Proceedings of the Standing Senate Committee on
Energy, the
Environment and Natural Resources
Issue 17 - Evidence, March 9, 1999
OTTAWA, Tuesday, March 9, 1999
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 10:07 a.m. to examine such issues as may arise from time to time relating to energy, the environment and natural resources generally in Canada.
Senator Ron Ghitter (Chairman) in the Chair.
[English]
The Chairman: With us today are Mr. Stewart, President and CEO of the Canadian Nuclear Association, and Mr. Hunt, Director of Policy and Publications of the same association. Thank you for being part of our examination of the nuclear situation in our country.
Our timing is somewhat interesting, judging from the attention the nuclear industry has been receiving in the past few days. This committee tries to be contemporary and deal with matters of public interest. Little did we realize that all of this attention would be focussed on this subject at this particular time. This makes your appearance with us today even more meaningful as we continue our hearings into this important area.
My colleagues will have questions after your submissions. Please go ahead.
Mr. Murray Stewart, President and CEO, Canadian Nuclear Association: It is a pleasure to be here this morning. I welcome the opportunity to discuss this topical matter with you.
I have handed out a packet of background information for each of you which includes a couple of papers on nuclear energy. One is related specifically to sustainable development; and one is related to climate change. I will go through the slides in the package fairly quickly. Another pamphlet in the package outlines a number of companies involved in the nuclear industry in Canada with which you may not be familiar.
I will give you an overview of our association and the contribution of nuclear technology to Canada. I will deal with how it can be an aspect of climate change, although I believe this committee will be looking at climate change in more detail at a later date. However, I will give you a flavour of some of the things we are doing with regard to climate change. I will then be pleased to answer any questions you may have related to our industry.
The Canadian Nuclear Association was established in 1960. It is composed of a broad range of companies that are involved in the nuclear industry. That range includes the mines in Saskatchewan; processing industries; engineering consulting companies; electric utilities that have nuclear reactors in Canada -- Ontario Hydro, Hydro Quebec, New Brunswick Power -- and many of their sub-suppliers; several banks, unions involved in the nuclear industry; as well as the medical industry, as I will explain in a moment. A big part of our industry is related to radioisotopes and, for that reason, we have the involvement of companies such as MDS Nordion, a very large radioisotope producer in Kanata. We cover a broad spectrum of the nuclear industry.
I often describe our industry in Canada as having three legs. The first leg is the uranium mining and processing sector. Canada is the world's leading supplier of uranium. We supply over one-third of the world's uranium. Canada is currently expanding its industry tremendously with the building of three new mines in Saskatchewan. With those mines, Canada will be competitive and ensure Canada's leadership position well into the 21st century.
The second leg is the medical, food irradiation, and industrial isotope industry. Again, Canada is a world leader in certain isotopes, such as Cobalt-60. Globally, Canada produces upwards of 90 per cent of the isotopes for medical and food irradiation purposes. The bulk of that actually is produced in Kanata. There are tens of thousands of shipments of isotopes for medical, food irradiation and industrial purposes out of the Ottawa airport every year to places around the world. This is a key part of the Canadian nuclear industry.
The third leg is power generation. Today, I will concentrate on the power generation and CANDU side of the business. Canada produces about 17 per cent of its electricity through nuclear energy. That is in Ontario, Quebec and New Brunswick. We believe we have the world leading technology in delivering nuclear energy, and that is the CANDU system.
As to the scale of the nuclear industry in Canada, approximately 30,000 people are employed directly in our industry. When you include indirect employment, it is probably closer to 100,000 Canadians. It is spread over about 150 companies from coast to coast. It is about a $6-billion industry in Canada. I mentioned we are the leading supplier of uranium. We are a net exporter, which is rare in a lot of our high tech industries.
There are many spin-offs from the nuclear industry. For example, one of our members is CAE Electronics Ltd. Which produces the flight simulators for 747s and Airbuses. The root of their technology is the development of simulators for nuclear reactors. That is their core technology, and that started CAE Electronics on the simulator route. This also applies to Spar Aerospace Limited, and the development of the Canadarm. The core technology of the Canadarm robotics is the robotic system for loading fuel on a CANDU reactor.
These companies that have now gone into expansion products had their roots in the Canadian nuclear industry. For every CANDU reactor we export around the world, there is, invariably, a CAE Electronics simulator that is used to train operators of the reactors. It is no different from the way 747 pilots are trained.
Nuclear power around the world supplies about 17 per cent of the world's electricity, and that through just over 400 operating nuclear reactors. Globally, fossil fuel is the main energy source for electricity. Over 60 per cent is fossil fuel which, of course, touches on the climate change issue. Almost 80 per cent of electricity in Canada is produced from nuclear and hydroelectric power, with relatively little fossil fuel being used. Fossil fuel is used only in Alberta and the Maritimes. Canada has a clean electricity generation sector because it is primarily hydroelectric and nuclear.
Currently around the world approximately 30 nuclear reactors are under construction. There are no reactors under construction in North America and there are very few in Europe. There is a final tranche in France. Most of the new reactors are built in the Far East, the Middle East, the Russian countries and Southern Asia. There is still active participation in the building of new nuclear reactors. Over the last year there has been approximately 6,000 to 7,000 megawatts of net increase of nuclear power around the world. It is expanding quite dramatically. As I say, there are no new reactors in North America primarily because of deregulation. Until North America uses up all of its excess electricity, there will be no need for any new generation. Over the last 10 years very little new generation capacity has been built. What has been built is primarily co-generation for the thermal side of the requirements, and that with natural gas turbines.
I would mention three points on nuclear power. The first is that nuclear power is competitive; the second has to do with the waste management of nuclear power; and the third is to give you further detail on the impact of nuclear power on climate change and greenhouse gas emissions.
As far as nuclear power being competitive is concerned the most telling evidence is that all of the existing 400 reactors around the world, and all of the 30 reactors being built, have been built and are being built for economic reasons. Fortunately, or unfortunately, they are not being built for environmental reasons. It is the lowest cost power for that country's particular application, be it Korea, China, or any other country.
This slide I am showing gives you relative lifetime power costs of nuclear energy versus co-generation versus coal-fired power. This was done by Natural Resources Canada as part of a global study by the OECD which looked at the relative costs of energy around the world. This study did not include hydroelectric power because it is so site specific in terms of capital cost versus long-term cost. It showed that nuclear power, co-generation, combined cycle and coal-fired are similar in cost, depending on local conditions. In one case nuclear power will be slightly cheaper, in other cases coal will be slightly cheaper, and in other cases natural gas could be slightly cheaper. Those three energy sources are very similar in competitive commercial cost.
We do not need new power plants in Ontario, but if we did build new power plants in Canada, that is the kind of relative costs we would take into consideration. The costs are very similar.
The Chairman: I am not sure I understand the terminology. Would you explain this graph in more detail?
Mr. Stewart: LUEC is the lifetime levelized cost for electricity. If you build a nuclear power plant, over a 30-year or 40-year life, 3.42 cents would be its lifetime cost of producing electricity from that power plant. That would be the total cost of the utility, including waste disposal, decommissioning, and all the other associated costs with the nuclear plant. That is an all-in lifecycle cost of the nuclear power plant.
Senator Spivak: What kind of waste disposal are you talking about? Is it the kind that is being used now?
Mr. Stewart: It assumes the initial storage in pools, dry storage for a period of decades, and providing financing for deep geological disposal.
Senator Spivak: That decision has not yet been made. It is an assumption.
Mr. Stewart: No, it has not been decided. To make the cost numbers comparable, you must include the reserve cost of deep geological disposal. The $15 billion to $18 billion for the lifecycle of all of Canada's reactors is being collected by the utilities today. It is included in these costs.
Senator Kenny: My eyebrows shot up for a moment when I saw this chart. There is a perception that there is a significant subsidy for nuclear power that was paid earlier by taxpayers. If this is not the case, perhaps you could enlighten us. Are there corresponding subsidies related to gas turbines or co-generated electricity?
When you said that the costs are fairly close, with slight variations that depend on geography, my first reaction was to question what you were excluding and who in fact is paying the cost. Is a significant portion of the cost here being borne by the taxpayers in order to arrive at this equal bottom line?
Mr. Stewart: The "Fuel" and the "O&M" are the operating costs. That is purely from the utility. The investment cost is a full commercial cost, whether AECL engineers or other companies manufacture the hardware. That is a fully profitable cost of building a nuclear reactor.
Senator Kenny: Have you taken into account all of the tax dollars that were spent at Chalk River to develop the technology for the reactor in the first place?
Mr. Stewart: No, I am not sure how you would do that because it costs so much to build and to engineer, on a cost basis, a nuclear power plant.
We can, however, show you the net impact of the R&D money that Canada has put into the nuclear industry over the last 40 or 50 years. You are looking at a tremendous multiple factor on return to Canada from that investment. We can give you copies of an Ernst & Young study that was done during the AECL review. It shows that there has been a good overall return from Canada's R&D investment. All we are talking about is the R&D investment.
Senator Spivak: What about the financing costs?
Mr. Stewart: The financing costs are included here. If money has to be borrowed to finance a reactor, that cost is included in this calculation.
Senator Spivak: That is not what I am asking about.
Senator Kenny: Are there comparable government subsidies for natural gas or coal?
Mr. Stewart: I cannot comment on the government incentives on exploration or production of natural gas or coal.
Senator Kenny: What you are showing us here basically demonstrates the costs of building and running a facility today.
Mr. Stewart: You would be taking advantage of the technology that Canada has developed over the last 50 years, which is embodied not only in AECL but also in many other Canadian companies through either government R&D funds for long-term research, basic physics, or other research that a host of other companies have done on their own to develop the technology in support of the CANDU systems.
Senator Spivak: The financing costs I was referring to are the costs the Canadian taxpayer bears to sell CANDU reactors and the ongoing subsidies. Every country that is being sold CANDU reactors is financed by the Canadian government.
Mr. Stewart: We use export financing when we sell a CANDU overseas, and that is normally at commercial rates. This is assuming normal financing. This is the Canadian situation.
Senator Spivak: That is not what happens. I want to know the reality.
Mr. Stewart: I disagree. Certainly in Canada, utilities that build power plants finance those power plants out of either their own funding or their own bonding. Ontario Hydro, New Brunswick Power, or Hydro Quebec issue bonds at commercial rates in U.S. or Canadian funds, and that is how they finance their capital expansion.
Senator Spivak: I will not pursue this, Mr. Chairman, but the point is that these sales would not be made if Canada did not put up the bucks to countries that are buying these CANDU reactors. Is that not the case?
Mr. Stewart: I am not sure. It is not relevant to a Canadian reactor. Certainly, most countries around the world that buy any large infrastructure project, be it railway systems, power plants, or aircraft, use financing from the country that manufactures the products and export them. The CANDU reactors is no different from any other infrastructure project that Canada has the technical capability and sufficiently strong technical capability to export; and that in competition with other countries around the world. Yes, we finance the CANDU reactors on the basis of OECD consensus rates.
Senator Buchanan: In that chart you include gas turbine. I presume that is gas, not natural gas?
Mr. Stewart: It is natural gas combined cycle.
Senator Buchanan: In Alberta?
Mr. Stewart: No, these numbers are in Ontario. That would include the wheeling of the gas from Alberta to Ontario.
Senator Buchanan: It is interesting that you have the LUEC with natural gas at 4.44 and coal at 4.31. For over 20 years I have been fighting to continue the coal industry in Cape Breton, Nova Scotia. In Ottawa they just close their ears to the issue. We are now approaching the point of economic disaster. I am realist enough to know that the production of coal in Cape Breton and the number of people employed will be reduced, but the plan is to wipe out the industry entirely.
For many years we heard that natural gas would be found offshore and shipped ashore. I worked very hard through the 1980s to make sure that happened, and it is now happening. The unfortunate thing about politics is that others are taking credit for it now, rather than giving credit to those who brought it along in the 1980s.
We are told that natural gas is much more efficient, but I disagree. We are told it is cheaper to generate electricity with natural gas, and I disagree with that also. Others also disagree, particularly people in the coal industry and people in Cape Breton who know the mining industry of Cape Breton. They are saying that if the coal industry is going, let it go, because natural gas from Sable Island will come to Cape Breton and we will convert. I have been looking at cost of converting 1,000 megawatts of coal-generated power to natural gas and I can assure you that there is a lot of money involved in that.
It is interesting to see your LUEC for natural gas versus coal; coal is 4.31, which of course is lower than natural gas. That is the first time I have seen that. I am glad that you brought those figures with you.
Forgetting about the subsidies for coal in Cape Breton over the years, I am convinced, and many others are convinced, that if a new mine were to be built at Donkin, we would be able to better that 4.31. Do you agree?
Mr. Stewart: I will support you fully in the sense that the lowest cost electricity generation in Canada is Alberta coal. Actually it is less than 3 cents. There is no question that the coal plants in Sundance and Keep Hills produce the lowest cost power in Canada.
However, there is the issue of climate change as it relates to carbon. You may have to go to carbon sequestration or various other methods to keep them running. I have a chart that deals with the range of coal-fired costs in Canada. There is a range from about 2.5 cents up to about 4 cents to 5 cents for coal. It is very much dependent on the location. Alberta has another advantage. They do not have to put scrubbers on their plants because there is very low sulphur emission.
Senator Buchanan: We do not have a scrubber in one of our major plants, the one at Point Aconi. That was started when a very progressive government was in power. Point Aconi has a fluidized-bed plant which simply eliminates about 80 per cent to 85 per cent of SO2 from the generating plant.
Mr. Chairman, I think it would be interesting if the committee were to study the cost of finishing the Donkin Mine. The figure of 4.31 would be higher because of the cost of mining coal in the Phelan colliery and in Prince. However, with a new mine, where $90 million has been spent in terms of 1985 dollars, the amount of money to be spent to complete that mine, would be about $100 million. The coal is right there to be mined immediately and the cost per tonne would be cheaper than the others. If we used Donkin Mine and Prince coal and eliminated the Phelan, that 4.31 would come close to the cost in Alberta.
Senator Taylor: With respect to your chart, Mr. Stewart, I notice you use a 5 per cent discount rate. Is that not a bit of fudging? I am saying this in a pleasant way now, being an engineer. You have a huge capital cost with nuclear and a huge ongoing fuel cost with coal and gas. Therefore, if you used a 10 per cent discount rate instead of 5 per cent, would your costs not go up quite a bit?
Mr. Stewart: On this particular analysis the crossover point would be between 7.5 per cent to 8 per cent.
Senator Taylor: That is what I thought. If you use higher percentage rates, then the one that costs a lot to operate comes out looking a lot better than the one that costs a lot to initiate. Is your crossover about 7 per cent to 7.5 per cent?
Mr. Stewart: In this particular case.
Senator Taylor: That is interesting. I thought you were better than that.
The Chairman: Does the chart include the $700 million over the past 20 years that has been funded by the federal government with respect to the storage of waste material and research in that area?
Mr. Stewart: Not specifically. This is the net result of what it would now cost for the ultimate deep geological disposal. However AECL would price the unit.
The Chairman: These numbers are not very helpful. Going back to Senator Kenny's point about the cost to the taxpayer, there is no reflection in these numbers of the $700 million that the federal government has put out in the area of dealing with the storage problem. It is not built into these numbers, is it?
Mr. Stewart: No, these are the commercial numbers. I do not know of any government R&D that is recovered.
The Chairman: I am not talking about R&D particularly. I am reading from this supposed secret report that has been getting some attention lately. In here it states that development of a nuclear fuel waste disposal concept and related storage and transportation technologies took place over 20 years at a cost of approximately $700 million, mostly funded by the federal government. Is there no reflection of that in your numbers?
Mr. Stewart: Not specifically, no. The ultimate cost of deep geological disposal is in there, or the assumed cost of that, but not a return on the government funding of the past.
The Chairman: Please proceed.
Mr. Stewart: Let me talk about waste for a moment. To put it in perspective, the first point I would like to make is that, as we speak and sit here today, all of Canada's high level nuclear fuel waste is managed effectively and it is totally safe. It is fully contained at the nuclear power sites. There is no danger to the public.
All of those sites that are currently storing the spent waste are fully licensed by the AECB. In every case they have gone through an environmental assessment with public input. Each of those sites has been fully approved through a full public process, including the AECB.
The existing sites at each of Canada's nuclear reactor sites are sized to take all of the nuclear waste that those power stations will generate with a normal life, including any life extension. You hear about life extensions in nuclear power plants such as Point Lepreau and others. The sites are also designed to take the full life of those nuclear plants. I stress that point for one reason. If you look at our neighbour to the south, that is not the way they have constructed their nuclear facilities. They assumed the government would set up centralized storage and disposal systems and, hence, did not put in the capability at their nuclear power plants to maintain storage, even interim storage, of all the waste from their individual power plants. Because of the delays in the U.S. in the government setting up central depositories or even central interim storage facilities, you will see in the press and other places that nuclear power plants in the U.S. are having difficulty because they do not have storage facilities. A different approach was taken in Canada. We do not have that problem.
To give you an illustration, the next slide shows you the dry storage facility at Point Lepreau in New Brunswick. A very similar facility exists at the other Canadian power plants. Also in Argentina, Romania, and Korea, you will see a very similar situation with the CANDU reactors, where you have large concrete silos of different shapes and configurations. However, after the fuel is kept in the so-called "swimming pools" for six years, where they get to about a hundredth of the radiation level that came out of the reactor, they are then stacked in these silos. Here they can stay for many, many decades until Canada does arrive at a long-term disposal system.
These settings are perfectly safe. You could live right beside them and you would have no more than background radiation. There is background radiation on these facilities. There is no force cooling. They are all naturally cooled. There are no mechanical or electronic devices for any failure possibility on these waste facilities.
The Chairman: Why do we have to move them then? Why is there attention to this issue in the Seaborn report, this secret cabinet memorandum, that refers to the necessity of ultimately finding another location for them?
Mr. Stewart: There is a necessity, I believe, to ultimately move them to a permanent facility.
The Chairman: Why?
Mr. Stewart: The plan and the commitment to the communities where we have built nuclear reactors is that when the reactors come to the end of their useful lives, be it 40 or 50 or 60 years and they are decommissioned, those facilities will be taken back to a green field facility, as is the case with any other industrial process or plant.
There is that commitment in the original environmental assessment. You could argue that you could leave them there indefinitely, but certainly the plan is that these facilities, when they have come reached their ultimate life term, will be returned, as is any other facility, to their natural state. Hence, you would want to move the waste to a final resting place.
The Chairman: We would like to stay on this point because it is fundamental to some of our concerns.
Senator Taylor: Mr. Stewart, what is the waste? Is it a powder or ingot? What comes out that you call "waste"?
Mr. Stewart: I do not have a picture with me. A CANDU fuel bundle is about the diameter of that jug. It is 20 or 30 zirconium tubes in an array. Inside those zirconium tubes is a whole series of little ceramic pellets. The ceramic pellets are the nuclear fuel. It is uranium oxide. The fuel itself is a ceramic that would look like a coffee cup.
Senator Taylor: Is it soluable in water?
Mr. Stewart: No. It is a true ceramic. It is a high density. It has been sintered in high temperature furnaces to make it ceramic-like.
It is contained in these bundles in this array. These arrays are then loaded into the fuel channel on one side of the reactor. CANDU reactors have so-called "on-line fueling." You have two robots. You keep loading new fuel bundles in one side of the reactor. As you push one in, the spent one comes out the other end, so you have a continuous process in a CANDU reactor where you are taking out the spent fuel. What comes out of the reactor looks exactly like what went in.
Senator Taylor: I have another technical question. As you know, mining dumps have been reworked since the middle ages with better and better techniques. You go back to the old waste dump and get out more iron or gold or silver, whatever it is.
In this case, is it possible or probable that, if that fuel is not completely spent, we will invent reactors down the road that could put the same ceramic cartridges through again and derive power from them?
Mr. Stewart: This does not replace ultimate disposal, but you could reprocess the fuel. You do get some contaminants in it that you have to remove to reprocess, because that affects the efficiency of the reaction. As for the uranium, the good 238 that you are using for the reaction, you only use about 3 per cent of the energy content of the fuel once through a CANDU reactor. At the price of uranium today, at $10 a pound for uranium, it is easier to produce additional natural uranium fuel.
Senator Taylor: In the early days of oil usage, we were taking only 3 per cent of the energy out of it. Therefore, storage of waste, for generations to come, should probably be accessible in the event we want to use what has been discarded.
Mr. Stewart: Absolutely. Even for the deep geological disposal, one of the options that was added later in that approach is that it be retrievable. I agree with you that in 20 or 30 years, if you want to mine the disposal, that is totally and absolutely feasible. It is certainly an option. It is one of the options that the commission considered, and it is certainly an option the utilities are keeping on the back burner.
Canada has invested $500 million -- you use the figure of $700 million -- over 20 years to develop a long-term deep geological disposal concept. It did undergo one of the most extensive environmental assessments in Canada with the Seaborn Panel. The panel did report to the government in March of 1998 and, as we know, the federal government responded to the Seaborn report last December.
One of the fundamentals of the response of the government to the Seaborn Panel report was a reconfirmation of Canada's federal policy on waste. It is very simple. It is a polluter-pay approach. I will not go through all of the detail, but it is basically a polluter-pay system in that he who creates the waste is responsible financially, for the management of it, and for the proper husbandry and ultimate disposal of that waste. That was a fundamental precept in the federal policy on waste. That was probably the main difference in view in NRCan's, or the government's, response to the Seaborn Panel suggestions.
The government response reconfirmed Canada's radioactive waste policy framework, which is that the polluter pays, is responsible financially, and has to manage it. The government had three main points in its response. The producers and owners will establish a waste management organization as a separate legal entity and have the responsibility for the long-term management of waste, whatever the option may be. It will be up to the waste management organization to propose the options.
There was a commitment for fully funding the waste. As you know, this has not been the case with Canadian utilities for, in some cases, legal reasons. In other cases it just was not done. Again that is a condition.
The waste management organization would report to the government with its plan, and the government would set up an oversight mechanism for the waste management organization to ensure the waste management is done properly. That is currently underway by the federal government.
You may not be aware that Natural Resources Canada has just completed a cross-country public review process, with public consultation and input on what could be, from a public point of view, an appropriate oversight of the waste management organization and of the proper waste management. That was completed last month. I have not seen the results of that consultation process, but that was conducted right across the country. That took a couple of months.
My message to you is that, from the NRCan response and all the conditions as proposed by the government, the industry is fully committed to meet all the requirements of the government's response to the Seaborn report and all the requirements embedded in the intent and actual practice of the federal government's policy on high level waste. That is an unequivocal statement.
Let me talk a little bit about climate change because I know there is some interest in that at the federal and provincial levels.
From a climate change point of view, the main concern relates to carbon dioxide. I will mention the relative CO2 emissions from various power sources. I am using the tonnes of CO2 per terawatt hour. To put it in perspective, Ontario generates about 100 terawatt hours a year. A coal-fired power station, for every terawatt hour, produces about 840,000 tonnes of carbon dioxide. Oil is rarely used. Natural gas produces just over 500,000 tons and, nuclear power and hydroelectricity generate no carbon dioxide in the generation of power.
The combined cycle generation of electricity, has half the CO2 production of coal. Therefore, if you can replace coal by combined cycle natural gas, you reduce your greenhouse emissions by half, which is good. There are many benefits of Canada exporting natural gas to the U.S. It gets them away from coal which is replaced with natural gas.
Unfortunately, from a climate change point of view, if your combined cycle plant is to meet a new increased demand for electricity, you will still produce 500,000 tonnes of carbon dioxide per terawatt hour. If you are replacing coal, combined cycle is good; if you are meeting a new demand, you are still producing half of what you would have done if you had built a new coal plant.
As I said, there are 400 nuclear reactors around the world. We added up the tonnes of avoided CO2 had an alternate reactor had been built, be it coal-fired or hydroelectric. In 1995 we avoided approximately 1.8 billion tonnes of CO2. Since the start of the main nuclear commercial power, about 22 billion tonnes of CO2 have been avoided. Without nuclear power today, the nuclear industry would emit about 32 per cent more CO2.
The next chart is a little closer to home. This is all Natural Resource Canada and Government of Canada information. The green line shows Canada's CO2 emissions from all sources since 1958 to the present day. From 1958, the first half of the chart, the increase in CO2 is essentially a perfect match of GDP growth. Like it or not, CO2 increases with GDP. You can see that almost every country in the world with industrial content will increase its CO2 emissions, be it from transportation or industry or any other source.
Canada is a little different, though, because between the early 1970s and today, our overall CO2 has increased very little even though our GDP has increased. The main reason for that was the start of nuclear power. If Canada had gone the same way as the U.S. in terms of power generation with coal-fired power stations, we would be up to the red line on the chart. That is, excluding Gentilly in Quebec, which I have assumed would have been hydroelectric. Over that period of time, in Canada, we have avoided about 1.2 billion tonnes of CO2. Now, every year, we are avoiding about 100 million tonnes of CO2. That gives you a comparison, in Canada, of the impact of nuclear power.
Only about 30 per cent of the energy used by industry and people is electricity. The other 70 per cent is fossil fuels, be it in your automobile, industrial processes, space heating and all of that. To really tackle climate change, you must tackle that 70 per cent, because that is the bulk of it.
The biggest emitter of CO2 in Canada is transportation.
You want clean energy in other applications. Of course, nuclear power is one approach. The Bruce Nuclear Power Plant in Ontario is a co-generation facility. Only about 80 per cent of its output is electricity; 20 per cent is thermal heat which goes to an industrial park adjacent to the Bruce reactor site. It is a combined cycle plant not unlike gas turbines.
This NRCan slide gives you a flavour of the projected business-as-usual scenario of CO2 emissions in Canada by various sectors. As you can see, transportation is the largest emitting sector and it has the largest increase in growth. This is related to emissions by automobiles, planes, trains and trucks. We are a big country and, of course, as we prosper, which we intend to do, our transportation activity increases.
You will hear a lot about transportation. One way of reducing CO2 emissions from automobiles is by using hybrid vehicles which have high efficiency gasoline engines supplemented with electricity and battery systems. You may have seen the new Toyota Primus in Ottawa. That is a hybrid vehicle which has relatively low emissions. Every one of our normal automobiles today emits, on average, about 5.4 tonnes of CO2 a year. That is based on 10,000 miles a year. With a hybrid gasoline, the latest technology, that could be reduced by about one-third.
The other approach is to use hydrogen and fuel cells. You have certainly all heard about the Ballard fuel cell. Hydrogen is perfectly clean in a fuel cell when it produces electricity. The key is where the hydrogen comes from. If the hydrogen is produced by electrolysis from a coal-fired power plant, you almost double the net CO2 emission. You may eliminate the CO2 at the tailpipe, but you produce more CO2 in producing the hydrogen. In the same way if you go to co-generation generated hydrogen, the emission is equivalent to that of a regular gasoline internal combustion engine.
If you use the reforming method of methane, the emissions will be, again, equivalent to those produced by the hybrid.
Of course, the ultimate solution is to use hydroelectricity or nuclear power. If you use that power to generate the hydrogen and then put it into a Ballard fuel cell, you can truly tackle the electricity substitution of automobiles.
Senator Spivak: Can you tell us what that represents in total quantities? Are the emissions the same for producing hydrogen in a coal-burning plant and for using gasoline in cars?
Mr. Stewart: I do not quite follow.
Senator Spivak: Suppose, in Canada, we had hydrogen-powered cars and that that hydrogen was produced by coal, would the emissions from that production be equivalent to the emissions of gasoline-powered vehicles? What is the comparison? What are we saving in total emissions, if anything, if cars run on hydrogen produced in a coal-burning plant?
Mr. Stewart: How many cars are there in Canada, Colin?
Mr. Colin Hunt, Director of Policy and Publications, Canadian Nuclear Association: Typically, there are two vehicles per household.
Mr. Stewart: There are probably 20 million vehicles and, with a production of five tonnes per vehicle, that is 100 million tonnes. That is about right, because Canada now emits about 600 million tonnes of CO2 a year.
Senator Spivak: You remove the 100 million tonnes. How much would you produce if those cars were running on hydrogen produced in coal-burning plants?
Mr. Stewart: You would produce 200 million tonnes, double. Our 600 million tonnes would go up to 700 million tonnes. The Kyoto commitment is 550 million tonnes.
Mr. Hunt: Just to clarify that, senator, you need to multiply these numbers by the total vehicle fleet in the country or in the region, and that will give you the number.
Mr. Stewart: I can give you background papers that will explain the economics.
I must add one caveat to that. We are comparing apples and oranges because, you would be replacing full-sized cars with smaller lightweight vehicle. There is an added incentive to do some technical work on the vehicles as well.
We are working very closely with the Climate Change Secretariat on these climate change tables, the federal-provincial process for arriving at a solution for Canada in order to meet our Kyoto commitments.
Since we have the advantage of an electricity sector with very low emissions, we are considering how electricity could help other sectors. We have worked out three scenarios. Canada will have at least a 1 per cent to a 2 per cent increase in electricity demand in the business-as-usual scenario. We are a prosperous country and our prosperity will continue. We must generate additional electricity just to keep up with the business-as-usual case.
I will pose three very simple questions. First, what will happen to our emissions if we maintain today's electricity generation mix, that is, nuclear, fossil, hydroelectric, to meet the increased power growth? Second, how would you change that mix to meet the increased demand in electricity and still meet the Kyoto commitment? Third, if we take advantage of Canada's clean electricity, and if electricity demand increases by 30 per cent in 2010, how will we meet that demand?
The next slide is a comparison. The bars are coloured to assist you. If you take The blue bar represents hydroelectricity; green nuclear; black is fossil-fired or coal; and yellow is a combined cycle.
Senator Spivak: What about wind and solar generation?
Mr. Stewart: That is represented by the purple bar at the top. That bar includes wind, solar, biomass, and fuel cells.
If you kept the mix the same, business-as-usual, our emissions would increase by 7 per cent. That does not meet the requirements of the sector. What you have to do to meet the mix is decrease the fossil and take advantage of additional utilization of the hydroelectric plants.
I have assumed we have 22 properly running nuclear reactors. Right now, as you all know, we do have not 22 properly running nuclear reactors.
Senator Taylor: Is this 22 new ones?
Mr. Stewart: No, the existing ones. We have 22 reactors in Canada today. Right now eight are laid up, but if we bring them back up to normal world-class performance, we could produce upwards of 20 per cent to 30 per cent additional electricity from our existing fleet of reactors. This is assuming Ontario Hydro is successful with the recovery plan. We can easily meet the Kyoto requirements in the electricity sector.
The Chairman: I do not understand the chart which refers to minus 6 per cent. Minus 6 per cent from what starting point?
Mr. Stewart: The Kyoto protocol says Canada must meet minus 6 per cent of our 1990 emissions. We take the 1990 emissions of the electricity generation sector and ask: How can we meet minus 6 per cent of that in year 2010 so that our sector meets the Canadian commitment?
The Chairman: Is that your sector alone?
Mr. Stewart: Yes, just our sector.
The third bar demonstrates that that is really not good enough performance for our sector because other sectors will not be able to meet a minus 6 per cent target. They cannot do it because of the tremendous growth in their sectors, and we do not want to hurt the industrial growth of Canada.
By switching from polluting fuels to electricity, as long as it comes from a clean source, we are considering what the electricity sector can contribute to other sectors, such as fuel cells for automobiles. The electricity table takes into account high growth rates and what additional costs Canada will incur to produce more electricity. A simple step would be to have more electromechanical pulping in pulp and paper mills. We would use less thermal and more electricity. Another step we might take is to electrify transmission lines for natural gas.
Senator Spivak: In that scenario do you have conservation and energy efficiency?
Mr. Stewart: Absolutely. Again, that depends on the net growth. NRCan has used a figure of 1 per cent increase in electricity. Canada, over the last 10 years, has been running about 2 per cent to 2.5 per cent. Even the business-as-usual case is assuming considerable energy efficiency and conservation. That is the first thing you have to do.
Senator Spivak: Does that mean doing things like changing all the light bulbs in every building in Canada? What does that conservation option encompass in practical terms?
Mr. Stewart: It would decrease the rate of growth. Even on a business-as-usual case, it would not take the rate of growth of electricity needs to a negative point. The big users of electricity in Canada are industries.
Senator Spivak: It would decrease the rate of increase.
Mr. Stewart: Yes.
Senator Spivak: Are you assuming that all of the conservation measures would take place in every building in every industry in Canada?
Mr. Stewart: You have to do that.
Senator Spivak: In your discussions with Natural Resources and anyone else about what your quota would be, is all of that is taken into account? I want to know what the premises are.
Mr. Stewart: Very much so. The premise on the electricity table and the climate change premise on electricity is based on the fact that you do everything possible on the conservation side. The other premise is you do everything possible on the alternative energy sources side. You maximize solar and wind power.
The Chairman: Am I correct that, if you do nothing and do not change the mix, you will not meet the Kyoto target?
Mr. Stewart: That is right.
The Chairman: To achieve the minus 6 per cent, what would be the magnitude of the cost to the taxpayer?
Mr. Stewart: In the pure electricity sector there would probably be no cost. You would actually save. If the nuclear plants run better, that saves you money.
Senator Spivak: My fear is that our future generations might be radiated because we want to save money.
Senator Taylor: Let us talk about manufacturing hydrogen for use in cars. I do not think drivers would carry a nuclear bag in the back of their cars which would convert the fuel to hydrogen.
Mr. Stewart: We are looking at hydrogen as a fuel.
Senator Taylor: Would there be central station where, like you would with propane or natural gas, you would fill up?
Mr. Stewart: That is right.
Senator Taylor: It is a highly inflammable substance. Would drivers have to drive way out to the bush to load up?
Mr. Stewart: Probably the most dangerous commodity we handle every day is gasoline. It is a matter of familiarity with the substance and having the right technology to contain it. Gasoline is an unbelievably dangerous product. It ignites. It requires the proper technology for containment, as does propane.
Senator Taylor: We currently manufacture hydrogen. We use it in an acetyl welding process.
Mr. Stewart: Yes, that is correct.
There are three Kyoto mechanisms associated with the Kyoto protocol. One is emissions trading, where countries can trade emissions to reduce the overall cost. The other two are joint projects. One is called "joint implementation"; and the other is called the "clean development mechanism." This is where one country either transfers technology, provides financial support or whatever, and facilitates clean technology development in another country. If a country like Canada does that in Brazil or another country, both countries can share the CO2 reductions on a very simple basis.
Consider the CANDU reactors that Canada has developed overseas since the United Nations framework convention on climate change. Using 1990 as a benchmark, we have developed three units in Korea, two in Romania and there are two currently under construction in Qinshan, China. All have been developed since the climate change became an issue. In each case the alternative energy source would have been coal. That was the alternative in China, Romania and Korea; and it still is their main energy source. I have added up the CO2 reductions from those and plotted it out on this chart. I considered when the unit came on line and the relative fading out of CO2. They are all CANDU 6s, a 700 megawatt CANDU unit. Each CANDU unit saves about 4.5 million tonnes of CO2 a year compared to emissions from coal. The units Canada has exported since 1990, by the early 2000s, will reduce the emission of over 30 million tonnes of CO2 per year.
I project to 2012 because the time frame of the Kyoto protocol is 2008 to 2012. The cumulative effect of the CO2 of just Canada's export reactors since 1990 is 400 million tonnes of CO2, almost Canada's total annual, all source, CO2. It is a big number. We are only talking about seven CANDU reactors that we have exported since 1990, some of which are under construction at the moment.
The Chairman: On the trading of emissions that we hear so much about, by the use of Canadian-made reactors that we are exporting around the world, we are saving emissions. Are you suggesting that Canada could then, in the determination of its Kyoto numbers, take that into consideration?
Mr. Stewart: Absolutely. It depends on all the details of the CDM.
Senator Spivak: But the levels go down every year.
Mr. Stewart: To use the example of Qinshan, the two reactors in China. Those would have been coal. The numbers do go down. In some places it is replacing old coal; in some places it is replacing coal.
Senator Spivak: That is not what I mean. I mean, in a total global emissions context, every country's numbers have to go down regardless.
The Chairman: This is bringing it down.
Mr. Stewart: No, it may not be because this relates to the issue of developing countries. The reason for the clean development mechanism is to allow countries like China, Brazil or Indonesia to develop their industry in a clean way. It gives an incentive to those countries to build zero emitting solar or wind plants, or whatever, to produce power as opposed to building a coal plant.
Senator Spivak: Those global emissions have to come down every year.
Mr. Stewart: That is right, for the developed countries.
Senator Spivak: You cannot just internationally trade in a stationary context, because it is not stationary. It keeps coming down.
The Chairman: Alternatively, it may not be increasing as fast as was anticipated.
Mr. Stewart: The emissions in developing countries will increase because their industry is expanding. What you are trying to do is truncate the growth rate and break its relationship to industrial development and population growth.
Rural electrification is still coming to these countries. We do not want to build high CO2-emitting power sources. We must utilize a clean alternative and have the developed countries promote that, and develop it. We must also transfer technology to allow them to do a lot of it themselves indigenously. In reward for that the developed country and the developing country share the reduction. That is open to negotiation.
That is the concept. Otherwise industrial development in Canada will stop and we will not meet the minus 6 per cent target. Every Canadian company, instead of adding a new bay to a factory, will build the factory somewhere that has no limits. The global CO2 will skyrocket, and no one will benefit.
From an energy policy point of view, we think nuclear energy should be part of that. I have explained a lot of the environmental benefits, the economic benefits, and the social benefits from jobs. Of course, we have security of supply from a Canadian point of view because it is a totally indigenous industry. It is competitive. We talked about some of the non-electrical uses of electricity. I did not get into the predictable costs, but one of the benefits of nuclear power is that the fuel cost is so small as compared to fossil fuels and natural gas.
This last slide is what I call my "bumper sticker." That is a picture of two Qinshan CANDUs that are currently being built just outside of Shanghai in China. That power generation would have been by coal if they had not chosen the CANDUs. The amount of CO2 emissions avoided by those reactors, is equivalent to the emissions of 2.5 million vehicles. This will give you some perspective.
The Chairman: In what time frame?
Mr. Stewart: Every year. That is just straight arithmetic.
The Chairman: Thank you, Mr. Stewart.
Senator Kenny: Thank you for an interesting presentation. It set the background for the committee very well.
One of the principal reasons we are conducting this study now is because of an underlying concern we have about nuclear safety, principally about reactors that currently exist in the world. It seemed that a logical way to go about this study was to start by looking at Canada and seeing what sort of job we were doing and then branching out from there to see how the rest of the world was doing.
Our premise -- and I am testing it with you -- was that, if someone has a problem with a reactor in Bulgaria, it will, fairly soon, be a problem for us here. Talking about safety with folks who are in the nuclear business is a little bit like talking about safety with folks in the airline business. They really do not like to talk about it a lot because it seems to be alarmist and leads to headlines that do not help folks.
Are all the reactors in Canada CANDUs?
Mr. Stewart: All the commercial power reactors are CANDUs. There are some experimental reactors and isotope-producing reactors, but all of the 22 we talked about are CANDUs.
Senator Kenny: Are there levels or ratings for the reactors? Is there an agency that rates or scores the reactors in terms of their safety performance and reliability on a regular basis?
Mr. Stewart: It is not being done for all the reactors. A standardized process of measuring performance has been developed by the World Association of Nuclear Operators whereby they can measure safety and operations within a set of parameters. This is now being done by Ontario Hydro. Every month they rate the performance of all of their reactors against these WANO standards.
Senator Kenny: Are we rating them right now?
Mr. Stewart: Ontario Hydro is, but that is fairly recent.
Senator Kenny: If we wanted to find the safest reactor in Canada, right now nobody could tell us where that is, and if we wanted to find the least safe reactor, no one could tell us that either.
Mr. Stewart: I would say that they are all safe. I am not sure how you define "safest."
Senator Kenny: Would I get the same answer from your counterpart in Bulgaria?
Mr. Stewart: Probably not. There certainly are some reactors in the former Soviet Union that are not inherently as safe as a CANDU. They are a different design. Certainly, I would not say the Chernobyl reactor is as safe as a CANDU or a modern boiling water reactor or a PWR.
Senator Kenny: You are a master of understatement.
Mr. Stewart: To put it bluntly, the Chernobyl reactor could never have been built anywhere but where it was built. It would never have passed licensing requirements.
Senator Kenny: We do not have a system of rating the safety of reactors in Canada where you cannot say that a reactor qualifies as an A+ on every test and a reactor in another place is 23rd on the list because it is a B+ or a C- or whatever. I am happy to hear you say that they are all safe, but that is like saying all of the cars that General Motors manufactures are safe. Certainly, they are safe, but some are safer than others. Some are in better shape than others. Some are better maintained than others. Some are inherently better designed that others.
Inasmuch as our reactors are not all designed identically, they are of different ages, they have different people managing them, there are obviously different levels of safety in the reactors in Canada.
Mr. Stewart: We have basic standards that all reactors must meet, and they do. The WANO measurements do not quite address the specifics of your question where you would relatively rate them.
As an illustration, you might argue that the Pickering A units are not as safe because one of the conditions of bringing them back into operation -- and I hope that happens next year or the year after -- is the adding of an independent secondary shutdown system. They are the oldest Canadian CANDUs. For them to come back as operating units, they will be retrofitted with a totally independent secondary shutdown system or a different form of that.
You could argue that those units were not as safe as, say, Pickering B, Darlington or the Bruce units. You would have to look at the specifics.
Senator Kenny: Are you saying that we need not worry, those reactors are not working right now, so they do not pose a risk?
Mr. Stewart: Right.
Senator Kenny: Do you say there an international or worldwide system?
Mr. Stewart: Yes, the World Association of Nuclear Operators does have a measurement system that looks at all aspects of nuclear power plants. That applies not only to safety, but also to relative performance, economic factors. It covers a broad range of considerations, including individual worker safety. There is a whole range of factors.
Senator Kenny: Do they have representatives or an office here in Canada?
Mr. Stewart: They do not have a representation here but they have their standard systems. The current president of WANO is Al Kupcis, the former president of Ontario Hydro.
Senator Kenny: How can we access them?
Mr. Stewart: They are in Atlanta. If you would like to get in contact with them, I would be pleased to give you a reference.
Senator Kenny: You have given us a map that shows the importance of nuclear energy to the world. It is a bit dated. It is 1990. We have different jurisdictions now. Where are the areas that you worry about as a citizen in terms of the functioning of nuclear reactors?
Mr. Stewart: As I have said before, the main concern would be some of the ones in the former Soviet Union.
Senator Kenny: If we have another Chernobyl or another Three Mile Island it means you will never build another reactor in Canada.
Mr. Stewart: I would not debate that point with you. It is a serious concern. We would just as soon there not be another Chernobyl. There certainly has been a lot of global support to Russia to improve the safety systems, to improve the operating capability of those reactors because that disaster, to a large extent, was a design problem. However, there was also a tremendous human error problem. A a human factor, coupled with a design that allowed it to happen, was really the combination that caused that disaster.
Senator Kenny: On page 39 of the Nuclear Canada Yearbook 1998 you have listed world reactor capacity. You list countries that have nuclear reactors and rank them. At the bottom of the page you talk about reactor types. Are gas-cooled reactors, the GCR and AGR, the most dangerous?
Mr. Stewart: No. Those are the early British reactors.
Senator Kenny: Which reactors are the most dangerous? Which ones do not have the protective shell covering?
Mr. Stewart: What you are talking about are the water-cooled graphite moderated.
Senator Kenny: Yet, there are still some being built.
Mr. Hunt: There are approximately two to three LGRs or RBMK-type reactors of which there are at least three or four listed as being under construction, even though there has been no significant progress on them in the last 10 years.
Senator Kenny: Are there 20 or 30 RBMKs in operation right now?
Mr. Hunt: There are 14 listed there. Those are not all of the reactors that there are in the former Soviet Union. They comprise approximately 35 per cent to 40 per cent of the reactors in the former Soviet Union.
Senator Kenny: If you were grading the ones you wanted to look at first, would you probably look at those first?
Mr. Hunt: Those are the first today and they were the first immediately after 1986 and the Chernobyl accident itself, yes.
Senator Kenny: Was the reactor at Chernoybl one of that type?
Mr. Hunt: Yes. It was an RBMK-type reactor.
Senator Kenny: Moving from reactors, what about what I would call the "rogue" states that you have listed here? Iran and North Korea are two examples. Do those countries conform to international conventions and do international associations have the capacity to monitor and keep track of them?
Mr. Hunt: The Iranian government has said, and the International Atomic Energy Agency has agreed, that at no time has Iran ever violated or every threatened to violate any of its conditions as a signatory to the non-proliferation treaty.
Mr. Stewart: You cannot say the same for North Korea. They are not a signatory to the non-proliferation treaty.
Senator Kenny: What other countries on this list are not signatories?
Mr. Stewart: The other ones that come to mind are Pakistan and India.
Mr. Hunt: If I could just make a correction, North Korea is a signatory to the NPT. That has been the source of problems between IAEA, the United States and South Korea. North Korea is a signatory and there have been allegations that it has been violating its status.
Mr. Stewart: There is an inspection issue.
Senator Kenny: I am trying to establish or get some sense of what level of comfort we can have with our systems. Where do we rank relative to those elsewhere? Should we be focusing on what is going on in Canada and whether we have good systems? How do we satisfy ourselves that we do? If reactors in Eastern Europe do a Chernobyl, will radiation end up in the milk in Canada in 48 hours?
Mr. Stewart: Obviously, you have to assure yourself that Canada is in a good position.
Senator Kenny: How should we go about that?
Mr. Stewart: You must talk to the people involved. I would suggest you talk to the AECB. I would certainly suggest you talk to the three utilities that are responsible for them. You might also want to talk to AECL. Certainly they develop technology in support of those utilities as well.
From an international perspective, you might want to talk to someone from the World Association of Nuclear Operators. Another group in Canada you might want to talk to is the people at the Department of Foreign Affairs and International Trade because they get involved in the export side. They are key with respect to the non-proliferation aspects.
Senator Kenny: What disinterested body should we approach? In other words, who is not an operator or who is not trying to export for the manufacturers? Where do we look for impartial views on our own performance?
Mr. Stewart: The World Organization of Nuclear Operators is still the industry. It is not a watchdog per se.
Senator Kenny: Does the IEA do any work on this; does the OECD?
Mr. Stewart: I would suggest the IEA. The Nuclear Energy Agency, which is part of OECD, might fill your bill. I would also suggest you talk to the International Atomic Energy Agency.
Mr. Hunt: Just to clarify, there are two organizations that sound very similar here. You referred to one of them. The International Atomic Energy Agency has a great deal to do with proliferation. You would certainly be well advised to have them in. The International Energy Agency has nothing whatsoever to do with proliferation or security concerns.
Senator Kenny: Is one of them part of the OECD in Paris?
Mr. Hunt: No. The International Energy Agency is quite independent. The International Atomic Energy Agency is not a function of the OECD. It is a function of the United Nations. That is in Vienna, Austria.
Mr. Stewart: The other group would be the Nuclear Energy Agency, which is a subset of OECD.
Senator Kenny: Is Sam Thompson is the head of that?
Mr. Hunt: No, it is Donald Johnston.
Senator Kenny: What about the energy side?
Mr. Hunt: It used to be Mr. Echavarri. He was in Canada about two months ago.
Mr. Stewart: I would also encourage a visit to any of the Canadian nuclear facilities. Any of our companies would be more than happy to greet you, be it at Darlington or a nuclear fuel production facility, any of the mines, or any of the processing facilities. There is one very close to you in Kanata, if you want to look at the world's largest producer of radioactive isotopes for medical purposes.
Senator Spivak: Where are the scientific research independent groups that concentrate on nuclear energy? I know that the Royal Society, for example, has some people who are interested in nuclear energy. In which of the research groupings of scientists are there people who are working on, for example, the waste?
Mr. Stewart: We would have to give you a list, but probably the greatest amount would be done at various universities around the world. That would be your main source of R&D.
Senator Spivak: Do you have some idea where the centres of excellence are in that sort of research?
Mr. Stewart: We might have to come back to you on that. We could give you some recommendations of a truly independent university. The U.S. Department of Energy has extensive facilities, be it Oakridge and other places you have heard of, that do extensive research on nuclear waste and nuclear technology.
Senator Cochrane: Mr. Chairman, I would like to ask about the public input regarding the safety of these storage facilities. Who are the people overseeing this, and how often does the Atomic Energy control Board conduct reviews and so on?
Mr. Stewart: Before a dry storage facility is set up, it would have gone through an initial environmental assessment by the Canadian Environmental Assessment Agency which comes under the Department of the Environment. There would be an initial review which would include public hearings.
After it goes through that process it has to be approved both at the provincial and federal levels. We have a duplicate process in most provinces. They do a similar environmental assessment. They have to pass both of those.
Any nuclear activity has to go through another public review process as part of the Atomic Energy Control Board licensing. This is before any construction. After the environmental assessment, it still requires a licence because all nuclear activities are licensed by the Atomic Energy Control Board. It still has to go through the full licensing process of the Atomic Energy Control Board which would issue, initially, a construction licence.
Then it would go through another review to actually get a licence to operate. Then, in Canada, we have a licence renewal process. Every two years most facilities, as part of the review process again, would go in front of the board of the Atomic Energy Control Board Agency, for relicensing of the facility to continue operation. It is done over a 60-day period.
There is an initial review where the public could have input. Between the first review, the interim review, and the final review there is public consultation. As a matter of fact, you may have seen ads to that effect in your local newspapers. The AECB will make public announcements and advertise that Point Lepreau dry storage is currently being reviewed for relicensing and solicit input from any interested stakeholder. In some cases, the AECB actually goes to the community for their board meetings.
Dr. Bishop has quite aggressively started going to the communities to allow the public easier and better access to the AECB on these relicensing approaches
It is quite a rigorous process with a lot of input from the public.
Senator Cochrane: Would nuclear power have any advantage over, say, hydroelectricity in regards to cost and efficiency? I am thinking about the Lower Churchill Falls development.
Mr. Stewart: Hydroelectricity is very site specific. It requires relatively expensive, up-front capital. It is much like solar power in that you buy lifetime fuel when you make the initial investment. The capital investment is relatively high, but the operating cost of the plant is extremely low.
As Senator Taylor was saying, the relative cost is dependent on the financing rate, the cost of money, and the power contracts for the site. Hydroelectric is also dependent on water conditions. In British Columbia you have a 600-foot head. You can have a relatively small dam with a relatively small turbine because you have a very high head. However, in Manitoba, to build Conawapa, the next power station on the Nelson River, the capital cost is relatively high because you have a relatively low head of water, so the turbines must be larger. Again, your cost is less and the environmental impact could be less because you do not have a flooding arrangement. It is so-called "run of river." You just dam back a little bit to Limestone, back to the next power station.
Senator Cochrane: Do you think hydro would be cheaper than nuclear power?
Mr. Stewart: It depends on the site. I would certainly hope we eventually build Lower Churchhill Falls. It is a very good source of electricity that we can export to the U.S. as part of our industrial development.
The Chairman: In the government's response to Seaborn to which you referred, it is stated that: The producers and owners of nuclear fuel waste in Canada will establish a waste management organization, incorporated as a separate legal entity. Have you taken any steps in that regard?
Mr. Stewart: You would have to get the specifics from the three utilities, but certainly discussions have been initiated. They were initiated immediately, and it is certainly the intention that those three utilities will set up that separate legal entity. They are in the process of doing that as we speak.
The Chairman: Are they responding favourably to the federal government's position?
Mr. Stewart: Yes.
The Chairman: Am I correct that Romania already has one of our CANDU reactors?
Mr. Stewart: They have one running and one that is half built.
The Chairman: What controls should the Canadian government be placing upon the sale of those CANDU reactors to ensure that they are being operated appropriately, efficiently, and that they are not being utilized for purposes other than their original intention?
Mr. Stewart: To answer the last part first, we obviously have to abide by our current policy. We deal with no one that is not a signatory to the non-proliferation treaty. Canada has added a bilateral agreement to that. We are one of the few countries that has added such a bilateral agreement. They cannot use the fuel for any other purposes than was originally intended. According to that arrangement, they cannot even reprocess the waste fuel without the permission of Canada.
The Chairman: What controls do we have to ensure that they are operating according to the agreement?
Mr. Stewart: That is done through the on-site inspection of the International Atomic Energy Agency. Every reactor in the world that comes under the NPT is inspected by the IAEA. There are monitors; there are cameras. It is a thorough surveillance process. They count fuel bundles. You can track every fuel bundle in a CANDU reactor, from where it came, where it goes, where it is. They actually send in independent inspectors to make sure nothing has gone amiss.
The Chairman: Is this happening as well in the Ukraine and Russia, where we hear about smuggling and exporting and sale in the black market? Should we be concerned about that?
Mr. Stewart: I would be equally concerned about military materials. I would have the same personal concern you would about what Canada can or cannot do in trying to ensure that there is no leakage or smuggling of former weapons-grade materials or current weapons-grade materials.
Mr. Hunt: I will be very specific in answering that question, Mr. Chairman. You can consider for the moment three classes of materials that were and are in the former Soviet Union: Laboratory materials, specific military stock piles and civilian commercial fuel and commercial fuel waste. In that I am also including fuel and reprocessing waste. Of the material which has appeared in the various smuggling incidents over the last six years or so, all are laboratory origin material. None of it is military and none of it is civilian commercial. They know that because of the metallurgical analyses to which these specimens were subjected.
All of the material that has been involved in these smuggling cases has been extremely tiny quantities, in fact, less than a gram. In some cases it is as little as a hundredth of a gram.
The year before last, the United States government conducted a military audit of Russia's nuclear weapons security system. We understand that audit was quite favourable, but that covers specifically the military inventories. It has nothing to do with the rather large quantities of material which could be out there in the Russian laboratory systems. This is not necessarily restricted to military labs. This material could be in universities and all kinds of places.
Mr. Stewart: The commercial reactors all come under the same requirements of the International Atomic Energy Agency.
Mr. Hunt: That is right. Their fuel is supplied to them. It is accounted for and it is returned. Again, just to emphasize the point: The material which is of concern is material which is pure weapons-grade plutonium 239 in many cases or, in some cases, pure U-235. These materials exist in pure form. That is not how civilian reactor fuel or reactor fuel waste exists.
Mr. Stewart: This is a weapons-grade plutonium. The other one is the HEU, highly enriched uranium. The U-235 is highly enriched.
The Chairman: You are assuring us that at least with the CANDU reactors, the controls, the enforcement, and the knowledge as to the use of those reactors, is well in hand, and that Canada should not feel negative or insecure about what we are doing in that regard; is that so?
Mr. Hunt: The answer to that, Mr. Chairman, is yes. All of those countries to which we sell CANDU reactors account to the IAEA for all of the waste fuel which those reactors produce. Nothing can be subtracted from it for any alternative purposes.
Mr. Stewart: We must not back off on our due diligence in ensuring that we do have that infrastructure in place. You will hear that from the AECB in Canada. We fully support a strong regulator in Canada and the IEA. We need those.
Senator Spivak: The one instance of where there was tremendous fallout is Chernobyl. You may not be able to answer this question now, but could we get the length of time that the surrounding area will be under severe restrictions? Could you also provide us with information as to what happened leading up to this incident. That would be a lesson to the world. Could you also provide us with some information as to any similarities between that disaster and what might happen if, as a result of nuclear waste storage, there was some seepage into our water tables? These are concerns. Could you provide us with some written material in response to those questions?
Mr. Stewart: We can provide you with some information in that regard. There has been a lot of research into what happened at Chernobyl.
Senator Spivak: Of course, the government reaction in Russia was to keep information out of the public domain. Hopefully, that would not happen here.
The Chairman: Mr. Stewart and Mr. Hunt, thank you very much for your time and effort.
The committee adjourned.