AN ANALYSIS OF FEDERAL PREEMPTION ISSUES AS THEY RELATE TO PRIMARY PRODUCTION ACTIVITIES IN THE NUCLEAR FUEL CYCLE

• Jurisdiction: United States

Uranium Exploration and Development
(Apr 2006)
CHAPTER 13B
AN ANALYSIS OF FEDERAL PREEMPTION ISSUES AS THEY RELATE TO PRIMARY PRODUCTION ACTIVITIES IN THE NUCLEAR FUEL CYCLE
Stephen J. Lauer
Sharon W. Horndeski
Comeau, Maldegen, Templeman & Indall LLP
Santa Fe, New Mexico

STEPHEN J. LAUER

Stephen J. Lauer is a member of Comeau, Maldegen, Templeman & Indall, L.L.P. in their Santa Fe, New Mexico office. His practice areas include Insurance; Natural Resources; Environmental Law; and Litigation.

Mr. Lauer is admitted to: 1973, New Mexico; 1976, Colorado (inactive); U.S. District Court, District of New Mexico; U.S. District Court, District of Colorado; and U.S. Court of Appeals, Tenth Circuit. He is a member of the American Bar Association and the State Bar of New Mexico.

Education: University of Minnesota, J.D., 1972; Macalester College, B.A., 1969.

SHARON W. HORNDESKI

Sharon W. Horndeski is an Associate with Comeau, Maldegen, Templeman & Indall, L.L.P. in their Santa Fe, New Mexico office. She is admitted to: 1986, Texas and U.S. District Court, Northern District of Texas; 2000, New Mexico.

Education: Cleveland-Marshall College of Law, J.D., 1985; Stanford University, A.B., 1969; University of California at Los Angeles, Ph.D., 1978. She is a member of the American Bar Association and the State Bar of New Mexico.

Tunnel vision, a classic administrative disease, arises when an agency ... effectively carries the single-minded pursuit of a single goal too far, to the point where it brings about more harm than good ... The regulating agency considers a substance that poses serious risks, at least through long exposure to high doses. It then promulgates standards so stringent--insisting, for example, upon rigidly strict site clean-up requirements--that the regulatory action ultimately imposes high costs without achieving significant additional safety benefits. A former EPA administrator put the problem succinctly when he noted that about 95 percent of the toxic material could be removed from waste sites within a few months, but years are spent trying to remove the last little bit. Removing that last little bit can involve limited technological choice, high cost, devotion of considerable agency resources, large legal fees, and endless argument.

United States Supreme Court Justice Stephen Breyer, Breaking the Vicious Circle: Toward Effective Risk Regulation at 11 (1993) (emphasis added).

Nationwide, the mining industry is experiencing an increasingly difficult time permitting its operations. As is true of the economy in general, large operators are, in many instances, moving significant portions of their operations overseas. President Bush has decried an "addiction" to foreign sources of oil from which this country must be weaned.¹ He has suggested that nuclear electricity generation must be employed as part of the process of reducing dependence on foreign sources of energy.² Patently, it makes no sense to wean the country from foreign oil, only to have that energy source replaced by an "addiction" to foreign sources of nuclear fuel. Although there has been an encouraging uptick in domestic production of uranium in recent months in response to more favorable market conditions, only approximately 3.6 percent of nuclear fuel consumed by domestic utilities comes from domestic production.³

Despite over a quarter-century of nuclear power generation in this country without a serious incident, there remains significant opposition to the development of nuclear power sources. Well funded and highly committed advocacy groups have attempted to thwart nuclear

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power development at all stages of the production and delivery process. However, there is a powerful tool for operators in curtailing these environmental challenges to nuclear electricity generation: the doctrine of FEDERAL PREEMPTION. For anyone unfamiliar with this concept, it has been defined as a constitutional doctrine which derives from the Federal Constitution at Article VI, the so-called "Supremacy Clause." That provision states that all laws which Congress enacts under the Constitution are "the supreme law of the land." Essentially, the courts use the preemption doctrine to decide whether Congress intended for a specific piece of legislation to govern that field of regulation, to the exclusion of state and local legislation on the same subject.⁴

As a result of the fact that the federal government has "occupied the entire field of nuclear safety concerns,"⁵ environmental challenges to nuclear power production have been turned back on federal preemption grounds in areas such as plant sitings,⁶ plant construction or operation,⁷ emergency response plans,⁸ waste transport,⁹ waste disposal,¹⁰ and transmission line routing.¹¹

Because of this ever-growing trend, those of us on the front lines of the regulatory and legislative battles have perceived, frankly, a growing trend toward attacking the front end of the nuclear fuel cycle--i.e., uranium mining and milling--because direct challenges to nuclear plant construction and operation in the above-listed areas have largely been unsuccessful, from the perspective of advocacy groups. These challenges range from outright mining bans,¹² to environmental regulations and interpretations of the type described by Justice Breyer above, that are so stringent they are technically infeasible to achieve in the course of normal mining or processing operations, even using the best available technology.

The purpose of this paper is to examine whether the federal preemption doctrine successfully rebuts challenges to primary production of nuclear fuels based on mining bans and overly stringent state, local and tribal regulation. Uranium milling is already subject to a comprehensive Nuclear Regulatory Commission ("NRC") regulatory scheme.¹³ The largest part of future production of yellowcake, the concentrated oxide of uranium derived from the

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mining of uranium ore,¹⁴ will likely come from "solution mining" or "in situ leaching" ("ISL") sources.¹⁵ ISL production is likewise subject to comprehensive NRC regulation.¹⁶ Consequently, federal preemption may also apply in this area. Nonetheless, the states, localities and tribes may retain a considerable reservoir of authority based on environmental, economic and cultural considerations to regulate future uranium mining and processing. The bounds of federal authority in this area are largely untested.

In the materials below, we will first briefly describe modern mining and milling techniques, then discuss the regulatory structure in which they operate, and finally analyze whether that regulatory structure can be used as a basis for preemption of total bans or overly stringent environmental regulations adopted by state, local or tribal authorities.

I. DESCRIPTION OF REGULATED MINE PRODUCTION FACILITIES

The first step in an analysis of preemption issues is a determination of whether the federal agency actively regulates the activities sought to be concurrently regulated by a state, local or tribal entity. Since federal regulation at uranium mining and processing facilities is complex, and since some facilities are regulated while others are not, a description of the types of facilities at issue may be helpful.

The federal preemption issues discussed below center around four types of facilities: conventional mines, ISL mines, uranium mills and uranium mill tailings areas. Conventional mines were operated from the 1950's into the early 1980's. They are of two types. One employs the room and pillar method of mining. Also, there were a few open pit mines. No application to NRC or any other agency authorized to act under the Atomic Energy Act ("AEA") is required to open a uranium mine.

After the ore is removed from the mine, it is transported to a uranium mill for processing. The product of a mill--yellowcake--is transported to a conversion plant for further processing.¹⁷ The yellowcake is a fine, yellow-colored powder. The conversion plants are outside the scope of this discussion. Mills are licensed by NRC in most states, although in so-called "Agreement States" where NRC has ceded regulatory authority,¹⁸ AEA licenses are issued by state environmental authorities.

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The waste from the mill is "a sand-like residue called `tailings'."¹⁹ Domestic ores only contain two to eight pounds of extracted product per ton, so virtually all of the volume of the ore mined is transported to the tailings area.²⁰ The tailings are slurried from the mill to the tailings area. Ponds ordinarily develop upon the surface. The tailings emit radon gas. Seepage from tailings facilities constructed in the 1950's through 1970's commonly intersects groundwater, raising environmental concerns. The amount of tailings deposited at a typical tailings area ranges from slightly over 1 million tons to over 30 million tons of material. One of the larger tailings areas in New Mexico is pictured in Attachment A. The operation and restoration of tailings areas are heavily regulated under the AEA. Regulatory "measures include seepage control, re-grading the piles, and covering them with clay and soil, and revegetating the piles or covering them with crushed rock."²¹

The modern method of uranium recovery in the U.S. leaves the original rock in place (in situ). Instead of manually excavating the rock from underground as in conventional mining, water wells are used, very much like those for a home. A dense cluster of wells (as many as 200 for a 100-acre site) are used to inject the leaching agent (usually sodium bicarbonate) into the ore body, recirculate the water in the ore body and withdraw the product. ISL production activities are graphically presented in Attachment B. Men are not placed underground. No tailings or other large piles of material are created. Restoration of the affected portion of the aquifer consistent with baseline conditions or federal or state...