United States Nuclear Regulatory Commission - Protecting People and the Environment

EA-03-010 - Schlumberger Technology Corporation

October 14, 2003



EA-03-010
NMED No. 020536

Mr. Fred Kellerman
Operations Manager
Schlumberger Technology Corporation
200 Gillingham Lane
Sugar Land, Texas 77478

SUBJECT: NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTIES - $90,000 (NRC Inspection Report No. 030-06388/02-001 and Investigation Report No. 4-2002-042)

Dear Mr. Kellerman:

This refers to the predecisional enforcement conference conducted in Great Falls, Montana on May 30, 2003. The conference was conducted to discuss several apparent violations of NRC requirements related to a May 21, 2002 incident involving the loss of control of a well-logging source containing approximately 1.3 curies of Cesium-137 (Cs-137). The incident, which Schlumberger Technology Corporation (STC) reported to the NRC on May 23, 2002, after the radioactive source was found on an oil rig near Havre, Montana, resulted in unintended radiation exposures of 31 members of the public, i.e., oilfield workers. We completed our inspection of this incident on April 28, 2003, at which time we conducted a public exit meeting with you and members of your staff in Houston, Texas. On May 8, 2003, we issued an inspection report describing the apparent violations associated with this incident. We also provided you the results of the investigation conducted by NRC's Office of Investigations (OI) which determined, as STC had, that the well-logging crew involved in this incident willfully failed to perform required radiation surveys that were intended to assure that the source had been returned to its shielded container before the crew left the well-site.

Based on the information developed during our inspection and investigation, and our consideration of the information that you provided during the conference, the NRC has determined that several violations of NRC requirements occurred. These violations are described in the enclosed Notice of Violation (Notice), and the circumstances surrounding them were described in more detail in our inspection report. The violations include: 1) 13 radiation exposures in excess of NRC's annual public exposure limit of 0.1 rem; 2) a willful failure to perform radiation surveys following the completion of well-logging activities; 3) a loss of control of a radioactive source for two days; and 4) a failure to take immediate action to secure the radioactive source when it was found.

While none of the oilfield workers received a radiation exposure that is considered harmful (i.e., the highest estimated exposure was 0.4 rem, less than 10 percent of the annual allowable dose for radiation workers), the NRC takes seriously any incident that results in members of the public being unnecessarily exposed to radioactive material. The circumstances involved in this incident are cause for particular concern. The incident resulted from a willful violation of STC's procedures by logging crew members. Two of the three individuals on the crew failed to perform the required radiation surveys and falsified logs by certifying that they had done the surveys. STC's corrective actions following a similar incident in Edinburg, Texas in August 2001 apparently failed to instill in this logging crew the importance of performing required surveys and of assuring the integrity of required records. The actions of STC's logging crew resulted in 31 members of the public being unnecessarily exposed to radiation from STC's loss of control of a Cs-137 well-logging source, 13 of them over the annual exposure limit. In addition, this incident likely would have been more significant had inclement weather not limited the time workers spent in the vicinity of the source.

In a June 26, 2002, letter to the NRC, STC described its corrective action plan. STC's corrective actions for this incident included actions to recover the source and return it to its shielded container; disciplinary action against the three employees involved in the incident; the dissemination of information about this incident to all STC logging operations in the United States; and plans to modify employee training to include additional emphasis on potential injuries to individuals and legal responsibilities of employees and managers. At the predecisional enforcement conference, you discussed additional actions that you were considering, including design modifications to the equipment involved in this incident.

In assessing the significance of these violations, the NRC separately assessed the significance of: 1) the public radiation overexposures (Violation A); 2) the willful failure to perform surveys and resulting loss of control of the radioactive source (Violations B, C and D); and 3) the failure to take immediate action to secure the source when it was found (Violation E). Each of these violations or grouping of violations has been classified at Severity Level III in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600.

In accordance with the Enforcement Policy, a civil penalty with a base value of $6,000 is considered for a Severity Level III violation or problem(1). The NRC assessed each violation or problem in accordance with the civil penalty assessment process described in Section VI.C.2 of the Enforcement Policy. With respect to Violation A, the radiation overexposures of 13 members of the public, the NRC considered only the Corrective Action factor since the overexposures were not willful and since STC had not had escalated enforcement action in the two years preceding this incident. Although STC was deserving of credit for its corrective actions related to the overexposure violation, given the importance that NRC attaches to protecting members of the public from radiation exposures, we exercised our discretion, as provided for in Section VII.A.1 of the Enforcement Policy, to assess a separate $6,000 base civil penalty for each of the 13 radiation overexposures. This results in a civil penalty of $78,000.

With respect to Violations B, C, and D, the willful failures to survey and the resulting loss of control of a radioactive source, the NRC considered both the Identification and Corrective Action factors since there was willfulness involved. We determined that STC was deserving of credit for its corrective actions related to these violations, but not for identification. Identification credit was denied, as provided for in Section VI.C.2 of the Enforcement Policy, because there were clear missed opportunities, i.e., STC could have prevented these violations had its employees adhered to standard operating procedures. This results in a civil penalty of $6,000.

With respect to Violation E, the failure to take immediate action to secure the source when it was found, the NRC considered only the Corrective Action factor since the violation was not willful and since STC had not had escalated enforcement action in the two years preceding this incident. We determined that STC was not deserving of credit for its corrective actions related to this violation because as of the time of the predecisional enforcement conference, STC had taken no specific actions to address this violation. This results in a civil penalty of $6,000.

Therefore, to emphasize the fundamental importance of assuring adherence to procedures designed to protect the public health and safety, the importance of preventing unnecessary radiation exposures to each member of the public, the importance of maintaining control of licensed material, and the significance that NRC attaches to willful violations, I have been authorized, after consultation with the Director, Office of Enforcement, the Deputy Executive Director for Materials, Research, and State Programs, and the Commission, to issue the enclosed Notice of Violation and Proposed Imposition of Civil Penalty (Notice) in the amount of $90,000 for the Severity Level III violations and problems described above. In addition, issuance of this Notice constitutes escalated enforcement action, which may subject STC 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. The NRC will use your response, in part, to determine whether further enforcement action is necessary to ensure compliance with 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 made available electronically for public inspection in the NRC Public Document Room or from the NRC's document system (ADAMS), accessible from the NRC Web site at http://www.nrc.gov/reading-rm/adams.html. The NRC also includes significant enforcement actions on its Web site at www.nrc.gov; select What We Do, Enforcement, then Significant Enforcement Actions.

Sincerely,

/RA/

Bruce S. Mallett
Regional Administrator

Docket No.: 030-06388
License No.: 42-00090-03



Enclosures:
1. Notice of Violation and Proposed Imposition of Civil Penalties
2. NUREG/BR-0254 Payment Methods (Licensee only)

cc: w/Enclosure 1:
State of Montana Radiation Control Program Director
State of Texas Radiation Control Program Director
State of North Dakota Radiation Control Program Director


NOTICE OF VIOLATION
AND
PROPOSED IMPOSITION OF CIVIL PENALTIES

Schlumberger Technology Corporation
Sugar Land, Texas
Docket No. 030-06388
License No. 42-00090-03
EA-03-010

During an NRC inspection and investigation completed April 28, 2003, violations of NRC requirements were identified. In accordance with the "General Statement of Policy and Procedure 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 penalties are set forth below:

A.   10 CFR 20.1301(a)(1) requires, in part, that the licensee conduct operations so that the total effective dose equivalent to individual members of the public from licensed operations not exceed 0.1 rem (1millisievert) in a year.

Contrary to the above, in calendar year 2002, the licensee failed to conduct operations so that the total effective dose equivalent to individual members of the public from licensed operations did not exceed 0.1 rem (1millisievert). Specifically, as a direct result of the loss of control of a 1.3 curie cesium-137 well logging source on May 21, 2002, 13 individual members of the public received total effective dose equivalents in excess of 0.1 rem (1millisievert) in calendar year 2002. Total effective dose equivalents for these 13 individuals ranged from 0.2 to 0.4 rem.

This violation involves 13 separate examples of a Severity Level III violation (Supplement IV).
Civil Penalty - $78,000 (13 x $6,000)


B.   10 CFR 39.13(c) states, in part, that the Commission will approve an application for a specific license for the use of licensed material in well logging if the applicant submits to the Commission written operating and emergency procedures as described in 10 CFR 39.63 or an outline or summary of the procedures that includes the important radiation safety aspects of the procedures.

License Condition 19 of Byproduct Material License 42-00090-03 issued to Schlumberger Technology Corporation (STC) requires, in part, that the licensee conduct its program in accordance with statements, representations, and procedures contained in the license application dated April 23, 1990, and letters dated December 4, 1990, through December 8, 2000. This information included a copy of the licensee's Operating and Emergency Procedures, contained in the Logging Supervisor/Assistant Radiation Manual.

STC's operating and emergency procedures, contained in the Logging Supervisor/Assistant Radiation Safety Manual, specified that after a logging source was removed from the tool and locked in the shield (i.e., the source storage container), a post-job survey of the container was required to ensure the source was in the container prior to loading the container onto the vehicle. A revision to STC's operating procedures following an August 2001 incident in Edinburg, Texas, specified that an additional survey to verify the presence of the source within its transport shield prior to departure from the wellsite was to be performed by the most senior operator in the crew. This revision had been implemented and was in effect prior to May 21, 2002.

Contrary to the above, on May 21, 2002, after completing a logging job near Havre, Montana, and removing the 1.3-curie cesium-137 logging source from the logging tool, the licensee's logging crew members failed to perform any required radiation surveys of the cesium-137 source storage container to ensure the source was present in the container prior to loading the container back onto the vehicle and departure from the wellsite.

C.   10 CFR 39.67(c) requires, that if a sealed source assembly is removed from a logging tool before departure from the temporary jobsite, the licensee shall confirm that the logging tool is free of contamination by energizing the logging tool detector or by using a survey meter, prior to departure from the wellsite.

Contrary to the above, on May 21, 2002, after completing a logging job near Havre, Montana, and removing the 1.3-curie cesium-137 logging source from the logging tool, the licensee's logging crew members failed to confirm that the logging tool was free of contamination by energizing the logging tool detector or by using a survey meter prior to departure from the jobsite.

D.   10 CFR 20.1801 requires, in part, 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, on May 21, 2002, the licensee did not secure from unauthorized removal or limit access to a 1.3-curie cesium-137 logging source which was in an unrestricted area. Also, the licensee did not control and maintain constant surveillance of this licensed material. Specifically, the source was left unattended on a drilling rig floor for approximately 56 hours.

Violations B, C and D represent a Severity Level III problem (Supplements IV and VI).
Civil Penalty - $6,000


E.   10 CFR 39.13(c) states, in part, that the Commission will approve an application for a specific license for the use of licensed material in well logging if the applicant submits to the Commission written operating and emergency procedures as described in 10 CFR 39.63 or an outline or summary of the procedures that includes the important radiation safety aspects of the procedures.

License Condition 19 of Byproduct Material License 42-00090-03 issued to STC requires, in part, that the licensee conduct its program in accordance with statements, representations, and procedures contained in the license application dated April 23, 1990, and letters dated December 4, 1990 through December 8, 2000.

The licensee's Operating and Emergency Procedures, contained in the Logging Supervisor/Assistant Radiation Manual (revision date August 1999), Part C.2, Incident/Emergency Reporting Procedures, Section 4.1, Emergency Procedures, specifies, in part: "the responsible Schlumberger person must take all practical precautions to minimize exposure to other personnel; restrict any area which might be contaminated-keep the public away; handle all emergencies that require immediate action, and make sure the area is secured."

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, on May 23, 2002, after locating a missing cesium-137 logging source on a drilling rig floor where the source had been misplaced on May 21, 2002, STC employees failed to take all practical precautions to minimize exposure to other personnel, restrict any area which might be contaminated, keep the public away, secure the area, or maintain constant surveillance of the source. Specifically, subsequent to finding the source, licensee employees departed the location and traveled about five miles away to retrieve a source storage container, leaving the source unsecured and unattended on the rig floor.

This is a Severity Level III problem (Supplement VI).
Civil Penalty - $6,000

Pursuant to the provisions of 10 CFR 2.201, STC (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 Penalties (Notice). This reply should be clearly marked as a "Reply to a Notice of Violation; EA-03-010" 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. Your response may reference or include previous docketed correspondence, if the correspondence adequately addresses the required response. 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.

Within the same time as provided for the response required above under 10 CFR 2.201, the Licensee may pay the civil penalties proposed above or the cumulative amount of the civil penalties if more than one civil penalty is proposed, in accordance with NUREG/BR-0254 and by submitting to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, 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 30 days of the date of this Notice of Violation and Proposed Imposition of Civil Penalties, an order imposing the civil penalties will be issued. Should the Licensee elect to file an answer in accordance with 10 CFR 2.205 protesting the civil penalties, 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(s) 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 penalties, the factors addressed in Section VI.C.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 penalties due which subsequently have been determined in accordance with the applicable provisions of 10 CFR 2.205, this matter may be referred to the Attorney General, and the penalties, 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 penalties, and Answer to a Notice of Violation) should be addressed to: Mr. Frank Congel, 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 IV, 611 Ryan Plaza Drive, Suite 400, Arlington, TX 76011.

Because your response will be made available electronically for public inspection in the NRC Public Document Room or from the NRC's document system (ADAMS), to the extent possible, it should not include any personal privacy, proprietary, or safeguards information so that it can be made available to the public without redaction. ADAMS is accessible from the NRC Web site at http://www.nrc.gov/reading-rm/adams.html. If personal privacy or proprietary information is necessary to provide an acceptable response, then please provide a bracketed copy of your response that identifies the information that should be protected and a redacted copy of your response that deletes such information. If you request withholding of such material, you must specifically identify the portions of your response that you seek to have withheld and provide in detail the bases for your claim of withholding (e.g., explain why the disclosure of information will create an unwarranted invasion of personal privacy or provide the information required by 10 CFR 2.790(b) to support a request for withholding confidential commercial or financial information). If safeguards information is necessary to provide an acceptable response, please provide the level of protection described in 10 CFR 73.21.

In accordance with 10 CFR 19.11, you are required to post this Notice within two working days.

Dated this 14th day of October 2003


1. For the purpose of considering civil penalties, STC is considered to fall into ".... other large material users" in Category "d" of Table 1A of the Enforcement Policy.

 

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