Friday, May 16, 2008

AECL Throws in the Towel - Medical Reactors Scrapped

Whooee! Well, friends an' foes, the chickens is comin' home to roost. Everybody remembers the big Isotope Crisis where the Canadian Nuclear Safety Commission blew the whistle on AECL's mismanagement of the reactor at Chalk River and that led to a shut down and that led to Harper callin' all MP's to override the safety folks and start up the nuke plant despite non-compliance with safety orders. We all remember how Linda Keen was fired in the middle of the night a coupla months later.

Underneath all that was the assurance that Chalk River's aging NRU reactor was to be replaced by two shiny, new specially-designed medical isotope reactors: Maple 1 and Maple 2. Back in February, those reactors were 8 years behind schedule and $400 million over budget. But, don't worry, AECL assured us.

Experts and informed observers were saying that the Maples had a serious design flaw and would likely never come online. Hogwash, said AECL. The new reactors would be churning out isotopes by late 2008. There were just a couple of minor problems, they said.

Greg Weston wrote about it for the Sun.

The old Chalk River reactor has been patched and repaired since it was first tagged for the scrap heap almost two decades ago -- after a serious accident in 1991 when a broken weld spilled 18,000 litres of contaminated heavy water into the reactor building.

The reactor was formally scheduled to be taken out of service the minute the new Maple reactors were in service which, 17 years later, still has not happened.

The federal agency that owns and operates all three reactors, Atomic Energy of Canada Ltd., still claims the first of the new atomic marvels will be ready for service by the end of this year.

But government sources told Sun Media both of the new reactors -- called Maple 1 and 2 -- have a serious design flaw, and would cost taxpayers a fortune.

A source close to the issue says flatly: "You can bet you will never see those in service. Ever."

The growing consensus that the new reactors are duds is the latest chapter in what may be one of the longest-running government boondoggles in history.

In 1996, MDS Nordion, a Canadian company that markets medical isotopes, agreed to pay Atomic Energy $140 million to build two Maple reactors that were to be in commercial service no later than 2000.

MDS would own the reactors, and Atomic Energy would get a share of the proceeds from the sale of medical isotopes across Canada and around the world.

But by 2005, costs had spiralled out of control, and still the Maple reactors were plagued with technical and other problems.

In 2006, after a lengthy legal fight with Atomic Energy, MDS Nordion did something that should have sounded alarm bells about the reactors.

The company simply wrote off the staggering $345 million it had invested in the Maple reactors, and handed Atomic Energy the keys -- and all future financial responsibility for the project.

In return, MDS got a guaranteed 40-year supply of isotopes.

MDS Nordion's share price went up on the announcement.

At that time, Canadian taxpayers had at least $150 million in the Maple project, bringing the total project cost to just over $500 million.

In 2007, officials at the federal agency predicted it would cost the public purse another $130 million to get the new reactors in service.

But senior government sources say the figure is closer to another $400 million, bringing the total cost to around $900 million -- an overrun of about 650% from the original contract price.

"There is no way those (reactors) make any economic sense for commercial isotope production," says one federal official close to the situation.

"Taxpayers would be subsidizing them forever."

Sources also warn that even investing $400 million more would not guarantee the reactors would actually work.

The biggest technical problem, in simple terms, causes the nuclear reaction to speed up as the reactor speeds up, creating a cycle of ever increasing power that may not have a happy ending.

Atomic Energy officials argue that the problem is only slight, and can be rectified.

But one federal official points out the world has already seen the phenomenon in action once, albeit on a far larger scale than anything that could occur at Chalk River.

"It was called Chernobyl."

Well, folks, AECL has finally thrown in the towel. They are scrapping the $600 Million white elephants. They're gonna walk away from the Maples just like MDS Nordion did in 2006, after MDS had invested $345 million.

AECL is a crown corporation and all the losses associated with this colossal screw-up have been at the expense of the Canadian taxpayer. They've spent 12 years collecting hundreds of millions in welfare while building a coupla pieces of junk. We can't sue them because we ARE them.

AECL aborts reactor development

The Canadian Press

MISSISSAUGA, Ont. — Atomic Energy of Canada Ltd. is scrapping development of its two new MAPLE medical-isotope reactors at its Chalk River, Ont., laboratories.

The decision “is based on a series of reviews that considered, among other things, the costs of further development, as well as the time frame and risks involved with continuing the project,” the federal Crown corporation said Friday.

The MAPLE reactors, described as the first in the world dedicated entirely to medical isotope production, were intended to be capable of supplying the entire global demand for molybdenum-99, iodine-131, iodine-125 and xenon-133.

AECL said the decision to abort them “will not impact the current supply of medical isotopes.”

It said contracts with MDS Nordion provide for production to continue at AECL's existing National Research Universal reactor in Chalk River.

So, we're not only tossing out the two flawed Maples, we're planning to honour the 40 year supply contract with MDS. I guess we're planning on keeping NRU Chalk River running for another 38 years. The reactor was built in the 50's and was scheduled for decommissioning in 2000, when the Maples were to have replaced it. Now, they'll never replace it.

Let's all remember that Dalton Ginty has AECL on the short list, along with General Electric and Areva, to bid on $40 billion dollars worth of new nuclear power generation in Ontario. They are said to be the hometown favourite with their newly-designed, never-built ACR-1000 CANDU.

Harper wants to sell all the crown corps. AECL's been on the block for a couple years. Looks like somebody'll be able to snap up a bargain. Confidence in and value of AECL must be at an all time low.

Disgustin', sez I.

JimBobby

5 comments:

Mushroom said...

So I guess the big winner will be OMERS and Bruce Power for picking up the remnants of AECL. No way can Harper force a sale to foreign buyers such as General Electric and AREVA. Mind you, Bruce Power may have Canadian pension stakeholders in the regulatory framework, but we also need to study the merits of this adventure. Pension fundholdings are like conglomerates which lost their shirts in the 80s and early 90s.

Mike said...

Well, well, isn't that interesting? My next door neighbor works at NRCAN and was involved with this. It has been a secret for 2 years. Yes, this shut down has been in the works for 2 years, meaning Gary Lunn know about this back when he was warned about the NRU shutdown in September.

More evidence that the crisis was created in order to find a reason to sell AECL to a private company, cheap. I wonder if the company that wins will have ties to the Conservatives?

Do you think Encana, which wants nukes for the Tarsands, might scoop it up?

This thing was planned to go down like this since the days the Cons took office. A totally manufactured crisis with this predictable result.

JimBobby said...

Thankee fer chimin' in, fellers.

Yeah, I think they did the first preliminary tests a couple years ago and that's when they discovered the design flaw. How do they justify taking more taxpayer money after having discovered the Maples were never going to work? Deny, delay and obfuscate and keep milkin' the cash cow.

Speakin' of Bruce, they got a couple reactors they're refurbishing at our expense. The deal started out to be something like $1.7 billion. Now, they're six months behind schedule and over budget by $300 million. Ontario taxpayers are on the hook for at least an extra $150 million.

Megaprojects equal mega-screw-ups. All over Ontario, we have old dams that used to run spinning mills, flour mills and even electric generators. In my little burg, they had electric street lights powered by "The Dynamo at the Dam" back in 1902. Today, there's falling water in hundreds of small towns that could be used to generate power. There are new designs for small scale hydro-electric that are efficient and use modern materials not available in 1902. I think it was 1903 when our little dynamo caught fire and the town went back to gas lights until getting on to a regional grid.

In the time it takes to draw the blueprints for a nuke plant, we could have dozens of small scale hydro generators up and running and supplying clean, renewable power -- at a fraction of the cost of nukes, too.

JB

Anonymous said...

Well many years ago, Southampton Ontario and other small towns around , were getting power from a falls at Rocky Saugeen. Then in 1960, came the Bruce Nuclear plant which supplied these towns instead....'nuf said.

Anonymous said...

"AECL is a crown corporation and all the losses associated with this colossal screw-up have been at the expense of the Canadian taxpayer."

Yeah, not quite. You just said in the previous sentence that "MDS Nordion [walked away] in 2006, after MDS had invested $345 million."!

Talk about intellectual laziness!