The November 8 US presidential election results will bring new faces and policies to the energy world in January 2017 when the 115th Congress convenes and President-Elect Donald Trump and Vice President–Elect Mike Pence are sworn into office. The first order of business for the president-elect and his transition team will be to assemble their Cabinet. All indications point to the secretaries of the Departments of Energy and Interior and the administrator of the Environmental Protection Agency—all Cabinet positions—as the likely nominees who will advance policies to enhance oil and gas production and support the coal industry.

On November 16, the US Nuclear Regulatory Commission (NRC or Commission) held a public meeting at its headquarters to discuss rulemaking activity and public views on the role of third parties in licensee access authorization and fitness-for-duty determinations.

Questions surrounding the role of third parties in this context began when the US Court of Appeals for the Seventh Circuit decided in Exelon Generation Company v. Local 15, International Brotherhood of Electrical Workers (676 F.3d 566 (7th Cir. Ill. 2012)) that NRC regulations permitted third party arbitration of unescorted access denials and revocations. The NRC staff maintains that the Seventh Circuit decision is contrary to NRC regulations and recommended to the Commission in late 2015 that the agency undertake an expedited rulemaking process to clarify that only licensees can make final decisions on access authorization and fitness-for-duty. The Commission rejected the expedited rulemaking recommendation, instead opting for the normal rulemaking process to address this issue. The agency is currently in a “pre-rulemaking” stage as it gathers information to inform its draft regulatory basis document—the document that will ultimately determine whether or not the NRC will propose a rule on this topic.

On November 9, the US Nuclear Regulatory Commission (NRC) Staff held a public meeting to discuss how the NRC plans to optimize the safety review process applicable to subsequent license renewal (SLR) applications—the third such public meeting on this important topic. The purpose of these meetings has been to solicit interested stakeholder perspectives on the lessons learned from initial license renewal application reviews and inspection activities. The objective is to identify process improvements, heighten efficiency and, ultimately, infuse greater certainty into both the process and schedule for SLR application review.

The US Nuclear Regulatory Commission (NRC) announced on November 7 a number of changes to the NRC Enforcement Policy (Policy). This Policy update involves a significant change in the way the NRC implements its enforcement mandate. The most significant aspect of the changes involves making the Policy more efficient by bringing construction activities into the context of power reactor discussions. This merging of different types of licensees also is reflected by the addition of enforcement situation examples, which are referred to by NRC staff when determining the appropriate severity level of a traditional enforcement action. Of course, as always, licensees should stay alert for any unanticipated or unintended consequences from this issuance. Please see our LawFlash, NRC Announces Updates to Enforcement Policy, for more details regarding the specific changes being proposed.

On October 28, the US Nuclear Regulatory Commission (NRC) published the Decommissioning Lessons Learned report. The detailed study of NRC and industry decommissioning best practices is based on experience gained from the most recent plants that have been shut down prematurely. NRC published the study, at least in part, in recognition that current economic conditions will result in additional nuclear power plants being shut down over the next few years. Helpfully, the study identifies a number of best practices that plants that plan to permanently shut down have been or are currently implementing. The study also includes a comprehensive roadmap of expected decommissioning transition licensing activities related to pre- and post-shutdown notices, Technical Specifications, financial assurance requirements, emergency planning, security, and post-Fukushima commitments.

The US Nuclear Regulatory Commission (NRC) recently announced that it will hold a public meeting titled The Role of Third Parties in Access Authorization and Fitness-for-Duty Determination. The meeting will take place at NRC headquarters on November 16, 2016, from 1:00 to 4:00 p.m. The rulemaking on this topic will eventually resolve whether third parties, or only licensees, can make final determinations on who may have unescorted access to nuclear reactor plants.  

The NRC’s Access Authorization and Fitness-for-Duty Rules play an important role in the NRC’s framework by ensuring that reactor licensees have the ability to protect their facilities against security threats, including “insider” assistance. Recent confusion about arbitration’s role or other employment-related dispute resolution mechanisms has led to questions about these mechanisms’ respective roles vis-à-vis the NRC’s licensees in ensuring reactor facilities’ security.

October 10 was the deadline for five states to comply with the REAL ID Act of 2005, which implements federal standards for tamper-proof identification documents, such as driver’s licenses. According to the US Department of Homeland Security (DHS), effective January 30, 2017, “nuclear power plants may not accept for official purposes driver’s licenses and state IDs from a noncompliant state/territory without an extension.” Kentucky, Maine, Oklahoma, Pennsylvania, and South Carolina will soon come under REAL ID Act enforcement. These states join Minnesota, Missouri, and Washington State on DHS’s “noncompliant” list. Accordingly, people will have to use another form of “official” identification when visiting a nuclear plant in these states and attempting to gain access. 

Other forms of official ID, such as a passport, are not affected. Although this may be a temporary restriction for the above states (they are working on modifying their processes/documents to satisfy the REAL ID Act), any changes will take time, and companies should ensure that plant processes and procedures are consistent with these prohibitions. Please contact author Tom Poindexter if you have any questions.

The Nuclear Regulatory Commission (NRC) staff has issued a plan to revise 10 CFR 30.35 to require licensees that possess radioactive sealed sources with Category 1 or 2 quantities of byproduct material (such as cobalt-60, iodine-131, cesium-137, and americium-141) to provide financial assurance for the sources’ disposal. The radiation that these sealed sources emit is useful in a variety of ways in industry, medicine, and research, such as radiography, irradiators to sterilize medical equipment, oil and gas well logging, and to detect or treat cancer. However, as NRC has recognized, the costs of disposal can be significant—some surpass $100,000.

Although the NRC has not yet drafted the language for the proposed rulemaking, the NRC has stated that any rulemaking would not apply to facilities licensed under Parts 50, 52, 70, 72, or 76, which have separate financial assurance requirements. Additionally, NRC has recognized that disposal could consist of the sealed source being returned to the manufacturer.

The NRC plans to initiate rulemaking, even though there is no substantial evidence of a safety concern due to lack of financial assurance for disposal of sealed sources. For example, the NRC has cited only a single case in which the government had to incur costs to dispose of a sealed source due to a licensee’s bankruptcy. The Commissioners have not yet approved the plan to engage in rulemaking. Therefore, those who submit comments early to the Commissioners may be able to dissuade them from engaging in rulemaking. If you would like assistance in preparing comments, please contact us.

Russia recently suspended or terminated its nuclear agreements with the United States, further deteriorating diplomatic relations between the two countries. Russia’s actions place on hold or end certain collaboration efforts between the two nations on peaceful uses of nuclear technologies. However, these actions do not suspend or terminate the umbrella US-Russia nuclear cooperation agreement (123 Agreement) that both countries entered into under Section 123 of the US Atomic Energy Act. Accordingly, the US government has a legal basis to authorize nuclear exports to Russia, and vice versa. Political forces, however, make those exports uncertain.

First, on October 3, 2016, Russia rejected the Obama administration’s alternative proposal for the disposition in both the United States and Russia of 34 metric tons each of surplus weapons-grade plutonium. This agreement, which originated in 2000 and was revised in 2010, is known as the Plutonium Management and Disposition Agreement. The United States intended to fabricate the mixed-oxide fuel in a facility under construction at the Savannah River Site in South Carolina. However, because of increasing cost estimates for that facility and other strategic reasons, US President Barack Obama proposed to Russian President Vladimir Putin an alternative “dilution and disposal” path for US plutonium. On October 3, President Putin rejected the alternative and suspended the agreement, stating that he would consider reinstating it if the United States agreed to several conditions, such as reducing military presence in countries that border Russia and canceling financial sanctions against Russia.

On September 26, the US Court of Appeals for the Ninth Circuit issued an interesting order in the ongoing Navy sailor suit, Cooper et al. v. Tokyo Electric Power Company, Inc., seeking the US Department of State’s views on the pending appeal.

The case involves a tort action brought by US Navy personnel who allege that they suffered radiation-related injuries while providing humanitarian relief from Navy ships located off the shores of Fukushima, Japan, in March 2011. Defendant Tokyo Electric Power Company (TEPCO) owns and operates the Fukushima-Daiichi Nuclear Power Plants, which were damaged as a result of the earthquake and resulting tsunami. Plaintiffs brought suit in the US District Court for the Southern District of California, contending that TEPCO was negligent in operating the plant.