2013/05/14

A billion loonies here, a billion loonies there…



Yes, soon it adds up and you’re talking real money, but the there are other things to consider. People in Ontario, Canada tend to not give much thought to their heavy reliance on nuclear energy. Although they are likely to worry about the price tag of future projects, the important questions have little to do with money. The issue is whether sticking with nuclear will be a lost opportunity to develop better ways to generate electricity, avoid the damage to the industry that will come with the next nuclear catastrophe (wherever it is), end the accumulation of nuclear waste and stop nuclear energy’s role in the proliferation of nuclear weapons.

A recent editorial in The Toronto Star shed some welcome light on Ontario’s dependence on nuclear power. Since Fukushima, the major media in other nuclear-energy-dependent states (France, U.S.A, Japan, U.K) have given fairly extensive coverage to legitimate public concerns about regulatory capture, safety, costs of new facilities, upgrades and decommissioning, and whether it would be better to pursue other alternatives.
The province of Ontario relies on nuclear energy for about half of its electricity supply, but the media coverage since Fukushima has been relatively tame and scarce compared to other nations where nuclear is a large player in the energy mix. I haven’t seen everything in the Canadian media, and I can’t prove a negative, but in Canada there seems to have been a relative lack of interest in nuclear news during a time when it was on the front pages everywhere else.
In one report, I even saw an industry spokesperson thanking the local media for getting the story right since the Fukushima disaster. She didn’t seem to notice how embarrassing this compliment might be for a professional journalist. Yet, oddly, the journalist smiled and didn’t notice that she had just been called a lapdog.
Similar to the way they launched a real estate bubble right after they had watched the real estate market in the US implode in 2007-08, Canadians have a boundless ability to engage in “it’s-different-here” thinking. We think we are more progressive than the Americans, better governed, more rational, more egalitarian. The whole world wants to immigrate to Canada, supposedly. Our nuclear power plants must be better too, so why worry or ask questions?
Thus the media took the power companies’ word for it when they said vaguely that “lessons have been learned” from the Fukushima catastrophe. They never explained what improvements were made during the extensive safety reviews because doing so would have implied that decades had gone by with the plants exposed to unnecessary risks. Fortunately for the power companies, the media and the public were too complacent to ask probing questions.
To some extent, the lack of concern is understandable and deserved. There haven’t been any nuclear accidents in Ontario’s generating stations, and they use heavy water reactors that are much less vulnerable to the meltdown than the light water reactors used in Fukushima (also used in New York State, on the American shore of Lake Ontario). However, I doubt the Ontario public even cares enough to have learned about this difference. Another factor is that the public hasn’t experienced any massive earthquakes or tsunamis that would give the matter any sense of urgency.
Furthermore, the Canadian regulators and power companies have never come close to the awesome depths of arrogance, corruption and incompetence exhibited by the nuclear village in Japan. In Canada, we don’t hear reports of organized crime rings getting contracts to do the most dangerous cleanup operations during plant maintenance. We don’t hear of these sub-contractors rounding up day laborers (homeless and nameless people who disappear after the job), to be exposed to radiation on cleanup jobs that the power companies are too stingy to carry out safely. We don’t hear stories about such casual workers dying from leukemia without disability compensation and health care (for details, see The Nuclear Mafia Derails Democracy in Japan). Perhaps this was a fatal error made by the nuclear industry in North America: Because nuclear energy was managed with a relatively high regard for safety in a somewhat functioning democracy, when the technologies were exported, there was a flawed assumption that the safety culture could be exported as well.
In spite of the safety record in Canada, there are still good reasons for people in Ontario to think more seriously about their commitment to nuclear, and especially about the heavy dependence on a source of energy that cannot be replaced quickly in an emergency.

Cost

Nuclear has enormous multi-billion-dollar up-front costs that somehow manage to not scandalize a public that is so quick to see waste everywhere else. This was the subject of the editorial in The Toronto Star that pointed out how a cancelled gas generating station had become a political scandal for having “wasted” $585 million. Another report in The National Post noted with outrage:

“The estimated cost of tearing up contracts with the developers of the gas plants and building new energy projects in Napanee and Lambton has soared to at least $585 million, far above the $230 million McGuinty and the Liberals had been claiming.”

The outraged writer of this analysis seemed not to notice that his own wording implied that the “wasted” costs include the cost of building the generating station in a different location – in other words, what it would have cost anyway, had it been built in the original location. The editorial in The Toronto Star pointed out the gas plant scandal pales in comparison to recent and upcoming expenses of overhauls to the province’s nuclear fleet. The figures from the report are arranged in the table below:



A
B
B/A
Nuclear
Power
Plant
date of estimate of repair costs
estimate of repair costs
CAN$
actual cost of repairs
CAN$

Point Lepreau,
New Brunswick
2008
0.75 billion
2.4 billion
3.20
Pickering, Ontario
2000
1.30 billion
2.6 billion
(repairs not yet complete)
2.00
Bruce,
Ontario
2005
2.75 billion
4.8 billion
1.75
Darlington, Ontario
2010
6 – 10 billion
?
?
Cost of obtaining only an estimate of the Darlington repair costs: $1 billion
The original estimate of construction cost of Darlington was $3.95 billion; the final cost was $14.4 billion, 3.64 times more expensive than the estimate.
According to the B/A column, the historical average of final repair cost vs. estimated cost is 2.31. Thus we could estimate how wrong the estimate of Darlington’s repair cost will be. Actual costs can be estimated to be 2.31 times more expensive than the original estimate – thus a final cost likely to be between $13.8 billion and $23.1 billion.

 Major Power Generating Companies in Ontario

Generating Capacity (Megawatts)

nuclear
hydroelectric
thermal
Ontario Power Generation
6606
6996
5447
Bruce Power
6300
----
----
(The canceled gas thermal plant would have contributed 800 megawatts in this mix.)

For perspective, it is worthwhile to see these costs in context of the annual Ontario budget. For 2013-14 there is a $127.6-billion spending plan with a projected deficit of $11.7 billion. Ontario’s debt will grow to $272.8 billion. The big ticket items are $48.9 billion for health, $24.1 billion for education, and $10.6 billion for interest on debt.
So we could say it’s a bargain to spend $20 billion or so for a service delivered over decades, to keep the juice flowing for a province with a GDP of $600 billion. No electricity, no economy. It certainly makes the cost of the gas generating station seem like peanuts, though a consideration of its worth has to take account of its generating capacity – 800 megawatts, or 13% of the capacity of Bruce Nuclear Generating Station. Nuclear proponents stress that the up-front costs are huge, but the fuel is cheap. With a thermal station, it is the opposite, so over time it’s hard to say which is more costly. Thermal stations allow for flexibility. Because they don’t involve huge sunk costs, they can be shut down in the future if better options become available.
Curiously, none of the media reports explains why the construction and repair costs are conceived as part of the provincial government budget. The power companies were privatized in the 1990s, so one would assume that costs would be recovered by selling electricity to customers. Perhaps the government is lending the money up front, and taking legal liability for accidents and regulatory decisions to cancel or change plans, but it’s hard to understand why the Darlington repairs would be considered as part of the provincial budget. Ratepayers and taxpayers are the same people, so it feels like a tax when everyone has to pay for an essential service one way or another, but it is misleading to say the overhaul of the nuclear fleet is a government cost, unless something goes terribly wrong and the government has to compensate radiation victims and evacuees, or pick up the tab for projects that fail to deliver the promised services.
So, no, cost is not the issue, if the nuclear fleet could operate cleanly and efficiently for the next few decades. The point I make here is that there is a good chance that nuclear could fall out of favor for numerous reasons besides cost.

Future Disasters Could Lead to the Demise of the Industry

Fukushima and Chernobyl are the acknowledged nightmare disasters, supposedly the worst possible events that the nuclear industry promises will never happen again, but in a certain sense, the real nuclear energy accident that matters hasn’t happened yet. The victims of Chernobyl and Fukushima didn’t really matter to those who were interested in maintaining nuclear power. They were small populations of rural people - nobodies living in political systems that could ignore them. When a catastrophe happens near Los Angeles, Chicago, New York, Washington, London or Paris, the “fallout,” in every sense of the word, will be different. When the radionuclides are landing on the children and grandchildren of the political and financial elite, the evaluation of what is acceptable risk will be somewhat altered. The costs arising from a level 7 accident (worst on the scale) in France is estimated to be €430 billion by l’Institut de radioprotection et de sûreté nucléaire (IRSN). But it seems like complete guesswork to say what the economic and social impacts could be. Much would depend on the way the wind was blowing and where the fallout rain came down.
I state this also as an eventuality, not a hypothetical. There is a long record of near misses in the operation of American nuclear plants, and flood risks equal to the tsunami risk in Japan are still being ignored. There is no reason to believe that the nuclear regulatory system functions any better than the financial regulatory system (see Gar Smith’s Nuclear Roulette for a full accounting of regulatory capture and risks in the American nuclear fleet). When the disaster happens, public support and financing for nuclear power will dry up, and it won’t matter which utilities have good safety records or superior technology.

Waste and Environmental Impacts

The nuclear industry likes to repeat the falsehood that nuclear energy is clean and carbon free. Ontario’s Ministry of Energy carefully states:

”Nuclear power is a reliable, safe supplier of the province’s baseload generation needs, accounting for about 36 per cent of the province’s installed electricity capacity. Nuclear operates 24 hours a day, seven days a week and it produces about 50 per cent of the electricity generated in Ontario. Nuclear power does not produce any primary [italics added] air pollution or release greenhouse gases into the atmosphere.”

The key word here, unlikely to catch the attention of a casual reader, is primary. Pronouncements on the websites of Ontario power companies don’t even bother with such hedging in their claims that nuclear is clean or that no member of the public has ever been harmed by the nuclear industry in Canada. There are numerous indirect polluting impacts in the nuclear supply chain. The air in Toronto is cleaner than it used to be since Ontario shut down coal-fired generating stations, but that doesn’t mean nuclear is without its own environmental impacts.
In Port Hope, a small town one hour east of Toronto, a billion-dollar decontamination project is underway to clean up the mess left over several decades by Cameco’s nuclear fuel facility. Canadian taxpayers, including those from provinces that never used nuclear energy, pick up the tab while the corporate polluter carries on with concerns, one of which is its role a major partner in Bruce Power.
In the Northwest Territories and Northern Saskatchewan, native people who worked in the uranium mines suffered from high rates of lung cancer and their lands were contaminated. Conditions for miners have been improved compared to those of the early years of the industry, but the historical record of abuse and neglect is deplorable. Heather Tufts summarized the issue this way in her article The Impacts of Uranium Mining on Indigenous Communities:

“The climate change debate positions nuclear power as a partial solution to carbon emissions according to some scientists and politicians. Uranium mining speculation lacks comprehensive health and safety regulations while the ethics of Canadian exported uranium, which can lead to depleted uranium used in zones of war, needs greater scrutiny. Abandoned uranium mines and the subsequent hazards experienced in forgotten communities have been virtually ignored in Canada leading to tragic, unmitigated circumstances.”

In addition to the health consequences, which were never officially acknowledged or compensated, the tailing ponds left from these mines are extremely toxic, radioactive dumps for which there has been very little attempt at remediation. A short report by International Physicians for the Prevention of Nuclear War summed up the situation:

“Saskatchewan's Premier in the 1970s, Allan Blakeney, was quoted as saying: ‘On the issue of radioactive waste disposal we have had to make a leap of faith and assume that a satisfactory means of disposal will shortly be found.’ Several decades later, there is no satisfactory solution - only a longer list of failed attempts. The first phase of the clean-up of Saskatchewan's abandoned uranium mine sites was only announced in 2007 and is estimated to cost $24.6 million [2.4% of the amount for Port Hope cleanup]. The growing volume of nuclear waste poses a safety and health risk for generations to come.”

The spent fuel disposal problem, still with no permanent solution (though the latest proposal is to bury it near the shores of Lake Huron – go here to learn more or sign the petition), gets relatively more attention than the mining waste problem that exists in the open air at mines worldwide. Furthermore, unlike Port Hope, the local communities in Saskatchewan are not full of quaint heritage homes that attract the hearts of Toronto realtors. This environmental blight is entirely beyond the awareness of the Canadian public, so it will never get its own billion-dollar cleanup project.

Graffiti in Toronto's upscale Forest Hills (March 2013), referring
to the GE-Hitachi nuclear fuel processing facility a few kilometers
away in a more downmarket part of town.
In addition to the hazards and carbon fuel involved in uranium mining, there are energy inputs and environmental costs at all other stages of the nuclear energy system - fuel processing, fuel enrichment, fuel transport, plant construction, plant decommissioning, spent fuel cooling, transport and disposal. The enrichment process has been a particularly well kept dirty secret. Massive amounts of fossil fuels and CFC coolants are used to enrich uranium, and the CFC gases used were an exemption from the Montreal Protocol of 1987. [see Makhijani et. al] To say that nuclear is clean is highly misleading – a frequent deliberate distortion of nuclear promoters. We can compare the energy return on investment (EROI, how much energy input is needed to get X amount of energy out of a technology) of nuclear with other ways of generating electricity, but there is not likely to be any consensus on the figures. There are too many variables, and too many ways for advocates on various sides to make their own interpretations. Nuclear might come out with a better EROI, but only if we devalue the environmental burden and risks that will be placed on future generations. If a nuclear plant or spent fuel storage pool is destroyed in a war or accident, then nuclear energy will be seen in the future as a foolhardy and devastating mistake. It is wrong to judge nuclear energy's value only by the standards of the minor catastrophes that have happened so far.

Proliferation

People in the nuclear energy industry reject the linkage between nuclear weapons and nuclear energy. It is theoretically possible that humanity could forsake nuclear weapons but use enriched uranium and plutonium only for “peaceful” purposes. Yet the historical record shows that almost every country that builds nuclear power plants also wants nuclear weapons, or the ability to manufacture them in the event that their coverage under a nuclear umbrella should become unreliable. Alternatively, they become complicit, with or without intention, in spreading proliferation risks. Canada’s claim to fame is to have sold CANDU reactor technology to India, which India quickly used to launch its own weapons program. All nuclear reactors produce waste that can potentially become fuel for nuclear weapons or sub-critical radiological “dirty” bombs.
If nuclear fuel is cheap, it is largely because of the economies of scale created by the weapons industry of the Cold War. For example, since the 1990s, the American nuclear industry has been getting cheap fuel from Russia taken from decommissioned nuclear weapons. The infrastructure for fuel processing and enrichment was established by and paid for by the U.S. government, primarily for weapons production. (Ontario's heavy water reactors used to use non-enriched uranium, but they now use slightly enriched uranium made in America.) The creation of a nuclear power industry was a way to make use of the existing plants and regain some of the costs of building weapons. Without the government interest in producing weapons, it is doubtful that private investors ever would have been interested in pursuing a form of energy production that was so dangerous, and expensive, and difficult to manage safely in a way that would make it acceptable to the public. For that feat, we needed governments to impose it on us.

Technological Change

Nuclear power might be perceived as cost effective over the long haul, if everything goes well, but the large initial costs make this a very big gamble and a potential lost opportunity to pursue other options. Nuclear power is said to be the ocean liner of energy types. Once it is built and on its way, it cannot change course, no matter what icebergs appear in front of it. The Titanic metaphor is perhaps why this problem is referred to as “sunk costs.” Take the Japanese government now (and, as Henny Youngman would plead in the joke about his wife, I say “please”). The world’s worst nuclear accident has contaminated the northern half of the country. Everyone knows a massive earthquake could strike anywhere. It has become painfully obvious, even to nuclear proponents in other countries, that nuclear power cannot be done safely in this kind of seismic zone, but still the government, the bureaucracy and the corporations invested in nuclear are determined to make use of their sunk costs. Prime Minister Abe wants a restart “as soon as the safety of nuclear plants can be guaranteed.” He thinks this means “soon” but he doesn’t realize that for all disinterested and rational observers, it means “never.”
The hazards of getting committed to sunk costs have been made apparent not only by Fukushima but also by a rapid change in the price of other energy sources. A glut of natural gas has reversed the “nuclear renaissance” that was underway just a few years ago. Several American nuclear plants have closed down, and more are likely to follow. New projects are stalled because private capital and the insurance industry are not interested. And who knows what else could come along at any time? This month there was news of a breakthrough in solar energy that is going to be a “game changer” according to the inventor and the experts who have seen his plans. The technology is under patent application at the moment, so little is known about it. However, this is what a report in McClatchy Newspapers had to say:

“… the previously undisclosed invention has yet to be constructed and fully tested. But John Darnell, a scientist and the former congressional aide who has monitored Ace’s dogged research for more than three years and has reviewed his complex calculations, has no doubts. ‘Anybody who is skilled in the art and understands what he’s proposing is going to have this dumbfounding reaction: Oh, well it’s obvious it’ll work,’ said Darnell, a biochemist with an extensive background in thermodynamics. ‘Ron has turned conventional wisdom about solar on its head.’”

If this innovation, or others in energy storage and efficiency, deliver on their promises, nuclear power plants might soon be regarded like other steam engines of the past.

Early 20th century steam engine.
Late 20th century steam engine.

Sources:

Arjun Makhijani, Lois Chalmers, Brice Smith, Uranium Enrichment: Just Plain Facts to Fuel an Informed Debate on Nuclear Proliferation and Nuclear Power, Institute for Energy and Environmental Research, October, 2004.
Jose Etcheverry, “Cancellation of Ontario Gas Plants Pales in Comparison to Nuclear Repair Costs,” The Toronto Star, May 9, 2013.
Javier E. David, “Nuclear Power Falters, Engulfed by 'Cauldron' of Bad Luck,” CNBC, May 13, 2013.
Greg Gordon, “Patent Filing Claims Solar Energy 'Breakthrough,’” McClatchy Newspapers, May 8, 2013.  
Heather Tufts, “The Impacts of Uranium Mining on Indigenous Communities,” Peace, Earth and Justice News, February 12, 2010.
Richard Wilcox, “The Nuclear Mafia Derails Democracy in Japan,” Dissident Voice, August, 2012.
Vincent Thimonier, “Nucléaire: un Fukushima français changerait-il la donne? Lyon Capitale, May 13, 2013.
Hibakusha Worldwide: Northern Saskatchewan, Uranium Mining Site,” International Physicians for the Prevention of Nuclear War, 2012.
Ontario budget 2013: 10 Highlights,” The Toronto Star, May 2, 2013. 

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