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GE-Hitachi Fined for "Significant" Security Breaches in Nuclear Fuel Effort

By Elaine M. Grossman

Global Security Newswire

(Oct. 20) -The huge K-25 facility at Oak Ridge, Tenn., used gaseous diffusion to enrich uranium, prior to shutting down. A U.S. firm attempting to commercially develop laser-based enrichment technology was found in May to have violated "security-related" federal regulations (U.S. Energy Department/Christian Science Monitor). (Oct. 20) -The huge K-25 facility at Oak Ridge, Tenn., used gaseous diffusion to enrich uranium, prior to shutting down. A U.S. firm attempting to commercially develop laser-based enrichment technology was found in May to have violated "security-related" federal regulations (U.S. Energy Department/Christian Science Monitor).

WASHINGTON -- GE-Hitachi Nuclear Energy has paid more than $45,000 in penalties for "significant" violations of federal regulations in its effort to develop a new means of producing atomic fuel, Global Security Newswire has learned (see GSN, Aug. 22).

Newly available U.S. government documents show that the Nuclear Regulatory Commission determined in May that the company's Global Nuclear Fuels-Americas branch had committed five infractions in its laser enrichment program. GE-Hitachi hopes to win licensing approval for the nation's first such laser facility by next June.

The proposed plant near Wilmington, N.C., would employ an as-yet experimental process to commercially enrich uranium for fueling nuclear power stations worldwide. If successful in an industrial setting, laser enrichment could be carried out in relatively small facilities and significantly reduce the cost of reactor fuel.

At least one of the violations in the company's so-called Global Laser Enrichment effort involved "willful actions" and "deliberate misconduct," according to an NRC letter obtained under the Freedom of Information Act.

The Nuclear Regulatory Commission has not publicly released the May 19 notification letter it sent to the GE-Hitachi entity. However, it made the document available to GSN in heavily redacted form, citing proprietary information and security concerns for the selected omissions.

Many key words and phrases are missing from the document, so the specific nature of the violations remains largely unclear.

What is apparent from the text, though, is that the violations were "security-related" and were deemed troubling because of the potential for harm. David McIntyre, an NRC spokesman, on Tuesday declined to discuss the breaches on the basis that the agency does not publicly address security matters.

In May, however, the nuclear commission found at least one infringement of regulations serious enough to constitute a "Severity Level II" violation -- one that is "of very significant regulatory concern," according to agency guidelines.

"Although no actual consequences occurred ... the potential consequences were very significant due to ... the willful actions (deliberate misconduct)" of one or more individuals, the much-censored NRC letter states.

It continues: "Willful violations are a particular concern to the NRC because our regulatory framework is based, in part, on the integrity and commitment of licensees, contractors, and employees, to adhere to regulatory requirements."

Other unspecified violations cited in the notice represented a "significant" or "Severity Level III" contravention, for which the NRC assessed a $17,500 civil fine.

The one "very significant" violation -- marked by "deliberate aspects" not spelled out in the redacted letter -- warranted a $28,000 penalty, the commission said. GE-Hitachi paid a total of $45,500 in NRC civil fines earlier this month, according to the NRC document and information provided by company and agency spokesmen.

One of the justifications cited by the nuclear agency for blocking out more than three dozen passages in the four-page notice is already raising eyebrows among some atomic experts who have read the document. The commission is pointing to a Freedom of Information Act exemption from public release aimed at protecting law enforcement information that "could reasonably be expected to endanger the life or physical safety of any individual."

With the exact nature of the violations remaining secret, the oblique reference to persons vulnerable to potential security risk adds a mysterious twist to the case.

The agency findings stemmed from a January on-site inspection and an in-office inspection the following month, the violation notice states. After an April conference with NRC officials to discuss the violations, the company took several "corrective actions," including "terminating individuals from the project" and reinforcing a "commitment to integrity," according to the letter.

This was not the first time the Nuclear Regulatory Commission cited GE-Hitachi for serious infractions in its Global Nuclear Fuels effort. The agency lashed the entity in June 2010 for a significant problem with its "integrated safety analysis methodology," the May letter states.

Word of the revelations has reached Capitol Hill, where some key Democrats and Republicans have voiced nuclear proliferation concerns associated with the laser-enrichment technology (see GSN, July 30, 2010).

Debate lately has revolved around an American Physical Society petition filed last year that calls on the independent Nuclear Regulatory Commission to require license applicants for domestic civil nuclear facilities to evaluate any potential proliferation risks.

The physicists' group and its supporters have argued that U.S. licensing of the laser enrichment technology might embolden Iran or other suspected nuclear-weapon aspirants to build covert laser facilities that could be more easily hidden from public view than today's mammoth enrichment plants (see GSN, Jan. 12).

"Members [of Congress] will take a dim view if it is found that NRC and GE have been attempting to sweep a history of multiple serious violations of government regulations under the rug," one Capitol Hill aide said this week.

The congressional staffer and a number of other sources for this article spoke on condition of not being named, citing the sensitivity of the issue.

Nuclear energy and foreign policy experts said they are particularly troubled by news that one or more individuals associated with the Global Laser Enrichment effort knowingly flouted federal security-related regulations.

"There was a previous case in which an employee engaged in willful misconduct at an enrichment facility," said Francis Slakey, a physics and public policy lecturer at Georgetown University. "His name was A.Q. Khan. We know how that turned out."

Slakey -- a public affairs deputy at the American Physical Society -- was referring to the Pakistani scientist who in 2004 confessed to leaking sensitive nuclear technologies to Iran, North Korea and Libya. Khan was released in 2009 after five years of house arrest (see GSN, May 17).

"Laser enrichment technology can be dangerous from a proliferation perspective," the congressional staffer said. "For individuals of the company entrusted with this technology to be guilty of willful violations, according to the NRC, raises serious questions about the company's competence to protect this technology."

A GE-Hitachi spokesman based in Wilmington insisted otherwise.

"The U.S. government has been actively involved from the outset to ensure that strict measures are in place to safeguard this technology," Mike Tetuan, a Global Laser Enrichment representative, said in a written response to questions. "GLE has worked very closely with the responsible government agencies to ensure security."

McIntyre, the NRC spokesman, said the agency's handling of the incident shows that the oversight system is working.

"Without addressing the substance of the violation, I can say that this enforcement action demonstrates that the NRC inspects our licensees and when we find violations of our regulations, we act swiftly to correct them," McIntyre told GSN.

Tetuan credited his company for "uncovering and promptly reporting the events" in question to the Nuclear Regulatory Commission, adding that GE-Hitachi "has taken all necessary corrective action to ensure future compliance."

He also noted the firm last year commissioned an independent analysis that "confirmed that development of the [laser] technology will not result in a risk of proliferation of enrichment technology."

GE-Hitachi has not released the evaluation by a three-person expert panel, citing a need to protect commercial trade secrets.

Donald Kerr, a former Los Alamos National Laboratory director who led preparation of the seven-page independent assessment, has been slightly less definitive than the company spokesman about the team's findings. He recently told the New York Times that, in the panel's view, laser enrichment could not be "easily hidden."

"My understanding is that the analysis team came to the conclusion that laser enrichment offers a detectable signature for the large-scale facility of the kind that GE-Hitachi aims to build," Slakey said. "However, it is unclear whether the analysis also considered the possibility that a foreign entity's illicit laser enrichment facility might be scaled-down and successfully hidden."

Coming amid lingering worries about the technology's global proliferation potential, news that the first U.S. commercial program of its kind has been cited for security violations -- even as its federal license to begin operations remains pending -- could make for heightened unease in Congress.

"If these alleged violations touch upon laser enrichment, a very keen interest is guaranteed among those on the Hill and in the nonproliferation community who are concerned about the proliferation risks of that technology," a second congressional source said this week.

Slakey, who spearheaded his organization's petition for mandatory nonproliferation assessments before NRC nuclear-facility licenses are issued, said the Global Laser Enrichment violations raise questions about "integrity" in the company. They also underline why an NRC licensee's "voluntary proliferation assessments aren't sufficient," he said.

The existing NRC licensing system does not require a dedicated review of proliferation concerns. To date, agency officials have maintained that the "net effect" of the overall process discourages the spread of sensitive technologies.

The agency is reviewing the APS petition, which was supported by more than 2,000 nuclear experts, lawmakers and ordinary citizens but opposed by the atomic energy industry's lobbying arm, the Nuclear Energy Institute. The Nuclear Regulatory Commission is expected to issue a decision on it early next year.

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