Natural Resources Committee on May 15th, 2012

[The Vice-Chair, NDP, Peter Julian]

Hello. I'm Peter Julian, the vice-chair who is temporarily replacing our chair, who is en route.

We would like to thank our witnesses for coming today.

We have Martin von Mirbach, director of the Canadian Arctic program of the World Wildlife Fund. From Babcock and Wilcox Ltd., we have Christofer Mowry and Christopher Deir, president and manager, respectively. From the Canadian Nuclear Safety Commission, we have Michael Binder, president and chief executive officer; Barclay Howden, director general for the directorate of regulatory improvement and major projects management; and Patsy Thompson, from the directorate of environmental and radiation protection and assessment.

Thank you all very much for coming here today.

We will start with the Canadian Nuclear Safety Commission.

Mr. Binder, you have 10 minutes. Merci beaucoup.

[Dr. Michael Binder, President and Chief Executive Officer, Canadian Nuclear Safety Commission]

Good morning, Mr. Chairman, and committee members.

My name is Michael Binder. I am the president of the Canadian Nuclear Safety Commission. It is indeed a pleasure to accept your invitation to be here today to explain what the CNSC is involved in and how it relates to the committee's study of resource development in Northern Canada.

The CNSC is Canada's nuclear regulator with the mandate to protect the health, safety, and security of persons and their environment and to implement Canada's international commitments on the peaceful use of nuclear energy. Furthermore, the mandate includes the dissemination of objective scientific information. The CNSC carries out its mandate under the Nuclear Safety and Control Act, the NSCA.

The CNSC is an independent quasi-judicial commission that regulates all things nuclear in Canada, including uranium mining, nuclear fuel fabrication, nuclear reactors and power plants, the production and use of medical isotopes, and the decommissioning and remediation of nuclear sites.

As you can see, the CNSC is involved in several areas that relate to resource development activities. But first let me give you a quick update on our response to the Fukushima nuclear accident in Japan.

I'm sure you're all aware of the massive earthquake and tsunami that hit Japan in March 2011 and the impacts on the Fukushima Daiichi nuclear plant. The CNSC immediately formed an internal task force to assess whether lessons learned could be applied to the Canadian nuclear facilities. Its recommendations were presented to the commission tribunal on May 3. While the task force found that, overall, Canadian nuclear power plants were safe, recommendations for safety enhancements were presented for the commission's consideration.

Today, however, I'm here to give you a brief overview of the CNSC's perspective on environmental protection, uranium mining, aboriginal consultation, and small power reactors.

As I mentioned, the CNSC is a safety regulator and its mandate under the Nuclear Safety and Control Act includes protection of the environment. This means that we always examine the potential impact on the environment whenever a licence application is before the commission.

We are experts in doing environmental assessments. Since 2003 we have completed, or are now conducting, 66 environmental assessments. We've just completed the joint review panel study of the Darlington nuclear plant new-build project. The joint review panel for the deep geological repository is currently under way.

The environmental assessment process in Canada's three territories is a bit different from in the rest of Canada. It is carried out under specific legislation or land claims agreements such as the Nunavut land claims agreement. In the case of Nunavut, the Nunavut impact review board runs the environmental assessment process and the CNSC staff provide the technical support. If the environmental review results in the project being given the green light, then the CNSC will take into account the environmental assessment recommendations when it licenses the project.

The CNSC has been regulating uranium mining in Canada since the mid-1980s. The legacy of Canada's mining industry has often been to abandon the projects when the ore body is exhausted. Part of the CNSC's focus has been to bring abandoned uranium mines under regulation and remediate them so that they are not an ongoing safety or environmental risk.

Most of Canada's uranium mining activity is currently taking place in northern Saskatchewan, but there are proposals being considered with the Matoush project in northern Quebec and the Michelin project in Labrador.

In recent years there has been greater interest in Canada's north for its uranium reserves and the potential economic benefits which this activity holds; with typically around 50% of the workforce being northern workers.

Although there are other potential projects, only one, Kiggavik, is moving ahead at the present time. It is still in the environmental assessment stage, which is being led by the Nunavut Impact Review Board.

Again, let me emphasize that the CNSC will not license these projects unless they are safe. The CNSC is a hands-on regulator, and we will ensure that our licensees are operating safely and are meeting the licence conditions while they are in operation. Our regime includes annual inspections and reporting on compliance. Licensees also have to provide financial guarantees up front, which ensure that they have the required financial resources to properly clean up the site when they terminate their mining operations.

With respect to aboriginal consultation, the CNSC is an agent of the crown and is committed to fulfilling the crown's duty to consult with Canada's native people. We are proud to have developed a proactive and transparent aboriginal consultation policy. In March 2011, we launched our participant funding program to make it easier for the public, including aboriginal groups, to participate in our regulatory public proceedings.

Mining development in the north will require reliable sources of electricity and one alternative being talked about is small nuclear reactors. The CNSC is ready to review a design if a proponent brings us an application; and we will license it if we are convinced that it will be safe.

At the present time, two vendors have applied to us for design review. There is the Babcock and Wilcox mPower and the NuScale reactor system. We have had some very early discussion with other vendors. None of these designs will likely be ready for a licence-to-construct application for another three to five years, in our view.

There is a lot of global activity currently under way in the development of small reactor technology. For example, the U.S. Department of Energy has earmarked $450 million for the Nuclear Regulatory Commission to support the licensing of American-made small reactors and to demonstrate that the technology is viable.

You may be surprised to know that there are several small reactors already operating in Canada and the CNSC has decades of experience regulating and licensing these units. I'm referring of course to the small reactors known as SLOWPOKE, which are found at five university and research facilities in Canada. In fact, Canada was a pioneer in the development of these small reactors. They are safe and they continue to run reliably.

In closing, the CNSC is actively involved in issues relating to resource development in Canada's north.

Safety is our number one concern, both for human health and the environment. We will not license a facility if we are not convinced it will be safe.

I'd be pleased to answer any questions you might have.

Thank you. Merci beaucoup.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. Binder.

We will go now to the second group to present today, from Babcock and Wilcox mPower Inc., Christofer Mowry, president; and Christopher Deir, manager, Babcock and Wilcox Canada.

Mr. Mowry, I understand that you have to leave by 10 o'clock.

[Christofer Mowry, President, Babcock and Wilcox mPower Inc., Babcock and Wilcox Ltd]

Approximately. Yes.

[The Chair, Conservative, Leon Benoit]

If questioners could remember that.... But Mr. Deir will be staying around to answer questions.

Go ahead with your presentation, for up to 10 minutes, please.

[Christofer Mowry]

Mr. Chairman, and members of the committee, thank you for the opportunity to testify today.

As you said, my name is Chris Mowry, and I am the president of Babcock & Wilcox mPower, a business unit of The Babcock & Wilcox Company. I am also the president and chairman of Generation mPower LLC, a majority-owned subsidiary of B&W.

I appreciate the opportunity to present testimony today on the promise of small modular reactors and to describe our innovative B&W mPower reactor, which is an advanced, passively safe, and economic alternative for the Canadian market. I will focus my remarks on the technical, safety, and economic attributes of SMRs and their potential applications in Canada, as well as on some related challenges.

B&W has more than 50 years of continuous nuclear engineering and nuclear manufacturing experience, in the U.S., Canada, and around the world. We provide customers with manufacturing and nuclear-related services from 17 facilities across North America and operate nuclear manufacturing facilities in Indiana, Ohio, Virginia, and Tennessee in the United States as well as in Ontario and Saskatchewan in Canada. We currently employ more than 1,000 workers at B&W Canada, which is our wholly-owned Canadian subsidiary in Cambridge, Ontario. We employ directly and through our joint ventures approximately 12,000 nuclear professionals across North America.

Today’s North American reactors operate at a remarkable level of safety, making the U.S. and Canada global leaders in nuclear safety and security. In the wake of the devastating earthquake and tsunami in Japan and the resultant emergency at the Fukushima-Daiichi nuclear plant, the nuclear community, including regulatory agencies, industry, and the general public, is evaluating what additional layers of safety are appropriate to mitigate these types of challenges. Our efforts to work together to learn from Japan’s experiences will help make tomorrow’s nuclear technologies even safer than they are today.

The B&W mPower SMR offers significant safety enhancements to current safety goals through the use of an inherently safer plant architecture and significant defence-in-depth systems. These design features can be summarized in five points. First, there's an integral nuclear steam supply system that has no large penetrations in the primary cooling circuit, which is a design that eliminates the possibility of typical worst-case loss-of-coolant accidents. Second, it has a small reactor core with a low power density and a large water inventory, a design that provides a large buffer against short-term challenges to core cooling. Third, it has a containment and a reactor building that is fully embedded underground, a design that effectively isolates the reactor and all emergency cooling water sources and safety systems from natural disasters and external threats such as what occurred in Japan. Fourth, there are no requirements for AC power, emergency diesel generators, or pumps for any of the safety systems; this is a design that instead uses natural circulation to remove decay heat. Fifth, it has a fully protected spent fuel pool with very large cooling water volume located deep underground, which is a design feature that provides protection for spent fuel similar to that provided for the reactor core itself.

Taken together, these SMR design features result in a reactor that will be two to three orders of magnitude safer than the current U.S. Nuclear Regulatory Commission requirements mandate. The design creates a 14-day safe haven before any outside intervention is required to maintain reactor cooling and more than 30 days of inherent protection before the spent fuel pool could experience any exposure of the fuel. Furthermore, our SMR design requires no emergency operator action for the first 72 hours after an emergency shutdown, which is best in class for all advanced light water reactor designs, large or small. This feature allows the operators to focus on long-term mitigation of events.

The events at Fukushima were, more than anything else, the result of the plant site and location. The SMR industry is in a unique position to efficiently incorporate both design and regulatory lessons learned from Fukushima into our designs. We have an ongoing and extensive effort to evaluate the mPower SMR design in the context of what we are learning about the events at Fukushima. Our evaluation is confirming that the safety performance of our design is extremely robust when confronted by an extreme Fukushima-type event.

I'd like to emphasize that the success of SMRs does not require any changes that would weaken existing or proposed regulations that may be forthcoming in light of Fukushima. While the way in which an SMRs design meets regulations may differ from that for large reactors, the underlying safety requirements are exactly the same.

We are currently engaged in an extensive test program to provide regulators in-depth data to evaluate the safety of the mPower reactor. This includes our dedicated integrated systems test facility, which is an unfueled, scaled, prototype reactor system. We expect testing, which represents a significant investment on our part, to demonstrate to regulators, potential customers, and public stakeholders that the B&W mPower reactor will far exceed current safety requirements.

We are currently working with both the NRC and the CNSC on pre-licensing activities involving early reviews of our design, before starting our formal licensing activities. We are on track to submit a formal Design Certification Application in the U.S. by the end of 2013. We remain committed to placing the first B&W mPower units in service before the end of 2022 in the U.S. and to support in-service dates in the mid-2020s here in Canada.

With regard to economics, B&W would not be investing our own resources in this effort if we did not believe we could produce a very competitive product and create a viable business model. Market analysis concludes that the global addressable market for small modular reactors ranges from 100 to 125 gigawatts through 2020 for baseload carbon-free electricity. SMRs directly address the key challenges associated with the construction of large nuclear plants, including financial risks, cost and time uncertainty, production bottlenecks, and expensive power grid upgrades.

This is achievable through a paradigm shift from economies of scale to factory assembly of simplified, integral reactors in a manufacturing setting. Through this shift, we believe we will be able to offer SMRs to our customers without any cost premium for going small: we can compete with any new-generation large reactor design. Based on our large experience in manufacturing small reactors, we believe we can achieve our cost-efficiency targets in fewer than 10 modules.

In addition, we formed a consortium comprising 15 U.S. utilities, with a larger industry advisory council of 28 utilities, including three Canadian utilities. We are working closely with all of these and with our engineering, procurement, and construction partner to validate the economic value of our reactor. This process has allowed us to conclude that not only is our design competitive with traditional nuclear, but it provides substantial economic benefits over intermittent renewable resources.

In Canada, existing and proposed environmental legislation has highlighted the potential for nuclear power in areas that have traditionally relied on baseload coal-powered generation. The Ontario government’s decision to shut down all coal-powered generation in the province by 2014 creates a potential baseload deficit in the northern regions of Ontario. At the same time, continued growth, such as the recently announced plan by Clifford Mines to develop a ferrochromite facility in Sudbury, can be expected to require significant expansion of reliable baseload generation. Similarly, western provinces’ reliance on coal power will require options to meet expected demand growth in those regions. These needs are specifically what the B&W mPower reactor was designed to accommodate. We look forward to working with Canadian utilities and developers to ensure that our design is considered in future deployment plans.

There are two issues that could potentially impact upon our deployment of mPower technology in Canada. These are the current nuclear liability regime and the process for conducting environmental assessments for nuclear in Canada.

To align Canada with international standards, it is vital that Parliament promptly complete action on amendments to the 1970 Nuclear Liability Act and that Canada ratify the Convention on Supplementary Compensation for Nuclear Damage, known as the CSC. The CSC is an important International Atomic Energy Agency initiative to commit the international community to common and high standards for handling nuclear facility accident claims.

The September 2011 IAEA action plan on nuclear safety calls on member states to become part of a global nuclear liability regime. The four bills introduced since 2007 were generally consistent with the CSC but require a few technical changes to ensure alignment with the requirements of the CSC. The CSC was ratified by the United States in 2008.

Prompt CSC ratification by Canada would address nuclear liability issues; attract international contractors for power reactor life extension and new build projects; and drive further Canadian nuclear exports, which we would participate in, helping to preserve Canadian nuclear jobs and infrastructure. The CSC has already been ratified by Argentina and Romania, two countries where B&W Canada and other Canadian nuclear suppliers have done significant amounts of work.

We applaud the recent decision of the federal government to accept the recommendations of the review panel for the new build in Darlington. While we're fully supportive of a robust and thorough environmental assessment, it’s imperative that the process be predictable and provide value. The recent example at Darlington began six years ago, and final issue of a licence to prepare the site is still to come, demonstrating the need to ensure the process works for the benefit of all involved.

I'd like to close by noting Canada’s leadership in nuclear power generation. The Canadian Nuclear Safety Commission is one of the most respected regulators in the world, an independent body without influence from special interest groups and one that ensures that any project under its purview is undertaken with one objective: the safety of the Canadian public. The nuclear regulatory regime in Canada is mature and well understood by us. This has given B&W the confidence to begin pre-licensing activities with our mPower design in Canada. We believe our design will receive a fair, impartial, thorough, and timely review.

Canada’s long history in nuclear technology, including the development of the successful CANDU reactors, nuclear medicine advances, and a robust nuclear supply chain, gives B&W and the rest of world confidence that Canada can support new nuclear now and in the future.

Thank you for the privilege of testifying today. I'm happy to answer any of your questions.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. Mowry, for your presentation.

We'll go now to the third and final presentation for today.

From the World Wildlife Fund Canada, we have Martin von Mirbach, director of the Canadian Arctic program. Go ahead please, sir, with your presentation.

[Martin von Mirbach, Director, Canadian Arctic Program, World Wildlife Fund (Canada)]

Mr. Chairman, committee members, thank you for inviting the WWF to appear before you today to contribute to your important study on resource development in northern Canada. I'll limit my remarks this morning mainly to offshore oil and gas development in Arctic waters, informed by past experiences in the Mackenzie Valley as well as offshore developments elsewhere.

WWF's mission is to stop the degradation of the planet's environment and to build a future in which humans live in harmony with nature. With 150,000 supporters across Canada and 5 million worldwide, we have an outstanding history of partnership with government and industry in Canada and globally.

Today, as we address this committee, WWF is releasing its eighth Living Planet Report in major capitals and business centres around the world. The key findings of this latest report are that while the global demand for natural resources has doubled since 1966, biodiversity has declined by roughly 30% over the same period. The economic and human costs of poor stewardship in an increasingly populated world could be devastating to the prospects for society and the world's economies.

The WWF recognizes and supports the need for carefully planned economic development in the Arctic, in particular, development that provides long-term sustainable benefits to northerners. We also acknowledge that Arctic development is being contemplated in the context of a projected growth of 500 new projects nationwide in the coming decade, attracting $500 billion in new investments. More than ever, now is the time for our government to step forward and demonstrate convincingly to Canadians that there is a regulatory and policy regime in place that is equal to the task of planning, assessing, and implementing these new projects in a manner that conserves key environmental and cultural values and minimizes conflicts with other social, economic, and environmental objectives.

For example, one key cross-cutting objective is the urgent need for effective action to address climate change, which requires national leadership and coordinated global action. The WWF has published a study, The Energy Report: 100% Renewable Energy by 2050, that charts the potential to achieve a renewable energy future. In this context, new investment in high-cost, high-risk fossil fuel developments is arguably questionable public policy, particularly if it is not accompanied by more effective mitigation actions for national climate change than we've seen to date.

Recent measures embedded in Bill C-38 are designed to accelerate the project review and approval process. An effective and streamlined regulatory approach is certainly a laudable goal, but only if it actually achieves the objectives of the review process—to understand the potential negative impacts and avoid, minimize, or mitigate them. In the case of Arctic offshore oil and gas development, there are reasons to believe that a more cautious approach is appropriate that, if done right, would potentially be beneficial.

Last year we participated in the National Energy Board's review of offshore oil and gas regulations in the Arctic and made several detailed submissions. Our key recommendations are summarized in the presentation we made to the NEB round table in September 2011, a copy of which has been shared with you. This morning I'll simply note a few of the knowledge and technology gaps that exist in the Arctic context.

Compared with other regions of Canada, the Arctic has relatively sparse environmental baseline data on species distribution and abundance. This dearth of information is compounded by the accelerating impacts of climate change in Arctic waters, with significant uncertainties about how ecosystem components will respond to those changes. The impacts of unprecedented new developments in Arctic waters add a further degree of uncertainty to the picture.

It is encouraging to note that the Beaufort regional environmental assessment, although misnamed since it has no assessment mandate, will address many of these knowledge gaps during its five-year mandate. As well, the WWF has recently published an analytical tool for identifying and mapping features that support ecosystem functioning in a changing Arctic.

The challenges of operating under arctic conditions are well-known: woefully inadequate logistical and support capabilities, with technical crews and equipment far distant and difficult to mobilize; short operating seasons; harsh environmental conditions that strain the performance limits of people and equipment; and the unique challenges of spilled oil in icy conditions. Using research prepared for the NEB, we found that during the short summer season in the Beaufort Sea, conditions are likely to be too harsh to deploy emergency response personnel 65% to 85% of the time. Throughout the remaining long winter months, there would be no ability to carry out blowout capping or cleanup operations. The treatments themselves, including dispersants, containment, and in situ burning, are less effective in ice-infested Arctic waters.

To put it bluntly, there's currently no oil spill response capacity to address a sizeable well blowout or large-scale spill in Arctic waters. This message is echoed in a recent report from the leading international insurance company, Lloyd's, which concludes that cleaning up any oil spill in the Arctic would present “multiple obstacles, which together constitute a unique and hard-to-manage risk”, and which urges companies not to “rush in [but to] step back and think carefully about the consequences of that action”.

Lloyds is not the only business interest to question the advisability of offshore oil drilling in the Arctic. WestLB, a bank based in Germany, will no longer loan money to offshore oil projects in the Arctic. As a spokesperson for the bank put it, “the further you get into the icy regions, the more expensive everything gets and there are risks that are almost impossible to manage. Remediation of any spills would cost a fortune”.

As you can see, it's not only conservation groups who believe that we're not yet ready to move forward with offshore Arctic drilling. However, while we address the aforementioned knowledge and technology gaps we can and should simultaneously invest in the full range of preparations needed to move closer to sustainable development in the Arctic.

First, time is needed to develop and test new methods to increase the safety of operations and the efficacy of oil-spill cleanup; to strengthen Arctic support infrastructure, including search, rescue, and spill response capacity; and to provide the training needed for northerners to benefit from new developments in their territory.

Second, there are no easy shortcuts when consulting with affected parties, especially Indigenous rights holders. In this regard, I call your attention to the “Circumpolar Inuit Declaration on Resource Development Principles in Inuit Nunaat”, copies of which have been shared with you. This declaration was developed by and on behalf of the Inuit Circumpolar Council and its constituent members. It recognizes that responsible development, including from non-renewable resources, “can make an important and durable contribution to the well-being of current and future generations of Inuit”. But a common concern throughout is that the pace of development must not outstrip the capacity of Inuit to participate meaningfully in addressing the challenges and taking advantage of the benefits of development. I urge you to study this declaration and to invite the ICC to speak with you about it.

Third, the regulatory review process for offshore oil and gas activity would proceed more smoothly and with less expensive and time-consuming conflict if it occurred in the context of a previously completed regional marine spatial plan. Such a plan would consider all significant activities in an integrated way and explicitly delineate areas where activity can occur as well as sensitive areas meriting special consideration. It would be developed in an inclusive manner involving all stakeholders, resulting in an open, transparent, and accountable decision-making process that produces socially acceptable decisions. These conditions don't currently exist in the Canadian Arctic, although there are noteworthy planning processes such as the Beaufort Sea partnership that can be built upon and learned from. As well, strategic environmental assessment is a tool that can address cumulative impacts and set overall thresholds for an entire region. Investment in upfront ecoregion-wide planning ultimately results in less financial and political uncertainty.

Forth, we have an excellent opportunity to strengthen the circumarctic governance regime for offshore development. Oil spills ignore national boundaries and, therefore, it is in our strong self-interest to ensure consistent and good regulations are in place and effectively implemented throughout the Arctic. Initiatives are currently under way through the Arctic Council—the chair of which Canada will assume in 2013—to create internationally binding rules on offshore Arctic oil development. In taking part in those negotiations, Canada has an opportunity to secure the well-being of its northern people by ensuring that development in Canada and in neighbouring countries is held to the same high standards.

Fifth, we have an opportunity in Canada to develop a truly visionary Canadian energy strategy, charting a course for Canada that is aligned with this country's climate change commitments and that addresses the shortcomings noted in the recent report by the environment and sustainable development commissioner. Opening up new frontiers for oil and gas development without a long-term energy plan that tackles CO2 emissions risks pushing us further from our national goals and international responsibilities. In an increasingly carbon constrained world, this can affect not just Canada's reputation but also our access to markets for our products and services.

In conclusion, there is currently insufficient knowledge and inadequate technology and infrastructure to safely carry out drilling in Canadian Arctic waters. More time is required to address these gaps, but this necessity can become a virtue if at the same time we collectively invest in the research, planning, infrastructure, and dialogue that are the key characteristics of responsible stewardship. It may take longer for new Arctic developments to come on stream, but those developments, whatever they turn out to be, will be better planned; less contentious, with greater social licence; and less risky for investors, governments, communities, and the environment.

The WWF stands ready to work collaboratively with government and industry to chart a course for well-planned and sustainable development in the Arctic.

Once again I thank you for giving me the opportunity to share our views with you.

[The Chair, Conservative, Leon Benoit]

Thank you very much for your presentation, Mr. von Mirbach, director of the Canadian Arctic program for World WildLife Fund Canada.

Before we go to questioning I want to remind people of our study. At the last meeting I noticed a fair bit of straying, I think on both sides, from the topic that we were here to discuss. We're here to do a study on resource development in northern Canada. I would ask all members to keep their questions to the topic at hand.

We'll start the questioning with a seven-minute round.

Mr. Allen, you have up to seven minutes. Go ahead, please.

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

Thank you, Mr. Chair.

Thank you to our witnesses for being here today.

I'd like to focus a little bit on Babcock and Wilcox, since they'll be leaving at 10 o'clock.

We've heard a lot of testimony on supporting resource development in the north. A tremendous amount of infrastructure is going to be needed, and that includes energy. When I listened to your presentation on the small reactor, it was interesting. It almost sounds to me as if you're going after a niche market in rural and potentially remote areas, based on some of the plant architecture you did talk about.

Just in general, at what size, in megawatts, would you see these units, even though you're at the preliminary stage? You talked about 100 to 125 gigawatts. What are you looking at in terms of size of these units for marketing?

[Christofer Mowry]

Thank you for your question.

There are a couple of things. One of the advantages of small reactors is their siting flexibility. Our reactor is 180 megawatts, which is the baseline for one unit. That is 15% of the size of a standard, large 1,000-megawatt type plant. As a result of that, it has quite a bit of flexibility with siting, and it can support siting in more isolated communities where 1,000 megawatts isn't needed or something like that. And because it is designed to be cost competitive with the large reactors, we have a lot of interest from utilities that would traditionally want to site large reactors but can't accept the financial risks.

Designing a reactor only for a niche application would not create and close a business case for us, so we have to develop a solution that has the flexibility to be economically competitive for both large generation as well as more niche applications.

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

Have you done any preliminary work on the cost per kilowatt hour?

[Christofer Mowry]

Yes, and our view right now is that the cost per kilowatt, including the owner's cost, would be under $5,000. That's backed up by detailed civil structural cost estimates from our EPC partner.

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

Okay.

Regarding your plant architecture, a couple of times you referred to “deep underground”. In the case of the containment, you talked about the small core, big water reservoir containment deep underground. Then you talked about spent fuel disposal deep underground.

Can you define what deep underground means? How would you see the challenge of developing deep underground storage in rural and remote areas?

[Christofer Mowry]

Yes, that's a great question.

Our reactor and containment building—the nuclear island—is approximately 140 feet deep. That would result in basically a single-storey building that's above ground, similar to a supermarket, which has no safety function whatsoever. It has a number of truck bays and those types of things. All of the safety structures are embedded underground.

The key there, of course, is that they are what I will call below grade. So in locations where you have issues with deep excavation or water, it's then more about creating a berm under which the structure can be located to protect it from external threats. That's the main goal.

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

But in a traditional area, would it almost be treated a little bit like a mine in terms of it being 140 feet deep? Would you treat it typically like a mine and excavate? Would that typically be how you'd do that?

[Christofer Mowry]

Yes, and we've done calculations to look at the incremental costs of having the nuclear island completely underground. For a two-unit plant, which would be 360 megawatts at $5,000 a kilowatt, you're talking about an overall investment of about $1.8 billion. The extra cost for digging that hole is about $9 million, so it's not much. It isn't just a straight-down hole, but it necks down.

The key here is to ensure the safety performance of this thing against extreme events and extreme threats without having to have a lot of infrastructure around it, and having a high degree of confidence that the technology and the reactor are protected in a very good way.

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

Okay.

Let me ask you about the resource profile when you actually look at building these things and actually operating them. Have you done projections of the staffing requirement for the construction jobs that would be created by this and, in the long run, staffing projections as to what it would take to actually operate it?

[Christofer Mowry]

That's a great question. When you look at a truly economic competitiveness environment, you have to look at both the construction costs and the long-term operating costs, that is, with a total cost-of-ownership perspective. It's not only imperative that the construction costs be competitive but also the operating costs. Again, for a two-unit type of power plant, you're looking at a couple of hundred people to operate it in total, and that would include maintenance, operating, security, all of those types of things.

One of the features of our design is that it only needs to be refuelled every four years. It was specifically designed that way to reduce the amount of continuous on-site presence and logistics requirements. That period is approximately twice as long as the normal refuelling interval for a large non-CANDU-type heavy water reactor.

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

Good.

Mr. Binder, I want to get to the regulatory side of this a little bit in terms of some of the pre-licensing discussions you've had. We do have these SLOWPOKEs. Obviously, this reactor differs significantly from a SLOWPOKE reactor.

Do you have an idea of the average time it would take to pre-license, and even license, a reactor like this one?

[Dr. Michael Binder]

Thank you.

The way a pre-license review takes place is that we get to know each other, because a lot of these brand new designs have not been built anywhere before. As a result, there's no practical demonstration of this technology as yet. In fact, that's why I think the Americans are now in the process of trying to build such a prototype, to see how it performs in reality.

What we do is to compare the proposed design against our regulatory requirements, and to try to acquaint the proponent with our requirements for safety and security, etc. You have to understand that this is not a license to build: the vendor has to find a client, and the client comes to us with an application to build, whereunder all of those issues will be looked at.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen, and thank you, Mr. Binder, for the answer.

Mr. Julian, for up to seven minute, please. Go ahead.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair, and thank you to our witnesses here today. We appreciate your being here.

I'll start with you, Mr. Binder. You mentioned Fukushima in your presentation, and I'm going to ask you two questions about it. The first is, can you give us an approximate idea of the liabilities resulting from what happened with the Fukushima nuclear plant, the total cost of cleanup? Those estimates would be helpful to us.

My second question is on the issue of the small nuclear reactors in the north. You do flag small reactors in your presentation, the SLOWPOKE research reactors. Those are in ideal conditions, of course, in southern Canada. What's being proposed, of course, is not for the ideal conditions found on some university campus in southern Canada; we're talking about very demanding, very difficult conditions, particularly if the proposal is to have these small nuclear reactors operating as power sources to mining developments in the north. We're talking about very harsh, very difficult conditions.

When you talk about evaluation, I'd like to know to what extent the commission would be evaluating any type of application under harsh conditions? To what extent would these additional criteria be brought in, the ones that are obviously present, which would make this a more risky proposition than having a SLOWPOKE reactor on a university campus in the south?

[The Chair, Conservative, Leon Benoit]

Mr. Binder, go ahead, please.

[Dr. Michael Binder]

On your first question on the total liability, all I will give you is what I have read in the press. I think the latest figure I read in the press is that the total cost is estimated to be $100 billion. That's for everything: cleaning up the communities, the infected communities, and the facility itself, etc. I don't know the validity of those numbers. I'm not aware of those things. My answer is picked right from the press.

In our assessment, and I'll ask my colleague Mr. Howden to give you more details, it is up to the proponent, the client, to come to us with arguments about the safety case. It's up to them to demonstrate to us why the proposed facility would be safe for the environment, for people, and for security in the proposed location, if you like.

That's no different in any location. I don't necessarily see that as any different from operating a mine in the northern climate, for example, where they have to deal with some of those same kinds of harsh realities, the harsh weather, etc.—but the current proposal is to dig deep underground. We would have to look at what that means in terms of its impacts, in terms of the operation. So I cannot tell you a priori what it's going to be, but we have a definitive kind of requirement for the proponent to prove to us that it's going to be safe for the environment, for the people, for security.