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HomeMy WebLinkAboutCOM 0212.068 1996-1998 Qi1~z~l~ Irradiation Free Food Haw~i P.O.Box 11350 Hilo, HI. 96721 lsosl 966-csac ' 37 Ri ii 15 Ff1 1 April 15, 1997 COUfJI t G Hi7JJAll Dear Council Members, I am writing to share with you the following important information: 1) a letter from Senator Akaka in which he states that he is opposed to the use of radioactive materials in an irradiation facility because the risks are "unacceptable." If you have not yet received a letter from State Senator Andy Levin stating the same position, then you will soon. 2) information we recently received which can give you a sense of where the cobalt-60 for the proposed irradiation facility would come from. As we suspected, the chain of dependence leads to a story of environmental degradation and potential nuclear holocaust. The old reactor they are relying on to produce the cobalt-60 is due to be permanently shut down in the yeaz 2000. I have e-mailed the Campaign for Nuclear Phaseout in Canada for an update and as soon as I receive that I will share it with you. Please read the end section in the "Nuclear Sunset" report about the AECL's isotoae business. If AECL does not build the Maple-X10 reactor, there may be no more cobalt-60 from Nordion after the year 2000. This could mean that the cost of cobalt-60 could rise dramatically. 3) a press release from Food and Water announcing that Frieda's, a lazge retailer/wholesaler of specialty produce, will not market irradiated fruit from Hawaii or anywhere else. More of the same can be expected. I hope this information is pertinent. Points number 1 and 2 surely relate to economic feasibility. Sincerely wm~~. tea. Z~Z,. V~ Kathy Dom ~iP N~. FN~~ Ant. Dsta f APR 1 a v}$y DANIEL K. AKAKA - ' MEM9Eq: HAWAII COMMITTEE ON ENERGY AND wgsXixcrarv oPF¢E: NATURAL RESOURCES ]20 Hggr SENgTE OFFICE COMMITTEE ON GOVERNMENTAL AFFAIRS BUILOINO united ~tate.~ senate COMMITTEE ON INDIAN AFFAIRS WASxINGTON, DC 20510 COMMITTEE ON VETERANS' AFFAIRS TELEPXONE: 12021 229-5361 WASHINGTON, DC 20510-1103 XON OLVLU OFFICE: 3109 PgixcE Jorvgx KuXlo Apri 1 4 19 9 7 KgLgNIANgOLE FEOEPRL BUILDING / P.O. Boa 50199 Horvoww, HI 96550 TELEPXONE: IB081 522-09]0 Ms. Kathy Dorn P.O. Box 11350 Hilo, HI 96721 Dear Ms. Dorn: This is in response to your letter regarding irradiation. I concur with your view that the use of nuclear materials to irradiate fruits and vegetables is unacceptable. However, electronic non-nuclear sterilization of food and nonfood articles is an accepted practice in the United States and in many other countries throughout the world. i see no reason why Hawaii's farmers should not enjoy the benefits of this technology. Bandages, cotton swabs, and other materials used to protect wounds and cuts are sterilized using this process. These articles are commonly found in every drugstore throughout Hawaii and the U.S. A wide variety of items used in hospitals, clinics, and doctors offices are also sterilized by electronic means. This technology has also been approved as a post-harvest deinfestation and shelf life enhancing process in the United States, Europe, and many other countries. After extensive scientific review, the Food and Drug Administration and the Animal and Plant Health Inspection Service have approved this technology for treating a variety of fruits and vegetables. Finally, I cannot agree with an assertion that crop sterilization using electronic means favors large corporate agribusiresses. There are nearly 850 farms in Hawaii that could benefit from this technology. The average annual value of crops produced by these farms is $27,700 per farm, and when farm operating costs are subtracted, the average annual profit per farm is very modest. To summarize, I concur with your concern about irradiation using nuclear materials, but do not agree that the same concern exists for post harvest sterilization using electronic means. If i may be of further service, please let me know. Aloha pumehana, DANIEL K. AKAKA U.S. Senator PRINTED ON RECYCLED PAPER vucl~az Sunset Economic Costs of the Ca~tadian Nuclear !ndustn- httpJ/wux~.cenr.orgisunsetl.htmt i~l:~c~e~r S~znset: The Economic Costs of the Canadian Nuclear Industry by David H. Martin Nuclear Awareness Project and David .Argue David Argue Consulting for the Campaign for N uclear Phaseout C~ copyright February 1996 _ . Cauapaigu for Nuclear Phaseout Campagne eontre i'expausion du uucdeaire l rue Nicholas Street, Suite 412 Ottawa, Ontario, IaN 7B7 tel: 613-789-3634 fax: 613-241-2292 e-mail: copra web.apc.org Campaign for Nuclear Phaseout (CNP) is anon-profit alliance of safe-energy and environmental groups from across the country, founded in 1989. C" r'P is dedicated to the phaseout of nuc{ear power in favour of safer, cleaner energy alternatives. With a solid base of support from close to 300 endorsing organizations, CNP has carried out an extensive educational program. It has also worked for the passage of private members' legislation that would phase out uranium mining and the nuclear energy industry, as we?1 as prohibit new licences for the export of nuclear technology or materials. Additional copies of Nuclear Sunset: The Economic Costs of the Canadian Nuclear Industry are available from the Campaign for Nuc{ear Phaseout. David II. Martin is a researcher with fifteen years of ~r ~c o~t/as/v~ z! a Aso .car Sunset: Economic. Casts of the Canadian Nuclear Industn' http://wwH~.ccnr.org/sunsetl.ht:nl experience working on nuclear, as wel! as other energy and utility issues. He is the Research Director of_iuctear Awareness Project, anon-profit environmental organization dedicated to raising public awareness about nuclear issues and energy alternatives. The group carries out research and public education projects; operates a public resource centre; and publishes a newsletter. Nuclear Awareness Project, PO Box 104, Uxbridge, Ontario, L9P IM6, teUfax 905-852-0571, Internet: nucaware@web.apc.org David Argue is an economist with fifteen years of experience consulting to government, business and non-profit clients. He is the Managing Director of David Argue Consulting, a firm specializing in economic analysis for the utility and energy sectors. David Argue Consulting, 3~7 Roehampton Ave., Tcronta, Ontario, M4P 1S3, tet/fax 416-932-0324. Table of C':ontents List of Tables Executive Surnmarv i .Introduction 2. "Economic Benefits" of the Nucleaz Industr<~ and AECL Subsidies 3. Direct Em.playment in the Canadian Nuclear Indusm~ 3.3 Ontario Hvdro Nuclear H~~dro pubec 3.2.1. Employment at Gentilly-2 3,3 New Brunswick Power 3.3. I Employment at Point Lepreau 3.4.:^.tomic Ener~~ of Canada Ltd.: An Uncertain Future o. 6 03/OR/9721:J7:50 Nucleaz Sunset. Economic Costs of the Canadian Nuclear IndusdY hrip://Hww~.ccnr.orgJsunsetl.html 3.5. The Nuclear Private Sector 3.5.1 Private Sector Employment 3.5.2 The Viabilityof the Nuclear Industry 3.6 The Uranium Industry 3.7 Uranium Refining and Conversion 3.7.1 Employment in Uranium Refining and Conversion 4. The AECL Isotope Business S. AECL's Decommissioning Liability 6. Federal Heaw Water Investments 6.1. Glace Bay Heaw Water Plant 6.2. Port Hawkesbur~ Heavti~ Water Plant 6.3. Bruce Heaw Water Plants 6.4. LaPrade Heavy Water Plant 6.5. The Heaw Water Inventory & the Korean Sale 6.6. Heavy Water for Romania 6.7. Current Heaw Water Production 7. Conclusion Appendix A Canadian Private Sector Nuclear Industry 1993 Provincial Distribution of Private Sector Nuclear Industry Companies 1993 Appendix B Canadian Private Sector Nuclear Industry 1994 Provincial Distribution of Private Sector Nuclear Industry Companies 1994 Appendix C orb o~/os/9~ zlarsl Nuclear Sunset Ewnomic Costs of the Canadian Nuclear Industry http://wmtie.ccnr.org/sunsetl.hnnl Organization of CANDU Industries Membership List (as at January 1992) Provincial Distribution of OCI Membership 1992 List of Tables Table 1 Total Funding to AECL Table 2 Canadian Nuclear Industry Employment Year-end 1992 Table 3 Ernst & Young Estimate of Nuclear Industry Jobs 1992 Table 4 Canadian Nucleaz Industry Employment Year-end 1994 Table 5 Ontario Hydro Nucleaz Operations Staff Table 6 Estimated Retubing Dates for Ontario Hydro Nuclear Reactors Table 7 Employment at GentiIly-2 Table 8 Emplo~nent at Point Lepreau Table 9 Atomic Enema of Canada Ltd. (AECL) Employment 1979- 1994 Table 10 Ontario Hydro Funding of CANDU Owners Group (COG) Table 11 CNA Listing of Canadian-based Private Sector Companies Table 12 Uranium Mine, Mill & General Employment (on- site) Table 13 Uranium Refining and Conversion Employment Table 14 Tax~ver Subsidies for Decommissioning of AECL Nuclear Facilities. 198-86 to 1994-95 ~$million of the year} Executi~re Summary The Canadian nuclear industry was created through government intervention, and from the beginning relied on nublic funding. Now. fifty years later_ the nuclear of 76 04/08/07 21:57:51 Nuclear Sunset: Economic Costs of the Canadian Nuclear Indusm~ http://wM1~w.ccnr.org/sunsetl.html industry continues to depend on significant subsidies from taxpayers. Despite its failure to become financially self-supporting, the Canadian nuclear industry promotes itself by stressing its supposed contributions to the Canadian economy. The most recent major public relations exercise of this nature was sponsored by Atomic Energy of Canada Ltd. (AECL) and conducted by the consulting firm of Ernst & Young. The resulting report, entitled The Economic Effects of the Canadian Nuclear Industry, released in October 1993, has been uncritically accepted by many federal decision-makers. The present report, called Nuclear Sunset: The Economic Costs of the Canadian Nuclear Industry is a response to the Ernst & Young report, in the area of "economic benefits" and AECL subsidies (section 2), and also in the area of direct employment (section 3). Nuclear Sunset also identifies three other areas of concern, where AECL continues to drain the public purse and put the taxpayer in even greater risk of future liability. These areas are AECL's Isotope Business (section 4); AECL's Decommissioning Liability (section 5); and Federal Heavy Water Investments (section 6). The nuclear industry in Canada is truly a "sunset industry". Activity and employment both peaked around 1980, and have declined steadily since. Foreign sales have largely failed to materialize, and nuclear construction proposals in Canada have been cancelled. The federal government faces a decision on nuclear subsidies not only for the 1996 budget, but also in connection with the imminent expiry of a seven-year Memorandum of Understanding between the federal government, Ontario, Quebec and New Brunswick on funding for AECL (see section 3.4). The MOU was initiated in 1990 by Take Epp, former Tory Minister of Energy Mines and Resources, and it expires on April 1, 1997. The Province of Ontario has recently cut back its funding of AECL through this program. The federal government and the provinces (mainly Ontario) must soon decide whether to renew their subsidies for the Canadian nuclear industry. An internal, federal government review of the Canadian nuclear industry and AECL subsidies took place in late 1995. No public participation in this review was permitted. and the proceedings and results have remained secret. With nuclear industry supporters firmly entrenched in the government bureaucracy, there is little doubt that this review will support ongoing (if somewhat reduced) government subsidies for the Canadian nuclear industry. of 76 04/08/97 21:57:51 Nuch:ar Sunset: Economic Costs of the Canadian Nuclear Industw http:/A~ww.ecnr.orglsunsetl.htm] V J Many Canadians find it unacceptable that discussion about the disbursement of public funds for the nuclear industry should be conducted behind closed doors in Ottawa. Making this situation worse, is the fact that this secret review is based on the advice of nuclear advocates whose industry colleagues receive the financial benefits. Particularly at a time when social programs are no longer seen as affordable, funding for Atomic Energy of Canada Ltd (AECL) should be at the top of the "cutting" list. Government subsidies for the nuclear industry should be ended. Ernst & Young an-ived at their $23 billion estimate of the nuclear industry's contribution to Canada's Gross Domestic Product using fundamentally flawed assumptions and faulty methodology. They assumed that nuclear power was the most cost-effective electrical generating option available. This is simply untrue. Cogeneration plants and many energy efficiency technologies are far cheaper to construct and operate, and offer far higher GDP multipliers than nuclear energy. Among other methodological errors, Ernst & Young counted the cost over- runs of nuclear stations as "economic benefits". For example, the 1978 "release estimate" for Ontario Hydro's Darlington Nuclear Generating Station was $3.95 billion, whereas the final cost of the station was over $14 billion. AECL Subsidies When calculated in real, 1995 dollars, total federal funding to Atomic Energy of Canada Ltd (AECL) since its creation in 192 until March 31 1995, has been about $13 billion. Ernst & Young claim that AECL's total funding to fiscal 1993 was $4.8 billion. This figure, however, is deceptive, since it makes no allowance for inflation, and includes several significant errors. The figure of $13 billion funding to AECL represents a real, cash subsidy, by taxpayers to AECL, and does not include any "opportunity cost", i.e. what the subsidies would be worth if the government had instead invested them in break- even ventures. The opportunity cost for the accumulated subsidies to AECL up to the end of fiscal year 1995 is $120.4 billion. Canada's economy would have been much better off, if the government had simply used the AECL subsidies to reduce the national debt. Direct Employment in the Nuclear Industry Ernst & Y"oung overestimated the number of jobs in the Canadian nuclear of G4 04/OR/97 22:02:40 tiuclcar Swset: Economic Costs of the Canediw Nuclear Industn~ http://H~~~,ccnr.org/sunsetl.hwl industry by about 40%....ey claim that there were about 3~,~~0 jobs in the nuclear industry at year-end 1992. A more realistic estimate is about 18,000. There are several possible reasons for AECL's overestimation of employment, including: double counting (for example, several references indicate that uranium industry employees were counted rivice); counting total employment levels at companies whose business is only partly nuclear, instead of just counting the nuclear-related jobs; overestimating the number of companies in the nuclear manufacturing private sector; and using biased assumptions for extrapolating employment levels at those companies that were not actually polled. The most significant overestimate is for employrent among "private sector suppliers". Ernst & Young estimate employment in that sector for 1992-93 at 8,500, whereas this study estimates that the actual 1992 figure was about 2,000. Nuclear Prospects Ontario Hydro has decided to shut down, rather than rebuild part of the Bruce "A" Nuclear Generating Station. It is possible that Ontario Hydro's other nuclear stations will also be phased out early in order to avoid costly retubing or other major rehabilitation work. Staffing levels can be expected to decline proportionally. It is widely expected that Ontario Hydro's virtual monopoly on electricity generation in Ontario will be broken, makine any new nuclear construction virtually unthinkable. A competitive market will inevitably lean towards more efficient supply alternatives with shorter construction lead-times such as natural gas-fired cogeneration and combined cycle plants. The prospects for new nuclear construction in any province outside of Ontario are almost as slim. Canada is the world's largest producer and exporter of uranium, and Cameco (the privatized former crown corporation in uranium mining and refming) has seen a recent increase in stock price. However, even this sector of the industry is facing a serious challenge over the medium- to long-term. Huge military stockpiles of uranium in the USA and Russia, as well as fuel recovered from nuclear weapons will likely make serious inroads on the market share of the Canadian uranium mining and refming industry. The AECL Isotope Business Long thought to be the one "profitable" division of AECL, the former Radiochemical Company of AECL was privatized in l 991 as "Nordion International Inc.", when it was sold to MDS Health Group. To secure the sale, of 76 04/08/97 2208:30 Nuclear Sunset Economic Cost of the Canadian Nuclear ]ndustn~ http://wHrvv.ccnr.org/swsetl.htm] AECL was obligated under a 23 year contract to provine radioisotopes at a fixed price. Several factors have turned this commercialization into a fiasco. First, AECL's NRX reactor was forced to shut down in 1993. This has made radioisotope production solely dependent on the NRU reactor, which itself is experiencing technical problems and higher-than-expected operating costs as it approaches the end of its operating life in the year 2000. Second, the estimated construction costs of a new production reactor, the MAPLE-X10, have escalated from $23 million in 1989 to an extraordinary $100 million by 1994. Nordion has refused to help cover the cost over-runs for the MAPLE-X10. Moreover. in 1993, MDS/Nordion launched a lawsuit to have the 1991 contract rescinded, and to have AECL return the $165 million purchase price of Nordion, along with $300 million in damages. This dispute remains unsettled. In addition to the $100 million MAPLE-X10. a second reactor will be needed once the NRU reactor is shut down. AECL is also considering construction of the IRF (Irradiation Research Facility) reactor at an estimated cost of $500 million. Investment of public funds in any new radioisotope production reactors is ill- advised, because AECL and Nordion will soon be facing new competition for the sale of their most profitable radioisotope (Molybdenum-99) from radioisotope producers in the US and Europe. AECL's Decommissioning Liability For four }-ears, AECL has defied the Auditor General of Canada by not financially accounting for its decommissioning costs. Decommissioning activities include dismantling radioactive structures such as old reactors; cleaning up radioactively contaminated sites; managing the associated radioactive wastes; disposing of radioactively contaminated equipment; and returning sites to "green field" condition. According to AECL's current practice for the financing of decommissioning activities, the company will simply send the bill to the taxpayers each year for expenses as they are incurred. This is not an acceptable procedure for proper financial planning or accounting. AECL has made a preliminary and partial estimate of deconunissioning costs at about $300 million. However; the Auditor General's office has estimated federal decommissioning costs at $850 million, including AECL's portion. AECL should fully account for those decommissionine liabilities and should create a fund to cover those costs. This study's calculation of total funding to AECL (Table 1) does not include any of 76 04/OR/97 22:0830 ~uclea Sunset: Economic Costs of the Canadian Nuclear Industry http://H~uu~.ccnr.org/sunsetl.hanl amount for decommissionulg1iability. Federal Heavy Water Investments Heavy water, needed for CANDU reactors, is difficult, expensive, and dangerous to manufacture. Considering the grossly inflated historic expectations for CANDU sales at home and abroad, it is perhaps not surprising that heavy water manufacture represents the single greatest financial and technological fiasco experienced by the Canadian nuclear industry. Two heavv water plants in Nova Scotia, and one in Quebec, as well as most of the Bruce Heavy Water Plant in Ontario have been built and then shut down in the absence of any market for the heavy water. In 1981, the Canadian parliament , forgave AECL heavy water plant loans and interest totalling $816.9 million. In effect; federal taxpayers provided a one billion dollar subsidy for the production of a surplus federal heavy water inventory. Nevertheless, AECL and the federal government have recently agreed to forego a large part of heavy water sales to South Korea and Romania, giving over $300 million worth of business to Ontario Hydro instead. At the same time, the federal government has supplied about $300 million worth of heavy water, free of charge, for a scientific experiment. This failure to obtain a return on the federal heavy water inventory in effect adds dollar for dollar to the federal government budget deficit. Conclusion Key decision points on public subsidies for the nuclear industry include the federal budget in 1996, and the expiry of the federal/provincial Memorandum of Understanding (also known as the CANDU Owners Group agreement) on nuclear funding on April 1, 1997. The federal parliament's Standing Committee on Environment and Sustainable Development has already recommended that the government should "terminate its involvement in the CANDU Owners Group". Cabinet should heed that advice. The secret government review of the nuclear industry conducted in 1995 should be made public. A public consultation process should be launched to consider the phaseout of public support for the nuclear industry, in advance of the expiry of the federal; provincial Memorandum of Understanding. In keeping with current spirit of fiscal restraint, the federal government should simply end its subsidies to AECL. 1f the nuclear industry is as promising as it claims, it should be able to provide its own financing and demonstrate that it can of 76 04/08/97 22:0830 04-10-199' 12~40PM FROM FOOD +?,IJATER INC. TO 18089566846 P.02 FOOD&WATER NEWS RELEASE Wednesday, April 9, 1997 Contact: Ivfichael Colby For Immediate Release (802) 563-3300 ar 563-2135 (until 9 EST FRUIT DISTRIBUTOR REVERSES IRRADIATION POSITION Frieda's Isaacs "Irradiation-free" Statement A Major Blow to Hawaii's Irradiation Plans Plans to build a fruit irradiation facility in Hawaii were dealt a serious blow today as Food 6c ~,Vater, Inc. announced that a fruit distributor that had shown an apparent interest in the technology had reversed itself and issued an "irradiation-free" statement to the group. The company, Ftieda's. which specializes in exotic and tropical fruits and is famous for coining the term "Kiwi" fruit, had been the target of a Food do Water grassroots campaign since the group learned that Frieda's distributed free samples of irradiated Hawaiian fruits at a trade shotiv late last year. After a brier telephone conversation between leaders of Frieda's and Food 8c Water, Frieda's President, Karen Caplan, faxed a letter to the group late Tuesday afternoon declaring that her company "does not expose any of our foods to irradiation nor do we have any plans to in the future." "We congratulate Frieda's for listening to the thousands of citizens that called them to express their concerns with radiation-exposed foods, and welcome them co the growing list of companies that have rejected food irradiation,'' said Michael Colby, Food & Water's Executive Director. "Frieda's decision should be a wake-up call to those few people in Hawaii that remain in some kind of irradiation fantasy land. Make no mistake, irradiation is controveriai, attd irradiated foods will meet considerable resistance." Ever since Food & Water learned about an article in The Packer, a produce industry trade publication, reporting that Frieda's was "breaking new ground by giving irradiated fruit from Hawaii a chance." Food & Water has relentlessly targeted the company by circulating more than 20,000 Action Alerts to its grassroots networks and generating thousands of calls, letters and taxes to Ftieda's headquarters. Frieda's is just the latest food retailer or distributor associated with I~awaii's irradiation efforu to reverse its position on the controversial technology. Last year, Marsh Supermarkeu, a retail chain based in Indiana. made an about face on irradiation afrer selling radiation-treated 1-lawaiialt fruit and then feeling the heat from its customers. Earlier this year, several fruit distributors in California also backed out of future arrangements to sell irradiated Hawaiian fruit afrer ?etting a taste of citizen opposition. (more) RR I, Box 680 Walden. VT 05873 (802) 563-3300 Fax (802) 563-3310 1-800-EAT-SAFE l<' 04-10-1997 12~42PM FROM FOOD & WATER INC. TO 1808?666846 P.04 (Frieda's Reverses Irradiation Position, page A few political leaders in Hawaii, including the 1Vlayor of Hawaii County, Stephen Yamashiro, are pushing hard to have a publicly Snanced food irradiation facility built near Kilo. But the proposal has met stiff opposition from local citizens. C1.S. and Japanese consumer and environmental groups, as well as deep skepticism from the food industry. Irradiation exposes foods to the equivalent of !0 to 30 million chest x-rays to sterilize food, kill insects and extend shelf-life. Though the (,'.S. Food 8c Drug Administrarion has approved irradiation for most foods, serious health and environmental questions about the technology remain. Irradiation causes the formation of new chemicals in foods called radiolytic products. Some of these chemicals are known carcinogens and still others are untested and unknown. Irradiation facilities also pose risks to workers and surrounding communities from possible radioactive ]eaks and accidental exposure to radiation sources. Food & Water, Inc., a leading national food safety and environmental organization founded by a family physician in 1986. leas led the effort to educate citizens on the human health and environmental dangers of exposing foods to radiation and has over 100,000 supporters nationwide. RR I, Box 68D Wsldsn, VT 05873 (80Z} 563-3300 Fax (802) 563-3310 I.800-EAT-SAFE 04-10-1991 12~41PM FROM F00D & WRTER IhJC. TO 18069666846 P.0,3 J `;~'I Tt~ S~7CCSRatly P7f7LINC8 PCC>p!<f Tuesday, April 8, 1997. 'Michael Coiby Executive Director FOOD & WATER, INC. FAX 80~-553-?3 i4 Good morning Michael! Thank you so touch for your phone call this ~nonting. I'm glad we finally gat a chance to speak to each other. As we discussed our company does rot e:tpose any of our foods to irradiation nor do we have any pleas to in the futu.-e. Michaei, i appreciate that you are sensitive to the act that some of the information that you received about our company and irradiation (frarn The Packer article j was not correct, and T am very sorry that your orgatuzation had to expend your sesottrces on your recant mail and lax campaign, Because my company is so comtnittad to canstuners and to customer service, I want you to know that every single phone call. fax or letter from your members was answered cordially and immediately. vlichael, I look fotwarc! to receiving the notification you will be sending to your members regarding your retraction of the campaign about our company. Sincerely, ~3u.z-~t-~~j~a..'r.`~ Koran Caplan President 4465 Carp(>raie CcrrNr.(3rive • .COS+1dariuao, c;A pp72f]-ij61 U.5.A. 7EL• 714/816•d'1 GO • FAx ?t4/816-Q2;^ • E-:fait: jriecias+edet:unet,car.. TOTGiI. P, a01 nuclear Sunset: Economic Costs of the Canadian Nuclear lndustn~ http://eww.ccm.org/sunse[l.htm] ':'oral 4 . 0 38 C. 0 39.5 27?. , 275.5 288. 9 Source: Cameco Corporation Human Resources, March 16, 1995. Note: These figures are for all on-site staff, and do not include Head Office staff. 4. The AECL Isotope Business AECL has experienced a major crisis in its radioisotope business that has revolved around its plans to build a new isotope production reactor known as the MAPLE-X10 (Multipurpose Applied Physics Lattice Experimental - 10 MW). The MAPLE-X10 was intended to take over the main work of isotope production from the aging NRU reactor, allowing the NRU to play aback-up and research role for the few remaining years of its life. The NRU (National Research Universal) is a heavy water moderated and cooled 13~ MWt reactor which first began operation in 1957. Following atwo-year review and assessment of the future of the NRU initiated in ] 989, AECL Research eventually decided in 1991 that a replacement reactor would be built, and that operation of the NRU would he extended to about the year 2000. [131] Even this short-term lifetime extension for operation of the NRU required a refurbishment that was expected to take place in the 199/96 fiscal year at a cost of about $30 million. The refurbishment plan included upgrading containment. emergency core cooling and emergency water and power supplies; adding a second shutdown system; and adding a qualified reactor control room capable of withstanding earthquakes and other external events. [132] Atomic Energy Control Board staff reviewed the refurbishment proposal and "were not satisfied that AECL had demonstrated that these [upgrades] were the most beneficial changes". [133] However, the NRU had a serious accident on January 12, 1991. A break in a weld on the cooling system resulted in l 8,000 litres of tritium-contaminated heavy water leaking into the reactor building. Considerable amounts of tritium were vented to air over the following two weeks, resulting in tritium levels in snow at least 100 times above background in an area of a fev~ hundred square kilometres, mostly on the Quebec side of the Ottawa River. [134] The NRU remained shut do~~~tt for repairs until mid-December, necessitating the use of the older, and more polluting NRX (National Research Experimental) reactor for isotope production. If an}~hing had gone wrong with the NRX reactor, there would not have been any back-up for radioisotope sales. In fact, the. NRX reactor was outdated; and had been kept operating despite safety of 76 04/OR/97 2220.14 Nuclear Sunset: Economic Costs of the Canadian Nucleaz Industn~ http://k~slc.ccnr.orF/sunsetl.html problems in order to mew. ;;ommercial obligations. [135] Shy. tly after the NRU was back in operation, The NRX was shut down for maintenance and repairs in January 1992, after it had operated continuously for most of 1991. AECL initially decided that the reactor would be shut down permanently in 1995, and that until that time, it would continue to provide back-up isotope production for the NRU for periods often weeks per year. [136] However, by March 1993 AECL had decided that the reactor would not be restarted, based on a re-evaluation of its condition and age; the expected radiation doses to staff; and expected emissions of radioactive contaminants. [137] AECL's original plan had been to keep the NRX running as back-up for the NRU until the MAPLE-X10 was in operation. The 40-year-old NRU has been an ongoing problem, experiencing numerous leaks and power losses. Former AECL Research President Terry Rummery described it in 1993 as AECL's "biggest financial headache". [138] The urgency over the MAPLE-X10 construction, and the reason for the eventual cancellation came about because of a contractual obligation to Nordion International Inc.. In March 1988, the federal government had announced its plan to prig°atize AECL's Radiochemical Company and its Medical Products Division. The former was incorporated under the name of Nordion International Inc., and the latter as Theratronics International Ltd.. In September 1988, AECL "sold" Nordion and Theratronics to Canada Development Investment Corporation (ODIC a federal crown corporation) for eventual transfer to private ownership. On November 1, 1991, ODIC sold Nordion for $165 million to MDS Health Group. $150.5 million from the sale was transferred on paper to the federal government. [ 139] AECL also entered into a 23-year contract for the exclusive supply of radioisotopes to Nordion. At the time, AECL noted that "The nature of the business requires the corporation [AECL] to make significant investments in production and ~~s~aste handling facilities." [140] AECL has not acknowledged these costs in its accounting... "There is no evidence that a provision has been made in the financial statements for these costs. This is yet another contingency cost liability that is not accounted for by AECL in the financial statements." [141 ] Some time after the sale to Nordion. it became obvious to AECL that it had drastically underestimated both the cost of operating the NRU reactor, and the capital cost of the new MAPLE-X10 reactor. However, MDS/Nordion, having already entered into a contract on the basis of lower costs, was understandably reluctant to pay more for their isotopes in order to compensate for AECL's incompetence. MDS went to court, claiming that AECL was obligated to of 64 04/08/97 2227'46 Nuclear SunseC Economic Coss of the Canadian Nuclear Industry http /iw~~w.cem.orglsunsetl.html complete the MAPLE-h_ , to back up production at the NR~. Failing that, MDS argued that the 1991 sales contract should be rescinded, and that AECL should return the $165 million purchase price of Nordion, plus $300 million in damages. As a result of the legal action, AECL halted construction of the MAPLE-X 10 in November 1993. [142] The case eventually dent to arbitration. Due to the legal dispute in progress with MDS/Nordion, the MAPLE-X10 was delayed. AECL has continued to operate the NRU despite clear evidence that refurbishment is urgently needed to reduce worker exposure; radioactive emissions to the environment; and the risk of another serious accident. The Atomic Energy Control Board bears some degree of responsibility in this situation, since it allowed AECL to proceed with the initial stages of construction for the MAPLE-X10 reactor without having approved the final design or safety analysis for the reactor. The MAPLE-X10 reactor was to have been a 10 MW light-water cooled and moderated pool-type reactor to be built at AECL's Chalk River Nuclear Laboratories. The reactor building was designed to filter and vent radioactivity, rather than contain it. The main purpose of the reactor was to produce short-lived radioisotopes for medical purposes. AECL describes the reactor as being fuelled with "low enriched uranium" (LEU), meaning that the amount of U-235 in the fuel is relatively low. However, the LEU typically used in light water reactors is 2-4% U-235, whereas the MAPLE-X10 fuel would be 19.7% [143] Construction on the MAPLE-X10 reactor building began in mid-1990. By August 1991, AECL's safety analysis showed that design changes would be required to meet AECB safety standards and all construction was hatted. The AECB noted that "...identification of these design deficiencies at this late stage illustrates significant deficiencies exist in AECL's organization of reactor design function". [ 144] Design alterations on the MAPLE-X10 were not completed until 1993. The changes included the addition of another shutdown system, and an emergency core cooling system. However, AECL decided Co cancel the project in November 1993, eventually writing off $75.351 million in 1993-94. [145] AECL had spent $40 million on just the design and construction of the reactor building, without even starting construction of the reactor itself. The original estimated total cost of the reactor in 1989 was $23 million, but AECL allowed this to escalate dran~atically to $100 million. In 1994, Nordion Vice-President Ian Mumford stated, "The $100 million figure blows our mind. We ask how this could happen but they won't show us how they get to such numbers." [ 146] MDS/Nordion had apparently contributed $20 million of the $40 million spent on the reactor up to that point. or 63 oa/os/v~ zz:z I:a~ Nuclear Sunset: Economic Costs of the Canadian Nuclear Industn httP://am~~.ccm.org/sunsetl.html In the Spring of 1994, Natural Resources Minister Anne McLellan hired Toronto lawyer Stephen Goudge as a "fact-finder" in the dispute between MDS/Nordion and AECL. In October 1994, McLellan ordered AECL to resume discussions with MDS/Nordion, and the two parties suspended arbitration proceedings in favour of "facilitated discussions". On October 11, 1994, Goudge stated that the conflict would be resolved within six to eight weeks. [147] In December 1994, Nordion Vice-President Ian Mumford stated that he expected the dispute to be resolved within two weeks. [148) One year later, in December 1995, Mumford stated that he expected a resolution of the dispute "within a couple of months". [149] In late 1995, MDS/Nordion reportedly made a $140 million proposal to build ttvo reactors and a reprocessing facility- at AECL's Chalk River Nuclear Laboratories. It is not clear how much taxpayers will be expected to pay, and how much MDSlNordion will ultimately pay. An} investment of public funds is highly risky at best, and will leave taxpayers ~F ith a lasting legacy of deadly radioactive waste --particularly from the production of Molybdem,:tn-99 (known as Moly-99). In the production process for Moly-99, hig1~1} enriched uranium is eradiated, then dissolved in acid to extract the Moly-99. This results in an acidic high level liquid waste of the same type created by plutonium extraction in nuclear weapons programs. The waste has the potential to go critical (i.e. undergo fission chain reactions leading to a nuclear explosion). This waste is currently kept in a single 24,000 litre Fissile Solution Storage Tank (FISST), which is estimated to contain about 1 million terabecquerels (TBq) of fission products. Moly-99, with a half-life of about sixty-six hours; decays into technetium-99m, which is considered ideal for medical diagnostic purposes because it has a half-life of only six hours, and thus poses less risk to patients. The technetium-99m is used to 'label' chemical compounds which migrate to ~ arious organs, allowing an image to be detected from the gamma rays emitted. AECL currently produces most of the world's Moly-99, and the $50 million a year sales [150] represent about one half of Nordion's business. If it wishes to stay in the radioisotope business, AECL needs to build at least two new reactors, since the NRU is scheduled to be shut down in the year 2000, and a second reactor is needed for back-up. Yet it is unlikeh~ that AECL and Nordion will be able to compete with low-cost production from existing reactors in the US and Europe. At the same time, if the government decides to cut its losses and get out of the radioisotope business, it must compensate MDS/Nordion. Investment in new radioisotope production reactors is ill-advised because new producers are set to enter the Moly-99 market to compete with AECL and of 64 oa/us/~~ zz:zl.a~ uuear aunset: economic Costs of the Canadian Nuclear industry http;//w~aU~.ccnr.org/sunsetl.html Nordion. The US Depa. .ent of Energy plans to produce eu~ugh Moly-99 for 70% of the US market by making an $ ll million upgrade on a 4-MW reactor at the Sandia National Laboratories. [151] In addition, the Mallinckrodt Medical pharmaceutical company has been licensed to upgrade a 45 MW reactor in the Netherlands in order to meet about 25% of world demand for Moly-99. [152] Mallinckrodt is presently one of Nordion's ]argest customers; and in about two years, it will become a competitor. [153] AECL and federal taxpayers are in a no-win situation. In addition to the construction of a MAPLE-X 10 reactor, AECL is also considering an even more expensive proposal the Irradiation Research Facility (IRF) was estimated to cost about $500 million. [154] Thus the cost of the new radioisotope reactors will be at ]east $600 million. The government seems set to approve a resolution of the MDS/Nordion dispute with AECL in which taxpayers will again have to subsidize new reactors. It seems likely that Ivff)S/Nordion a private corporation will be at least a partial beneficiary of this subsidy. Nordion has suggested that it will pay for a share of the construction costs through a 40% increase in the price of the Moly-99 that it sells. [155] However, this move would be risky, as it will be facing sales competition, for Moly-99 in the near future. In the long-term, Canadian taxpayers will again be left with the high cost of managing the radioactive high level liquid waste from the production process, as well as a greater share of reactor construction costs. if MDS/Nordion's revenues from Moly-99 decline. 5. AECL's Decommissioning Liability In AECL annual reports for 1991-92, 1992-93, 1993-94, and 1994-95 the Auditor General of Canada has strongly criticized Atomic Energy of Canada Ltd. for failing to account properly for the cost of "decommissioning". Decommissioning activities include dismantling radioactive structures such as old reactors; cleaning up radioactively contaminated sites; managing the associated radioactive wastes; disposing of radioactively contaminated equipment; and returning sites to "green field" condition. AECL's past and current practice for the financing of decommissioning costs has simply been to send the bill to the taxpayers each year for expenses as they are incurred. As the Auditor General has pointed out, this is not a proper financial planning or accounting process. In his report to the Minister of Energy Mines and Resources in the AECL 1991-1992 Annual Report. Auditor General Denis Desautels stated, ,r ~a 01/08/97 2221:47 uclear sunset: Economic Costs of the Canadian Nucleaz Industry http://www.ccn .org/su:,setl.html survive independently. Otherwise the sun should be allowed to set on the Canadian nuclear industry. Taxpayers have akeady paid too much.