United States Nuclear Regulatory Commission

Office of Public Affairs

Washington, DC 20555

Phone 301-415-8200 Fax 301-415-2234

Internet:opa@nrc.gov

No. 96-111 FOR IMMEDIATE RELEASE

(Friday, August 2, 1996)

NRC STAFF, GENERAL ATOMICS SIGN AGREEMENT

ON CLEANUP FUNDING FOR OKLAHOMA FACILITY

The Nuclear Regulatory Commission staff and General Atomics

Corporation have asked an NRC Atomic Safety and Licensing Board

to approve a settlement agreement related to cleanup of the

closed Sequoyah Fuels Corporation nuclear fuel facility near

Gore, Oklahoma.

Sequoyah Fuels Corporation is a subsidiary of General

Atomics.

In October 1993, the NRC issued an order requiring Sequoyah

Fuels Corporation and General Atomics (GA) to provide funding for

the cleanup of the Gore facility. Sequoyah Fuels Corporation and

GA requested a hearing before an Atomic Safety and Licensing

Board on the order. The Cherokee Nation and Native Americans for

a Clean Environment were admitted as parties to this

administrative proceeding. The latter two organizations have

until August 9 to comment on the settlement agreement before the

board approves or disapproves it. The board's decision is

subject to the Commission's review.

Under the agreement, GA will establish a $9 million trust

fund, for the benefit of the NRC, provided that the Internal

Revenue Service issues an opinion that the contributions to the

trust are tax-deductible by GA when made and taxable only when

distributed from the trust. If the IRS does not agree, GA's

contributions to the trust are capped at $5.4 million.

GA has until October 8 to establish the trust fund. The

first deposit of $600,000 or $1,000,000 (depending on IRS

actions) is to be made on October 18. Further financial and

regulatory details are set out in the agreement.

Although both parties recognize the need for approval by the

Atomic Safety and Licensing Board, and possibly by the Commission

itself, the agreement became effective upon execution on July 10.

The agreement is revocable if the board, the Commission, or
another Federal agency or a court disapproves it or any

substantive part of it.

In consideration of the trust established by GA, the NRC

staff has agreed to rescind its October 15, 1993, order against

GA. The 1993 order alleged that GA and Sequoyah Fuels

Corporation, which GA acquired in 1988, were jointly and

severally responsible for providing funding to continue

remediation of existing nuclear contamination at the Sequoyah

Fuels site. It further stated that they were responsible for

providing financial assurance for decommissioning as required by

NRC regulations, and for providing both an updated and detailed

decommissioning cost estimate and a plan for ensuring the

availability of adequate funds for decommissioning.

The Sequoyah Fuels plant was operated by Sequoyah Fuels

Corporation from 1970 to 1993 under an NRC license. It converted

uranium oxide (yellowcake) to uranium hexafluoride, a step in the

production of nuclear reactor fuel. A second process, begun in

1987, converted depleted uranium hexafluoride to uranium

tetrafluoride. Sequoyah Fuels formally notified the NRC in

February 1993 that it wished to terminate its license. The

license will remain in effect until radiological contamination on

the site has been cleaned up to meet NRC requirements.

Due to extensive contamination of groundwater, soil and

structures at the site, NRC has included the Gore site in the

agency's Site Decommissioning Management Plan. The site receives

special NRC attention under the plan to ensure safe and timely

decommissioning. NRC initiated development of an environmental

impact statement last November to consider alternative

decommissioning options and the potential impacts of those

options. Further information is available from Jim Shepherd,

NRC's project manager for the Gore site, at 301/415-6712.

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