EA-00-118 - Bass Energy, Inc.
June 30, 2000
Bass Energy, Inc.
ATTN: Mr. Paul Thomas
P. O. Box 206
Bruceton Mills, West Virginia 26525
|SUBJECT:||NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTY - $8,800 (NRC INSPECTION REPORT NO. 47-25225-01/99-01 AND NRC OFFICE OF INVESTIGATIONS REPORT NO. 2-99-032)|
Dear Mr. Thomas:
This is in reference to an investigation initiated by the Nuclear Regulatory Commission (NRC) Office of Investigations (OI) on November 3, 1999, and an NRC inspection conducted at Bass Energy, Inc.'s Deep Coal Mine #1, in Buckhannon, West Virginia, on September 28, 1999. The initial purpose of the OI investigation was to determine whether Bass Energy permitted Burning Rock Coal Company, a non-licensed entity, to operate a fixed gauge (coal ash analyzer), containing material licensed by NRC, prior to having the license transferred to Burning Rock. During the investigation it was determined that Bass Energy, Inc., also transferred control to a second non-licensed entity, Glady Fork Mining Company. The synopsis to the OI report, a description of each apparent violation, a summary of the OI investigation, and the inspection report were transmitted to you by letter dated May 11, 2000. Based on the results of the inspection and investigation, a closed and transcribed predecisional enforcement conference was conducted with you at the Comfort Inn in Morgantown, West Virginia, on June 1, 2000, to discuss the apparent violations, the root causes, and your corrective actions to preclude recurrence. Enclosure 2 provides a listing of attendees at the predecisional enforcement conference, and Enclosure 3 contains a copy of the materials presented by NRC.
Based on the information developed during the inspection, the OI investigation, and the information you provided during the conference, the NRC has determined that violations of NRC requirements occurred. These violations are cited in the enclosed Notice of Violation and Proposed Imposition of Civil Penalty (Notice), and the circumstances surrounding them are described in detail in our letter dated May 11, 2000.
The violations in the Notice involve non-compliance with regulatory and license requirements, and include the failure: (1) to obtain written consent from the NRC prior to transferring control of licensed material to unlicensed companies on two occasions; (2) to secure or maintain constant surveillance of licensed material from unauthorized access; and (3) to provide information to the NRC that was complete and accurate in all material aspects. Although no significant radiological event occurred during the time in which the coal ash analyzer was possessed and used by entities not licensed by NRC, the failure to properly transfer, secure and limit access to licensed material is a significant issue. Proper transfer and implementation of adequate security measures for licensed materials are required so as to prevent untrained and/or unauthorized individuals from gaining access to radioactive materials, the consequences of which could include unnecessary radiation exposure to members of the public.
On two occasions, you transferred control of the coal ash analyzer to companies not authorized to possess and use the device, the second transfer occurring after you were informed of the requirements governing security and transfer of licensed material in your possession. Specifically, after transferring control of the coal ash analyzer to Burning Rock Coal Company, Inc., you were informed by NRC management that transfer of control of licensed materials could not be completed prior to receiving NRC approval. You nonetheless transferred control of the device to another non-licensed entity (Glady Fork Mining Company) even though you had confirmed that this would not be done in your letter to the NRC dated October 6, 1999. In addition, although your October 6, 1999 letter to the NRC stated you had taken measures to ensure security of licensed material, the security of the coal ash analyzer remained inadequate until February 29, 2000, when you installed new locks. At the predecisional enforcement conference you indicated that you would provide evidence to support your contention that security of materials was adequate; however, to date you have not provided the NRC with any such information. With respect to the transfer of control to Glady Fork Mining Company and the failure to maintain adequate security, you were put on notice of the NRC requirement and related your understanding in the October 6, 1999, letter, yet failed to assure compliance. Therefore, the NRC concluded that Violations A.2 and B were willful. Willful violations of regulatory requirements are of significant concern to the NRC because our regulatory program is based on licensees and their employees acting with integrity and communicating with candor. In addition, the inaccurate information provided in your October 6, 1999 letter to the NRC, the specifics of which are described in the Notice, is of concern in that the completeness and accuracy of information submitted to the NRC is an essential element in providing the NRC with reasonable assurance that personnel are adequately trained and that activities are being conducted safely and in accordance with regulatory requirements.
These violations are indicative of performance deficiencies by Bass Energy and you significantly contributed to them by your failure to understand that allowing unlicensed entities to have complete access to licensed materials constituted an unauthorized transfer of control. The NRC expects licensee officials to be cognizant of regulatory requirements associated with licensed activities and to take actions to ensure regulatory compliance, especially when potential areas of non-compliance are brought to management's attention. Additionally, Bass Energy's failure to implement the corrective actions set forth in your letter of October 6, 1999 was material in that it caused NRC to forego additional inspection or other regulatory actions to confirm compliance. Therefore, in accordance with the "General Statement of Policy and Procedures for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600, the three violations described in the enclosed Notice have been categorized as a Severity Level II problem.
In accordance with the Enforcement Policy, a base civil penalty in the amount of $4,400 is considered for each Severity Level II problem. The NRC considered whether credit was warranted for Identification and Corrective Action in accordance with the civil penalty assessment process in Section VI.B.2 of the Enforcement Policy. Credit was determined not to be warranted for Identification in that the NRC identified the violations, resulting in no mitigation of the base civil penalty. Based on Bass Energy's failure to implement corrective actions after being put on notice, failure to implement the commitments set forth in the October 1999 letter, and the second transfer of control of the coal ash analyzer to a non-licensed entity without obtaining NRC consent, the NRC determined that corrective actions for the violations were not comprehensive, and that credit was not warranted for the factor of Corrective Action, resulting in a doubling of the base civil penalty to the amount of $8,800 for the Severity Level II problem.
Therefore, to emphasize the need for maintaining control of licensed material, for providing NRC complete and accurate information and in recognition of the significance of willful violation of regulatory requirements, I have been authorized, after consultation with the Director, Office of Enforcement, to issue the enclosed Notice in the amount of $8,800 for the Severity Level II problem. In addition, issuance of this Notice constitutes escalated enforcement action that may subject you to increased inspection effort.
You are required to respond to this letter and should follow the instructions specified in the enclosed Notice when preparing your response. In your response, you should document the specific actions taken and any additional actions you plan to prevent recurrence. After reviewing your response to this Notice, including your proposed corrective actions and the results of future inspections, the NRC will determine whether further NRC enforcement action is necessary to ensure compliance with NRC regulatory requirements.
In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter, its enclosure, and your response will be available electronically for public inspection in the NRC Public Document Room or from the Publicly Available Records (PARS) component of NRC's document system (ADAMS). ADAMS is accessible from the NRC Web site at http://www.nrc.gov/reading-rm/adams.html (the Public NRC Library).
If you have any questions regarding this letter, please contact Douglas M. Collins, Director, Division of Nuclear Materials Safety at (404) 562-4700.
Docket No. 030-32990
License No. 47-25225-01
Enclosure: Notice of Violation and Proposed Imposition of Civil Penalty
cc w/encls: Commonwealth of West Virginia
|Bass Energy, Inc.
Bruceton Mills, West Virginia
|Docket No.: 030-32990
License No.: 47-25225-01
During an NRC inspection conducted on September 28, 1999, and an NRC Office of Investigations investigation completed on November 3, 1999, violations of NRC requirements were identified. In accordance with the "General Statement of Policy and Procedures for NRC Enforcement Actions," NUREG-1600, the NRC proposes to impose a civil penalty pursuant to Section 234 of the Atomic Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205. The particular violations and associated civil penalty are set forth below:
|A.||10 CFR 30.34(b)
requires that no license issued or granted pursuant to the regulations
in Part 30 and parts 31 through 36, and 39 nor any right under a license
shall be transferred, assigned or in any manner disposed of, either
voluntarily or involuntarily, directly or indirectly, through transfer
of control of any license to any person, unless the Commission, after
securing full information, finds that the transfer is in accordance
with the provisions of the Act and gives its consent in writing.
Contrary to the above,
|1.||Between July 8, and August
10, 1999, Bass Energy, Inc. transferred control of its license to
Burning Rock Coal Company by allowing the company to operate a gauge
containing 20 millicuries of cesium-137 and 300 millicuries of americium-241
without first obtaining the written consent of the Commission.
|2.||Between December 1999 and February
2000, Bass Energy, Inc. transferred control of its license to Glady
Fork Mining Company by allowing the company to operate a gauge containing
20 millicuries of cesium-137 and 300 millicuries of americium-241
without first obtaining the written consent of the Commission. (01012)
|B.||10 CFR 20.1801 requires
that the licensee secure from unauthorized removal or access licensed
materials that are stored in controlled or unrestricted areas. 10
CFR 20.1802 requires that the licensee control and maintain constant
surveillance of licensed material that is in a controlled or unrestricted
area and that is not in storage. As defined in 10 CFR 20.1003, controlled
area means an area, outside of a restricted area but inside the
site boundary, access to which can be limited by the licensee for
any reason; and unrestricted area means an area, access to
which is neither limited nor controlled by the licensee.
Contrary to the above, from October 1998 through February 29, 2000, Bass Energy, Inc. failed to secure from unauthorized access sealed sources containing 20 millicuries of cesium-137 and 300 millicuries of americium-241 located in a Scan Technologies Model 3500, Serial No. 19958, gauging device, nor did the licensee control and maintain constant surveillance of the licensed material. Specifically, the control panels for operating the fixed gauging device were not locked, nor was the device secured in any other manner from unauthorized access, and no qualified persons remained at the facility to control and maintain constant surveillance of the licensed material. (01022)
|C.||10 CFR 30.9(a) requires,
in part, that information provided to the Commission by a licensee,
or information required by the Commission's regulations to be maintained
by the licensee, shall be complete and accurate in all material respects.
In a letter dated October 6, 1999, to the NRC, Bass Energy, Inc.'s president stated that: (1) the cabinet containing the control panel used to manually operate the gauge had been locked; (2) the coal ash analyzer was being inspected daily and would not be used until transferred to the new owner; (3) Bass Energy had possession of the keys to the coal ash analyzer; (4) the front gate leading into Bass Energy Inc.'s entrance was locked; (5) mining activity was not being conducted at the present time; and (6) the NRC would be notified prior to any future mining.
Contrary to the above, on or about February 28, 2000, during your interview with the NRC Office of Investigations, the NRC determined that the cabinet containing the control panel had not been locked, the coal ash analyzer had not been inspected daily and had been utilized by non-authorized entities; the location of the keys to the analyzer were unknown, and the front gate was not locked. In addition, the NRC had not been notified of mining activities that were conducted as a result of the unauthorized transfer of control of licensed activities to Glady Fork Mining Company. The inaccuracies set forth in the October 6, 1999 letter were material in that they caused the NRC to forego additional inspection or other regulatory actions to confirm the level of safety of licensed material and compliance. (01032)
This is a Severity Level II problem (Supplements VI and VII).
Pursuant to the provisions of 10 CFR 2.201, Bass Energy, Inc. (Licensee) is hereby required to submit a written statement or explanation to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, within 30 days of the date of this Notice of Violation and Proposed Imposition of Civil Penalty (Notice). This reply should be clearly marked as a "Reply to a Notice of Violation" and should include for each alleged violation: (1) admission or denial of the alleged violation, (2) the reasons for the violation if admitted, and if denied, the reasons why, (3) the corrective steps that have been taken and the results achieved, (4) the corrective steps that will be taken to avoid further violations, and (5) the date when full compliance will be achieved. If an adequate reply is not received within the time specified in this Notice, an order or a Demand for Information may be issued as why the license should not be modified, suspended, or revoked or why such other action as may be proper should not be taken. Consideration may be given to extending the response time for good cause shown. Under the authority of Section 182 of the Act, 42 U.S.C. 2232, this response shall be submitted under oath or affirmation.
Within the same time as provided for the response required above under 10 CFR 2.201, the Licensee may pay the civil penalty proposed above in accordance with NUREG/BR-0254 and by submitting to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, a statement indicating when and by what method payment was made, or may protest imposition of the civil penalties in whole or in part, by a written answer addressed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission. Should the Licensee fail to answer within the time specified, an Order imposing the civil penalty will be issued. Should the Licensee elect to file an answer in accordance with 10 CFR 2.205 protesting the civil penalty, in whole or in part, such answer should be clearly marked as an "Answer to a Notice of Violation" and may: (1) deny the violation listed in this Notice, in whole or in part, (2) demonstrate extenuating circumstances, (3) show error in this Notice, or (4) show other reasons why the penalties should not be imposed. In addition to protesting the civil penalties in whole or in part, such answer may request remission or mitigation of the penalties.
In requesting mitigation of the proposed penalty, the factors addressed in Section VI.B.2 of the Enforcement Policy should be addressed. Any written answer in accordance with 10 CFR 2.205 should be set forth separately from the statement or explanation in reply pursuant to 10 CFR 2.201, but may incorporate parts of the 10 CFR 2.201 reply by specific reference (e.g., citing page and paragraph numbers) to avoid repetition. The attention of the Licensee is directed to the other provisions of 10 CFR 2.205, regarding the procedure for imposing a civil penalty.
Upon failure to pay any civil penalty due which subsequently has been determined in accordance with the applicable provisions of 10 CFR 2.205, this matter may be referred to the Attorney General, and the penalty, unless compromised, remitted, or mitigated, may be collected by civil action pursuant to Section 234c of the Act, 42 U.S.C. 2282c.
The response noted above (Reply to Notice of Violation, statement as to payment of civil penalty, and Answer to a Notice of Violation) should be addressed to: Mr. R. William Borchardt, Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852-2738, with a copy to the Regional Administrator, U.S. Nuclear Regulatory Commission, Region II.
Your response will be made publicly available. Therefore, to the extent possible, the response should not include any personal privacy, proprietary, or safeguards information so that it can be available electronically for public inspection in the NRC Public Document Room or from the Publicly Available Records (PARS) component of NRC's document system (ADAMS). ADAMS is accessible from the NRC Web site at http://www.nrc.gov/reading-rm/adams.html (the Public NRC Library).
In accordance with 10 CFR 19.11, you may be required to post this Notice within two working days after receipt.
Dated at Atlanta, Georgia
this 30th day of June 2000