Nuclear renaissance or nuclear fantasy?

Lawrence Solomon/Neville Nankivell
National Post
May 4, 2001

As concern grows over rising fuel costs and reliable energy supplies, nuclear power is getting a second look. So are the arguments against it.

Nuclear fantasy
By Lawrence Solomon

The nuclear fantasy is back. And the fantasizers today, as before, are mostly button-down conservatives who have their hearts in high-tech machinery, their heads in the sand, and their hands on the public purse.

In Toronto this week, U.S. Vice-President Dick Cheney signaled the nuclear revival at an annual meeting of the Associated Press. Conservation and renewable energy, the environmentalists’ choice, will not be America’s savior, he decreed, but fossil fuels and nuclear power – his choice – will. To help make his picks the winners, Mr. Cheney is boosting subsidies for the fuels he favours while slashing subsidies to their rivals.

In his attempt to resurrect nuclear power – Mr. Cheney deplores the fact that no new reactors have been ordered in decades – he listed its virtues. Nuclear power is “safe, clean and very plentiful,” he asserted. Mr. Cheney prudently omitted “economical” from his list: A nuclear power plant costs about 10 times as much to build as a cogeneration plant of equal size, and about three times as much as its power equivalent in windmills. Not once, anywhere in the world, has a company – public or private – built a nuclear plant over a green technology in an open marketplace.

In Quebec City last month, President George W. Bush spread the word to Prime Minister Jean Chrétien, tantalizing him with prospects of selling nuclear power into the U.S. market. Last Tuesday, Ontario Premier Mike Harris revelled in the glories of a nuclear future that the leaders had discussed. “They felt there were great opportunities for more generation, maybe more nuclear plants, more CANDU reactors here in Canada, here in Ontario and … perhaps building surplus power, jobs and investments here to sell to the United States,” an awestruck but visionary Mr. Harris told the Ontario legislature.

His Tory predecessors two decades earlier had similar visions. They proved delusions when Ontario Hydro went bankrupt under the weight of its nuclear debt. While Mr. Harris fantasizes about new nuclear plants supplying the lower 48 states, nine of Ontario’s 21 nuclear plants are today either temporarily or permanently shut down, and Ontario faces blackouts next year if those still operating don’t perform to expectations. In parts of Mr. Harris’s Ontario, the province’s failing reactors contributed to brownouts twice in the last two years.

CANDU reactors in other provinces have performed even worse. One of Quebec’s two reactors, built to run for 40 years, was shut down after running a matter of days. New Brunswick’s sole reactor, which is supposed to supply 30% of the province’s power, was down two-thirds of the time over the last six months. To keep the lights on, New Brunswickers were importing power, not shipping it south.

For more than half a century, a nuclear future has fired the imagination. Atomic automobiles, powered by a single pound of uranium, would travel 5 million miles between refuelings, one Caltech professor predicted in the 1940s. Nuclear batteries would run everything from wristwatch-radios to home appliances, a chemical association president prophesied. Artificial suns made from chunks of uranium mounted on towers would bring the weather under control, ending unwanted fog and snow and allowing corn to be grown indoors, wrote the author of Atomic Power in the Coming Era. “Our children will enjoy electrical energy too cheap to meter; will know of great periodic regional famines only as matters of history; will travel effortlessly over the seas and under them and through the air,” preached Lewis Strauss, the venerated chairman of the U.S. Atomic Energy Commission in 1954.

Amid this euphoria, nuclear power could do no wrong, and could be denied no privilege. Every government in the Western world backed it as necessary; those wealthy enough to afford it blessed it with money and speedy regulatory approvals. An unquestioning public accepted the pronouncements from on high. Even into the 1970s, commercial nuclear power had overwhelming public support; opposition to it was barely discernable. Environmental groups such as Pollution Probe hoped it could replace dirty coal plants.

Decades later, despite hundreds of billions of dollars in investments, the nuclear dreams have gone “poof.” Although governments bestowed it with unprecedented subsidies, nuclear energy meets a small fraction of their citizens’ energy needs; in Canada, nuclear energy provides about one-third as much energy as wood.

The nuclear bubble burst partly because Three Mile Island and Chernobyl put the lie to the industry’s safety claims, and mostly because Margaret Thatcher unintentionally put the lie to the industry’s economic claims. Through her privatization of the U.K.’s power system, the country’s power utility, the Central Electricity Generating Board, had to open up its books. The financial world blanched at the data on the nuclear plants, as the London Observer described in a 1989 editorial entitled “Nuclear fantasy.”

“It has taken the cold stare of the City [London’s financial district] to penetrate the veils of secrecy and deceit that have long enveloped the nuclear industry,” it wrote. “Privatization has proved that nuclear power is hopelessly uneconomic and saddled with decommissioning costs that no private company could accept without huge guarantees from the government. Yet from the 1950s to a few months ago, anyone who breathed the slightest doubt about its viability was met with a blizzard of faulty figures and downright lies.”

Privatization doomed the U.K.’s nuclear expansion plans and spawned a private sector building boom in high-efficiency power plants. More importantly, the U.K.’s success — power prices dropped while environmental quality improved — became the dominant worldwide model for electricity deregulation, also dooming nuclear expansion plans elsewhere.

Yet true believers do not easily quit. They read tea leaves for signs that destiny will out, and grasp at any straw — no matter how absurd — to bring about the second coming. Mr. Cheney — a man committed to unleashing coal production and pumping hydrocarbons from the Arctic reserve, off the sensitive Florida coast, and in the Rocky Mountains — mocks himself by championing nuclear power as an antidote to global warming, as if his nuclear-hydrocarbon combination will address anyone’s concerns over climate change.

Mr. Cheney scoffs at the term “do more with less,” saying “conservation may be a sign of personal virtue,” but is no basis for a sound comprehensive energy policy.

Here are other personal virtues for Mr. Cheney to consider, ones suitable for a conservative political leader. Stop picking winners and losers. Understand that doing more with less — also known as increasing efficiency — remains the single biggest solution to meeting our energy needs. Don’t discount, in Luddite fashion, the new generation of advanced technologies. Trust the marketplace. And take heed of the advice from the London Observer’s editorial of 1989: “The country should construct an energy policy based on the real world, rather than a nuclear fantasy.”

Nuclear renaissance
By Neville Nankivell

The nuclear option is suddenly back on the policy table as part of the future electricity-generation mix for most major industrialized economies. As natural gas costs keep rising and concerns grow over reliable electricity supplies, this is a sensible change from many earlier intentions to phase out nuclear power eventually. As a Canadian government official put it recently: “we need every arrow in the energy quiver.”

In the United States, Canada and some European Union countries, applications to upgrade existing nuclear plants and extend their operating licences are now being looked upon more favourably. New plants are also being seriously considered again after years of moratoriums. This is the case in Finland, whose president recently declared it would be absurd to renounce nuclear power. As part of its long-range energy supply policy, the Bush administration favours granting permits for new U.S. plants. Japan is sticking to its construction program.

In Canada, there’s even some talk of the future possibility of a nuclear power plant in Alberta so the province won’t be so dependent on natural gas. New Brunswick and Quebec are expected to extend the working lives of their existing nuclear units through refurbishing proposals that are now under review. Ontario will soon have a group of its laid-up reactors back in service. Its plan to lease another plant to a consortium headed by British Energy, a private sector group, will involve substantial new capital investment in nuclear facilities.

Some 30 nuclear power plants in the United States, or one-third of the total, have applied for license extensions — typically 20 years — on the basis of plans to invest in upgrades. Most others are expected to follow suit. Yet just a few years ago there had been predictions that a third of the nuclear power plants in the United States would be closed rather than have their licences renewed.

These developments portend a renaissance for an industry in which Canada is particularly advanced technologically, and is also a major world supplier of commercial uranium used in the fuel fabrication process. There is, however, still formidable public hostility to nuclear power — although the industry has had an excellent safety record since the chilling accidents at Chernobyl and Three Mile Island some 15 to 20 years ago. Recent surveys in the United States suggest the mood may be changing.

A clear majority there now supports the building of new plants, compared with 42% a couple of years ago. Behind the swing: sharply rising electricity prices and power shortages in California and other parts of the country. Nonetheless, the industry will have its work cut out to get the public truly onside for nuclear renewal. It will have to show, for instance, that zero tolerance is in force for lapses such as those that happened last decade in Ontario, where sloppy maintenance procedures led to several nuclear units being taken off-line for intensive inspections and work to get them up to proper operating performance.

That said, the industry, which is tightly regulated, has a lot going for it now. Nuclear power is becoming more price competitive because of the rising costs of conventional fuel sources such as natural gas, coal and oil. In the United States, nuclear power is now cheaper than coal in terms of operating costs for thermal generation, and well below gas and oil. Nuclear plants are more expensive to build than gas-fired ones, but technological advances are now improving the efficiency of existing plants. Industry consolidation is helping too. Overall output of nuclear plants in the United States is up 20%. An increasing number of private sector-owned U.S. plants are now quite profitable. Next-generation reactors promise even better operating results. New construction techniques should help hold down capital costs.

The industry is also rightly promoting the positive role that “blue skies” nuclear power can play in reducing greenhouse gas emissions. The 1997 Kyoto Protocol, aimed at establishing specific emission reduction targets internationally, is effectively dead because U.S. President George

W. Bush has said his administration won’t ratify it. But this doesn’t mean the United States or other governments will abandon efforts to encourage production of more environmentally friendly energy. The best way to do this, said U.S. Vice-President Dick Cheney in Toronto this week, is to extend the operating lives of existing nuclear plants and allow new ones to be built. Mr. Cheney is heading an energy task force on behalf of the President. To fill this bill properly, low-emission nuclear power will have to be market competitive and not propped up by government subsidies.

There’s still the problem of permanent disposal of hazardous nuclear waste, although various concepts — including a deep-storage proposal for Canada — have been judged technically feasible. Opposition from anti-nuclear groups, including violent protests in Europe over the movement of radioactive waste, has spooked governments from moving more expeditiously on this issue. Yet those who do ship radioactive material have had an exemplary safety record.

Some industrialized countries, such as Germany, remain opposed to further nuclear power development and intend to stick to phase-out plans. But increasingly, more governments are keeping an open mind on the issue. This is the realistic way forward. Global electricity demand continues to grow robustly. Meeting it is key to maintaining economic growth.

Neville Nankivell is a columnist and former editor-in-chief of the Financial Post.

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