Natural Resources Committee on March 24th, 2011

[The Chair, Conservative, Leon Benoit]

Good afternoon, everyone.

We're here today to continue our study on energy security in Canada. Today we're looking at the nuclear industry.

We have two panels. In the first panel we have two witnesses. First, from the Canadian Nuclear Association, we have Denise Carpenter, president and chief executive officer. Welcome.

From Bruce Power we have Duncan Hawthorne, president and chief executive officer. Welcome to you.

Thank you both very much for being here. We'll hear your presentations in the order they are listed on the agenda, so we will start with Denise Carpenter, for up to seven minutes, please.

[Denise Carpenter, President and Chief Executive Officer, Canadian Nuclear Association]

Thank you, Mr. Chairman and members of the committee.

First of all, on behalf of the 71,000 men and women who work in Canada’s nuclear industry, from the workers at our TRIUMF research centre in British Columbia, the SLOWPOKE-2 facility at the University of Alberta, Cameco and AREVA in Saskatchewan, and all our power plant workers and researchers in Ontario, Quebec, and New Brunswick, we commend the people of Japan, who have shown both amazing resilience and fortitude since the devastating earthquake and tsunami almost two weeks ago.

Let me start by saying that while there is no such thing as absolute safety, Canada’s fleet of reactors is safe. Each structure is designed and built to seismic standards, despite being located in areas with low seismic activity and virtually no risk of a tsunami. Safety has always been, and continues to be, the number one priority for our industry.

Our industry is based on worldwide learning and continuous improvements based on a worldwide body of engineering experience.

As a result of the Japanese nuclear incident, the federal regulator is reviewing the safety cases for all of Canada’s nuclear facilities, as is normal when events of this nature occur. We are proud of our safety record, but we are never complacent. The tragedy in Japan will of course be examined thoroughly for lessons we can apply here at home.

My colleague Mr. Duncan Hawthorne will be speaking to you about this in more detail in a few minutes.

Let me turn to the broader subject of energy security. Nuclear energy is an important part of Canada’s diversified electricity supply mix. Indeed, we are a 24-hour baseload power source. We produce 15% of Canada’s electricity and over 50% of Ontario’s.

A major advantage of nuclear power is that it produces massive amounts of electricity reliably, safely, and over long periods of time. With continuous advancements in engineering and learning, we expect to get up to 60 years of life from our plants. However, as with all energy and fuel sources, there are challenges and rewards. Our industry’s cost structure consists of high capital costs and low fuel costs.

First let’s consider the benefits of those capital investments. They are the same as the benefits that come from all large, well-thought-out industrial infrastructure projects, the most important one being jobs. These projects also generate revenues and taxes for communities and benefits for supply chains all across Canada.

With respect to jobs, in July 2010 the Canadian Manufacturers & Exporters showed that just two projects alone, the refurbishment of facilities at Bruce and Darlington, will support 25,000 high-wage jobs for a decade, injecting $5 billion annually into Ontario’s economy and leaving us with better infrastructure that will serve our households and our industries for generations to come.

We must also consider the low operating costs of a nuclear power plant. Once a plant is producing energy, it requires little fuel. And uranium costs are subject to very little volatility in price, so an investment of this sort does not risk price volatility. According to studies conducted by the OECD , the overall cost to the consumer of nuclear power over the life of a power plant is similar to that of large-scale hydro, natural gas, and coal, and is even lower than wind and solar.

Our industry has very few external costs, meaning that we impose few costs on society or on the environment that we aren’t accountable for ourselves. That’s because we occupy small pieces of real estate. We release virtually no emissions into the broader environment. We produce spent fuel and other radioactive materials that are very small in volume and that are very strictly monitored, and we mostly keep and manage them ourselves.

In fact, we are the only industry that can really say that we know exactly where all our waste is. Our regulators make sure that we do. And to us, it’s not just pure waste; it’s a fuel that one day we may be able to recycle. As a net result, we account for the full costs of packaging, managing, storing, and disposing of these materials, which means that those costs are built into and covered by the price of nuclear power today.

On the environmental front, I mentioned that the power being produced is virtually emissions-free. If we did not have the nuclear power plants we have in Canada today, and instead relied on fossil-fuel-based electricity for that output, our country would generate more than 90 million tonnes of greenhouse gases every year. That would add about 12% to our annual greenhouse gas emissions.

Further replacing fossil-fuel-based energy with nuclear energy can have a very positive impact as we strive to lessen our country’s, and indeed the world’s, carbon footprint. Nuclear’s low emissions, low fuel costs, and low real estate needs were already attractive to many countries before we started talking about either capping carbon emissions or putting a price on them. As energy demands increase and we move towards a carbon-constrained world, nuclear energy has a role to play in Canada and abroad. As developing countries look to sustainable and renewable fuel sources, nuclear is a clear choice. It is virtually emissions-free. It is affordable. It can help create jobs at home and in developing countries, which will stimulate economies rooted in innovation and research.

I wish I had more time to talk about innovation and nuclear research and development, and indeed about nuclear medicine, but I don't. These are great sources of pride for our nation. Through these areas, our industry is driving productivity, and ultimately improving our standard of living.

In closing, I will say that with each passing year the global community of people who care about the environment has more and more in common with the global community of people who provide nuclear power generation, those who are continually striving to improve its safety, its economics, and its environmental performance.

With that, I'd like to thank you for the opportunity to be here today.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Ms. Carpenter.

We go now to Duncan Hawthorne, from Bruce Power. Go ahead, please, for up to seven minutes.

[Duncan Hawthorne, President and Chief Executive Officer, Bruce Power]

Good afternoon, Mr. Chairman.

Obviously the presentation on nuclear power would be impacted by the events that have taken place in Japan, so I felt it might be helpful to give the committee an overview of what's here. I've provided a slide deck to try to allow the committee to understand exactly the sequence of events.

Now let me, without actually going through slide by slide, try to give you an overview of the situation. Of course everyone has watched the devastating effect the earthquake and tsunami had on the entire region of Japan that was affected.

With respect to the nuclear plant itself, at the time the earthquake hit there were six units on the site, units one to six. Three were in operation—units one, two, and three—and three were in various stages of shutdown mode. When the earthquake hit, the plant responded as you might have wished it would do. It withstood the earthquake and the automatic cooling systems went into operation, again in a way the design would have wanted to see that happen.

About 30 minutes after the earthquake, the tsunami created massive damage to the facility and in fact swamped much of their shutdown system. Basically, it's easy to see from here that the plant was not capable of withstanding the level of tsunami it was struck by. The height of the wave exceeded the design expectation for the site. It had a devastating effect on all of the shutdown systems.

I've tried to explain this event in many ways to people, and I was just at a meeting in Ontario this morning trying to do the same thing, so if I can explain this in layperson's terms, it might be easier for you.

If you can imagine your own kettle at home that's boiling water, that's actually very much like a boiling water reactor. The water actually boils within the reactor during normal operation, and instead of the water escaping through your spout as it would in your kettle, it actually then is fed to the turbine generator. So if you can imagine a scenario where suddenly you have nowhere to send the steam—because that's what happened when this event occurred, the connection between the reactor and the turbine was broken—you still have a tremendous amount of heat being generated inside your kettle and nowhere for the steam to go.

The obvious concern there is how do you keep it cool? How do you prevent the lid from blowing off? In the early period after this event when they lost cooling, that was exactly the situation they were faced with, the possibility of the water continuing to boil off and structural damage occurring.

Really, from the minute the tsunami hit, they had to consider how to apply cooling to these three powerful reactors that are still generating heat. Having tried a series of things, they then were forced with a situation where they knew that fuel damage was occurring, the water level in the reactor was dropping, and they had to do two things fairly quickly: one, to relieve the pressure by venting, and two, to find some alternate way of adding water to the reactor. They chose to do that by using seawater and using fire pumps, and they progressively worked their way through these three units.

One of the things I think we've all seen pretty dramatic pictures of is where the secondary containment has been affected. Really, the reason for that is that as they're venting, they're also venting hydrogen into that secondary containment. Under normal operation that hydrogen should have been burnt off as it was generated. There would be a lower volume of it, and it would have been dealt with as it came. But their hydrogen ignition equipment was also electrically powered. So without that, they vented hydrogen in a pretty large volume, and then the hydrogen ignited and it blew the secondary containment apart on unit one and then did the same on unit three. Those were the structural impacts we've all watched.

The important thing, however, is despite the obvious visual impact that had, the structure of the primary containment for all of these reactors continues to be sound.

The second stage of the problem, then, is now that they have water in these vessels, they have to deal with the fact that the fuel pools have been sitting with fuel and they'll also need to be cooled. That's compounded by the fact that the secondary containment has been blown off in two of the units. So you have fuel that's overheating in a fuel pool, with no means of cooling it either, and as it steams off it sends contaminants into the atmosphere.

As things stand today, and you'll have seen this in much of the video footage, they've been using extraordinary measures to cool the fuel pool: they've been using fire trucks to hose down the fuel pools and add water; they're using seawater and fire pumps to keep the reactors cool. It really is all a coping strategy.

The situation has gotten better every day, but we'd be wrong to say that they have it stabilized at the moment. They are still doing it in a very non-standard way. Over the course of the last 48 hours they've been able to get electrical power back to these reactors, and that allows them to start recovering instrumentation, controls, and normal cooling systems.

My estimate would be that it will take at least another two weeks to try to get back to normal system operation, in terms of providing cooling by normal means. But these facilities are commercially out of action forever, and it's now about putting them into a safe layup and shutdown state.

At the heart of this, of course, is a question mark over whether or not the design basis for this plant was valid. Everyone I think understands that Japan is a very seismic-reactive area. Their plants are designed to meet earthquake standards that we would never consider applicable to our area. But even there, this quake and the tsunami that was a consequence of it exceeded the design specification.

As Denise said earlier, lessons for us.... We have very sound design-basis arguments here, of course. In Japan, not only is the plant designed differently, but the location of the plant is very different, in terms of the onerous environment.

We are conducting a review of our plants to do three things: firstly, to confirm that the design basis for our plants is sound; secondly, to confirm that the equipment we rely on can be proven to be available in a range of scenarios, such as fire, flood, explosion, and those kinds of things. The third thing we've been asked to do is to liaise with emergency measures organizations so that we can confirm that all of our controls and arrangements for any off-site event are adequate to meet this low-probability outcome.

We've been asked to do that in a matter of months by our regulator. Much of this we consider to be providing reassurance. We have already a pretty advanced situation here in Canada. We have a set of documents called “severe accident management guidelines”. I say that we are, in Canada, ahead of many in the production of those documents, which would obviously provide some reassurance, were we to suffer events that go beyond our design basis.

As an industry, of course, we all believe that there will be lessons to be learnt from the Japanese event. A job we have here in Canada is to reassure people about the safety of our own plants.

I'll finish by saying one thing, which is important: when there were two events that happened in the past that affected our history—Three Mile Island in 1979, 32 years ago last week, and Chernobyl 25 years ago—both of those events originated in the plant and escalated within the plant. We are not that operator today, and we haven't been that operator for a long time. This Fukushima event actually was a natural catastrophe, which affected the plant. We should certainly be prepared to learn lessons from this, but we should not allow it to compromise our view of the 30-plus years of safe operation that we in Canada have seen from our own nuclear plants.

I'll happily answer any questions.

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. Hawthorne, for being flexible and for coming with that explanation. I know all members of the committee were looking for that, so thank you very much.

We'll start our questions and comments with Monsieur Coderre, for up to seven minutes.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you very much, Mr. Chair.

Clearly, today's meeting is rather special, particularly given what is happening in Japan. So it is understandable that our questions may be influenced by that to some degree. We will try to define where we stand on that issue. That is quite clear.

Canada must have a variety of energy sources, but the fact remains that the nuclear issue is a very sensitive one now, both in terms of transporting waste and in terms of the waste itself. A lot of people say that nuclear power plants do not emit a lot of CO ₂, but if we look at what is happening in Japan, we can see that, when an explosion occurs and radiation is released, people are worried.

I would like us to dig a little deeper. I understand that you see things from the point of view of the industry. No one wants things to work badly, even if they want to make a profit. I understand that. So safety must be the priority. In any case, it is up to the regulators and to governments to ensure that checks and balances are in place in this area and to ensure that things go well.

Ms. Carpenter, you said that Canada's nuclear facilities are safe. We know that there are several plants in Ontario and that we have to face certain realities in New Brunswick and at Gentilly, in Quebec.

Do you think it will require a lot more money to ensure that we never have a Fukushima here? Or do you believe that what we currently have is sufficient and that we need not be concerned?

I am talking about construction and additional investments.

[The Chair, Conservative, Leon Benoit]

Ms. Carpenter, go ahead.

[Denise Carpenter]

Thank you.

As we said earlier, it's a highly regulated industry. We have a safety record.... Duncan Hawthorne said 30 years, but it's actually close to 50 years of safe operation. We have never had people die due to radioactivity in Canada. So just based on that history, it's a safe industry.

As Mr. Hawthorne indicated, we have an engineering process and a regulatory process that respects that. And I turn it to Mr. Hawthorne to talk to specifics around the safety and some examples at his plants.

[Duncan Hawthorne]

Yes, there have been some questions in response to this event. Would we have to re-engineer much of our equipment and plant, and would that then add to the cost of it?

While it's not a final outcome in terms of all of the causal factors in Japan, our view would be that our plants are designed to meet what we would consider to be credible design-basis faults. Once we have carried out the review we've been asked to do with the regulator, it will be our job to confirm that the design basis is sound.

We are pretty confident that will be the case. I still expect there'll be a number of lessons learned, but I don't expect them necessarily to be capital-intensive lessons. I expect they will be lessons about how you manage a multiple event, because obviously this is a site with four units, all together. So if you have an event in one, then it actually can escalate to all four. And obviously in Ontario we do have units.

For my own plant, of course, many parallels have been drawn because we actually do have six operational units, much like the plant at Fukushima. When we return our other two units to service shortly, we will have the largest power plant in the world in one place, in Ontario.

So I think there will be lessons about how our emergency management system copes with all of this generation in one place, and whether our plans are adequate to address that. But I think it is already clear to me that there will not be major plant requirements.

For example, if you think about the Fukushima plant, to make it more tsunami-proof, if I can say that, it would simply have been a matter of repositioning some of the equipment at a higher level. It wouldn't have been about purchasing more equipment. So some of those things would obviously be taken into the design for a new build.

[Denis Coderre, Liberal, Bourassa, QC]

I'm not looking to compare, because they are two totally different things. But I think it is legitimate to ask some of those questions, because we never know specifically regarding earthquakes and all that. Of course you have your own grid of worst-case scenarios and what you have to plan and what to do. But because this is a public standing committee and there are a lot of people who are, I hope, listening to us and they have a lot of questions without any answers, I think reassuring people is also part of our job.

Do we have some technique to make sure or do we have kind of a map of what might happen for natural catastrophes? Do we have in some of the reactors and the placement of those reactors vis-à-vis...? We never know. Today we're talking about the Champlain Bridge and there are some experts who say it might fall down if something happens. We don't want the worst, but we want to expect and try to figure out what is the reality of the situation right now.

[Duncan Hawthorne]

Just to give you an idea of how that comes about, of course, there are two separate things that you consider. One is the design of the plant and the second is the location of the plant. In the licensing basis for the plant, you have to meet the licensing standard, which will include a lot of your design criteria and design basis stuff. Separate from that, you have to do an analysis of the suitability of the location. I said I wouldn't do this, but Pierre Tremblay is going to speak after me, and of course he will speak about the new build process at Darlington. An environmental assessment there will be assessing the suitability of this location for a nuclear plant, and all of the questions about how the site meets those criteria have to be met in order to pass the EA test.

[Denis Coderre, Liberal, Bourassa, QC]

You mentioned, Madame Carpenter, that we are not recycling the nuclear waste and that it might become energy there eventually. But there is an issue of managing nuclear waste. Now we have to transport them up to Sweden to recycle them.

Do you believe that now Canada needs to take a look at other recommendations--and it's not just for Bruce Power, it's for the overall--to have a better policy for nuclear waste and recycling?

[Duncan Hawthorne]

Maybe I'll deal with it, because sometimes things get mixed up in our minds. Firstly, in terms of spent nuclear fuel, there is a Canadian policy. It's called the adaptive phased management policy, and of course the Nuclear Waste Management Organization are actually tasked with developing a location here somewhere in Canada to store spent nuclear fuel, which would be high-level waste.

There is of course a proposal to build an intermediate-level waste storage facility, which again Pierre can speak about, because this is an OPG situation, but the intention is that this deep geological repository will also go through an environmental assessment. The steam generators are low-level waste. The last time I appeared before the commission I talked about that.

We have to be clear that there are really three things. There's high-level waste, where there's already a Canadian policy approved, adaptive phased management, to find a location and store; and in the meantime we store on site, either in spent fuels or in dry fuel containers. If you come to any of our sites, you would see those in operation. And then there's intermediate-level waste with a deep geological repository, and low-level waste is all about volume reduction. Our intention with the steam generators was to achieve that volume reduction.

[The Chair, Conservative, Leon Benoit]

Merci, Monsieur Coderre.

Now to the Bloc Québécois, for up to seven minutes. Monsieur Pomerleau.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you, Mr. Chair.

Thank you, Mr. Hawthorne and Ms. Carpenter.

As my colleague was saying, given what has just happened in Japan, it is almost impossible to avoid the issue of security. We are discussing security in terms of management, operations and storage. Many questions are being raised. We speak for the people raising them. That is more or less what we would like to know.

Mr. Hawthorne, I would like some clarification from you. What does Bruce Power do in a nuclear power plant? Is the owner, the manager or the builder? What is Bruce Power's role? What is its status?

[Duncan Hawthorne]

Bruce Power actually leases these assets from Ontario Power Generation, so we're the lease operator. We have a lease for the entire operational life of the site. So the assets are still owned by the Province of Ontario.

[Roger Pomerleau, Bloc, Drummond, QC]

You manage it.

Ms. Carpenter was saying earlier that there are almost no emissions into the environment and that they themselves largely take care of the storage and management of the tiny amount of spent fuel.

The generators we are talking about are enormous—given the other waste, I imagine. How is it currently stored on your site? Is it regulated by the government? Is it stored in a special way? Is it safe?

[Duncan Hawthorne]

Yes. With respect to spent nuclear fuel, the system is as follows: We refuel our CANDU plants continuously on load. We move our fuel. We store it on-site, underwater. We have a fuel base with a capacity sufficient to take about 25 years of normal operation.

I think many of you would be somewhat surprised to see the volume of waste that's been generated in such a long operating period. It's not as large as perhaps people might think. Over the last three or four years we have been moving fuel progressively from this underwater storage into dry fuel storage casks, which are effectively lowered into the water. So all this fuel is handled underwater. It's put inside a concrete cask. The water is then evacuated, and they are stored and sealed. They are all transported within the Bruce site into dry fuel storage concrete casks, which are capable of storing the fuel for up to 100 years.

This is an integral part of the adaptive phased management program. For example, fuel can come from the reactor. It can stay in the fuel bay for 25 to 30 years. It can then be moved into concrete casks, which again can be stored on the site for 100 years. The intention of the adaptive phased management is that after this, they will then be moved to a central location, which has yet to be determined.

All that is managed by federal regulation. Everything we do on the site is part of federally regulated activity. We are the licensee for the site, so whether we own the assets or not, as a licensee we are bound by the federal regulations for all those activities.

[Roger Pomerleau, Bloc, Drummond, QC]

So your activities are regulated. You comply with government regulations.

Are the storage methods ones that you decide to use when you lease the facility? Do you make a commitment to store spent fuel in a particular way in advance when you become the lessee?

[Duncan Hawthorne]

No, this arrangement is consistent with what the industry does generally. The difference between North America and the rest of the world is that other parts of the world take their spent fuel and recycle it. We in North America choose not to recycle fuel, so we store it.

The reason we don't recycle goes back to the Cold War in the mid-1960s, when the U.S. decided they did not want to recycle spent fuel. From that point on, North America has been in a storage-only situation. Once we got into that situation, the fuel pools were not sized to keep fuel forever, so the dry fuel storage is the obvious next step, to take them from the fuel pool and store them in these concrete casks. That's an industry practice, and it's happening across North America.

[Roger Pomerleau, Bloc, Drummond, QC]

Let's discuss operating costs. Ms. Carpenter was telling us that the storage of waste, the residue of the combustion process, is taken into account in the operating costs of the plant. Probably, at the end of the day, the customer pays. In your case, are the storage costs for all of these generators actually calculated into the operating costs?

[Duncan Hawthorne]

It's an important feature about our industry that everything in the cost of power includes the long-term storage of spent fuel but also a provision to meet the decommissioning costs for our site—for example, for every megawatt hour, we have to set aside 0.92 of a dollar to meet our spent fuel costs and our decommissioning liability.

As part of the total costs for our facility, we have to manage all of our operating costs and all of our other expenses, but we also have to set aside a provision for the decommissioning of a facility. The amount is actually assessed by our regulator. If the amount increases, then we have a regulatory obligation to meet that shortfall. We also have a requirement to fund spent fuel storage.

[The Chair, Conservative, Leon Benoit]

Merci. We're out of time.

Mr. Cullen, for up to seven minutes.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thanks, Chair.

And thank you to our witnesses.

This is taking place in the context of the tragedy that's going on in Japan. It's a confluence of timing that this committee is talking about energy security in Canada and how nuclear power fits into that question of security.

When we deal with energy security, two of the fundamental principles we deal with are safety of the energy supply and cost. I think those are fair definitions that we work with. We're also talking about public support for various options in power generation. Does the public want to see windmills? Do they want to see solar, gas-fired, nuclear, and what not?

We met with the nuclear regulator this morning.

When Japan built that reactor, the specifications were not up to a 9.0 magnitude earthquake. The specifications were below that. Is that your understanding?

[Duncan Hawthorne]

Yes, that's correct.