[cdn-nucl-l] Error in National Post article on AECL funding

[Tom Adams <TomAdams@nextcity.com>]

(Author's note: This article incorrectly states AECL's annual subsidy as
$100 million. Although that figure was promised by the federal
government as the limit of subsidization of AECL, in fact the figures
every since that promise was made have been substantially higher. Tom
Adams)

Financial Post, 2002 March 20

Last call for AECL subsidies
 After 50 years of grants, Canada's nuclear industry still asks for
more, seeming oblivious to the fact 'the world is abandoning nuclear
power'

 Tom Adams
 National Post

 Should Canada continue to bankroll that perennial money loser, Atomic
Energy of Canada
 Limited's nuclear reactor sales program? Herb Dhaliwal, the new federal
Minister of Natural
 Resources, will soon be putting that question before the federal
Cabinet, along with two
 reviews designed to inform their opinion.

 Such reviews are not new. Mr. Dhaliwal's predecessors have been
churning them out for 50
 years, most recently in 1995 and 1998. One of the current crop of
expert reviewers brought in
 to help the government decide, Nesbitt Burns, was an advisor back in
1995. The other
 reviewer, KPMG, employs Reid Morden, until three years ago AECL's
chairman and CEO.

 What is new is skepticism from a prominent Cabinet member. Whether the
government should
 continue the $100-million a year subsidy is "what the review's all
about," Mr. Dhaliwal said
 hours after taking over his new portfolio earlier this year. "What is
the future of our Candu
 reactor and atomic energy? Because if we're not making any sales and
there's no potential,
 should we continue to invest in those areas or not?"

 Mr. Dhaliwal has good reason to ask hard questions. In 1995, and with
help from Nesbitt
 Burns, AECL committed to sell 10 reactors in 10 years. Since then, only
two were sold, both to
 China. The last hot prospect, Turkey, declined the nuclear option in
July 2000. As Turkish
 Prime Minister Bülent Ecevit then observed: "The world is abandoning
nuclear power."

 In the 1998 review, AECL committed to snag business in Southeast Asia
by setting up offices
 in Thailand, Vietnam, and Indonesia. So far, no bites there, despite
billions of dollars in bait
 that AECL has dangled before potential purchasers.

 The only pending "sale" is to complete a Candu in Romania called
Cernavoda 2 that was
 actually sold in 1977 yet remains only 40% complete. The process of
completing it has been
 complicated by a series of misadventures, including shoddy work by
slave labourers and the
 execution of the project's sponsor, former dictator Nicolae Ceausescu.
Like so many nuclear
 projects before it, the project awaits yet another subsidy from the
Canadian government in
 the form of a Canada Account loan from Export Development Corporation,
this time for
 $390-million.

 AECL's drive to find foreign customers gained new urgency in 1993, when
Ontario Hydro decided it could no longer afford to buy Candu
 reactors. To stave off its own bankruptcy, Ontario Hydro began to phase
out its existing nuclear plants by closing one reactor less than
 halfway through its planned service life and tearing up its plans to
build, jointly with AECL, 10 more reactors. In 1997, Ontario Hydro
pulled the
 plug on another seven operating reactors, admitting to an Ontario
legislative committee that it would be unable to meet its financial
obligations
 due to its nuclear problems.

 Once the nuclear industry promised electricity too cheap to meter. Now
the industry cares little what its power costs to consumers, an attitude

 that goes some way to explain its failure. AECL scientist Jeremy
Whitlock, the industry's unofficial voice through his on-line nuclear
presence
 and comments in the press, minces no words in presenting his industry's
perspective. When asked whether he and his nuclear colleagues
 thought nuclear-generated power was cheap, he replied: "I submit to you
that this is an irrelevant question, and if you think that any of us
 suppose otherwise, you have simply not done your homework." Instead of
cost, Mr. Whitlock prefers to measure value through complicated
 desk studies that attempt to value the "life cycle factors of the
technology."

 AECL has lived off an uninterrupted stream of federal government
subsidies for 50 years. In 1996, George Lermer, then dean of the faculty
of
 management at the University of Lethbridge, reported that between 1947
and 1994, the federal government had invested $19-billion (in 2001
 dollars) in AECL and its Candu program, over and above any offsetting
gain to the federal government or federal taxpayers. Prior to Ontario
 Hydro's forced closure of one-third of its remaining reactor fleet in
1997, Mr. Lermer concluded: "The Candu project should have been
 declared a commercial failure and wound up at least two decades ago."
Instead, the federal government has since provided the nuclear
 industry with billions more in financing.

 Always a wily follower of Ottawa fads, AECL adapts its message to suit.
Sometimes it casts itself as a cure to regional disparity to pick up
 regional development dollars. That is how Cape Breton obtained an
unneeded heavy water plant costing hundreds of millions. Sometimes it is

 a champion for the Third World poor -- all the better to tap the
Canadian International Development Agency for foreign aid dollars.
School
 children in Thailand received some of AECL's nuclear "education," paid
out of funds earmarked for aid. In recent years, AECL has thrown a
 green cloak over its shoulders and tried to get paid for not emitting
greenhouse gases. From its beginnings, AECL has excelled at tapping into

 government export credit subsidies.

 AECL has succeeded in gulling so many, in part, because AECL has been
allowed to conceal itself from scrutiny. Despite a legislative
obligation
 to report annually, its corporate plans have not been filed with
Parliament since 1995. In 1998, AECL stopped reporting its overseas
"agent
 fees," used indirectly in the past to bribe foreign officials. The
public and the press have been kept in the dark along with government
agencies
 and the federal Cabinet. Whether Canadians continue to be kept in the
dark, and whether we continue to be forced to support what has
 become the longest-lived failure in industrial history, is now up to
Mr. Dhaliwal.

 Tom Adams is executive director of Energy Probe, a Toronto-based
think-tank. TomAdams@nextcity.com.