CHAPTER 10
IMPLEMENTATION OPTIONS FOR ENCOURAGING REPLACEMENT OF RADIONUCLIDE RADIATION SOURCES WITH ALTERNATIVES

Replacement technologies for Category 1 and 2 radionuclide sources are available or possible for nearly all irradiation applications. The existence of commercial x-ray and electron-beam sources for some applications indicates that in some circumstances the marketplace has assessed the currently available alternative technologies to be financially feasible. The full social cost of radionuclide use includes some costs not borne by the users, including the costs of safe disposal for some radiation sources (a component of the other social costs (OSC), introduced in Chapter 1) and the costs associated with the risks that the radionuclide radiation sources might be used in acts of terrorism (TRC, introduced in Chapter 1). The extent to which the user should be responsible for costs of disposal and the costs that might be incurred in association with radiological terrorism deserves some debate.

The availability of alternative technologies and a desire to reduce the total social costs of radionuclide use motivate the committee’s recommendations that the U.S. government take steps to promote the replacement of high-risk radionuclide sources with lower risk alternatives. As noted in Chapter 3, the committee’s charge directs the committee to make findings and recommendations on options for implementing the identified replacements,” and the U.S. Nuclear Regulatory Commission (U.S. NRC) asked that these include both technical and policy options. The committee considered a range of policy options that could be employed to encourage or implement replacements. The U.S. NRC informed the committee that the agency examines proposed uses of radioactive material to evaluate whether they protect public health and safety and promote common defense and security; not whether the uses conform to policy goals beyond those considerations.1 The committee did not consider the specific legal or regulatory authority required for implementation of policy options, whether the policy options fit within the common defense and security clause of the U.S. NRC mission, or if new legislation would be needed to enable the U.S. NRC or another agency to carry them out, and the committee makes no claims about these questions.

An array of different policies could be adopted to promote radionuclide replacement. The sections that follow first set out a generic menu of policy options to assist policy makers in considering the range of policies available, and then discuss particular applications to address the risks posed by devices using radioactive cesium chloride. The same policy options could be applied to replacement of other radionuclides, americium-241 sources being the most similar to radioactive cesium chloride both with respect to hazard and with respect to the lack of disposal options. The committee does not here emphasize these other radiation sources because (1) the committee considers radioactive cesium chloride to be the top priority; (2) there are already incentives in the fields of radiotherapy, radiography, and well logging that make professionals in those fields seek nonradionuclide alternatives. In radiotherapy, teletherapy units have shifted from cobalt-60 to linear accelerator (linac) sources, and companies with linac products are trying to compete with the Gamma Knife®, which is the only Category 1 or 2 radiotherapy device that

1

The U.S. NRC’s mission, as described in its strategic plan (U.S. NRC, 2004) is to “License and regulate the Nation's civilian use of byproduct, source, and special nuclear materials to ensure adequate protection of public health and safety, promote the common defense and security, and protect the environment.”



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CHAPTER 10 IMPLEMENTATION OPTIONS FOR ENCOURAGING REPLACEMENT OF RADIONUCLIDE RADIATION SOURCES WITH ALTERNATIVES Replacement technologies for Category 1 and 2 radionuclide sources are available or possible for nearly all irradiation applications. The existence of commercial x-ray and electron- beam sources for some applications indicates that in some circumstances the marketplace has assessed the currently available alternative technologies to be financially feasible. The full social cost of radionuclide use includes some costs not borne by the users, including the costs of safe disposal for some radiation sources (a component of the other social costs (OSC), introduced in Chapter 1) and the costs associated with the risks that the radionuclide radiation sources might be used in acts of terrorism (TRC, introduced in Chapter 1). The extent to which the user should be responsible for costs of disposal and the costs that might be incurred in association with radiological terrorism deserves some debate. The availability of alternative technologies and a desire to reduce the total social costs of radionuclide use motivate the committee’s recommendations that the U.S. government take steps to promote the replacement of high-risk radionuclide sources with lower risk alternatives. As noted in Chapter 3, the committee’s charge directs the committee to make findings and recommendations on options for implementing the identified replacements,” and the U.S. Nuclear Regulatory Commission (U.S. NRC) asked that these include both technical and policy options. The committee considered a range of policy options that could be employed to encourage or implement replacements. The U.S. NRC informed the committee that the agency examines proposed uses of radioactive material to evaluate whether they protect public health and safety and promote common defense and security; not whether the uses conform to policy goals beyond those considerations.1 The committee did not consider the specific legal or regulatory authority required for implementation of policy options, whether the policy options fit within the common defense and security clause of the U.S. NRC mission, or if new legislation would be needed to enable the U.S. NRC or another agency to carry them out, and the committee makes no claims about these questions. An array of different policies could be adopted to promote radionuclide replacement. The sections that follow first set out a generic menu of policy options to assist policy makers in considering the range of policies available, and then discuss particular applications to address the risks posed by devices using radioactive cesium chloride. The same policy options could be applied to replacement of other radionuclides, americium-241 sources being the most similar to radioactive cesium chloride both with respect to hazard and with respect to the lack of disposal options. The committee does not here emphasize these other radiation sources because (1) the committee considers radioactive cesium chloride to be the top priority; (2) there are already incentives in the fields of radiotherapy, radiography, and well logging that make professionals in those fields seek nonradionuclide alternatives. In radiotherapy, teletherapy units have shifted from cobalt-60 to linear accelerator (linac) sources, and companies with linac products are trying to compete with the Gamma Knife®, which is the only Category 1 or 2 radiotherapy device that 1 The U.S. NRC’s mission, as described in its strategic plan (U.S. NRC, 2004) is to “License and regulate the Nation's civilian use of byproduct, source, and special nuclear materials to ensure adequate protection of public health and safety, promote the common defense and security, and protect the environment.” 159

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160 RADIATION SOURCE USE AND REPLACEMENT is now increasing in use in the United States. In radiography, the inconvenience of imposing radiation protection procedures at job sites and the inherent limitations of radiography have driven practitioners to shift to other techniques for nondestructive inspection, such as phased- array ultrasound. In well logging, there are barriers to switching away from americium-beryllium sources, but the difficulties, costs, and exposures associated with these sources give the industry cause to look for better practices. It is clear to the committee that the large contract irradiator companies do not yet see strong incentives to shift from gamma irradiation to x-ray irradiation, and so this may be another area where additional encouragement is needed. Again, however, the committee’s discussion focuses on radioactive cesium chloride. Finally, mention of a policy option in this chapter does not constitute an endorsement of that option. Indeed, some are mentioned to highlight their undesirable qualities and consequences. GENERIC POLICY APPROACHES Table 10-1 summarizes four classes of generic policies: prohibitions, push incentives, pull incentives, and supply incentives. For each of these classes, several possible generic policies and their major advantages and disadvantages are shown. Prohibitions are the most direct way to eliminate radionuclide use. They force either replacement or abandonment of use. Rescinding already-issued licenses would be extremely costly in some cases, in light of investments made by users in anticipation of the continuation of the licenses, and would require compelling arguments to support the action. Even when narrowly applied, prohibitions are very blunt in removing both uses for which replacements are readily available as well as those for which particular circumstances make replacement infeasible or extremely costly. Because of these disadvantages, rescinding already-issued licenses is likely to be neither feasible nor desirable. Some observers may argue that if the U.S. NRC determines that a set of radiation sources pose substantial risks, then it should impose a swift, categorical prohibition. Few situations, however, offer clearly unacceptable risks.2 Prohibitions on new licenses (i.e., no sales or import of sources) offer more promise. Although they leave the existing stocks of radionuclide sources in place, they effectively cap the total number so that over time there will be a decline as the sources decay and units are retired. The determination of which uses to no longer license requires confidence in the existence of commercially viable replacement technologies. Even if replacements are commercially viable in general, there may be specific applications for which replacement is commercially infeasible. Therefore, prohibitions on new licenses would have to be carefully targeted to avoid losing benefits of radionuclide use that cannot actually be replaced with current technology. Push incentives seek to make replacement technologies relatively more attractive to potential adopters by internalizing more of the external costs (TRC + OSC) of use of radionuclides, as discussed in Chapters 1 and 3. One way to accomplish this is to impose more stringent requirements on users. The most desirable requirements would reduce the risks associated with use. For example, additional requirements to ensure physical security or the quick discovery of diversions would both reduce the risks and increase the costs of radionuclide use. The increased costs would make replacement technologies relatively more attractive. Developing effective regulations, 2 The selective banning of the type of sources involved in the Decatur, Georgia incident is one example. The banning of a certain design of connectors for attaching radiography source “pigtails” to drive cables is another. The latter action was taken following an accident in California in 1979 in which a plant worker received a serious radiation burn when he picked up a radiography source that had detached from the drive cable unnoticed by the radiographer (U.S. NRC, 1982).

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IMPLEMENTATION OPTIONS FOR ENCOURAGING REPLACEMENT 161 especially in light of the diversity of uses, would entail agency costs in designing restrictions that actually reduce risks and costs in enforcing those restrictions. TABLE 10-1 Generic Policies for Promoting Radionuclide Replacement Generic Policy Major Advantages Major Disadvantages Prohibitions Complete ban — Rescind existing Rapid and complete replacement Can be very costly to users licenses for particular radionuclides (or the party that pays); or classes of use inflexible New source ban — Stop issuing new Caps number of uses Slow; inflexible licenses for particular radionuclides or classes of use Push Incentives More stringent regulations — Require Directly reduce risks; make Regulatory costs; regulations investments by users in risk reduction replacements relatively more may not sufficiently promote attractive replacement Use fees — Raise monetary cost of Makes replacements relatively Difficult to choose appropriate use through fees on particular more attractive; generates rate; administrative costs radionuclides revenue for other uses Decommissioning funds — Impose Internalizes disposal into May be prohibitive in absence full dispositioning costs at time of technology choice of disposal options; purchase administrative costs Pull Incentives Direct subsidies — Offer payments Marginally encourages flexible Budgetary cost; administrative for particular retirements or replacements costs replacements Tax subsidies — Reduce cost Marginally encourages flexible Revenue loss; not applicable through allowed deductions for replacements to nonprofits replacements Buybacks — Offset scrapping costs Encourages flexible Budgetary cost; by purchasing particular classes of replacements, especially for older administration of physical devices devices disposal Supply Incentives Supplier subsidies — Research and Encourages improvements in Administratively difficult to development grants replacement technologies pick good projects; budgetary cost Certification services — Provide Encourages improvements in Budgetary cost publicly funded testing and replacement technologies; no certification services for replacement need to pick winners devices SOURCE: Provided by the committee.

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162 RADIATION SOURCE USE AND REPLACEMENT A more direct action that increases the cost of radionuclide use is to impose a fee on some aspect of use such as the activity in inventory. For example, a fee could be set on the net addition of activity from radioactive cesium chloride that would be paid by sealed-source providers; a lower fee could be set on net-curie suppliers provided in less dispersible forms of cesium-137 to encourage their development. The economically efficient fee would be exactly equal to the external costs of use (the social costs not previously borne by users). However, because the external costs cannot be confidently monetized, a fee would have to be set on some other basis, such as providing a sufficiently strong incentive to encourage replacement without making use so prohibitive that specialized applications without viable replacements become commercially infeasible. An advantage of the fee approach is that it would generate revenue that could be added to general revenues or earmarked for subsidy programs to encourage replacement or run an insurance pool to handle major radiological incidents. Most regulators are empowered to recover regulatory costs through fees and to impose fines for infractions by licensees, but not to impose fees such as those discussed here (for fear that they will use the power inappropriately to raise funds). Another action that would increase the cost of radionuclide use is to require licensees to provide larger decommissioning funds. The U.S. NRC requires licensees with inventories of radioactive material exceeding certain thresholds to set aside funds, either as segregated accounts or through financial intermediaries, to cover a portion of the estimated costs of decommissioning (see Sidebar 10-1). The quantity thresholds on sealed sources currently in place do not subject all license holders to the regulations on providing financial assurance for decommissioning. For example, there is no requirement for financial assurance for decommissioning of any self-contained irradiators with cesium-137 sources currently in use because these devices do not contain over 3,700 TBq (100,000 Ci). The thresholds could be lowered to include more licensees operating sealed sources or the provisions made more demanding to make the use of certain radonuclides more costly.3 If disposal costs could be confidently monetized, then a decommissioning fund arrangement that required users to bear these costs in full would be desirable to internalize OSC in their private decision making. Because production of more robust forms of cesium-137, such as pollucite, require investment in new production lines, suppliers would have to be convinced that a sufficient and sustained demand exists for the product. Actions that tend to ensure that there will be a continued demand for these new radionuclide radiation sources at a somewhat higher price would tend to lower one of the barriers to availability of this alternative. Pull incentives encourage the adoption of replacement technologies by lowering their cost to potential adopters. Direct subsidies involve cash payments made from federal funds to adopters of specific technologies. Implementation would require a budget allocation, the determination of qualifying investments, and an administrative agency to distribute the funds. As with a user fee, determination of the efficient level of subsidy would depend on the monetization of external costs of the radionuclide source being replaced. The efficient subsidy would equal the avoided external costs, TRC + OSC. The subsidy could be provided without an explicit budget allocation through an income or profits tax deduction or credit. Neither of these tax subsidies would be relevant to not-for-profit organizations such as the American Red Cross, which uses cesium chloride blood irradiators. 3 In its 2006 position statement, the Health Physics Society recommended this approach: “The HPS recommends that a requirement be incorporated into the licensing process that an acquirer of Category 1, 2, or 3 sources must provide financial surety for disposal of the sources. This financial surety could be, for example, via an escrow account under NRC control with sufficient funds to cover government or third- party costs to dispose of the sources on the license with return of remaining funds to the purchaser upon disposition of all sources and termination of the license. The establishment of financial surety is consistent with the IAEA Code of Conduct” (Health Physics Society, 2006).

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IMPLEMENTATION OPTIONS FOR ENCOURAGING REPLACEMENT 163 SIDEBAR 10-1 Financial Assurance Requirements on Sealed-Source Licensees for Decommissioning Some sealed-source licensees are required to provide financial assurance for decommissioning of their sources, devices, or facilities, in the form of prepayment or an external sinking fund, surety bond, a dedicated letter of credit, insurance, or some other guarantee. The U.S. NRC’s requirements for financial assurance are described in regulations and guidance (10 CFR § 30.35 and NUREG-1757), and they apply to licensees with sealed sources within specified activity ranges. The ranges and the requirements are described in the table below. The funds required for licensees with quantities of material in the highest category are reevaluated every three years. Financial assurances are not required for radionuclides with half-lives less than 120 days, and so a licensee with only iridium-192 is not required to have financial assurances for decommissioning in place. A different set of activity ranges applies to unsealed sources. For unsealed sources, the limits are lower and the required funds are higher, presumably in light of the greater potential for contamination from unsealed sources. Under a decommissioning plan, the financial assurance amount must include estimated costs for disposal. The program has not had to confront the problem of estimating disposal costs for radiation sources that would require disposal as Greater-than-Class-C waste (high-activity cesium-137 and americium-241 sources) because nearly all of the sources in the United States subject to this requirement are below the activity thresholds for requiring financial assurance for the current year, 2007. 2007 Financial Assurance Requirements for Decommissioning Licensees with Sealed Sources Containing Examples of Radionuclide Byproduct Material in Financial Examples of Typical Activity Limits (based on the Following Assurance quantities in Appendix B of Sealed Sources or Requirement Devices in this Range Quantities 10 CFR Part 30) Less than 1010 times the None Less than 3,700 TBq 34 cesium-137 self- quantity in Appendix B (100,000 Ci) of cesium-137, shielded blood irradiators, of 10 CFR Part 30 OR OR Less than 370 TBq (10,000 1 or 2 cobalt-60 self- Ci) of cobalt-60, shielded irradiators, OR OR Less than 3.7 TBq (100 Ci) of 4 Am-Be neutron well americium-241 logging sources More than 1010 times $113,000 3,700 to 370,000 TBq 1 or more cesium-137 but less than 1012 times (100,000 to 10,000,000 Ci) of panoramic irradiators the quantity in Appendix cesium-137, OR OR B of 10 CFR Part 30 370 to 37,000 TBq (10,000 to 1 to 66 new cobalt 1,000,000 Ci) of cobalt-60, teletherapy heads OR OR 3.7 to 370 TBq (100 to 6 to 500 Am-Be neutron 10,000 Ci) of americium-241 well logging sources 12 More than 10 times Site-specific More than 370,000 TBq No known applications of the quantity in Appendix decommissioning (10,000,000 Ci) of cesium- cesium-137 sources in this B of 10 CFR Part 30 funding plan 137, range, based on OR OR estimated 37,000 TBq (1,000,000 Ci) of 1 cobalt-60 panoramic decommissioning cobalt-60, irradiator, costs OR OR 370 TBq (10,000 Ci) of No known americium-241 americium-241 sources in this range SOURCE: 10 CFR § 30.35

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164 RADIATION SOURCE USE AND REPLACEMENT A buyback program could also be used to subsidize the adoption of replacement technologies by current users of radionuclide devices. Currently, the cost of disposing of a device may be sufficiently high that it becomes a barrier to switching technology. It could also be a barrier to disposing of devices that have already been replaced by alternative technologies. For example, the disposal costs of a cesium research irradiator may add tens of thousands of dollars to the cost of switching technologies. Even when the irradiator is no longer being used, the disposal costs may lead owners to store the device on-site, perhaps with less attention to security than would have been the case were it still in use. Further, irradiators that are disposed commercially may be recycled for use in other countries, where a diversion risk would remain, or even increase. A buyback program, which would require a federal budget allocation and appropriate physical facilities for disposal or storage, could be designed to offset the disposal costs, removing a barrier to adopting replacement technology. It would also help sweep up no longer used devices and prevent them from being reused in other countries. Supply incentives seek to encourage device makers to develop and promote better replacement technologies. The various pull incentives could be given to firms that supply irradiation devices to end users. Their impacts would in general be similar to the pull incentives directed at users. A different pull approach that operates through suppliers is a program of research and development (R&D) grants aimed at improving replacement technologies. Consider, for example, R&D to address x-ray generation inefficiencies in the gray zone between 0.5 and 1.5 MV. These grants would lower the costs to suppliers of conducting R&D. Aside from their budgetary costs, they would also require considerable administrative oversight to select promising projects and ensure that grants are used appropriately. Another example of useful R&D is qualification of alternative matrixes for high-activity cesium-137 sources. R&D on producing more robust matrixes for high-activity cesium-137 sources could make it easier or less costly to provide lower hazard cesium-137 sources. Such research could be most effective if carried in partnership with investigators and facilities in Russia, where experts know more about what is already done and where hot tests (experiments with actual cesium-137) are possible. A natural starting point for such R&D is to convene a small international technical meeting on matrixes for cesium-137 where invited specialists from PA Mayak and other institutions could discuss current production methods, future prospects, and R&D needs. Such a meeting could be organized by a U.S. institution or agency or through the International Atomic Energy Agency (IAEA). If supply incentive options are attractive but policy makers seek lower administrative costs, then the federal government could offer to provide free testing and certification (to be carried out at national laboratories or by contractors) of new or modified devices that improve the risk profile. Testing and certification are required for licensing of equipment such as blood irradiators. Some device manufacturers and distributors cite the costs of redesign and recertification as barriers to bringing alternative technologies to market. In this scheme, the federal government would provide no direct grants or tax incentives and would not be put in a position of “picking winners.” Businesses would still bear the cost of redesign, which is a proprietary matter, with costs based on a variety of business decisions. The more standardized cost of testing and certification of a limited number of designs could be borne by the public through the federal government. Phase Out Use of Category 1 and 2 Cesium Chloride Devices In Chapter 3, the committee makes findings and recommendations concerning radioactive cesium chloride sources. Here, the committee describes the steps suggested as options for implementation of the replacement of these sources, beginning by recapping the rationale for action.

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IMPLEMENTATION OPTIONS FOR ENCOURAGING REPLACEMENT 165 Because the potential for area-denial radiological dispersal device (RDD) consequences are significant (perhaps the most significant) hazards associated with malevolent use of Category 1 and 2 sources, evaluations of security requirements for licensees should account for these consequences. The U.S. NRC, upon review, may determine whether to apply additional security requirements to some licensees. These are near-term actions. A full assessment of hazard that goes beyond deterministic health effects might very well lead the U.S. NRC to increase the security requirements for new cesium chloride irradiators to levels that would result in few new units being licensed. Indeed, the imposition of more stringent safety requirements based on a comprehensive assessment of risk by the Canadian Nuclear Safety Commission effectively stopped the licensing of new cesium chloride irradiator designs and has resulted in an overall decline in Category 1 and Category 2 cesium chloride sources by approximately 50 percent since 2000 (R. Jammal, Canadian Nuclear Safety Commission, verbal communication to the Committee on Radiation Source Use and Replacement, January 9, 2007; see Sidebar 10-2). SIDEBAR 10-2 Canadian Nuclear Safety Commission Actions Requiring Source Certificates The Canadian Atomic Energy Control Board (AECB) was established under the Atomic Energy Control Act of 1946. Its mission was to supervise and control the development, application, and use of atomic energy. In 2000, the new Nuclear Safety and Control Act and its regulations came into force and the Canadian Nuclear Safety Commission (CNSC) replaced the AECB, with an accompanying overhaul of the regulatory structure and approach. Licensing of sealed sources is just one area where regulatory changes have led to changes in practices. The AECB had “approved” devices that were not formally certified according to current standards and practices, as promoted by the IAEA and others. Under the new CNSC, certification was required for all sources and devices, which forced reexamination of every device design for certification during the three-year transition period from the old system to the new one. Device manufacturers submitted for certification many of their devices because the manufacturers would have been unable to sell or service the devices that did not receive certification. Licensees with those devices supported by the manufacturer felt no additional burden except some requirements to enhance security. Some devices were no longer supported by the device manufacturers, in which case the burden of seeking certification fell upon the licensee. In addition, each device now requires a special form certificate that must be renewed at least every five years. Special attention was given to radioactive cesium chloride devices because of the hazards they pose to worker and public safety and security. This action, along with the enhanced security requirements for sealed sources and devices, significantly reduced the number of Category 1 and 2 radioactive cesium chloride sources held by licensees. It did not, however, prohibit the sale of new devices or reloading of existing devices that were recertified and supported by a manufacturer. Many licensees with devices not supported by the manufacturer concluded that the certification was not worthwhile, particularly for underutilized devices, the services of which could be more efficiently provided by a central facility. The licensee cost of compliance was not considered by CNSC in imposing these requirements, because the requirements were considered matters of safety and security. The government of Canada also provided a place for retired radioactive cesium chloride sources to go. For a fee, Canadian companies licensed to service (decommission, decontaminate, and dispose) radiation sources and devices can take sources and dispose of them in the Atomic Energy of Canada, Limited disposal facility. This is true even for foreign radiation sources and devices that are decommissioned by an appropriately licensed Canadian company.

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166 RADIATION SOURCE USE AND REPLACEMENT The use of Category 1 and 2 cesium chloride sources involves substantial external costs because of the hazard posed by the potential for malevolent use (TRC) and the absence of an avenue for permanent disposal (OSC). Further, feasible replacement technologies currently exist or could be introduced for nearly all applications. The combination of large externalities of use (liabilities) and the availability of alternatives led the committee to recommend that the government take steps to phase out the use of these sources. The suggested options follow. Discontinue Licensing of New Category 1 and 2 Cesium Chloride Sources The Canadian experience suggests that more stringent regulatory requirements, based on a fuller assessment of consequences, could reduce the number of existing cesium chloride devices but not eliminate new ones of approved design. An explicit ban on new Category 1 and 2 cesium chloride devices would ensure that the number of such devices would not increase. The ban would be more effective if it applied to both new devices and the recharging of existing devices. It would signal to suppliers that there would be a market in the future for alternative technologies. As previously noted, at least one x-ray irradiator is already a commercially available alternative, and more may be on the way. In some applications, cobalt irradiators, which are less common and the committee views as less hazardous than cesium chloride irradiators, may be feasible alternatives. An even more stringent prohibition would ban all new Category 1 and 2 cesium sources rather than just those devices employing cesium chloride. The less stringent ban, however, creates an incentive for suppliers to offer devices employing cesium in glass or mineral (pollucite) form. The committee judges that these alternative forms would substantially reduce the hazard associated with cesium chloride sources. Some form of incentive appears to be needed to encourage source producers and manufacturers to provide high-activity cesium-137 sources in these alternative forms because they are more difficult and more costly to fabricate, and there is little evidence now of a customer demand for them. As noted above, the committee did not analyze whether the ban on radioactive cesium chloride could be implemented under existing U.S. NRC authority. Legislative authorization may be necessary. Incentives for Decommissioning Existing Sources The over 30-year half-life of cesium means that a cesium chloride irradiator can operate effectively for 20 to 30 years without being recharged. The profile of private costs includes a large initial capital investment, low operating costs (in the absence of stringent safety requirements), and a negative scrap value (i.e., decommissioning generally involves paying a scrapping fee rather than receiving a payment for the used device). For a cesium chloride irradiator already in operation, the capital costs are sunk in the sense of no longer being relevant to assessing the private future lifetime costs of use. Consequently, under current circumstances, replacement of these devices before the end of their useful life is unlikely to be financially attractive, so that a ban by itself on new irradiators would most likely only result in a slow decline in the stock of cesium chloride irradiators over several decades. One strategy for making replacement of existing cesium chloride irradiators more financially attractive is to make their scrap value positive or at least nonnegative. Although the committee was not able to establish a specific scrapping cost for cesium chloride irradiators, it appears that suppliers charge approximately $35,000 to $45,000 for stand-alone disposal cost of an undamaged device (including estimates for travel, expenses, labor, shipping, and rigging charges) as indicated by MDS Nordion (2006) and another manufacturer quoted in a decommissioning plan cited by U.S. NRC staff (personal communication with M. Lowenthal,

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IMPLEMENTATION OPTIONS FOR ENCOURAGING REPLACEMENT 167 May 16, 2007). The price might be lower to customers replacing an undamaged irradiator as part of the purchase of another device. The scrapped device might then be refurbished and sold to a user in a less developed country, the source might be reused, or the device might be stored pending availability of a disposal facility. Refurbishment and resale of a scrapped device, however, simply shifts the location of the risk, and so this approach is not favored by the committee. The device user may also be able to dispose of it and its radiation source without a direct monetary cost through the Offsite Source Recovery Project (OSRP) administered by the National Nuclear Safety Administration. The OSRP queries source owners to assess the efforts they have made to dispose of the sources through existing disposition pathways. If owners have opportunities to dispose of the sources themselves, then the National Nuclear Safety Administration makes a decision of whether or not to recover the device. A rough estimate of the cost of recovering irradiators through the OSRP can be made based on the 2006 and 2007 irradiating device campaigns (Pearson, 2007). The cost of the contracts for these two campaigns summed to approximately $1.7 million. The campaigns recovered, or will recover, a total of 46 irradiators from 39 sites, suggesting an average of about $40,000 per irradiator. None of these costs are borne by the owners of the unwanted devices, unless they want to expedite their disposal by paying for removal and transport of the device from their premises to the OSRP facility at Los Alamos National Laboratory. The committee was told that the OSRP is considering whether to ask the owners of unwanted sources whether they plan to simply replace the device with a new radionuclide radiation source. If a ban on new devices is not in place, simply refusing to accept old radioactive cesium chloride devices from licensees who are acquiring new radioactive cesium chloride devices avoids subsidizing the replacement (by not providing the owner with free disposal of the old device) and thus creates a disincentive to acquiring a new cesium chloride irradiator. Similarly, recovering radioactive cesium chloride devices and sources and storing them without consideration of whether alternative disposal options are available to users would encourage decommissioning of cesium chloride irradiators. The OSRP costs money, and the committee estimates that such a campaign could cost $50 million over the next decade or longer to fund the recovery of the approximately 1,300 cesium chloride devices currently in use.4 The advantage of this approach is that the recovered irradiators and their sources would be retired not only from use in the United States but also from recycling to users in other countries that might have a less robust regulatory system. This modification to the OSRP would have only modest effects on the retirement of cesium chloride irradiators. A more aggressive buyback policy may be desirable to speed the replacement of these irradiators. Specifically, the OSRP program could be authorized and funded to buy cesium chloride irradiators at a positive price. Either recovery or buyback would be most effective if coupled with either the ban on new cesium chloride licenses, as suggested by the committee, or an explicit requirement that participants not replace scrapped machines with new cesium chloride devices. Otherwise, the program would become a giveaway. The most likely replacement technology for cesium chloride irradiators is the x-ray irradiator. The initial capital cost of an x-ray irradiator such as the Raycell® is approximately $180,000. In addition, the x-ray irradiators involve substantially higher maintenance costs, because the x-ray tubes must be replaced (the manufacturers told the committee that replacement should be expected about every five years) and power sources sometimes fail. A typical service contract for an x-ray irradiator such as the Raycell® currently costs about $10,600 per year. Further, relative to cesium chloride irradiators with current safety requirements, the operating costs of x-ray irradiators are likely to be somewhat higher because of the cost of electricity and the lower reliability, although the gamma irradiator has higher security, regulatory, 4 Note that this does not include devices held by manufacturers and distributors.

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168 RADIATION SOURCE USE AND REPLACEMENT and decommissioning/disposal costs. For purposes of estimating the magnitude of the buyback price necessary to induce early retirement of cesium chloride irradiators, we ignore operating costs and focus instead only on capital and maintenance costs. The following estimates are based on the answer to the following simple question: For any given interest rate and years of remaining life in a cesium chloride irradiator, how high would the buyback price have to be to induce a switch to an x-ray irradiator? The answer to this question assumes a ban on new cesium chloride irradiators and on recharging of existing cesium chloride irradiators so that a switch would be made to an x-ray irradiator at the end of the useful life of the currently used cesium chloride irradiator. The buyback price has two components: (1) the financial cost of purchasing the $180,000 x-ray irradiator now rather than at the end of the life of the cesium chloride irradiator, and (2) the cost of the annual service contract for each of the earlier years of use. Component 1 is simply the current purchase price of the x-ray irradiator minus the present value of the same purchase at the end of life of the cesium irradiator. Component 2 is estimated as an annual service contract payment of $10,600. Table 10-2 shows the estimated buyback prices as a function of the real interest rate (the nominal interest rate with inflation removed) and the number of years of life remaining for the cesium chloride irradiator. The real interest rate of 6 percent is based on the 2007 prime lending rate (8.25 percent) plus 1 percent minus the 2006 inflation rate (3.25 percent). As indicated in the middle column of Table 10-2, assuming that irradiator owners face a real discount rate of 6 percent, a buyback price of approximately $90,000 would lead to the retirement of irradiators with 5 years of remaining life; a buyback price of about $158,000 would lead to the retirement of irradiators with 10 years of remaining life. Looking down the columns, one can see that inducing the retirement of devices with longer remaining useful lives would require higher buyback prices. Looking across rows, higher assumed real interest rates require higher buyback prices for short-lived devices for which the incremental cost of switching is dominated by the initial capital cost and lower buyback prices for the very long-lived devices for which switching is dominated by the longer period of higher annual maintenance costs. If a ban on new cesium chloride irradiators were put in place, then it is likely that manufacturers would increase their investments in bringing more reliable and less costly substitutes to the market. Specifically, it would be reasonable to expect that with a larger market, the life-cycle costs of x-ray irradiators would decline. Consequently, a buyback program would become more effective over time. That is, a buyback program that currently retires devices with five years of life remaining would likely retire devices with more than five years of life remaining in the future. Further, the owner gets a newer product with greater throughput. The retiring unit has longer irradiation times because the source has diminished due to radioactive decay, whereas an x-ray unit should have a steady irradiation time throughout its lifetime. A 15-year-old cesium-137 irradiator takes 40 percent longer to reach the same dose as when it was purchased. The dollar amounts shown in Table 10-2 assume that the x-ray is the replacement technology. It is also possible that the replacement might be an irradiator (or even just a set of source pencils) that uses cesium in some other form than highly dispersible cesium chloride, assuming a more robust form were available. In this case, the incremental maintenance costs would be zero. Table 10-3 assumes that the capital cost of the replacement device is $200,000, slightly higher than the current costs of a cesium chloride irradiator. The estimates assuming a 6 percent real discount rate suggest that a buyback price of approximately $100,000 would induce the retirement of cesium chloride irradiators in between 10 and 15 years.

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IMPLEMENTATION OPTIONS FOR ENCOURAGING REPLACEMENT 169 TABLE 10-2 Breakeven Buyback Prices Assuming X-Ray Replacement (Thousands of Dollars) Real Interest Rate Years of Life Remaining 0.04 0.06 0.08 5 79 90 100 10 144 158 168 15 198 208 214 20 242 245 245. 25 278 273 267 TABLE 10-3 Breakeven Buyback Prices Assuming Alternative-Form Cesium Replacement (Thousands of Dollars) Real Interest Rate Years of Life Remaining 0.04 0.06 0.08 5 36 51 64 10 65 88 107 15 89 117 137 20 109 138 157 25 125 153 171 Because the committee was not able to monetize the risks associated with the use of cesium chloride irradiators, or the risks associated with the use of alternative-form cesium irradiators, it does not make a specific recommendation about the magnitude of a desirable buyback price. Any buyback program must be structured carefully to ensure that no one has an incentive to buy a cesium chloride irradiator before the policy goes into place. Cost-Benefit Perspectives The committee's charge does not call for full cost-benefit analyses of radionuclide radiation source replacement, and it would not have been feasible for the committee to attempt such analyses. Indeed, even in attempting a cost analysis of the TSC includes several costs that are difficult to quantify, such as the psychological impact on the city and the nation, which might be greater in eventual costs than any costs from cleanup or crop loss. These costs to stakeholders range from a city's dependence on tourism being threatened for years to come, to the medical impact of chronic fear among the citizens, not to mention the costs of additional security and other proactive measures that are taken throughout society after a large disaster or attack. The committee believes that the qualitative cost-benefit framework is useful and that the committee does not have enough information to push the quantitative analysis very far. However, there is some merit in illustrating the quantitative cost-benefit approach, and so the committee provides a limited example with some notional values.

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170 RADIATION SOURCE USE AND REPLACEMENT Example: There are approximately 1,300 self-contained irradiators in the United States that employ radioactive cesium chloride sources. The risk of a device being used in an RDD attack that causes severe consequences is the product of the likelihood of an attack (including accessing the source or device and weaponizing it) and the consequences of that attack, here measured just by the monetary costs for temporary loss of use and for decontamination (not the unknown psychological and long-term economic costs). The committee has no basis for establishing an absolute probability that one of these devices will be stolen and weaponized or weaponized in place, and used in an area-denial RDD attack. Government officials who carry out threat and vulnerability assessments are better positioned to evaluate those probabilities, although they are not usually assessed quantitatively. The committee can reason through a few aspects of probability on a relative basis: Better security lowers the probability of an event and therefore lowers the risk. Replacing the radionuclide radiation source with a lower hazard radiation source reduces the consequences (and may therefore lower the attractiveness of the device as a weapon). Replacing the radionuclide radiation source with a radiation generator reduces the consequence of an RDD attack using that device to zero and so reduces the risk to zero. Consider the possibility of a high-consequence attack, hypothetically $5 billion for cleanup and other near-term economic damage, and a hypothetical cost of phasing out these devices over 20 years of $100,000 to eliminate the risk from each device through replacement. One breaks even on the expenditures versus the economic risks if the probability of a high- consequence attack is about 1 in 50 over the 20 years. That is, if one were to assess that the probability of a $5-billion–consequence RDD attack is greater than about 1 in 1,000 per year (1 in 50 is approximately equal to an annual probability of 1 in 1,010), then a $100,000 per device expenditure that eliminates the RDD risk for that device yields a net benefit. This example oversimplifies somewhat because it neglects the time value of money (i.e., does not discount future costs) and it uses hypothetical values, but it illustrates the quantitative cost-benefit approach and a possible scale to consider. Of course, if one is allocating limited resources using this approach, then a broad set of risks is assessed and resources are expended on the risk mitigation strategies with the greatest net benefit for the whole set. Assessing net benefits can be challenging and demands care in identifying and evaluating the full effects of an action, including potential international spillover from domestic actions. For example, if a U.S. ban reduces world prices for a highly hazardous radionuclide radiation source because the United States accounts for a substantial fraction of demand and world supply is price elastic, then use of the devices might increase elsewhere in the world because of a lower price. This in turn may increase the risk of an RDD attack in the United States that makes use of radiation sources from other countries. These and other considerations are part of a full cost-benefit analysis of radionuclide radiation source replacement. Reduce Use of Other Category 1 and 2 Radionuclide Sources Although eliminating the use of cesium chloride irradiators deserves the highest priority by policy makers, speeding the introduction of replacement technologies also deserves consideration. This, too, can be done through push, pull, and supply incentives outlined in Table 10-1. For example, one approach for making alternative technologies more attractive is to require that licensees bear the full life-cycle costs of the radiation source. The life-cycle costs include the costs of manufacturing (borne largely outside the United States), transportation, and decommissioning (including disposal), as well as the risks associated with diversion. This approach could be put into practice through two primary mechanisms. First, the OSRP could be required to estimate the costs of safe disposal of each type of radionuclide that could be the

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IMPLEMENTATION OPTIONS FOR ENCOURAGING REPLACEMENT 171 basis for the establishment of a decommissioning fund requirement for licensees. The precedent for this approach is the decommissioning financial assurance requirements for sealed-source licensees. Second, the U.S. NRC, using a comprehensive risk approach, could set a scale of risk for different radionuclides that would be the bases for fees on either their stocks or additions to their stocks. These fees would internalize some of the risk now borne by society but not by licensees. Even if they did not fully internalize the risk, such fees would raise the cost of using radionuclides relative to alternative technologies, thereby speeding the rate of development and adoption of radiation source alternatives. Who Bears the Burden? As noted at the beginning of this chapter, the extent to which the user should be responsible for costs of disposal and the costs that might be incurred in association with radiological terrorism is open to debate. In the committee’s view, however, current regulations do not adequately address decommissioning costs for Category 1 and 2 cesium chloride sources. One might argue that the level of the threat of radiological terrorism is beyond the control of the user and depends on government entities dealing with national security. Indeed, the threat of radiological terrorism is beyond the user’s direct control. However, vulnerability is within the user’s control, as is consequence, to some extent, and these are components of terrorism risk. The costs of disposal and potential terrorism are real and to decide not to internalize the costs is a decision to support use of radionuclide radiation sources rather than to discourage their use. However, users make choices based on the regulatory environment in place at the time of purchase. The licensees who already own these sources are owed a greater duty to help defray costs because society has chosen to change the regulatory environment after they made their purchase. FINDINGS AND RECOMMENDATIONS Finding: Nonradionuclide replacements exist for nearly all applications of Category 1 and 2 radionuclide sources (not just radioactive cesium chloride). At this time, these replacements may not all be practical or economically attractive, but most of them are improving. Chapter 4 shows a variety accelerator systems that can be designed to operate as radiation-generator replacements for radionuclide sources. In Chapter 5, the committee explains that self-shielded irradiators can be operated with x-ray generators instead of radionuclides. Some x-ray-based irradiators are already commercially available, and more companies that design and manufacture x-ray generators told the committee that they are considering entering the market. As described in Chapter 6, large companies in the business of sterilization of medical supplies and devices operate several kinds of facilities (ethylene oxide, gamma irradiation, and electron-beam irradiation) to use the technology that is best suited to the sterilization contract. An x-ray irradiation facility can be a direct replacement for a cobalt-60 panoramic gamma irradiator, and offers both electron-beam and x-ray irradiation in one facility. The first very large scale facility for x-ray irradiation is to be built soon in Fleurus, Belgium. It is unclear whether such facilities will be cost neutral, more expensive, or less expensive per pallet of goods irradiated than similarly sized gamma irradiators. As noted in Chapter 7, linear accelerators for radiotherapy have almost entirely replaced cobalt-60 teletherapy devices in the United States, except for the Gamma Knife®, the use of which is still growing. The Gamma Knife® is less versatile than a linear accelerator for radiotherapy, but offers some advantages,

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172 RADIATION SOURCE USE AND REPLACEMENT which their competitors are trying to match with accelerators. The development of new technologies, especially in the areas of ultrasonics and x-ray sources, have provided several alternatives to gamma radiography in the field of nondestructive inspection. In some areas, it is likely that the use of some of the alternatives is currently limited by the availability of trained personnel and wider acceptance of the results as durable records of proper inspection, as noted in Chapter 8. Chapter 9 similarly explains that the neutron well logging tools that use americium- beryllium sources are beginning to see competition from accelerator fusion sources. Finding: Neither licensees nor manufacturers now bear the full cost of liabilities related to misuse of Category 1 and 2 radiation sources, nor do they bear the costs of disposal of cesium and americium sources. Category 1 and 2 radiation-source licensees are not required to be insured for the possible consequences of malicious use of their radiation sources. This is no different than in other sectors of our society, but it means that the costs of some liabilities are not borne by licensees. In addition, licensees of Category 1 and 2 cesium-137 and americium-241 sources in the United States do not now bear the costs of disposal of their sources because the only disposal facilities for these sources can only accept sources that come from the Department of Energy (DOE) or its predecessor, the Atomic Energy Commission. DOE has its OSRP program, which packages, transports, and stores high-risk radiation sources and devices without fee. Some licensees pay for the cost of packaging and transportation to effect the removal on their own schedule, but the cost is lower than the cost of disposal will be in an as-yet-unknown disposal facility for Greater-than-Class-C low-level waste. Recommendation: In addition to actions related to radioactive cesium chloride, the U.S. government should adopt policies that provide incentives (market, regulatory, or certification) to facilitate the introduction of replacements and reduce the attractiveness and availability of high-risk radionuclide sources. The committee describes several options for implementation of alternatives in this report. Among these options are to make licensees bear the full life-cycle cost of radiation sources, particularly for disposal of cesium-137 and americium-241 sources; to revise the requirements for decommissioning funds for Category 1 and 2 devices to increase the up-front costs for higher hazard sources; enhance DOE’s OSRP to include a buyback of devices that still have use value, provided that the devices are replaced with lower hazard devices. The government could impose charges on all sources, or just on new sources, based on hazards or risks. CONCLUSIONS A variety of policies could be used to speed the replacement of Category 1 and 2 sources. Beyond a reconsideration of security requirements by the U.S. NRC, using a more comprehensive set of potential consequences, the committee views a ban on new licenses for cesium chloride irradiators as the policy most worthy of immediate consideration by policy makers. The committee also sees enabling the OSRP to recover cesium chloride irradiators more quickly as worthy of immediate consideration (as long as the old devices are not replaced with cesium chloride irradiators and the recovered devices and sources are not recycled). Buying back irradiators at a positive price to speed their replacement with alternative sources should also be considered, especially if supported by a more comprehensive assessment of

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IMPLEMENTATION OPTIONS FOR ENCOURAGING REPLACEMENT 173 risks by the U.S. NRC. Requiring that Category 1 and 2 source users establish decommissioning funds that reflect the full social costs of disposal should be considered as part of a long-term strategy for reducing the uses of radiation sources that involve net social costs.

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