The only leader in Canada’s nuclear program departs

Duncan Hawthorne’s watch has ended

Canada’s nuclear industry shows signs of circling the drain with bad news on many fronts. However, for me the most negative recent development is the retirement of Duncan Hawthorne after fifteen years at the helm of Bruce Power.

Duncan was the only true leader in Canada’s nuclear industry. (Using the past tense refers to his time at Bruce although he is still very much alive.) Leader is a word used casually in many contexts to simply mean the person in charge. Authentic leadership, the ability to motivate, unite and inspire people to accomplish set objectives, is a rare quality.  Duncan was able to do that very successfully in building and operating Bruce Power.

Duncan had a vision of where he wanted to take his company and he was able to convince his employees to buy into it by among other means bringing unionized workers in as profit-sharing partners in the corporation rather than their usual role as opponents to management.

He knew the names of most of his people and managed by continually walking around his facilities. He was approachable and encouraged employees to come to him with their ideas and problems. He was very good at this because he had come up through the ranks of the UK nuclear industry himself and so had a rapport based on understanding of all levels of the organization.

Duncan had a charismatic personality. He had a great sense of humor and with his distinctive accent was a very entertaining speaker. One of his best bits I remember was his story about how he knew he had arrived in management in the UK when the phone in his new office had “lots of buttons on it”. He was also adept at interacting with the media and was the only credible spokesman for the Canadian nuclear industry because he actually knew what he was talking about.

He skillfully steered Bruce Power through the continual incompetent screw ups of Ontario’s energy policy and managed to navigate around its openly corrupt “cash-for-access” government. In the end he got an agreement from them that will enable Bruce Power to refurbish its remaining reactors so ensuring its long-term future. To say the least he kept his shareholders happy.

Duncan believed in his community and contributed a lot to the quality of life in the areas surrounding the plant.  I think it is fair to say that he was very highly regarded by the people there. So much so that a regional clinic was recently named after him.

Another thing I very much respect him for was his announced decision to become a Canadian citizen.  I’m not sure whether this actually happened but knowing him it probably did. His commitment to the country is in stark contrast to the motley assortment of mercenary twits imported for higher management in other components of our nuclear enterprise.

I’m sorry to see Duncan go for many reasons. On a personal level although I didn’t agree with some of his ideas, I found him a good person to deal with. On a professional level, he was the true leader of our nuclear industry and we are now effectively leaderless – a bad position particularly in tough times like the present.

Bruce Nuclear Waste Repository: The Wrong Place at the Wrong Time – Part IV Economic & Political

When you find yourself in a hole stop digging.

People get so wrapped in their own activities that they don’t see the wider picture. We are all guilty of that to some extent.  Scientists and engineers in the nuclear industry tend to view situations in terms of technical problems and this is true of the Bruce DGR project. However, the decision to proceed will be made primarily for political and economic reasons as it should be.

Let’s consider economics first. How much will this DGR cost? We’ve haven’t built one in this country yet. The Nuclear Waste Management Organization (NWMO) has been conducting a well-planned transparent process eventually leading to establishing a DGR for the burial of used nuclear fuel but construction is still decades in the future. Funding for this DGR has been and will continue to be raised over many years by a small added charge to electricity rates.

The Bruce DGR is another matter. It will be funded by additional taxes and/or electricity charges to Ontarians o is let’s try to estimate its costs. The used fuel DGR planned by NWMO has an estimated cost of $18 billion but $10 billion of that is for transportation giving construction, closure, monitoring costs of about $8 billion.  OPG estimated about $2.1 billion for its DGR in a 2012 letter based on a consultant’s estimate from 2004. Multiplying by pi (Blackett’s rule of nuclear estimates) gives $6.6 billion. The recent Niagara tunnel excavation was completed in 2013 only four years behind schedule and only 50% over budget but this OPG project was hydroelectric and not nuclear.  The US experience also may help. Building the US Yucca Mountain DGR planned for used nuclear fuel cost $15 billion to when work was stopped although it may be restarted. Estimates indicate that WIPP, the US DGR that OPG held up as an example until its accidents earlier this year, has burned up about $5.5 billion to date and total costs are estimated around $9 billion far exceeding its original estimate of $440 million. Based on the foregoing, my nominal estimate for the Bruce DGR is $6-8 billion. That’s a lot of money for an optional project.

As pointed out many times in this blog, the government of Ontario has complete control over OPG. The Liberal party of Ontario has a solid majority mandate to be that government for the next four years. However, in the recent election all the constituencies along the eastern shore of Lake Huron voted for the opposition Progressive Conservative party including Huron-Bruce where the DGR would be located.  It’s inconceivable that the Liberals would allow a tasty multi-billion dollar chunk of make-work pork to go to the Kincardine area simply to please its citizen who voted against them. It just makes no political sense and for that reason alone the DGR project is a non-starter.

The Ontario government is faced with a scary financial deficit.  They’re looking to cut budgets in the face of the pressing needs to replace $400 billion worth of crumbling infrastructure such as roads, bridges, public housing, transit, sewers and a multitude of other essential replacements and repairs.  Although it is not in that category of down-to earth rebuilding, it is arguable that OPG’s Darlington refurbishment project would provide economic stimulus especially to preserve the high-value high-tech nuclear industry.  Most of the companies associated with refurbishment are located in Liberal suburban or urban ridings including Darlington itself.  Personally I think refurbishment keeps the Canadian nuclear industry alive preserving the nuclear option for the future.

It is predictable there will be savings from deep staff cuts at OPG as it goes from the current ten reactors to four by 2020. It is also likely that OPG’s scandalously lavish pension plan (the company contributes four dollars for each employee dollar) will be scaled down. An independent committee on government assets has also just recommended that OPG be split into separate hydroelectric and nuclear parts. The next stage could well be leasing the nuclear part to Bruce Power who would much better manage OPG’s nuclear assets.

The projected cuts at OPG will make it more likely the refurbishment projects (at least the first reactor) will go forward provided they stay on schedule and on budget. The refurbishment budget is in the order of $15 billion an amount, if history is any guide, will be substantially over run. The DGR project would add a further $6-8 billion dollar project (assuming no cost overruns) on top of refurbishment. There’s no way the cash-strapped Ontario government is going to allow that. The taxpayers of Ontario will be made to pay for these additional nuclear program costs either through higher electricity bills (an increasing barrier to attracting new manufacturing to the province) or through higher taxes, both unappealing politically.

OPG senior management claim there is a “business case” for the DGR compared to the costs of continued above-ground storage. (One might question the real-world business experience of OPG senior management?) The documentation around the project shows the DGR advantage is thin even using low-balled construction costs. This margin would completely disappear when the usual overruns appear.  Some may think I’m being too hard on OPG to which I would reply it’s because they have had such an abysmal track record for not being able to bring nuclear projects in on time and on budget.

As explained in a previous post the Bruce DGR is not needed. A feasible solution is to leave the low-level operating waste in above-ground storage where it is now for few a hundred years after which its radioactivity levels will have decayed to a few percent of its initial level. At that point it could be safely placed in a well-designed land fill. The intermediate level waste, consisting mainly of used metal reactor parts arising from refurbishment and decommissioning, could also be left in above-ground storage as it is now or it could be buried in a designated section of the NWMO DGR eventually to be constructed for used nuclear fuel hopefully at a site far from important bodies of water.

My advice to OPG is to stop digging and abandon the Bruce DGR project in the face of the compelling economic and political reasons why it is simply not going to be allowed to happen.

 

Bruce Nuclear Waste Repository: The Wrong Place at the Wrong Time – Part III Social License

Local support and the sleazy politics used to obtain it were discussed in the Part I post. However, there is a serious issue concerning the social license per se namely whether it should be considered at all by the hearing Panel.

The first Canadian commission to consider a DGR was the Seaborn Commission formed in 1989 to do an Environmental Assessment (EA) of AECL’s technical plan developed over the previous twenty years to deposit nuclear fuel waste deep in a granitic rock pluton in the Canadian Shield. There was extensive public consultation with over 500 oral submissions and a similar number of written submissions over the nine year mandate of the Commission.  Its 1998 report concluded that while the technical plan was a sound basis for proceeding, public acceptability of the concept had not been demonstrated. In today’s terminology the proponents weren’t able to prove they had the necessary “social license”.  A few years later, the federal government passed legislation establishing the Nuclear Waste Management Organization (NWMO) with a primary objective of ensuring the social licenses necessary for nuclear fuel waste disposal were in place.

The CNSC has recently stated in the slides from a recent Calgary speech by its president:

“[CNSC’s] Mandate does not include social licence” [but rather] “Commission makes science-based risk informed decisions”

“The CNSC does not make determinations based on social acceptance or economic benefits”

Since it’s acting on behalf of the Commission the Panel reviewing the Bruce DGR according to the CNSC president should have no business assessing social license issues and must stick to technical matters only.  I find it remarkable that they can make this claim in view of the historical precedent of the Seaborn Commission.  However, as the recent Federal Court decision has shown the CNSC doesn’t have a good handle on how to conduct an EA.  This position is also taken in spite of CNSC’s aggressive promotion of the nuclear industry under the guise of providing technical information (personally I’m all in favour of promoting nuclear power but the-should-be-unbiased CNSC is the wrong agency to do it).

At the Panel hearings OPG highlighted the approval of the local community as a major argument for the Bruce DGR and thus, the Panel accepted lots of testimony on this issue. By so doing the Panel now can’t avoid making a pronouncement on whether there’s a social license for the facility. If it doesn’t then that omission alone would be grounds for an appeal to the Federal Court of Canada especially since the Canadian Environmental Assessment Act (CEAA) requires an EA to take into account factors relevant to the social license such as: public comments, purpose of the designated project and alternative means of carrying out the objective of the project. An EA must be conducted in accordance with the CEAA and the opinions of the CNSC president quoted above are totally irrelevant.

During the hearings intervenors noted that some 125 municipalities around the Great Lakes had passed resolutions opposing the Bruce DGR and so OPG’s social license was obtained by dubious means from only 11,000 people in the Bruce area and not the 11,000,000 represented by the resolution s. Clearly, the major reason for the widespread public opposition is that the proposed DGR is at the Bruce site beside the Great Lakes. Thus, ironically the factor most attractive to OPG is exactly why the social license is lacking.

Some nuclear types will fulminate that this is just another instance of “politics” creating opposition to what they believe a good technical solution. This attitude reflects an all too common belief in the industry that the public doesn’t understand the technology and thus, makes wrong decisions based on scientific ignorance implying an educated public would approve all of their actions.  They are mistaken because perception is reality in this case. Most people have a bad gut feeling about storing nuclear waste beside the Great Lakes.  The technical presentations at the hearings could only lay out the physical parameters of the problem but they didn’t convince the public to change its common sense view that the Bruce DGR is dumb.  While some technical idealists may conceive of a perfect world where all decisions are based solely on science, I’m glad I live in a democracy where the politics of public acceptance trumps the opinions of technocrats like me.

I’m afraid that the Bruce DGR may poison the waters for the NWMO’s planned DGR for used nuclear fuel. A negative finding by the Panel on the Bruce DGR or its cancellation by OPG would make it more difficult to secure the social license for the used nuclear DGR sought by NWMO since an inference might be drawn that DGRs in general are undesirable. I would find this distressing since I fully support the need for the used fuel DGR and the process being used by NWMO to find a site for it.

The following statements by Bruce Power chief Duncan Hawthorne quoted in the Kincardine News of February 14, 2013 are worth noting:

“Among them was his belief residents of potential host communities are unable to differentiate between the plans for two DGRs.”You’ve confused the whole community,” Hawthorne said he had written to the NWMO. “We’re looking at something that’s 125 years from now. Go away for a decade.”

He’s got it completely wrong; it’s the Bruce DGR that should go away.

In the last post in this series I’ll discuss the political and economic reasons why the Bruce DGR is unlikely to happen.

 

Bruce Nuclear Waste Repository: The Wrong Place at the Wrong Time – Part II Technical

Continuing from the previous post let’s look at the technical issues introduced in the just completed round of hearings on OPG’s plan to construct a Deep Geological Repository (DGR) to bury low-level wastes from the normal operations of reactors (those of both OPG and Bruce Power) and used reactor parts with long-lived radioactivity arising from the refurbishment and decommissioning projects of both entities.

Dr. Frank Greening, a retired OPG expert, pointed out that the radioactivity levels in the reactor parts to be stored in the Bruce DGR were a factor of 100 to 600 higher than OPG had claimed in its original safety case. OPG initially dismissed this as unimportant because essentially it didn’t make any difference but later they included it in a revised safety case. This failure of institutional professional expertise was unsettling and raises serious questions about the competence of those who wrote the safety case and especially the CNSC staff who reviewed and approved it.  During the hearings I would have liked to hear someone from OPG or CNSC say something like “we’re sorry we screwed up on this and we’ll try to do better in future” Instead all we had from them was smoke and obfuscation around this point.  Greening later left his wheelhouse ( as the current cliché goes) and made other accusations whose validity I’m unable to judge.

The Waste Isolation Pilot Project (WIPP), an underground nuclear waste facility near Carlsbad New Mexico, was held out as a model in the 2013 OPG submissions for the Bruce DGR as the only one comparable to it. The facility has been operated for fifteen years by the US Department of Energy (DOE) to store low level waste from nuclear weapons development work done decades ago at the Los Alamos National Laboratory (LANL). On February 14 this year there was a fire at WIPP during which thirteen workers were mildly exposed to radiation with elevated radiation levels detected in the air around it. The cause of the accident is still unknown and WIPP will not reopen until it is fully understood which may take some years.  (The DOE safety case for WIPP calculated that the odds of a radiation accident were one in 10,000 to one in 1 million per year of operation.) Paraphrasing the OPG response at the hearings, it was argued that a similar accident couldn’t happen at the Bruce DGR because OPG’s waste is different and OPG is more careful/smarter/safety conscious than LANL, DOE and the WIPP operators. Both argument s are hard to sustain when the cause of the accident remains a mystery.  If WIPP is a model for the Bruce DGR then a fire or leak deep underground would be a much greater burden on future generations than any other option.  In my opinion the WIPP accident may ultimately kill the Bruce proposal.

The report of the so-called Independent Experts Group (IEG) was supposed to demonstrate that the risks of the DGR were less than leaving the waste above ground or depositing it in a giant granite boulder (pluton) in the Canadian Shield far from any significant body of water. The Panel wanted the IEG to use the well documented DGR prototype that AECL originally developed based on data from experiments in its Underground Research Laboratory (URL) in Manitoba just for purposes of a comparison. Instead the IEG used a hypothetical pluton located on the Bruce site beside the Great Lakes.  This misses the Panel’s point entirely. When challenged by the Panel, IEG members made several unconvincing excuses for this serious gaff. For example, they said they couldn’t consider the URL for comparison because Manitoba had a law against depositing nuclear waste in the province and AECL had declared none would be buried there.  Why either of these circumstances would rule out using the data purely for comparative purposes wasn’t clear.  In my opinion considering the fictional Great Lakes pluton came across as rather foolish.  Any numbers that could have been included from the AECL work for example were avoided in their written report which was purely subjective.  It used simple two-axis log plots that reminded me of the kind used in business schools and while reading it I expected them to discover a “cash cow” at some point in their deliberations. To say the report was highly qualitative is an understatement.

One point the IEG did make with which I fully agree is that nothing needs to be done with the waste in question for at least a hundred years. In effect they argued that there’s absolutely no need for a Bruce DGR at this time which I assume was not what OPG hired them for.

This again raises the critical argument for me. Namely is the DGR proposed for Bruce really needed?

To answer this question it’s important to emphasis that OPG has opted to build a DGR. This is purely a matter of choice and no convincing arguments have been advanced by OPG to show that a DGR is a necessity. In fact, most of the world’s reactor operators have opted to continue to store these wastes above ground as has been done in Canada to date.  In the 2013 round of hearings OPG admitted they had selected the DGR option primarily based on local support or a “social license” by the local communities given that they own the Bruce land and much of the waste is already at Bruce. A “business case” and a geological argument were later constructed to support the plan. No additional technical rationale for the necessity of the proposed DGR was presented at the hearings and therefore, I conclude it is not needed.

The answer to the key question is “no” we don’t need the Bruce DGR. .

In the next post the social license issue will be discussed.

 

Bruce Nuclear Waste Repository: The Wrong Place at the Wrong Time – Part I

As the second round of public hearings approaches the Panel examining the OPG proposal to establish a Deep Geological Repository to bury nuclear waste at the Bruce reactor site has become even more mired in an avalanche of crap. I won’t give into my inclination to compare the Panel to the inimitable Three Stooges but one of their lines (from the 1941 movie Time Out for Rhythm) is appropriate:

 “Stupidity!? We’re technical experts!”

As I noted in my November 11, 2013 post on this issue

 “psychological intimidation and harassment of hearing witnesses by the police was appalling… the Panel did a poor job of preserving the integrity of the process … I feel the hearings were badly flawed and the Panel’s conclusions should be considered as tainted.”

If that wasn’t bad enough I also pointed out OPG’s unilateral and previously unannounced intention to put long-lived decommissioning and refurbishment wastes in the DGR in addition to the relatively short lived operational wastes from reactor stations.

A lot has happened since the last round of hearings.

My previous post concerning the Federal Court decision on the bungling of the Environment Assessment for new reactor construction at Darlington argued that this ruling had focused a higher degree of legal scrutiny on CNSC decisions.  I suppose that an on-going process at this and other such hearings in the future will be looking for what lawyers call “grounds for appeal”  Again I repeat my regret that there is a legally amateur Panel rather than an experienced judge in charge of the hearings. I think it’s a safe bet that if the Panel approves the DGR then there will be an appeal to the Federal Court of Canada.

Another relevant but unrelated recent decision by the Supreme Court of Canada on First Nations land claims may also impact the hearings.  These claims span a large complex of issues in Canada and I don’t pretend to understand the decision. However, my interpretation is that it refers to aboriginal groups whose land claims have not yet been settled (“un-extinguished” in legal jargon). The Court held that bands in this position are entitled to be involved in and profit from the economic development of the claimed areas, even lands where nomadic tribes used to hunt and fish without necessarily establishing permanent settlements.  The Saugeen Ojibwa Nation (SON), the main band taking part in the DGR hearings, claims the Bruce nuclear site as traditional hunting and fishing grounds. I don’t know the status of SON land claims but I would think the Supreme Court decision will strengthen their already very strong position at the hearings.

The DGR has raised substantial protests from Great Lakes communities and from the state of Michigan in particular. The two US senators from Michigan are opposed and interestingly enough it is reported the state has a law that forbids nuclear waste storage within ten miles of the Great Lakes.  The international embarrassment the DGR has caused could be turned into a positive.  The Panel report has to be submitted to the federal government for a final decision on approval. Perhaps, cancelling of the DGR plan could be made a bargaining chip in getting US approval for the Keystone XL pipeline that Prime Minister Harper is pushing so hard. Cancellation might put two US Senators side for Keystone.

As I noted before, the DGR scheme is being pushed by local politicians from communities around the Bruce site. As a result of secret meetings with OPG that began in 2005 five local Bruce area municipalities agreed to support the DGR for a total payoff of $35 million between them to be paid over 30 years.  However, no evidence has come to light that individual politicians received personal pay offs.  Under the deal the local municipalities apparently won’t get the money if the DGR is not approved – a clear incentive for them to keep pushing it.  An independent investigation released last week showed that the municipal councils negotiated the deal in secret meetings with OPG that initially had no minutes and about which their citizens didn’t know. Voters only found out about this deal at the DGR hearings last year. The investigator concluded that this under-the-table proceeding was in clear violation of the Ontario Municipal Act. The gravity of this revelation is stressed in the Sun Times of nearby Owen Sound editorial of August 16.

“It was and remains a disgrace that a publicly owned corporation should effectively buy the influence of elected representatives and a disgrace that those municipalities allowed themselves to be bought off and still do to this day. “

If OPG management were smart, they would realize that these hearings are a continuing public relations disaster and they should use one of many possible excuses to gracefully withdraw the proposal.  They could then wait ten, fifty or even a hundred years to try again with no real harm to their corporate objectives. But in the last few years no one has accused OPG management of being smart.

The above has covered some non-technical developments since November 2013.  I intend to discuss technical issues in the next post.

 

 

Canada’s nuclear industry needs leadership

Strong leadership will be needed for our nuclear industry to survive the coming decade.

The problems of the nuclear industry are often portrayed by its members as originating in public fear fanned by hostile critics and the media. Certainly there’s some truth in that but in my opinion that neglects the main reasons for its decline namely a lack of influential politicians willing to go to bat for the industry and the fact that there are very few nuclear leaders in Canada.

Dr. David Keyes was one such leader. During the world’s first major nuclear accident at Chalk River’s NRX reactor in 1952, Keyes stood at the lab’s gatehouse calmly smoking his pipe and greeting workers by name as they evacuated. As the leader of the lab, his actions damped down any panic that could have occurred and in fact he remained on site for most of the accident. Although Keyes had long departed by the time I arrived in the late 1960’s, old-timers still remembered “daddy Keyes” with respect and affection as an avuncular but strong leader.

Other industry leaders emerged in the years after Keyes who developed the CANDU reactor and pioneered its adoption by the utilities. We had politicians both federal and provincial that backed nuclear energy and pushed its growth in spite of the objections of anti-nuclear organizations as is now happening in places like Korea, Taiwan and India but that’s all gone now in Canada.

The privatization in 2001 of eight nuclear reactors of the former Ontario Hydro to form Bruce Power has proved very successful, achieving excellent performance primarily based on the strong effective leadership of Duncan Hawthorne. He has transformed the former corporate culture of Ontario Hydro to a profitable business model, has driven its high safety record, has earned the loyalty and respect of his employees and brought the unions in as partners instead of adversaries all the while keeping his shareholders happy. Although I certainly don’t agree with some of his moves, overall he remains the only credible spokesperson for the nuclear industry in Canada and its only real leader.

On the other hand the nuclear component of OPG (Ontario Power Generation) is badly in need of leadership. To be fair OPG operates in a public service environment where leadership is only the prerogative of politicians advised by legions of know-nothing fart catchers who qualified for their jobs by putting up signs and handing out literature during the minister du jour’s election campaign. Unlike Bruce Power OPG can’t lobby politicians or advertise at Maple Leaf games. Also different is the domination of OPG by rapacious unions resulting in lavish salaries and many redundant jobs. The OPG hierarchy gives me the impression of being transient and mercenary. For example, how many of the OPG imported brass have shown a commitment to this country by becoming Canadian citizens?

The coming refurbishments of ten reactors (six at Bruce and four at OPG’s Darlington station) will entail intense competition for limited resources that I called the “choke point” in a previous post. My bet is Bruce power will run rings around OPG in the contest. OPG’s reaction is the great refurbishment plan exercise by OPG documented elsewhere on this blog, an exercise in bureaucracy that proves my point that OPG management is only able to administer rather than lead. The coming refurbishments will require a high degree of cooperation and coordination that simply won’t happen between competing nuclear entities. By the way it was just announced that the plan is already more than $200 million over budget before implementation even starts in 2016

The shutdown of the six other reactors at Pickering by 2020 will cause massive layoffs that even the OPG unions with the greatest possible degree of splitting existing jobs into multiple new ones (“feather bedding”) will be unable to avert. In most cases the axed employees will not have the skill set or experience to contribute to the refurbishments. For the good of the industry one would like to see the best employees retained but this can only happen in a nuclear entity combing both Bruce Power and OPG. After 2020, OPG with four reactors will be the tail to Bruce Power’s dog with eight

For all of these reasons the only practical solution I can see to avoid future chaos is to merge the nuclear parts of OPG into Bruce Power by leasing the four Darlington reactors to them. This should have been done years ago and whether the politicians can overcome their ideological differences enough to do it remains to be seen

Warning to the nuclear industry: beware the gasman

If there are any problems with refurbishment, gas is waiting in the wings ready to replace nuclear generation.

I gave a talk on the status of nuclear power at the CERI Natural Gas conference in Calgary this week and learned a lot about the situation of the Natural Gas (NG) industry. Frankly I hadn’t realized the world had changed so much in a few short years.

The development of increasingly sophisticated and effective technologies for the fracking extraction of gas has led to a profound revolution in gas markets. There are now vast reserves of gas available at low prices. As one person at the conference said “we are awash in cheap gas”. For example, just the state of Pennsylvania has gone from producing about 0.7 Bcf/day (billion cubic feet per day) in 2009 to almost 10 Bcf/day in 2013, a production level similar to that of Alberta. That state has gone from an importer of gas to a major exporter in a few years.

Such rapid and dramatic changes have come about from the fracking exploitation of large areas of gas deposits (“plays” as the gas people like to call them) such as the Marcellus and Utica plays in the US northeast just to the south of lakes Erie and Ontario. Consequently the geography of gas markets has shifted. The gas now used in Ontario is increasingly imported from US Marcellus producers rather than from Alberta.

In the last few years, very large gas deposits exploitable by fracking comparable in size to the Marcellus formation have been identified in north east British Columbia and Alberta notably the Montney and Horn River Basin plays. The BC government is encouraging the export of this gas via pipelines to the coast and then by LNG (Liquefied Natural Gas) tankers to Asian markets. However, this plan requires a big capital investment for new pipelines and LNG terminals and several years to obtain permits for their construction. Until then, this gas is stranded.

Therefore, Canadian producers are looking hard for new markets for large amounts of cheap gas. Electricity production is one possibility. Alberta will likely replace its current coal-fired generators with combined cycle gas generation but this would make only a small dint in the available supply. Replacing Ontario’s nuclear generators with gas-fired generation would consume a lot more gas. One panelist at the conference openly expressed the view that if refurbishment failed (with the implicit hope that it would) then a significant opportunity for gas would arise.

In the nuclear industry, we’ve always been told gas wasn’t a feasible base load generation option for Ontario because there wasn’t enough gas and it would cost too much. The revolutionary changes in gas supply and pricing mean that neither statement is true any longer. Now it would be possible to negotiate long (say 30-50 year) attractively priced gas contracts to generate electricity at rates competitive with today’s nuclear plants. Combined cycle natural gas generating plants can be built rapidly (about 2 years from green field) at low capital cost (about $ 1 billion for 800 MW) for electricity at similar wholesale or lower rates to nuclear plants. It appears to me that such a transition from nuclear to gas would now be feasible. I would imagine this issue is discussed in the Bruce Power board since it is partly owned by Trans Canada, a major player in gas and gas transmission.

Of course, nuclear generation still has the advantage that unlike gas generation it doesn’t produce green house gas emissions. However, if the refurbishment projects start to incur large cost overruns and schedule slippages, I’m not sure how well the climate change argument would hold up with politicians and the public. Incidentally, it seems Quebec hydroelectric exports to the US north east are declining making another a source of “green” electricity available.

The refurbishment projects must be delivered on time and on budget for Canada’s nuclear industry to survive. Complacency based on past attitudes such as “they need the reactors back on line so they’ll pay anything” would be fatal with the gasman watching so closely.