Supreme Court Urged to Review Ninth Circuit Decision Requiring Terrorism Threat to be Included in NEPA Analysis

A California utility has petitioned the Supreme Court to review a Ninth Circuit decision requiring the Nuclear Regulatory Commission (the Commission) to consider potential terrorist attacks as part of its environmental review for nuclear facility licenses. San Luis Obispo Mothers for Peace v. Nuclear Regulatory Commission, 449 F.3d 1016 (9th Cir. 2006), petition for cert. filed, 2006 WL 2826275 (U.S. Sept. 29, 2006). If the Supreme Court declines review, or affirms the Ninth Circuit, entities operating nuclear facilities will be required to take into account the environmental consequences of potential terrorist attacks during facility licensing under the Atomic Energy Act (AEA). Additionally, terrorism analyses could be required for a broad range of federal projects, including dam relicensings, that may be identified as high value targets of terrorist attacks.

Background

The Diablo Canyon nuclear power plant is located in San Luis Obispo County, California. The facility’s twin 1,100 megawatt reactors provide electricity for over 1.6 million homes in northern and central California.[1] In December 2001, Pacific Gas & Electric (PG&E) submitted an application to the Commission to construct and operate an Interim Spent Fuel Storage Installation (Storage Installation) at Diablo Canyon.[2] The facility’s current spent fuel storage capacity will be reached by the end of 2006. PG&E’s proposal provides for additional spent fuel storage capacity sufficient to operate the facility through 2025.[3] Without additional spent fuel storage, PG&E may need to reduce or shutdown power generation at the Diablo Canyon facility.[4]

In April 2002, the Commission published notice that it was considering PG&E’s Storage Installation proposal and was providing an opportunity for a public hearing on the application.[5] The San Luis Obispo Mothers for Peace, the Sierra Club, and nine other organizations (collectively, the Petitioners) filed a hearing request with the Commission, contending, among other things, that the environmental report submitted with PG&E’s application failed to consider the impacts of a terrorist act on the proposed Storage Installation. The Commission Licensing Board rejected the Petitioners’ contentions related to terrorism on the grounds that:

• the possibility of a terrorist act was too far removed from the natural or expected consequences of agency action to require study under NEPA;
• the risk of a terrorist attack cannot be predicted, so analysis would likely be meaningless;
• NEPA does not require a worst-case analysis; and
• NEPA’s public process is not an appropriate forum for sensitive security issues, such as nuclear reactor security.[6]

The Commission subsequently denied Petitioners’ request for review of the Licensing Board’s decision that “rejected challenges to [the PG&E] Installation application.”[7]

In October 2003, the Commission released an Environmental Assessment under NEPA, concluding that “the construction, operation, and decommission of the Diablo Canyon Installation will not result in significant impacts to the environment.” Therefore, the Commission determined that “an [EIS] is not warranted for the proposed action, and … a Finding of No Significant Impacts is appropriate.”[8]

The Ninth Circuit Holds that the Spent Fuel Storage License Required a Terrorism Analysis

Petitioners appealed to the Ninth Circuit, contending that the Commission’s licensing decision violated NEPA, the AEA, and the Administrative Procedure Act (APA). Washington, California, Utah, and Massachusetts filed an amicus brief in support of the petitioners.[9] PG&E intervened, and the Nuclear Energy Institute filed an amicus brief, in support of the Commission.[10] The Ninth Circuit rejected all four of the Commission’s rationales for categorically refusing to consider the environmental effects of a terrorist attack on the Storage Installation.[11]

1) The Threat of Terrorism is Not Categorically Too Remote or Speculative

Relying on Metropolitan Edison Co. v. People Against Nuclear Energy, 460 U.S. 766 (1983), the Commission argued that it properly disregarded the environmental impacts of a terrorist attack because such an attack is too far removed from the natural or expected consequences of an agency action. In Metropolitan Edison, the Supreme Court held that NEPA did require the Commission to analyze potential psychological injury to nearby residents when considering whether to reopen the Three Mile Island facility. The Ninth Circuit, however, held that Metropolitan Edison was inapposite because that case addressed the effects of the risk of an accident, rather than the environmental consequences of an actual accident.[12]

Instead, the Ninth Circuit found its analysis in No GWEN Alliance v. Aldridge, 855 F.2d 1380 (9th Cir. 1988) to be controlling. In that case, the Ninth Circuit held that the Air Force was not required to analyze the environmental consequences of a nuclear war when constructing radio towers (ground wave emergency network, or GWEN) that would transmit strategic messages during a nuclear conflict because the causal link between constructing GWEN facilities and a nuclear war was highly attenuated.[13]

Relying on No GWEN, the Ninth Circuit held that the appropriate inquiry with regard to the Diablo license was whether a terrorist attack is so “‘remote and highly speculative’ that NEPA’s mandate does not include consideration of their potential environmental effects.”[14] The Commission failed to provide any justification for its determination that a terrorist attack at Diablo Canyon was remote or speculative. Further, given Petitioners’ contentions that the proposal would increase the likelihood of a terrorist attack at the facility, the Court found that “it was unreasonable for the [the Commission] to categorically dismiss the possibility of terrorist attack on the Storage Installation and on the entire Diablo Canyon facility.”[15]

Additionally, the Court noted that the Commission’s conclusion that a terrorist attack was remote or speculative was inconsistent with the government’s efforts to combat terrorist attacks against nuclear facilities. As the Court explained, “[w]e find it difficult to reconcile the Commission’s conclusion that, as a matter of law, the possibility of a terrorist attack on a nuclear facility is ‘remote and speculative,’ with its stated efforts to undertake a ‘top to bottom’ security review against this same threat.” Thus, the Court held that the Commission was required to make determinations consistent with its stated policy and procedures.[16]

2) Precise Quantification of the Risk of an Attack is not Necessary

The Commission also justified its decision not to analyze potential terror attacks because the risk of such attacks could not be determined. The Court held that NEPA does not provide agencies to eliminate possible environmental consequences from review by labeling the risk as “unquantifiable.”[17] The Court concluded that the Commission’s argument was “tenuous” because it had already claimed to have assessed the probability of future terror attacks as part of its “top to bottom” security review.[18] “Thus, we conclude that precise quantification of a risk is not necessary to trigger NEPA’s requirements, and even if it were, the NRC has not established that the risk of a terrorist attack is unquantifiable.”

3) Analysis of Consequences of a Terrorist Attack is not a ‘Worst Case’ Analysis

The Commission also argued that NEPA did not require consideration of the environmental impacts of potential terrorist attacks because NEPA does not require a “worst case” analysis. The Ninth Circuit agreed that NEPA does not require a “worst case” analysis, but noted that current NEPA regulations do require agencies to consider potentially catastrophic consequences, even if the probability of occurrence is low.[19] The Court explained that a low probability of occurrence does not necessarily make an outcome a “worst case” scenario. Thus, the Court held that the Commission should consider the range of consequences of a terrorist attack, not just the most catastrophic impacts of such an attack.[20]

4) National Security Concerns Can be Alleviated

Finally, the Commission argued that public NEPA analysis was inappropriate because an analysis of the impacts of a potential terrorist attack would include national security issues. The Ninth Circuit recognized the sensitive nature of a terror-related analysis, but held that “[t]here is no support for the use of security concerns as an excuse from NEPA’s requirements.”[21] Security considerations may permit or require the Commission to modify certain NEPA procedures. However, the Commission cannot altogether abandon NEPA analysis. Although the public may not be able to access the entire NEPA security analysis, that does not prevent the public from contributing information to the decision-making process.

PG&E Petitions the Supreme Court for Review

PG&E recently filed a petition seeking review of the Ninth Circuit’s decision by the Supreme Court. PG&E contends that the Ninth Circuit’s decision conflicts with prior Supreme Court precedent and decisions from two other circuits. San Luis Obispo Mothers for Peace v. Nuclear Regulatory Commission, 449 F.3d 1016 (9th Cir. 2006), petition for cert. filed, 2006 WL 2826275 (U.S. Sept. 29, 2006). According to PG&E, the Ninth Circuit’s requirements unduly burden participants in the Commission’s regulatory program, and would impact a broad array of nuclear facility projects, including “waste storage licensing and amendment proceedings, power plant license renewal applications, new power plant license applications, and the Yucca Mountain high-level waste repository project.”[22] The Commission has no plans to join PG&E’s petition, but may file an amicus brief if the Supreme Court decides to review the Ninth Circuit’s decision.[23] Utah, New Jersey, and other states with pending nuclear facility licenses are watching this case closely.[24]

Contact Dustin T. Till for more information.