Energy

A nuclear bombshel that is killing the industry

Robert Gibson October 30 1978
Energy

A nuclear bombshel that is killing the industry

Robert Gibson October 30 1978

A nuclear bombshel that is killing the industry

Energy

In 1976, 40,000 protesters gathered at the site of a proposed fast-breeder reactor near Brokdorf in West Germany. They were met by 5,000 police armed with Mace, tear gas and water cannons, and kept out by heavy barbed-wire fences.

Last spring, Austrian Chancellor Bruno Kreisky decided to call a national referendum to decide whether or not the country’s first nuclear plant should be used. The Zwentendorf plant, which has been complete for some time, would normally have received start-up permission from the Austrian Parliament. But Kreisky, fearing the wrath of Austria’s powerful anti-nuclear movement and remembering the fate of his friend Olof Palme, chose to pass the responsibility along to the electorate. (Palme was prime minister of Sweden until the election of 1976 when his Social Democratic Party, which had held power for 44 years, was defeated by anti-nuclear voters.) The Austrian referendum is scheduled for Nov. 5.

In Europe, nuclear politics means confrontation politics. Most countries, particularly those not blessed with abundant hydro or fossil-fuel resources, continue to find the nuclear option attractive. But the opposition of citizens, who oppose a technology they believe to be unacceptably dangerous, is powerful. And while it has so far failed to halt the spread of nuclear power in Europe, the opposition—with the help of declining demand for electricity—has slowed ex-

pansion to the point where companies in the nuclear industry must succeed in the export trade or go out of business.

In Canada, despite the high hopes of government and industry officials who had thought the CANDU reactor would be the international showpiece of Canadian high technology—and despite the absence of bitter European-style confrontation with nuclear power opponents—the nuclear industry may soon pass away. The crucial nail in the coffin may be the seemingly mild interim report of Dr. Arthur Porter’s Royal Commission on Electric Power Planning in

Ontario—the most important document to date on the future of nuclear power in Canada.

The weighty report unveiled by Porter to the public on Sept. 27—based on 335 hours of public hearings and stacks of submissions from Ontario Hydro, private industry, government representatives, international experts and hired consultants—contained some ini| tial good news for nuclear proponents, ir Porter and his fellow commissioners g concluded that, despite the uproar this 8 summer, “within reasonable limits, the 8 CANDU reactor is safe.” And although 2 the report suggests that a moratorium on future nuclear stations would be warranted if a satisfactory method for permanent disposal of radioactive waste is not found by 1985, Porter is optimistic that such a method will appear in time. Which soothed an industry tender on the issues of safety and wastes disposal from the protests of anti-nuclear groups.

But Porter’s safety findings were not enough. The nuclear industry has a more serious problem—one that is closer to its pocketbook: Reactor sales are scarce and the outlook is bleak. Don Douglas, former chairman of Babcock and Wilcox, a major supplier of nuclear equipment, told a Porter Commission hearing last December that the industry was in trouble. “By 1979 it will be producing at only half its capacity of 3V2 to four reactors per year,” he said. “And the present projections of domestic demand indicate that the industry will continue to operate below capacity for at least the next 10 years.”

By domestic demand, Douglas meant Ontario. The province’s existing nuclear facilities and committed purchases rep-

resent close to 90 per cent of the Canadian nuclear industry’s total sales. When Douglas appeared before Porter, Ontario Hydro was predicting that demand for electrical energy would increase 6.2 per cent annually at the turn of the century, implying a need for about 40 reactors in addition to those Hydro was already committed to build. For the industry, it worked out to slightly less than two reactors per year.

Three months later, Ontario Hydro dropped its forecast to 5.2 per cent. Until this decade, electricity use had increased by about seven per cent each year. But the expansion began to slow in the ’70s, even before energy price increases following the 1973 oil crisis introduced consumers to the joys and economies of conservation. Hydro retained brave hopes of a return to the seven-per-cent growth rate of the cheap energy era until 1976. By 1977 the actual growth rate had fallen to 2.2 per cent. Further reduction in the Hydro forecast was inevitable.

The worried Canadian Nuclear Association (CNA), representing nuclear manufacturers, consultants and utility users, contracted Leonard and Partners of Ottawa to examine the economic prospects of the industry. Their report, released on Sept. 19, revealed that the industry was operating at the minimum

production level consistent with continued survival and faced a further slump in the early ’80s. And some companies were “already considering withdrawal from the industry.”

Leonard and Partners did not close off all hope. They concluded that a slightly smaller industry would be able to eke out a marginal existence if Ontario Hydro would commit itself to building at least as many new reactors as the 5.2-per-cent growth rate implied. In addition, they saw some reason to anticipate export sales and thought that Ontario and Quebec might be willing to assist the industry by ordering nuclear plants a few years earlier than necessary. But while some export sales were on the horizon—notably to Romania—no export boom was in sight. Ontario was already expecting to have too much power on its hands by the mid-’80s and, in Quebec, the government had yet to decide whether it even wanted to add an extra reactor to its Gentilly complex.

Standard Modern Tool, one of two companies in Canada that make fuelling machines for reactors, is now doing better than some other nuclear component manufacturers. It is currently operating at about 80-per-cent capacity, but by the end of 1980 its fuelling machines department will be down to 15 per cent. Standard Modern’s vice-presi-

dent, Walter Hibbins, says that even if the Romanian export sale goes through, it won’t come in time to prevent idleness in 1980. “The penny has already dropped for the nuclear industry,” Hibbins claims, “and nothing can happen in the next three years soon enough to solve the industry’s problems short of a deliberate make-work decision.”

But when the Porter Commission released its report eight days after the Leonard and Partners study, the future looked even bleaker. Porter and his colleagues rejected Ontario Hydro’s forecast of a 5.2-per-cent average annual electrical growth. Instead, they concluded that “the average growth rate to the year 2000 will probably be in the order of four per cent per annum.” Porter judged that Ontario should install no more than 12 nuclear reactors (three stations with four 850-megawatt reactors each) between 1988—when currently committed construction will be finished—and the turn of the century. Order at that level—about one reactor per year—would support only a quarter of the industry’s current productive capacity. Exports (and possible sales to Quebec) might bridge some of the gap but, as Porter pointed out, “recent history . . . inspires confidence neither in the ease with which Canada is likely to achieve further exports beyond the two CANDU reactors sold to Argentina and South Korea, nor in the commercial profitability of such ventures.”

CNA president Nicholas Ediger somehow remains optimistic that nuclear manufacturers, which have 6,000 employees and a capital investment of $214 million, will pull through. “If there are not enough domestic sales, then there will just have to be exports,” he says. But nuclear manufacturers will be risking a lot if they stay in the nuclear business relying on the export trade, knowing that Ontario will no longer provide a basis for survival if Porter’s views are accepted. They may stick it out through lean years only to find the future is even leaner.

The nuclear industry will have to wait until October, 1979, for Porter’s final word on probable electrical growth and the likelihood of future reactor sales. Last October, international energy consultant and soft energy advocate Amory Lovins told Porter that the U.S. nuclear industry was like a dying brontosaurus: its spine was broken but its head had not yet heard the news. The Canadian industry is also dying. But it is well aware of its dilemma and it has not been seriously injured in battle. It is merely starving to death, quietly and discreetly. Robert Gibson