WASHINGTON — The Nuclear Regulatory Commission on Monday denied Utah's latest bid to block a license for a nuclear waste storage area on the Skull Valley Indian reservation, rejecting the argument that the waste could be stuck at the site permanently.

The unanimous ruling leaves the state just one remaining avenue to challenge -- over the risk of a fighter jet crash -- and moves the commission a step closer to a decision on granting a license to Private Fuel Storage, a group of electric utilities seeking to store 44,000 tons of waste on the Skull Valley reservation until a permanent dump is opened.

Gov. Jon Huntsman Jr.'s general counsel, Mike Lee, said he expects the NRC's final determination by the end of the summer.

"We're profoundly disappointed, but we remain optimistic about our other arguments, including the remaining argument before the Nuclear Regulatory Commission," Lee said. "We're still several steps away from any point we would deem even the beginning of construction on the project to be imminent."

State attorneys argued that Gary Lanthrum, director of the Department of Energy's transportation program, stated that, under the existing DOE waste storage contracts, the department would refuse to bury nuclear waste in a permanent dump if the storage casks are welded shut as planned.

"Our concern is, as it has always been, once the fuel gets here is it ever going to leave?" said Assistant Utah Attorney General Denise Chancellor.

The state argued, at the very least, the waste would have to be returned to the reactors and repackaged before being shipped to Yucca Mountain and that the NRC should have to redo its environmental impact studies to take that into account.

The commission disagreed, affirming an earlier decision by the Atomic Safety and Licensing Board that sided with PFS. Several letters provided by PFS from the Energy Department to various utility companies promised flexibility to accommodate waste stored in a variety of casks.

"In the face of this rather overwhelming written record, Utah offers only the unexplained [and apparently off-the-cuff] remarks of Lanthrum, and argues that his remarks require a rethinking of fundamental assumptions about the PFS project," the commission wrote. "The board sensibly thought differently."

The commission noted that Lanthrum was not in chain-of-command for such decisions and that the state was unable to offer any additional evidence that DOE policy had changed, or explain why the policy might have been altered.

"It was one of the last couple of hurdles we had to get through in this whole process, so we're pleased that the commission agreed with the licensing board and with our position," said PFS spokeswoman Sue Martin.

The state has one more challenge pending -- its contention that the dangers of a fighter jet crash or errant cruise missile smashing into the site were not adequately considered. The state filed that appeal this month, shortly after the Atomic Safety and Licensing Board rejected similar claims.

If the NRC grants the license -- and every significant recent decision by the commission and licensing board has gone against the state -- Utah will have other avenues remaining to challenge the PFS site.

The state could challenge the granting of its license in a federal appeals court, either in the 10th Circuit in Denver or in the District of Columbia.

It also is working to persuade the Interior Department not to grant a right of way for shipments to travel to the Skull Valley Goshute Indian reservation, or persuade Interior Secretary Gale Norton, as trustee for Indian issues, not to approve the tribe's contract with PFS.

Rep. Rob Bishop, R-Utah, also has added language to a Defense Department bill that has passed the House that would create a wilderness area near the Skull Valley Goshute Indian reservation to prevent a rail line being built to the facility. It has yet to be considered in the Senate.

Source: Knight Ridder/Tribune Business News