NATIONAL

HARPER EMBRACES THE NUCLEAR FUTURE

JOHN GEDDES May 7 2007
NATIONAL

HARPER EMBRACES THE NUCLEAR FUTURE

JOHN GEDDES May 7 2007

HARPER EMBRACES THE NUCLEAR FUTURE

NATIONAL

Climate-change anxiety breathes new life into nuclear power, and shifts Ottawa’s plans

JOHN GEDDES

Stephen Harper would seem an unlikely pitchman for nuclear power. When the Prime Minister launches into his familiar spiel about Canada as an emerging “energy superpower,” we all think we know what he’s talking about—he’s an Alberta MP, after all, and his father worked for Imperial Oil. Yet in a key speech last summer in London, his most gleeful boast was not about record oil profits, but about soaring uranium prices. “There aren’t many hotter commodities, so to speak, in the resource markets these days,” Harper joked to the Canada-U.K. Chamber of Commerce crowd. Then, noting that Britain is among those countries poised to begin buying new reactors for the first time in decades, he added: “We’ll hope you remember that Canada is not just a source of uranium; we also manufacture state-of-the-art CANDU reactor technology, and we’re world leaders in safe management of fuel waste.” The time and place Harper chose to plug Canada’s nuclear industry were telling. Just three days before his July 14 London speech, British Prime Minister Tony Blair, whom Harper greatly admires, had waded into a storm of controversy by formally proposing that Britain build new nuclear plants to stay on track with its plans to cut greenhouse gas emissions.

President George W. Bush was way ahead, having signed an energy bill the summer before that offered billions in tax breaks and loan guarantees in a bid to jump-start the first new nuclear reactor construction in the U.S. since the 1970s. Given all that action, Harper’s government casts its own embrace of nukes as part of an international wave of enthusiasm for zero-emissions reactor power. “Almost from the time we took office,” says Natural Resources Minister Gary Lunn, “we’ve seen a nuclear renaissance around the globe.”

It’s a renaissance fuelled largely by climatechange anxiety. Generating electricity with natural gas and coal contributed 17 per cent of Canada’s greenhouse gas emissions in 2004, the latest data available, right up there with road transport at 19 per cent, and the fossil fuel industry itself at 20 per cent. Nuclear plants offer the allure of reliable power without planet-blanketing carbon dioxide. Not only that, the price is right. In Ontario, the going rate for nuclear-generated electricity is under five cents a kilowatt hour, compared to a bit over eight cents for power from larger wind farms. And the wind doesn’t always blow. The nuclear industry senses its moment and, nearly three decades after Three Mile

FRANCE HAS58 REACTORS ANDTHE

CLEANEST AIR IN THE

INDUSTRIAL WORLD, SAYS ONE MINISTER

Island battered its reputation in North America, is ramping up PR. Bruce Power, Canada’s only private nuclear generating company, recently signed a sponsorship deal with the Toronto Blue Jays.

But anti-nuke activists are hardly giving up the fight. They point out that the old problem of what to do with radioactive trash— nearly two million bundles of waste uranium now stored temporarily around Canada’s 22

reactors—still hasn’t been settled. Then there’s the daunting upfront cost of a nuclear plant, about $5 billion each for newest model reactors, and the hundreds of millions Ottawa spends on nuclear R&D. If anywhere near as much was poured into green alternatives, anti-nuclear groups contend, that cost-perkilowatt-hour gap would soon narrow. Still, green groups no longer have a decisive edge on the ecological-virtue side of the argument. Global warming fears, with the attendant predictions of drought and flood and mass extinctions, might make the need to store radioactive waste, even contemplate the odd reactive accident, seem less dire.

All of which means a bitter confrontation

in the offing between reinvigorated advocates and long-dug-in opponents. That may be why, aside from Harper’s travelling salesmanship and Lunn’s boosterism, the Conservatives have been soft-selling their pro-nuclear stance. Unlike Blair or Bush, Harper hasn’t risked putting nuclear power back at the top of the agenda in a decisive moment. Instead, he has quietly made a series of moves that signal a shift over his year-and-a-half in office, from an uncertain relationship with Canada’s nuclear industry, particularly federally owned Atomic Energy Canada Ltd., to making room

for nukes at the core of energy and environmental strategy. “We think AECL has a great future,” says Lunn, the minister responsible for the Crown corporation. “From purely an environmental perspective, for no other reason, you have to consider nuclear.”

Back when they took power early last year, the fit between Harper’s Conservatives and nuclear power looked awkward at best. After all, AECL, founded in 1952 and still soaking up hundreds of millions in taxpayer support, looks suspiciously like the sort of Liberal-style industrial policy tool the true-blue Harper-

ites were supposed to loathe. And back then, Harper was an avowed climate-change skeptic. If he didn’t believe in the problem, why buy into a supposed solution?

Any misgivings, though, have clearly been put to rest. Federal bureaucrats did their bit to nudge the Tories into the nuclear camp. Shortiy after last year’s election, Natural Resources officials put together a briefing for Lunn’s staff on nuclear policy, which was obtained by Greenpeace Canada under the Access to Information Act and provided to Maclean’s. On an otherwise heavily censored page titled “stra-

tegic considerations,” comes this simple but telling point-form assertion: “Nuclear is an important building block of long-term energy policy framework.” And by long-term, they meant very. Under Lunn, the department last year affirmed Ottawa’s support for what it calls “a multilateral international collaboration to develop nuclear energy technology for application post-2020.”

But plenty is happening much more quickly on the nuclear front. In Ontario, the Liberal government’s controversial electricity plan, tabled last June, calls for two new reactors and the refurbishing of old ones, projects expected to cost up to $40 billion over two decades. (The new reactors would be the first since the Darlington power station came into service in 1992 after notorious construction delays and billions in cost overruns.) John Tory, the provincial Conservative leader, is calling for more new nuclear plants faster, accusing Premier Dalton McGuinty of downplaying the need out of fear of the anti-nukes backlash. Ontario’s program is central to federal plans. Although the provincial Liberals have expressed a preference for sticking with Canadian technology, they haven’t ruled out going to one of AECL’s French or U.S. rivals if the price was better. Lunn has declared it “imperative” that the province buy its new reactors from AECL.

Perhaps even more politically intriguing is the prospect of AECL carving out a new market in Alberta’s oil sands—the energy story closest to Harper’s heart. The concept is driven by global warming. Separating oil from sand in the enormous development requires vast amounts of steam. Currently, the oil companies are generating it by burning natural gas, making the project a huge spewer of carbon dioxide, a serious problem as Ottawa contemplates cracking down on emissions in a new climate-change policy.

Enter Energy Alberta Corp., a Calgary company that formed a partnership with AECL last fall with the audacious aim of solving the oil-sands’ emissions problem with nuclear power. Wayne Henuset, one of two veteran oil-patch executives behind the concept, said this week the company plans to file a site application with the federal Canadian Nuclear Safety Commission within 90 days for an Alberta-based generating station—he won’t say exactly where—powered by two AECL reactors.

Henuset’s optimum timeline: secure regulatory approval within four years, start construction in 2011, throw the switch to begin using nuclear power to separate sand from up to 500,000 barrels of oil a day in 2016. “We’ve got the federal government onside, the provincial government onside, and two local communities that want us,” he says.

Lunn has predicted it’s only a matter of time before nuclear reactors begin playing “a very significant role in the oil sands.”

FOR POLITICIANS, ENVIRONMENTALISTS, and the reactor industry, the new terms for the old debate over nuclear power would have been inconceivable back in the dark days after Three Mile Island and Chernobyl. In the 1970s and ’80s, nuclear power had a disastrous environmental image, and by the 1990s, the sector looked dormant, even doomed. But climate-change fears have intensified so much in the past few years that electricity without emissions sounds pretty sweet. The pro-nuclear side feels reborn. “We’ve been through the wars,” says Jerry Hopwood, AECL’s vice-president of reactor development, and a 32-year company veteran. “People like myself stuck with it through the tough times. Right now, morale is fantastic.”

It wouldn’t be if AECL was for sale, which might once have suited plenty of Tories just fine. In fact, briefing notes for an early meeting Lunn had with AECL president Robert Van Adel, obtained by Greenpeace, show he was planning to bluntly ask for Van Adel’s “perspectives on privatization.” That wasn’t a far-fetched proposition. The French nuclear giant Areva is widely viewed as an eager buyer if AECL ever goes on the block. Lunn said he has met Areva representatives, although he declined to discuss exactly what they wanted to talk with him about. “There is interest in the market [in buying AECL],” he said. “But there’s absolutely no discussion of that at any level in the government at this time.” Beyond the possibility of privatization, AECL’s future was broadly in play through the first half of last year. On a heavily censored page in another Natural Resources briefing from early 2006, obtained by Greenpeace, a broad rethinking is suggested in the point-form note: “need to review and assess prospects for AECL within six months.”

If AECL sailed through that review, two timely tactical moves appear to have been the keys to its success. First, last spring, AECL executives created “Team CANDU,” an alliance with big private companies, which Lunn duly applauded, saying the participation of players like Hitachi and SNC-Lavalin boosts his confidence that any future Canadian reactors projects will be completed without any risk that taxpayers would be on the hook for cost overruns. Second, last fall, AECL struck its deal with Energy Alberta to push the oil sands concept that carries such obvious appeal for Harper and his Alberta base.

Still, it remains unclear how aggressive the

SUPPORT FROM PARLIAMENT HILL MIGHT

FADE IF AECL FAILS

TO MAKE SALES IN A BOOMING MARKET

Conservatives will be about openly touting nuclear power as a core element of their climate-change strategy. Environment Minister John Baird is expected to release the government’s new plan for curbing greenhouse gases from major industrial sources this week. For tactical reasons, he might decide to underplay nuclear power, even if its expansion amounts to a basic assumption behind the policy. Any explicit pro-nukes reference would rile up environmental groups that are already expected to be scathing in their reaction. As well, provincial governments are mainly responsible for choosing the mix of sources for meeting their electricity needs, and the federal Tories don’t want to be seen as pushing nuclear power on them.

But between the lines of a leaked draft of Baird’s plan, it’s hard not to read an implied case for nuclear power’s upside potential. “More than two-thirds of Canada’s coal-fired generating capacity will need to be replaced by 2020 and more new generating capacity will be required,” says the draft. “Some $150

billion in capital investments will need to be made.” Options for investing in new generating capacity that won’t spew CO2 are, to say the least, limited.

Environmental groups call for unprecedented investments in renewable sources like solar and wind. But the Conservatives make little or no distinction between nuclear power and those so-called “soft” renewables. Take Lunn’s announcement in January of what the government calls its ecoENERGY Technology Initiative, which is pouring $230 million into “clean-energy technologies.” His news release said the fund’s priorities “include carbon dioxide sequestration, clean coal, clean oil sands production and renewable energy.”

But a background document adds another priority that somehow didn’t make it into that publicized list: “nextgeneration nuclear.” Anti-nuclear activists complain that the government is merely continuing Ottawa’s long-standing practice of subsidizing nuclear so heavily that solar, wind and other clean-energy options don’t stand a chance. Last year, the federal government poured $180 million into AECL’s research and development efforts, not including a $520million commitment to fund a five-year cleanup of waste at the corporation’s research sites. Despite that support, the corporation was barely in the black, posting net income of just $5 million in 2005-06.

Solid support from Parliament Hill might not last if AECL fails to make sales in what’s shaping up to be a booming reactor market. It’s counting on Ontario to become the first buyer of its new Advanced CANDU Reactor, or ACR, the technology on which it pins hopes of cashing in on the climate-change driven nuclear rebound. Jerry Hopwood oversees the 200 engineers, scientists and support staff who work directly on this high-stakes, hightech ACR project. They are a small segment of AECL’s 4,500 employees, but Hopwood’s unit is critical to the corporation’s future. Its rivals, much larger companies to start with,

look to be ahead in the race to bring new reactors to market. Areva is already building the first of its new model in Finland, and Westinghouse’s updated design has been chosen as the first stage of a huge expansion of China’s nuclear generating capacity.

But Hopwell says AECL is in good shape. Work on what he calls the “conceptual design” for the ACR is done, and more detailed design work is slated to be finished by 2010. That means, he says, the first commercial station powered by the new reactor could be switched on by 2016. “Ontario is the logical first place,” he says. “It’s the home of CANDU.”

There are other possibilities. New Brunswick’s new Liberal government won the province’s election last year on a platform that included possibly adding a second reactor at Point Lepreau, Atlantic Canada’s only nuclear power plant. Then there’s Alberta. Production in the oil sands is slated to grow fivefold over the next decade or so to five million barrels of crude a day. “At that stage,” Hopwood says, “several nuclear units would certainly be appropriate to supply energy demand.”

Foreign markets also beckon. Some observers expect China to build as many as 40 reactors in the next two decades. Westinghouse has locked down the first piece of that huge expansion, and there was fear AECL might be frozen out. But Lunn said he and other cabinet ministers worked during visits to China to persuade the Chinese to put AECL back in their plans. “They have now said they are open to CANDU technology,” he said. AECL is trying to build on a track record, having delivered two reactors in China in 2002 and 2003, both on budget and ahead of schedule.

Britain is another focus for AECL’s export thrust. Tony Blair warns of the need to replace aging reactors or be increasingly reliant on imported fossil fuel. His government is slated to release an energy white paper this summer that’s expected to formally call for new nuclear reactors. A massive battle with environmental groups is brewing, and British public opinion appears deeply split. Still, following up on Harper’s salesmanship in London last summer, AECL likes its chances, optimistically projecting that Britain might buy up to four of its reactors as it adds up to 12,000 megawatts of generating capacity in the next 20 years.

ALL THE TALK OF AECL RIDING A WAVE OF domestic and international reactor sales drives Canadian environmental groups crazy. “Frankly, renewables, conservation, and energy efficiency are way more cost-effective in terms of reducing carbon dioxide,” says Emilie Moorhouse, a Sierra Club of Canada campaigner on energy and climate change. “If you’re investing billions in nuclear, that’s just

taking away from these more cost-effective solutions.”

Her emphasis on costs is typical of Canadian anti-nuclear activists these days, and revealing. They tend to see the history of nuclear megaproject fiascos and the ongoing heavy subsidization of AECL as their most effective argument against more nukes. But they could be fighting against the current of public opinion, as awareness of climate change rises. Polling by Ipsos Reid for the Canadian Nuclear Association found that support for nuclear power has risen over two years to 44 per cent from 35 per cent nationally, and jumped to 63 per cent from 48 per cent in the key battleground of Ontario. Not all that change can be attributed to global warming worries. In 2003, the power grid failed in Ontario and much of the northeastern U.S., a blackout that left 50 million consumers with plenty of time to ponder in the dark about the need for a reliable power supply.

But anti-nuclear campaigner Shawn-Patrick Stensil, a Greenpeace energy expert, argues that AECL is too far behind in its design work to take advantage of Ontario’s new electricity plan. “If AECL has a chance of selling the ACR anywhere in the world, they have to sell in Ontario first,” Stensil says. “But the McGuinty government wants to get new nukes online by about 2015, and the design work isn’t even done yet on the ACR. They are missing the market window.”

Hopwood denies there is any timing problem, saying AECL could bid for an Ontario sale and even go ahead with an environmental assessment before completing a detailed ACR design. Stensil says speculation is swirling that AECL will end up trying to sell Ontario an updated version of its old reactor, the CANDU 6, sold most recently to China and Romania. That would be a dangerous setback for the

ACR, which AECL needs to show off to potential foreign buyers. “They need a guinea pig,” Stensil said.

Whatever reactor Ontario chooses, the environmental movement is gearing up for a fight. Details of how the province will press ahead, and exactly how the Canadian Nuclear Safety Commission will conduct regulatory reviews, including an environmental assessment of any new reactor, are still to be announced.

LEAR INDUSTRY WILL LOOK TO

CAKLOIT CRACKS IN

THE ENVIRONMENTALIST OPPOSITION

Obviously, the federal Tories would just as soon let the province fight the inevitable war. But one key piece of the puzzle sits squarely on Lunn’s desk, the unsettled issue of longterm nuclear waste disposal. Just before the Tories won the 2006 election, the Nuclear Waste Management Organization delivered a report to the Department of Natural Resources recommending a deep underground storage facility. It would make sense to settle the issue before Ontario embarks on its nuclear expansion. But any move to act on the report would invite a firestorm of controversy. “We are carefully considering those recommendations at this time,” is all Lunn would say, refusing to even hint at when the government might announce a course of action. (A good

bet: not until after the next election.)

However these battles unfold, the nuclear industry and its political supporters will be looking to exploit cracks they see in the wall of environmentalist opposition. They never tire of mentioning that Patrick Moore, a founder of Greenpeace, has turned pro-nuclear. Perhaps more intriguing, though, is the nuance creeping into the language of some environmentalists who are still far from sold on nuclear power. Even David Suzuki, the public face and living patron saint of the Canadian green movement, has raised eyebrows by declaring in at least two broadcast interviews that he doesn’t take a “knee-jerk” position against nuclear energy, although he remains, for now at least, firmly opposed.

In an email exchange with Maclean’s, Suzuki explained his position. “I don’t say unequivocally that nuclear is not an option. It may very well be sometime in the future,” he wrote. 'But right now, I think it’s nuts to even suggest nuclear. Climate change confronts us with the opportunity to think and design the kind of energy we want in the future and to me, it’s clear it should be a network of smallscale, diverse sources.” He lists wind, solar and tidal power as his preferences.

In fact, those green options seem to be gaining some ground. Ontario is banking on doubling the electricity it draws from renewables by 2025 to 15,700 megawatts. That would outstrip nuclear power’s projected 14,000-megawatt contribution under the McGuinty plan, up from about 11,400 megawatts—or half the province’s electricity—today. Ottawa has no say in how the provinces plan for supplying their power needs, and Lunn is careful not to impose. “It is absolutely essential,” he says, “that provinces make their own choices about energy mix.”

But he also expresses informed admiration for a perhaps unexpected model—France, where 58 reactors supply 80 per cent of the country’s electricity. “They have the cleanest air shed of all the industrialized countries,” Lunn notes. “They made this decision 20 years ago, ahead of their time, and it has proven to be very successful.” And that, even if it’s not really up to him to have one, sounds like a plan. M