A federal grand jury in the Eastern District of Kentucky issued an indictment against an individual for transportation of radioactive material generated from fracking activities without compliance with US Department of Transportation hazardous materials regulations. The indictment comes on the heels of increasing focus at the state and federal levels on the safe disposal of so-called “TENORM” wastes, i.e., technologically enhanced naturally occurring radioactive material wastes that are generated as a result of certain mining and manufacturing activities, including hydraulic drilling or “fracking.” The indictment highlights the need for companies to plan for the disposal of TENORM generated during their operations, including performing appropriate due diligence on any contractors they may engage to assist with disposal.

As background, the natural environment includes certain amounts of radioactive material, sometimes referred to as naturally occurring radioactive material or “NORM.” This material is found in various rock formations around the country and the world, and the level of radiation varies by location. Of particular note, certain amounts of NORM are commonly found in the geological shale formations that contain shale oil and natural gas. The EPA has defined TENORM as “naturally occurring radioactive materials that have been concentrated or exposed to the accessible environment as a result of human activities such as manufacturing, mineral extraction, or water processing.” TENORM can be generated during various mining activities, but also can build-up during water treatment operations and in certain manufacturing activities, like fertilizer production and certain building materials. TENORM can present a possible radiation hazard to personnel at high concentrations. As a result, companies generally monitor their equipment to ensure that TENORM levels do not build up to an unsafe level, and use various methods to remove and dispose of TENORM as it builds up.

Regulations covering the disposal of TENORM vary from state to state. Some states allow disposal of certain quantities of TENORM in any landfill or waste disposal facilities. Materials with higher concentrations require more specialized disposal methods, such as solidification, dilution, or mixing with nonhazardous wastes. However, to transport TENORM wastes to a disposal facility, shipping companies must comply with the US Department of Transportation’s Hazardous Material Regulations, which govern the interstate and intrastate transportation of quantities of TENORM above certain thresholds for radioactive materials.

With that background in mind, the announcement that grand jury in the Eastern District of Kentucky issued an indictment against a shipper on July 16 is worth examining. The indictment alleges that the individual and two companies that he controlled contracted in 2015 with an oil and shale gas drilling brine processer in West Virginia to handle the disposal of TENORM waste streams (in the form of sludge) from the facility. The indictment alleges that he then contracted with other trucking companies and drivers in Kentucky to transport, mix, and dispose the TENORM collected to a Kentucky landfill without following the Hazardous Material Regulations. The indictment also alleges that the individual made false representations to state and federal government agencies, trucking companies, and truck drivers that the TENORM was nonhazardous and exempt from the Hazardous Material Regulations, including generating false shipping manifests. The creation of these false manifests allegedly prevented detection of the violations by the US Department of Transportation, and also misled the Kentucky landfill into accepting the wastes when it was not prepared or equipped to accept such radioactive material for disposal.

The indictment contains 27 counts for two separate crimes. Twenty-two counts relate to alleged willful and reckless violations of the transportation provisions of the Hazardous Material Regulations in his shipments of TENORM sludge from the processor. The remaining five counts all relate to mail fraud involving cashed checks by the individual without performing the services for his customer that he was contracted to provide, including solidification and proper transportation of the waste for disposal. The indictment seeks a money forfeiture of $127,110, the amount obtained as the result of his violations.

Although criminal indictments for failure to follow the Hazardous Material Regulations appear to be rare, the indictment reminds companies of the need to be aware of the potential for TENORM generation in their activities and the need for proper transportation and disposal. While mining and manufacturing companies can use appropriate contractors to perform these services for them, the indictment also reminds TENORM generators of the need to conduct appropriate due diligence on the contractors they use to prevent against potential reputational harm at a minimum. Morgan Lewis has helped companies with conducting environmental due diligence and will continue to follow TENORM developments.