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Why is the federal government funding new nuclear power reactors?

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Natural Resources Minister Seamus O'Regan, pictured in September 2020. Image: Seamus O'Regan/Twitter

In its September throne speech, the federal government signalled its intention to fund the development of new nuclear reactors (SMRs) as part of its climate action plan. 

Today, the government made its first SMR funding announcement: $20 million from ISED's Strategic Innovation Fund for the company Terrestrial Energy to develop its prototype SMR in Ontario.

Anyone interested in evidence-based policy is wondering: Why are they doing this? There is no evidence that nuclear power will achieve carbon reduction targets, while there is considerable research indicating the contrary.

In fact, in today's funding announcement, federal Natural Resources Minister Seamus O'Regan confirmed that the new reactor will take more than a decade to develop and will contribute nothing to Canada's 2030 target for reducing greenhouse gas (GHG) emissions.

The same week as the throne speech, the release of the 2020 World Nuclear Industry Status Report (WNISR) confirmed, as did its previous reports, that developing new nuclear energy is too slow and uneconomical to address the climate crisis compared to deploying renewable energy technologies.

Last week, research based on data from 123 countries over a 25-year period made a similar finding. December 2019 research from Stanford professor Mark Z. Jacobson refutes claims that nuclear energy is zero-carbon. A November 2019 article in the American business magazine Forbes argues that building new nuclear reactors instead of investing in more climate-effective energy resources actually makes climate change worse.

SMRs, the nuclear reactors promoted by the federal government, are in particular over-hyped as a climate crisis solution. SMRs have been proposed as a solution for remote communities and mining sites currently relying on diesel fuel but new research has found the potential market is too small to be viable. 

SMRs exist only as computer models and nobody knows for sure if they will work. Last month, the Canadian energy watchdog The Energy Mix interviewed WNISR lead author Mycle Schneider, who called SMRs "PowerPoint reactors, not detailed engineering."

Given all the research evidence pointing away from funding nuclear energy in a climate action plan, why is the federal government proposing to do it?

In a webinar presentation earlier this year, the president of the Canadian Coalition for Nuclear Responsibility Gordon Edwards put it bluntly: "The nuclear industry is desperate."

Edwards believes the federal government's push for new reactor development is coming from the nuclear industry. "If they can, the nuclear industry will convince governments to pour public money into this for whatever reason, by misrepresenting its advantages and minimizing or even ignoring its disadvantages."

The federal government is "politically in hot water," Edwards continued. "They can't stop the petroleum industry. They bought a pipeline. They are not cutting down on greenhouse gasses like they said they were going to, they are going to be adding to it. So politically, it makes sense for the government to say, 'since we can't do a damn thing about actually fighting climate change, let's just say we're putting all our money behind nuclear reactors and they are going to solve the problem.'"

Edwards' analysis of data from the World Nuclear Association found that from 1996 to 2019, the number of nuclear reactors increased by only four units across the globe, from 438 to 442, while in the same time period, nuclear's contribution to global electricity production plummeted from 17 per cent to 10 per cent.

Nuclear reactor promoters are "barely keeping themselves alive," said Edwards, and have realized for quite a while that "they are in trouble."

The federal government created the nuclear industry in Canada and has funded it since the late 1940s. For more than 70 years Canada has been spending vast sums of public money to keep it going. Atomic Energy of Canada Limited (AECL), a Crown corporation with a mandate to promote and support nuclear science and technology and manage nuclear waste in Canada, received $826 million from the federal government in 2017-2018. Most of the public funds are turned over to a private-sector entity, Canadian Nuclear Laboratories, whose majority partner is SNC Lavalin.

One description of the nuclear industry in Canada is that it can be understood as a kind of Ponzi scheme. In its current corporate plan, AECL listed a cost liability of almost $6.4 billion for decommissioning and waste management provision and $988 million for contaminated sites in 2017-18.

The industry needs new nuclear reactors as a replacement revenue stream. New reactors require capital investment but no banks or private investors are willing to invest due to the poor return on investment. Public funding is the only option to keep the industry alive and pay off its liabilities, and more public money is always required or the entire scheme will collapse.

However this ends, the Canadian public will most certainly end up with the bill.

The nuclear industry lobby has many open doors on Parliament Hill. In the two years between September 2018 and September 2020, energy sector lobbyists were very busy in Ottawa.

A search for monthly reports of lobbying activity in the Registry of Lobbyists using keywords for the energy industry found that "oil" was the most common (350 reports), followed by "gas" (192 reports) and then "nuclear" (116 reports). Far behind nuclear were "solar" (58 reports) and "wind" (27 reports).

In some cases the nuclear industry does not need to lobby the government because it is already working for the government. In New Brunswick, the public utility NB Power is part of the industry.

Its Point Lepreau nuclear reactor is the only nuclear power plant located in Atlantic Canada. The NB Power vice-president nuclear is both the highest-paid public servant in the province and a board member of the Canadian Nuclear Association (CNA), the nuclear industry's lobby organization active on Parliament Hill.

In other cases, a revolving door shuttles senior government personnel involved in nuclear energy files to the CNA lobby. In one recent example, the former parliamentary secretary to the minister of natural resources who was responsible for nuclear policy is now a consultant for the CNA.

Former senior AECL executives and government nuclear energy staff are now establishing and managing various start-up nuclear companies actively seeking public funding from the federal government. And according to the throne speech, the money is available.

The Canadian government's plans to invest in nuclear energy contrast with the European Union's proposed Green New Deal released in June this year that specifically excludes investment in nuclear energy because of its harmful environmental impacts. The decision followed sustainable finance guidelines also adopted this year and developed in a process that included environmental and other civil society groups as well as energy industry representatives.

It remains to be seen if the Canadian government will also open its doors to groups other than energy lobbyists as it continues to shape its climate action plan. One way or the other, now that federal funds are flowing for new nuclear reactors, it is certain that climate activists will be refining their strategies and demands for genuine climate action.

Susan O'Donnell is a researcher, writer and activist based in Fredericton.

Image: Seamus O'Regan/Twitter

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