Natural Resources Committee on Feb. 24th, 2009

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

Therefore it is not a new phenomenon.

Mr. MacDiarmid, you said you are very mindful of the need to acquire the CNSC licence renewal in 2011. Your comment was that we need to invest in the reactor and support systems for life extension and that we're two and a half years away from that licensing period coming up. I just want to know if those investments, if you will, in the reactor will be done as part of normal outages. Will they be done as part of normal outages and as part of a project, or how is that going to be done?

[Hugh MacDiarmid]

I will turn to Mr. Pilkington to talk about the approach and whether it is outages or not.

[Bill Pilkington]

The isotope supply reliability program is a fairly broad program. It involves improvements to equipment and systems and to procedures. It involves long-term planning for succession planning for staffing for the NRU reactor. Currently the majority of the work to implement improvement will be done with the reactor in operation or during normally scheduled maintenance outages.

We do look forward in the future to scheduling, probably on an annual basis, one outage that would be longer in duration for jobs that require a longer shutdown. We would coordinate that with the other reactors in the world that supply medical isotopes so that in fact there is no interruption of supply.

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

Following that, you talked about the two life-extension projects that are going on at Bruce and Lepreau, and that they are very different in nature from each other. Both are first of a kind in their own right.

It's also true that you're also the agent for the upgrade and refurbishment at Wolsong in Korea. Is that not correct? Is that also behind schedule?

[Michael Ingram, Senior Vice-President, Operations, Atomic Energy of Canada Limited]

No, it is not.

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

No, it is not. So obviously you are learning something from the lessons-learned exercise, but each one of these is different. Would you expect that when you take the outage at Chalk River there is going to be something different? Because, as you say, it is not just tightening a few bolts and putting a fresh coat of paint on, there is risk in a project like this in taking the outage for isotope supply. Is that not true?

[Bill Pilkington]

If I can speak to that, many of the changes that will be made at the NRU reactor and the other isotope production facilities will be done with the NRU in operation. This is actually going to be quite different from the refurbishment of a commercial CANDU reactor in that the work that's being done does not affect the reactor vessel itself or the core materials. It's mainly around support systems.

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

From a risk standpoint, when you look at the Government of Canada from a risk standpoint with AECL, you said you have a market for 20 of these projects, potentially, in the next 15 years. On the challenge of qualifications and making sure you are able to be in the game for these refurbishments, are you learning from these lessons learned? How much difference do you see in some of these projects? Are you going to continue to run into differences, and are you going to have to expand the capabilities in Canada to make sure we have people who are nuclear-qualified to help you do this work?

[Michael Ingram]

It is appropriate to say that we'll need to expand the capabilities because we see the tremendous potential for us to play a large role in this.

We certainly are learning lessons as we progress on the projects, and the best way to demonstrate that is to talk about Bruce Power, where our production rates and our ability to refurbish the second reactor are notably better than that of the first reactor we're working on. So we certainly are. We have put in place practices to make sure we are learning our lessons and applying those lessons as we move forward.

[The Chair, Conservative, Leon Benoit]

Mr. Elston, would you like to add to that?

[Murray Elston]

Thank you, Mr. Chairman.

I think there are a couple of things that have to be understood as well. The techniques that are being applied to the refurbishment at Lepreau and at Bruce are different because the models they're working on revitalizing are different. But in each case there has been a tremendous amount of research and development and deployment of new technology by the people from AECL.

The work with the new machines, the new mechanisms that reduce the waste and then move it for storage are first-generation types. That same research and development has spawned a number of products that have been used in other sites around the world. We are focusing on single projects at Bruce and at Lepreau, but the research and development undertaken by this company has led to a series of commercial opportunities in other markets.

One, there are lessons learned, for sure; two, there are new pieces of equipment that will be usable at other sites; and three, the development of new people who will work on these refurbishment or revitalization projects is going to be indispensable in providing Canadian know-how around the world as we move on to those 20 reactors.

The other thing is that our industry generally is on the upswing in terms of hiring new women and men through our universities and colleges. That type of capacity that is coming from these refurbishment programs is the type of thing that will provide us with stamina to resist the types of heavy competitive forces we go up against around the world.

You have reflected on the one item, but there are so many other pieces of very good work that are going to provide us with the capacity to have a very robust nuclear industry into the rest of the century.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen.

We have two people for the final round.

Could you keep your questions to maybe three or four minutes, Mr. Tonks and Mr. Anderson?

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

To follow up on that excellent line of questioning from Mr. Allen, what is the status with respect to the application for continuation of the NRU reactor? And who has the oversight in terms of your relationship--I suppose to your board--of giving a status report that is definitive and can assuage the concerns of the national and international community that you can meet the ongoing requirement for medical isotopes?

[Hugh MacDiarmid]

Thank you for the question. We believe this process is being managed in a very thorough and careful way, with a goal to having the highest probability of the re-licensing application being successful in October of 2011.

We are working very carefully and closely with CNSC staff so that there are clear expectations as to what we must do to satisfy their licensing requirements and to understand that far enough in advance that we can actually do the work in a systematic and thorough way.

As it relates to our own internal governance process, we have both a project risk review committee and a science and technology nuclear oversight committee of our board of directors. I, as the CEO, with Bill, as the chief nuclear officer, and Michael, as the head of operations for our refurbishment projects are collectively accountable to those directors of our corporation. We have very, very thorough and regular reviews.

We do not intend to let any of our regulatory commitments fall by the wayside because of that October 2011 deadline.

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

Are there public reports? Is there public scrutiny of those reports in some form?

[Hugh MacDiarmid]

We go through the mechanisms within our own internal governance process, so we do not typically make those public. Meeting minutes of AECL's board of directors, I believe, are subject to public disclosure.

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

The dual nature with respect to this accountability regime that you share with us and with CNSC seems to balance two objectives: one is to produce medical isotopes and the other is to guarantee safety to the public.

I have to ask this question. Are you satisfied that the accountability regime is open, transparent, and that it acts in the public interest? And second, is there any other nuclear regime jurisdiction that shares that kind of a mandate?

[Hugh MacDiarmid]

Well, I can only really speak to my own side of that mandate, which is clearly that you have the absolute unwaivering commitment from this management team that we are going to operate that reactor safely and that we are also going to do our level best to provide reliable isotope production. In a sense, we don't see those two as contradictory. That's our job and we have to do both. We will not compromise safety in order to meet an isotope production deadline—cannot and would not do that.

So I don't have perhaps the same duality that you referred to with Mr. Binder in his comments, in that we have one goal, which is the safe operation of the reactor, and we also produce the isotopes.

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

Okay.

Thank you, Mr. Chairman.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Tonks.

Mr. Anderson, you have about three minutes.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I want to thank you for coming out today. I think the best thing or the thing we've gotten the most out of this afternoon is that we've finally brought some realism to this notion that there was some sort of danger, risk to the public, in these incidents. I guess I look for the enthusiastic reporting on the news tonight that that's the case, because Mr. Binder made a very strong case for that and demonstrated that issue. So I thank you for coming, and I wanted to recognize that.

I have a couple of questions, and I want to go back to what Mr. Tonks and Mr. Allen were talking about. We committed about another $100 million to support of refurbishments of CANDUs in the supplementaries. I'm just wondering if you can tell me why the government has to continue to fund those projects. Is that a good investment of taxpayers' dollars, and why is it necessary when most of those utilities are publicly owned already and some are privately owned?

[Hugh MacDiarmid]

The simple answer is that we have contractual commitments and we signed agreements with the customers to deliver a certain scope of work in relation to the contract we signed, and we intend to fulfill those commitments.

The point has also been made that the learning, which is occurring in this early stage of the evolution of this line of business for us, sets the stage for an ongoing revenue stream for AECL, which will stretch decades into the future. So we believe we're laying the groundwork for a very successful line of business for our company.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Well, just as a last question then maybe, I'd like to get some of your ideas about the role of nuclear energy in this economic situation we find ourselves in. We've got an economic downturn. What is your vision for the next few years as things seem to be tightening up economically? What positive role does the development of nuclear energy play in the situation we find ourselves in?

I'd like Mr. Elston to answer that as well.

[Hugh MacDiarmid]

I'll be cautious about how far I step into the domain of government policy, but certainly I can see that nuclear power is a very sound infrastructure investment, and it is something that provides clean energy with low emissions, which meets many environmental targets. Clearly, the commencement of a major nuclear project creates thousands of person-years of employment and GDP benefit to the country.

[Murray Elston]

There are two very important items. Once a project like the production of electricity from nuclear reactors is given the green light, there are all kinds of people who have to be hired to do the regulatory work, both in front of the CNSC and in terms of environmental assessment, the types of gathering of information, the huge amounts of work that go into that. You can easily see the expenditures of $30 million to $50 million in the lead-up to getting these projects on the go.

We are anticipating in Ontario, obviously, the decisions around Darlington, and already there are people who are at work laying the groundwork for the regulatory compliance, so that we can actually start building plants as we move into the next decade.

So there is an immediacy of employment. There is a spinoff from the types of jobs that are created. There is an uptake in education opportunities in our universities and in our colleges, and there are tax dollars generated from the preparation alone, let alone when we get into the actual new builds. In the refurbishments, we're talking about 1,500 to 1,600 people at the Bruce site, I think, who are working on those revitalization projects, and that alone is quite a boost in the Ontario context.