Market offers verdict on nuclear option
Don't you wish you could have bought Atomic Energy of Canada (AECL) from the federal government? Had you been the buyer, you would have pocketed $60 million from the transaction. Sound like a strange deal? It is, but it's the kind of deal that is normal in the weird world of nuclear energy.
SNC-Lavalin, which recently bought AECL from the federal government, put up $15 million for the company and then received $75 million in federal supports for research and development. For that, SNC gets most of AECL's $1.1 billion in assets.
If that was all there was to it, it would be worth it to get this monkey off our backs. Canadian taxpayers have put more than $20 billion into AECL since 1952, when it was incorporated, and lost money on that investment in each of the subsequent 59 years. More than a billion has been poured in over the last four years alone. Canadians have paid though the nose to support the nuclear option, and most Canadians don't even use nuclear power.
Unfortunately, Canadian taxpayers will continue to pay for nuclear power for centuries to come. The only way SNC would buy a white elephant like AECL was if the government (i.e. the public) retained the company's liabilities of $4.5 billion. Furthermore, the public will have to pay to decommission existing AECL reactors when that time comes and to dispose of and manage the nuclear waste that will, for all intents and purposes, remain dangerous forever. We will also be required to pay any cost overruns from past and current AECL projects, such as the estimated $1 billion owed on the Point Lepreau nuclear power plant in New Brunswick.
And SNC is expected to lay off at least 40 per cent of AECL's 2,000-person commercial reactor division workforce.
Theoretically, SNC will pay the government royalties on the use of the CANDU technology in the future, but the truth is that's not likely to happen.
All this nonsense may seem weird to you and me, but voodoo economics is the norm for the nuclear industry. The fact that the government had to pay someone to take the company off their hands proves the argument, made most forcefully by Amory Lovins of the Rocky Mountain Institute, that nuclear power does not work in a market economy because it cannot make a profit; nuclear power only works when the public shoulders the costs and long-term risks.
Jack Gibbons, chair of the Ontario Clean Air Alliance, reports that all costs in, nuclear power from CANDU plants costs 21 cents per kilowatt hour, whereas it is possible to buy hydro power for six cents a kWh and to produce negawatts for four cents a kWh. (Negawatts is a term for making more power available by reducing energy waste.) Gibbons points out it would be possible to build a virtual nuclear power plant using the negawatts approach for one-fifth the cost of the real thing, but with no longterm waste to contend with. Nor do we risk disaster, the possibility that the impossible might happen, as it did when the Fukushima reactors melted down, with anticipated clean up costs of $100 billion over the next 100 years.
The strange, strange dream of nuclear power. We will pay and do almost anything to keep this illusion going, but the reverse myth is that the alternatives - the ones that don't poison and pollute the world forever - won't work because they are too expensive or impractical.
Now, however, scientists, governments, and significant elements of the business community are in agreement that we can build a lowcarbon, sustainable, global energy economy. The latest Intergovernmental Panel on Climate Change report stated that 80 per cent of global energy needs could come from renewable energy by 2050. The constraint in making this a reality is not technology, land area, or resources but political will, the IPCC concluded. Maybe if we could transfer the political will that has been devoted to nuclear for all these years to renewables we can achieve that goal.