Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-85-02853/USCOURTS-ca10-85-02853-0/pdf.json

Parties Involved:
Homestake Mining Company of California
Petitioner
Kerr-McGee Chemical Corporation
Petitioner
New Mexico Environmental Improvement Division
Intervenor
Nuclear Regulatory Commission
Respondent
Quivira Mining Company
Petitioner
United Nuclear Corporation
Petitioner

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

QUIVIRA MINING COMPANY, KERR-McGEE } 

CHEMICAL CORPORATION, HOMESTAKE } 

MINING COMPANY OF CALIFORNIA, and ) 

UNITED NUCLEAR CORPORATION, } 

Petitioners, 

FILED 

United States Court of Appeals 

Tenth Circuit 

JAN 2 71989 · 

ROBERT L. HOECKER 

Clerk 

v. 

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) 

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} 

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} 

} 

} 

) 

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No. 85-2853 

UNITED STATES NUCLEAR REGULATORY 

COMMISSION and UNITED STATES OF 

AMERICA, 

Respondents, 

NEW MEXICO ENVIRONMENTAL 

IMPROVEMENT DIVISION, 

Intervenor. 

Petition for Review of Regulations Promulgated by 

United States Nuclear Regulatory Commission 

(NRC Docket No. PR-40) 

Richard A. Meserve, Covington & Burling, Washington, D.C. 

(Peter J. Nickles and Sonya D. Winner, also of Covington & 

Burling, and G. Stanley Crout, Sunny J. Nixon and Michael s. 

Yesley of Stephenson, Carpenter, Crout & Olmsted, Santa Fe, New 

Mexico, with him on the briefs} for petitioners Quivira Mining 

Company, Kerr-McGee Chemical Corporation, United Nuclear 

Corporation and Homestake Mining Company of California. 

E. Neil Jensen, Attorney, U.S. Nuclear Commission, Washington, 

D.C. (William c. Parler, General Counsel, William H. Briggs, Jr., 

Solicitor, and E. Leo Slaggie, Deputy Solicitor, United States 

Nuclear Regulatory Commission, Washington, D.C.; Peter R. 

Steenland, Jr., Chief, Appellate Section and J. Carol Williams, 

Attorney, Land & Natural Resources Division, U.S. Department of 

Justice, washington, D.C., with him on the briefs) for respondents 

United States Nuclear Regulatory Commission and United States of 

America. 

Before LOGAN, McWILLIAMS, and TACHA, Circuit Judges. 

LOGAN, Circuit Judge. 

Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 1 
This case constitutes another chapter in the litigious saga 

of the Uranium Mill Tailings Radiation Control Act of 1978 

(UMTRCA), Pub. L. No. 95-604, 92 Stat. 3021 (codified as amended 

in scattered sections of 42 U.S.C.). 1 Here, industry petitioners 

Quivira Mining Company, Kerr-McGee Chemical Corporation, Homestake 

Mining Company of California and United Nuclear Corporation 

challenge regulations promulgated in 1985 by the United States 

Nuclear Regulatory Commission (NRC) pursuant to UMTRCA. These 

regulations, consisting of an introduction and twelve criteria 

(the 1985 Criteria), establish standards for the NRC to follow in 

licensing and relicensing uranium mills and uranium mill tailings 

sites. 50 Fed. Reg. 41,852 (1985) (codified at 10 C.F.R. pt. 40, 

app. A). 

Petitioners contend that (l) the 1985 Criteria are not 

supported by the cost-benefit analysis which the amended UMTRCA 

requires; (2) the criteria do not allow sufficient site-specific 

flexibility; (3) application of the criteria to thorium tailings 

is arbitrary and capricious and violates due process; and (4) the 

financial criteria are arbitrary and capricious and violate 

UMTRCA. 

I 

Mill tailings are the principal byproduct of the process of 

milling ore to extract uranium. These tailings contain 

radioactive material, most_significantly radium. Radium decays to 

produce radon, an inert gas. The radon gas that escapes from 

1 Title II of UMT&~A amended . §§ 83, 84, 161, 274 and 275 of the 

Atomic Energy Act of 1954 (AEA), 42 U.S.C. § 2011 et seq . 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 2 
tailings piles degrades into a series of short half-life decay 

products which are hazardous if inhaled. If the radon does not 

escape the tailings piles, its decay products remain in the piles 

and produce gamma radiation that may be harmful to creatures 

living near them. Uranium mill tailings also contain potentially 

dangerous nonradioactive material such as arsenic and selenium. 

These toxic and radioactive materials may be ingested with food or 

water. See American Mining Congress v. Thomas, 772 F.2d 617, 621 

{10th Cir. 1985), cert. denied, 476 U.S. 1158 {1986); 48 Fed. Reg. 

45,927-28 {1983). 

Congress enacted UMTRCA in 1978 to address hazards presented 

by uranium and thorium mill tailings. UMTRCA assigned regulatory 

responsibilities to the Department of Energy, the Environmental 

Protection Agency {EPA) and the NRC. The EPA was directed first 

to promulgate "standards of general application . . . for the 

protection of the public health, safety and the environment from 

radiological and nonradiological hazards associated with [uranium 

mill tailings]." 42 U.S.C. § 2022. The NRC, in accordance with 

its "management function," id. § 2114, promulga ted specific 

regulations, con~orming with the EPA general standards, to control 

mill tailings at "active" sites {those currently under NRC 

license) and at new sites to be licensed in the future. 2 

2 UMTRCA also ·requires the Department of Energy to provide for 

the decommissioning of all "inactive" sites, again in accordance 

with EPA standards. 42 U.S.C. § 7918(a)(l). This aspect of 

UMTRCA is not at issue in this case. 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 3 
When the EPA did not promulgate its standards within the time 

originally set by Congress, the NRC published its own regulations 

(the 1980 Criteria} in advance of any EPA general standards. See 

Uranium Mill Licensing Requirements, 45 Fed. Reg. 65,521, 65,533-

36 {1980) (codified at 10 C.P.R. pt. 40, app. A (1981)). Like the 

aforementioned 1985 Criteria, the 1980 Criteria took the form of 

an introduction and thirteen criteria covering various aspects of 

mill tailings contro1. 3 In 1983, Congress amended UMTRCA, Act of 

Jan. 4, 1983, Pub. L. No. 97-415, 96 Stat. 2067~ and pursuant to 

those amendments the EPA promulgated final regulations dealing 

with active sites. 48 Fed. Reg. 45,946 (1983) (codified at 40 

C.P.R. § 192.30-.43). In American Mining Congress v. Thomas, 772 

F.2d 640 (lOth Cir. 1985) (AMC II), cert. denied, 476 u.s. 1158 

(1986), we upheld these regulations against numerous challenges 

from environmental and industry petitioners. See also American 

Mining Congress v. Thomas, 772 F.2d 617 {lOth Cir. 1985) (AMC I) 

(reviewing EPA inactive site regulations), cert. denied, 476 U.S. 

1158 {1986}. 

3 Although a panel of our court initially upheld the promulgation 

of these criteria against several challenges, our court later 

vacated that judgment. Kerr-McGee Nuclear Corp. v. NRC, 17 Env't 

Rep. Cas. (BNA) 1537 (lOth Cir. 1982), judgment vacated and en 

bane rehearing granted, Nos. 80-2043, 80-2229, 80-2269, 80-2271 

(lOth Cir. Oct. 6, 1982), en bane setting vacated sub nom. Quivira 

Mining Co. v. NRC, (lOth Cir. Sept. 22, 1986). Because the KerrMcGee judgment was vacated, it has no effect on our disposition of 

this case.· To alleviate concerns over any res judicata effect of 

the Kerr-McGee opinion, our September 22, 1986 order and judgment 

explicitly stated that "our earlier order vacating our panel 

opinion and judgment, which we have not reinstated, eliminates any 

res judicata effect of the [Kerr-McGee] litigation of the issues 

involved." Slip op. at 3. Thus, we address anew all the issues 

raised by petitioners. 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 4 
The NRC then initiated rulemaking proceedings to bring its 

1980 Criteria into conformity with EPA active site regulations. 

These proceedings resulted in the 1985 Criteria, the regulations 

now under review. Although many of these criteria are identical 

to their 1980 counterparts, others were changed significantly. 

II 

Before turning to the issues raised by petitioners, we 

enunciate our standard of review. As we noted in AMC I, 772 F.2d 

at 625, UMTRCA specifies that the standards set out in the 

Administrative Procedure Act (APA), 5 U.S.C. §§ 701-706, govern 

review under it. 42 u.s.c. § 2022(c)(2). For the type of 

informal notice-and-comment rulemaking at issue here, the APA 

specifies that agency action may be set aside if found to be 

"arbitrary, capricious, an abuse of discretion, or otherwise not 

in accordance with law." 5 u.s.c. § 706(2)(A). Review under this 

standard is deferential; an agency rule is arbitrary and 

capricious only 

"if the agency has relied on factors which Congress has 

not intended it to consider, entirely failed to consider 

an important aspect of the problem, offered an 

explanation for its decision that runs counter to the 

evidence before the agency, or is so implausible that it 

could not be ascribed to a difference in view or the 

product of agency expertise." 

Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto. Ins. Co., 463 

u.s. 29, 43 (1983). 

In determining whether an administrative regulation 

permissibly construes the statute that an agency is charged with 

enforcing, our inquiry is shaped· by the specificity of the 

congressional enactment: 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 5 
"First, always, is the question whether Congress has 

directly spoken to the precise question ,at issue. If 

the intent of Congress is clear, that is the end of the 

matter ; for the court, as well as the agency , must give 

effect to the unambiguously expressed intent of 

Congress. If, however, the court determines Congress 

has. not directly addressed the precise question at 

issue, the court ~oes not simply impose its own 

construction on the statute, as would be necessary in 

the absence of an administrative interpretation. 

Rather, if the statute is silent or ambiguous with 

respect to the specific issue, the question for the 

court is whether the agency's answer is based on a 

permissible construction of the statute." 

Chevron U.S.A. Inc. v. Natural Resources Defense Council , Inc., 

467 u.s. 837, 842-43 (1984} (footnotes omitted); see also INS v. 

Cardoza-Fonseca, 480 u.s. 421, 445 n.29, 447-48 (1987); United 

States v. Riverside Bayview Homes, Inc., 474 u.s. 121, 131 (1985); 

Chemical Mfrs. Ass'n v. Natural Resources Defense Council, Inc., 

470 u.s. 116, 125 (1985). 

III 

Petitioners primarily argue that the 1985 Criteria are not 

supported by the cost-benefit analysis they assert UMTRCA 

requires. The NRC candidly admits that when it promulgated the 

1985 Criteria it did not then analyze the costs and benefits of 

the requirements that the crit~ria imposed, and it advances 

alternative arguments why this is not error. First, the NRC 

contends that Congress did not require it to perform cost-benefit 

analysis before promulgating the criteria, but instead required 

only that 11 the NRC give 'due consideration' to the costs of its 

mill tailings program." Brief of Respondents at 22. Second, it 

argues that even if Congress required cost-benefit analysis, 

previous analysis by the NRC and/or the EPA satisfies this 

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requirement. 

A 

Courts and Congress often use the phrase "cost-benefit 

analysis" imprecisely, with the result that it is difficult to 

discern just what type of analysis is intended. As we noted in 

AMC I, 

"[t]he label 'cost-benefit analysis' encompasses 

everything from a strict mathematical balancing formula 

to a less strict standard that merely requires the 

agency to recognize both the costs and benefits of 

specific proposed alternatives and consider the 

diffarences in choosing an appropriate alternative. 

'Labels are neither important nor determinative. '" 

772 F.2d at 631 (quoting American Petroleum Inst. v. EPA, 540 F.2d 

1023, 1037 (lOth Cir. 1976), cert. denied, 430 u.s. 922 (1977)). 

In AMC I, we distinguished between two strands of costbenefit analysis, see 772 F.2d at 630-32, to which we will refer 

here as "cost-benefit optimization" and ''cost -benefit 

rationalization." Cost-benefit optimization, the strictest type 

of cost-benefit analysis, requires quantification of costs and 

benefits and a mathematical balancing of the two to determine the 

optimum result. See id. at 631. Cost-benefit rationalization, a 

considerably looser cost-benefit approach, requires the agency 

merely to consider and compare the costs and benefits of various 

approaches, and to choose an approach in which costs and benefits 

are reasonably related in light of Congress' intent. See id. at 

632; ~ also Roberts & Kossek, Implementation of Economic Impact 

Analysis: The Lessons of OSHA, 83 w. Va. L. Rev. 449, 466-70 

(1981) (advocating, under the Occupational Safety and Health Act, 

approximate.weighing of·costs and benefits whereby agency shows it 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 7 
has considered relevant factors and made reasoned choice among 

alternative regula tory opt io.ns ) . 4 

After reviewing the language and· legislative history of AEA 

S 84(a)(l), 42 U.S.C. S 2114(a)(l), we believe that Congress did 

not intend to free the NRC altogether from cost-benefit analysis; 

rather it intended the NRC to perform_ cost-benefit rationalization 

for the 1985 Criteria. Section 2114(a)(l), as amended in 1983, 

Pub. L. No. 97-415, S 22(a), 96 Stat. 2067, 2080, requires the NRC 

to ensure the management of tailings in such a manner as 

"the Commission deems appropriate to protect the public 

health and safety and the environment from radiological 

and non-radiological hazards associated with the 

processing and with the possession and transfer of such 

material, taking into account the risk to the public 

health, safety, and the environment, with due 

consideration of the economic costs and such other 

factors as the Commission determines to be appropr late. rt 

42 u.s.c. § 2114(a)(l) (emphasis added). 

In AMC I, we interpreted subsection (b) of § 22 of the 1983 

amendments, which imposed upon the EPA the following statutory 

mandate: "In establishing such standards, the [EPA] Administrator 

shall consider the risk to the public health, safety, and the 

environment, the ~nvironmental and economic costs of applying such 

· standards, and such other factors as the [EPA] Administrator 

determines to be appropriate." 42 u.s.c. § 2022(a). We concluded 

4 A third strand of analysis, which considers costs to some 

degree, 1s feasibility analysis. Feasibility analysis in the 

environmental context requires an agency to protect public health 

to the maximum extent possible , constrained solely by what is 

economically or technically feasible. AMC I, 772 F.2d at 631. 

This approach places less burden on the agency than either costbenefit optimization or cost-benefit rationalization. Feasibility 

and cost-benefit analyses are mutually exclusive approaches. Id. 

See also American Textile Mfrs. Inst ., Inc. v. Donovan, 452 U:S, 

490,564 (1981). 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 8 
that this section required the EPA to perform the type of cost-

" . 

benefit analysis which we style here as cost-benefit 

rationalization. See AMC I, 772 F.2d at 632 ("We read the UMTRCA 

to provide that the EPA must consider the costs involved in the 

regulations and, with the guidance of Congress' intent, find that 

these costs bear a reasonable relationship to the benefits derived 

Congress intended cost-benefit analysis, but less strict 

than an optimized cost-benefit analysis."). 

The NRC attempts to distinguish AMC I are unpersuasive. 

While it is true that the language of 42 U.S.C. § 2ll4(a)(l) is 

slightly different from the statutory language we interpreted in 

AMC I, this difference is not material. The legislative history 

of § 22 of the 1983 amendments demonstrates that Congress intended 

for the NRC to conduct the same type of analysis in promulgating 

regulations pursuant to§ 2114(a)(l) as that which 42 U.S.C. 

§ 2022(a) required the EPA to conduct. The bill's Senate floor 

manager, Senator Simpson, noted that the amendments required both 

agencies to balance costs and benefits: 

"[T]he conferees have agreed to include specific 

references in the appropriate sections of the Atomic 

Energy Act directing EPA and NRC, in promulgating such 

standards and regulations, to consider the risk to 

public health and safety, and the environment, the 

economic costs of such standards or regulations, and 

such other factors as EPA or NRC, respectively, 

determine to be appropriate. Essentially, we intend by 

this requirement that these agencies must balance the 

costs of compliance against the projected benefits to 

assure that there is a reasonable relationship between 

the two." 

128 Cong. Rec. Sl3052 (daily ed. Oct. 1, 1982) (emphasis added); 

see also id. at 13055 ("the basis for consideration of costs by 

EPA in promulgating general standards and by NRC in issuing site 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 9 
specific regulations is now expressly established. Both of these 

agencies must establish that cost of .compliance bears a reasonable 

relationship to expected benefits 11 ) (statement of Senator 

Simpson). 

The NRC points to other legislative history, which, it 

argues, shows that Congress did not intend to require NRC 

regulations to be justified under a cost-benefit analysis. In 

particular, the NRC points to the following passage from the 

Conference Report: 

"Moreover, in adopting the language, the conferees 

intend neither to divert EPA and NRC from their . 

principal focus on protecting the public health and 

safety nor to require that the agencies engage in costbenefit analysis or optimization." 

H.R. Conf. Rep. No. 97-884, 97th Cong., 2d Sess. 47, reprinted in 

1982 U.S. Code Cong. & Admin. News 3592, 3603, 3617 (hereinafter 

Conference Report). The NRC also cites the following colloquy 

between Congressmen Ottinger and Udall, the Conference Chairman, 

to support its claim that Congress required only feasibility, and 

not cost-benefit analysis: 

"Mr. OTTINGER. • . • I note that the conference report 

also requires that the NRC and the EPA give due 

consideration to the environmental and economic costs of 

the mill tailings regulations. Is it your undeistanding 

that this is not intended to impose a new or different 

basis for the issuance of regulations or for the review 

of regulations previously issued? 

Mr. UDALL. That is my understanding. The agencies 

have assured the conference that such factors have been 

duly considered in the development of their mill 

tailings regulations. If such regulations are feasible, 

nothing in this provision would require either agency to 

reformulate or reconsider regulations which have been ·issued. 11 • 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 10 
128 Cong. Rec. H8824 (daily ed. Dec. 2, 1982). 

We rejected this argument in AMC I, and we reject it again. 

Although the Conference Report states that the Conference 

Committee did not intend "to require [the EPA or NRC] to engage in 

cost benefit analysis or optimization," this statement may be 

misleading. By referring to "optimization," Congress eschews only 

the stricter form of cost-benefit analysis; this sentence says 

nothing abotit the less strict cost-benefit rationalization 

approach. The Conference Report follows immediately with the 

admonition that "economic and environmental costs associated with 

standards and requirements established by the agencies should bear 

a reasonable relationship to the benefits expected to be derived." 

Statements in the House debates also show that Congress intended 

cost-benefit rationalization to support the NRC's actions. This 

debate clarifies that while the conferees did not envision an 

exact balancing of costs and benefits, id., and considered health 

and safety to be paramount, they also intended economic factors to 

be considered seriously, id. at 8824-25 (statements of Reps. 

Ottinger and Lujan). 

We believe that the preponderance of legislative history 

establishes a congressional desire that the NRC consi der costs in 

relation to benefits in promulgating its regulations. This 

history also, by discussing the EPA's and NRC's parallel 

obligations to consider cost-benefit analysis and imposing those 

obligations in the same section of the 1983 amendments to UMTRCA, 

shows that both agencies should apply the same level of costbenefit analysis. Thus, .. the NRC, · while recQ9nizing as its 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 11 
"paramount responsibility protection of the public health and 

safety and the environment," Conference Report at 47, 1982 u.s. 

Code Cong. & Admin. News at 3617, also must employ cost-benefit 

rationalization. As we stated in AMC I concerning the EPA, and 

now hold applicable to NRC, this level of cost-benefit analysis 

requires the agency to "consider the costs involved in the 

regulations and, with ~he guidance of Congress' intent, find that 

these costs bear a reasonable relationship to the benefits 

derived." AMC I, 772 F. 2d at 632 (emph~sis added); ~ also AMC 

II, 772 F.2d at 646. 

B 

Having concluded that cost-benefit rationalization must 

support the criteria, we must ask whether such analysis has taken 

place . We address this question in two stages: (1) whether the 

NRC conducted cost-benefit rationalization when it promulgated the 

original 1980 Criteria~ and (2) whether the cost-benefit analysis 

supporting the EPA active site regulations was sufficient to 

support those 1985 Criteria which differ from the 1980 Criteria. 

W~ undertake this two-stage analysis because the 1985 

Technical Criteria (criteria 1 through 8), which petitioners 

challenge on cost-benefit analysis grounds, can be divided into 

two types for purposes of our analysis. 5 The first type 

5 Criteria 9 through 12 compose a third type. Petitioners do not 

specifically challenge these criteria on cost-benefit analysis 

grounds because they were not enacted pursuant to the general 

provisions of § 2114(a}(l). Instead, more specific statutory 

provisions authorized their promulgation. The financial criteria 

(criteria 9 and 10) · were promulgated pursuant to 42 u.s.c. 

S 220l(x); we discuss petitioners' challenges to the financial 

criteria. separately in se.ction VI of this opinion. Petitioners do 

Continued to next page 

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(unamended criteria) consists of those criteria that are 

essentially identical to the NRC 1 s 1980 promulgation: criteria 2 

(preference for large site disposal), 3 (below-grade disposal as 

"prime option••), 4 (site and design criteria), 7 (preoperational 

and operational site monitoring), and 8A (daily inspections), 6 and 

portions of each of the other technical criteria. Since these 

criteria are virtually unchanged from the NRC 1 s 1980 Criteria, we 

uphold them if cost- benefit rationalization accompanied their 

original promulgation in 1980. 

The second type of criteria (revised criteria) were 

promulgated in 1985 to conform with the EPA general standards, 40 

C.F.R. §S 192.30 to 192.43, and essentially duplicate those EPA 

regulations. Parts of the Introduction? and criteria 1 , 5, 6 and 

8 fall into this category of revised criteria. 8 Because the 

Continued from previous page 

not challenge the ownership criterion (criterion 11), which was 

promulgated pursuant to§ 2113(b), or the long-term surveillance 

criterion (criterion 12), which was promulgated pursuant to 

§ 2113(b)(5). 

6 Except for minor word changes in these entirely "unamended" 

criteria, the only amendment to them was the deletion in criterion 

4 of the following sentence pertaining to the rock cover placed 

over tailings disposal sites: "Shale, rock laminated with shale, 

and cherts shall not be used." This deletion does not affect our 

analysis. 

7 The first three paragraphs to the Introduction survive 

essentially unchanged from the 1980 Criteria. The NRC added the 

fourth paragraph to the Introduction for the 1985 Cr i teria to 

paraphrase AEA § 84(c), 42 u.s.c. § 2114(c). 50 Fed . Reg. at 

41 ,856. We analyze this portion of the Introduction infra in part 

IV of this opinion. 

8 The 1985 revision of criterion 1 modifies the general goal in 

siting or design decisions, but leaves unchanged from t he 1980 

Criteria the site features that industry applicants must consider 

in ·=determining tailings · sites. The ·revised genera l goal--

Continued to next page 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 13 
revisions to the criteria merely duplicate the EPA regulation, the 

issue to be addressed 'is whether the statute permits the NRC 

interpretation that it may rely upon the EPA cost-benefit 

Continued from previous page 

"permanent isolation of tailings and associated contaminants by 

minimizing disturbance and dispersion by natural forces, and to do 

so without ongoing maintenance"--basically duplicates the EPA 

requirement of long-term protection from environmental hazards, 

see 40 C.F.R. S 192.32(b)(l)(i) (uranium), id. S 192.4l(a) 

(thorium), and the EPA 1 s decision that passive-control methods, 

rather than ongoing maintenance, be favored. See 48 Fed. Reg. 

45,935-36 (1983). 

Criterion 5 deals with protecting groundwater. As 

promulgated at 48 Fed. Reg. 41,863-84 {1985), and at the time the 

parties to this appeal submitted their briefs, this criterion 

expressly imposed only an interim standard. See id. Petitioners 

argue that this standard, in connection with a minor change in 

criterion 1, go beyond the EPA regulations by imposing a 

nondegradation standard to protect all groundwater sources, usable 

and unusable, rather than the EPA secondary standard, which 

considers "[t]he current and future uses of ground water in the 

area." 40 C.P.R. § 264.93{b)(l}(v); see id. § 192.32(a){2) 

(incorporating by reference groundwater protection standard in id. 

§§ 264.92 and 264.93). We do not accept petitioners• argument: 

By its own terms, "Criterion 5 supplements and does not conflict 

with or modify provisions of 40 C.P.R. Part 192. Until or unless 

the Commission undertakes additional rulemaking ••. licensees 

and applicants should consult 40 C.F.R. Part 192 for the 

applicable ground-water protection requirements. 11 The NRC 

recently revised criterion 5 and promulgated a new criterion that 

also addresses groundwater. 52 Fed. Reg. 43,553-68 (1987) (to be 

codified at 10 C.P.R. pt. 40). These criteria, which are not now 

before this court on appeal, were promulgated "to conform the NRC 

regulations to the standards promulgated by the EPA." Id. at 

43,553. . 

Criterion 6 concerns the closure of mill tailings sites. The 

portions added in 1985--the first full sentence, the third 

paragraph, and footnotes 1 and 2 of the criterion--derive directly 

from the EPA standard. See 48 Fed. Reg. 45,937 (1983) (EPA 

assumption that tailings site operators will use earthen covers); 

40 C.P.R. § 192.32(b)(l)(i) (imposing 200 year/1000 year period of 

effectiveness): id. § 192.32(b~(l)(ii) (imposing 20 picocuries per 

square meter per second (pCi/m s) standard on releases of radon222 from2

uranium.byproduct materials); id. § 192.4l(b) {imposing 

20 pCi/m s standard for radon-220 releases from thorium 

byproducts); id. § 192.32{b}(2} (stating conditions where 

requirements for longevity and control of releases from uranium 

Continued to next page 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 14 
analysis. 

1. 

The first stage of our analysis asks whether the NRC 

conducted cost-benefit rationalization before promulgating the 

1980 Criteria. Before turning to the record accompanying the 1980 

Criteria, a preliminary question arises relating to our earlier, 

withdrawn opinion in Kerr-McGee Nuclear Corp. v. NRC, 17 Env't 

Rep. Cas. (BNA) 1537 (lOth Cir. 1982). Petitioners argue that 

Kerr-McGee held that only feasibility analysis9 supported the 1980 

Criteria and that the question of cost-benefit rationalization 

thus is not now open for our consideration. Petitioners are 

incorrect in both their reading of Kerr-McGee and their 

interpretation of its continuing validity. Contrary to 

petitioners' assertions, Kerr-McGee nowhere held that cost-benefit 

analysis was lacking to support the 1980 Criteria. What KerrMcGee did hold is that UMTRCA as it existed at that time could be 

Continued from previous page 

byproduct materials do not apply}; id. § 192.4l{c) {stating 

conditions where requirements for longevity and control of release 

from thorium byproduct material do not apply); id. § 192.32, nn. 1 

& 2 (which the footnotes to criterion 6 restate essentially · 

verbatim). The remainder of criterion 6 survives with only very 

minor changes from the NRC's 1980 promulgat ion. 

The final two paragraphs of criterion 8 derive directly from 

the EPA uranium and thorium byproduct material regulat ions. The 

penultimate paragraph of criterion 8 restates almost verbatim 40 

C.P.R. § 192.4l(d), which establ ishes maximum annual dose emission 

levels from thorium byproduct materials. The final paragraph 

specifies that effluent limitations in 40 C.F.R. pt. 440, as 

applicable, cover uranium and thorium byproduct materi al. This 

paragraph merely restates 40 C.F.R. § 192.32(a)(3)(ii ); see also 

40 C.P.R. § 192.41 (provisions of § 192.32 also apply to thorium 

byproducts). 

9 . Se~ supra note 4. 

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. interpreted to require feasibility study only rather than costbenefit analysis. Id. at 1551-54. All the Kerr-McGee panel had 

to say concerning whether petitioners balanced costs and benefits 

is that "petitioners are probably correct that NRC's analysis was 

not sufficient [for cost-benefit balancing]." Id. at 1551 

(emphasis added). This language does not establish any holding by 

the Kerr-McGee panel. More fundamentally, the Kerr-McGee judgment 

has been vacated, and as such is of no effect. See supra n.3. 

Thus, even if Kerr-McGee had held that the NRC had not engaged in 

cost-benefit analysis, we still could approach that question on a 

clean slate here. 

We now turn to the record supporting the 1980 Criteria to 

determine if the NRC performed cost-benefit rationalization. For 

the most part, petitioners launch only a broad-based attack on the 

criteria by arguing that the NRC did not conduct analysis 

sufficient to support any of the regulations. 10 Because the 

criteria consist mostly of general guidelines to be applied 

flexibly rather than specific iron-clad rules, petitioners' 

general challenge amounts to an argument that the NRC did not 

consider costs in relation to benefits when formulating these 

guidelines. 

We agree with the NRC that we need not inquire whether the 

agency performed "quantitative cost itemization in dollars and 

benefit itemization in unspecified units for every sentence in the 

Appendix A criteria that might impose some burden on the 

lO We address post slip op. at 22-24 petitioners' objections to 

specific parts of the criteria. 

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industry." Brief of Respondents at 22 n.lO. We also recognize 

that the NRC has pledged to take into account "the economics of 

improvements in relation to benefits to the public health and 

safety" in making site specific licensing decisions, see 1985 

Criteria, Introduction, and we believe this commitment is 

consistent with the statutory mandate to determine that the costs 

of regulation bear a "reasonable relationship'' to benefits. 

Consequently, our inquiry is limited to whether the NRC ensured 

that the costs of its general approach to regulating_ uranium mill 

~ailings, as embodied in the unamended criteria, were reasonable 

in light of the benefits to be gained from such regulation. 

A large portion of an NRC environmental impact statement on 

uranium milling, upon which the 1980 Criteria were based, is 

devoted to cost-benefit analysis. See Office of Nuclear Material 

Safety and Safeguards, U.S. Nuclear Regulatory Commission, Final 

Generic Environmental Impact Statement on Uranium Milling (1980} 

(hereinafter NRC-FEIS}, X R. at summary§ 5 and chs. 6, 9, 11 and 

12. Looking at the benefit side first, the NRC evaluated the 

benefits of mill tailings regulation largely in terms of reduced 

health risks to humans. To make this evaluation, the NRC 

postulated both a "model 11 mill and a cluster of twelve such mills 

that operated with "a relatively low level of environmental 

control. 11 Id. at 6-1. Using the model mill scenarios, the NRC 

established a base case of risks against which it could compare 

various environmental control alternatives. See i d. Ch. 9 

(Environmental Impacts of Alternatives). Significant among these 

risks .was. the· determination that. between the years 1979 and 3000, 

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operation of model mills in the United States would cause 6,QOO 

premature cancer deaths, or about six deaths per year, id. at 6- --- 68, 6-71 (Table 6.37), and 1,800 genetic defects, id .. at 6-72 

(Table 6.38), in the United States, Canada, and Mexico. In 

addition, persons living near a model mill, that is, within 2.0 

kilometers (1.2 miles) downwind from the mill, id. at 6-23, would 

experience a twenty-five percent increase in risk of premature 

cancer death, compared to the risk from exposure to background 

radiation. Id. at 6-73. Clustered mills present a greater risk 

than single mills, such that the average person living in the area 

of clustered activity would experience a tenfold increase in risk 

of premature cancer death over the risk from background radiation 

alone. Id. at 6-73 to -74. Occupational exposure over a work 

period of approximately fifty years would lead to a lifetime risk 

of premature cancer death of about thirty in 1000, which would 

result in thirty-nine deaths between the years 1979 and 2000, 

about eight times the risk from natural radiation exposure. Id. 

at 6-74. 

After postulating the radiation hazards of a model mill, the 

NRC estimated the human health benefits of reducing radiological 

emissions in varying degrees from the base case. For example, 

Table 9-13 of the NRC-FEIS set out the decline in premature cancer 

deaths expected with each reduction in radon emissions. Id. at 9-

31. See also id. at 9-4 to 9-10, Tables 9.1 to 9.7 (predicting 

effects of differing types of environmental controls). On the 

basis of these comparisons of health benefits, the NRC took as its 

gea-1-- the~-"long"""'!term isolation of . .tailings and site decommissioning 

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in such a way that conditions at disposal sites will be very 

similar to those in the surrounding environs, and in a manner 

which will not necessitate ongoing, active maintenance to preserve 

these conditions." Id. at 12-6. 

Having determined that the greatest achievable benefit of 

mill tailings regulations would be to reduce emissions to 

background levels over the long term, the NRC next examined 

alternatives for tailings disposal, see id. at 8-la· to 8-29, the 

degree to which these alternatives would reduce emissions, ~ id. 

at 9-1 to 9-48, and their costs, see id. at 11-1 to 11-13·; 12-8. 

The study estimated the costs of the base case ("no mitigating 

measures") and of nine alternative tailings disposal programs, 

which were classified into three general modes: the active care 

mode (alternative 1), the passive monitoring mode (alternatives 2 

through 6), and the potential reduced care mode (alternatives 7 

through 9). Id. at 12-9 (Table 1). 11 The NRC settled on the 

passive monitoring mode alternatives as the best approach because 

they met the NRC's major regulatory objectives: "assuring longterm stability, controlling airborne radioactive emissions 

(radon), and protecting ground water," at a ''reasonable" cost. 

Id. at 12-25. The agency rejected the potential reduced care mode 

alternatives as too expensive for the speculative incremental 

11 Assuming the price of yellowcake uranium ore (U30a) at thirty 

dollars per pound, these costs were distributed over the following 

range: mitigative measures in the base case would equal .17% of 

the cost of yellowcake; 1.7% of that cost for mitigative measures 

under the active care mode; 2.0% to 4.1% of that cost for 

mitigative measures under the passive monitoring mode; and 13.7% 

to 38% of that cost for mitigative measures under the potential 

· ·reduced ·care mode. -- NRC-FEIS at 12-8· (Table 1). 

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benefits they would produce, id. at 12-10 to 12-11, and dismissed 

the active care mode as unacceptable because it would saddle 

future generations with "a prolonged obligation to care for wastes 

generated to produce benefits which those generations will receive. 

only indirectly, if at all." rd. at 12-7. 

As we held in AMC I, we must defer to the agency's finding of 

a reasonable relationship between the costs and benefits of 

regulation. 772 F.2d at 638. We believe the NRC sufficiently 

related the cost of the controls required in the 1980 Criteria 

with the benefits of those controls to establish such a 

"reasonable relationship." In performing its cost-benefit 

analysis, the NRC not only found the overall costs reasonable, but 

also compared the costs of meeting each of its major objectives 

through the passive monitoring mode alternatives with the benefits 

of those goals and found the costs of accomplishing each objective 

to be "reasonable."1 2 

The NRC in 1980 set as its goal to reduce direct and airborne 

radon emissions from tailings piles to no more than two picocuries 

per square meter per second, a reduction that it believed would 

require, inter alia, burying tailings piles with covers at least 

three meters thick, see NRC-FEIS at 12-13 to 12-15 . After 

recapitulating the risks to individuals and populations , the NRC 

reasoned that the costs of these controls would be about one 

l2 Because of the great uncertainty and substantial dispute 

underlying the major factors inv~lved, the NRC declined to perform 

a . "fully monetized, incremental cost-benefit optimization•• 

analysis. Id. at 12-19 to 12-20. As we have ruled, ante slip op. 

at 8, 16-17-,-this type of extensive cost-benefit analysis was not ·· ·required. 

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.. 

percent, or in the worst case about 1.5 percent, of the· price of 

.. . 

yellowcake. Id. at 12-12; 12-15; 12-17. The NRC concluded that 

this relationship between costs and the benefits of reduced risks 

was reasonable: 

"The range of potential costs at a given site was 

examined to assure that no undue economic burdens would 

result at parti cular sites in implementing the proposed 

generally appli cable limits. Based on this evaluation , the staff concludes that, while variability in costs may 

exist, no undue economic hardships will occur, as costs 

will represent a small fraction of product price (less 

than about 1.5% even in an unlikely worst case)." 

Id. at 12-15; ~also 45 Fed .. Reg. 65,521, 65,525 (1980). 1 3 

With respect to the problem of toxic material seepage into 

underlying aquifers, the NRC set the goal of preserving current 

and potential groundwater uses so that, for example, aquifers that 

are of drinking-water quality remain so. NRC-FEIS at 12-23; 45 

Fed. Reg. at 65,525. Recognizing that each disposal site presents 

different hydrologic and geologic conditions, the NRC concluded 

that specific methods for addressing groundwater protection must 

be chosen on a case- by-case bas is. The NRC found, however, that 

each of several methods considered appropriate for tailings sites 

would cost between one and two percent of product price. NRC-FEIS 

at 12-24. The NRC considered this cost reasonably related to the 

l3 The EPA, i n draf~ing its 1983 regulations, adopted a less 

stringent 20 pCi/m s as the appropriate standard for radon 

emissions, AMC II, 772 F.2d at 646; see also AMC I, 772 F.2d at 

624, and likewise did not establish a three meter minimum covering 

thickness. The 1985 Criteria, particularly criterion 6, were 

amended to conform to these more. relaxed standards. To the extent 

that the 1985 Criteria do not alter the 1980 Criteria's approach 

to radon emissions, we hold that the NRC cost-benefit 

.. · rationalization in ·1980 was sufficient to uphold them. -

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Finally, the NRC examined the costs and benefits of 

controlling emissions during the operation of uranium mills. 

Here, the NRC looked at the radioactive hazards caused both by 

dusting from tailings piles and radon emissions from yellowcake 

drying operations. See NRC-FEIS Summary at 13, Table 3 (effects 

on nearby individual, average individual, and average mill worker 

of pre-reclamation airborne radioactive emissions with controls 

applied); id. at 9-3 to 9-10 (estimates of gaseous and particulate 

radioactive emissions during mill operations}. It next considered 

the costs of the proposed controls, finding them to be low, about 

.1 percent of product price, id. at 12-26 to 12-27, a nd noted that 

all of the proposed control methods were then being employed at 

newer mills. Id. at 12-26. The NRC concluded that cost-benefit 

relationship to be reasonable, id., thus satisfying the standard 

of AMC I. 

We now turn to the three specific objections that petitioners 

raise to the criteria. First, petitioners attack criterion 4(d), 

which requires 11 f ull self-sustaining vegetative cover . or 

rock cover 11 on each tailings site. Petitioners assert that the 

costs and practicabilities of these options were not sufficiently 

thought out by the NRC. They claim that in the southwest United 

14 Considering control of radon emission and protection of ground 

water together as part of a tailings control program, the NRC 

concluded that the total cost of such a tailings control program, 

even though it may be up to fifty percent greater than the 

estimated costs, was reasonable in relation to expected benefits. 

NRC-FEIS at 12-25. 

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States, where many tailings sites are located, arid conditions 

prevent the vegetative cover required by the NRC and that the type 

of rock cover specified by the NRC can be expensive to obtain~ 

The record, however, shows that the NRC adequately addressed each 

of these concerns when drafting criterion 4(d). The Appendix to 

the NRC-FEIS notes that 11 [i]n some areas, such restoration [with 

vegetative cover] may not be possible, because sufficient 

vegetation cannot be established. In this event, stabilization by 

riprap may be necessary ... NRC-FEIS, app. K-6, XI R. Tab 148, at 

K-29. The Appendix further details that the NRC investigated and 

developed an estimate of the cost of obtaining rock cover, 

including the cost of hauling such cover to the tailings sites. 

Id. We believe that the 1980 study sufficiently addressed 

petitioners' concerns about the costs of covering disposal sites. 

Petitioners next challenge the slope requirements of 

criterion 4(c). This criterion provides as follows: 

"Embankment and cover slopes must be relatively 

flat after final stabilization to minimize erosion 

potential and to provide conservative factors of safety 

assuring long-term stability. The broad objective 

should be to contour final slopes to grades which are as 

close as possible to those which would be provided if 

tailings were disposed of below grade; this could, for 

· example, lead to slopes of about 10 horizontal to 1 

vertical (lOh:lv) or less steep. In general, slopes 

should not be steeper than about 5h:lv. Where steeper 

slopes are proposed, reasons why a slope less steep than 

5h:lv would be impracticable should be provided, and 

compensating factors and conditions which make such 

slopes acceptable should be identified. 11 

10 C.F.R. pt. 40, app. A. Petitioners particularly assert that to 

meet the slope requirements, many site owners would have to · 

purchase "vast amounts of land," Brief of Petiti oners at 34, and 

- that the NRC's failure to consider this cost invalidates the 

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criterion. While petitioners are correct that the cost of 

purchasing such land was not expressly factored into the NRC's 

analysis, this is not a fatal flaw. Many of the affected sites 

are located in isolated or desert ~reas, where land often will be 

obtainable at low cost. More importantly, criterion 4(c) is . 

phrased in terms of a "broad objective" of a flat slope, and it 

expressly allows site owners to demonstrate why the· slopes 

specified in the criterion would be "impracticable.. at their 

sites. Thus, the criterion by its terms answers petitioners' 

concern over slopes. 

Petitioners finally object to criterion 3's designation of 

below-grade disposal as the "prime option." Petitioners here 

raise a vague challenge to the supposed benefits of such disposal, 

asserting that the EPA standards recommend below-grade disposal 

only for new sites. Brief of Petitioners at 35. We reject this 

challenge for two reasons. First, t hat the EPA and NRC differ as 

to the details of the required manner of disposal does not of 

itself render the NRC cost-benefit analysis invalid. The same set 

of facts may allow a reviewing agency conducting cost-benefit 

rationalization to reach several equally valid conclusions. 

Second, as with criterion 4(c), criterion 3 is sufficiently 

flexible to allow mill operators to use alternative methods if 

costs become excessive. Criterion 3 only requires mill operators 

to give "serious consideration [to] this disposal mode," and it 

expressly recognizes that economic, · geologic, and environmental 

factors "might make full below g;rade burial impract cable." 

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2. -. 

Having upheld the unamended criteria, we now address whether 

a cost-benefit analysis adequately supports the revised criteria. 

Here, the NRC concedes that it performed no new cost-benefit _ 

studies in promulgating these criteria. It argues that because 

the revised criteria are· identical to portions of the EPA active 

site regulations, and because we ruled that the EPA properly 

performed cost-benefit analysis in promulgating those regulations, 

AMC II, 772 F.2d at 646, UMTRCA allows the NRC to rely upon the 

EPA's analysis and does not require a new study. Petitioners 

dispute this, asserting that Congress required the NRC to perform 

a separate cost-benefit analysis. 

The statutory language admits of the readings advocated by 

both parties. UMTRCA requires the EPA Administrator to 

"consider," inter alia, ''the environmental and economic costs" of 

its active site regulations, 42 u.s.c. § 2022(b)(l); the NRC is to 

give "due consideration to economic costs," id. § 2114(a)(l). By 

petitioners' reading of the statute, "due consideration" by the 

NRC requires it to consider anew cost-benefit concerns for all of 

its criteria. The NRC's reading of the statute would allow it to 

rely upon the EPA cost-benefit study in "duly considering'' the 

economic costs of the revised criteria. 

The legislative history concerning cost-benefit study 

likewise is ambiguous concerning whether the NRC must separately 

study those criteria that are identical to the EPA regulations. 

The Conference Report accompanying the 1982 amendments states: 

"· [T]he conferees have agre.ed to include specific ··· references in the appropriate sections of the Atomic 

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Energy Act directing EPA and NRC, in promulgating such 

standards or regulations, to consider the risk to the 

public health, safety, and the environment, the 

environmental and economic costs of such standards of 

[sic] regulations, and such other factors· as EPA or NRC, 

respectively, determine [sic] to be appropriate. 

The conferees are of the view that the economic and 

environmental costs associated with standards and 

requirements established by the agencies should bear a 

reasonable relationship to the benefits expected to be 

derived. This recognition is consistent with the 

accepted approach to establishing radiation protection 

standards, and reflects the view of the conferees that, 

in promulgating such general environmental standards and 

regulations, EPA and NRC should exercise their best 

independent technical judgment in making such a 

determination." 

Conference Report at 47, 1982 u.s. Code Cong. & Admin. News at 

3617. Petitioners argue that the references to both agencies, and 

the admonition that each apply 11 their best independent technical 

judgment," show that Congress required a full cost-benefit 

analysis by the NRC, even of those criteria identical to the EPA 

regulations. While we may indeed read the legislative history in 

this way, we also may read it to require such independent judgment 

concerning costs and benefits only when the two agencies are 

promulgating different regulations. The passages quoted do not 

specifically address the issue presented. As such, they do not 

foreclose the NRC's argument that, when EPA and NRC regulations 

coincide, the NRC can adequately exercise its independent judgment 

by relying upon the EPA's study. 

Since Congress has not spoken to the precise question at 

issue--whether the NRC must re-weigh costs and benefits for the 

revised criteria--we inquire under Chevron whether the NRC 

interpretation is 11 based on a permissible construction of the 

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statute." Chevron, 467 U.S. at 843. We find the NRC 

interpretation of UMTRCA--that it may rely upon the EPA costbenefit analysis--a permissible construction of the statute. 

First, UMTRCA requires the NRC to give ••due consideration" to 

economic costs. While such consideration requires all of the NRC 

criteria to be justified by cost-benefit analysis, it does not 

explicitly require the NRC rather than another agency to perform 

that analysis. It is a permissible construction of the "due 

consideration" command for the NRC to accept the EPA analysis for 

the revised criteria. Further, to allow the NRC to rely on the 

EPA cost-benefit analysis does not render the "due consideration" 

command of § 2114 superfluous. As to those criteria that differ 

from the EPA regulations, "due consideration" requires the NRC, on 

its own, to compare costs and benefits. 

Finally, the timing requirement imposed by 42 u.s.c. 

§ 2022{f)(3) supplies practical support for the NRC 

interpretation. This section requires the NRC to conform its 

criteria to the EPA regulations within six months after the EPA 

has promulgated final standards. The NRC argues that six months 

is an inadequate period of time to perform a second cost-benefit 

analysis of criteria conforming to the EPA regulations, and thus 

this short time period shows that Congress did not wish to require 

the NRC to perform a second cost-benefit study. This is a 

reasonable plumbing of Congress' intent, and it receives some 

support from the legislative history to that section. The 

Conference Report, in setting out this six-month time period, 

. noted. tha.t "the conferees fully expect that thEF six month period 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 27 
of time is of sufficient length to enable the Commission to 

provide notice and opportunity for public comment prior to 

reaching its determination." ·conference Report at 46-47, 1982 

u.s. Code Cong. & Admin. News at 3616-17. By mentioning only the 

time as needed for public notice and comment, Congress implicitly 

stated that no further time was needed for an NRC cost-benefit 

study. We thus uphold the NRC's reliance upon the EPA costbenefit analysis. 

IV 

Petitioners next assert that the NRC has not provided "sitespecific flexibility" for individual licensing decisions as 

required by AEA S 84(c), added in 1985. That section provides as 

follows: 

"In the case of sites at which ores are processed 

primarily for their source material content or which are 

used for the disposal of byproduct material as defined 

in section 2014(e)(2) of this title, a licensee may 

propose alternatives to specific requirements adopted 

and enforced by the Commission under this chapter. Such 

alternative proposals may take into account local or 

regional conditions, including geology, topography, 

hydrology and meteorology. The Commission may treat 

such alternatives as satisfying Commission requirements 

if the Commission determines that such alternatives will 

achieve a level of stabilization and containment of the 

sites concerned, and a level of protection for public 

health,. safety, and the environment from radiological 

and nonradiological hazards associated with such sites, 

which is equivalent to, to the extent practicable, or 

more stringent than the level which would be achieved by 

standards and requirements adopted and enforced by the 

Commission for the same purpose and any final standards 

promulgated by the Administrator of the Environmental 

Protection Agency in accordance with section 2022 of 

this title." 

Pub. L. No. 97-415, § 20, 96 Stat. 2067, 2079, codified at 42 

U.S.C. § .2114{c). To implement this statutory command, the NRC 

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added the following paraphrase of the statutory language to the 

Introduction accompanying the 198~ Criteria: 

.. Licensees or applicants may propose alternatives 

to the specific requirements in this Appendix. The 

alternative proposals may take into account local or 

regional conditions, including. geology, topography, 

hydrology, and meterology [sic]. The Commission may 

find that the proposed alternatives meet the 

Commission's requirements if the alternatives will 

achieve a level of stabilization and containment of the 

sites concerned, and a level of protection for public 

health, safety, and the environment from radiological 

and nonradiological hazards associated with the sites, 

which is equivalent to, to the extent practicable, or 

more stringent than the level which would be achieved by 

the requirements of this Appendix and the standards 

promulgated by the Environmental Protection Agency in 40 

CFR Part 192, Subparts D and E." · 

1 0 C.F.R. pt. 40, app. A. 

Petitioners assert that the addition to the Introduction was 

not sufficient to carry out the statutory command for flexibility. 

We disagree. The NRC drafted its modification to the Introduction 

as a functional equivalent of the statutory language of§ 84{c). 1 5 

The Introduction explicitly commits the NRC to evaluate 

alternatives to the numbered criteria on precisely the terms 

Congress commands: when the alternative "is equivalent to the 

extent practicable, or more stringent than" the applicable NRC 

criteria. 42 U.S.C. § 2114(c). Pet itioners may have cause in the 

future to challenge, in the context of individual l icensing 

procedures, whether the NRC's application of this provision 

15 We address whether the NRC, when exercising its power under 

§ 84(c) to approve alternatives to the numbered cri teria, must 

obtain ,the prior approval of the ·EPA Administrator when those 

alternatives do not comply with the EPA active site regulations in 

a companion opinion that we enter thi s same day. See 

Environmental Defense Fund v. Un i ted States Nuclear Regulatory 

Conun'n, __ P.2d __ (January , 1989, lOth Cir. No. 86-1237). 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 29 
achieves the statutory command of flexibility.l6 See, ~, E.I. 

duPont de Nemours & Co. v. Train, 541 F.2d 1018 , 1028 (4th Cir. 

1976) (whether EPA will properly administer provision for 

variances under Federal Water Pollution Control Act properly 

reviewable "when a claim for a variance is made in a permit 

application"), aff'd in relevant part, 430 u.s. 112, 128 n.l9 

(1977). We will not, however, anticipate that the NRC will 

administer the provision for flexibility so as to violate the 

command of S 84(c). See Westinghouse Elec. Corp. v. United States 

Nuclear Regulatory Comm•n, 555 F.2d 82, 92 (3d Cir. 1977) 

(refusing to anticipate that application of rule will violate 

governing statute, and noting ample opportunity for judicial 

intervention should such violations occur}. We conclude that the 

Introduction adequately incorporates the § 84(c) command for 

flexibility. 

In a related challenge, petitioners argue that the Criteria 

as a whole do not adequately distinguish between new and existing 

mill tailings sites. The premise of this argument is that UMTRCA 

explicitly requires the NRC positively to make such a 

distinction. 17 Even if we accept this premise, however, we 

16 Much of petitioners' argument presents a parade of horribles 

that will occur at particular mill sites if the NRC does not 

regulate with the flexibility set forth in the Introduction. 

17 In arguing that OMTRCA requires the NRC to distinguish between 

new and existing sites, petitioners rely upon several items of 

legislative history. See,~' H.R. Rep. No. 1080, 95th Cong., 

2d Sess., pt. 1, at 16, reprinted in 1978 U.S. Code Cong. & Admin. 

News 743 3 , 7438-39 (NRC to consider possible differences in 

applicability of regulations to existing versus new tailings 

sites). Petitioners, however, cit~ no provision of UMTRCA 

explicitly requiring a distinction between new and existing sites. 

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believe that the site-specific flexibility incorporated into the 

Introduction meets such a requirement~ 

v 

Petitioners next attack those porti6ns of the 1985 Criteria 

that apply to thorium tailings. Here, they raise two challenges. 

First, they state that since "[t]horium and uranium are different 

elements ••• display[ing] different physical characteristics," 

Brief of Petitioners at 42, application of the 1985 Criteria to 

thorium, without additional cost-benefit analysis, is arbitrary 

and capricious. 

application of 

Second, they challenge on due process grounds the 

the 1985 Criteria to thorium tailings absent a 

formal adjudication. We address these challenges seriatim. 

A 

As part of their authority to regulate "byproduct material," 

42 U.S.C. § 2014(e), both the EPA active site regulations, 40 

C.P.R. § 192.40-.43, and the NRC 1985 Criteria, specifically 

criteria 6 and 8, regulate thorium tailings. Petitioners 

correctly state that the NRC did not conduct an independent 

"scientific and cost-benefit analysis," Brief of Petitioners at 

43, of the specific thorium regulations contained in criteria 6 

and 8. Nevertheless, we reject their assertion that the thorium 

regulations are invalid. As previously noted, in AMC II we 

rejected a broad challenge that the EPA active site criteria 

lacked adequate cost-benefit analysis. 772 F.2d at 646-47. While 

AMC II did not specifically analyze the technical and cost-benefit 

basis of the thorium active site regulations, we believe that AMC 

g, by explicitly .. reviewing the regulations "codified at 40 c. F. R. 

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§ 192.30-43," id. at 643, adequately upheld the thorium 

regulations against the broad cost-benefit carping petitioners 

assert here. 

In addition, our review of the record in this case shows that 

the EPA indeed conducted technical and cost-benefit analysis of 

its thorium criteria. See EPA-FEIS Vol. I, App. G (Thorium Mill 

Tailings) (1983), XII R. tab 15; EPA-FEIS Vol. II, B.l.l to 6.1 

(response to Comments Regarding Standards for Thorium Byproduct 

Materials) XII R. tab 15A. In particular, the EPA concluded, from 

its Appendix and analysis, "that risks from thorium mill tailings 

are reasonably comparable to those from uranium mill tailings and 

that the same numerical standards are appropriate." EPA-FEIS Vol. 

II, B.3.2, XII R. tab 15A. As we have previously ruled, the NRC 

may rely upon the EPA technical and cost-benefit analysis 

supporting its active site criteria. Accordingly, we hold that 

the NRC thorium regulations are adequately supported by costbenefit analysis.l8 

18 We reject petitioners' argument, based on the NRC ruling in In 

re Kerr-McGee Chemical Corp. (Kress Creek Decontamination), 23--

N.R.C. 799 (1986), that the NRC Atomic Safety and Licensing Board 

views the EPA active site thorium regulations to be "not 

scientifically valid" for thorium tailings. Brief of Petitioners 

at 43. Kress Creek expresses no such view. Kress Creek was not a 

tailings pile management case, and its statement that the EPA 

thorium standards are not appropriate to cleaning up the offsite 

contamination that was the subject of Kress Creek does not render 

the EPA standards inappropriate to the situation for which they 

were designed--tailings piles. As the NRC noted in Kress Creek, 

it expressed "no conclusion with regard to the appropriateness of 

this standard in dealing with a different situation." 23 N.R.C. 

at 810. 

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B 

Petitioners next assert a constitutional due process 

challenge. At present, the criteria would apply to only one 

thorium tailings site~ Kerr-McGee Chemical Corporation's West 

Chicago facility. Petitioners assert that since the thorium 

criteria would apply only to that site, their promulgation under 

the APA's informal notice and - comment rulemaking procedure, see 5 

u.s.c. § 553, was improper. See 50 Fed. Reg. 41,861 (1985) 

(Appendix A criteria issued pursuant to§ 553). Kerr-McGee argues 

that applying the criteria to the single thorium site is the 

"equivalent of an adjudication," Brief of Petitioners at 44, and 

that the failure to provide Kerr-McGee a formal adjudication on 

the record, see 5 U.S.C. §§ 554-57, violated due process. 19 

Petitioners premise their claim on the assertion that if a 

"rulemaking" potentially will apply only to one site, it is not 

"rulemaking" but is an "adjudication" under the APA. Courts 

uniformly have rejected this assertion. In Anaconda Co. v. 

Ruckelshaus, 482 F.2d 1301 (lOth Cir. 1973), for example, the EPA 

19 We read Kerr-McGee's argument as resting purely on 

constitutional grounds. Kerr-McGee does not claim that the NRC 

rulemaking procedures were improper under 42 U.S.C. § 2239 in that 

Kerr-McGee was denied a "hearing," as required by that statute, or 

that such a hearing did not comply with APA § 553. Nor does KerrMcGee argue that the § 2239 reference to a "hearing" requires the 

rulemaking procedure to be conducted "on the record after 

opportunity for an agency hearing," APA § 553(c), and thus to 

incorporate the procedural protections of APA §§ 556, 557. See 

City of West Chicago v. United States Nuclear Regulatory Comm~ 

701 F.2d 632, 641-45 (7th Cir. 1983) (in licensing adjudication 

under § 554 of APA, 42 U.S.C. § 2239 does not require formal 

procedural protections of APA §§ 556 and 557). Cf. United States 

v. Florida East Coast Ry., 410 u.s. 224, 234-38 (1973) (Interstate 

Commerce Act requirement that Commission promulgate rules "after 

hearing" did not trigger trial-type procedures of APA §§ 556, 

557). 

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promulgated a proposed county-wide rule concerning emission of 

sulfur oxide. Anaconda was 11 the only significant source of sulfur 

oxide pollution in the county and so concededly the proposed 

regulation, although general in form, would apply to Anaconda 

alone." Id. at 1303. This court rejected Anaconda's claim that 

its status as the only regulated party was 1'conclusive as to 

whether the hearing should be adjudicatory. 11 Id. at 1306. The 

grant of a public hearing, at which Anaconda appeared and 

submitted material, satisfied the company's procedural due process 

rights; an adjudicatory hearing was not required. Id. at 1306-07. 

Similarly, in Hercules, Inc. v. EPA, 598 F.2d 91 (D.C. Cir. 

1978), the EPA issued regulations under the Federal Water 

Pollution Control Act limiting discharge of two toxic substances, 

endrin and toxaphene. Velsicol Chemical Corporation, the sole 

domestic manufacturer of endrin, and Hercules, Inc., which 

asserted that it was the sole domestic manufacturer of toxaphene, 

each argued that the status as the only manufacturer subject to 

regulation required that the agency use adjudication rather than 

rulemaking. The court disagreed. It first quoted the Supreme 

Court's distinction between rulemaking and adjudication, with the 

former involving promulgation of 11 'policy type rules or 

standards,'" and the latter "'adjudicat[ing] disputed facts in 

particular cases. 111 Id. at 118 (quoting United States v. Florida 

East Coast Ry., 410 u.s. 224, 244-45 (1973)). It then noted that, 

in promulgating the regulations, the EPA was charged by statute to 

consider general policy issues regarding a pollutant, and that 

tt[t]hese ~quiries are the same whether the substance is 

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Appellate Case: 85-2853 Document: 01019724754 Date Filed: 01/27/1989 Page: 34 
discharged by one manufacturer or one thousand." Hercules, Inc., 

598 F.2d at 118. Finally, the court rejected Velsicol's assertion 

that as the only manufacturer of endrin, it was the only entity 

affecte·d by the rule. The court concluded that 

"[t]he standards affect the multitude who fish, take 

drinking water, or otherwise, directly or indirectly, 

come in contact with waters containing the discharged 

toxic substance, all of whom may appear in proceedings. 

Toxic substances are mobile, and individuals far from 

the site of the discharge may be exposed to them. 

Rulemaking, not adjudication, is the appropriate 

flexible procedural mechanism to accommodate the input 

of all concerned." 

Id.; see also South Terminal CorQ. v. EPA, 504 F.2d 646, 660-61 

(1st Cir. 1974) {that a proposed rule written in general terms 

imposes regulatory duty on only one facility does not render it 

"adjudicatory"; no due process violation in not conducting 

adjudicatory proceedings). 

In the instant case, the thorium regulations, although 

applying to only one site, are written in general terms so as to 

apply to a prospective class of such sites. The thorium criteria 

translate general policy concerns about the proper level of 

emissions into concrete regulations governing all future sites. 

In addition, the health and environmental effects of thorium 

tailings potentially affect a multitude of people, and rulemaking 

is an appropriate procedural mechanism to accommodate the 

interests of all concerned. We thus conclude that promulgation of 

the Appendix A thorium criteria was properly conducted as 

rulemaking. 

That we classify the NRC's action as rulemaking does. not 

automatically. resolve .. whether that rulemaking accorded Kerr-Mc;Gee 

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due process. The record shows that the proposed thorium rules 

were published on November 26, 1984, 49 Fed. Reg. 46,418 {1984), 

and the comment period, originally scheduled to expire on January 

10, 1985, was extended to February 10, 1985. 50 Fed. Reg. 2,993 

(1985). Kerr-McGee took full advantage of this time period, 

submitting extensive written comments concerning the thorium 

criteria. See I R. tab 6 {comments by Kerr-McGee, et al., before 

NRC); see also II R. tab 6A, 6B {comments about proposed EPA 

thorium standards}. Further, Kerr-McGee never raised any 

procedural objections before the NRC or asked to present oral 

argument or cross-examine witnesses. Cf. South Terminal Corp., 

504 F.2d at 660-61. Finally, we note that Kerr-McGee will have a 

full opportunity in the licensing proceeding concerning its West 

Chicago facility to argue that site-specific concerns, 42 u.s.c. 

S 2114(c), require deviation from the criteria as to that 

facility. We hold that the rulemaking procedure accorded KerrMcGee due process. 

VI 

Finally, petitioners raise specific challenges to the 

financial criteria, criteria 9 and 10. Firit, they challenge 

criterion 9, which allows for a variety of surety mechanisms to 

ensure the decontamination, decommissioning, and reclamation of 

tailings sites, but rejects bare self-insurance: 

"However, self insurance, or any arrangement which 

essentially constitutes self insurance (e.g., a contract 

with a State or Federal agency) will not satisfy the 

surety requirement since this provides no additional 

assurance other than that which already exists through 

license requirements." 

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Petitioners assert that this rejection of self-insurance is· 

arbitrary and capricious under 5 U.S.C. § 706(2)(a). We disagree. 

Criterion 9 was promulgated pursuant to UMTRCA § 203, 42 

U.S.C. § 220lx(l), which authorizes the NRC to establish 

"such standards and instructions as the Commission may 

deem necessary or desirable to ensure --

(1) that an adequate bond, surety, or other 

financial arrangement (as determined by the Commission) 

will be provided ••• by a licensee to permit the 

completion of all requirements established by the 

Commission for the decontamination, decommissioning, and 

reclamation of sites, structures, and equipment used in 

conjunction w.i,th [mill tailings]." 

In enacting § 220lx, Congress left it to the NRC to define what 

constitutes ''adequate" assurance of financial responsibility for 

decommissioning a site. In the NRC's view, mere self-insurance 

provided insufficient protection. See NRC-FEIS at 14-9. In light 

of the current precarious financial situation of most uranium 

producers, see Brief of Petitioners at 17-19, the NRC's rejection 

of self-insurance as a form of adequate financial protection is 

reasonable. Further, criterion 9 does not limit a licensee's 

financial flexibility in providing financial surety, and it does 

not require the NRC to reject a licensee's "self-insurance" 

proposal that would in fact provide additional assurance beyond 

the licensee's unsupported promise to decommission the site in 

accordance with its license. We do not find cri terion 9's 

rejection of bare self-insurance arbitrary or capricious. 

Petitioners also argue that criterion 10, which establishes a 

minimum charge of $250,000 (1978 dollars) to cover the costs of 

long-term surveillance of each tailings site, is inconsistent with 

UMTRCA § 203, 42 U.S.C. § 22'0l(x). Section 203 au-thorizes the NRC 

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to 

11X. Establish by rule, regulation or order 

standards and instructions as the Commission 

necessary or desirable to ensure--

. (2) that • 

may 

such 

deem · 

(B) in the case of each license for such material 

{whether in effect on [the date of the enactment of this 

section] or issued or renewed thereafter), if the 

Commission determines that any such long-term 

maintenance and monitoring is necessary, the licensee, 

before termination of any license for byproduct material 

as defined in section 2014(e)(2) of this title, will 

make available such bonding, surety, or other financial 

arrangements as may be necessary to assure such longterm maintenance and monitoring." 

Specifically, petitioners assert that the statutory l anguage "in 

the case of each license ••. if the Commission determines" that 

such monitoring is necessary--requires the NRC to determine that 

each site requires such monitoring before imposing any cost. 

Brief for Petitioners at 45-46 & n.62. We disagree. 

By definition, every site regulated under the Appendix A 

criteria contains uranium or thorium byproduct material. These 

substances present potential health and environmental hazards for 

hundreds or even thousands of years into the future, ~ H.R. Rep. 

No. 1480, 95th Cong., 2d Sess., pt. 1, at 11, reprinted in 1978 

o.s. Code Cong. & Admin. News 7433,· 7433. Since a l l . sites pose 

such long-term hazards, the NRC reasonably interpreted § 203 to 

apply to each tailings site. The $250,000 initial fee assures 

that a fund exists to provide basic monitoring and to continue 

that monitoring into the future. See NRC-FEIS at 14-12 to 14-14. 

We find criterion 10 to be a proper regulatory implementation of 

§ 220lx. 

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For the foregoing reasons, we AFFIRM the NRC Appendix A 

criteria against the challenges raised herein. 

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