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Harper embraces the nuclear future

CANOE -- CNEWS: Macleans - Harper embraces the nuclear future Page 1
May 3, 2007

Harper embraces the nuclear future
Climate-change anxiety breathes new life into nuclear power,
and shifts Ottawa's plans

By JOHN GEDDES -- Maclean's

Stephen Harper would seem an unlikely pitchman for nuclear
power. When the Prime Minister launches into his familiar spiel
about Canada as an emerging "energy superpower," we all think
we know what he's talking about - he's an Alberta MP, after all, and
his father worked for Imperial Oil. Yet in a key speech last summer
in London, his most gleeful boast was not about record oil profits,
but about soaring uranium prices. "There aren't many hotter
commodities, so to speak, in the resource markets these days,"

Harper joked to the Canada-U.K. Chamber of Commerce crowd.
Then, noting that Britain is among those countries poised to begin
buying new reactors for the first time in decades, he added: "We'll
hope you remember that Canada is not just a source of uranium;
we also manufacture state-of-the-art CANDU reactor technology,
and we're world leaders in safe management of fuel waste."

The time and place Harper chose to plug Canada's nuclear
industry were telling. Just three days before his July 14 London
speech, British Prime Minister Tony Blair, whom Harper greatly
admires, had waded into a storm of controversy by formally
proposing that Britain build new nuclear plants to stay on track with
its plans to cut greenhouse gas emissions. President George W.
Bush was way ahead, having signed an energy bill the summer
before that offered billions in tax breaks and loan guarantees in a
bid to jump-start the first new nuclear reactor construction in the
U.S. since the 1970s. Given all that action, Harper's government
casts its own embrace of nukes as part of an international wave of
enthusiasm for zero-emissions reactor power. "Almost from the
time we took office," says Natural Resources Minister Gary Lunn,
"we've seen a nuclear renaissance around the globe."

It's a renaissance fuelled largely by climate-change anxiety.
Generating electricity with natural gas and coal contributed 17 per
cent of Canada's greenhouse gas emissions in 2004, the latest
data available, right up there with road transport at 19 per cent,
and the fossil fuel industry itself at 20 per cent. Nuclear plants offer
the allure of reliable power without planet-blanketing carbon
dioxide. Not only that, the price is right. In Ontario, the going rate
for nuclear-generated electricity is under five cents a kilowatt hour,
compared to a bit over eight cents for power from larger wind
farms. And the wind doesn't always blow. The nuclear industry
senses its moment and, nearly three decades after Three Mile
Island battered its reputation in North America, is ramping up PR.
Bruce Power, Canada's only private nuclear generating company,
recently signed a sponsorship deal with the Toronto Blue Jays.
But anti-nuke activists are hardly giving up the fight. They point out
that the old problem of what to do with radioactive trash - nearly
two million bundles of waste uranium now stored temporarily
around Canada's 22 reactors - still hasn't been settled. Then
there's the daunting upfront cost of a nuclear plant, about $5 billion
each for newest model reactors, and the hundreds of millions
Ottawa spends on nuclear R&D. If anywhere near as much was
poured into green alternatives, anti-nuclear groups contend, that
cost-per-kilowatt-hour gap would soon narrow. Still, green groups
no longer have a decisive edge on the ecological-virtue side of the
argument. Global warming fears, with the attendant predictions of
drought and flood and mass extinctions, might make the need to
store radioactive waste, even contemplate the odd reactive
accident, seem less dire.

All of which means a bitter confrontation in the offing between
reinvigorated advocates and long-dug-in opponents. That may be
why, aside from Harper's travelling salesmanship and Lunn's
boosterism, the Conservatives have been soft-selling their pronuclear
stance. Unlike Blair or Bush, Harper hasn't risked putting
nuclear power back at the top of the agenda in a decisive moment.
Instead, he has quietly made a series of moves that signal a shift
over his year-and-a-half in office, from an uncertain relationship
with Canada's nuclear industry, particularly federally owned Atomic
Energy Canada Ltd., to making room for nukes at the core of
energy and environmental strategy. "We think AECL has a great
future," says Lunn, the minister responsible for the Crown
corporation. "From purely an environmental perspective, for no
other reason, you have to consider nuclear."

Back when they took power early last year, the fit between
Harper's Conservatives and nuclear power looked awkward at
best. After all, AECL, founded in 1952 and still soaking up
hundreds of millions in taxpayer support, looks suspiciously like
the sort of Liberal-style industrial policy tool the true-blue
Harperites were supposed to loathe. And back then, Harper was
an avowed climate-change skeptic. If he didn't believe in the
problem, why buy into a supposed solution?

Any misgivings, though, have clearly been put to rest. Federal
bureaucrats did their bit to nudge the Tories into the nuclear camp.
Shortly after last year's election, Natural Resources officials put
together a briefing for Lunn's staff on nuclear policy, which was
obtained by Greenpeace Canada under the Access to Information
Act and provided to Maclean's. On an otherwise heavily censored
page titled "strategic considerations," comes this simple but telling
point-form assertion: "Nuclear is an important building block of
long-term energy policy framework." And by long-term, they meant
very. Under Lunn, the department last year affirmed Ottawa's
support for what it calls "a multilateral international collaboration to
develop nuclear energy technology for application post-2020."
But plenty is happening much more quickly on the nuclear front. In
Ontario, the Liberal government's controversial electricity plan,
tabled last June, calls for two new reactors and the refurbishing of
old ones, projects expected to cost up to $40 billion over two
decades. (The new reactors would be the first since the Darlington
power station came into service in 1992 after notorious
construction delays and billions in cost overruns.) John Tory, the
provincial Conservative leader, is calling for more new nuclear
plants faster, accusing Premier Dalton McGuinty of downplaying
the need out of fear of the anti-nukes backlash. Ontario's program
is central to federal plans. Although the provincial Liberals have
expressed a preference for sticking with Canadian technology,
they haven't ruled out going to one of AECL's French or U.S. rivals
if the price was better. Lunn has declared it "imperative" that the
province buy its new reactors from AECL.
Perhaps even more politically intriguing is the prospect of AECL
carving out a new market in Alberta's oil sands - the energy story
closest to Harper's heart. The concept is driven by global warming.
Separating oil from sand in the enormous development requires
vast amounts of steam. Currently, the oil companies are
generating it by burning natural gas, making the project a huge
spewer of carbon dioxide, a serious problem as Ottawa
contemplates cracking down on emissions in a new climatechange

Enter Energy Alberta Corp., a Calgary company that formed a
partnership with AECL last fall with the audacious aim of solving
the oil-sands' emissions problem with nuclear power. Wayne
Henuset, one of two veteran oil-patch executives behind the
concept, said this week the company plans to file a site application
with the federal Canadian Nuclear Safety Commission within 90
days for an Alberta-based generating station - he won't say exactly
where - powered by two AECL reactors.
Henuset's optimum timeline: secure regulatory approval within four
years, start construction in 2011, throw the switch to begin using
nuclear power to separate sand from up to 500,000 barrels of oil a
day in 2016. "We've got the federal government onside, the
provincial government onside, and two local communities that want
us," he says. Lunn has predicted it's only a matter of time before
nuclear reactors begin playing "a very significant role in the oil

For politicians, environmentalists, and the reactor industry, the new
terms for the old debate over nuclear power would have been
inconceivable back in the dark days after Three Mile Island and
Chernobyl. In the 1970s and '80s, nuclear power had a disastrous
environmental image, and by the 1990s, the sector looked
dormant, even doomed. But climate-change fears have intensified
so much in the past few years that electricity without emissions
sounds pretty sweet. The pro-nuclear side feels reborn. "We've
been through the wars," says Jerry Hopwood, AECL's vicepresident
of reactor development, and a 32-year company veteran.
"People like myself stuck with it through the tough times. Right
now, morale is fantastic."

It wouldn't be if AECL was for sale, which might once have suited
plenty of Tories just fine. In fact, briefing notes for an early meeting
Lunn had with AECL president Robert Van Adel, obtained by
Greenpeace, show he was planning to bluntly ask for Van Adel's
"perspectives on privatization." That wasn't a far-fetched
proposition. The French nuclear giant Areva is widely viewed as an
eager buyer if AECL ever goes on the block. Lunn said he has met
Areva representatives, although he declined to discuss exactly
what they wanted to talk with him about. "There is interest in the
market [in buying AECL]," he said. "But there's absolutely no
discussion of that at any level in the government at this time."
Beyond the possibility of privatization, AECL's future was broadly
in play through the first half of last year. On a heavily censored
page in another Natural Resources briefing from early 2006,
obtained by Greenpeace, a broad rethinking is suggested in the
point-form note: "need to review and assess prospects for AECL
within six months."

If AECL sailed through that review, two timely tactical moves
appear to have been the keys to its success. First, last spring,
AECL executives created "Team CANDU," an alliance with big
private companies, which Lunn duly applauded, saying the
participation of players like Hitachi and SNC-Lavalin boosts his
confidence that any future Canadian reactors projects will be
completed without any risk that taxpayers would be on the hook for
cost overruns. Second, last fall, AECL struck its deal with Energy
Alberta to push the oil sands concept that carries such obvious
appeal for Harper and his Alberta base.

Still, it remains unclear how aggressive the Conservatives will be
about openly touting nuclear power as a core element of their
climate-change strategy. Environment Minister John Baird is
expected to release the government's new plan for curbing
greenhouse gases from major industrial sources this week. For
tactical reasons, he might decide to underplay nuclear power, even
if its expansion amounts to a basic assumption behind the policy.
Any explicit pro-nukes reference would rile up environmental
groups that are already expected to be scathing in their reaction.
As well, provincial governments are mainly responsible for
choosing the mix of sources for meeting their electricity needs, and
the federal Tories don't want to be seen as pushing nuclear power
on them.

But between the lines of a leaked draft of Baird's plan, it's hard not
to read an implied case for nuclear power's upside potential. "More
than two-thirds of Canada's coal-fired generating capacity will need
to be replaced by 2020 and more new generating capacity will be
required," says the draft. "Some $150 billion in capital investments
will need to be made." Options for investing in new generating
capacity that won't spew CO2 are, to say the least, limited.
Environmental groups call for unprecedented investments in
renewable sources like solar and wind. But the Conservatives
make little or no distinction between nuclear power and those socalled
"soft" renewables. Take Lunn's announcement in January of
what the government calls its ecoENERGY Technology Initiative,
which is pouring $230 million into "clean-energy technologies." His
news release said the fund's priorities "include carbon dioxide
sequestration, clean coal, clean oil sands production and
renewable energy." But a background document adds another
priority that somehow didn't make it into that publicized list: "nextgeneration

Anti-nuclear activists complain that the government is merely
continuing Ottawa's long-standing practice of subsidizing nuclear
so heavily that solar, wind and other clean-energy options don't
stand a chance. Last year, the federal government poured $180
million into AECL's research and development efforts, not including
a $520-million commitment to fund a five-year cleanup of waste at
the corporation's research sites. Despite that support, the
corporation was barely in the black, posting net income of just $5
million in 2005-06.

Solid support from Parliament Hill might not last if AECL fails to
make sales in what's shaping up to be a booming reactor market.
It's counting on Ontario to become the first buyer of its new
Advanced CANDU Reactor, or ACR, the technology on which it
pins hopes of cashing in on the climate-change driven nuclear
rebound. Jerry Hopwood oversees the 200 engineers, scientists
and support staff who work directly on this high-stakes, high-tech
ACR project. They are a small segment of AECL's 4,500
employees, but Hopwood's unit is critical to the corporation's
future. Its rivals, much larger companies to start with, look to be
ahead in the race to bring new reactors to market. Areva is already
building the first of its new model in Finland, and Westinghouse's
updated design has been chosen as the first stage of a huge
expansion of China's nuclear generating capacity.
But Hopwell says AECL is in good shape. Work on what he calls
the "conceptual design" for the ACR is done, and more detailed
design work is slated to be finished by 2010. That means, he says,
the first commercial station powered by the new reactor could be
switched on by 2016. "Ontario is the logical first place," he says.
"It's the home of CANDU."

There are other possibilities. New Brunswick's new Liberal
government won the province's election last year on a platform that
included possibly adding a second reactor at Point Lepreau,
Atlantic Canada's only nuclear power plant. Then there's Alberta.
Production in the oil sands is slated to grow fivefold over the next
decade or so to five million barrels of crude a day. "At that stage,"
Hopwood says, "several nuclear units would certainly be
appropriate to supply energy demand."

Foreign markets also beckon. Some observers expect China to
build as many as 40 reactors in the next two decades.
Westinghouse has locked down the first piece of that huge
expansion, and there was fear AECL might be frozen out. But
Lunn said he and other cabinet ministers worked during visits to
China to persuade the Chinese to put AECL back in their plans.
"They have now said they are open to CANDU technology," he
said. AECL is trying to build on a track record, having delivered
two reactors in China in 2002 and 2003, both on budget and ahead
of schedule.

Britain is another focus for AECL's export thrust. Tony Blair warns
of the need to replace aging reactors or be increasingly reliant on
imported fossil fuel. His government is slated to release an energy
white paper this summer that's expected to formally call for new
nuclear reactors. A massive battle with environmental groups is

brewing, and British public opinion appears deeply split. Still,
following up on Harper's salesmanship in London last summer,
AECL likes its chances, optimistically projecting that Britain might
buy up to four of its reactors as it adds up to 12,000 megawatts of
generating capacity in the next 20 years.
All the talk of AECL riding a wave of domestic and international
reactor sales drives Canadian environmental groups crazy.
"Frankly, renewables, conservation, and energy efficiency are way
more cost-effective in terms of reducing carbon dioxide," says
Emilie Moorhouse, a Sierra Club of Canada campaigner on energy
and climate change. "If you're investing billions in nuclear, that's
just taking away from these more cost-effective solutions."
Her emphasis on costs is typical of Canadian anti-nuclear activists
these days, and revealing. They tend to see the history of nuclear
megaproject fiascos and the ongoing heavy subsidization of AECL
as their most effective argument against more nukes. But they
could be fighting against the current of public opinion, as
awareness of climate change rises. Polling by Ipsos Reid for the
Canadian Nuclear Association found that support for nuclear power
has risen over two years to 44 per cent from 35 per cent nationally,
and jumped to 63 per cent from 48 per cent in the key battleground
of Ontario. Not all that change can be attributed to global warming
worries. In 2003, the power grid failed in Ontario and much of the
northeastern U.S., a blackout that left 50 million consumers with
plenty of time to ponder in the dark about the need for a reliable
power supply.

But anti-nuclear campaigner Shawn-Patrick Stensil, a Greenpeace
energy expert, argues that AECL is too far behind in its design
work to take advantage of Ontario's new electricity plan. "If AECL
has a chance of selling the ACR anywhere in the world, they have
to sell in Ontario first," Stensil says. "But the McGuinty government
wants to get new nukes online by about 2015, and the design work
isn't even done yet on the ACR. They are missing the market

Hopwood denies there is any timing problem, saying AECL could
bid for an Ontario sale and even go ahead with an environmental
assessment before completing a detailed ACR design. Stensil says
speculation is swirling that AECL will end up trying to sell Ontario
an updated version of its old reactor, the CANDU 6, sold most
recently to China and Romania. That would be a dangerous
setback for the ACR, which AECL needs to show off to potential
foreign buyers. "They need a guinea pig," Stensil said. Whatever
reactor Ontario chooses, the environmental movement is gearing
up for a fight. Details of how the province will press ahead, and
exactly how the Canadian Nuclear Safety Commission will conduct
regulatory reviews, including an environmental assessment of any
new reactor, are still to be announced.

Obviously, the federal Tories would just as soon let the province
fight the inevitable war. But one key piece of the puzzle sits
squarely on Lunn's desk, the unsettled issue of long-term nuclear
waste disposal. Just before the Tories won the 2006 election, the
Nuclear Waste Management Organization delivered a report to the
Department of Natural Resources recommending a deep
underground storage facility. It would make sense to settle the
issue before Ontario embarks on its nuclear expansion. But any
move to act on the report would invite a firestorm of controversy.
"We are carefully considering those recommendations at this time,"
is all Lunn would say, refusing to even hint at when the
government might announce a course of action. (A good bet: not
until after the next election.)

However these battles unfold, the nuclear industry and its political
supporters will be looking to exploit cracks they see in the wall of
environmentalist opposition. They never tire of mentioning that
Patrick Moore, a founder of Greenpeace, has turned pro-nuclear.
Perhaps more intriguing, though, is the nuance creeping into the
language of some environmentalists who are still far from sold on
nuclear power. Even David Suzuki, the public face and living
patron saint of the Canadian green movement, has raised
eyebrows by declaring in at least two broadcast interviews that he
doesn't take a "knee-jerk" position against nuclear energy,
although he remains, for now at least, firmly opposed.

In an email exchange with Maclean's, Suzuki explained his
position. "I don't say unequivocally that nuclear is not an option. It
may very well be sometime in the future," he wrote. "But right now,
I think it's nuts to even suggest nuclear. Climate change confronts
us with the opportunity to think and design the kind of energy we
want in the future and to me, it's clear it should be a network of
small-scale, diverse sources." He lists wind, solar and tidal power
as his preferences.

In fact, those green options seem to be gaining some ground.
Ontario is banking on doubling the electricity it draws from
renewables by 2025 to 15,700 megawatts. That would outstrip
nuclear power's projected 14,000-megawatt contribution under the
McGuinty plan, up from about 11,400 megawatts - or half the
province's electricity - today. Ottawa has no say in how the
provinces plan for supplying their power needs, and Lunn is careful
not to impose. "It is absolutely essential," he says, "that provinces
make their own choices about energy mix."

But he also expresses informed admiration for a perhaps
unexpected model - France, where 58 reactors supply 80 per cent
of the country's electricity. "They have the cleanest air shed of all
the industrialized countries," Lunn notes. "They made this decision
20 years ago, ahead of their time, and it has proven to be very
successful." And that, even if it's not really up to him to have one,
sounds like a plan.

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