Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 30 - Evidence, May 9, 2002
OTTAWA, Thursday, May 9, 2002
The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill C- 27, respecting the long-term management of nuclear fuel waste, met this day at 9:10 a.m. to give consideration to the bill.
Senator Nicholas W. Taylor (Chairman) in the Chair.
[English]
The Chairman: We have witnesses today from Ontario Power Generation and from Atomic Energy of Canada Limited.
It is fortunate that you are all on the same panel, in some respects, because one of the biggest criticisms we have heard about the proposed legislation is that there is an incestuous relationship between Ontario Power Generation, OPG, and Atomic Energy of Canada Limited, AECL.
Mr. Dicerni, Please proceed.
Mr. Richard Dicerni, Executive Vice-President and Corporate Secretary, Ontario Power Generation: Honourable senators, thank you for this opportunity to appear before your committee today. I will speak to nuclear energy first, to put into context the need for and the reason for Bill C-27, after which I will speak specifically to Bill C-27.
In Ontario, nuclear energy currently provides about 45 per cent of the electricity that is used in the province. Subject to further regulatory approvals, within two or three years, this provision will increase when the Pickering and Bruce units that are currently laid up come back on line. Those six units would add approximately 30 terawatt hours to the base that is currently generated by nuclear power. When you consider that Ontario currently consumes about 150 terawatt hours, we are talking about a 20-per-cent increase, all from nuclear power.
The Chairman: What would the percentage of that be?
Mr. Dicerni: The increase would be 20 per cent. Currently, the base is 150 terawatt hours.
The Chairman: What would the total percentage of power generated in Ontario be when those units come back on line?
Mr. Dicerni: About two thirds, I would say.
Nuclear power has a number of advantages, including the fact that it is clean and free of the emissions that cause smog, acid rain or global warming. In that context, we think that nuclear power is an essential component of the country's commitment to achieving the Kyoto protocol.
I should now like to turn to the discussion on Bill C-27, which Ontario Power Generation supports because it is the right thing to do. It is a balanced bill that recognizes the public interest as well as the need to move forward.
This morning, I propose to discuss four or five issues that have been raised in the course of debate in the Senate and in the House of Commons, and then I will provide our perspective on those issues.
Mr. Chairman, you alluded to certain public mistrust surrounding the nuclear power sector and wondered how the public interest is to be safeguarded when the system is run by the nuclear industry itself. I would like to emphasize the various oversight and decision-making processes that are not within the purview of the Waste Management Organization, WMO. It is important to underline that the WMO will make recommendations and applications but it will not make the decision. It is not an institution that will go away in some dark corner and, on its own, make a number of decisions.
The first step is that the WMO must develop, within three years, a plan that must be submitted to the Minister of Natural Resources. The Minister of Natural Resources and the Government of Canada must determine whether the plan is adequate — whether it has been well considered and adequately consulted on. That first decision point is within the bailiwick of the government.
The second step, assuming the plan has been accepted and a specific site or project is identified, is to subject it to an environmental assessment run under the auspices of the Minister of the Environment through the Canadian Environmental Assessment Agency, CEAA. At the end of the day, that agency, by extension of the minister, must make the decisions because they are not made by WMO. Assuming that phase is successfully concluded and there is a need to build or develop a licence to operate, then WMO must apply to the Canadian Nuclear Safety Commission, CNSC, for the appropriate licences. Through all of these processes, decision making is not in the hands of the WMO but rather in the hands of government bodies to whom we submit to represent the public interest. In our view, the public interest is well looked after through these various oversight bodies.
The second comment or criticism that has been made is that this is not an open and transparent process. As honourable senators are aware, the proposed legislation calls for an advisory panel to be established. That panel will have to make reports, which will be made public. Again, there will be a measure of transparency.
The WMO must, and this is in clause 12 of the bill, carry out consultations on each of the proposed approaches. The proposed legislation states that the minister, if he or she feels that this has not been adequately done, can undertake consultations. All the annual reports of the WMO will be tabled in Parliament. Therefore, I submit that there will be a significant degree of participation by the public, and there will be a significant degree of transparency and openness in this exercise, as required by legislation.
The third comment that you have likely heard is that three years is not a long enough time to do justice to this endeavour. There is a fine balance that must be maintained between getting on with something on the one hand and ensuring that you do an adequate job on the other hand. The adequacy of the job in this context does include public participation and input. When we discussed this matter before the Commons committee, we, as one voice, outlined the fine balance. If you impose a time frame of three years, some people may argue that it is too short to adequately permit full public input. However, we did not set the time frame; the government determined that three years would be appropriate.
We will do our utmost to do the best job possible, factoring in as many of the inputs as we can, and still have a credible plan to submit to the government within three years of the bill's enactment.
We wish to do well at a job that is transparent and open to the public because we will be spending a significant amount of money on various funds. The bill calls for us to put $500 million into a fund as a down payment, and then annually an additional $100 million. These monies cannot be passed on automatically through a stipend to the people of Ontario who use nuclear power for their electricity. It comes out of OPG's bottom line. These are significant amounts of money. In that respect, we wish to do this job right. We do not want to be accused six years down the road of not adequately consulting or adequately considering the various options, because the whole process will create a significant financial burden on the company.
In conclusion, we recognize that the bill put forth by the government was different from the recommendation of the Seaborn panel, which was a Crown corporation. A Crown corporation has other characteristics. The DNA of a Crown corporation is different from the DNA of an industry-led organization.
In some of the testimony honourable senators have heard there is a perception that an industry-led endeavour will be fraught with all sorts of warts and that bad things will happen. It is important to note that, in Sweden and Finland, where there has been some significant progress made on managing nuclear waste, the process has been led by an industry organization, not a government organization.
In conclusion, we are committed to finding a long-term solution for used nuclear fuel. We want to do this right, as we believe it is the responsibility of this company and other prospective members of WMO to work on this from a sustainable development perspective, and we want to have an open and fair debate.
Dr. David Torgerson, Senior Vice-President, Technology, Atomic Energy of Canada Limited: Honourable senators, thank you for inviting us here this morning to talk about this bill.
Last fall, I had the honour of appearing before the House of Commons standing committee that was reviewing this bill. My remarks today are based on that submission. AECL's position is that we support this important proposed legislation.
AECL is a world-class nuclear technology and engineering company providing customers in Canada and overseas with a full range of advanced energy products and services. We are a Crown corporation with both a commercial and a public policy implementation mandate to create value for our customers and our shareholder, the federal government, by managing the Canadian nuclear platform responsibly and cost effectively by leveraging this platform to deliver nuclear products and services and by paying dividends from profitable growth to maintain the platform. Our vision is to become the top worldwide supplier of technology-based nuclear products and services, including radioactive waste management services.
AECL has the most experience of any Canadian organization in the field of radioactive waste management. AECL, and its predecessor, has had responsibility for providing waste management services to Canadian nuclear waste producers for over 50 years. We are responsible for management of low-, intermediate- and high-level radioactive wastes arising from defence, medical applications, universities, prototype CANDU reactors and from our research reactors.
A substantial portion of Canada's investment in nuclear R&D performed by AECL scientists and engineers has focused on management and disposal technology and the know-how of radioactive waste, including nuclear fuel waste. We were responsible for R& D on deep geological disposal. We are providing services to Natural Resources Canada through our low-level radioactive waste management office.
This extensive capability can be put to use for the benefit of all Canadians. Indeed, our focus is to ensure that Canadians benefit from their investment. We believe this is achievable through the provision of AECL services during the study phase and the implementation of the long-term management approach for nuclear fuel wastes ultimately chosen by the Governor in Council.
Our submission to this committee is one of support for the principles of the bill. The framework it proposes to establish is essential to moving forward and dealing with the long-term management of nuclear fuel waste. AECL is prepared to actively participate in the successful implementation of the proposed legislation. We will make our services and technical expertise available to work towards achieving a return on the federal government's investment.
The proposed legislation framework promotes a fully transparent implementation process providing and encouraging opportunities for a full range of participation. This includes participation in the preparation of studies, the development of recommendations and in actual implementation. Throughout all phases, a balanced approach taking into consideration a range of needs and interests will need to be developed, monitored and maintained. Full transparency is essential for the government and the public to have confidence in the successful implementation of this proposed legislation.
AECL fully supports the principles and intents of Bill C-27. This is a sound approach. We recognize the need for the establishment of a waste management organization by Ontario Power Generation, Hydro-Québec and New Brunswick Power.
In order for it to be responsive to the requirements set out in Bill C-27, including the three-year schedule for preparation of its study, which includes public consultation, this waste management organization must access all relevant and reliable sources of technical information, technology and expertise.
In conclusion, Bill C-27 is supported by AECL. An appropriate approach has been developed to respond to an important issue that needs to be addressed in a fully transparent manner. We look forward to working with the nuclear energy corporations in fulfilling implementation obligations. We are ready to ensure, to the best of our ability, that Canadians benefit from our investment in R&D and from AECL's scientific, engineering and management capability in waste management technologies and services.
The Chairman: Mr. Dicerni, you mentioned that the advisory council was another hurdle the WMO had to clear, and that they had to give their approval.
My impression from reading Bill C-27, and your impression might be different, is that the WMO appoints the advisory council. Is that not like asking Colonel Sanders what is wrong with the chicken coop?
Mr. Dicerni: I do not think I referred to the advisory committee as being an approval level; rather, it is a source of public input or public transparency that would add more openness to the exercise. The advisory committee has a legislative mandate to provide a public report on behalf of those who represent the public interest.
Second, if we — and we would obviously be part of the WMO — err on the appointment of the advisory committee, I think this would not be in this company's or the WMO's interests.
A witness before your committee advocated that in all likelihood the members of the advisory committee would be plucked from the nuclear industry. That would be an unwise choice, akin to us being somewhat brain-dead in terms of not recognizing the importance of reaching out to other sectors of society.
The Chairman: Would an advisory council appointed by the minister not be more truly an advisory council than one appointed by WMO? As you say, there is transparency, but it seems the window may be somewhat soapy if they are foolish enough to appoint only members of the nuclear industry. Foolish appointments are not unique in Canada in any field. We do our best to try to set one to watch the other. Are you happy with the WMO appointing the council, and do you feel sure they would appoint people that would call them to task?
Mr. Dicerni: I would hope the WMO would seek to appoint people who are credible, have a measure of personal integrity and are not afraid to express their opinions. If the WMO's advisory committee is simply made up of individuals who are deemed by parliamentarians to be simply a rubber-stamp, the advisory committee will not be performing its legislative role.
I hope we will be able to find individuals, and I am confident that we can, who are able to perform this job.
Having said that, I would like to emphasize that the public interest will be addressed through some of the many other means, such as ministerial review, review under the Canadian Environmental Assessment Act and review through the Canadian Nuclear Safety Commission. All these bodies represent the public interest. Having had to appear in front of all the above, I personally can vouch for the effectiveness and the thoroughness of those processes.
The Chairman: I cannot see it in the bill; however, I had the impression that the members and term of the advisory council were at the pleasure of the WMO. In other words, they are not five-year appointments or something set.
Mr. Dicerni: I am not sure the modalities of appointments have been completely worked out. There are different models that could be put in place to ensure, on one hand, some measure of continuity and, on the other hand, some measure of renewal. Some could be appointed for three years, four years or five years, recognizing that certain individuals would not wish to tie themselves up for a five- or ten-year period.
It is a question of balancing people's interests, commitment and availability. We are confident that there would be enough people who would be prepared to commit to a period of time.
I initially mentioned three years to five years because that first phase of the WMO's work is critical and will determine what happens in the next phase. For example, if one concludes hypothetically that the preferred choice is to leave nuclear waste on site, then perhaps the second wave of the advisory committee could be more representative of local people at those sites. If alternatively, the preferred path is to find a centralized above-ground location, perhaps the advisory committee should be more representative of that area and the communities surrounding that area.
I submit to you that the nature and representation of the advisory committee may, over time, have to evolve in order to fulfil its legislative mandate.
The Chairman: I must admit that you do not leave me with a warm and fuzzy feeling. The advisory council size is problematic. The length of time they serve is problematic. In other words, it is problematic all the way through. I see you are doing your best to defend the bill.
Mr. Dicerni: We did not write the bill.
The Chairman: I know. I am just saying that I am not getting a good feeling.
Senator Eyton: Thank you, gentlemen, for appearing before us this morning.
You seem to favour the model proposed in this bill over a Crown corporation. Why is that?
Mr. Dicerni: We were not given much of a choice. From our perspective, we had to be either for or against the bill. If we came out against it, it would not move the yardstick a great deal. Therefore, we have taken the approach that we should be as constructive as we can within the framework of the bill as written.
If we had been the authors of the bill, we probably would have leaned in this direction for one reason. It appears to be the approach that has worked. In Finland, where there has emerged a societal consensus around how and where to store waste, it has been through an industry-led endeavour. The progress being made in Sweden is also similar.
There are not many success stories worldwide. Those that do exist are somewhat based on the model that is espoused in Bill C-27.
Senator Eyton: Does this model not mean it is likely to be more adversarial?
Mr. Dicerni: I will defer to my colleagues because I did not live through those experiences. I would submit, however, that the debates that took place in front of the Seaborn panel could be described as adversarial and were not warm and fuzzy.
At the end of the day, the subject matter, being somewhat contentious, brings about people's deep personal convictions. I am not sure that the plumbing — in other words, whether it is Crown corporation- or industry-led, will make that significant a difference vis-à-vis outcome. It is how you go about it and the processes that you follow to get there as compared to whether it is a Crown corporation- or an industry-led affair.
Senator Eyton: I should like to ask a little bit about the three-year period, which seems to be excessively long. Waste management has been around as an important public issue for perhaps 50 years, but certainly for 20 or 30 years. I would have thought that all of the options that could be considered are on the table now and well known. Also, I would have thought that the proponents and opponents of all those options are also in the room and that we know their positions.
As well, there has been a three-year period with much public consultation. I rather suspect the proponents and opponents would have been roughly repeating the same arguments for and against that they could today.
In that context, would you comment on the three years? It seems to me not very useful to anticipate that you need all that time. I would have thought you could do it in three months or perhaps one year. Three years seems an opportunity to make it more contentious and more difficult to make decisions.
Mr. Dicerni: First, in the mid-1990s, as Deputy Minister of Environment and Energy in the Province of Ontario, I had some responsibility for locating some waste sites. The province had taken over the responsibility for locating waste sites for garbage for the GTA. This was, shall we say, traditional garbage as compared with radioactive waste.
Three years into the mission, not a shovel had been put into any ground. Consensus had not broken out in terms of where to put the sites or how people would welcome the arrival of someone else's garbage. The issue of achieving societal consensus is not easy, especially on this matter.
One of the options presented in the bill is to retain the waste in situ in perpetuity. I think most people in those communities would want to be involved in a consultation process of a fairly significant nature. Again, I go back to the examples in Scandinavia where communities were consulted extensively to ascertain if they were prepared to accept the waste. This type of consultation takes time, and keep in mind a flower does not grow any faster if you pull on it. There are certain things that require a bit of time. The United Kingdom has recently mandated a committee to develop options to examine this issue. They have given that committee six or seven years.
Senator Eyton: Assume three years is an ideal period of time. There is a built in conundrum, in that, as you said, you are charging ahead with nuclear power investment and the percentage, after the new power is on line, is in the order of 55 per cent. It is not as high as the two-thirds — 66 per cent — that you mentioned earlier. There is nuclear waste; it will always be there and it must be dealt with one way or another. It is not a question of saying, ``We don't want nuclear waste.'' That option is, in effect, off the table.
In addressing the question of public understanding and support, and leaving aside for the moment intelligent disposal, what if that public understanding and support, even after all that consultation, does not come about? What if, for whatever reason, there is a horrible accident that initiates a public reaction against the industry? In effect, while there may be an intelligent way to dispose of the waste, there would be no public support for an entire industry that would now comprise about 55 per cent of the power generation in this province? Do you have some scenario planned for such a circumstance?
Mr. Dicerni: Nuclear waste is currently stored extremely safely at existing sites; we have dry storage capabilities at Darlington, Pickering and Bruce, which very much look after the waste. There is space currently available and there will be a bit more space available in the future to look after it. It is not as though, for example, in 2005, if the minister rejects the report and deems the proposal inadequate, we would collectively fall off a cliff.
The second comment I should like to make is that, having been through the waste operation with the provincial government once, you have to start these operations with a positive outlook. You have to believe that you can achieve the goal at the end of the day, although it will not be easy. However, I think it can be done. It will be a challenge to achieve that consensus because people have strong views.
Senator Eyton: Who has it right? I come from a place where people look around and wonder if someone has it right so that they can know how to do it right. Where is that lovely combination of good public understanding and support and what you would consider an ideal waste management option in place and working? Who is the stalking horse that we should look for?
Mr. Dicerni: I think Scandinavia is probably the jurisdiction that has made the most progress. Their situation came down to two communities in a runoff to host the permanent waste site. This was put to the community and to a vote in their parliament, et cetera. They affirmed their need for nuclear power and the need to look after the nuclear waste. Two communities were left with their hands up after three or four others dropped out. In the end, it was a choice between two communities.
Senator Eyton: You said ``Scandinavia.'' Was that in Sweden?
Mr. Dicerni: It was in Finland. Sweden is moving on it. Mr. Nash has been there and has seen it more closely than I have.
Mr. Ken Nash, Vice-President, Nuclear Waste Management Division, Ontario Power Generation: In fact, as Mr. Dicerni was mentioning, last year there was a vote in the Finnish parliament, and although I cannot remember the exact numbers, support for the plan was approximately 144 to three. That included members of their equivalent to the Green Party. Sweden is following a very similar process. They have narrowed it down to two communities, where detailed studies are occurring over the course of the next few years. They expect to make a decision on which of these communities will host the permanent facility.
As mentioned earlier by Mr. Dicerni, these are industry-led waste management organizations that are following the same principles that Mr. Dicerni mentioned, that is, the need to deal with this matter on a permanent basis and the need to deal with it with a high degree of societal consensus.
Senator Eyton: Would one of the options for an Ontario solution be to ship it to British Columbia, for example?
Mr. Dicerni: Ontario has generated approximately 90 per cent of the nuclear waste, so there is a certain logic in saying that Ontario should have a central site. There is a certain logic to assuming that it would be within the provincial boundaries of Ontario, given that it starts with 90 per cent of the generation of it.
The Chairman: I have a question for Mr. Torgerson with respect to the Operational Safety Review Team, OSART, of the International Atomic Energy Agency, IAEA. As you know, this committee looked at the safety of nuclear power. In Paris, we heard about the OSART examination of operating plants. Since then, Canada has asked to have OSART take a look at our operating plants. My impression is that the Americans, before they went ahead with the Yucca Mountain disposal system, talked to OSART about nuclear waste. Have you had any talks with representatives of international agencies from Vienna or Paris about nuclear waste?
Mr. Torgerson: We have had considerable interaction with international agencies such as the IAEA in Vienna and the Nuclear Energy Agency of the Organisation for Economic Co-operation and Development, NEA/OECD, in Paris. Our experts deal with experts from other countries in those fora.
We have also been dealing specifically with the Americans over the past several years on the permanent disposal of nuclear fuel waste. In fact, we are a contractor to the Americans to provide technical expertise in assisting them with their program. Yes, we have had considerable experience with international agencies, and more specifically with the U.S. waste disposal program.
The Chairman: That leads to my next question. As a geologist, and I do not know if that is part of your background, I gather the Yucca Mountain is in a volcanic tooth. Does that give peace and security to those that live on the Canadian Shield, or are you convinced that the Canadian Shield mines are the only place? On the other hand, are the cordillera of British Columbia and Yukon being considered as a Yucca Mountain-type situation?
Mr. Torgerson: The focus for the Canadian nuclear fuel waste management program has been on the granitic rock of the Canadian Shield. We have not examined volcanic tuff at any time or had a research program specifically geared to that type of rock formation. In fact, there are many different geologic formations suitable for the suitable for the permanent disposal of nuclear fuel waste.
What you are looking for, as you know, as a geologist is a stable formation, and there are a number of them throughout the world. Our focus is on granitic rock, not on volcanic tuff.
Senator Mahovlich: You mentioned the Pickering and Bruce plants being closed. How often does this happen? Has the closure been because of accidents, or is this a normal procedure? If there are any accidents, can you be transparent with us and give us an update?
Mr. Dicerni: Ontario Hydro had a fleet of 20 nuclear reactors. Around 1997-98, it decided to concentrate on 12 of those and rehabilitate the other eight. ``Rehabilitate'' refers to a major refurbishment of those units.
In the interim, we have leased all eight Bruce stations to a subsidiary of British Energy, Bruce Power, and they are looking after the rehabilitation of two of those units. We at OPG are concentrating on refurbishing and upgrading the four earliest Pickering A units, that is to say, Pickering 1, 2, 3 and 4.
We have conducted environmental assessments regarding the rehabilitation of these plants and submitted those to the Canadian Nuclear Safety Commission who reviewed and approved it. We have subsequently sought a licence to reopen the plants. That licence has been granted, subject to us meeting a number of licence conditions.
We report back to the regulator every six months or so on our progress. Our next progress report will be in two or three weeks from now, toward the latter part of May. We expect to have the first of these four units that were laid up back in operation toward the latter part of this year, early next year.
Senator Mahovlich: What is our largest energy producing plant in Ontario?
Mr. Dicerni: Darlington.
The Chairman: Mr. Dicerni, although every power producer is assessed an amount for their budget it is not clear in the proposed legislation how the vote goes? Does every owner have one vote, or are your votes weighted to the amount of electricity you produce?
Mr. Dicerni: It could be weighted to the amount of nuclear waste that is generated. Alternatively, it could be weighted to the amount of money that each company will be asked to contribute. As you know, it is set out in the bill that different companies have different down-payment numbers; hence, in political science terms I would deem this rep-by-pop.
The Chairman: ``Pop'' would not be the amount of power you generate but the amount of waste?
Mr. Dicerni: Partially. In our company, for example, we currently generate 50 per cent of our electricity through nuclear, 25 through hydroelectric and 25 to 30 per cent from fossil powers. Hydro-Québec is 97 per cent hydroelectric and 3 per cent nuclear; New Brunswick Power is in the order of 30-70. Given the diversity of the profile, it is based on the amount of power generated by the nuclear sector, which is commensurate with the amount of nuclear waste you generate.
The Chairman: In this case, we have already quite an amount of nuclear waste, as well as ongoing waste production. Do you foresee an argument over assessments being based on the ongoing production of waste, or do you see the newer companies saying most of it is old waste that must be disposed of? Do you see a fight coming up as to how the assessment should be levied?
Mr. Dicerni: I do not think so. Going forward, chances are the proportion of waste generated by New Brunswick Power and Hydro-Québec will be in the same proportion as in the past. The overall percentages should not dramatically change. Ontario/OPG will still be the dominant generator of nuclear waste.
The Chairman: I have not been able to follow, except through the newspapers, which are not the most reliable method of obtaining information on any topic, let alone nuclear, but I get the impression that the Government of Ontario's nuclear capacity is for sale, or is in the process of being sold, to private British companies. In that sale, how will the old waste be accounted for? In other words, will whoever buys out part of Ontario Hydro be responsible for their share of nuclear waste?
Mr. Dicerni: In the context of the Government of Ontario's policy dealing with a competitive market, as compared with a regulated monopolistic market, which started on May 1, we, because we have a significant proportion of the generation in the province, have been told as part of our licence to operate that we must reduce our market share over the next four to ten years in order to ensure that there is adequate competition.
In that context and in anticipation of the market opening, we undertook an auction process to ascertain if there were any companies interested in buying or leasing some of the nuclear facilities at Bruce. British Energy was one of the companies that expressed that interest. It came in, made an offer that we felt was a fair value to us, and to the shareholder, and leased those properties for an 18-year period of time.
They provided to us and the Government of Ontario an initial down payment of $625 million. There are annual rental payments that are paid.
The annual rental payments cover the costs to be incurred to deal with the nuclear waste that they generate. We still kept, as owner of the property, responsibility for the waste that is there. They will pay us a fee for the waste that they generate going forward.
The Chairman: You keep the old waste. They pay for the waste that they create.
Mr. Dicerni: That is correct.
The Chairman: One final point before I turn to Senator Keon. Perhaps I heard you incorrectly during your presentation, but do you think that the financing of WMO is somewhat too rich and that there should be some kind of control factor? You do not want to see a huge pile of money in there that is not being used.
Mr. Dicerni: No, I referred to the amount as being important outlays of cash. The amount of $100 million a year does represent a significant contribution.
We have not taken issue with either the down payments or the annual contribution. However, I was noting that the amount represents, for a company such as Ontario Power Generation, a significant commitment of funds.
The Chairman: Will the Auditor General be able to look at the WMO's expenses?
Mr. Dicerni: I believe the WMO is being set up as a not-for-profit company.
The Chairman: That is what the government is supposed to be, but it does not always work that well.
Mr. Dicerni: I would make a distinction on the amounts that are to be put in segregated funds, which are the huge amounts and which the companies are not able to touch. Those funds are put into a bank account, if you wish, to which we do not have access. We cannot make withdrawals against those sums until the government has accepted the plan, and it has been blessed all the way.
The operation of the WMO to develop the plan will be more modest in scope, something along the order of perhaps $7 million or $8 million. That will be a more modest endeavour.
Again, I assure honourable senators that OPG and other companies that will be paying the large chunk of this are extremely committed to the highest degree of prudence and probity in the expenditure of these funds. These are our monies.
Senator Keon: Mr. Dicerni, you came up with an interesting scenario of leasing the Bruce plants to a subsidiary, rather than an outright sale to someone. I am not a businessman, but I am aware of the number of arrangements when it comes to subsidiary corporations and parent corporations.
In an area where accountability and quality is such an issue, I would be interested in you expanding somewhat on the operations of your subsidiary. Who is responsible for quality control in renovating these plants? Who is ultimately accountable if something goes wrong? Would you be kind enough to expand on that?
Mr. Dicerni: Bruce Power operates the plants at the Bruce site. Bruce Power is a consortium representing employees who have a certain stake in this operation. They have made an investment in this company.
Cameco and British Energy are also involved. Those are the three companies with whom we have signed a lease for 18 years.
In regard to quality control, they are subject to the same standards of operation as other nuclear operators in the country. The Canadian Nuclear Safety Commission regulates them. They, like OPG, must apply for licences to operate. If they want to restart units 3 and 4, they will have to undertake an environmental assessment under the Canadian Environmental Assessment Act. They will have to get it approved and then submit an application to restart. There is a fairly rigorous regulatory process that governs the operations.
For your information, the Canadian Nuclear Safety Commission released yesterday a report card on the operations of all nuclear plants in the country, rating them from A to E, using different metrics. There is a fairly open process, and it is well documented.
Senator Keon: Is the ultimate accountability with you or with them?
Mr. Dicerni: The ultimate accountability to run these plants, and I am talking about the running of the plants, flows from the licence that they have been given by the regulator.
Senator Keon: The ultimate accountability for quality in the building of these plants, is it with them or with you?
Mr. Dicerni: It is with them. If they wish to restart the unit, it is the operator of the unit, subject to regulatory oversight.
Senator Buchanan: Would you give me those percentages again? You have 50 per cent nuclear, 25 hydro and 25 fossil energy. Is that correct?
Mr. Dicerni: It will vary from time to time. At present, Ontario consumes 150 terawatt hours of electricity. About 40 of those flow from fossil. Hydroelectric is about 33. There were non-utility generators (NUGs) put into place in the early 1990s. They generate about 10 to 12 hours, depending on the price of gas. There are a few imports, for 3 or 4 terawatt hours. The rest is nuclear in the province of Ontario. That nuclear production is divided between Bruce Energy and OPG.
Senator Buchanan: I copied down the figures incorrectly. There is about 40 per cent fossil; is that correct?
Mr. Nash: It is perhaps less than 40 per cent as fossil.
Senator Buchanan: Whatever it is, what percentage of Ontario generation is from coal?
Mr. Dicerni: That figure would be about 25 per cent.
Senator Buchanan: Where does your coal come from?
Mr. Dicerni: Powder River Basin, mostly.
Senator Buchanan: Is it all American?
Mr. Dicerni: Mostly.
Senator Buchanan: When you say ``mostly,'' do you have any Canadian coal?
Mr. Dicerni: I do not believe so.
Senator Buchanan: Certainly you do not have any coal from Cape Breton any longer.
Mr. Dicerni: I do not believe so.
Senator Buchanan: That ended years ago. Now it is ended for good. What do you pay per tonne, U.S. dollars, for coal?
Mr. Dicerni: I do not know. I can find out for you. There is some measure of commercial sensitivity around that, because we are constantly renegotiating our contracts with area suppliers, including people who transport the material. I could get back to you and give you a ballpark figure.
Senator Buchanan: I ask because, as you know, there is a utility board hearing in Halifax currently with Nova Scotia Power. Nova Scotia Power is looking for an increase because of the exchange rate and the cost of U.S. coal. One hundred per cent of the coal currently used is coming from either the U.S. or further down south. Not too many years ago, 100 per cent of it was Cape Breton coal. Now, and for the last number of years and for the next number of months, there is a move afoot to open a new coal mine in Cape Breton. The cost of coal to the power corporation in Canadian dollars from that new mine will be very important in terms of how much the corporation is now paying for U.S. coal landed in Mulgrave and at the Sydney docks. I am interested to know what you are paying for U.S. coal per tonne.
Mr. Dicerni: I am sorry, I do not have that specific piece of data. I know that our coal prices over the last two years have increased. There has been a fairly significant trend upwards in the pricing.
Senator Buchanan: Are you paying in U.S. dollars?
Mr. Dicerni: Yes.
Senator Buchanan: Is there a chance that you could provide those figures to the clerk of the committee?
Mr. Dicerni: We could do that.
The Chairman: Clause 10 of Bill C-27 speaks to the assessment to keep the WMO going, and that is from Ontario Hydro Energy Incorporated, Hydro-Québec, New Brunswick Power Corporation and Atomic Energy of Canada Limited, AECL. I received the impression from you that as new people come on stream they will have to come into the WMO. How will the new people that you sell out to and who create their own waste be assessed?
In my reading of clause 10, it sounds as if they will have a free ride.
Mr. Dicerni: In the immediate future, we do not envisage anyone building a new nuclear plant. We have absolutely no plans to sell any additional nuclear plants. The likelihood of new participants entering into the equation is quite small.
The Chairman: New people would have to come from the ground up. I thought you said earlier that government had decided to divest itself of some of the power generation.
Mr. Dicerni: That is correct.
The Chairman: Those new people would be leasing from your divestment and would be creating nuclear waste; will they not have a vote in the WMO? Will you take over the nuclear waste, in terms of the lease?
Mr. Dicerni: In the scenario that was followed, when we leased to the Bruce facility we retained ownership of the waste that was created —
Senator Buchanan: The new waste, too?
Mr. Dicerni: — and have ownership, as part of our leasing arrangement with them. This falls under our area of responsibility. Therefore, we have maintained at Bruce an area that is specifically focused on managing waste. That is part of the transaction. It is in the lease that the waste remains a responsibility of Ontario Power Generation.
The Chairman: That is interesting. It makes it more attractive to divest.
Senator Mahovlich: I have not heard much with respect to Chalk River lately. Are tests using MOX fuel pellets still being done in Chalk River?
Mr. Torgerson: Yes. As we speak, tests are ongoing at the research facility at Chalk River.
Senator Mahovlich: Are there any special requirements to dispose of this kind of waste?
Mr. Torgerson: The tests are being conducted to show that the waste is being destroyed in the neutron spectrum that would be typical in a CANDU reactor. We have taken a very small amount of waste, about 500 grams of plutonium, and we are demonstrating that it can be destroyed in the reactor.
Senator Mahovlich: A few years ago, Prime Minister Jean Chrétien wanted to take plutonium from Russia and the United States, as they were trying to reduce their nuclear arsenals. Was that exercised?
Mr. Torgerson: These are the experiments I was referring to. We have taken a small amount of weapons-grade plutonium to demonstrate that it can be destroyed in the core of a nuclear reactor. These experiments demonstrate the technology and show that it could potentially be done. There has been no commitment whatsoever to actually carry out anything other than research and development.
Senator Sibbeston: We have heard much concern expressed by witnesses who appeared before us earlier in the week. We heard from representatives of an Aboriginal organization and the Sierra Club, as well as former members of the Seaborn commission. In particular, the Sierra Club of Canada stated in their presentation that the nuclear industry's attempt to force a community in the Canadian Shield to accept a nuclear waste dump will be the environmental battle of the millennium. It seems to me, given the way the WMO is to be set up by the nuclear industry, that there will be much suspicion and concern in the public about the work of the organization. I am sure questions arise about the safety of the approach that would be taken.
Considering all of this, what would you say about these people's concerns, — including the way in which the WMO is to be structured and appointed by your people? Also, there was some evidence that the geological-excavation approach has already been determined, that it has already been settled that the nuclear industry will likely recommend this approach.
Mr. Dicerni: First, the only thing that has been predetermined is the fact that the Sierra Club is against nuclear power. They have historically been against nuclear power as a form of power generation. Most of the statements that they make flow from this fundamental belief.
Second, as one representative of one company, OPG, I can assure you that no predetermined choice of a preferred scenario has been made. Moreover, if we were foolish enough to do this, it would imply going through a fairly grand charade that would be detrimental to the industry and to the integrity of these companies. We do not plan to be part of any sham-type consultation process.
Regarding your first point, that this will be our Waterloo and that we are going through this process in a somewhat cavalier way, I can only refer to what I have said before: We are committed to doing this in as open, transparent and participatory manner as possible.
At the end of the day, some people are fundamentally against nuclear power and will always throw out potential concerns. We will not be able to do this if we do not do it in a safe way. The regulatory processes I referred to beforehand, the Canadian environmental assessment and the Canadian Nuclear Safety Commission, are very rigorous processes that maintain a vigilant oversight role that protects the public interest. I do not accept the premises put forth by the Sierra Club.
Senator Sibbeston: The Seaborn commission concluded that geologic disposal systems might be feasible from a technical point of view, but are not socially proven or acceptable. To quote from Dr. ElBaradei, who says:
...it is increasingly clear that the technology for high level waste disposal, although an essential prerequisite, is not usually the major factor that is limiting the rate of progress. Lack of acceptance by the public — often manifested in a so-called ``not in my backyard'' syndrome — as well as by policy makers, continues to be the major hurdle in most countries. Although this lack of acceptance has a number of roots, the central issue is that of safety. And it is not just a question of achieving safety, but of convincing people that safety is achievable — building confidence that the technology really does provide safety. In my view, therefore, the future of high level waste disposal is, in effect, synonymous with the perceived safety of its disposal by the public.
The general conclusion of the doctor and other commentators in this case is that progress on this issue can only be achieved when people, both locally and in the region that is affected, have honestly and effectively been consulted and when they feel they have had genuine input and involvement in the decision making. Do you ascribe to that view?
Mr. Dicerni: Yes, I do.
Senator Sibbeston: Science and technology do change rapidly. Are the provisions in clause 20 sufficiently strong to ensure that the models incorporate the latest scientific thinking and methods? Do you expect that the strategies developed by WMO will be structured so that future options are kept open?
Mr. Dicerni: I believe that clause provides enough flexibility to deal with evolving science and research. That is why the proposed legislation, as I read it, is prescriptive up to a point, while providing flexibility if new developments materialize.
Again, the judge who will determine if that has been adequately factored in will be the government and its various oversight regulatory bodies. The WMO will not be the judge in making that determination.
Senator Sibbeston: We heard from Aboriginal people from Northern Ontario who came before us a number of days ago and expressed many concerns about the legislation. They said they were open, however, if certain changes were made that would see them participate.
What is your view in regard to the Aboriginal people's role in this process? I appreciate that they may have a role on the advisory board that is to be set up. Just how do you think the Aboriginal people will be involved in the process that you will be embarking upon?
Mr. Dicerni: These are very preliminary thoughts, in that we have not finalized a great deal in regard to the actual work of the WMO, recruiting staff and so forth. We feel it would be appropriate to have the legislation fully approved before we move on to developing the modalities of implementation of the legislation. That is the context for deeming these remarks to be preliminary.
Bill C-27 specifically identifies Aboriginal people as being an important group that should be involved in the consultation process. It will be, in part, influenced by the nature of the options that are pursued. Again, there are three options presented. The option dealing with leaving the waste at site may be of less interest to the Aboriginal people. If, alternatively, the option pursued is above ground storage in an area where there are some historical rights, there would be, I assume, a higher degree of involvement and participation.
It partially depends on the nature of the consultation and the specific option that will be pursued. Given that there is a legislative reference to it, I am sure it will be as fulsome and as appropriate as possible.
Senator Sibbeston: It seems central to the success of the approach that the government is taking with respect to its waste disposal and the establishment of WMO and the advisory committee. It seems critical that the people who are appointed to the advisory board are credible to the public and industry. Obviously, you must focus on that and ensure that you have good, credible people. Do you share that feeling that this is critical to your success?
Mr. Dicerni: I share that view, and as time progresses that will become clear. I would add, in terms of the advisory committee, since we have spoken about it, we have also received representations and deputations from local elected officials who very much want to be on the advisory committee because they think that if one goes down the path of at site then they want to be very much represented. There are a variety of very legitimate intervenors who will have a place at the table. That is why I was saying that the thoughts are somewhat preliminary, because they do relate to the various activities that the advisory committee will undertake.
Senator Hubley: I will ask a question in regard to what I consider to be the bottom line when decisions will be made. You have certainly identified Scandinavia as perhaps being a model for us.
In your knowledge of the process, who had the final decision to select a host site — which I feel is a very friendly term, but is a good word for what the process will be? Was it an organization or group or government? Do you feel they will need to have the final say?
Mr. Dicerni: I will let Mr. Nash, who is more familiar with the Scandinavian experience, provide some of the specifics. However, first, the government had the final say. That had to be ratified by a vote in Parliament. That vote was made much easier by the fact that the local community endorsed it. If you want a contrarian approach, the Yucca Mountain process, which is not industry-led but government-led, was a situation where the broader community, in this case the entire United States, appeared to be designating a spot, and the people in Nevada did not share the view that this was a wise choice.
Those are the two models that I think are more germane. At the end of the day, it is a government call.
Mr. Nash: I would add to that that the industry WMO in Finland did work for a large number of years with several communities to provide them with information and with funds to do their own studies. They did allow a great deal of participation of those communities led by the municipal governments.
Eventually, the municipal governments made a determination that they were in fact willing to accept nuclear waste into their communities. The process then went to the federal level when the federal government, as Mr. Dicerni mentioned, endorsed it in Parliament.
Senator Hubley: Have the events of September 11 put additional pressure on the process?
Mr. Dicerni: Partially because this process has not started, I could say no. Having that said that, the regulator, the Canadian Nuclear Safety Commission, has issued orders that have led to fairly significant upgrades of security at all nuclear plants across the country.
In our case, for example, we have entered into a contract with the Durham Regional Police who now have armed officers and squad cars 7-24 at all our plants. There has been, if you wish, an upgrade.
That will be an important dimension for the work of the WMO when it goes forward, in addition to the consultations that we have discussed and the role of Aboriginal peoples, et cetera.
The Chairman: Mr. Torgerson, we heard that in some places in the world the waste today may well be fuel tomorrow. In other words, there are new systems that might be able to rework the old waste pile. Therefore, if that is the case, the storage should be close to the site so that it could be reworked.
Would you care to comment on that as a scientist?
Mr. Torgerson: There are many dimensions to this question. However, to keep this succinct as possible, I would only say that because of the very high efficiencies of the CANDU-type system we are able to use waste from other types of reactors. In principle, you can burn that waste in a CANDU reactor and extract further energy from it. One person's waste might be another person's fuel.
We have been carrying out a research and development program in cooperation with the United States and Korea to study the use of waste from other reactors in our type of reactor. Some countries, such as Korea, operate both CANDU reactors and other types of reactors, so they are interested in reducing the amount of total nuclear waste by converting that waste into fuel that can be used in their CANDU reactors.
This is another application of this rather marvellous technology invented in Canada that we call CANDU.
Senator Sibbeston: I have one final question. I was at a conference in Vancouver earlier this spring concerning energy. There was a great deal of discussion about fuel cells as an emerging area of technology that will make great advance in our future.
In the nuclear industry, are there any real startling innovations being made that will make nuclear energy available in homes and in modules that can be readily used? Are we making any advances in that area?
Mr. Torgerson: A really exciting area of Canadian innovation is the production of hydrogen by means that do not pollute. That means using electricity and electrolysis. There are some leading organizations in Canada that are creating new technology. As you mentioned, items being developed include fuel cells, method of producing hydrogen and, of course, methods of producing electricity that do not create any pollution, greenhouse gases, nitrogen oxide or sulphur oxide. We have been looking at the coupling between nuclear power and the production of hydrogen so that hydrogen can be produced in a very environmentally friendly way.
The hydrogen economy for transportation is coming. There are Canadian companies working on units that will make hydrogen for your vehicle; these units could be housed in a garage and plugged in. A car owner would drive home at night, produce hydrogen for his or her vehicle, and then drive out.
AECL has been working with a number of private-sector Canadian companies to look at the coupling between nuclear energy and the hydrogen economy. It is a very exciting area of research.
Senator Sibbeston: We spend much money, particularly in the Northwest Territories, on diesel generation of power. It creates much pollution. There is a need for something innovative that would be good for the North. It seems that nuclear energy might be the answer, in the development of packages or modules that could be transported readily into the North to produce electricity to entire communities. That concept has always interested me. Are we getting to the point where that may be possible in the future?
Mr. Torgerson: We have, in the past, developed small reactors for that purpose, to generate either heat or electricity in remote locations. It is certainly possible to make small modular units that could fit into isolated communities and provide electricity and heat.
Currently, as you mentioned, that area is dominated by fossil fuels. Eventually, as fossil fuels start to give out or get too expensive, this technology would again come to the fore. It is a technology that sits there and would look after itself. It does not pollute the environment.
The Chairman: Thank you very much, panel, for taking the time to attend here today. We have learned much.
The committee adjourned.