Evidence of meeting #37 for Natural Resources in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was reactors.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Steve West  President, MDS Nordion
John Waddington  Nuclear Safety Consultant, As an Individual
Grant Malkoske  Vice-President, Strategic Technologies, MDS Nordion

11:40 a.m.

Conservative

The Chair Conservative Leon Benoit

Good morning, everyone. We're here today to continue the study of the decision of Atomic Energy of Canada Limited and the government to discontinue the MAPLE reactors project, and its ramifications on the supply of isotopes.

We have as witnesses today, from MDS Nordion, Steve West, president; and Grant Malkoske, vice-president of strategic technologies. At the table we also have John Campion. He is legal counsel and will not answer questions. We have as an individual John Waddington, nuclear safety consultant.

I believe we have one presentation from each group. From MDS Nordion, Steve West is giving the presentation.

Go ahead please, sir, for up to ten minutes.

11:40 a.m.

Steve West President, MDS Nordion

Thank you, Mr. Chair.

Good morning. My name is Steve West, and I am president of MDS Nordion. Accompanying me today is Grant Malkoske, the vice-president of strategic technologies; and John Campion, who is counsel--

11:40 a.m.

Bloc

Claude DeBellefeuille Bloc Beauharnois—Salaberry, QC

Point of order, Mr. Chairman. Is there a copy for the interpreters? They do not have one.

11:40 a.m.

Conservative

The Chair Conservative Leon Benoit

I believe they are having copies delivered to them right now.

Please go ahead, Mr. West.

11:40 a.m.

President, MDS Nordion

Steve West

Thank you. I would like to reintroduce Mr. Malkoske, our vice-president of strategic technologies, together with John Campion, counsel to MDS. Both Mr. Malkoske and Mr. Campion have been working on this file for over a decade.

We have a statement to make to the committee today and are available to answer your questions. We would like to share some background relative to the supply of medical isotopes to the world and MDS Nordion's involvement in that. That history shapes our views today.

Secure long-term isotope supply assurance has been and continues to be a fundamental requirement for the nuclear medicine community. When MDS purchased Nordion from the Government of Canada in the 1991 privatization, long-term supply was a critical component.

Our 1996 agreement with AECL required them to complete two new dedicated reactors for our medical isotope supply—MAPLE 1 and MAPLE 2—and a new processing facility. MDS agreed to invest $145 million to build these new facilities, and AECL agreed to have them in service by November 2000.

MDS saw this as an important investment in providing for medical isotope supply security after the life of NRU. By February 2006, AECL had not completed the project. MDS had invested over $350 million in the project. The parties reached a mediated agreement. That agreement provided for an exclusive long-term supply of medical isotopes for 40 years and an interim supply until the completion of MAPLE. The agreement also established a series of in-service states for the MAPLE project from 2008 through 2010.

On May 16, 2008, AECL and the government announced their intention to discontinue the development of the MAPLE reactors at Chalk River. That announcement was a surprise to MDS. Prior to May 16, AECL did not notify or consult us on their decision or the announcement. As would be expected under our contract, we learned of it on May 16. As a customer of AECL, we were and remain very disappointed about the current intention not to complete MAPLE, despite significant investment and effort over the past 12 years.

We held regular meetings with AECL, and we had been consistently reassured that they were working on solutions to the MAPLE technical issues and would complete the project. Continuity of medical isotope supply for patients both here in Canada and worldwide is very important to all of us. Canada supplies more than 50% of the world's medical isotopes. The government has stated that there will be no disruption of supply and has asked AECL to pursue the extension of the NRU operation beyond its current licence in 2011. This is an important commitment to maintaining a steady and reliable supply of isotopes in the near to mid-term. We appreciate this commitment.

A decision to re-license NRU, however, does not address isotope supply after the life of NRU. MAPLE was intended to replace NRU and to establish long-term continuity of isotope supply. This was the basis for the substantial investments we have made in this public-private partnership: to build market-leading reactor capacity in Canada. We look forward to learning more about the plans for addressing long-term supply from the government and AECL.

There is one additional point I want to make. Last Thursday's testimony by AECL publicly highlighted a significant difference between our and AECL's view of the interim and long-term supply agreement. We have a very different view of that contract from AECL, as articulated both in its testimony and by its conduct. Among other things, we believe the contract obligates AECL to bring the MAPLE reactors into service and provide 40 years of reliable isotope supply.

We are currently evaluating our options and intend to pursue appropriate steps to protect the interests of patients, our customers, and shareholders. We respectfully request that the committee understand that these issues involve matters of commercial and legal confidentiality and will limit what we can speak about today.

Thank you, Mr. Chair.

11:45 a.m.

Conservative

The Chair Conservative Leon Benoit

Thank you for your presentation, Mr. West.

If this issue were before the courts, of course, the committee would have to deal with this in one way. It isn't; therefore, we can continue in the normal fashion.

Mr. Waddington, go ahead, for up to 10 minutes, please.

11:45 a.m.

John Waddington Nuclear Safety Consultant, As an Individual

Thank you, Mr. Chairman.

Good morning, ladies and gentlemen.

I thought I should open by saying who I am, since I'm appearing as a private individual. I'm a professional engineer with about 40 years of experience in the nuclear safety business, nine years or so working on pressurized water reactors and the last 31 years working on CANDU and Canadian reactors with the Canadian Nuclear Safety Commission, with whom I was a director general for 11 years.

I did produce a short statement that I could read out to you on why MAPLE didn't work, or I could just answer questions, as you think fit.

Since retiring, one of the tasks I have been engaged in is to sit on an advisory panel, with a number of very distinguished retired professors, that advises AECL's board of directors on its research and development program. I should just make that clear.

I could outline in a brief manner why the MAPLE reactor didn't work, if that would be of use to the committee.

11:50 a.m.

Conservative

The Chair Conservative Leon Benoit

I think that would be very helpful for the committee. If you would do that, it would be very much appreciated.

11:50 a.m.

Nuclear Safety Consultant, As an Individual

John Waddington

Very good, sir.

First of all, I think I have to outline what is meant by “didn't work”. To get a licence to build and operate a reactor, one must submit calculations to the regulator, the CNSC, that predict precisely how that reactor will behave. These calculations will show, amongst many other things, what is expected to happen when you want to increase the power of the reactor.

Now, forgive me if I stray into a bit of reactor physics, but I'll do my best to make it straightforward.

To start a reactor, control absorbers, made of a material that absorbs neutrons, are slowly pulled from the reactor in a series of small increments, at incremental distances. The density of neutrons in the core is measured all the time. Initially it's a very small number just due to the spontaneous fission of U-235, which is naturally in the reactor.

Each time the absorbers are pulled out a little further, the number of neutrons increases and then dies back again. Eventually, as you keep pulling the reactor control rods out, the number of neutrons in the core, instead of dying back, equalizes out and is at a steady number. At that point, when the number of neutrons is at a stable level, you have basically a self-sustaining critical reaction. The number of neutrons that are being born in the fission process is exactly being equalled by the number of neutrons that are being either captured by the absorbers, captured by other material in the reactor, or captured by another uranium atom and fissioning. The number of fissions in each generation remains the same. We have a stable population of neutrons.

The core, at this point, is still at a very low power. To increase the power, the control absorbers are pulled out again by small increments, and the number of fissions is increased. You've taken some neutron absorber material out of the core so the fissions increase, and the power of course increases. When the desired power is reached, the absorbers are pushed back in the core to bring the core back to a stable state again in which the number of fissions in each generation is exactly the same.

Now we come to the nub of AECL's problem. A desirable feature of any reactor is that as the power of the reactor goes up, the reactivity--just how reactive the core is--goes down. Let's illustrate this in practical terms. If you want to increase power, let's say, from two megawatts to five megawatts, you pull the absorbers out, let's say, ten millimetres. Those aren't the exact numbers, but we'll use those numbers for the sake of illustration. The power increases, and then as you approach the new power you push the absorbers back in again to stabilize the reaction, as we mentioned. You expect to see the absorbers go back in a lesser distance, say about five millimetres for illustrative purposes. What that says is that the volume of the core is slightly less reactive. You need a bit more volume to produce more power. But you are pushing the control rods back in at a slightly higher point than when you started. You pulled them out at 10 millimetres; you've pushed them back in five millimetres, and the reactor stabilizes or is expected to stabilize again at this new absorber height.

That is what is called a negative power coefficient of reactivity. That means you have a slightly less reactive core at the higher power. What that does is make the reactor easier to control.

AECL designed the MAPLE reactor to have a small negative power coefficient of reactivity, and all its design calculations showed that it did.

When a reactor is first commissioned, an operator has to demonstrate to the CNSC that the reactor will behave in reality exactly as it was predicted to behave in the analysis. When the commissioning tests of MAPLE 1 were first done in 2003, there was a surprise. Instead of the control absorbers stabilizing the reactor at a position slightly farther out of the core, as we just had a look at, once the power had gone up, they in fact stabilized the reactor slightly farther in. In other words, a slightly smaller volume of the core was producing slightly more power. That is termed a positive power coefficient to reactivity.

The difference was quite slight; it's just a few millimetres difference in rod height. The important point, though, was that as far as the CNSC and indeed AECL were concerned, the reactor was not behaving as it was predicted to behave. It was also slightly positive instead of slightly negative. But the important point here is that the behaviour didn't match the predictions.

In a nutshell, the reactor behaviour observed was slightly different from that predicted. And in the eyes of the CNSC and indeed in AECL's own eyes, not being able to predict the behaviour with a high degree of precision really is not acceptable. And as we noted, it is desirable to have a negative power coefficient, as any increase in power is slowed down by the negative feedback. A positive one can be acceptable, provided it is small.

Now, the change in core reactivity with power arises from many different factors, for example, the temperature and density of the moderator and the coolant, and from fundamental properties of the fuel itself. And that is a key result of the physics calculations that AECL was doing.

When the surprise arose, of course, the CNSC stopped the commissioning of the reactor until some explanation were forthcoming.

Now, what did AECL do about it? They did carry out a very detailed analysis of all the possible causes of this observed behaviour, using a panel of their most experienced staff and outside help, and they identified about 200 potential factors, of which about four or five were particularly likely.

They also asked the Idaho National Laboratory in the U.S. to do an independent prediction of the behaviour of the MAPLE core. The Idaho National Laboratory employs some of the very best reactor physicists in the world, and they also have access to the most up-to-date calculational methods. They came up with precisely the same predictions as AECL did; AECL's physics calculations, in essence, were consistent with the world's best physics calculations.

AECL carried out a whole series of tests, and has been doing so in the last two to three years, on the reactor itself, with the CNSC monitoring every step, to show what the contribution was from each of the factors they and other researchers thought were likely to be the source of the problem. The tests showed that some of those factors were indeed contributing to the positive power coefficient, but not enough to explain the whole effect they were seeing. The last set of tests in April of this year showed that the last factor being tested was not contributing at all to the anomaly that had been seen.

AECL's management, as far as I can see, were left with a technical problem for which a solution was not immediately apparent. They had put several hundred skilled engineers and scientists on the task, as well as many external reviewers, without finding the specific cause of the problem. Again, it was not so much that the coefficient was positive rather than negative; it was that they could not satisfy the regulator, the CNSC, that they understood the root cause of the problem.

To solve the problem would likely need the development of new fuel that would be designed to have a definite negative power coefficient of reactivity. That's a task that takes several years and several million dollars.

How could AECL be faced with such an unknown today? The MAPLE reactor is unlike any other reactor. It's very small—about the size of a garbage can. It's quite small, and has a combination of highly enriched fuel in the “targets” that are to be harvested for their isotopes, and a combination of low-enriched and depleted uranium fuel to drive the core. It is a very non-homogenous core. This small size and the unusual reactor physics seem to have introduced a very sensitive interaction between the dimensions of the core, the fluid mechanics of the core, and the reactor physics that has not been observed before.

Thank you, Mr. Chairman. I'd be pleased to answer any questions the committee has.

Noon

Conservative

The Chair Conservative Leon Benoit

Thank you, Mr. Waddington.

Mr. Alghabra.

Noon

Liberal

Omar Alghabra Liberal Mississauga—Erindale, ON

Thank you, Mr. Chair.

Good afternoon, gentlemen, and thank you for coming.

Mr. West, can you explain to us the nature of the agreement with AECL for the supply of isotopes? Does AECL sell isotopes directly to other customers, or are you the only customer? How dependent is your business on it? Tell us about the nature of the arrangement you have with AECL.

Noon

President, MDS Nordion

Steve West

We have an exclusive arrangement with AECL: we buy isotopes exclusively from AECL as our primary source of supply, and they sell isotopes exclusively to MDS Nordion. That arrangement under our current agreement is from the NRU reactor. The contract also requires AECL to provide isotopes to us for 40 years from the MAPLE dedicated isotope facility .

Our current arrangement is an interim arrangement, designed to serve until the MAPLE reactors were brought online. This contract also allows us, during times of planned or even unplanned reactor outage, to secure isotopes from other partners that we have around the world.

Noon

Liberal

Omar Alghabra Liberal Mississauga—Erindale, ON

You are already an exclusive customer of isotopes.

Noon

President, MDS Nordion

Steve West

Yes, we are.

Noon

Liberal

Omar Alghabra Liberal Mississauga—Erindale, ON

I think anybody who has been observing the development with the MAPLE reactors could be aware of some of the problems that have arisen. When was the last time AECL told you that everything was still on schedule?

Noon

President, MDS Nordion

Steve West

Over the life of the project, we have had regular meetings with AECL in which they have informed us about the progress of the project. We mediated a new agreement with AECL in February 2006. As part of that mediation, AECL told us they would be able to bring the MAPLE facilities online by October 2008. In all of the meetings we have had with AECL, they have always assured us that they would be able to bring the reactors online according to the project plan.

Noon

Liberal

Omar Alghabra Liberal Mississauga—Erindale, ON

When was the last update?

Noon

President, MDS Nordion

Steve West

It would have been in April or March. These were regular meetings. There were monthly meetings and some quarterly meetings. We were concerned about the technical issues and uncertainties surrounding this project, but AECL never told us they couldn't complete the project. Throughout all those discussions, despite missing milestones, AECL stuck to the project plan.

Noon

Liberal

Omar Alghabra Liberal Mississauga—Erindale, ON

It's fair to say the same thing happened when the NRU reactor was forced to shut down without any notice and the isotope supply was interrupted in late December. When Mr. Malkoske was here, he told us that MDS was not notified at the time that there would be an extended shutdown.

Noon

President, MDS Nordion

Steve West

That is correct.

12:05 p.m.

Liberal

Omar Alghabra Liberal Mississauga—Erindale, ON

The minister seems to believe that if AECL gets out of the supply of isotopes the private sector will step in. Could you tell us your point of view? What would happen if AECL got out of the isotope supply business?

12:05 p.m.

President, MDS Nordion

Steve West

We are probably the major private enterprise player and isotope supplier around the world—the pre-eminent player. We have invested all this money in the MAPLE project. The government has not shared with us any of their perspectives or plans related to other private enterprise organizations. It's hard for me to comment on the government's plans.

12:05 p.m.

Liberal

Omar Alghabra Liberal Mississauga—Erindale, ON

From your perspective, let's say AECL and the government get out of the supply of isotopes. What options would the private sector, including companies like yours, have?

12:05 p.m.

President, MDS Nordion

Steve West

As it stands at the moment, the only viable option we see to provide a secure long-term supply of isotopes is completion of the MAPLE project. This latest news is very fresh and new, and we have not considered any alternative options. I'm not sure what other private enterprise companies might be doing.

12:05 p.m.

Liberal

Omar Alghabra Liberal Mississauga—Erindale, ON

You are in the isotope business. Are there any other reactors available or potentially available to supply isotopes?