Canadian Nuclear Subsidies
Fifty Years of Futile Funding
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Atomic Energy of Canada Limited (AECL) is the federal crown corporation that designs and markets CANDU reactors. On AECLs 50th anniversary President Robert Van Adel ranted in the propaganda style of the 1950s about the unending promise of nuclear power. He confuses wishful thinking with fact, and hope with reality. Fact: AECL is a financial basket case that has received $17.5 billion in subsidies already, and they want more. Reality: after a 50 year track record of technical and financial failure, its safe to assume this pattern will not change.
In 2001-2002 the federal government increased AECLs annual subsidy to $211.2 million the largest amount in 15 years. AECL employment has grown to 4000, the highest level in since 1994. This is a dramatic rejection of the governments 1996 Budget Plan, which capped AECL subsidies at $100 million per year. Prime Minister Chrétien has evidently made the restoration of nuclear subsidies one of his parting legacies for Canadian taxpayers. No wonder AECL describes Chrétien as an enthusiastic and long-time supporter of AECL and CANDU.
AECL President Van Adel is reorganizing the company on an enterprise model. But a crown corporation dependent on massive government subsidies cannot really be based on a free enterprise model, or have a truly commercial culture. Van Adel talks about the sustained investment needed to turn AECL around. Unfortunately for Canadian taxpayers, sustained investment means more public subsidies.
Nuclear industry propaganda has recently focused on the false claim of a nuclear renaissance. Following the introduction of electricity competition in the United States, utilities could write off much of their nuclear debt as stranded costs, allowing older nuclear plants to sell at a fraction of their cost and continue operating. The nuclear renaissance was really a nuclear bailout. Ratepayers are still being forced to pay for stranded costs, and there are no firm proposals in the U.S. for any new nuclear plants. The reason is simple: new nuclear plants are twice the cost of natural gas plants.
High cost is not the only argument against nuclear power. Nuclear power is a security nightmare. Terrorists dont need nuclear bombs if they can cause a meltdown at a nuclear power plant. Nuclear power is not a clean technology -- radioactive emissions and radioactive waste cause cancer and birth defects; there is always the risk of a catastrophic accident like Chernobyl; and nuclear weapons proliferation is a constant danger. Nuclear power was also rejected as a solution to climate change at the 2001 Climate Change Conference in Bonn. Nuclear power is in conflict with Canadas commitment to the Kyoto Protocol -- renewable energy and efficiency technologies are cheaper, cleaner, and safer.
With no public debate, the Cabinet has given AECL over $200 million to design a new reactor prototype called the Advanced CANDU Reactor (ACR). AECL claims it will be cheaper and find a ready market. Weve heard this before over AECLs 50-year history of foul-ups... the Organic Cooled Reactor in Manitoba was a technological dead-end; the CANDU-Boiling Light Water Reactor at Gentilly, Québec, used ordinary water as coolant like the ACR -- it was a disaster that operated less than 200 days and cost taxpayers $126 million plus design costs; the Slowpoke Energy System cost $45 million to design, but nobody wanted a small reactor for a furnace; the CANDU 3 design cost $75 million for a smaller and cheaper reactor (like the ACR), but nobody wanted to risk an untested design; the CANDU 9 design costs were kept secret, but it was never built after South Korea canned its CANDU program; and the two MAPLE reactors at Chalk River have been another AECL fiasco, with start-up delayed over four years. AECLs next proposal for a publicly funded nuclear mega-project is the $500 million Canadian Neutron Facility (CNF) reactor to replace the aging NRU reactor in 2005. There is no real need for the CNF reactor because research can be conducted at other international facilities. Given AECLs unparalleled history of incompetence and failure, it is throwing good money after bad to provide $200 million in public funds for the Advanced CANDU Reactor, or $500 million for the CNF reactor.
CANDU reactors have been breaking down far earlier than their expected 40 year lifetimes. After 20 years or less, major refurbishment is needed that costs as much or more than the original cost of the plant. As a primary consultant, AECL has been blamed for yet another fiasco in the refurbishment of Ontario Power Generations Pickering A Nuclear Station. The start-up of the first reactor has been delayed three years, and costs have escalated from $800 million to $2.5 billion for all four reactors.
AECL devised a refurbishment plan for New Brunswick Powers Point Lepreau nuclear plant. In September 2002 the New Brunswick Public Utilities Board recommended against the $845 million proposal, saying that it was too risky and too expensive. Federal taxpayers carry of the risk if AECL fouls up the project. Yet in order to push the project ahead, AECL is now asking the federal government to accept even more risk or become an equity partner. The Cabinet should just say no to yet another nuclear money pit. The Hydro-Québec Board of Directors is expected to decide in 2003 on whether to refurbish its Gentilly 2 reactor.
AECL has always promised financial salvation through CANDU exports, but only 12 reactors have been sold -- less than 3% of the world total. In 1996, AECL said our goal is to secure ten CANDU sales over the next ten years. Since then, only three reactors have been sold -- two to China in 1996, and one to Romania in 2003. Cernavoda-2 was just the completion of a 1980 deal, but it still required a $328 million guarantee through the Canada Account of Export Development Canada -- a direct hit for Canadian taxpayers. The two Qinshan reactors sold to China also received $1.5 billion in Canada Account financing. Reactor sales are too big and too risky for private sector institutions, so why should the government risk public funds? AECLs recent loss of sales in Turkey, Australia and South Korea underscore that CANDU exports are a dead-end. There is no possibility of further reactor sales in the foreseeable future.
AECLs deadly legacy for Canada is radioactive waste and contamination. The Province of Manitoba has protested the extended length of AECLs 60-year clean-up of the Whiteshell Laboratories. AECL wont even release its clean-up plans for the Chalk River Laboratories in Ontarios Ottawa valley, and the government refuses to conduct an environmental assessment on the overall decommissioning plan for the site. Radiation contamination from 50 years of sloppy practices has spread to the Ottawa River, source of recreation and drinking water for millions in Québec and Ontario.
AECL celebrated its 50th Anniversary in 2002 along with MAD Magazine and Sugar Frosted Flakes. Unlike those two profitable businesses, AECLs most notable achievement in 50 years has been its ability to suck up huge subsidies from the federal government like a nuclear-powered vacuum cleaner. After fifty years of futile funding, its time to pull the plug.
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