‘Serious’ Problems Linked to Nuclear Waste Dump Firm : State Had No Choice in Hiring Lowest-Ranked Bidder for Job Despite Panel’s Critical Review

A Kentucky firm has been chosen by the state of California to build and operate the state’s first low-level radioactive waste dump despite what a state review committee called the company’s record of “serious regulatory noncompliance” at its dumps in other states.

The state Department of Health Services had no choice but to give the job to U.S. Ecology because the Louisville company was the only bidder left after the state’s first three choices bowed out, all on the grounds that the potential financial and legal risks were too great.

The state at one point tried to start the bidding over with modified conditions, apparently in hopes of giving the job to another company. That attempt was blocked by a court action initiated by one of the original bidders.

Officials of U.S. Ecology have acknowledged problems at their other waste dumps in Illinois, Kentucky, Nevada and Washington state. As operator of two of the three active low-level radioactive waste dumps in the United States, company officials also point to the firm’s 30-year experience in the field.

U.S. Ecology officials said most of the company’s past problems--contamination around the dump sites--occurred before 1980, before recent advances in the field of dumping radioactive wastes. “You pay a price being a pioneer,” said William E. Prachar, president of American Ecology. U.S. Ecology is a wholly owned subsidiary of American Ecology, based in Agoura Hills.

An August, 1984, report by a health department committee, which evaluated firms bidding for the dump project at an as-yet-unselected site, said:

“The past history of U.S. Ecology’s operations casts doubts on their ability to perform future activities.”

The report also said the company “has shown repeatedly throughout its application and operations of this type that they will do only what is necessary to keep operating.”

Last Dec. 24, the health department announced the selection of U.S. Ecology and said the firm “meets requirements” in most categories. That is the lowest standard short of disqualification.

Health department officials said in interviews that they named U.S. Ecology as license designee because a 1983 state law requires such jobs to be offered to qualified bidders in the order they are ranked.

U.S. Ecology “won by default,” a health department attorney said.

The company quickly accepted the job, putting up a $1-million performance bond and the first $250,000 annual license fee.

The dump is expected to be in operation by 1989 at a site to be selected by the state. The desert areas of Riverside, San Bernadino, Imperial and Inyo counties are considered the most likely locations. California will lease the land to the developer.

Materials for such low-level radioactive dumps range from certain equipment from nuclear power plants to rags, papers, filters and protective clothing used in commercial and medical processes. In all, California industries produce about 140,000 cubic feet of low-level radioactive waste annually, according to the California Radioactive Materials Management Forum, an association of hazardous waste producers.

Spent fuel from nuclear power plants, which is classified as high-level radioactive waste, is being stored in pools of water at the plants, pending the selection of a site for a permanent repository.

Most of California’s low-level waste is now trucked in sealed 55-gallon barrels and other containers to a U.S. Ecology dump in Washington state, where it is placed in ditches up to 50 feet deep and covered with dirt.

A 1980 federal law put pressure on the states to build their own dumps or to form agreements, called “compacts,” with other states to arrange for joint disposal. In 1983, the California Legislature approved creation of a dump on state-owned land. The operator would pay a licensing fee to the state and make money through charges to firms sending their waste there.

Most of U.S. Ecology’s problems have been in Illinois, where the attorney general’s office filed several suits against the company stemming from its operation of a dump in Sheffield, 120 miles west of Chicago.

Illinois has charged that traces of tritium and carbon-14, both radioactive isotopes, have migrated into a lake more than 2,000 feet from the site.

One of the Illinois lawsuits seeks $97 million in damages based on the “potential harm” the site poses to the environment.

Richard Cosby, special assistant to the Illinois attorney general, said the money would help guarantee that the state could maintain the site for the next several hundred years, the half-life of much of the radioactive waste there.

Prachar has denied the charges and said U.S. Ecology expects to win the lawsuits.

Effect on California

If U.S. Ecology loses the lawsuits, California could be left with the responsibility of running the new dump, according to California Assemblyman Steve Peace (D-Chula Vista), head of the Legislature’s Select Committee on Low-Level Nuclear Waste.

U.S. Ecology also closed a dump in Maxey Flats, Ky., in 1977. According to David Berick of the Environmental Policy Institute in Washington, a 1974 study of soil samples from Maxey Flats showed traces of highly radioactive plutonium outside the dump area.

“The company didn’t do what they were supposed to do,” said David Clark, health program administrator for the Kentucky Radiation Control Board. He also blamed state officials for the contamination. “We didn’t know back in the early days what we know now,” he said.

U.S. Ecology’s two active dumps are in remote areas near Beatty, Nev., and Richland, Wash. The nation’s only other operating dump for low-level radioactive waste, in Barnwell, S.C., is managed by Chem-Nuclear Systems of Columbia, S.C., one of the three bidders that turned down the California project.

Problems at the Beatty site led to the only fine U.S. Ecology has had to pay. The company pleaded no contest in U.S. District Court in Nevada in 1977 and paid a $10,000 fine for failing to prevent employees from using a cement mixer and other tools, all of which were radioactive, outside the dump area.

Employees had also removed plywood for their own use in building patios, sheds and playhouses, according to a federal investigators. Beatty is between Death Valley and the Nevada Test Site, a nuclear weapons testing ground, and workers in the remote area were apparently desperate for supplies.

Model in Washington

The company says its dump in Richland, Wash., where more than 90% of California’s low-level radioactive waste is sent, will be a model for California’s.

Washington officials say there have been few problems with the radioactive dump there, but they added that U.S. Ecology has not complied with federal safety requirements for toxic materials in an adjoining chemical dump.

The California Radioactive Materials Management Forum has lobbied in Sacramento for several years for creation of a California dump. According to Alan Pasternak, technical director for the group, its members are anxious to head off higher waste disposal bills that will result from government-mandated surcharges.

Congress ordered the three states with dumps for low-level radioactive waste to add, effective this year, a $10 per-cubic-foot charge for imported waste unless it comes from states with which they have compacts. The fee could increase to $40 by 1990.

A 1980 federal law called for the compacts as a way to get states to take responsibility for their own radioactive wastes. The law would have allowed states with dumps to ban imports of low-level radioactive waste effective Jan. 1. On Dec. 19, however, Congress extended the date to 1993.

The 1983 California statute that authorized the dump, sponsored by Sen. Alfred E. Alquist (D-San Jose), set up the procedures for selecting the company that would build and operate the facility.

Regulatory Function

It prohibits the state from entering into a contractual agreement with the company, setting up a licensing arrangement instead. That procedure was designed to give the state a regulatory function, according to Vince Montane, a senior aide to Alquist.

It was the lack of a written contract that scared off the three top bidders. “We said, ‘Let’s sit down and sign something,’ ” said Ralph DiSibio, special programs manager for Westinghouse Electric Co. in Pittsburgh, the state’s first choice in July, 1984.

According to the evaluation of the bidders, who submitted proposals in July, 1984, Westinghouse was selected because of its method for “encapsulating” the waste barrels in concrete containers that would deter leakage and make recovery easier if necessary.

Westinghouse was the only bidder to propose such a method, one it is using to help Kentucky clean up the Maxey Flats site once run by U.S. Ecology.

When Westinghouse backed out of the deal, the health department announced that it wished to reopen the bidding because it had neglected to rank the remaining bidders as specified in the state law.

In response, Chem-Nuclear, which was praised in the 1984 state report for a “successful” record running the dump in Barnwell, S.C., sued the health department, demanding that the state rank the three remaining bidders and then pick the best proposal.

Another Bidder Chosen

Chem-Nuclear won the suit last July. In November, the health department gave top ranking to another bidder, a joint venture of Morrison-Knudsen of Boise, Ida., the giant engineering concern, and Pacific Nuclear Systems from Washington state.

U.S. Ecology was ranked last among the three remaining bidders.

On Dec. 2, Morrison-Knudsen withdrew its application.

The job was offered to Chem-Nuclear two days later, and the company turned it down. “You could put up as much as $23 million,” company president Michael Jump said. “If someone decides they don’t want (the site), then what? You don’t get a dime back.”

U.S. Ecology then was offered the job.

Responding to the state’s charge that U.S. Ecology follows environmental laws to the minimum extent possible, Prachar said recently, “I think there is some basis for the historical criticism that the company met its operational criteria but didn’t extend itself much beyond that.” He said the company is working to change that.