significant impact to them. So, I appreciate that you're continuing to work that I'm not sure what the answer is. MR. MILLER: The CFO and I will have to work together closely on that. We face that issue with uranium recovery this year, but we solved the problem I think to the satisfaction of everyone. We'll see what we can do for this in the future. It is a concern that's been on the table, though, for a number of years, Commissioner, as we get more and more Agreement States. COMMISSIONER SVINICKI: Okay. Thank you. Mike, something you mentioned just in passing in your presentation, but in the area of transportation and spent fuel storage you mentioned dealing with staff turnover. I think when put that way it sounds like it is similar to many offices. But I noticed in some of the data that you provided it's actually a rather exaggerated situation in that area of expertise for you. I have some data that says 60% of the staff there have less than two years experience in working on these things. Transportation and spent fuel storage
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66 amendments and applications are an area where candidly in the two budgets I've looked at were often more managing a backlog than we are able to stay current with that work. How are you, again, given that 60% of the staff there having less than two years' experience. I think that you are doing some mentoring and other things, but is there anything that you would point out about managing what I think is kind of one of our more extreme cases of where we have a lot of new folks? MR. WEBER: Great question. It's something that we struggle with on a daily basis. First of all, we're able to bring in very talented people. So while they may have limited NRC experience they may have extensive external experience. And that really helps when they come on board to hit the ground running. We're doing a lot on knowledge management so that we share within the program so that some of the more experienced reviewers can share their insights, their experiences. We do work on the qualification program. We have brown bag luncheons. It goes on and on. I might add that at the same time we're also looking to enhance the effectiveness and the efficiency of the review process. So, it's kind of a triple whammy. You've got a backlog that we want to cut back on although that's a challenge along with the reducing resources. You've got this turnover challenge that we're dealing with. And then you're trying to concurrently streamline the processes while enhancing the quality and the effectiveness of the reviews. There are opportunities that we're pursuing to do that, but we're fortunate to
67 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 have the leadership of Bill Brach and his deputy directors as well as the very competent qualified branch chiefs and staff in that program to step up to the plate and handle that kind of a challenge. COMMISSIONER SVINICKI: Okay. And that was a little bit of a perfect setup. My last question was going to be for Marty who had talked about Lean Six Sigma opportunities. I would ask at this point as you've had very productive results in some areas do you feed that back into target the areas for your next Lean Six Sigma review that would have the highest potential providing us efficiency and effectiveness harvesting those benefits there? MR. VIRGILIO: The short answer is yes. The longer answer is one of our big challenges is targeting those areas that are going to be most beneficial. We've just recently put a call out to the offices and we've laid out a set of criteria as to how to select these processes. We've asked each office to come forward with maybe two or three areas where they'd like to apply Lean Six Sigma. The challenge -- there are a number of challenges in that and we're trying to take the lessons learned and move them forward as we go along. One of the things is stability of the program. We've actually started into one of our Lean Six Sigma to a program that was not very stable and we had to terminate the review. Another one is availability of data. So, we're constantly learning lessons about where can you actually apply this technology and where can you make a difference and where can't you. And so, all of the lessons learned that we have up to this point went out in that data call in terms of these are the criteria we would like the offices to consider as they nominate the potential candidates for the next
68 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 round. COMMISSIONER SVINICKI: Have we been making good progress on getting our own black belts, NRC staff with the Black Belt certification? MR. VIRGILIO: Yes, we have. We've got a team now. There's sort of a dynamic where we believe the best approach is to keep that team whole in one location, but we are turning over some people, bringing some people back into the office to lead Lean Six Sigma within those program offices that they came from. COMMISSIONER SVINICKI: Have we been able to involve the Regions in these activities? MR. VIRGILIO: Not up to this point. Most of it has been headquarter focused, but I think now the call has gone out, so we'll look for an opportunity to focus on a Region or more than one Region-based program. COMMISSIONER SVINICKI: Okay. Great. Thank you, Mr. Chairman. CHAIRMAN KLEIN: Mike, you had mentioned in your presentation that you're spending more time looking at the independent spent fuel facilities because there's more of them getting there. I guess this is probably a question both for you and for Bill. Are you looking at transitioning some of that work into the ROP at some point in time? MR. WEBER: We look at that on a frequent basis. In fact, we had an inspector counterpart meeting in February. I came away from that meeting saying, "There ought to be a better way that we can do this."
69 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 add. CHAIRMAN KLEIN: Charlie, on your slide 27 this may be a question where you'll start and Marty and Bill may follow up. You mentioned ICRP 103. Could you talk about where you think we're headed on that? MR. MILLER: I can. We've got a paper up with the Commission on this. I think that we want to do a number of things, Chairman. If you'll just indulge me for a second I can cover a few of them. Part of what we live with are legacy decisions, but I think we do have the opportunity going forward to try to leverage the capabilities that exist in the reactor program to cover some of the independent spent fuel storage installation inspections. But it works both ways because from the reactor program perspective maybe it would be better to shed some of that work to the independent spent fuel storage installations business line. It is challenging because if we take a recent case there's a lot of close coordination that has to take place between the operating reactor and the storage of the spent nuclear fuel, especially as the licensees prepare for the campaigns that offload the fuel out of the pools into the dry casks. But it's something that we have been looking at and we're going to have to, as we go forward -- and I think the new budget structure is going to shed a light on that. It's going to show us, "Gee, what are we spending and why are we spending it in that way and is that the best way to accomplish the outcome for the agencies?" MR. BORCHARDT: Mike gave a good answer. I have nothing to
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70 NEI has indicated, for example, that it's moving forward to have all reactor workers below the two rem limit. It's not so easy to do for materials facilities. And so, we have to take a hard look at that, especially in the medical area. So, what do we want to do on that front? We're going to need to think about -- we want to think about international harmonization in that regard, not only in the reactor area, but there's an increased international movement of doctors and individuals in various industrial applications as well. So, we have to factor that in. We need to engage licensees in the discussions on the options and the impacts of dose limits early and that's why we want to get started now. It's going to take a number of years, I think, based upon our history of major changes to Part 20 to get there. I think it took 12 years the last time. We'd like to be able to do it in less time than that now, but a lot of the work with regard to those conversion factors and other areas of the technical aspects of it still have to be worked over the next few years. We just can't plow forward and change the regulations at this time. We need to be actively involved with our Agreement State partners and the states. They're going to have a big say. We think that the CRCPD needs to weigh in on this as well as the public. So, there's a lot of work that we can do to start to set the stage for the future by beginning the interactions. I don't want to forget our federal partners. If you look across the federal government all kinds of generations of ICRP recommendations are used. OSHA, for example, still uses ICRP II in some regard. So, through our interactions where
71 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 we take a leadership role on the Interagency Steering Committee on Radiation Protection this course, we're going to want to bring the federal family together to see how best that we can harmonize that for the future so that at least we can get on some common plane. Those are just some thoughts on how we plan on proceeding in the near term to try to position us for a change to regulations that likely won't come for several years yet. I think it will put us in a position that we'll be ready when the time comes to do a timely rulemaking on that activity. CHAIRMAN KLEIN: You had mentioned federal partners. Obviously, Naval reactors is also an area that I'm sure has interest, so I assume you're communicating with them as well? MR. MILLER: They are federal partners and they're part of it. One of the biggest educations I got was many years ago when I was in NRR when we dealt with Naval reactors with regard to some of the activities that they do. We had some modern technologies that we wanted to apply to some of the things that they were doing. We needed to make sure that we stay close to them so they fully understand what we want to be doing. So, they'd be a key part of it under the duties under the Department of Energy. MR. VIRGILIO: Chairman, if I could, I'd just like to take the opportunity to acknowledge a couple of the staff members that have been working on this. One is Vince Holahan who did the early work, but more recently Don Cool, two of our SLS folks have really done a lot in terms of moving us forward in this area.
72 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 I would agree with Charlie. I think what we're trying to do is look to the future, maybe 2015 to have rulemaking in place to start the technical basis development. I would recognize that we're not in complete agreement with some of the provisions of ICRP 103. The whole notion of protection of biota still leaves me wondering. I just don't see the scientific basis that drives us down that path. Until we see such basis and I don't think we will, Don has been working rather heroically through his work at the IAEA and the basic safety standards to ensure that the framework there is the right framework. There are provisions of 103 that I think the industry -- the reactor industry is very supportive of. The new release limits, the effluent release limits is an area where there's broad support for us moving forward. So, I think there's a lot of it Charlie mentioned that we still have a lot of holes to fill, a lot of background and technical information that will be developed and presented to us over the next couple of years. But the time to start is now if we're going to have a rulemaking in place in the 2015 timeframe. Thank you. CHAIRMAN KLEIN: Any final questions? COMMISSIONER JACZKO: I just have one more question. Charlie, I think this is for you. This is a question on WIR. We know, I think, where we stand right now. Some of the work we've done -- we did our performance assessment on the Saltstone facility. We've done some monitoring visits on Saltstone. I think the last general communication we had was we had sent a letter to DOE asking for additional information about some of the concerns I think the staff
73 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 had expressed with the performance of the Saltstone vaults. Can you just update me maybe on where we stand with that or are we making progress on those issues? What are the net steps for the NRC? MR. MILLER: We've had a number of meetings with the Department of Energy. I think we've made a lot progress with the Department of Energy. I'm going to ask Larry Camper to go to the microphone because his staff has spent a lot of time working with the Department of Energy on WIR activities including a number of periodic trips to Savannah River. I'll let him update you. MR. CAMPER: Thank you. Larry Camper, Director, Division of Waste Management Environmental Protection. Commissioner, I think the program interface with the Department of Energy is going very well. There's no question historically we got off to some stress points, if you would, but, of course, two agencies were put into positions they had never been in before under the Act in '05. We have identified two outstanding issues and that is the long-term performance of grout, as well as some flush water being on top of the Saltstone formation. DOE has provided information to us on those questions. We expect to complete our review by the end of March. I think they were very forthcoming with that information. Obviously, we'll continue to monitor that situation there in perpetuity, frankly, to ensure that the performance objectives are being met consistent with what the Act requires us to do. COMMISSIONER JACZKO: Do we have another visit scheduled?
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74 MR. CAMPER: We do. In fact, we've done three visits. We've also been to Idaho National Laboratory as well. But the Saltstone, of course, has been the area of greatest focus and questions. We've been there three times, I think. We are going down again in March. COMMISSIONER JACZKO: Okay. I appreciate the update and I'd certainly be interested in seeing what we find in March as well. Thanks. MR. CAMPER: Thank you. CHAIRMAN KLEIN: Well, thank you for a good presentation. Very broad, very important program. So, thank you and all your staffs for all the hard work. And again, thanks for the Agreement States and other organizations that interact with the NRC on a regular basis. So, thanks for your participation. The meeting is adjourned.
(Whereupon, meeting was adjourned.)