Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 24 - Evidence
OTTAWA, Thursday, October 19, 2000
The Standing Senate Committee on Energy, the Environment and Natural
Resources, met this day at 9:00 a.m. to examine issues relating to energy, the
environment and natural resources generally in Canada.
Senator Mira Spivak (Chairman) in the Chair.
The Chairman: The Senate Committee on Energy, the Environment and Natural
Resources is meeting to review safety related aspects of nuclear power plants in
Canada. Our witnesses are from Ontario Power Generation. This meeting is being
broadcast live on the Internet.
We are anxious to hear your presentation. Please proceed. I am sure that when
you are through, the senators will have questions for you. Unfortunately, some
of our senators are busy at other meetings. You can understand that this is a
crunch time. We want to get everything done. This might be the last day for
Mr. Ronald W. Osborne, President and Chief Executive Officer, Ontario Power
Generation: We do accept that there are other issues on the agenda. Having said
that, we are delighted to have the attendance we do, because we are proud of
what we do. We will do our best to convince you that we should be. Thank you for
We would like to cover four topics in our prepared remarks, but we welcome
questions on any aspect of nuclear operations that you are interested in. The
first topic is our commitment to safe operations. The second is our plan to
return the Pickering A station to service. The third is our programs to protect
the environment around the stations and safely manage nuclear waste. The fourth
is our proposed lease of the Bruce nuclear station, which is of some interest to
anyone following the nuclear industry.
I will begin with safety. Let me stress at the outset that no aspect of our
nuclear program is more important than safety. Without safe operations there
would be no nuclear operations. There has never been a fatality related to the
operation of our nuclear stations in more than 30 years of commercial nuclear
activity, going back to the beginning of the 1970s. As for public safety, we
operate our stations to achieve radiation emissions that are less than one
one-hundredth of the regulated limit. Most of time we are operating at well
under one one-hundredth of the limit.
You are aware that we are now in the midst of a major nuclear improvement
program. We are determined to become again a top performer within our industry.
Safety performance is the most important element in overall nuclear performance.
Eight of the 11 indicators that we use to measure our nuclear performance
relate to our safety performance. Those indicators were developed by the World
Association of Nuclear Operators. I believe some of your members had an
opportunity to visit WANO last week. Those indicators developed by WANO are used
throughout the global nuclear industry to measure performance on a standardized
basis. There is an attempt to achieve uniformity of measurement.
As I said, eight of the 11 indicators are safety related. Every one of those
eight safety indicators has shown either a major improvement over the past two
years or has remained stable. We were already at the top of industry
performance. We are achieving the maximum score in five of those eight safety
The other, non-safety indicators deal with our performance in optimizing
production from nuclear stations. They are not in and of themselves directly
related to safety, although obviously all operations speak to safety. Now that
we have achieved major improvements in our safety, we will over time be
increasing our focus on the performance indicators, while maintaining our focus
on the safety indicators.
I will give an indication of our progress. Our overall nuclear performance
index, which is the amalgam of those 11 indicators, has moved from a score of 58
per cent or 58 points out of 100, at the end of 1997, to 83 per cent at the end
of this year's second quarter. Obviously that is good progress, but we still
have a way to go.
We compare ourselves to the North American nuclear industry. The bar for that
North American industry is constantly rising. The performance index for U.S.
nuclear stations now averages just over 90 per cent. We are at 83 per cent; they
are at just over 90 per cent. However, over the past three years we have
narrowed their lead. Our goal is to achieve top quartile among all nuclear
plants in the North American index over time.
You are aware that the Ontario electricity industry is moving from a monopoly
to a competitive framework. We have now been reconstructed as a commercial
company with a bottom-line orientation. A logical question is whether a profit
motive will cause Ontario Power Generation to relax its commitment to nuclear
safety. I want to state unequivocally that our commitment to nuclear safety will
not waiver. In fact, a commercial orientation requires a very strong safety
Our nuclear units and hydroelectric stations are our lowest cost generators
today, much cheaper to operate than fossil fuel stations and particularly gas
fired stations given today's gas prices. We operate our nuclear stations on a
continuous basis to maximize their contribution. That happens to be the way in
which safety of the operations is maximized. Our nuclear stations represent
close to one half of our annual electricity production.
Like our hydroelectric facilities, our nuclear stations have a huge
environmental benefit: they do not emit greenhouse gases or the gases that
contribute to acid rain and smog. Since 1971, when the first Pickering unit
began to operate, our nuclear reactors have displaced 11 million tonnes of
sulphur dioxide, 2.5 million tonnes of nitrogen oxide and some 1.2 billion
tonnes of carbon dioxide that otherwise would have been emitted by virtue of
burning fossil fuels. That 1.2 billion tonnes of carbon dioxide is the
equivalent to the greenhouse gas emissions of all of the passenger vehicles in
Canada over a 12-year period. It is a large contribution to the reduction in
greenhouse gas emissions.
The OPG nuclear stations will be absolutely critical to our environmental
performance and our future competitive success when we enter open markets.
Having said that, I want to stress that we would never operate these facilities
in such a way as to jeopardize their continued operation. To maintain and
enhance the cost and environmental advantages that we enjoy from these stations,
we will do everything that we can to improve their safe and environmentally
Bottom-line operation focus has occurred in the U.S. nuclear generation
industry. Most U.S. nuclear units are held by investor-owned companies, not by
public entities. Publicly traded firms are watched not just by regulators and
other stakeholders but also by investors. Investors do not tolerate poor safety
performance, so this clearly would affect the return that they get on their
investment. Experience shows that the best-run nuclear units are the ones that
have the best safety performance.
U.S. nuclear plants have shown tremendous improvement over the past 15 years.
The nuclear performance index for the U.S. industry, which is tracked by WANO,
has improved from a score of 42 per cent to 92 per cent between 1985 and 1999.
As I mentioned earlier, safety performance is a major part of the overall index.
At the same time, while achieving better safety performance, the U.S. nuclear
industry has increased its power production. From 1980 to 1999, the last 20
years, the unit capability factor of U.S. nuclear units, in effect the
percentage of maximum generation each can produce, has increased from 63 per
cent to 89 per cent. And despite a small reduction in the number of nuclear
units, the U.S. industry generated 9 per cent more electricity overall in 1999
than it did in 1998, while raising that WANO bar I referred to.
That directly benefits the environment, since more nuclear production equals
less production from fossil fuel generators. It also clearly benefits the
financial performance of those U.S. generating companies, because nuclear
production is considerably cheaper than fossil-fuel generation. The bottom line
for the nuclear industry is that reactors have to be very safe and well
maintained to keep production high on a sustained basis. That is a commercial
imperative for the financial health of the generating companies.
We are working hard at Ontario Power Generation to achieve those same
excellent results attained by the U.S. nuclear industry. Our commercial
orientation and our entry next year into a competitive market leave us no other
choice. We will continue to improve both safety margins and production levels.
We are fortunate within the nuclear industry that we have adopted a
cooperative spirit to help ensure safe operations across the industry. Our
nuclear facilities receive WANO reviews and we participate in WANO reviews of
other nuclear stations worldwide. Recently, we participated in a review of a
nuclear station in Pakistan. While this raises a number of public policy issues,
as I am sure you are aware, our position is that, on balance, such participation
is healthy and necessary to ensure safe nuclear power operations throughout the
I will turn now to our plan to return the Pickering A generating station to
service. I am pleased that some members of the committee visited the station to
get an idea of how it operates. I want to emphasize that Pickering A was not
laid up for safety concerns; it was always operated safely, as I have indicated.
We laid up both Pickering A and Bruce A so that we could concentrate all of our
resources -- human and otherwise -- on improving the performance of the
remaining 12 reactors at Pickering B, Bruce B and Darlington. I gave you some
indication of those improvements in the WANO indices. Those generators were also
laid up so that we could prepare for a major retrofit of the Pickering A units,
perhaps to be followed by a similar retrofit of Bruce A.
Ontario Power Generation believes it is important that we return Pickering A
to service. The more than 2,000 megawatts of power capacity that station
represents is the lowest cost incremental source of electricity generation
available to Ontario. That has major benefits for our economy and obviously for
our shareholders, the people of Ontario. However, this generation also has
significant environmental benefits. As I said before, it is free of the
emissions that lead to global warming, smog and acid rain. The 15 terawatt hours
of annual production from Pickering A will displace 13 million tonnes of
greenhouse gases each year, 18,000 tonnes of nitrogen oxide, and 60,000 tonnes
of sulphur dioxide that otherwise would be generated by coal-fired stations.
A question has arisen at these hearings as well as elsewhere about whether
the environmental assessment process that has been followed for the return to
service of Pickering A is adequate. We strongly believe it is more than
adequate. It was the Canadian Nuclear Safety Commission that determined the type
and scope of environmental assessment that we would perform based upon existing
legislation. We have produced a very comprehensive examination of the potential
environmental impacts associated with bringing the units back to service. We
have identified the appropriate mitigating actions. We have a copy of the
assessment and its supporting documentation with us here today, if you would
like a comprehensive set. I know that you have many elements of it, but if you
would like the entire package you are welcome. If you prefer that we take it
away we will, because it is quite bulky. Obviously, the choice is yours.
Public involvement has been extensive, and generally it has been greater than
is required by law under the process. You have a letter on file from Bob
Strickert, our site vice-president at Pickering, that outlines the public
involvement in the EA. I would simply add to that letter that we have been
effectively performing environmental reviews under the Atomic Energy Control
Board regulations or under the Canadian Environmental Assessment Agency
regulations for about four years, in the public domain and subject to public
scrutiny. It is a lengthy process.
We have provided information to thousands of people in the community through
newsletters and our Web site. We have provided many opportunities for members of
communities to talk with us at open houses, public meetings, and through a
unique "Neighbourhood Walk" program.
Under the Neighbourhood Walk program, OPG employees have volunteered to go
door-to-door in Pickering and Ajax neighbourhoods to discuss our plan to return
Pickering A to service. I was one of those who volunteered a couple of weeks ago
along with Mr. Gene Preston. Altogether, our employees have knocked on more than
16,000 doors in the communities of Pickering and Ajax. I must say we are very
pleased with the positive reception that we have received from the vast majority
of homeowners. We have a report on this activity available to you if you like.
While we are not the final arbiters of the adequacy of the environmental
assessment, we fully support the position of the Canadian Nuclear Safety
Commission, formerly the Atomic Energy Control Board, that the environmental
assessment produced meets all requirements. Of course, it would be impossible to
satisfy all members of the community; we recognize that. Some critics of nuclear
safety are unshakeable in their convictions. In the end, it will be up to the
CNSC, our regulator, to decide if the assessment should be approved.
We are committed to making a number of safety and environmental improvements
before we return Pickering A to service. We are investing actually more than $1
billion to upgrade the station. That includes extensive work on the steam
generators, rebuilding the turbines, inspecting all of the pipes and making
replacements where necessary, replacing many of the plant's heat exchangers,
refurbishing valves and electrical switchgear, and enhancing the shutdown
system. Moreover, the Canadian Nuclear Safety Commission will review the safety
of the station before they allow it to operate. The public interest will be
safeguarded before the plant returns to service.
I will turn now to our commitment at OPG to becoming a top environmental
performer. We see that as necessary for commercial competitive success. Each of
our nuclear stations has achieved ISO 14001 registration for their environmental
management systems. Our environmental management systems will greatly assist us
in ensuring regulatory compliance in environmental matters. Darlington, in fact,
was the first nuclear generating station in North America to be registered with
this international standard a couple of years ago.
At each of our facilities we are protecting the health and survival of native
wildlife species and ecosystems with which we share the land, under the guidance
of our biodiversity policy. For example, at our Pickering station more than 25
per cent of the station's 195 hectares are included in the site's biodiversity
and natural areas management plan. Last year, the Wildlife Habitat Council
certified our Pickering wildlife management program with special commendations
for our on-site Hydro Marsh and adjacent Frenchman's Bay and Duffin's Creek,
which support significant wildlife populations.
We have also established a program at each nuclear station to assess and, if
necessary, remedy land contamination.
Let me turn specifically to nuclear waste. Waste management is obviously an
important environmental initiative. Few industries manage their waste in a more
responsible and rigorous way than the nuclear industry. We have more than 30
years of experience in dealing with nuclear waste. We have safe techniques for
managing our nuclear waste in surface containers at nuclear stations -- a
technique we could, if required, use well into the future. Over the longer term,
we could use surface storage or we could use underground storage. Either would
be technically feasible. OPG supports the development of a waste management
organization to manage nuclear waste over the longer term, working with Natural
Resources Canada. The creation of a waste management organization has come out
of a lengthy process that I know some of you were involved in with the Seaborn
We also have plans to decommission our nuclear stations and to restore the
sites. In addition, we have been moving on the financial front: we have
contributed some $650 million to segregated funds over the past 18 months for
long-term waste management and plant decommissioning. We will continue to make
similar contributions in the future. When the time comes to decommission the
stations and to permanently deal with the waste, we will have the money to do
Finally, let me turn to the Bruce lease. As you would have read in our
submissions and in the press, we have entered into a long-term lease with
British Energy via an entity that that company is setting up in Canada called
Bruce Power. They will lease Bruce from us for a minimum period of 18 years. All
of this is subject to regulatory approvals that we are now embarking upon. If
approved, no arrangements will happen until some time next year.
This will be the most reviewed and scrutinized transaction I have ever been
associated with in some 30-odd years in a variety of businesses. Our board of
directors, which has a standard commercial obligation to its shareholders, first
reviewed it. Our shareholder, the province of Ontario, looked over our shoulders
and reviewed the transaction. The province hired its own financial advisers to
second-guess the process that our financial advisors had gone through. Since its
announcement, the transaction has been scrutinized by the public and by the
The transaction will be subject to continuing scrutiny. Bruce Power will have
to satisfy all the regulations set by the Canadian Nuclear Safety Commission and
the Ontario Energy Board, the same as we do, for continued operations to be
assured. They will also need to meet all federal and provincial environmental
regulations to which we are subject.
The lease of our Bruce plants to Bruce Power -- British Energy -- is
important both to OPG and to the Canadian nuclear industry. It is important to
us because it allows us to concentrate our resources on reaching top performance
at Pickering and Darlington. It will also be helpful to have another player in
the Ontario nuclear industry. It will be healthy for us to have competition in
our own backyard from another nuclear operator. Regulators and other
stakeholders, like yourselves, will have others besides us to talk to and
against whom to compare us in CANDU reactivity.
The nuclear industry should take confidence in the fact that the British
stock market behind British Energy is willing to make a major investment in the
Canadian nuclear industry. In addition, last week's announcement that Cameco
Corporation from Saskatchewan intends to acquire a 15 per cent interest in the
transaction provides further evidence that the business community has confidence
in CANDU technology and the nuclear assets at Bruce.
I will close by simply reaffirming our commitment to safe nuclear operations.
As I have indicated, our nuclear operations are essential to our future
competitiveness and success in open markets. If our nuclear operations are not
safe, they threaten the viability of the company. If, on the other hand, we are
top safety performers, we will be more likely to maxmize our financial success
and enhance shareholder value. Safety and shareholder value go hand in hand.
Nuclear operations are also important to the economy and to maintaining
competitive electricity prices. As I have said, they have a key role in
minimizing air pollution and global climate change. We are absolutely committed
to achieving the highest levels of nuclear performance and to becoming an
industry leader in nuclear safety performance again.
I know we have been more long-winded than you would like, but there is a
great deal to cover. We look forward to your questions.
The Chairman: Thank you, Mr. Osborne. We appreciate this full explication.
Senator Banks: Mr. Osborne, you mentioned that radiation emissions are less
than one one-hundredth of the regulated limit. Does Canada subscribe to the
internationally accepted conventions for acceptable limits of radiation? For
example, there is a group called the International Commission on Radiological
Protection. Do we conform more or less to those standards?
Mr. Pierre Charlebois, Senior Vice-President, Technical Services, and Chief
Nuclear Engineer, Ontario Power Generation: Yes, senator, we actually
participate with the ICRP, the International Commission on Radiological
Protection. In fact, we had some of their senior experts in our offices not too
long ago to exchange information with them. We are a participant.
Senator Banks: Do we derive our standards more or less from ICRP? Do we agree
with them? Is it a worldwide acceptable standard?
Mr. Charlebois: You must appreciate that we do not derive the standards. Our
regulator derives the standards to which we must comply. Therefore, the
regulator and the ICRP work in conjunction with the industry and establish those
requirements for our regulations in Canada.
Senator Banks: As you are no doubt aware, there is some misgiving among folks
on any industry that is more or less self-regulated. We have heard testimony to
the effect that the ICRP is sort of a closed shop. It derives from the nuclear
industry per se. It contains about half physicists, a quarter medical
administrators from nuclear nations, some radiologists and a smattering of
people from other disciplines. However, occupational health specialists,
oncologists, epidemiologists and public health specialists are not included in
the main committee of ICRP. That has caused some folks to wonder how much a
self-regulated industry like that would have the public health in mind.
We have also heard testimony to the effect that those standards, which we
understand are more or less worldwide for the nuclear industry, are not what the
public thinks they are. When we hear about conforming to acceptable standards,
most people think it means that our health is protected by those standards. Most
people think it means that if exposure to ionized radiation falls below those
standards then there is no health hazard. However, we have heard testimony to
the effect that that is not so. We have heard that the ICRP standards are set
not in terms of an acceptable health standard but in terms of an acceptable
trade-off: the danger to public health on the one hand against the benefits
derived from the risks on the other hand.
The standards are not always comparable. For example, we understand that the
standards accepted and imposed in Minnesota are more strict than the ICRP
universal standards, by which I think Canada is governed, by a factor of 2,000.
That causes some people to be concerned.
I would appreciate your comments on the contention that the standards by
which we are judging our exposure levels are not safety standards or health
standards, but rather an acceptable trade-off. By reference, the chemical
industry has standards for the acceptable number of deaths per population that
are considerably higher than those which are deemed to be an acceptable standard
in the nuclear industry. When people who are not scientifically equipped hear
that what is being done is within the acceptable standard, can they rely on that
standard? Can they take comfort that the acceptable standard is a health
standard and not a trade-off of benefits and risks?
Mr. Osborne: I will start at the 200,000-foot level while Mr. Charlebois
tries to think of technical answers. That is an incredibly complex question.
Senator Banks: It is a complex subject.
Mr. Osborne: It goes to years of study on defining acceptable limits. The
issue you raise is not unique to nuclear power. For example, every one or two
years we are required to perform something called a dam safety review with
respect to our hydroelectric facilities. Those facilities pose certain public
risks because they store water in an unnatural fashion behind an artificially
created dam. You are well aware of the consequences of what happens when a dam
breaks -- the Saguenay River incident a few years ago springs to mind. Precisely
this issue -- what is an acceptable level of risk -- is behind the standards of
dam safety analysis and performance.
I have to admit that I was somewhat startled when I returned to this business
after 30 years of absence to find that we as an industry and the population at
large must make subjective judgments around the probability of dam failure and
the number of deaths one is prepared to tolerate. When the statistics are
actually examined and one looks at the probability factors in dam safety, the
conclusion is soon reached that our dams are operated and maintained at
incredibly high standards -- they are designed not to create any fatalities.
However, the simple fact is that there is risk attached to having dams.
Equally, it is a fact that there is no form of electricity generation that
does not in some way impact upon the environment or safety at large. People
manufacturing windmills are injured in plants that manufacture the windmills.
People manufacturing photovoltaic material get injured in plants that
manufacture that material. A coal-fired plant is equally susceptible. It always
astonishes me that a coal-fired plant in Detroit can explode and kill three
people, which happened two years ago, with absolutely no ripple through the
community at large to speak of, beyond the immediately affected community. That
was a fossil plant that literally exploded and killed three employees. The
reality is that we face all of those kinds of compromises, if I can use your
term, in life.
In my former life in telecommunications, it was the issue of the impact of
headsets and radio waves on brain cancers. I have learned, as a layman coming
into this business somewhat late in his career, that the focus on safety issues,
emission levels, radiation levels and so on is incredibly more intense than I
could ever have surmised. I put myself through the rigors of trying to figure
out what it means. For example, in a recent maintenance outage at our Darlington
station, I decided to go inside the vault to try to understand what our
employees put themselves through when they do that. I was astonished that the
time it took me to get in and out of the vault was infinitely longer that the
time I was permitted to actually spend in the vault. Most of the time was spent
preparing for possibilities as opposed to working in the vault.
Similarly, last week I went into the vacuum building at Pickering to
experience firsthand what these issues mean in real life. All I can say to you
is that the best brains we have available to us in the nuclear and regulatory
industry have been applied to this subject. No evidence has ever surfaced to
suggest that any health hazard has resulted within the confines of our plant or
similar plants operated appropriately, within the regulations and by competent
We are pleased that the CNSC will conduct another cancer survey in Pickering,
because we are entirely convinced, based upon all the evidence to date, that the
results will be the same as those of all the other, similar surveys. I suspect
that you are familiar with a survey in Port Hope; that example has been cited by
all viewers. Clearly, with the benefit of hindsight, there was behaviour around
radioactive materials that would not be acceptable today -- behaviour that never
has been acceptable in our operations and that would certainly not be acceptable
in anybody's operations today. The results of that study are in the public
domain. We are scrutinized by all of the appropriate health authorities.
With all due respect, while it is worth debating, I find your observation
that this is a self-regulated industry difficult to accept. Having appeared on
numerous occasions over the past three years in front of our regulator here in
Canada, I am absolutely convinced of the independence of that body and of their
diligence in looking after the public interest. I have read all of the articles
that imply that the gene pool is the same -- all nuclear physicists went to the
same school or came out of the same training program, et cetera. It is a fact
that there is a gene pool of nuclear physicists and health scientists. Just as
in most walks of life, regulators and operators tap into that gene pool in
various ways. However, the reality is that there is independence and objectivity
within the regulator in Canada. I have the firsthand experience and the scars to
show as a consequence.
With respect to the specifics of actual emission levels and barriers, I claim
no expertise. Clearly I could not comment on Minnesota, for example; I can only
observe what we are subject to. I will ask Mr. Preston or Mr. Charlebois to add
to the comments.
Mr. Charlebois: As Mr. Osborne indicated, all activities in life involve a
certain amount of risk. Exposure to radiation is essentially the same. I cannot
comment on the ICRP committee composition, but I can assure you that they are a
very capable scientific body. They establish limits for exposure based on a
large amount of historical experience with accidental exposures to radiation, as
well as exposures to radiation during events such as Hiroshima. On the basis of
that accumulated body of information they establish limits for nuclear energy
workers and for the public. In fact, that represents a very low risk of impact
on the health of the population. Our regulations are driven by those scientific
We must recognize that radiation is a natural occurrence. As examples of
natural sources of radiation we have the sun, rock formations and many building
materials. The industry aspires to make a small contribution to the overall
exposure that people experience in their day-to-day lives. That kind of
information is published from time to time in Ontario, demonstrating the impact
of the emissions from our nuclear facilities.
The committee must also be reassured that the limits that we use internally
for administrative control in terms of exposure, either to the public or to the
employees, are lower than the limits allowed by regulations. Thus, we strive to
make it as low as possible.
The Chairman: This is an important question and perhaps we could return to
it. There are other senators who wish to ask questions.
Senator Eyton: In the last part of your presentation, Mr. Osborne, you talked
about Bruce. I am curious as to why, in looking at the alternatives, Ontario
Power Generation decided that it would sell first Bruce and not the others. I
recognize your indication that you were trying to concentrate on Darlington and
Pickering, but I guess the question is: Why Bruce?
My second and related question is this: Why British Energy? Could you comment
on their nuclear performance relative to OPG's performance in terms of the WANO
standards? Was British Energy perceived to be a good operator?
Can you tell us something about the terms of that transaction? Everyone
looked at it very carefully, but was it a good transaction for Ontario? In
particular, there are some costs that we do not know about. Who would be
responsible for the decommissioning costs, for example, of that transaction?
Mr. Osborne: I will deal with your questions serially. Why was Bruce chosen?
As I indicated, logic dictated that Pickering and Darlington were an operating
unit that could be maintained with all the flexibility to move people and their
skill sets backwards and forwards between Pickering and Darlington. It made no
sense to split those units and end up with us at Bruce and someone else at
either Pickering or Darlington. That was a purely pragmatic decision.
There was another aspect of pragmatism to the choice of Bruce. We had
determined that for a variety of cost and technical reasons it made more sense
to focus on bringing back the Pickering A units before focusing on bringing back
the Bruce A units, which were equally fallow. Those reasons went not to safety
but rather to the question of the most pragmatic way to deal with the recovery
of the units. We are focusing on Pickering A. We cannot focus on Pickering A and
Bruce A simultaneously. It is simply a bridge too far for one company and one
management team. If it there was to be an early opportunity for Bruce A units to
come back, it should be in someone else's hands.
Why British Energy? We hired Salomon Smith Barney, an internationally
reputable firm of investment bankers, to lead the process so that all qualified
successful nuclear operators could bid into the process. It was a typical
commercial transaction in that sense, except that in working with Salomon Smith
Barney we had obviously identified nuclear operators that we thought should be
invited to the party and some that should not. We ended up with roughly 15
global-scale nuclear operators that we thought had the heft and capability to
run a Bruce unit without risk to the public. Through the normal auction process,
those 15 operators were whittled down to five final bidders. There was another
round with three bidders, and British Energy won the bid.
The essence of British Energy's bid is in the public domain. In aggregate
terms, there is roughly $3.1 billion of lease payments, of which $625 million
will be paid by way of a deposit in the early stages. Annual payments will be
roughly $150 million a year thereafter. Net present value is a concept that I
have had some difficulty explaining to the media. Nevertheless, business people
understand that the net present value of a stream of payments is not the
aggregate. The net present value is just slightly shy of $2 billion. That is the
essence of the deal, and it happens to reflect well the value placed upon Bruce
when all of Ontario Hydro's assets were revalued by a combination of Goldman
Sachs, Wood Gundy, Merrill Lynch and ScotiaMcLeod three years ago on the
restructuring. We were satisfied not only that we had done the restructuring
correctly but also that we had a fair result from the auction.
The benefits to the province are manifold, as I have indicated. I will not
repeat what I said in my prepared text except to say that I think that Ontario
and Canada will be well served by having not just us but others operating CANDU
Why British Energy? It was a qualified bidder, as I have indicated. It has
done a superb job of resurrecting a nuclear program that in the United Kingdom
would have been described as troubled 10 years ago when the U.K.'s industry was
restructured much as ours is being restructured. British Energy's safety record
is excellent. It has continuing dialogue with its regulators, just as we do. One
can find information on the public files with its regulator. All that
information is available to our regulator, by the way, and to anyone who wishes
to intervene in our regulatory process. One can find full discussion of all the
issues that British Energy faces with its regulator. Those issues are strikingly
similar to the issues we deal with. For example, will there be enough trained
scientists 30 years from now? Are you sure that you have adequate control of
people hired from third parties to do work? Are you sure that you have not cut
your head count back to the point where you do not have sufficient people to run
the plant, et cetera? We will see all of those issues displayed and explored
between British Energy and its regulator in the public domain. Those same issues
will be explored in the public domain in two hearings next year. British Energy
will have to satisfy the CNSC as to its bona fides. That is why at the end of
the day, senator, British Energy is a good choice.
Senator Eyton: Could you comment on the decommissioning costs?
Mr. Osborne: We have operated Bruce now for the last 25 years, and virtually
every dollar of decommissioning cost that will ever be incurred, albeit years in
to the future, has already been incurred. Whether the plant runs for 35 years or
25 years does not change the decommissioning equation. The decommissioning cost
is an estimable if not a known quantity.
That is our liability. We have that liability today, and the most economic
way to come up with a transaction that was not fraught with uncertainty and that
did not attempt to hand off that liability to newcomers or to the province was
for us and the province to retain that obligation. That was taken into account
in the bidding process. The amount that bidders would have been prepared to pay
under the lease would have been significantly and disproportionately lower had
we even attempted to offload this historic liability on them.
On balance, we considered that maintaining control of our existing liability
made sense. British Energy will, however, share in any errors in estimate that
we have made. If it turns out down the road that we have underestimated, British
Energy will have to share in those costs proportionate to its use of the plant
versus our use of the plant. With respect to used fuel disposal, British Energy
will pay the incremental cost per fuel bundle that we will incur on our own fuel
bundles. That is, it will pay its share of the incremental cost of high level
waste used fuel, essentially disposal.
British Energy is paying its share either through the lease or through the
incremental cost of used fuel. We have maintained control of the liability, and
we will be responsible for creating, working with NRCAN, the new waste
management organization that is the subject of draft legislation, which I
understand should be introduced some time in the next few months.
Senator Wilson: I notice that in 1998 you began to set up an environmental
advisory group. I was in on that from the beginning but unfortunately had to
stop due to other commitments. Despite that advisory group, four of the leading
citizens groups from neighbouring communities continue to be very concerned
about the way in which the environmental assessment is being done. Our committee
hired a consultant, the Institute for Resource and Security Studies, which
recommended that a new analytical model be developed to provide a more credible
picture of the accident risk posed by the Pickering station.
I note that you have done a fair amount of consultation. Your report says
that there have been newsletters, information, and interchanges through
community forums. My contention, though, is that citizens are not wanting more
information. Something must be done about people's dread of the nuclear
industry. People are less concerned with voluntary risks than they are with
involuntary risks. This plant is an involuntary risk in their community -- they
did not choose it. Therefore, they have more questions.
Many people are more concerned with consequences than with probabilities. We
keep hearing from you that it is not probable, but we want to know what the
consequences are. There has been some failure to look at a wide range of
worst-case scenarios. People want to know the risk of severe accident.
I should like your comments regarding the IRSS's conclusions. The institute
reviewed available studies relating to the Pickering A accident risk. They found
that the studies did not provide a complete and accurate picture of that risk. I
think it is because risk is conceived of too narrowly, only in technical terms.
Ordinary people have a much broader understanding of what risk might involve for
The study concluded that you have not established a basis for an informed
public debate about the risk implications of restarting the Pickering A
reactors. I should like to know what your reaction to that is, and then I have
one additional short question.
Mr. Osborne: Let me deal with the 200,000-foot level and then hand the
specifics off to my colleagues.
I accept that not everyone in our community has accepted our definition of
risk or the nuclear industry's definition of risk.
Senator Wilson: I was speaking of adjacent communities.
Mr. Osborne: I accept that there are people within those adjacent communities
who do not accept our definition of risk. I do not accept, however, that there
is what you refer to as a dread of nuclear in those communities. We have knocked
on 16,000 doors over the course of the past five months. Everyone at this table
has participated in that role. I just fail to believe that people could be so
incredibly polite to me and to others and not tell us what is on their minds. We
ask them what is on their minds. We ask them what their concerns are.
Yes, there are people who are very concerned. We accept that, but there is
not a widespread dread through out the community -- quite the reverse. We are
gratified with the results of that.
When we have some elements of a community leading in one direction and other
elements leading in another, and there are bodies of scientific thought on
either side of the debate, it behoves us to have someone who has to make a call
on the nuclear front. The person who makes that call is the regulator, the
Canadian Nuclear Safety Commission, which is peopled by qualified nuclear folks.
On the political side, it has to be, ultimately, the responsibility of the
federal government, with your advice and the advice of other people who make
those kinds of calls. All we can do is put the best available information
forward, and that is what you have from us. There is no interest on our part in
putting forward information that does not hold up. We recognize that others will
always look for holes in that information, but we always put our best foot
forward. With respect to specific safety analysis, Mr. Johansen will address
Mr. Kurt Johansen, Senior Manager, Environmental Assessments, Ontario Power
Generation: First, we are sensitive to the dread factor in neighbouring
communities' feelings of concern about risk. We undertook scientific social
research for the environmental assessment in order to get a handle on that. We
were pleased but somewhat surprised to find that the distribution of the level
of concern was pretty uniform, right from the fence line of our station to the
northern reaches of the city of Pickering. Basically, it says that there is a
high level of satisfaction with life in the neighbourhoods of the community.
There is simply no evidence of a widespread concern about our operations, or
concern about the restart of Pickering A. We have scientific data to back up
that conclusion, which is fully documented and included in the EA reports that
we are leaving with you.
That scientific research is corroborated by a number of other activities that
we have undertaken to get a handle on public concern, such as the Neighbourhood
Walk program, which many of us participated in. No evidence showed there. We
conducted seven open houses in the community and three more are planned. So far,
only 131 people have turned up for the open houses. We sent out 60,000 mailing
cards and received fewer than 200 back. Only a fraction of those expressed
concern. As you see, we are not relying on only one technique; rather, we have
cast a broad net to use different techniques to get a handle on this. We simply
do not see widespread concern.
With regard to worst-case scenario accident analysis, we hear much talk about
the fact that the environmental assessment is incomplete and overly selective
and so on. We must emphasize that a wide range of accident scenarios have been
analyzed and documented in the form of the official Pickering A Safety Report
and the companion report, the Pickering A Risk Assessment. Those are on the
public record and were made available to reviewers. The issue is the extent to
which the extreme, or shall we say the incredible, end of the range of accident
scenarios should be included in the environmental assessment. The regulator,
CNSC, directed that we should include for examination in the environmental
assessment only those accident scenarios that were "reasonably
probable," to use their words, because the Canadian Environmental
Assessment Act, the legislation governing this process, requires that
malfunctions and accidents that have some reasonable likelihood of occurring
should be considered, not incredible or unlikely scenarios. Thus, the
environmental assessment covered what it was ordered to cover by the responsible
authority, and it has exceeded the requirements of the legislation. Beyond that,
OPG has done many analyses of accident scenarios, going well beyond those that
are examined in the environmental assessment on the public record.
Senator Wilson: I am surprised that your industry must have such complete
unanimity among the public. You must be one of the few industries that have
In waste management, when the time comes to make that decision, what are your
plans for interaction with the aboriginal community?
Mr. Osborne: I will comment on the issue of unanimity. This industry studies
itself outside, inside, upside down and backwards constantly. We recognize that
the industry has to scrutinize and regenerate itself constantly. The industry is
also scrutinized by third parties constantly. In 30 years, I have not been
involved in an industry that has such a level of public scrutiny. I fully accept
why there is such a level of scrutiny, but in my experiences I have never been
subject to this level of scrutiny. We try to do our best to respond to that
We have an entire business profile with First Nations, because for example
many river systems are within their territory. We have First Nations colleagues
up at the Bruce Peninsula and in the Inverhuron area. Thus, we are very
experienced in addressing the concerns of First Nations.
With respect to the ultimate disposition of high and intermediate levels of
waste, no decision will be taken by the Government of Canada, whose decision it
is, without a full public process. Your Seaborn panel made that clear, and the
government has accepted that recommendation. The waste management organization
that we are being mandated to create will be responsible for coming up with
modalities to achieve that interface. At the end of the piece, any decision
around high level waste disposal, with respect to siting, for example, will be
subject to full and open public scrutiny and, undoubtedly, a full three- or
four-year panel process. To me it is inconceivable that all interested parties
would not have every opportunity to comment not just on the philosophy of high
level waste disposal but also on site-specific issues.
Senator Adams: You mentioned that from 1985 to 1999, nuclear plants improved
from 42 per cent to 92 per cent. Did that happen because of improved technology,
better equipment or the education of those who operate nuclear generating
Mr. Osborne: I will introduce Mr. Preston. He lived through that 15-year
period and was instrumental in recovering the performance of one major U.S.
facility. He can tell you firsthand how it happened.
Mr. Gene Preston, Executive Vice-President and Chief Nuclear Officer, Ontario
Power Generation: Senator Adams, we ran our plants in the onset without much
understanding of the maintenance requirements necessary to continue to have them
run at such a high performance level. As well, we did not have strong training
programs for our people to ensure that they had all the appropriate knowledge
for the various scenarios, transients and different operating conditions that
the plants would have to undertake. We learned those lessons through individual
plant experience and through sharing operating experiences with the nuclear
community and INPO, the Institute of Nuclear Power Operations, and WANO, the
World Association of Nuclear Operators. Sharing operating experience, sharing
solutions to problems and then implementing those lessons learned have been
perhaps the largest contributors to the fact that performance has been
increasing over the last few years.
Senator Adams: I see that you are upgrading generators, environment and
electrical stuff for this team. Do you have many units? Must you shut down any
operation? How will the system work while you are upgrading?
Mr. Preston: The upgrading referred to in the document is primarily the large
upgrades associated with the return to service of Pickering A, which is already
shut down. Those upgrades will be completed prior to the plant returning to
service. In the operating stations we take periodic maintenance outages, usually
of 30-day to 90-day duration on a routine basis. We inspect and ensure that the
physical condition of the asset or the plant is as we have predicted through our
models and our understanding.
The Chairman: I have one comment and then a series of questions. You said
that you wanted to emphasize that Pickering A was not laid up for safety
concerns. However, it could not meet the 1997 deadline for adding second safety
systems, and you shut down voluntarily. There is a play on words here.
We met with the World Association of Nuclear Operators last week. There was
quite a bit of discussion about confidentiality. I know that there is a court
case. What is your position on that case? Will you intervene in that case, or
perhaps you have already? What is your position on confidentiality?
We also talked about the issue of ageing reactors with WANO, but I could not
get a very clear view. WANO said that some of its plants had been licensed to
operate for 40 years and are now operating for 60 years. I could not get a
handle on the technical basis for that, which is of course relevant to what we
are doing with Pickering and with Bruce.
How much cheaper is nuclear power? Is the decommissioning cost included in
that? What about your operating coal-fired plants? There is some controversy
about those plants and their contribution to greenhouse gas emissions. Are those
plants the state of the art with scrubbers and all the other technology? I know
that is a matter of investment, but you have not really done most of that, have
If there is anything you do not want to answer here right off the bat, you
could write to us.
Mr. Osborne: I will try to answer in the same amount of time it took you to
deliver those questions. They are complex questions.
We would not claim that our coal-fired plant that we operate is as good as
anyone's coal-fired plant in our air shed with respect to sulphur dioxide. In
fact, our plant is 25 per cent ahead of most U.S. plants on the sulphur dioxide
front. With respect to nitrogen oxides, we are doing precisely what the plant in
the United States is doing. We are adding selective catalytic reduction units. I
do not know technically what they are except that you add chemicals to existing
chemicals to make a third chemical and end up with a by-product that can be
handled as opposed to an emission through a stack. We create fertilizer and
gypsum from the sulphur dioxide.
We recognize that our fossil plant needs upgrading. We have announced a
program accordingly. We will be state of the art. The Province of Ontario has
told us that we will always be at or ahead of the U.S. limits that have an
impact on us through the air shed. The vast majority of coal emissions in our
province come up through the air shed from the U.S. mid-west.
How much cheaper is nuclear power than other forms? It depends on whether you
already have a plant or not. If you have no nuclear plant today, and you are
comparing building a new nuclear plant to building other forms of generating
source, then nuclear is not the cheapest form. The cheapest form, assuming that
you have run out of hydro sites, would be coal. The second cheapest source would
be natural gas, and the third cheapest would be nuclear. Having said that, with
the run-up in natural gas prices in the last 12 months, the daylight between gas
and nuclear is very small as we sit here today.
If you already have an existing plant and the vast majority of the dollars
have been incurred, whether for the physical plant or for the decommissioning
costs, as is the case with Pickering A, then the incremental costs of going
forward with nuclear are cheaper than the other forms. The incremental cost of
the Pickering A electrons is roughly the same as the incremental cost of
coal-fired electrons going forward and considerably cheaper than gas,
hydroelectric, photovoltaic, windmills, et cetera.
As I indicated in my prepared comments, the megawatts available from
Pickering A are in fact the cheapest source of incremental production in the
province as we sit here today, recognizing that all decommissioning costs and
plant costs have already been incurred. It is there. That liability sits on our
balance sheet as we sit here.
I will ask Mr. Charlebois to talk to the ageing reactor issue.
On the WANO confidentiality, we find ourselves between a rock and a hard
place. We have no desire to hide anything from the public. We have put
everything we have that is within our power to put on the public record on the
public record. I can assure you that your staff could read all the CNSC reports
and former AECB reports on us, read all of our own submissions and public
documents about what we are good at and not good at. We made a very public
disclosure of what we were not so good at some three years ago just after Mr.
Preston arrived and just before I arrived. If your staff read all that, they
would get the essence of what is contained in those WANO reports.
The simple fact is that WANO operates best on the basis that its work is
confidential. It is not because of Ontario or Quebec or New Brunswick, or even
the United States. It is because there are jurisdictions in the world that would
not join the club if they felt that WANO was not going to do its utmost to stand
behind its criteria of confidentiality. WANO finds that it does its job best
when it can be totally frank and open without fear of membership being nervous
about public disclosure. We are on the public record in spades in many other
fora. The WANO reports simply underline and reinforce what we have been saying
to the public for some years.
We support WANO in its efforts to maintain that confidentiality because we
believe it is important that other countries -- I am not particularly anxious to
name names, but you know as well as I which countries they are -- be part of the
club because, frankly, it is the best form of regulation that we have of those
other operations. We believe WANO is critical.
The Chairman: You could leave the issue of ageing plants, because a number of
senators wish to ask questions.
Senator Taylor: In 1997 the Atomic Energy Control Board gave you 14 generic
action items. What progress has been made by OPG thus far? Was a time frame
placed on those actions?
Mr. Charlebois: Yes. The generic action items are issues that have been
raised by the regulator. Sometimes they are questions about our analysis, or
they may be asking us to demonstrate by research that the analysis is
conservative. That work has been underway since 1997, and we are making good
progress. We established a schedule for the completion of those activities.
Those activities require a certain amount of research and development as carried
out by various labs in Ontario. We are submitting our information progressively
to the regulators.
This year, if I recollect, we will close three or four of those generic
action items. We have a similar schedule in the year 2001-02 to completely
close. The criteria for closure have been established with the regulator, and so
far none of the action items we have dealt with has resulted in a major redesign
or retrofit of our plants. They have demonstrated that the built-in margins, our
safety analysis process and our plant design were, in fact, very robust. None of
the issues raised as questions resulted in having to do any more work.
Senator Taylor: Did you say that you will be finished all 14 action items by
the end of 2002?
Mr. Charlebois: I believe the last one, which requires the longest time, will
be finished around 2004. We could submit to the committee the same information
that we submit to the regulator. Every six months we give the CNSC an update on
the status of the generic action items.
Senator Christensen: Perhaps you could clarify your response to Senator
Banks. You talked about safety and the very excellent safety record that exists
in your plants. You also equated it to an explosion in a coal-fired plant and
said that you were surprised that it generated so little attention. Surely you
are not saying that an explosion in a coal plant would be equated with an
explosion in a nuclear plant.
Mr. Osborne: I am not suggesting that at all. I was simply pointing out that
there is no form of generation that does not raise safety issues. We take them
all seriously, whether it is dam safety or fossil safety; we have the same level
of safety requirements appropriate to the different forms of generation right
across the board. My comment was with respect to the surprise that the industry
and the population at large do not seem to have the same safety focus. Our
safety focus is absolute right across all of our forms of generation, and quite
clearly a nuclear plant explosion is a different animal. My point is that we
believe safety is absolute in all of our operations across all forms of
generation. We believe that we can hold our heads high in the face of public
scrutiny on all safety fronts.
Senator Christensen: I am also wondering about background radiation and the
amounts that are released from plants. It was quite clear that they are well
below the standards set and yet other witnesses tell us that there is no safe
standard of radiation. Relating back to a couple of other studies in which I
have been involved, over the aeons different forms of life establish a tolerance
to many things. However, if the level is increased over a sustained period of
time, major problems can occur. What is the effect on all life with increased
background levels over extended periods of time?
Mr. Osborne: I will hand off to my expert colleagues for that answer. I agree
with you that there are expert witnesses who can argue both sides of that
debate. There are no clear, crisp answers on levels of radiation that are safe
or unsafe any more than there are clear answers on levels of radio waves that
are safe in cellular phones. I use that as an example of the kind of debate that
occurs between experts on both sides. Equally, I have heard the argument -- and
I am not qualified to give it credence -- that there is a beneficial effect from
certain levels of radiation above and below which one should not go. I will ask
Mr. Charlebois to provide a scientific answer.
Senator Christensen: There is not any real definitive answer to that.
Mr. Osborne: There is none.
Senator Christensen: I raise that as a concern. We just have to accept that
it is a risk that we must take for looking at nuclear power.
Mr. Osborne: We must task ourselves to stay on top of the issue and be as
good as we can in the analysis of that risk, just as we do with other
environmental emissions, such as those from the fossil plants.
Senator Christensen: Do we admit there is a risk?
Mr. Osborne: Yes.
The Chairman: To interject, the public is worried because there is the
question of who is assessing the risk. There are many people involved in the
nuclear industry, and there is that question: do we need more of a mix?
Senator Eyton: I have a factual question and then a comment. This committee
visited Washington last week or perhaps the week before, where we met with
senior officials of the NRC. It was a fascinating meeting. They gave us a
picture of the nuclear industry in the United States. They regulate in total, I
think, 102 nuclear generating plants, and those plants represent about 20 per
cent of all power generated in the U.S. now. The other 80 per cent comes from
other sources including coal-fired, which we continue to complain about, and
gas, on which they will increase their reliance. The NRC officials also talked
about alternative fuels. In that context, what direction is OPG taking in terms
of nuclear power and the percentage of power nuclear will supply within Ontario?
What can you tell us about the alternative sources of power?
Mr. Osborne: As I indicated, around 50 per cent of our electrons today are
driven by nuclear. That should be around 60 per cent with Pickering A in its
order of magnitude. Of the remaining 50 per cent that is not nuclear, roughly
one half is hydroelectric and the other half is coal with a bit of gas and oil.
We have a nuclear-rich makeup within Ontario. Across Canada, as a whole,
nuclear represents roughly 20 per cent in the order of magnitude. Therefore,
relative to the United States, we are not far off, but other provinces have the
benefit of much better geography. For example, Quebec, Manitoba and British
Columbia have superb geography for hydroelectric power. In Ontario, we have
Niagara Falls and the St. Lawrence Seaway and then relatively small facilities.
With respect to alternative sources of power, we are working on a number of
fronts. We work with windmill operators, and we have just recently committed to
buy the output of a new windmill farm that is being built. We also work with
landfill site operators, and we have committed to buy the output from some
methane gas extracted from landfill in Kitchener-Waterloo. Perhaps most
interestingly, we are working with fuel cell technologies in our research arm,
which is based in western Toronto. For 10 years our research arm has been
providing service to what used to be Westinghouse, which subsequently became
Siemens Westinghouse. We have an agreement with the federal government of Canada
and the federal government of the United States in the personage of the
department of energy. Siemens Westinghouse and OPG are funding a portion of the
research to develop a large-scale commercially viable fuel cell for distributive
generation. We are working on a number of fronts, but I do not want to mislead
anyone into thinking that, in the short to medium term, alternative sources of
fuel will replace the tonnage of electrons required by Canadians or Ontarians.
It will not happen. It is something that will develop over time. Costs will have
to come down significantly before there is whole-scale, widespread development
of those new technologies.
We are as keen as anyone to offer what are called green products in our
energy portfolio. We have committed publicly that five years out we will have 2
per cent of our product line defined as green, which is a defined term accepted
by all stakeholders. It is something of a trick to get to 2 per cent. That is a
lot of power. It may not sound like much in percentage terms, but in absolute
terms it is a lot of power. It will require a lot of small hydro plants,
windmills, high technology, and methane gas. We are up to it, but it will
require everyone to put his or her shoulder to the wheel.
Senator Taylor: In view of the fact that we are decoupling the manufacture,
transportation and distribution of electricity to three different areas, the
consumers will be calling the tune much more than they did in the past, and not
only to pricing -- they may well be calling it to source. I do not know how far
this has progressed in Ontario. Have you made any forecasts or do you see any
changes in that 50 - 45 - 5 sort of set up that you were talking about? Do you
think the consumers will put their money where their mouth is and buy
non-nuclear power? Do you see any real change?
Mr. Osborne: To be honest, I think any change is highly unlikely. I hate to
predict public reaction to anything -- I am not in that business -- but I think
it is highly unlikely that very many people will say that they do not want to
consume any nuclear power, because they would run the very distinct risk of
running out of power.
Senator Taylor: They would rather have coal.
Mr. Osborne: They could go with coal and hydroelectric. The question often
gets asked in the reverse: How much extra will people pay to get photovoltaic,
windmill, landfill and other green power? The jury is out.
There are measures in California that require utilities to offer green
products. The uptake is not high. If you look at experience in California on
electricity prices over the course of the last summer, you see that the
overwhelming concern has been over the cost of basic generation, not whether
people will pay for the extra.
The Chairman: That is because of deregulation.
Mr. Osborne: It is due to a number of factors, senator.
Senator Taylor: She would buy green power.
Mr. Osborne: We would be happy to supply it. With respect to California, the
reason they are out of power is that nothing has been built in the last 10
years. It is as simple as that. You can blame that on a 10-year lead up to
restructuring, if you like. I do not know what the real factors are. The simple
fact is that for whatever reason -- inability to get siting permissions,
inability to get transmission lines built, concern about the regulatory
environment and how to make money, et cetera -- not a single plant has been
built in 10 years. Not surprisingly, with electricity demand in a buoyant
economy increasing, there is no daylight. The inevitable happens. In a
commodity, if you run $1 short, prices go through the roof. If you have $1 too
many, prices plummet. That is a commodity. Californians are paying the price of
10 years of under construction.
Senator Banks: You will have derived from my first question that I have
serious misgivings about the standards, not about your capacity, willingness and
urgency to meet and exceed the standards. I am not also questioning CNSC and all
that. I am questioning the standards that everyone in the world uses, because
those standards are not health-based, they are risk-based, I think. Would you
consider undertaking research, or is there any interest in the industry in
looking at finding a standard that would be health-based as opposed to
Mr. Osborne: Let me accept for the minute, although I am not qualified to do
so, that your definition of the standard is risk-based rather than health-based.
I do not know that, and I am new enough not to have the background. I will try
educating myself on that. I will try to either prove or disprove your theory. I
would ask Mr. Charlebois to comment on it in a moment.
If there is some truth to what you are saying, and I recognize that you say
it with the best intent and without in any way trying to prejudice the debate,
then certainly we would be interested in participating in general debate on that
subject. I think that realistically we are a small player on the world scene. We
are not going to move the boulder by ourselves. It would require that the entire
industry take a look at this. There is, for example, the International Atomic
Energy Agency in Vienna responsible for this. Reference has been made to the
International Commission on Radiological Protection. There are a number of
government regulatory bodies, including the NRC which some of you visited last
week. This is not something where we stand out as being, if you like, able to
move the ball.
Senator Banks: But would your company be prepared to look at that?
Mr. Osborne: Absolutely. As a layman in this business for three years, I had
thought it was a combination of risk-based and health-based standards.
Mr. Charlebois: Mr. Osborne is correct. It sounds like it is risk-based, but
it stems from assessment of health effects impact.
I will state one particular example. There is a location in Africa where,
because of naturally occurring radiation, the population is exposed to radiation
levels that are considerably higher than what we receive in southern Ontario by
a factor of at least 10, if not more. There have been numerous studies, some of
them by the ICRP, to see if any pattern is discernible that would suggest that
those radiation levels are having an adverse effect on the population. To the
best of my knowledge, that has never been proven emphatically. There is no
Senator Christensen: Would it not be that that population has been exposed to
that type of radiation in that particular area for a very long time and has
developed a tolerance to it?
Mr. Charlebois: There are specialists who believe that the human body has an
ability to repair any damage that might be caused by radiation. There have been
many studies on that matter. The information could be provided to the committee
to demonstrate some of the history behind that.
The Chairman: We are at the end of our time. We do not have time to deal with
the ageing nuclear generator question. Could you give us that answer in writing?
We are also interested in your forward-looking position on export of nuclear
power. There may be other questions, and I hope we could ask you to respond. I
am sorry that our time is so brief, because I know there are other issues we
would like to explore with you. However, I want to thank all of you gentlemen
for coming here today and giving us your time and sharing with us this
Senator Christensen has a matter to discuss with us in relation to the Alaska
Arctic National Wildlife Refuge. This issue was taken up with the people at the
Canadian embassy and it is to be hoped we will get a report soon.
Senator Christensen: Have we not in the past written a letter on this issue
to the U.S. President?
The Chairman: This committee dealt with this issue when Senator Carney was
the minister. It was the subject of discussions between us and officials in the
United States. However, I think we need to look at this again.
Senator Christensen: I will just give you a bit of background. I am not
asking you to sign this petition, but it has been circulated by the First
Nations asking the President, before he leaves office, to declare the Arctic
National Wildlife Refuge a national monument in order to protect it from further
development. The First Nations have asked if our committee would support that
petition. I have drafted a letter, the wording of which I am willing to modify,
asking that this consideration be given. I am not sure whether we, as a
committee, can send that kind of letter.
The Chairman: Sure we can.
Senator Eyton: What kind of area is involved? Is there any use that could be
made of it that would not be detrimental?
Senator Christensen: The area is the north slope where major oil and gas
exploration is being done.
Senator Eyton: What is the size of the area?
Senator Taylor: It is 80 to 100 miles deep from north to south, from the
ocean to the mountains. It is about 250 miles in the Alaska portion, and about
100 miles in the Yukon portion. It is a huge area. It is about 400 miles by 100
The Chairman: It is the key area.
Senator Christensen: It is the only area open for that particular herd, which
is the largest herd in the world. Due to the topography of the area, at calving
time it has very rich feed available, which means that the cows do not have to
graze over large distances. Also, at that time of year big winds come off the
ocean and keep the flies away, which ensures that the cows do not become run
down as a result of fighting flies.
The Chairman: There is also a lack of predators there, I understand.
Senator Christensen: Yes, that is true, but the feed and the wind are the
more important factors.
The Chairman: Senators, is there agreement to send this letter?
Senator Taylor: I do not know what "national monument" means. I
know that in Greenland the caribou are a much greater source of food than they
are here. You can operate in a caribou area as long as you shut down operations
during calving season, which is very short.
The Chairman: What is the view on this issue?
Senator Taylor: I am a little afraid on it.
Senator Banks: Can we get some background and deal with it again?
Senator Christensen: No. It has to be to the President before he leaves
The Chairman: He can do it the day after the election, before he leaves
office, without affecting the election. I would advise him to do that.
Senator Taylor: You can develop oil and gas without hurting the caribou.
The Chairman: You are not in favour of this letter?
Senator Taylor: I do not know what "national monument" means.
Senator Christensen: It is like a national park.
Senator Taylor: If they allow restricted types of development at restricted
times within the national monument, that would be okay.
Senator Eyton: I know nothing about it other than what I have learned this
morning. It is fair enough to express concern about preserving the habitat and
calving opportunities for the caribou herd, but I am not sure we can translate
that to say that action should be taken to protect this area and this wildlife.
Like Senator Taylor, I am not sure what "national monument" means.
Does that mean that nothing can happen in that area?
The Chairman: That is right. That is the Canadian government position.
Senator Eyton: Is it?
The Chairman: Yes. It has been for a long time.
Senator Taylor: But not with a national monument.
The Chairman: That is just a method to maintain that.
Senator Taylor: The Canadian government bought a whole lot of reindeer from
overseas in the 1950s and turned them loose in that area.
Senator Banks: Has Canada declared the adjacent area to be a national park?
The Chairman: Yes. Senator Adams, are you in favour of this?
Senator Adams: I do not think the letter should come from the committee.
Maybe it could come from the senator from the Yukon.
The Chairman: It looks like three are in favour and three are opposed.
Senator Christensen: Unless it is unanimous, I do not want to proceed.
The Chairman: We can, however, send letters individually.
Senator Eyton: I do not mind expressing concern.
The Chairman: The issue is not that, Senator Eyton. Canada's position is that
we have a national park there and do not want oil and gas development there and
would like the American government to have a national park.
Senator Taylor: That is not true. They have leased out all the oil and gas
The Chairman: This is Canadian government policy, and we would like the
Americans to follow that policy. The issue will be that, if there is a change in
government, the Americans will want to explore that and the Canadians will be
opposed to it.
The committee is not in favour of sending this letter. I regret that, but I
must bow to your decision.
The committee adjourned.