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condition that it could not be reprocessed. It was called failed fuel. In that condition, it had to be disposed of.

There were two choices. One was to repackage it in some way and transport it back to a Federal site, for whatever disposition could be made there, or to leave it at the West Valley site in some disposed manner. The decision was made by the AEC. I presume from listening to the NRC, that they consider it was made in their contractual capacity, but as you probably know, at the time of the AEC there was no separate regulatory agency-arguably they had some separateness, but there was only one commission.

In any case, they made the judgment and directed us to bury those wastes. We assessed what our license requirements were. In our judgment, the burial of those wastes was fully within the authority granted to us.

Mr. DINGELL. Was that done in writing or was that done orally? Mr. BROOK. No, there is a written communication from the AEC. Mr. DINGELL. Could you submit that to us?

Mr. BROOK. Yes sir.

Mr. DINGELL. That will help us.

Without objection, the staff will review that and if it is appropriate, we will insert it in the record.

Gentlemen, we thank you.

[The communication referred to follows:]

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2.

2.

Reference is made to Article XVII, Changes, of Contract

NO. AT (38-1)-344 between the Commission and Nuclear Fuel Services,
Inc., (Contractor) under which the Contractor will provide chemical
processing services for irradiated reactor material owned by the
Government.

It has been determined that during the processing of Lot AEC-XII
about 44 ruptured NPR fuel elements were discovered. The Contractor
has concluded that there is risk of damage to their remaining
dissolver if these ruptured fuel elements are processed and have
declared that these ruptured assemblies are "non-specification
material" as defined in Article VIII of Contract No. AT(38-1)-344.
The Commission agrees that the material, in its present form, ic
non-specification material even though it was specification
material when delivered to the Contractor and apparently the
ruptures developed later through no fault of either party.

3. Under paragraph B. of Article VIII, Non-Specification Material, of
the Contract, "any removal or other disposition of non-specification
material stored in the Contractor's storage facilities shall be
accomplished in a reasonable time and at the expense of the Com-
mission." The Commission has determined that it is in the best
interest of the Government to have the Contractor bury the ruptured
fuel elements at the Contractor's West Valley Plant and to treat
such material as waste under the provisions of Article IX of the
Contract.

4.

As full consideration for such service and upon satisfactory
completion of the work and the submission of a satisfactory

invoice or voucher, the Commission shall pay to the Contractor the fixed sum of $1,200 to cover all services in connection with burial of the fuel elements.

5. Teletype authorization of April 22, 1969, is superseded by this Change Order.

6.

7.

All other terms and conditions of the Contract remain the same.

If the foregoing Modification of said Contract is acceptable, please so indicate by signing in the space provided below and return three copies to this office.

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The foregoing Modification of said Contract is hereby accepted.

BY:

NUCLEAR FUEL SERVICES, INC.

cemoore

TITLE: Contract Administrator

Enclosures: (5)

Mr. DINGELL. The Chair advises our next witness is the Honorable Worthington Bateman. Acting Under Secretary, Department of Energy.

Mr. Bateman, we are pleased to have you with us. If you will come forward and identify yourself fully for the purpose of the record, and also identify those who appear at the table with you for purposes of the record, it will help both the subcommittee and the reporter.

STATEMENT OF DR. C. WORTHINGTON BATEMAN, ACTING UNDER SECRETARY, DEPARTMENT OF ENERGY, ACCOMPANIED BY GEORGE W. CUNNINGHAM, ASSISTANT SECRETARY FOR NUCLEAR ENERGY, SHELDON MEYERS, DEPUTY ASSISTANT SECRETARY FOR NUCLEAR WASTE MANAGEMENT, AND JACOB D. VREELAND, OFFICE OF GENERAL COUNSEL

Dr. BATEMAN. Thank you, Mr. Chairman. With me today are Mr. George W. Cunningham, the Assistant Secretary for Nuclear Energy; and, on my right, the Deputy Assistant Secretary for Nuclear Waste Management, Mr. Sheldon Meyers.

Mr. DINGELL. Gentlemen, you are recognized for such statement as you choose to give the subcommittee.

Dr. BATEMAN. Mr. Chairman, we submitted a detailed statement for the record; with your permission I would like to make a few summary remarks at the outset, and then we will be pleased to respond to your questions.

Mr. DINGELL. Without objection, the statement will be inserted in the record, [see p. 117] and you are recognized for such summary as you choose to give.

Dr. BATEMAN. I would like to briefly present some viewpoints about the history of this project. Some of these points have been made in previous testimony, but I would like to reiterate them to provide the context in which the Department and the administration views and support this proposed legislation.

We think the roles and responsibilities of three principal parties should be identified in developing solutions to the West Valley problem. These parties are the Federal Government, initially in the agency of the Atomic Energy Commission; the State of New York; and the Nuclear Fuel Services, the company from which you have just heard testimony.

The Federal Government responsibility basically derives from its interest in promoting and commercializing the nuclear fuel cycle some number of years ago. At that time, it was thought that the proper direction for Government atomic energy policy was to incorporate as many aspects of the nuclear fuel cycle under private enterprise as possible. As part of that effort, the Federal Government made a very sustained push to encourage commercial nuclear reprocessing in the United States.

The only plant to actually operate as a result of that policy was Nuclear Fuel Services, Inc., in West Valley, N.Y.

Second, the State of New York, as a party to this entire enterprise, was very interested in accelerating the development of the industrial base in the western part of its State. The State, therefore, welcomed and, in fact, encouraged in a variety of ways the location of this plant in their State.

Finally, the company, believed this to be an attractive opportunity for new commercial enterprise, and based its participation on an expectation that success of this plant at West Valley, N.Y., would place them in a superior position to compete for reprocessing services in the future.

At the time, of course, this all seemed very promising. There was a lot of enthusiasm about this activity and this event. It was celebrated by pictures in the papers and was acclaimed in statehouses and in Washington as well, as another demonstration of the promise of nuclear power and what it would do in terms of the economy of the country, both as a supplier of a very vital service, and as a creator of jobs.

Unfortunately, the nuclear environment, including the Federal environment, changed very substantially from those times, and changes in attitude toward nuclear power and in requirements that various aspects of nuclear power would have to meet made enterprises like NFS of dubious economic value. As a result, the plant at West Valley was closed down. While it was originally closed down for modifications to meet what were then thought to be the new regulatory requirements, a closer examination of those requirements and additional requirements in effect made the resumption of reprocessing at West Valley an economic impossibility.

So the plant was built; it operated for a while; it produced a lot of waste which is stored there today. Now we are at the end of a process which began a number of years ago in deciding how to deal with those wastes.

In our opinion, the responsibility for the generation of those wastes really rests on all the parties that were involved at the outset. We don't believe there is any magic formula for determining how the responsibility for cleaning up those wastes should be allocated among the Federal Government, State government, and NFS, although we agree that some contractual arrangements between the parties, particularly the State and NFS, should be looked at very closely.

The high-level liquid waste is a problem which clearly needs attention. Information from NRC and NFS, does not lead us to conclude at this time that the wastes present an immediate health and safety hazard. But that is a tricky word, "immediate," and we are not happy with deferring action at West Valley in the hope that the risks of a major accident there will somehow be avoided until we find time to get around to working on the problem. In our view, this is a problem that is serious, and the risks to the public need to be attended to now and not at some indefinite time in the future. The legislation that has been proposed does address what we believe is the most serious aspect of the problem, namely, the high-level liquid waste in the tanks at West Valley.

As I am sure you have heard from other witnesses today, there are many other problems at West Valley which this legislation does not directly address.

Mr. DINGELL. Mr. Bateman, would you at the appropriate time submit to us a specific list of those?

Dr. BATEMAN. Of the other problems?

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