Nuclear agency review may trigger privatization
TheStar.com - Business - Nuclear agency review may trigger privatization
November 30, 2007
Tyler Hamilton
Energy Reporter
The federal government is launching a strategy review of Atomic Energy of Canada Ltd. to determine whether the maker of the Candu nuclear reactor needs to be restructured, a move industry observers say will likely lead to a partial privatization of the heavily subsidized Crown corporation.
"It is time to consider whether the existing structure of AECL is appropriate in a changing marketplace," Natural Resources Minister Gary Lunn said yesterday.
"This review will give us the information we need to make the right decisions for AECL and the right decisions for Canadians."
Lunn's ministry will lead the review with help from the Department of Finance and "with assistance of outside expertise."
The Toronto Star, citing industry sources, reported in July that the federal government has been in talks to sell the commercial business of AECL and has already held informal meetings with U.S.-based General Electric Co. and France's Areva SA – both of which have expressed an interest in AECL.
This was followed in October by an internal reorganization at AECL, which saw five business groups broken into two distinct divisions – one devoted to commercial reactor sales and the other focused on research and development, and nuclear waste management.
Sources tell the Star that senior federal bureaucrats have already unofficially approached the banking community about plans to restructure AECL and that one scenario being floated is to sell a minority stake in the company's commercial reactor businesses to General Electric and engineering firm SNC-Lavalin Group Inc.
Lunn was asked at a parliamentary committee last week whether the government has had internal discussions about the privatization of AECL, but he wouldn't answer the question directly.
"We have made absolutely no decision with respect to that," he said. In the past he has maintained there have been no official talks.
Duncan Hawthorne, chief executive of nuclear operator Bruce Power, wasn't surprised at the decision for a strategic review, which could result in one of many outcomes for AECL. "It was the worst kept secret in the world, was it not?"
One wild card that could affect AECL's future is whether it lands a new reactor sale in Ontario. The company recently established an Ontario sales team and launched an aggressive "Choose Candu" email lobby campaign.
Failure to snag a sale in Canada could derail efforts to sell abroad, where giants GE, Areva and Westinghouse dominate.
"Frankly, when you look at the international reactor market, AECL doesn't have a lot of potential right now," said Shawn-Patrick Stensil, who tracks activity in the nuclear power market for Greenpeace Canada. "The question is how much of this review is going to be public or a dog-and-pony show."
Launch of the AECL review was accompanied yesterday by the announcement that Canada will join the Global Nuclear Energy Partnership, which aims to promote peaceful development of nuclear energy.
Under the partnership, countries such as Canada that export uranium as nuclear fuel would be required to take it back for reprocessing to be used again or for disposal. Creating stewardship over the uranium supply chain would help keep the dangerous material from falling into the hands of countries looking to develop nuclear weapons.
Meanwhile, Bruce Power announced yesterday it has signed a letter of intent to purchase certain assets of Energy Alberta Corp., the company that wants to build a nuclear reactor in the oil sands.
Hawthorne said Alberta needs 5,000 megawatts of new power by 2017 and nuclear fits the bill. He said Energy Alberta already has a head-start in the market, helping Bruce Power to accelerate its presence in the province.
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Canada won't become nuclear waste dumping ground, minister says
Last Updated: Friday, November 30, 2007 | 1:04 PM ET
CBC News
Canada will not be taking radioactive waste from other countries after it joined an international nuclear power partnership, Natural Resources Minister Gary Lunn says.
Opposition parties had expressed fears Canada's membership in the Global Nuclear Energy Partnership — which proposed the idea of returning spent nuclear fuel to the country of origin for disposal — could make Canada a dumping ground for the waste.
Canada is the world's top uranium exporter, meaning adoption of the proposal could have led to it being responsible for disposing of a sizable amount of waste.
But in an interview with CBC News on Friday, Lunn said that a condition of signing up for the partnership was that Canada will not take nuclear waste.
Instead, the minister said, Canada will share research and technology into how other countries can best deal with their own waste.
Opposition parties had lobbed criticism at the government following its announcement Thursday that Canada has joined the partnership.
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"The government has tried to slip this one under the wire," New Democratic environment critic Nathan Cullen said following the announcement.
During question period in the Commons on Friday, NDP Leader Jack Layton continued the attack on the decision, saying it should be put to a vote in the House because nuclear energy is not only expensive but dangerous.
"National security should be a key part of this discussion," Layton said.
The nuclear energy partnership proposes the expansion of nuclear energy worldwide through the use of an unproven breed of reactors that burn nuclear waste — a practice effectively banned in Canada and the United States since the 1970s because of security reasons.
The natural resources minister, however, responded that it is "great news" that Canada has joined the group, saying the country must be at the table for international nuclear talks.
"Canada should be a player. Canada can show leadership and we should show other countries," Lunn said.
Seventeen other countries are members, including China, France, Italy, Japan, Russia and the United States.
The partnership has many critics, both in the environmental movement and scientific circles.
On Thursday, the federal government also announced a review of Atomic Energy Canada Limited, the Crown corporation that builds and sells nuclear reactors.
"It is time to consider whether the existing structure of AECL is appropriate to the changing marketplace," Lunn said in a news release.
Opposition critics said that was a sign that AECL could be privatized.
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