Energy Probe director speaking at Watchdog meeting

Karen Lloyd
Port Hope Evening Guide
February 26, 2002

Norm Rubin, a professional in the field of nuclear energy, has been invited by Port Hope’s Nuclear Environmental Watchdogs to talk to the community Wednesday night about his values and principles and how they relate to Low-Level Radioactive Waste (LLRW).

While Mr. Rubin, who has been with Energy Probe for 24 years as a director of nuclear research and a senior policy analyst, shares the Watchdogs’ feelings of opposition about Port Hope’s LLRW cleanup.

He said he looks forward to a “general information sharing meeting,” where all citizens can take a critical look at the proposed waste plan and how it will impact them.

“My role, when it comes to nuclear issues, is to be an advocate,” Mr. Rubin said.

“My role, when it comes to an issue of this kind, is very different.”

“There are serious problems in Port Hope,” he said.

Mr. Rubin said his job with the committee is to consult its members and point them in the direction of asking important questions.

“We have to find reasonable ways to inject human values into technical decisions,” Mr. Rubin said.

Among his goals on Port Hope’s LLRW issue, is to try and rope the Ontario government into participating in the environmental assessment. That’s because it appears the federal government doesn’t want to put the time and energy into an extremely important job that needs to be done properly, he said.

“They’re taking the path of least resistance,” Mr. Rubin said, referring to the federal government’s screening process for the environmental assessment as opposed to a full panel review.

He added the three authorities involved with the assessment – Natural Resources Canada, the Canadian Nuclear Safety Commission and the Department of Fisheries and Oceans – have a record of being embarrassed when reviewed by an independent panel.

They have a plan, and the only way anyone can speak to them is over their shoulder while they’re running with that plan, Mr. Rubin said.

“(The LLRW cleanup) should be a decision by the people who will be affected by it,” he said.

And that is what Mr. Rubin said he will be discussing. He said there are ways people can influence the process.

“Let’s behave as if we want to keep this stuff out of the environment,” he said. “The challenge here is to get the word out.”

Mr. Rubin will be a guest speaker at the Nuclear Environmental Watchdogs’ public meeting Wednesday night at the Town Hall at 7:30 p.m.

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B.C. firm joins with ABB to develop wind farm

Paul Vieira
Financial Post
February 20, 2002

Uniterre Resources Ltd., a small Vancouver energy company, signed on to a joint venture yesterday to develop what would be one of the world’s biggest wind power generating projects, in northern British Columbia.

But a leading power industry expert said the project will never see the light of day unless Ottawa is prepared to dish out millions in subsidies.

The wind farm, as envisaged by Uniterre and its partner, Swiss-German industrial giant ABB Ltd., would generate up to 700 megawatts (MW) of electricity, enough for a city of 700,000. Wind in the proposed area, off the coast of the Queen Charlotte Islands, averages about 31 kilometres an hour.

Power generated would be transported via an underground cable to B.C. Hydro’s transmission grid in Prince Rupert.

The cost of this project is somewhere in the $1-billion range, Uniterre says.

The two companies will conduct a feasibility study to see if the project is economically viable. A decision to proceed is expected in mid-2003, and should they agree to go ahead, construction would start the following year.

“We wouldn’t start down this path if we didn’t think it was profitable,” said Jack Austin, Uniterre chairman and a Senator who represents British Columbia.

Not everyone agrees. “Unless this project draws in great amounts of government subsidies, it’s going to blow over,” said Tom Adams, executive director of Energy Probe, a power industry watchdog.

Mr. Adams said wind power is expensive – the cheapest estimate from alternative energy advocates is 8¢ a kilowatt hour (KwH), a substantial jump compared with Ontario, where consumers pay about 4.3¢ per KwH for electricity, or the U.S. mid-Atlantic, where electricity costs 2.5¢ per KwH.

Because of the high cost, wind ventures fail to draw the private-sector money required, Mr. Adams said, adding that the 100 MW wind power project in Quebec’s Gaspé region was backed by Hydro-Québec, the government-owned utility.

Mr. Austin, however, said he’s convinced the venture can attract third-party investors. He argued that power from the wind farm could be sold to B.C. Hydro, neighbouring jurisdictions such as Alberta and the U.S. Pacific Northwest, or big industrial companies in the province – specifically citing Alcan Inc., which has a smelter in Kitimat.

Moreover, a number of energy giants, such as Suncor and Royal Dutch/Shell Group, have indicated they will invest millions to develop alternative energy projects.

He added company executives would likely apply for money available through established federal programs, but said he would not be involved in that process given his role as a Senator.

“I don’t blame people for being skeptical – the location is remote, the market is not close,” Mr. Austin said. “I started out being a skeptic, too. But once I looked at various aspects, then I was convinced that this was worth undertaking.”

 

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Regulatory power real issue in electricity deregulation

Eric Reguly
Globe and Mail
February 14, 2002

Evidently looking to add some fizz to her fizzling campaign, Conservative Party leadership candidate Elizabeth Witmer this week promised “an immediate review” of Ontario’s decision to deregulate the electricity market in May. Deregulation is a fuzzy concept that, thanks to California and Enron, has dubious connotations. Too bad the term in this case is a complete misnomer. In fact, regulation, and lots of it, is on the agenda.

When you mention deregulation to the typical Ontario consumer, the reaction typically ranges from skepticism to fear. Deregulation means that the buyers and sellers can negotiate prices (partly true) and that prices will rise (possibly true, although the opposite could happen). It also means that Hydro One, the transmission arm of the old Ontario Hydro, is to be privatized through a monster initial public offering. This, of course, raises visions of price gouging because that’s what private companies naturally attempt to do. A utility owned by the taxpayers, as Hydro One is now, would always have the public interest at heart, or so consumers think.

In reality, the so-called deregulation will come with regulations that will govern almost every aspect of the industry. This, for the most part, would be a welcome change.

First some history. For most of its life, Ontario Hydro (which was split into Hydro One and Ontario Power Generation in the late 1990s) was a law unto itself. The government had no legal right to tell it what prices it could charge even though it was the sole shareholder. The bulk of its capital expenditures were unregulated too. Ontario Hydro took advantage of this by evolving into Canada’s biggest construction company. Generating plants that the province didn’t need were built at damn-the-cost prices. The Darlington nuclear plant, east of Toronto, opened in 1992 a decade late and about $12-billion over its original budget. In the late 1980s, Hydro was planning to construct a dozen new nuclear plants.

The free-wheeling era ended in 1992, when the newly installed NDP government decided to rein Ontario Hydro in. But, as it turned out, making it accountable to cabinet was not ideal. Politicians had the power to tell Ontario Hydro what to spend where, even if the projects made little economic sense. Then the government froze electricity rates, just when all the bills for Darlington and other costly plants were rolling in.

By 1997, Ontario Hydro was effectively bankrupt. Because of Ontario Hydro’s dismal record, the industry will forever be regulated. Ms. Witmer can relax somewhat (more on this in a moment) about potential rip-offs and general scamming because of the presence of two regulatory bodies, the Ontario Energy Board and the Independent Electricity Market Operator (IMO). The former will regulate the rates and returns of the industry’s monopoly companies – Hydro One and the local distributors such as Toronto Hydro, among others. The latter will control the access to the electricity grid.

In effect, the IMO, as it’s known, will act like a stock exchange floor, matching buyers and sellers at the fairest price. Any player that doesn’t abide by the rules will get kicked out.

The presence of the IMO, in particular, should give all electricity consumers confidence that open markets won’t favour any one group of participants. Sadly, this may not be the case because the IMO is not as independent as its name suggests. If there is one area in which Ms. Witner could make political points, it is here. The IMO has 17 board members; at least nine, and possibly 10, represent industry “stakeholders” – the generating and transmission companies, the big industrial users, the local distributors and the like. The others, a minority, are independents; that is, they don’t represent any stakeholder.

Rod Taylor, Hydro One’s strategy chief, is an IMO director. He, of course, will vote in favour of motions that will benefit Hydro One. Barry Chuddy, a senior employee of TransAlta, the Alberta company that is building generation capacity in Ontario, will obviously do the same for his employer.

If there is one way to help ensure that the new electricity market is tamperproof, it is to make the independents a majority on the IMO board.

Over time, they should control it outright, with no political interference from the Ontario cabinet.

Electricity, like water, is an essential service and it’s essential that no one interest group has the power to gang up on another.

 

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Ontarians face price shocks on hydro bills

Janet McFarland
Globe and Mail
February 9, 2002

Ontario Premier Mike Harris told a Toronto press conference in December that he is “100 per cent convinced” that electricity deregulation will bring lower prices for Ontarians.

Perhaps one day, but it’s not going to happen soon. And Mr. Harris surely knows it.

The reason is not so much that open market competition will drive prices higher; electricity rates in spot markets have been falling because of the economic slowdown and the reduced demand from manufacturers.

Prices in U.S. border states have dropped in recent months to levels below the wholesale price in Ontario. And Ontario has a healthy excess of electricity supply. That means the province will avoid a California-style crisis, where soaring demand and inadequate supply pushed prices through the roof.

The real reason prices will rise as the market opens this spring is that other costs are scheduled to increase, and because the underlying structure of deregulation brings new costs. Last year, 24 large municipal utilities filed applications for higher rates, and the Ontario Energy Board has ordered them to be phased in over three years. The utilities say they must earn market rates of return and make new “payments in lieu of taxes” under the province’s new system.

These sorts of rising regulated costs will be difficult to offset by deregulation in the generation part of the industry, even if the spot market price of electricity falls.

Supporters of deregulation argue that the current rate increases would have happened anyway after years of price caps. But critics, including a coalition of Ontario’s biggest manufacturers, say some of the coming rate increases stem directly from the new market structure. They point to the pressures to earn profits, the need for private companies to pay taxes and the legacy of a huge debt as factors in boosting prices.

Tom Adams, executive director of Toronto’s Energy Probe, is one of the critics.

Mr. Adams spent a decade urging the Ontario government to privatize the province’s electricity market as a way to bring more financial discipline to the former Ontario Hydro, and to reduce taxpayers’ exposure to poor business decisions and soaring debts. When Ontario decided to go ahead with the plan, Mr. Adams sat on the market design committee and initially was a board member of the IMO, the new body that will run the wholesale energy market. But with the market about to open in less than three months, he has become disillusioned.

He estimates consumers will see higher rates this year – 20 per cent higher this spring alone. He says that, while some of the price increases would have been unavoidable even without deregulation, some portion of it could have been averted.

In particular, he opposes the decision that changed the ownership structure of municipal utility companies. No longer quasi-co-operatives owned by consumers, their ownership was legally transferred to municipalities to prepare for deregulation. The idea was that once the ownership was clear, municipalities could decide whether to sell the utilities.

Mr. Adams says the new ownership structure has allowed cities such as Toronto to extract huge dividends from utilities – $140-million a year, for example, from Toronto Hydro. He believes this ownership change will cost consumers $700-million to $1-billion a year as a result. “This is the largest financial mistake in the electricity restructuring,” he says. He then corrects himself: He believes it’s the second largest mistake, after the decision to restart the Pickering A nuclear reactors.

Meanwhile, electricity prices will particularly rise for the million or so Ontarians who have signed long-term electricity supply contracts from marketing companies. Those companies have blitzed the province with door-to-door sales campaigns. The contracts commit consumers to paying rates that are higher than current market prices, and Mr. Adams says those consumers may see price increases of up to 40 per cent this spring. That’s twice as much as the rest of us will face.

Despite his criticism of the process, Mr. Adams is not calling for the province to abandon deregulation. He says the process has gone too far to turn back, and there is no better alternative on the table to adopt. Instead, he is urging a number of reforms to reduce the damage.

For example, he says there should be a moratorium on selling long-term supply contracts until retail consumers begin receiving their new bills. Starting this spring, bills in Ontario will be itemized so that customers know how much they’re really paying for their core electricity. Only then can they really assess the deals they’re being offered by the private retailers.

But even if tinkering is done now, higher bills are almost certain this year. The best that can be hoped for is that the impact will be relatively short-term, and that rates will fall as the initial costs are absorbed and competition grows. Consumers will not be satisfied that Mr. Harris has created a free-market model if there’s nothing in it for them.

 

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Hydro prices are set to climb

John Spears
Toronto Star
February 8, 2002

Greater Toronto residents can expect to pay an extra $6 to $7 a month for electricity starting March 1, according to rate applications filed yesterday by local hydro utilities.

The higher rates are the result of the Ontario government’s restructuring of the electricity market.

And more turbulence in hydro pricing is on the way, as the province plans to open a competitive electricity market May 1, which could make prices extremely volatile.

The price increases signalled by yesterday’s rate applications go into effect March 1, if they’re approved by the Ontario Energy Board. They’re independent of any further price swings produced by the competitive market set to open May 1.

The higher rates result from the province’s decision to stop treating local utilities as non-profit utilities owned by their ratepayers, and instead treat them as profit-making corporations, owned by the local municipalities.

The new municipal owners – who are free to sell the utilities or take on private partners – are also boosting rates so they can earn a return on their utilities.

The utilities must also pay the equivalent of corporate income taxes, from which they were previously exempt. Money from the new tax will be used to pay off the debt of the former Ontario Hydro.

Raising money to pay those new taxes is the principal factor driving the impending round of rate hikes, accounting for about 60 per cent of the increase.

Toronto Hydro has asked the energy board for permission to increase the rate for a typical residential customer by $6.63 a month, a hike of 7.2 per cent.

If approved, the new charges will boost the monthly bill for a typical residential customer using 1,000 kilowatt hours of electricity a month to $99.57, from $92.94.

The province slammed local utilities two years ago when many asked for large increases and leaned on the energy board to restrain the utilities’ rate hikes over a three-year period.

For Toronto Hydro, the new tax regime accounts for 59 per cent of the new rate. Other utilities reported a similar situation.

The new rates may start to change May 1 for customers who have not signed fixed price contracts, as a portion of the power bill will be set by an ongoing power auction among buyers and sellers.

Other utilities in the GTA lined up with Toronto Hydro for rate increases yesterday, the filing deadline for increases effective March 1.

Enersource Hydro Mississauga will charge a typical residential customer an extra $5.85 a month if its new rates are approved. That’s an increase of 7.3 per cent.

The 1,000 kilowatts used by a typical resident, which used to cost $87.60 a month, will cost $93.45 if the rate is approved.

Veridian Corp., which covers most municipalities between Pickering and Belleville, has applied for increases averaging 5.77 per cent for all rate classes.

But a typical residential customer in most of the utility’s service area will pay an extra 7 per cent, or $6.45 a month if approved by the energy board.

In Ajax, Pickering, Clarington and Uxbridge, the cost of 1,000 kilowatt hours of electricity will rise to $98.14 from $91.69. That covers 70 per cent of Veridian customers.

Veridian’s rates vary in other parts of its service area, as it works toward harmonizing prices across municipalities that formerly had their own hydro utilities.

Mike Richmond, a spokesperson for Ontario Energy Minister Jim Wilson, noted that much of the money for the rate increases will be devoted to paying down the debt left by the former Ontario Hydro. He said the province is trying to pay off the debt at an accelerated pace, in part with the new tax on local utilities.

The provincial auditor has told the province to retire the $21 billion “stranded debt” by 2017, Richmond said, but the province hopes to clear it from the books by 2012.

 

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Don’t stop progress

CNW
February 6, 2002

Stopping Ontario’s progress toward an open market for electricity as advocated by Mr. Hampton, Leader of the NDP, would be a foolhardy and dangerous step, Arthur Dickinson, president of the Association of Major Power Consumers in Ontario (AMPCO) said today. Dickinson cited years of mismanagement by the former Ontario Hydro, the provincially owned monopoly, that resulted in skyrocketing electricity rates, $39 billion in debt and a badly crippled nuclear fleet. “Going back to that system would be an abdication of responsibility for our future. Ontario simply can’t afford it,” he said.

“AMPCO has supported restructuring and open competition in the electricity industry for some time, because the economic prosperity and even the survival of some industries may depend on it”, Dickinson said. “An electricity market where customers have real choice would help Ontario’s economy stay competitive. With the establishment of the May 1, 2002, market opening date, investors can move ahead with plans for new electricity generation so that Ontario will have electricity when it needs it,” he said.

Dickinson noted that since 1995, AMPCO has consistently argued for the creation of real competition and customer choice in the electricity market. He said that AMPCO has been at the forefront of electricity restructuring in Ontario, and has invested resources both as an association, and through its individual members, to ensure that Ontario’s progress on this issue was forward – not backwards. Dickinson said that AMPCO unequivocally supports the electricity market opening on May 1, 2002.

“Stopping or delaying this process now, as some advocate, would be a foolhardy and backward step that would irreparably harm Ontario’s economic interests,” he said. Dickinson said that AMPCO would continue to work with the government to ensure a successful competitive electricity marketplace is achieved in Ontario. However, he cautioned that there is more important work to do to prepare the province for a move into an open market. AMPCO is recommending that the government:

1. Continue to fast track competition by rapid and genuine decontrol through sale of generating assets owned by Ontario Power Generation;

2. Reduce the burden of stranded debt as quickly as possible by ensuring that all proceeds of decontrol – including those secured through the privatization of Hydro One – go first to reducing the stranded debt;

3. Help to increase consumer understanding of provisions to ensure the continued safety and reliability of Ontario’s electricity service, as well as measures for consumer protection, and consumer choice.

AMPCO is a province-wide industry organization that advocates competitive electricity rates and promotes a reliable supply of electricity for all consumers. AMPCO members represent a wide range of resource, manufacturing and processing industries that use large amounts of electricity. Its 65 members spent over $1 billion on electricity last year.

 

Posted in Reforming Ontario's Local Electrical Distribution Sector | 1 Comment

The Future of Electricity

Tom Adams

February 6, 2002

  Presentation for the St. Lawrence Forum
St. Lawrence Centre for the Arts
Tuesday, February 26, 2002

Energy Probe is an independent environmental and consumer watchdog, active for over 30 years, and reliant on charitable donations from the public. You can find more information on us (including financial statements) or make a donation at www.energyprobe.org.

Origin of Ontario’s electricity reforms

“Ontario Hydro is a corporation in crisis,” Maurice Strong, Chairman, March, 1993.

“Ontario Hydro was controlled by a kind of a nuclear cult,” William Farlinger, Chairman, August, 1997.

Nuclear crisis leads to Ontario Hydro’s 1997 financial collapse

Ontario Hydro, in a confidential briefing to the Ontario Legislature Select Committee, October 28, 1997, revealed that it could not comply with its statutory financial obligations, effectively declaring the public sector equivalent of bankruptcy.

Structural flaws created conditions for Ontario Hydro’s failure

· Political control and the absence of liability eliminated accountability and efficiency;
· Centrally planned investments ignored risk;
· Starting in 1994, politically-determined rates contributed to financial instability.

Ontario Hydro’s structural flaws understood in 1916

“Public Ownership and the Hydro-Electric Commission,” by James Mavor (University of Toronto professor), the Financial Post of Canada, August 5, 1916, anticipated that Ontario Hydro would fail due to:
· “the tendency to minimize the risk and to underestimate the amount of capital necessarily involved”;
· “the tendency to overman the enterprise”;
· “the tendency to fix the price arbitrarily.”

Ontario’s electricity reforms – Criteria for Success

1. Lowest sustainable rates (artificially “stable” rates increase cost and impair reliability);
2. Eliminate taxpayer liabilities – Hydro bonds, nuclear waste and power contracts;
3. Reduce environmental harm;
4. Maintain system reliability.

The Good News

· Legislative foundation mostly sound;
· Progress toward a smart wholesale electricity market;
· Consumer protection and competition promotion through the Market Power Mitigation Agreement (MPMA);
· Two of three new regulators protecting the public interest working well – the Independent Market Operator and the Electrical Safety Authority – and the OEB is improving;
· Modest (but insufficient) environmental gains – nuclear waste funding and reduced smog;
· Some significant reliability gains from efficient prices and stronger transmission.

The Bad News

· Rising publicly-backed electricity debt – largest contributor is the restart of Pickering A;
· Continued special discounts for preferred industries;
· Impairment of independent regulatory bodies mandated to protect the public interest;
· Some unjustified increases in regulated distribution component of electricity prices;
· Inhospitable climate for private electricity investment;
· Regulator-created customer confusion creating opportunities for marketing scams.

(Each of the above resulted from government failing to deliver on its original promises.)

The U.K.’s 1989 electricity reforms benefit the public interest

“Electricity deregulation and privatization have been bad news for consumers everywhere they have been implemented,” said John Wilson – February 19, 2002, press release;
· Deep cuts in coal and oil use, acid gas emissions, and greenhouse gas emissions;
· Nuclear expansion stalled and existing nuclear capacity is contracting;
· Electricity prices for households down 32 percent;
· Increased electricity system efficiency, staffing down about 50 percent;
· Stopped cutting off power to the poor.

Comparing U.S. and Ontario electricity prices

“We’re going into a new market, a U.S. market where prices are much higher.” OEC, Feb. 6.
· Wholesale prices, not retail, in neighboring areas are relevant to future Ontario prices;
· New York wholesale prices averaged 2.8 ¢(US)/KWh in Q4, equal to Ontario;
· Pennsylannia/Maryland/New Jersey wholesale prices averaged about 2.6 ¢(US)/KWh in Q4, eight percent less than Ontario.

What needs to happen now?

· Open the market on time – delaying would increase the total cost of electricity, injure taxpayers, and could ultimately reduce reliability, just as it did in California and Alberta;
· Privatize government’s industrial activities;
· Strengthen regulatory independence;
· Bring emission rules up to the level required by international agreement;
· Freeze marketing until bills unbundled, enforce rules on marketers, test legality of some contracts, but no cancellation of legal contracts as Mr. Hampton called for on Feb. 6.

 

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Nuclear-waste woes

Tom Adams
Globe and Mail
February 6, 2002

Letter to the Editor
Globe and Mail

Re: Back in Power, Feb. 2, 2002

If nuclear power’s expansion awaits only a repository for its waste, an assumption repeatedly expressed in this article, then we would expect to find that waste problems caused nuclear power’s failure to provide economically priced electricity while paying back its original investment.

On the contrary, Canada’s nuclear program has failed economically despite the effective subsidy of ignoring much of its waste costs. Future federal taxpayers should expect major nuclear-waste bills arriving in the next couple of decades. Taxpayers in Ontario and New Brunswick should expect a particularly steep nuclear-waste bill.

Nuclear expansion died not only because of its waste problems, but also because of the weight of economic failure (as demonstrated by Ontario Hydro), reactor safety concerns (as demonstrated by Chernobyl), and proliferation concerns (as demonstrated by India and Pakistan). Even if the waste problem magically disappeared, the other showstoppers would remain.

Tom Adams
Executive Director
Energy Probe

Back in power

February 2, 2002, Globe and Mail, by Doug Saunders

It really does feel like the safest place in the world, this room carved from the lava rock 2½ kilometres inside a mountain. Dimly lit, very dry, eerily still, it has – despite the roar of the ventilators – the eternal calm of a tomb. The temperature is maybe a degree warmer than that of your house, but if all goes according to plan, it will soon be a lot less comfortable: more than 150 degrees Celsius, enough heat to roast a chicken, heat that will last for thousands and thousands of years, heat generated, along with many more worrisome rays, by the largest stockpile of radioactive material ever assembled.

The room is our final destination, after driving north from Las Vegas deep into the top-secret test range that blots the heart of the Nevada desert and boarding a train that clacked down a tunnel to the centre of a dry, dead volcanic peak.

In this stygian location, they have carved a high, wide chamber that a panel of scientists has deemed to be the safest, most secure place in the United States. Upon arrival, you do feel you could curl up on a flat rock and catch a good, deep sleep, but for the four mining technicians arguing about their Harley-Davidsons.

This will be the final resting place for the collected legacy of a wild half-century of atomic misadventure, encased in two-metre-high alloy cylinders, draped in titanium sheets and lined up in tunnels stretching outward over a thousand-acre underground lattice. It will span the atomic age: the uranium bricks that got it all started in 1942 on a squash court at the University of Chicago; the plutonium that filled the cores of the first hydrogen bombs; the reactor waste from Three Mile Island; the spent fuel from nuclear-powered aircraft carriers, and the cores from the warheads that were aimed at Moscow during the Bay of Pigs, all part of 70,000 tons of toxic detritus from every Cold War weapons project, experimental atomic pile and commercial nuclear reactor ever built.

The Yucca Mountain high-level waste disposal site, when it opens for business, will mark the final chapter in the 60-year odyssey of the glowing castoffs.

In the most elaborate garbage dump ever envisioned by man (and, not coincidentally, the biggest not-in-my-back-yard story ever told), technicians here have spent 20 years and more than $6-billion (U.S.) trying to figure out how to keep these deadly orphans of atomic history out of human contact for the next 100,000 years. To most North Americans, Yucca Mountain marks a quiet, bureaucratic end to an unfortunate chapter in the history of technology, a pauper’s burial for the nuclear era.

No nuclear power plant has been built in North America since 1977, when the business was decimated by the Three Mile Island disaster, and the nuclear-arms race came to an end in 1989, with the collapse of the Cold War. Along with the waste, then, you’d think that we would be burying the culture of the atom.

People in the nuclear-power business know otherwise: Yucca Mountain, when it finally completes its long political journey, will mark a whole new beginning.

Last month, this mountain burial site suddenly leapt into the public consciousness. The U.S. Department of Energy, responsible for all things radioactive, announced that it had accepted Yucca Mountain as the sole repository for all military and civilian nuclear waste in the United States. This means that President George W. Bush soon will send the plan to Congress for review and approval, a 90-day process that most observers expect to pass with much debate but little real opposition.

The U.S. plan is certain to become the model for other nations, including Canada, whose plans to bury its reactor waste deep within the Canadian Shield are modelled on Yucca Mountain. “Canada is at least 10 years behind the United States on this,” says Bill Seddon, an engineer who works at Yucca Mountain for Atomic Energy of Canada Ltd. “Their research is far more extensive, so we can expect to adopt a lot of their ideas when we end up choosing a site.”

The people of Nevada, of course, will protest loudly about the plan for Yucca Mountain, but the rest of the nation has long considered the state a dumping ground, and these days there are more important matters at hand. The deep burial of radioactive waste has become an urgent topic. The Sept. 11 attacks, demonstrating the destructive force of a fuel-laden jumbo jet, suddenly made North America’s 200 nuclear reactors, most of them near urban centres, seem like catastrophes waiting to happen. This week, the danger level spiked with the news that al-Qaeda terrorists have planned attacks on nuclear sites and researched specific targets.

Engineers have been quick to argue that the reactors themselves, encased within reinforced concrete domes, are strong enough to withstand a direct hit. But their waste – tens of thousands of tons of uranium, plutonium, deuterium and other highly toxic metals – is kept in pools and dry-storage casks usually located in comparatively flimsy buildings right next door. As well, the military’s waste from warheads and ships (40 per cent of U.S. naval vessels are nuclear-powered) is stored in similarly insecure structures.

So, for 60 years, all this deadly material has been piling up at 130 sites across the nation, a nagging worry that has now turned into an all-out panic. Yucca Mountain “gives us the opportunity to clean up the environment from a legacy of the Cold War,” says Patrick Rowe, a senior engineer who has been with the project for 20 years (before that, he was involved with the atom bomb tests that helped to create some of the waste in the first place).

“Republicans haven’t traditionally been known as friends of the environment, but this is a wonderful opportunity to clean up some major messes that have been made in the United States.”

In one sense, he is correct: Once the expected 10,000 trainloads of radioactive waste have been carried into the Nevada site over the next 24 years, the threat spread across the landscape will be reduced dramatically. It will, for instance, allow the final dismantling of the 18 nuclear reactors that have ceased operating but still contain tons of their own waste. And it will put high-level weapons waste out of the hands of terrorists, who could assemble it into a working weapon.

What Yucca Mountain will not do, though, is put an end to the nuclear industry. Quite the contrary.

“I think there’s a popular view that Yucca Mountain will get rid of nuclear power forever,” says Dan Balduini, an executive with Westinghouse TRU Solutions, the company that runs the U.S. Energy Department’s underground dump for low-level radioactive waste in Carlsbad, N.M.

“What people don’t realize is that it’s probably going to create a situation where it becomes possible to create even more nuclear waste, and it’s just going to keep on coming. This thing will become the justification for a whole new wave of nuclear plants.”

At the moment when we are most afraid of the atom’s power, nuclear power has suddenly become a coveted commodity once again. And this burial site, nestled in the sun-blasted atomic heartland, has turned out to be the key to a nuclear renaissance.

To understand how a waste dump and a terror attack could make nuclear power popular again, it helps to follow the interesting life of Dan Keuter.

He is, for lack of a better term, a collector of nuclear power plants, and his zeal has driven up prices. Officially, Keuter is vice-president of nuclear business development for Entergy Corp., the New Orleans firm cited as North America’s third-largest energy company. He also is a lifelong atomhead, having begun his working life as a college graduate at an Oregon nuclear plant.

“The political climate for nuclear power right now is better than it has been for many years,” Keuter enthused recently as he prepared to enter a meeting in Washington.

While the collapse of mighty Enron Inc. has made a hash of the energy business, sending everyone’s shares plummeting and putting a stop to most deals, he feels there is little doubt that owning generators will remain a solid business. The question is not whether construction of nuclear plants will resume, but how soon.

Nuclear power was supposed to be a dead technology. As recently as four years ago, even experts within the energy industry agreed that reactors were a bad investment, that no new ones would ever be built and that old plants should be mothballed or sold off as quickly as possible. They were fantastically expensive to put up, inefficient and prone to lengthy shutdowns, politically hairy, and laden with expensive long-term liabilities, especially those involving waste.

In the words of one energy executive, by the 1990s shutting down power plants was considered “the ultimate nuclear Advil.”

All this changed, thanks to Dan Keuter and a small group of fellow true believers. In 1998, he surprised the industry by leading his company’s purchase of the Boston-area Pilgrim plant, an old facility whose owner had considered shutting it down. It was a highly risky purchase, although the price now seems amazing: $13-million, plus $67-million for fuel. Given that the plant cost hundreds of millions to build, Keuter and his colleagues were essentially given the keys and told to drive it away. (They also entered a bidding war that year on Ontario’s Bruce B nuclear facility, now run by British Energy.)

This marked the first move in what would become a heated market for used nuclear-power plants, being sold off by bogged-down public utilities into a fully deregulated market led by companies like Entergy and AmerGen, which between them bought a dozen plants. By the end of 1999, the fire-sale prices had ended and companies were paying more than $1-billion for some plants, prices that investors still considered to be good.

The primary reason was the rising cost of energy. Natural gas was becoming extremely pricey just as electricity demand was going through the roof. Both have dropped in recent months, but it has become an orthodoxy in many parts of the energy industry that the world is nearing the end of its easily obtainable oil and gas supplies (a liberal view in the 1970s has become gospel among conservative businesspeople).

At the same time, nuclear power plants quietly became much more efficient during the 1980s. They used to operate only 60 per cent of the time, but computer technology and better management have raised the figure to 90 per cent, and refuelling shutdowns that used to take months now last just two or three weeks. As well, reactors have turned out to have much longer life spans than once thought. It’s now customary to request that operating licences be extended 20 years.

With nuclear power beginning a renaissance, and energy companies thinking of building the first new plant in a quarter-century, along came Sept. 11.

According to Keuter, the terrorist attacks, paradoxically, made nuclear power seem even more valuable to Washington officials and Wall Street investors. “It was a wakeup call that we have to do something about national security as far as energy supply. . . . It really raises the question that we have to wean ourselves from foreign oil and foreign supplies of energy and start developing our own. And nuclear power isn’t the only solution, but it could be a major contributor.

“The downside,” he acknowledges, “is that it raises questions about terrorist acts against all kinds of facilities, including nuclear power plants. But in reality, the nuclear power industry is better equipped to handle these types of events than almost any other sector out there.”

Two and a half decades seem to have put a lot of people on Keuter’s side. In the 1970s, atomic energy was a major target for environmentalists, who were concerned with old-fashioned pollution, especially the radioactive kind. Since then, ecological worries have shifted to the more ominous and less visible issue of global warming, for which the legacy of fossil-fuel emissions is usually at least partly blamed. A large percentage of these come from electrical generation, the majority of which is still done by burning from natural gas, oil and coal.

In other words, nuclear power is starting to look like a clean, pollution-free alternative. Is it possible, now that it seems the waste issue is about to be solved, that environmental groups will begin promoting atomic power once again? Not likely.

But, to the alarm of some, it turns out that the success of environmental regulations designed to curb ozone-destroying emissions have actually created an ideal breeding ground for a nuclear-power revival: Greenpeace, against its will, can be credited with making the atom hip again.

“There’s been an environmental movement around global warming and air pollution that’s helped us quite a lot,” Keuter says. “This is as important to us as the price instability of natural gas – coal makes it harder and harder to meet those environmental regulations, so nuclear becomes the safe alternative.”

Recent surveys show that, among the general public, nuclear power is more popular than it has been for a generation. And among the men who run the United States these days, the atom has become a bona fide friend of the Earth. “If you want to do something about carbon-dioxide emissions,” U.S. Vice-President Dick Cheney said last year, “then you ought to build nuclear power plants.”

And they will build nuclear power plants, with Washington’s kiss of approval as soon as gas gets expensive again, and – far more crucially – as soon as there’s some place to put the waste.

This has been the issue’s sine qua non for more than 40 years. For opponents, radioactive waste is the fatal flaw, the one factor that allows any technology, any scheme, to be dismissed out of hand, no matter how safe or clean it may otherwise claim to be. For supporters, waste is the one highly expensive, endlessly amortized end product that shatters the economics of nuclear power. With a safe repository, building nuclear plants is a snap. “High-level waste is an issue to get public acceptance, and once you get public acceptance, you get Wall Street acceptance,” Keuter explains.

A dump, it seems, is sometimes more than a dump. In this case, it is an engine.

On the long journey to Yucca Mountain, you realize that the atomheads have always been with us. In the past 25 years, when atomic power and nuclear weapons became unacceptable topics in polite society, they simply disappeared into the desert.

There are no signs pointing out Yucca Mountain. You simply turn right on Highway 95 at Nevada Joe’s, a 24-hour state-licensed brothel, and pass through a heavily guarded security checkpoint. Then, as you wind through a blasted desert valley, you find yourself amid a wonderland of Cold War atomic fantasies.

Here are three hulking, abandoned factories, known as R-MAD, E-MAD and Test Cell C, home to the Pentagon’s secret 20-year program to develop nuclear-powered rocket and jet engines. Nearby is the 500-metre BREN tower, which in 1962 had a plutonium reactor placed at its peak to test the effects of radiation on Asian villages.

It stands in front of the mountain that was the site of the Egress Program, in which thousands of soldiers burrowed deep underground before the mountain was subjected to a simulated nuclear attack. The troops stayed where they were for months until the radiation had dissipated, and then chewed their way out with boring machines to launch an MX missile counterattack.

Between the two sites lie several others, their original uses forgotten, still too radioactive to approach. And not far to the south is Mercury, where more than 800 atomic, hydrogen and neutron bombs were exploded, above and below ground, over almost half a century.

The Yucca Mountain site is located at the end of this winding road. Given its neighbours, is it any wonder that the people running it are given to some utopian excesses?

Patrick Rowe, the affable engineer, uses the florid language of the atomhead: a barrage of statistics, carefully constructed probabilities and actuarial projections designed to nullify any concerns about this highly dangerous project.

Here is a typical placating pronouncement, made as we pass an abandoned MX missile site: “If you lived within 100 feet of a rail transport corridor, and if 50,000 radioactive shipments went past your house over 24 years, you’d get less than a quarter of a millirem of radiation per year, and a chest X-ray gives you 15 millirems.”

Like most atomheads, he dismisses nuclear skeptics as “antis,” a meddlesome and irrational nuisance. With the Bush administration in power, the antis are barely even a nuisance.

Of course, there is a good chance that his optimism will be borne out. Actuarial tables offer little comfort to the irradiated, but Yucca Mountain’s eternal graveyard appears a much safer option than scattering deadly waste over 130 U.S. locations, and 50 or so in Canada. What Yucca Mountain supporters are more reluctant to discuss, a dangerous flaw in the program, is that it will do nothing to make reactors safer from terrorist attacks.

U.S. reactors are required to store their high-level waste in pools on site for the first five years, when it is the most radioactive and considered simply too dangerous to move. This means that every active reactor will still house, with varying degrees of impermeability, enough deadly waste at any time to create a very nasty plume of death. Even Rowe admits that “this site solves the long-term security problem, but not the short-term.”

There may be a solution, according to Richard Garwin, the physicist most often credited with inventing the hydrogen bomb.

He later became an outspoken antinuclear activist and disarmament advocate, using his positions with the Federation of Atomic Scientists and the Council on Foreign Relations to argue for the elimination of nuclear weapons. In recent years, however, he also has come to believe that nuclear power is not only beneficial but also the key to total disarmament.

“What I want them to do is to put the stuff in there, inside Yucca Mountain,” he says, “and if necessary, in the near future, I hope we’ll be able to take it out again.” This will be possible, he and co-author Georges Charpak, the 1992 Nobel laureate in physics, argue in their 2001 book Megawatts and Megatons, because weapons-grade radioactive material will be used to fuel a new wave of nuclear reactors, rendered safe from terrorism and turned into efficient electricity.

Garwin’s proposed tradeoff – a new look at nuclear power in exchange for a final farewell to warheads – is possible thanks only to the buffering force of Yucca Mountain.

He warns, however, that the anodyne logic of the atomheads should not be allowed to prevail: “What I say is that nuclear power isn’t helped by its most fanatical supporters, who say that radiation in small amounts can’t hurt you. Well, it can, even in small amounts. If we can be honest about that, and honest about the problem of waste, then maybe we can start to see through to some of the benefits.”

Deep within Yucca Mountain, it’s even easier to see that humanity simply has to find a better way to turn matter into energy. Nuclear fission has turned out to be a tradeoff to make Dr. Faustus proud: In return for a few decades of cheap, ecological, democratic benefit, we now are forced to contemplate eternity. Somehow, the deadly rocks have to be returned to the ground.

Until we come up with something better, perhaps Yucca Mountain’s artificial eternity will have to do. Here in the belly of the mountain, that eternity feels warm and secure. To see even a glimmer of sunlight from here would entail a half-hour hike through solid rock.

Turn the other direction, however, and you’re lost in an endless underground maze.

Keep off the grass – forever

How do you bar entry to a toxic-waste dump for tens of thousands of years?

Radioactive materials stored at Yucca Mountain will have half-lives of 10,000 years, and could be toxic as long as 100,000 years. That’s far longer than the human race has existed, so since the 1980s, scientists have been studying ways to warn future civilizations to stay away.

Over time, climate change could transform the stark location into a desirable site for a city, but anthropologists say no language spoken today would still exist, so linguists, science-fiction writers, semioticians and engineers were hired to come up with solutions.

In a 1984 report titled Communication Measures to Bridge Ten Millennia, the U.S. Department of Energy suggested creating an “atomic priesthood” and a “ritual-and-legend” system that would use religion to spread word of the underground horrors.

Other ideas considered: using chemicals to make the area so “repulsively malodorous” that no one would go near it; erecting giant panels using comic strips to illustrate the danger, and something vaguely described as “microsurgical intervention with the human molecular blueprint” – in other words, encoding warnings inside the genes of the entire human race.

Another study suggested covering the area in black rocks, so it would be impossibly hot all the time, or sculpting the local geology to make it dizzying, nauseating and forbidding, with no straight lines or view of the sky.

Yucca Mountain officials say they will probably adopt the following, somewhat less radical measures adopted by a New Mexico facility for less radioactive waste. They would come into effect when the site shuts down in 300 years, and are thought to make it secure for 10,000 years.

The great wall: A huge, erosion-proof berm 11 metres high and 33 metres wide would encircle the site and contain hundreds of “specially configured metal objects” and magnets to reflect radar and provide a unique magnetic signature.
Stonehenge II: Granite monuments eight metres high and weighing 20 tons would be placed around the perimeter. They would display messages (engraved in seven languages that best represent humanity) plus infographics and cartoons warning of the hazard below.
Temple of doom: At the centre of the site, a solid granite temple (with an open roof to allow natural lighting) would contain a variety of stay-away messages in words and pictures.
Tunnel vision: Rooms walled in granite and buried well below the surface to guard against erosion and climate change would contain the same information as the temple overhead.
The plan: Intercept any attempt in the distant future to dig into the mountain by someone ignorant of what it contains.
Buried treasures: Thousands of small warning markers would be placed just below the surface at random throughout the area. Each of the nine-inch-diameter disks made of granite, aluminum oxide and fired clay would carry a warning message in one of the seven chosen languages.

 

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Romanian reactor loans protested

IPPSO FACTO/February 2002 issue
February 1, 2002

Toronto: Leading energy critic Energy Probe has submitted a formal complaint to the federal government over a $390 million loan by Ottawa’s Export Development Corporation (EDC) to the Cernavoda-2 nuclear reactor project by Atomic Energy of Canada Limited in Romania. The project was begun as far back as 1980 under the dictator Nicolae Ceaucescu, and bears earlier criticisms of forced labour, defective materials and give-away financial arrangements. The site was abandoned in 1989 after a national revolt ousted President Ceausescu. AECL is now interested in reviving the project.

Justification for the subsidy comes from an environmental assessment conducted by AECL, which a number of environmental groups condemn in particularly forceful language. Energy Probe calls it full of outrageous shortcomings, including incomplete disclosure, rushed time lines, and a total lack of accountability. Furthermore, “deeply flawed” as Energy Probe calls the EA regarding narrow environmental considerations, regarding economic and broader societal risks the organization calls it completely worthless and an absurdity. Ottawa’s unwillingness to publicly evaluate such non-environmental effects suggests that they are “likely strongly negative,” Energy Probe argues. The EA’s assurances regarding decommissioning are “especially false and misleading,” using a partial decomissioning of a reactor (Gentilly 1) that saw no more than a few hundred hours of full-power use as a reference. That the risks are taken on behalf of taxpayers who cannot pull out of the investment is unacceptable, the group goes on to say. Any review of Cernavoda-2 should be in the hands of an independent panel, it argues.

Sister organization Probe International, which has condemned such other federally-supported projects as the Three Gorges dam in China, concurs. Probe International notes that the EDC is exempted from any obligation to carry out EAs under amendments to the Export Development Act, which became law on December 18, 2001, and even suggests the amendments were made with Cernavoda-2 in mind. “The game is rigged and the public can’t challenge the rules or the results,” Executive Director Pat Adams says.

The Sierra Club of Canada has joined the protest, adding that over sixty NGOs from around the world have called for an open and independent EA.

Interestingly, at the same time in the United States a coalition of advocacy groups is calling on the Senate not to reauthorize the Price-Anderson Act, which limits the financial liability of nuclear plant operators to sums far below current estimates of potential damage from a nuclear accident. The Act, dating from 1957, expires in August of this year unless reauthorized. Its extension for another fifteen years has already been approved by the House of Representatives.

 

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Nuclear plants targeted

Bill Gertz
The Washington Times
January 31, 2002

U.S. intelligence agencies have issued an internal alert that Islamic terrorists are planning another spectacular attack to rival those carried out on September 11.

The detailed warning was issued within the past two weeks in a classified report that said one target was a U.S. nuclear power plant or one of the Energy Department’s nuclear facilities. The alert was based on sensitive intelligence gathered overseas that revealed discussions among terrorism suspects.

The latest warning was similar to other terrorist threats that prompted public alerts in October and December. Officials familiar with the report said it contained six potential methods and targets of attack, among them:

# A bombing or airline attack on a nuclear power plant or other U.S. nuclear facility, such as a weapons storage depot, designed to cause mass casualties and spread deadly radiological debris.
# A bombing against a U.S. warship in Bahrain, headquarters of the U.S. Navy’s 5th Fleet, where some 20 ships are based. The attack would be similar to the October 2000 suicide bombing attack on the USS Cole.
# Another airliner attack on a building using a hijacked commercial jet as a suicide bomber.
# A vehicle bombing in Yemen. Authorities in Yemen, acting on intelligence gathered by the United States in Afghanistan, recently averted a car bombing of the U.S. Embassy in San’a by finding the explosives-laden vehicle.

A public alert had been issued Jan. 14 that said al Qaeda terrorists were planning an attack in Yemen. President Bush said in his State of the Union speech Tuesday night that U.S. intelligence agencies had uncovered plans of U.S. nuclear power plants at terrorist bases in Afghanistan, an indication attacks on the facilities were planned.

“We have found diagrams of American nuclear power plants and public water facilities, detailed instructions for making chemical weapons, surveillance maps of American cities, and thorough descriptions of landmarks in America and throughout the world,” Mr. Bush said.

“What we have found in Afghanistan confirms that — far from ending there — our war against terror is only beginning,” he said. A defense official said yesterday that intelligence gained from Afghanistan had led to the thwarting of three terrorist attacks, including the arrests of terrorists in Singapore and Yemen. A third operation is still “being rolled up,” the official said. “We have been getting a lot of indications [of an attack] but no specific threat information,” the official said.

Yemen’s foreign minister, Abubaker al-Qirbi, told The Washington Post on Wednesday that authorities in Yemen have tracked down two key al Qaeda suspects in that country.

Mr. al-Qirbi said Yemen was working to capture a group of suspects wanted by the United States for questioning about their links to Osama bin Laden, blamed for the September 11 attacks. A U.S. intelligence official said the intelligence community is constantly receiving new threat data. “It’s a heightened threat environment, and we get threat information on a regular basis,” this official said.

No public announcement has been made of an impending terrorist attack based on recent assessments. But the information related to a potential new attack first came to the attention of intelligence agencies last week, officials said.

The last time the Bush administration issued a public warning of a potential terrorist attack was Dec. 3, when Homeland Security Director Tom Ridge announced that Americans should be alert to the danger of an attack. It was the second such warning.

“We remain on alert,” Ridge spokesman Gordon Johndroe said yesterday, adding that the FBI also has issued a warning to law enforcement around the country to remain on high alert through March 11.

“Subsequent warnings for heightened vigilance around utilities, nuclear power plants, water treatment plants were issued a couple of weeks ago,” Mr. Johndroe said in an interview. “The threat remains, and therefore we remain on alert.”

Attorney General John Ashcroft said Friday, in releasing a photograph of a suspected suicide terrorist, that “I want to advise the public to exercise vigilance and common sense in the face of the terrorism threat.”

On Jan. 17, Mr. Ashcroft released photographs of five al Qaeda terrorists whose statement made on videotapes found in Afghanistan “suggest future terrorist acts, specifically suicide attacks.”

Energy Department spokeswoman Lisa Cutler said security has been stepped up at nuclear-weapons facilities throughout the United States since September 11.

In San Francisco yesterday, security guards detected bomb residue on the shoes of a passenger seeking to pass through a security checkpoint. The man disappeared before he could be questioned.

On Dec. 22, Richard C. Reid, a British national linked to the al Qaeda terrorist network, was arrested after he tried to light the fuse of an explosives-laden shoe on a Paris-to-Miami flight, authorities said.

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