Nuclear Information & Resource Service v. Nuclear Regulatory Commission

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 7, 2007 Decided December 11, 2007

No. 06-1301

NUCLEAR INFORMATION AND RESOURCE SERVICE AND
PUBLIC CITIZEN,
PETITIONERS

v.

NUCLEAR REGULATORY COMMISSION AND
UNITED STATES OF AMERICA,
RESPONDENTS

LOUISIANA ENERGY SERVICES, L.P.,
INTERVENOR

Consolidated with
06-1310

On Petitions for Review of an Order of the
Nuclear Regulatory Commission

Lindsay A. Lovejoy, Jr. argued the cause and filed the
briefs for petitioners.
 2
Darani Reddick, Attorney, U.S. Nuclear Regulatory
Commission, argued the cause for respondents. With her on
the brief were John A. Bryson, Attorney, U.S. Department of
Justice, Karen D. Cyr, General Counsel, U.S. Nuclear
Regulatory Commission, John F. Cordes, Jr., Solicitor, E.
Leo Slaggie, Deputy Solicitor, and Molly Barkman and
Geraldine R. Fehst, Attorneys.

Michael F. McBride argued the cause for intervenor
Louisiana Energy Services, L.P. in support of respondent.
With him on the brief were David A. Repka and John W.
Lawrence.

Before: GINSBURG, Chief Judge, and ROGERS and
KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge
KAVANAUGH.

KAVANAUGH, Circuit Judge: More than 100 nuclear
reactors in the United States produce electricity to power
American homes and businesses. Those reactors provide
about 20 percent of the Nation’s electricity.

In this case, the Nuclear Regulatory Commission granted
a license for a new, privately owned facility in New Mexico
to produce enriched uranium as fuel for nuclear reactors.
Individuals who live near the facility objected to the license,
and they filed petitions for review in this Court. Petitioners
contend that the NRC violated the National Environmental
Policy Act and the Atomic Energy Act in granting the license.
We deny the petitions and uphold the NRC’s decision to grant
the license.
 3
I

For several decades after the development of nuclear
power in the 1950s, the Federal Government produced all of
the enriched uranium used to fuel America’s nuclear reactors.
In the early 1990s, Congress privatized the uranium
enrichment operations; it formed the United States
Enrichment Corporation and later approved the sale of that
company. See USEC Privatization Act, Pub. L. No. 104-134,
§§ 3101-17, 110 Stat. 1321, 1321-335 to -350 (1996); Energy
Policy Act of 1992, Pub. L. No. 102-486, Title IX, 106 Stat.
2776, 2923. Today, USEC operates the country’s only
uranium enrichment plant, which is in Kentucky.

In 1990, Congress also amended the Atomic Energy Act
so that the Nuclear Regulatory Commission could license the
construction and operation of additional uranium enrichment
plants that would be privately owned and operated. See Solar,
Wind, Waste, and Geothermal Power Production Incentives
Act of 1990, Pub. L. No. 101-575, § 5, 104 Stat. 2834, 2835-
36 (codified as amended at 42 U.S.C. § 2243). During the
next 13 years, the NRC received two such applications for
uranium enrichment facilities, both filed by Louisiana Energy
Services, L.P. (LES). In 1991, LES applied to build the
“Claiborne” enrichment facility near Homer, Louisiana; LES
later withdrew that application. See In re La. Energy Servs.
L.P., 47 N.R.C. 113, 114-15 (1998). In December 2003, LES
sought a license for the so-called National Enrichment
Facility near Eunice, New Mexico. That second application
is at issue in this case.

Among other things, an applicant for a private-sector
enrichment facility must present a “plausible strategy” for
disposing of the nuclear waste that the facility will generate.
An applicant must provide a reasonable cost estimate to
 4
accompany the disposal strategy and give the NRC adequate
assurance that the applicant can pay for disposal. 42 U.S.C.
§ 2243(d)(2); 10 C.F.R. § 70.25; In re La. Energy Servs.,
L.P., 34 N.R.C. 332, 337 (1990). The NRC must conduct an
“adjudicatory hearing on the record” to ensure the applicant
has met all the requirements for licensure, and it must prepare
an environmental impact statement under the National
Environmental Policy Act “before the hearing . . . is
completed.” 42 U.S.C. § 2243(a)(1), (b)(1), (2); see also 42
U.S.C. § 4332(2)(C).

After LES’s application in this case, the NRC issued a
notice of hearing and opportunity for interested parties to
intervene in the licensure proceeding. Notice of Receipt of
Application for License, 69 Fed. Reg. 5873, 5874 (Feb. 6,
2004). Two organizations – Public Citizen and the Nuclear
Information and Resource Service – jointly filed a petition to
intervene. Pursuant to NRC regulations, they challenged
several aspects of LES’s application. See 10 C.F.R.
§ 2.309(a) (requiring that parties specify “contentions which
[they] seek[] to have litigated in the hearing”). The NRC
assigned the conduct of the licensure proceeding to a three-
member Atomic Safety and Licensing Board, which
considered petitioners’ contentions in a series of on-the-
record hearings. The NRC then heard appeals from the
Licensing Board’s decisions.

At the Licensing Board, petitioners alleged that the
NRC’s environmental impact statement had not adequately
assessed the environmental impact of the proposed facility –
particularly the environmental hazards associated with
uranium waste disposal. The Licensing Board issued written
rulings examining the environmental effects of the facility
and denying petitioners’ claims. The NRC upheld the
 5
Licensing Board’s determinations in written rulings that
further analyzed the environmental issues.

Petitioners also alleged that LES had not articulated a
plausible strategy to dispose of the waste generated by the
facility, and that it had not provided a reasonable estimate of
disposal costs. The Licensing Board considered LES’s two
alternative disposal strategies and the related cost estimates.
First, the Licensing Board evaluated LES’s “private-sector
strategy” and cost estimate for disposal at a private facility
outside of New Mexico. On this point, the Licensing Board
ruled for petitioners, holding that LES had not met its
evidentiary burden to establish that the cost estimate for the
private-sector strategy was reasonable. The NRC affirmed
that conclusion.

The Licensing Board also analyzed LES’s alternative,
“public-sector strategy.” To support that strategy, LES relied
on a law that requires the Department of Energy to take title
to and dispose of “low-level radioactive waste” generated by
uranium enrichment facilities. See 42 U.S.C. § 2297h-11.
The Licensing Board found the strategy plausible and rejected
petitioners’ challenge to the cost estimate for the strategy.
The NRC upheld the Licensing Board’s decision, thus basing
its ultimate approval of the license on LES’s public-sector
strategy and cost estimate, rather than on LES’s private-sector
plan.

In March 2006, as it was considering petitioners’
contentions, the Licensing Board held a public hearing on the
remaining issues associated with the enrichment facility. The
Board held this hearing to meet the mandatory hearing
requirement of 42 U.S.C. § 2243(b). In June 2006, the
Licensing Board completed its review and authorized a 30-
year license for construction and operation of the facility.
 6
The NRC declined to disturb the Licensing Board’s
authorization of the license, and the decision became final in
early August 2006. Construction has now begun.

Petitioners filed timely petitions for review in this Court.
They raise several objections to the NRC’s licensing decision:
(1) the NRC violated the Atomic Energy Act by
“supplementing” the environmental impact statement during
the hearing process; (2) the NRC violated the National
Environmental Policy Act by failing to adequately address the
environmental consequences of disposing of the facility’s
uranium waste; (3) the NRC violated the Atomic Energy Act
by accepting LES’s waste disposal strategy and cost estimate;
and (4) NRC Commissioner McGaffigan should have
disqualified himself from the licensure proceeding. We
address each issue in turn.

II

Before deciding petitioners’ claims, we first must
determine whether they have standing.

Under Article III of the Constitution, federal courts have
jurisdiction only to decide cases or controversies. One aspect
of the case-or-controversy requirement is that a party must
demonstrate standing to sue – that it has suffered a “concrete
and particularized” injury that is “actual or imminent”;
“caused by, or fairly traceable to, an act that the litigant
challenges in the instant litigation”; and “redressable by the
court.” Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658, 663
(D.C. Cir. 1996) (en banc) (internal quotation marks omitted).
An organization may establish Article III standing by
showing, among other things, that at least one of its members
would have standing to sue in his or her own right. Nuclear
Energy Inst., Inc. v. EPA, 373 F.3d 1251, 1265 (D.C. Cir.
2004).
 7
This is a “procedural rights” case in which a party “has
been accorded a procedural right to protect his concrete
interests.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 572
n.7 (1992). A party has standing to challenge an agency’s
failure to follow a procedural requirement “so long as the
procedures in question are designed to protect some
threatened concrete interest of” the party. Id. at 573 n.8. The
Supreme Court and this Court have repeatedly held that
individuals who live near a proposed federal project and
allege that they will suffer concrete injury from the project
have standing in NEPA and other procedural rights cases.
See, e.g., id. at 572 n.7 (standing for “one living adjacent to
the site for proposed construction of a federally licensed”
project, even where party “cannot establish with any
certainty” that remedying procedural defect “will cause the
license to be withheld or altered”); Cmtys. Against Runway
Expansion, Inc. v. FAA, 355 F.3d 678, 684-85 (D.C. Cir.
2004) (standing where parties’ neighborhoods would “be
subjected to increased noise”); Nuclear Energy Inst., 373 F.3d
at 1265-66 (standing where member alleged hazardous waste
would “contaminate his community’s ground-water
supplies”); cf. Fla. Audubon Soc’y, 94 F.3d at 667-68 (no
standing where parties alleged only a “general risk” of harm
and did not demonstrate a “geographic nexus to any asserted
environmental injury”).

Petitioners here live near the proposed uranium
enrichment facility. They allege a risk of injury from
radiation generated by the facility; in particular, they allege
that because the NRC has not identified a suitable disposal
strategy for the waste the facility will produce, the waste will
be stored at the facility site and will emit harmful radiation.
See, e.g., Declaration of Phillip C. Barr, at ¶¶ 3, 6-10, 13-16.
They assert claims that, if successful, would require the NRC
to take additional procedural steps before granting the license
 8
and would at least temporarily prevent construction and
operation of the facility near their homes. Petitioners’ claims
suffice to give them standing under the precedents of the
Supreme Court and this Court.

III

Under the National Environmental Policy Act, a federal
agency proposing a major federal action significantly
affecting the quality of the human environment must first
prepare an “environmental impact statement” that includes a
“detailed statement” on “(i) the environmental impact of the
proposed action, (ii) any adverse environmental effects which
cannot be avoided should the proposal be implemented,” and
“(iii) alternatives to the proposed action.” 42 U.S.C.
§ 4332(2)(C)(i)-(iii). Section 193 of the Atomic Energy Act
specifically requires the NRC to prepare an EIS in connection
with uranium enrichment facility applications before the
hearing on the license is completed. See 42 U.S.C.
§ 2243(a)(1), (2).

Petitioners allege that the NRC violated the Atomic
Energy Act by “supplementing” the EIS after the hearings on
the license application. They also contend that, under NEPA,
the EIS did not adequately address the environmental impact
of disposing of the waste generated by the facility.

A

We first consider petitioners’ claim that the NRC
violated the Atomic Energy Act by “supplementing” the EIS
after the close of hearings on the license application.

Section 193 of the Atomic Energy Act requires the NRC
to conduct a “single adjudicatory hearing on the record”
before issuing a license for constructing and operating a
 9
uranium enrichment facility. 42 U.S.C. § 2243(b)(1), (2); see
also 10 C.F.R. §§ 70.23a, 70.31. It also sets the deadline for
preparing the EIS:

An environmental impact statement . . . shall be
prepared before the hearing on the issuance of a
license for the construction and operation of a uranium
enrichment facility is completed.

§ 2243(a)(2) (emphases added). NRC staff released the draft
EIS for public review in September 2004 and then issued the
final EIS in July 2005 – well before both the NRC’s principal
rulings on petitioners’ contentions and the “mandatory
hearing” in March 2006 on the remaining, uncontested issues.
As this timeline demonstrates, the NRC satisfied the Section
193 requirement that an EIS “be prepared before the hearing
. . . is completed.” § 2243(a)(2) (emphases added).

Petitioners nonetheless claim that the EIS was not
“prepared” before the hearing was completed because the
written opinions of the Licensing Board and the NRC
“supplemented” the EIS. In its ruling after the mandatory
hearing, the Licensing Board considered the EIS and stated
that a staff document and the related discussion in the Board’s
opinion were intended to “supplement[]” the EIS. 63 N.R.C.
747, 819 (2006). Similarly, when ruling on one of
petitioner’s environmental contentions, the NRC included a
detailed analysis of various waste disposal options and stated
that the passage “amplified” the related discussion in the final
EIS. 63 N.R.C. 687, 700 (2006). Those points are irrelevant
to the statutory question here, however, because the agency
still “prepared” an EIS before the hearing was completed,
 10
which is all that this provision of the Atomic Energy Act
requires.1

B

We next address petitioners’ claim that the NRC’s NEPA
review was deficient.

Judicial review of an environmental impact statement
ensures that the agency “has adequately considered and
disclosed the environmental impact of its actions and that its
decision is not arbitrary or capricious.” Baltimore Gas &
Elec. Co. v. Natural Res. Def. Council, 462 U.S. 87, 97-98
(1983). A court reviewing an EIS considers whether an
“agency took a ‘hard look’ at the environmental consequences
of its decision to go forward with the project.” Cmtys.
Against Runway Expansion, Inc. v. FAA, 355 F.3d 678, 685
(D.C. Cir. 2004) (internal quotation marks omitted). We bear
in mind, of course, “that NEPA itself does not mandate
particular results, but simply prescribes the necessary
process.” Robertson v. Methow Valley Citizens Council, 490
U.S. 332, 350 (1989).

Petitioners argue that the NRC’s NEPA review was
deficient because the NRC did not sufficiently analyze the
impact of disposal of uranium waste from the enrichment
facility. Petitioners are incorrect: The NRC thoroughly
examined the environmental consequences of waste disposal.

Multiple sections of the EIS discussed the waste that the
enrichment facility would generate and the environmental
impact of various waste disposal alternatives. See EIS

1
Petitioners have not argued that the NRC’s method of
supplementing the EIS violated its regulations implementing
NEPA. See 10 C.F.R. § 51.92.
 11
Excerpts, Joint Appendix (“J.A.”) 1907-11 (discussing
“Waste-Management Options” for the facility and “Disposal
Options” for waste); J.A. 1907 (outlining “near-surface
emplacement” alternatives). The EIS described potential
private- and public-sector disposal facilities that are licensed
to accept various types of low-level waste; it described
different scenarios for converting and transporting the waste;
and it analyzed the environmental effects of the various
options. In addition to the EIS document, the Licensing
Board and the NRC subsequently developed an exhaustive
record as they considered petitioners’ environmental
contentions and supplemented the EIS. Among other things,
the NRC further analyzed the “long-term effects from
disposing of depleted uranium,” concluding that the potential
environmental effects of disposal at one proposed disposal
site in Utah “appear to be small,” and describing various
alternative disposal options. 63 N.R.C. 687, 690, 700
(2006).2

In short, the record makes clear that the NRC thoroughly
considered the environmental issues surrounding uranium
waste disposal. The agency plainly met its NEPA obligation
to take a “hard look” at the environmental consequences of
approving the license.

IV

Petitioners strenuously argue that the NRC erred in
approving the license because, in petitioners’ view, LES
failed to present a reasonable cost estimate for disposing of
radioactive waste from the facility.

2
Contrary to petitioners’ claims, NRC staff independently analyzed
the characteristics of the “reference site” in Utah and the potential
effects of storing the facility’s waste there. 63 N.R.C. 687, 693
(2006).
 12
A license applicant need not present a “concrete plan” to
dispose of waste generated by a proposed uranium enrichment
facility. In re La. Energy Servs., L.P., 34 N.R.C. 332, 337
(1991). Rather, an applicant must present “a plausible
strategy for the disposition of depleted uranium” waste. Id.
(emphasis added).3 An applicant also must present a
reasonable estimate of the costs of disposal and give adequate
assurance it can pay those costs. 42 U.S.C. § 2243(d)(2); 10
C.F.R. § 70.25(a), (e).

The NRC granted the license here based on LES’s
“public-sector strategy,” in which the Department of Energy
would take title to and dispose of the facility’s waste.4
Petitioners do not challenge the plausibility of giving the
waste to the Department of Energy; they acknowledge that
the Department is legally required to take title to the waste at
LES’s request, with LES bearing the disposal costs. See 42
U.S.C. § 2297h-11(a)(1), (2). Instead, petitioners contend
that LES’s cost estimate for waste disposal understates the
likely costs.

LES’s cost estimate started with the Department of
Energy’s estimate of the cost of waste disposal. To guard
against unforeseen costs, LES then added a 25-percent
contingency factor on top of the Department’s estimate.
Petitioners contend, however, that LES should have used a
contingency factor far greater than 25 percent because of the

3
Petitioners accept the “plausible strategy” requirement as the
governing standard for disposition of depleted uranium waste.
4
The bulk of petitioners’ objections in this Court are to the private-
sector strategy. We need not consider those arguments, however,
because the NRC approved the license based solely on the public-
sector strategy. See 10 C.F.R. § 70.25(a) (requiring only one plan
to pay disposal and other costs).
 13
Department’s alleged history of underestimating costs on
other projects.

To be sure, cost overruns are not uncommon for this kind
of massive project. See GOV’T ACCOUNTABILITY OFFICE,
DEPARTMENT OF ENERGY: MAJOR CONSTRUCTION PROJECTS
NEED A CONSISTENT APPROACH FOR ASSESSING TECHNOLOGY
READINESS TO HELP AVOID COST INCREASES AND DELAYS 9
(2007) (cost of “many” Department projects has
“significantly exceeded original estimates”). The NRC found
petitioners’ evidence on this point unpersuasive, however,
because it concerned only the Department of Energy’s “cost
overruns on unrelated prior projects.” 64 N.R.C. 37, 46 n.38
(2006). The NRC explained that it has previously rejected
such past-misbehavior arguments unless parties show a
“‘direct and obvious relationship between the character issues
and the licensing action in dispute.’” Id. (quoting In re
Dominion Nuclear Conn., Inc., 54 N.R.C. 349, 365 (2001)).
Petitioners present no basis for us to upset the NRC’s
conclusion that this particular estimate, with the 25-percent
contingency included, was reasonable.5

At oral argument, petitioners expressed particular
concern with the cost estimate for the public-sector strategy
because it was based on “near-surface disposal” of the
facility’s waste relatively near the surface of the earth – as
opposed to “deep disposal” hundreds or thousands of feet
underground. Petitioners contend that deep disposal will be

5
Petitioners also have asked for a Licensing Board hearing on
whether the 25-percent contingency factor was sufficient. The
NRC examined petitioners’ challenge on the merits, however, and
reasonably determined that the 25-percent contingency factor was
sufficient and that evidence of overruns on other Department of
Energy projects did not merit further Licensing Board proceedings.
 14
necessary because of the nature of the waste the facility will
generate; that deep disposal will cost significantly more than
near-surface disposal; and that LES will not have the funds to
pay for the higher costs of deep disposal. This is a weighty
argument, and we assume the NRC legally could have
required LES to demonstrate it could pay for deep disposal.
But the NRC instead required only a showing that LES could
pay for near-surface disposal; the NRC concluded that near-
surface disposal of the waste from this facility is permissible
under current federal regulations. As a reviewing court, our
role here is necessarily limited: We are not authorized to
micromanage the NRC’s licensure proceeding, or to second-
guess its acceptance of reasonable cost estimates. We
examine only whether the NRC reasonably concluded that
LES presented a plausible strategy for waste disposal and a
reasonable cost estimate to accompany that strategy – the
plausible strategy being disposal by the Department of
Energy, and the cost estimate including a 25-percent
contingency above the Department’s estimate for the costs of
near-surface disposal. We have no basis on this record,
particularly given our deferential review, to disturb the
NRC’s determination that LES’s cost estimate based on near-
surface disposal was reasonable.

V

Finally, petitioners contend that NRC Commissioner
McGaffigan (who has since passed away) should have
disqualified himself from considering the license application.
Petitioners moved to disqualify Commissioner McGaffigan
because, in an unrelated proceeding, he stated that the
Nuclear Information and Resource Service had used “factoids
or made-up facts or irrelevant facts” to support its positions,
and that one of its expert witnesses was a “person who
doesn’t know anything about radiation.” Motion at 2-3, J.A.
 15
1167-68. In that same proceeding, Commissioner
McGaffigan characterized the group as the “Nuclear
Disinformation Resource Service.” Id. at 3, J.A. 1168.
Petitioners argue that the licensure decision should be vacated
so that the proceeding can be conducted anew by an impartial
panel. We review Commissioner McGaffigan’s denial of
petitioners’ disqualification motion for abuse of discretion.
Metro. Council of NAACP Branches v. FCC, 46 F.3d 1154,
1164 (D.C. Cir. 1995).

Given the roles that agency officials must play in the
give-and-take of sometimes rough-and-tumble policy debates,
courts must tread lightly when presented with this kind of
challenge. Administrative officers are presumed objective
and “capable of judging a particular controversy fairly on the
basis of its own circumstances.” United States v. Morgan,
313 U.S. 409, 421 (1941). A party cannot overcome this
presumption with a mere showing that an official “has taken a
public position, or has expressed strong views, or holds an
underlying philosophy with respect to an issue in dispute.”
United Steelworkers of Am. v. Marshall, 647 F.2d 1189, 1208
(D.C. Cir. 1981) (citing Hortonville Joint Sch. Dist. No. 1 v.
Hortonville Educ. Ass’n, 426 U.S. 482, 493 (1976) and
Morgan, 313 U.S. at 421). Instead, an agency official should
be disqualified only where “a disinterested observer may
conclude” that the official “has in some measure adjudged the
facts as well as the law of a particular case in advance of
hearing it.” Cinderella Career & Finishing Sch., Inc. v. FTC,
425 F.2d 583, 591 (D.C. Cir. 1970) (internal quotation marks
omitted); Metro. Council, 46 F.3d at 1164-65.

Here, as the Commissioner noted, his “personal style”
was to “speak vigorously, sometimes colorfully,” to “spark
debate.” Decision on Motion at 3, J.A. 1311. Such
comments, particularly when made in an entirely separate
 16
proceeding, do not support the conclusion that Commissioner
McGaffigan had “adjudged the facts as well as the law”
regarding the particular license application at issue here.
Commissioner McGaffigan did not abuse his discretion in
denying petitioners’ motion.

* * *

We deny the petitions for review and uphold the NRC’s
decision to grant the license.

So ordered.