Natural Resources Committee on Nov. 4th, 2009

[Geoff Regan, Liberal, Halifax West, NS]

To whom was your submission made?

[Dr. Richard Florizone]

We were one of the 22 proposals submitted to the expert panel established by Natural Resources Canada.

[Geoff Regan, Liberal, Halifax West, NS]

Have you had any follow-up or feedback?

[Dr. Richard Florizone]

We have not had any formal follow-up yet. We're awaiting the deadline of November 30.

[Geoff Regan, Liberal, Halifax West, NS]

How long would it take to build a 25-megawatt reactor and who would finance it?

[Dr. Richard Florizone]

That's a good question. In talking to the regulator and in talking through the building program in Australia, our original proposal suggested that the fastest you could see something come online is probably about seven years. The timeline we've talked about is seven to ten years, so potentially it would be coming online shortly after the NRU was shut down, but that would mean moving relatively quickly into some pre-design work--basically immediately.

[Geoff Regan, Liberal, Halifax West, NS]

If your proposal was accepted, would it make any sense to continue to operate a reactor at Chalk River?

[Dr. Richard Florizone]

That's a good question. I think it ties back into the nation's nuclear strategy and the future of nuclear power R and D in the country. Bluntly speaking, perhaps you can think of the NRU as serving three purposes: medical isotopes, nuclear power R and D, and as a source of neutrons for neutron-scattering science.

Our proposal for the Canadian neutron source focuses on only two of those three: the neutron scattering and the medical isotopes. The issue is that if you want to include the third, if you want to do the power generation R and D, it's a much larger project and a much more significant reactor.

So the answer would be that you could have the medical isotope business and you could have the neutron-scattering science at the facility we've proposed, but right now if you shut down the NRU, you wouldn't have the capability for some of the R and D that's done around power generation.

[Geoff Regan, Liberal, Halifax West, NS]

If the government decided to continue to do R and D at Chalk River with the present or a future reactor, would it then still make sense to produce isotopes at the university?

[Dr. Richard Florizone]

Again, it would come back to your public policy goals. If you decided that you wanted to just have an isotope supply sufficient for the country, it's likely that you could a build a reactor in Chalk River that could serve that supply. If you wanted to optimize the reactor at Chalk River--again, depending again on your strategy with AECL--and optimize it more toward nuclear power R and D, let's say, it may be that you also might chose a portfolio approach where you have another reactor that's more focused on the isotope business and neutron scattering.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Mr. Regan.

We'll go now to the Bloc Québécois, with Madame Brunelle, for up to seven minutes.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Good afternoon, gentlemen and thank you for coming.

Mr. Alexander, your company is, without any doubt, the world leader in power generation from nuclear energy. I would like you to give us some more details. You told us that you are a multinational corporation, but according to my notes, 90% of your shares are held by the French state.

Do you see yourself as a state corporation?

[Roger Alexander]

That's correct. Eighty per cent to ninety per cent of the shares held of AREVA worldwide are held by the French state.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Is being a state corporation an advantage or a disadvantage? Here is my point. The federal government wants to restructure AECL and maybe to privatize it; this is understandable. We are told that its present structure does not allow it to benefit from this possible nuclear renaissance.

So, at the end of the day, is it beneficial to be a state corporation, essential to be in this highly competitive market?

[Roger Alexander]

Certainly for us, the way AREVA functions worldwide is as a profitable and essentially independent corporation. We have products that are required and that are sold, for which we have orders that we deliver against in the world market. We return significant profits to our shareholders on an annual basis.

So we're able to fund, as I mentioned, $1.2 billion a year in R and D of our own volition because of the profits we generate worldwide from our services and sales businesses, not only in nuclear, but also in the renewables sector. Next year, approximately 1 billion euros of our roughly 12 to 13 billion euros in sales will be from the renewables sector as well.

Again, we're a CO₂-free energy generating company. We are engaged in a number of businesses that return profits. The way it works, despite the fact that we're partially owned by the French state, is that we operate relatively independently to produce those profits and return money to the state.

So I think it has less to do with being a state entity than an independent business that has the right products and services for the market and that returns a profit.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

The fact is that your technology is different from the Canadian technology: heavy water versus light water. I understand some of it, however it is highly specialized.

Would you be able to work on CANDU reactors?

[Roger Alexander]

When you say “work with them”, we in fact have a services organization here in Canada. We do work at all of the Canadian sites on a services basis on the existing technologies here in Canada with respect to the businesses we have here. As well, of course, we have a significant presence in mining here in Canada, with uranium mining in Saskatchewan, Quebec, and the territories.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Then you might have an interest in buying AECL, maybe at least part of it.

[Roger Alexander]

As I said, we're following the situation quite closely and we will be very interested in what the government's recommendations are and what position the government and its advisers take.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

You are aware, as we are, of all the problems related to isotope production. In your statement, you tell us that AREVA can help. Could you explain how? Are you referring to the Osiris reactor technology which is producing isotopes in France?

[Roger Alexander]

We've been engaged in producing isotope reactors in other jurisdictions. I think Dr. Florizone covered the topic quite nicely in terms of the challenge and financial scope of building a research reactor.

Unfortunately, although everyone would like a short-term solution, that is not a short-term solution. In construction terms, we're talking about at least a five-year period to actually construct a reactor, with design, specifications, and licensing being organized beforehand. So that's just not a short-term solution.

I think the construction of a new isotope reactor is not a question that should concern anyone. It's just a matter of time.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

We talked a lot, in this Committee, of the shutdown of MAPLE 1 and MAPLE 2 reactors because of operating problems and some safety standards, supposedly.

Would it be of any interest, for a company like AREVA, to reactivate these MAPLE reactors? Could it save time? Do you consider that technology outdated? What do you say?

[Roger Alexander]

We really don't have any detailed knowledge of the MAPLE reactors or the technology there. We would essentially be interested in building a new reactor, not in doing any work on the existing MAPLE reactors other than what might be required from a specific service or assistance standpoint.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

You said something that I found very interesting. You have an innovative concept, recycling. It is absolutely wonderful to be able to reduce the volume of waste by 80% to 90%, but at what cost? It must be very costly if it has not been done yet. What is the process exactly?

[Roger Alexander]

Yes, we have a facility that's currently operating in La Hague and has been for a number of years. I was there the week before last to tour the facility. I hadn't had the opportunity to see it yet in my new responsibilities. It's reprocessing waste for France as well as for other countries such as Italy and Japan. In fact, we're working with the Japanese. A number of Japanese delegations are at our facility for training to work in their new facility, which is under construction.

The facility reprocesses waste. Of course, international law requires that the waste, after reprocessing, be repatriated to its country of origin. It's quite an impressive facility to see. There's waste coming from Japan to our La Hague reprocessing facility to be completely reprocessed. The eventual vitrified waste is repatriated to the country of origin, but of course in much less volume.