Canadian Nuclear Association

February-01-04

Canadian Nuclear Association

February, 2004

I regard myself as a typical MP on this file – long on concern, and short on knowledge.  I confess that I have no background in the area of nuclear technology, and have a newspaper understanding of the issues.  The Pickering Nuclear Station, however, is within 10 kilometers of my home and is of some concern for my constituents, and my family.

Our discussion today is concerned with the issue of public acceptance and political support, and how they relate to the success of the nuclear industry. One of the key messages I would like to convey is how vital these forms of “buy-in” are to the industry’s long-term viability, and to highlight the correlation between these forms of support, and the growth and development of nuclear power. In my neighbourhood, the nuclear industry has faced a major setback. As we will discuss, it serves as an example of one area in which the industry must put concerted effort to not only remedy the situation at hand, but also, to work to regain the support of those living in the surrounding vicinity.

All of you would know that Pickering A #4 has been undergoing refurbishing.  By any standard, this project has been a disaster.  The work being done has gone grossly over budget, with change orders reaching levels of the absurd.  Someone told me that change orders alone exceeded $800, 000 and that an engineering firm had to be hired just to manage the charge orders.  Anyone with an ounce of common sense knows that the way to rip-off a contract is to resort to continual change orders.  Jake Epp, a former member of the Conservative government and former Minister of Energy is a very credible individual, and his report was damning. Unit #4 started out as a $457 Million project, in August of 1999, and it was estimated that it would return to service by the middle of 2001. Unit #4 did not actually return to service, however, until September 2003, with the significantly larger price tag of $1.25 Billion. The project was over two-plus years late when completed, and at 2.7 times the original cost. And it gets worse. In August of 1999, the cost of the entire project, for all 4 units, was estimated at $1.1 Billion. The costs, however, have since escalated to $3.4 Billion, with a return to service date ball-parked to fall between October of 2006 and August of 2008.

Now I ask you, what political fool, given this track record, is going encourage and help foster public acceptance?

I feel sorry for Jake Epp, John Manley, and Peter Godsoe. All three of these men are good people, and extraordinarily bright. They will be the ones saddled with making a decision on this colossal mess.

How can the industry expect to earn and maintain public acceptance and political support if one of its flagship reactors is being managed so incompetently?  I would challenge you to ask yourselves:  Had the Ontario government foreseen the problems it would have with nuclear energy, back in the 1960’s, would it have ever given the industry an opportunity to put down roots in Ontario ?  The methods that have been used to manage nuclear energy in Ontario represent a disgraceful abuse of public asset, and if the nuclear industry doesn’t step in and fix it, there will be little left to talk about.  Political support and public acceptance are closely linked, and we would be hard pressed to expect anyone to try to muster public enthusiasm after such considerable abuse of their trust.  The industry, in effect, has turned a crown jewel into a nightmare for successive governments.

To no one’s great surprise, the public’s acceptance and support for nuclear energy has actually declined over the past twenty years as the problems within the industry snowball.

Part of the decline is due to a culture of arrogance. The industry represents some of the brightest minds in the country. According to the deck supplied to me, you have among you 300 PhDs, 750 Master’s degrees, 1000 PEngs. As a group, you are characterized by brainpower and aptitude. The question then, to put it bluntly, is why has the industry been so inept? Why have you done so little gain public support?

I spoke with a colleague of mine concerning these remarks. He is probably the one member of our caucus who really can speak on nuclear energy from a solid knowledge base.  While we discussed where the industry was at, he recounted his memories of sitting in Committee meetings, and having these meetings invaded by hippies with long hair, a few joints, and some guitar-aided chants. When this happened, the Committees used to rate the quality of the music based on whichever was the most catchy.

Today, the long hair is gone, the marijuana is about to be de-criminalized, and the catchy tunes have faded.

His most vivid memory, however, was the culture of secrecy and near arrogance in the energy industry at large. He described it as a culture of superiority, which permeated the industry.

Darlington went from 2.5 billion to 5 billion and ended up at 15 billion. Our government is walking through its own valley of doubt, at the moment, which has had the effect of eroding our credibility. We are now in the process of preparing a budget, and our challenge will be to regain our credibility while doing so. In keeping with the message and spirit of the Biblical parable of the talents, “He who has proven himself trustworthy with small amounts will earn trust to oversee great amounts.” This is the challenge that we face, and the challenge the nuclear industry faces, as well.

I’m in no position to give advice to you as industry representatives, but I do prefer, and would encourage you to adopt the Prime Minister’s approach to confronting problems that challenge one’s credibility. As we have seen through out this last week, we must square up to the problem. We must tell the truth. The Darlington project spent $500 million was spent before the debate even occurred. This is the kind of spending that Canadians and their representatives in government will not quickly forget. They know that you will have to come back at some point in time.

It is important to remember that even if the public is backed into a corner – be it with brown outs, the Kyoto Protocol, green house gas emissions, or the viability of gas supply - even when it appears there is little choice, you cannot expect to gain political acceptance or political support by default.

There are a number of different practices that are sure-fire credibility killers. Resistance to adherence to the Generally Accepted Accounting Program (GAAP) kills credibility. Spending prior to debate kills credibility. Stranded debt kills credibility. Enormous cost overruns kill credibility. Accumulating 30 years worth of waste above ground kills credibility. Stretching the life expectancy of a plant kills credibility. The situation in Ontario , as you know, is a mess, and the effects of this mess spill over to foster large-scale distrust of the industry as a whole. For better or for worse, the success of the Canadian nuclear industry will tie-in directly to its success in Ontario . Thus, as a point of public acceptance and political support, you have an enormous task ahead of you.