EA-98-495 - Southern Processing Enterprises

October 30, 1998

EA 98-495

Southern Processing Enterprises
ATTN: Mr. Joe Childress
Box 719
Beaver, West Virginia 25813

(NRC INSPECTION REPORT NO. 999-90002/98-02)

Dear Mr. Childress:

This refers to the special, announced onsite inspection of Southern Processing Enterprises (SPE), conducted on July 2 and October 9, 1998, at a temporary job site near Knoxville, Tennessee and at your facility in Beckley, West Virginia, respectively. The enclosed report presents the results of this inspection.

Based on the information developed during the inspection, the Nuclear Regulatory Commission (NRC) has determined that violations of NRC requirements occurred. These violations are cited in the enclosed Notice of Violation (Notice), and the circumstances surrounding them are described in detail in the subject inspection report. Violation A involves the unauthorized removal, in late 1997, of two generally licensed fixed gauges containing 250 millicuries (mCi) of cesium-137 (Cs-137). The gauges were removed by an individual who was neither trained nor licensed to perform such activities. The individual removed the gauges, from their fixed position, by cutting around the pipe where the gauges were attached. The gauges were placed in storage pending their transfer.

Violation B involves the failure to properly transfer these gauges. Specifically, the generally licensed gauges were inadvertently transferred in May 1998, to facilities in Kentucky and Tennessee. These facilities did not hold specific licenses to possess byproduct material, and SPE did not meet the requirement of 10 CFR 31.5 to transfer the byproduct material to a general licensee. SPE identified the unauthorized transfer and notified both the vendor of these generally licensed gauges and the Commonwealth of Kentucky, who in turn notified the State of Tennessee and the NRC Region II office.

The removal and unauthorized transfer of the generally licensed gauges resulted in minimal safety consequences to the public. Although subsequent investigation determined that one of the gauges was transferred with the shutter in the open position, the radioactive source was effectively shielded by surrounding piping, which resulted in minimal dose rates and little potential exposure to individuals handling the gauge. During the inspection, you acknowledged your awareness of the requirements for transferring the devices; however, you failed to ensure that the transfers of the gauges were performed correctly. Both Violations A and B could have been avoided had you employed the services of a trained and licensed individual to perform the gauge removal. Because these activities were conducted by a technically unqualified individual and, under different circumstances could have placed you and others at risk for radiological exposure, these violations are classified in the aggregate in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600 as a Severity Level III problem.

Based on our review of the inspection findings and your corrective actions described during our inspection on July 2 and October 9, 1998, the NRC has concluded that we have sufficient information to make an enforcement decision without the need for a predecisional enforcement conference.

Because your facility has not been the subject of escalated enforcement actions within the last two years, the NRC considered whether credit was warranted for Corrective Action in accordance with the civil penalty assessment process described in Section VI.B.2 of the Enforcement Policy. Your corrective actions included: (1) immediate notification of the vendor and the Commonwealth of Kentucky; (2) prompt follow-up on the status of the gauges at the recipient locations; and (3) permanent discontinuation of all generally licensed gauge activities. As noted below, the decision to assess credit for corrective action will be subject to your written confirmation that the actions previously described to the staff have been or are being taken.

Therefore, to encourage prompt identification and comprehensive correction of violations, and in recognition of the absence of previous escalated enforcement action, I have been authorized not to propose a civil penalty at this time. However, significant violations in the future could result in a civil penalty. In addition, issuance of this Severity Level III problem 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. For your consideration and convenience, NRC Information Notice 96-28, "SUGGESTED GUIDANCE RELATING TO DEVELOPMENT AND IMPLEMENTATION OF CORRECTIVE ACTION," is enclosed. The NRC will use your response, in part, to determine whether further enforcement action is necessary to ensure compliance with regulatory requirements.

As provided for in the enclosed Notice, you are required to include a description of the reasons for the violation, if admitted, and your corrective action. This description should address the actions taken following identification and the long term comprehensive actions taken or that will be taken to prevent recurrence. Your response should be submitted under oath or affirmation and may reference or include previously docketed correspondence if the correspondence adequately addresses the required response. If the NRC is satisfied with your response, you will be notified that this enforcement action is completed. However, if your documented corrective action is not sufficiently prompt and comprehensive such that a civil penalty may be warranted, we may telephone you or schedule a predecisional enforcement conference with you. In addition, if you dispute any of the enclosed violations or their severity levels, you should describe the basis for the dispute in your response. Further, you may request that an enforcement conference be held, in which case, please advise Mr. Mark Lesser at (404) 562-4731, within seven days of the date of this letter. In the absence of such a request but where matters are disputed, we may also elect to hold an enforcement conference. In the event that a conference is to be held, it will be scheduled at least two weeks after our receipt of your written response to the Notice. Following review of any disputed information and the record of the conference, if held, a decision will be made to modify, withdraw, or affirm the Notice and, if warranted, issue a civil penalty.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter, its enclosures, and your response will be placed in the NRC Public Document Room (PDR).

Original signed by
Jon R. Johnson
Luis A. Reyes
Regional Administrator

Docket No. 999-90002
License No. General Licensee


1. Notice of Violation
2. Inspection Report No. 999-90002/98-02
3. NRC Information Notice 96-28

cc w/o encl 3:
State of West Virginia
Commonwealth of Kentucky
State of Tennessee


Southern Processing Enterprises
Beckley, West Virginia
  Docket No. 999-90002
License No. General License
EA 98-495

During an NRC special inspection conducted on July 2 and October 9, 1998, violations of NRC requirements were identified. In accordance with the "General Statement of Policy and Procedures for NRC Enforcement Actions," NUREG-1600, the violations are listed below:

A.    10 CFR 31.5(c)(3)(ii) requires, in part, that any person who possesses, uses or transfers byproduct material in a device pursuant to the general license in 10 CFR 31.5(a) assure that installation, servicing and removal from installation involving the radioactive material, its shielding or container are performed by a person holding a specific license pursuant to 10 CFR 30 and 32 or from an Agreement State to perform such activities.


Contrary to the above, in late 1997, Southern Processing Enterprises (SPE), an entity who possessed byproduct material in a device pursuant to 10 CFR 31.5(a), failed to assure that removal from installation of radioactive material and its shielding contained in generally licensed devices (fixed nuclear gauges) was performed by a person specifically licensed to perform such activity, under either 10 CFR 30 and 32 or an Agreement State. Specifically, an SPE employee personally removed, from installation, two fixed gauges, each containing 250 mCi of Cs-137 and neither the employee nor SPE were specifically licensed to perform such activity. (030101)

B.    10 CFR 31.5(c)(8) requires, in part, that any person who transfers byproduct material in a device pursuant to the general license in 10 CFR 31.5(a), transfer the device only to persons holding a specific license pursuant to 10 CFR 30 and 32 or from an Agreement State to receive the device.


Contrary to the above, in or about May 1998, SPE transferred two generally licensed devices, each containing 250 mCi of Cs-137, one to a facility in Kentucky and another to a facility in Tennessee, and neither facility held a specific license, pursuant to 10 CFR 30 and 32 or from an Agreement State, authorizing their receipt. (030102)

This is a Severity Level III problem (Supplement VI).

Pursuant to the provisions of 10 CFR 2.201, Southern Processing Enterprises is hereby required to submit a written statement or explanation to the U.S. Nuclear Regulatory Commission, ATTN: Document Control Desk, Washington, D.C. 20555 with a copy to the Regional Administrator, Region II, within 30 days of the date of the letter transmitting this Notice of Violation (Notice). This reply should be clearly marked as a "Reply to a Notice of Violation" and should include for each violation: (1) the reason for the violation, or, if contested, the basis for disputing the violation, (2) the corrective steps that have been taken and the results achieved, (3) the corrective steps that will be taken to avoid further violations, and (4) the date when full compliance will be achieved. Your response may reference or include previously 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 to why the license should not be modified, suspended, or revoked, or why such other action as may be proper should not be taken. Where good cause is shown, consideration will be given to extending the response time.

If you contest this enforcement action, you should also provide a copy of your response to the Director, Office of Enforcement, U. S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and the Director, Enforcement and Investigations Coordination Staff, Region II.

Under the authority of Section 182 of the Act, 42 U.S.C. 2232, this response shall be submitted under oath or affirmation.

Because your response will be placed in the NRC Public Document Room (PDR), to the extent possible, it should not include any personal privacy, proprietary, or safeguards information so that it can be placed in the PDR without redaction. 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.

Dated at Atlanta, Georgia
this 30th day of October, 1998

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