Natural Resources Committee on March 30th, 2010

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

I wish it were in better circumstances.

Is that $8 billion figure in dollars adjusted over time, or is it just total net dollars contributed to AECL over the years?

[Hugh MacDiarmid]

To be honest, I wouldn't know whether those have been adjusted or not.

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

They're not, so in adjusted dollars we're talking about a $19 billion investment since the early 1950s. The notion that the government would then put the sale of such an asset into a budget, excluded from any sort of consideration of the net benefit for Canada, should be offensive to anyone who ever contributed a dollar to AECL over the last nearly 60 years.

Mr. Regan asked earlier about the various status updates on this repair. I'll take us through a little memory lane here, and these quotes are all directly from your updates, so I'm not putting anything in here. In May 2009 the anticipation was for more than one month, so that pushes us forward to June 2009. At least three months was the update in status report number six, pushing us to September; then a month later, in July, “it is now clear that the NRU will not return to service before late 2009”. That's another adjustment; we're now looking at maybe November or December. Two months after that, in August, you say “the NRU will return to service during Q1 2010”, so that's another adjustment.

Then status report number 34 in December, several months after that, says we're pushing it right to the very end of that quarter, meaning the end of March; in early January we hear it could extend to April, and two weeks after that, status report number 40 says NRU's target return date is confirmed as April.

Then in February, a month later, we learn it will be the end of April; in March, it will be during the second half of May. On March 17, a week later, you say AECL is currently revising, so just a week went by between the update to the public saying it would be May for sure until you were saying to hold on because you were revising. Then the most recent announcement, on March 25, which was update number 48, says “NRU will resume isotope supply by the end of July”.

It's 700% over budget. I fail to see how this doesn't affect the reputation of the organization in its ability to make accurate predictions about its own viability. Today you've informed us that it's 60% finished, yet the most challenging work is still ahead.

I'm deeply concerned. Neither of you is in the health field, nor are many of us, but we understand the impact on Canadians of not having a reliable isotope supply in order to be able to access reliable and safe diagnosis.

The record I just read is not one to be proud of, I would suggest. It's 700% over budget. There have been constant delays, and announcements of further delays. Canadians are feeling the impact and the concern when, as they saw just last week, operations and procedures are cancelled. I don't know how this does anything but hurt the reputation of this organization.

[Hugh MacDiarmid]

I do feel compelled to ask you to clarify your statement about being 700% over budget. That's certainly a number that is nowhere near, in my view.

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

The budget of AECL, writ large, has been as follows: in 2006 it went up 8%; in 2007 it climbed 105%; in 2008 it climbed a further 263%; and in 2009 it went up 674%.

[Hugh MacDiarmid]

This is the government funding in aggregate.

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

That's correct. Much of this was allocated in supplementals toward the Chalk River project in order to assist in the repair and cleanup of the situation.

[Hugh MacDiarmid]

In the supplementals the Chalk River project was clearly identified, I believe, as having a $72 million cash requirement associated with it. To put it in context, the NRU repair is indeed a significant amount of money, and we take that responsibility seriously, but it's not the totality of the funding requirement for AECL by any stretch.

Your reiteration of the schedule guidance is indeed a painful journey for us. At the same time, as I said, each and every one of those guidances was carefully considered and thought through. It was based upon the evidence we had available.

Again I will point out that the first time we put out a schedule envelope was in August, when we said Q1. Prior to that, we had said at least x number of months or at least y--

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

They were all minimums up until that point, and then you started setting deadlines.

[Hugh MacDiarmid]

They were minimums, which reflected a very real uncertainty that has now been borne out. Clearly we're dealing with a very uncertain situation.

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

You can understand why Dr. Turcotte expressed no confidence in the organization's ability to predict when these isotopes will be produced again. You can understand that.

[Hugh MacDiarmid]

We can only do our best and we can only assure you that we have consulted available expert advice and independent counsel in formulating our external guidance. We also have a commitment to transparency, which inevitably forces us into a situation where we have to deal with the fact that the goalposts will move as the evidence unfolds. That is regrettable, but we could not come up with a better approach to being transparent and consistent in giving you guidance based upon facts and evidence, as opposed to guesswork. So we're condemned to this fate because of the nature of the project.

I can understand that observers would have their confidence shaken by the way this has unfolded. All we can do is to be forthcoming and to come to this committee and do our level best to explain to you the situation, as we are doing today. Obviously, I sincerely hope that the last guidance we need to give to you will, indeed, be at the end of July.

[The Vice-Chair, Liberal, Alan Tonks]

I have to interrupt, Mr. Cullen. We're out of time on that one.

Thank you, Mr. MacDiarmid.

We will go to Ms. Gallant.

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

Thank you, Mr. Chairman.

I'll be sharing my time with Mr. Anderson.

Through you, to our witnesses, thank you for coming today and also for the updates that you have been giving to the stakeholders in the surrounding communities. The people in Chalk River, Deep River, Pembroke, and Petawawa feel that the NRU and the work that AECL does is part of their community. They feel some responsibility, not only because of the workers but also because we have family members there who are dependent on cancer diagnosis. That's what I'd like to focus on, as opposed to the cost or the politics of it, but the people. This is why it's such an urgent matter. Even cancer patients who are not impacted by the shortage are still worried about it because of the complexity involved, and it causes extra anxiety for them even though the NRU did develop the cobalt treatments, which patients are receiving in good order.

You mentioned and showed us how the repairs are complex and that there is little margin for error and that a lot of practice welding takes place before you actually weld in the vessel.

Can you tell us what kinds of errors you're guarding against and the consequences of different kinds of errors, and how the proximity to the NRX has been of benefit, if it has? Has this process we are going through, this learning, fixing, delaying process, been helpful to other older reactors going through the same process? Because they do help patients, including Canadian patients.

[William Pilkington]

Yes, I'll see if I got the entire question. First of all, you asked about the types of errors that we need to guard against. There are really two concerns in doing the repairs. One is, if we do a repair that results in excessive stress on the vessel wall, there is a mechanical seal that sits about six inches below where we're doing the repairs, and if that seal is disturbed, then it would be very challenging to reseat it on a reactor of this age. So a lot of effort has gone into developing stress models for the vessel and running through different repair scenarios to find the ones that give us the least stress on that lower seal on the vessel. So that's one of the challenges.

The second challenge is that if an error is made in the welding in the vessel, and if the wall is damaged, then we need to back out, and that essentially becomes a new repair site. We would then have to design the repair for the damage that was done. We would have to go through the whole process--the stages of development, qualification, integration, testing--so that could easily add months to the process. So it's critical that we get the job done right the one time we're in the vessel. To say we've done eight out of ten so far, and we're doing the ninth today.... It is going well. We believe we have the right amount of preparation.

On the proximity to the NRX, yes, we've actually used the NRX. It's geometrically quite similar to the NRU in terms of the layout, so we were able to build a mock-up there early and start practice. It's in an environment where, with that part of the NRX, there's no radiation field, so the workers can work at the right height, in a similar environment, but without any radiation present. So that's been very helpful.

Finally, in terms of the benefit, we've developed a lot of first-time tooling for this job. One of the biggest challenges was in fact to be able to design, build, and commission all of the tools required to do this repair. While it may not be directly transferable to other reactors, the remote repair techniques that have been developed here are generically applicable to many, many situations. So that will be a benefit when other companies or reactors come to AECL to help with inspections or repair. The tooling development and the vision systems that have been developed for this will be of great benefit.

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

Thank you.

[The Vice-Chair, Liberal, Alan Tonks]

Mr. Anderson.

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

Thank you, Mr. Chair.

This is a complex piece of machinery to shut down and start up again.

I guess you talked, Mr. MacDiarmid, about a commitment to transparency. I would like to know how confident you are that the goalposts aren't going to be moved again. Are you confident you've found all the problem areas and that we're not going to be back here again later this spring talking about August, September, and October?

[William Pilkington]

I'm very confident that the inspections that have been done have shown that, structurally, the NRU is in very good condition and is fit to return to service and operate well through the next licence period. The challenge that we face is starting up a reactor that will be shut down for over a year. That does present problems. Although the systems and equipment are in a lay-up state, we need to get them all going and find any problems that might exist early in the game. To do that, we have a return-to-service program that is actually in progress now, in parallel with the last repairs. We have a total of 35 systems, and we will bring all but seven of those back into service more than a month before the reactor itself can be started up. The idea is to get everything back in service as early as we possibly can, so if there are any challenges, we can get them addressed early before they have an impact on the schedule.

I would also point out that the types of equipment problems that could occur in the start-up are relatively small in impact when compared to the repair we just completed. So we could find that days are required in order to address an issue that comes up during start-up, but we're not talking about weeks and months here. That is why we have put some prudent contingency into the schedule.

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

You've talked about the fact that you have 60% of the weld done. How long do you anticipate the other 40% taking?

[William Pilkington]

The challenge in the last repair is that we need to go through the rest of the development phase, and then we need to do the qualification and testing. The size of this repair, to weld a single coupon for this repair, will take five days working around the clock. We need to do a number of these coupons in order to prove that we have the process, that it's practised, that we can complete it reliably. Between the development and the qualification and reliability testing phases, it will be essentially a month of work before we're ready to go to the reactor.

[The Vice-Chair, Liberal, Alan Tonks]

Mr. Anderson, I'm going to have to stop you there.

We have another committee that's coming in. I wonder if we could bring this part of the meeting to a close and I will thank our deputants on our behalf.

I was going to try to talk about our meeting on Thursday. At this time we don't have any deputants. It's going to be a business meeting. I thought members might like to talk about that. Otherwise the chair can have another seven minutes of questioning.

Do you want to do that? Okay, then we'll come to a close at 11 o'clock, because the other meeting will be coming in. We'll have two and a half minutes, as we did in the last round.

Is that okay?

Mr. Anderson.

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

Then, on Thursday, we're just planning to show up and have an in camera meeting.

[The Vice-Chair, Liberal, Alan Tonks]

That's right.

Are we understood on that?

Good. Then we'll go to Mr. Bains.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Thank you very much, Chair.

It's good to see you gentlemen again here before the committee.

My question is with respect to the budget bill, which indicates an outright sale of AECL, possibly to foreign investors. What's being sold, what will be left with AECL, and have you been consulted?