Natural Resources Committee on Oct. 28th, 2009

[Mycle Schneider]

I think there are other examples, historically speaking. If you look at the first-generation reactors developed in France, you'll see that they were gas graphite reactors. They didn't survive the first generation because the company that actually orders is not the company that has developed and built these reactors. They were designed by the atomic energy commission, but the ordering entity was Électricité de France.

The bet EDF had been making at the time was to say that it's impossible to go against a wave that is internationally in favour of light water reactors. That is, in terms of lessons learned, in terms of technological advances, it would be impossible. It was a very controversial decision in France. It was by no means a straightforward decision to buy Westinghouse technology. Don't forget that until 1984, I believe, the French reactors were actually reactors built under Westinghouse licence. Only afterwards were they franchised, if I may say so.

You have the same picture in the U.K. The U.K. tried to develop its own reactor technologies and failed because they had to confront competition that was just overwhelming.

I think that today the Canadian industry has basically missed the train of trying to catch up with other builders on this wave of light water reactor technology, which has basically conquered the industry worldwide.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Schneider.

Thank you, Mr. Cullen.

We'll go now to the government side, to Mr. Allen, for up to seven minutes.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you, Chair.

Thank you, folks, for being here today.

I have a few questions. I'm going to start with two and we'll see where we go from there.

It seems to me that in the long-run success of nuclear energy in Canada as well as the world we have to focus on three things. One, can we build and operate these things economically, which includes any refurbishment that we have to do? Two, how are we going to staff them? Three, how are we going to deal with the waste management aspects of it?

Given Mr. Cullen's comments a minute ago, Point Lepreau obviously is a challenge. AREVA is having some challenges in Finland with its project.

I'd like to ask Mr. Grandey from Cameco this question, as well as Mr. Shearer and some of the folks from the Canadian Nuclear Association. What are some of the key success factors? We know that quite a number of these projects have been built on time and on budget. What are some of those key success factors? It would seem to me that it's not all about technological knowledge; you need to have someone who can manage the project to get these done. With all due respect, some of our technological people couldn't run a hen over a manure pile--

[Voices]

Oh, oh!

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

--so if that is the case, what do you see as some of the key success factors? I'd just like to understand what some of the key success factors are so we can start ensuring that we get some of these built on time and on budget.

[Howard Shearer]

If I may respond, Hitachi, as I mentioned, has built 20 reactors and are now in construction on another 22. Some of the critical elements include methodology of construction, which I think the new ACR design will incorporate, because Hitachi has worked very closely with Atomic Energy to utilize its “lessons learned” experience. We certainly participated in Qinshan with the first introduction of the modularization technology in support of AECL's build. So I think that for the whole ideal of the methodology of construction, modularization is one key element.

The next element is training and skilled trades. I think Canada can certainly be proud of its workforce in the skilled trades, but this is a continuous experience. It's important to recognize that training, training, training, etc., becomes very crucial. A policy that focuses on continually maintaining the training of skill sets, for example, and also continued training, is very important.

I'd say there is a third one, which is certainly the ability of organizations to fundamentally invest in the infrastructure necessary to facilitate building, whether it's in terms of site development.... I'm talking specifically about pre-engineering, about the proper engineering being done from a design perspective and from a site preparation perspective ahead of time.

I think these are very important in terms of being successful in a project and Hitachi has built its projects on time and on budget.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Grandey.

[Gerald Grandey]

I would certainly echo that. I will come back to a theme that I developed earlier, that is, making sure that the regulatory framework is suited to the construction or the refurbishment--but certainly the construction--of the next generation of reactors. You do have that component, which is leading the complications in a number of the new build projects.

Finally, I think there's one other thing, and it may have been inherent, and it is that the industry has to adhere to the highest standards of quality management throughout the supply cycle and the construction of new power plants.

As Mr. Schneider said, we haven't built reactors in any big way in about two decades, so if you put it in context, the new generation of reactors that we're building are first of a kind, and we are learning all the lessons that one would learn—and relearning some—when one embarks upon the construction of something relatively new.

With the construction going on in India, China, Europe, and ultimately the U.S., we will get through that first-of-a-kind issue and make it much more modular and routine.

[Murray Elston]

A couple of things that are actually happening in Canada are of assistance to us going forward. The refurbishments, which first began at Pickering and are now at Lepreau and with us, are helping to rebuild a capacity in the industry that had tailed off, quite frankly, over the course of a few decades as the building stopped. There were contributions, obviously, to the export markets, but being able to have a supply chain that is geared up is an important element, along with the training, which was mentioned earlier.

In a sense, this is kind of the silver lining for some. With the bad economy that we have seen, there has been a conversion of some precision businesses from one field of endeavour, particularly the auto sector, looking into the nuclear industry as a place to put their high degree of manufacturing skills and tolerances. So there are places now where the capabilities that we need as an industry, those precision places, can now be found and developed. That will help us meet some of the very big challenges, one on the skilled labour side and then secondarily, hopefully, the material provision and “in time” type of supply for new build as well.

[Wayne Robbins]

From the industry side, I've seen a lot of projects over the years and it always comes down to the fundamentals, as we've talked about. It's the planning side. Make sure you're ready. The scope, the duration, and the initial cost estimates: those are fundamentals and those are critical for initial project successes.

On the things we're looking at—the learnings from the industry, the benchmarking, the tooling that we're fabricating up—all these mockups ensure success. It's that longer-term planning and getting ready to go before you start the project.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen. Your time is up.

We have only a few minutes left, so if we could have two minutes from each member in the order for the second round of questioning, we'll be starting with Mr. Tonks.

[Alan Tonks, Liberal, York South—Weston, ON]

Thanks, Mr. Chairman.

Thanks to all of you for being here.

I have just one question, then. We had testimony the other day on the technological shortcomings of the CANDU ACR reactor with respect to the negative power coefficient and inherent shortcomings that would make it not only difficult to use, given the arguments, but, in an engineering capacity, unsafe.

Without having heard that testimony, I guess it's difficult for you to reply, but generally from an engineering perspective, on the CANDU technology, we had the MAPLE issue, which seems to be proof of some sort that there are technology issues that have not been met. What's your response to that? I think the committee would like to know and have a comfort level.

We're talking about Canadian technology against the platform that exists. We don't want to underestimate or minimize that platform in any way, but if we're internationally developing a technology against the arguments that have been used, what's the likelihood that we'll have success if it's not a safe technology?

[Peter White]

The CANDU technology is some of the safest technology in the world because it is developed on “defense-in-depth” technology. Yes, the CANDU 6 has a positive void coefficient that can cause a power pulse, but the shutdown system has been designed in such a way that it can handle it. It's designed for it.

They have two independent shutdown systems, which other reactors don't have. The ACR has been designed to have a negative power coefficient or void coefficient. This will also increase safety, but it doesn't make it any safer than a CANDU 6. They are both very, very safe reactors. The design criteria on them is to make sure they can handle the design basis accidents that have been put forward by the regulator, which are very onerous accidents.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Tonks.

Mr. Trost.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair.

Today most of the questions have been about AECL, the CANDUs, etc., but I was wondering if some of the witnesses could briefly comment on—how should I put this?—the smaller issues, the niche issues, the ones that are not directly related to AECL and CANDU.

Here's what I'm wondering about. What are the other opportunities and challenges involving the Canadian nuclear industry that the committee should be looking at, specifically those that are not related to AECL, CANDUs, and all those problems? Are there other issues we should be looking at? You're going to have to be very brief. I know that Cameco's going to want to say something and I'm sure tart a couple of other witnesses will.

[The Chair, Conservative, Leon Benoit]

Perhaps you can give very quick answers. We have a minute and a half.

[Gerald Grandey]

Very briefly, I want to make the first point that, irrespective of the future of CANDU technology, Canada has an absolutely robust and wonderful nuclear industry that is competitive worldwide. That needs to be paid attention to.

To come back to the issues, you create agencies and then never look at their performance. Oversight needs to be there so that when it slows down, becomes too bureaucratic, or there are too many agencies in the soup, Parliament can do what it should be doing, which is to correct the system to make it more efficient.

[Murray Elston]

I think one big area is still putting money into the research and development side of the industry, the university side. AECL is a big part of that. I know you didn't want me to talk about it, but there is a huge number of linkages between that site and our universities going across the country. That's one point.

Second, I think a determination of exactly where the carbon policy in the country goes is an important element for nuclear. Obviously, that is of huge interest to us, because we think that we can be a contributing factor to helping the country and the economy meet the requirements that are being laid out ahead of us. But as with everything, I think certainty is really going to be a big help with that.

Next, I think we need to understand that the industry is larger than just one organization. We have a huge number of parts of the industry that provide all the way from medical assistance to diagnostics for other industries--it's not just medical--to the areas of competing internationally for various parts for other businesses. We're pretty broad-based and we need a good strong economic performance at home to help us reach out and do our business abroad.

Finally, the other point is to help us in some export markets where developments are possible. With India, for instance, there are now certain arrangements that have been made with the national government in India. Safeguards have been worked out that would permit a number of our industry members to trade actively in India. Large markets could help us add even more to the GDP here at home.

Those are three quick items.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. Trost.

We'll go to Monsieur Guimond for a couple of minutes for a question or two.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I have a very brief question for Mr. Elston and Mr. Ivanco.

There is talk of restructuring AECL and of privatization. In future, what role should the federal government play in the nuclear industry?

[Murray Elston]

For me, it's important that the government know there is a continuing role for the federal government no matter what the format is of its next step for restructuring. That is clear in any of the international markets that you study, particularly the countries that have domestic technology.

If you were to go to the CNA website, for instance, you would see a report there by SECOR. I think it was finished in about August of 2006, but has been on the site for some time. It identified what each country had done to assist their local industries. You will find that there was an active policy involvement, an understanding of energy requirements going forward, and an understanding as well that it was more than just the industry, which was coming from the government's positive public policy support for it.

It was, in fact, the development of innovative and imaginative research. It was the development of women and men taking leading roles internationally in science, in research, and in teaching. And then as well, it was the marketing of products abroad. There was a very strong presence by the government itself in helping the various elements of those national industries to reach out and market externally.

All of those items would be critical for the federal government, no matter what style of restructuring might be considered by Ottawa.

[The Chair, Conservative, Leon Benoit]

Thank you.

Merci, monsieur Guimond.

Ms. Gallant, you have one minute. This has to be really short. We have four minutes.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you, Mr. Chairman.

Canadian technology for nuclear reactors is the only technology that can use naturally occurring uranium as its fuel; all others require weapons-grade uranium as a fuel source. We also use heavy water as a moderator, as opposed to other countries that use combustibles like graphite. If Canada were to adopt nuclear technologies other than CANDU, how would the supply chain, especially as it applies to fuel, be impacted in Canada?

[Gerald Grandey]

For facilities that I talked about earlier that Cameco operates in Ontario, 80% of our output goes to light water reactors in the United States, Europe, and the Far East, and 20% of our output goes to the CANDU units, which, as you said, use natural uranium.

I want to correct one thing you said. Light water reactor technology does not use weapons-grade uranium. It is far, far lower in terms of its enrichment level at 5% or lower, compared to weapons-grade uranium, which is at 95%. The two are completely different.

If light water technology expands and comes to Canada, the supply chain that we are engaged in won't change a whole lot. We'll still be supplying our customers operating CANDU reactors and those using light water reactor technology, the same customers that we supply today.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Ms. Gallant.

Thank you all very much--

Mr. Regan has a point of order.