CANADA S NUCLEAR FUEL CYCLE NATURAL RESOURCES CANADA

Transcription

1 CANADA S NUCLEAR FUEL CYCLE NATURAL RESOURCES CANADA December 2005

2 1. URANIUM INDUSTRY HIGHLIGHTS Canadian Uranium Industry Highlights Canada retained its position as world leader in uranium production in 2004 with output of tu (tonnes of uranium metal), up some 11% from the 2003 total as full production resumed at the McArthur River mine following the temporary disruption of production due to water inflow. As of January 1, 2005, Canada's recoverable uranium resources amounted to tu, up almost 3% from the 2004 total of tu due to the discovery of new deposits, mining losses and ongoing deposit appraisal. With over 85% of the resource base categorized as low-cost, Canada is well positioned to continue its leadership in uranium production. All operating mines and mills are situated in the province of Saskatchewan. Two companies, both with head offices in the province, operate all four facilities. Cameco Corporation wholly owns and operates the Rabbit Lake production center and is the majority owner and operator of the McArthur River mine and the Key Lake mill, where all McArthur River ore is milled. AREVA subsidiary COGEMA Resources Inc. (CRI) is the majority owner and operator of the McClean Lake production facility. TABLE 1. CANADIAN URANIUM DATA Known Uranium Resources Recoverable from Mineable Ore (1,000 tu as of January 1) 1 Total Primary Production (tu) Total Producer Shipments (tu) Value of Shipments ($C millions) Average Price for Deliveries under Export Contracts ($C/kgU) / ($US/lb U 3 O 8 ) NA NA NA 46.60/ / Exports of Uranium of Canadian Origin (tu) NA Uranium Exploration Expenditures ($C millions) Resources at prices of $100/kgU or less. 2 Preliminary figures. NA Not available at this time. In 2002, Natural Resources Canada suspended the publication of the Average Price of Deliveries under Export Contracts for uranium. Recent Uranium Developments On March 24, 2005, the Supreme Court of Canada dismissed with costs an application to appeal the June 4, 2004, Appeal Court of Canada decision that overturned an earlier Federal Court of Canada decision that a McClean Lake operating licence was issued improperly. The issue in these proceedings was the application of the transition provision of the Canadian Environmental Assessment Act (CEAA). Although the McClean Lake uranium production facility had previously been reviewed by the Joint Federal-Provincial Panel in the 1990s under the Environmental Assessment and Review Process Guidelines Order (EARPGO), the 2002 Federal Court of

3 - 3 - Canada decision had determined that further review was required. The Supreme Court of Canada ruling ends these legal proceedings and McClean Lake will not be required to conduct further environmental assessment to support a previously issued Canadian Nuclear Safety Commission (CNSC) licence. The ruling removes legal uncertainties regarding environmental assessment requirements for such facilities. Despite the uncertainty that surrounded these court proceedings, production at McClean Lake has continued without interruption, and the mill has been processing stockpiled ore from the Sue C open pit. On May 19, 2005, the CNSC announced a decision to renew the facility s operating licence for four years, with amendments that allow modification of the mill to receive and process ore from the Cigar Lake mine. The licence renewal also permitted development of specialized equipment to mine a series of small, relatively deep uranium deposits that are too small to be mined economically using traditional methods. Surface excavations in preparation for open pit mining of the Sue A and Sue E deposits began in July 2005 and November 2005, respectively. In July 2004, the CNSC issued a Uranium Mine Construction Licence to Cameco for the construction of specific surface facilities at the site of the proposed Cigar Lake uranium mine and in early December 2004, a licence to construct the remaining facilities was issued. On December 21, 2004, Cameco announced that the Cigar Lake joint venture had decided to proceed immediately with construction at the Cigar Lake project. Construction began early in 2005 and is proceeding on schedule, with production expected to begin in A ramp-up period of up to three years is expected before the mine reaches full annual production of some tu. Current plans call for initially processing all Cigar Lake ore at McClean Lake, but as Cigar Lake production ramps up to full capacity, just over half of final uranium processing is expected to be completed at the Rabbit Lake mill, pending regulatory approval. Cigar Lake is the site of the world s second largest high-grade uranium deposit discovered to date. A proposal to increase production at McArthur River and Key Lake by some 18% annually is currently being reviewed by the CNSC. Subject to regulatory approval, such an expansion would raise annual production at McArthur River, the site of the world s largest high-grade uranium deposit, to some t U. Uranium exploration has increased significantly in Canada as the price for uranium continues to increase from a near historic low in Although the majority of the recent exploration activity remains focused on the Athabasca Basin of northern Saskatchewan, activity has also been reported in Nunavut, Quebec, Newfoundland and Labrador, Alberta, and the NorthWest Territories. A significant discovery of the Millennium deposit in the southeastern Athabasca Basin is the first tangible result of the heightened exploration. Promising drilling results have also been reported from Shea Creek and Maybelle River, both in the western Athabasca Basin area, the latter in the province of Alberta.

4 NUCLEAR ENERGY PROGRAM General Overview CANDU Fleet of reactors There are currently 22 nuclear power reactors in Canada which are operated by public utilities and private companies in Ontario (20), Quebec (1) and New Brunswick (1). Of the 22 reactors installed, 18 reactors are currently in full commercial operation. In addition, there are eight CANDU reactors currently in operation internationally and one under construction in Romania. The CANDU reactors have continued to perform very well over the past year. The capacity factors of the CANDU reactors in Canada average 80 percent whereas the capacity factor of the CANDU reactors operating abroad average 93% (For further information, please refer to Appendix 1). Electricity Generation Nuclear energy represents an important component of Canada s electricity sources. Last year, three Ontario nuclear reactors were brought back to service, resulting in a 20 percent increase in electricity generated by nuclear power in Canada. As a result, nuclear energy provides now around 15% of Canada s total electricity needs (almost 50% in Ontario) contributing meaningfully to climate change and other atmospheric emissions objectives, since it is virtually an emission free source of generating electricity. Table 2 provides further details on Canada s most recent nuclear power data. TABLE 2 Nuclear Electricity Generation in Canada (TWh) Ontario Quebec New Brunswick Canada Nuclear Total Nuclear Total Nuclear Total Nuclear Total (e) 49% 2.3% 22.3% 14.5% % 2.8% 20.7% 15% (e) estimate Source: Statistics Canada

5 - 5 - Economic benefits Annually, the nuclear industry generates revenues estimated at approximately $5 B per annum (this includes value of nuclear electricity produced, which stands at about $3 - $4 B per annum, export sales (including CANDU equipment/service exports ($500 M), uranium ($500 M), medical and industrial isotopes and related equipment ($300 M). This does not take into account the health and environmental benefits of nuclear technology. Over 150 firms in Canada benefit from Canada s nuclear technology. The nuclear industry employs over 30,000 people in high-tech and well-paid jobs for Canadians. 1 Nuclear Research & Development Canada has supported the nuclear energy R&D program for over 50 years. As a result, Canada has developed its own indigenous power reactor technology (CANDU) and various spin-off nuclear technologies. The Federal government has been investing in nuclear research and energy since Canada has spent about $6 billion (as spent $) in nuclear R&D since that time. Some studies have converted the as-spent dollars to current dollars, which results in estimates of $12-15 billion, depending on the study. Funding The Federal government funding for AECL s nuclear research and development program has been in the order of $100 million per annum in recent years. In addition, the government has provided incremental funding for specific R&D initiatives such as the Advanced CANDU Reactor (ACR) Program. In addition to improving the CANDU 600 design, Atomic Energy Canada Limited (AECL) is developing the ACR, the next generation of CANDU reactor. This evolutionary CANDU design builds upon the proven, safe and reliable features of predecessor CANDU models, while improving upon technical specifications to reduce costs, shorten the construction schedule and simplify and modularize the design. Nuclear Research Facility 1 Canadian Energy Research Institute, Economic Impact of the Nuclear Industry in Canada, 2003.

6 - 6 - Until such time as a decision is made to replace or refurbish the NRU reactor, it continues to function as a vital research facility for advanced materials research, nuclear technology development and isotope production. AECL has received approval from the CNSC to extend the licence for the NRU from its current date of December 31, 2005 to July 31, This will allow the reactor to continue to operate while technical studies are completed in support of the AECL s application for refurbishment and life extension of the reactor. With respect to the longer term, the NRC and AECL are presently looking at various options including a new replacement facility, refurbishment and closure. Closure is unlikely given the need for the facility to service existing reactors and meet the needs of new, advanced systems. Canadian Market Overview Prospects for New Build For most of this decade, we do not foresee any tangible prospect for new nuclear power plants in Canada. However, for the following decade, there are better opportunities for the deployment of new nuclear generating capacity in Canada. AECL is currently developing the ACR, and is aiming at reducing the capital cost to build a reactor. International experts have ranked the economics of the new reactor highly relative to other advanced reactors. Furthermore, it has the potential to be cost competitive with other sources of electrical power generation. Refurbishment In the near term, the restart and refurbishment of existing units are moving ahead. The two nuclear operators in Ontario, Ontario Power Generation (OPG) and Bruce Power, have pursued their respective recovery plans. Of the eight units that were laid-up at Bruce and Pickering, three units were brought back to service in 2004 and Pickering A, Unit 1 was returned to service on November 3, 2005 adding 2530 MW of generating capacity to Ontario s grid. Ontario Power Generation announced on August 12, 2005 that it has decided not to proceed with the refurbishment of Pickering A, Units 2 and 3. The physical condition of Units 2 and 3 did not make them as good candidates for refurbishment as Units 1 and 4. OPG also noted that studying the case to extend the life of the Pickering B and ultimately Darlington reactors were key elements of their future plans. Meanwhile, on October 17, 2005, Bruce Power and the Ontario Power Authority (OPA) announced that they had entered into an agreement to refurbish Bruce A Units 1 and 2. Atomic Energy of Canada Limited has been awarded the retubing contract by Bruce Power as part of the refurbishment of the Bruce A units. As well, Bruce Power will extend the operating life of Unit 3 by replacing the steam generators and fuel channels when required. They will also replace the steam generators in Unit 4. The capital program for the refurbishment and restart of these units is expected to cost $4.25 billion.

7 - 7 - New Brunswick Power signed a contract July 29, 2005 for the refurbishment of its nuclear power plant, Point Lepreau, with AECL as the general contractor. The refurbishment is expected to take place in with an estimated cost for the project, including replacement electricity, of $1.4 billion. Hydro-Québec is currently considering the refurbishment of its nuclear power plant (Gentilly 2) as it is approaching the point where a decision needs to be taken on whether to refurbish or prepare for decommissioning. A decision on refurbishment is expected in If approved, the refurbishment of Gentilly 2 is expected in International Market Overview CANDUs Abroad The Government of Canada has supported AECL in its efforts to promote CANDU technology in Canada and abroad. Currently, there are nine CANDU-6 reactors in operation or under construction outside of Canada. There are four CANDU reactors in operation in South Korea, two in China and one reactor in each of Argentina and Romania. A second CANDU reactor is under construction in Romania. The CANDU technology has been a Canadian success story with a track record of excellent performance in export markets, most recently in China with the construction of two CANDU 6 reactors at Qinshan. Both reactor were completed ahead of schedule and within budget. In Romania, the construction of the second CANDU reactor was resumed in early 2003, and is expected to be completed in We consider the prospects for new nuclear power reactors in both China and Romania quite promising. During the Prime Minister s visit to China in January 2005, an MOU on nuclear energy cooperation was signed by NRCan, AECL, the National Development and Reform Commission of China and China National Nuclear Corporation. It established a framework for collaboration on research and development programs, projects and activities aimed at furthering a basic understanding of nuclear energy and its applications, and improving cost and safety of nuclear energy systems. Subsequent to this MOU, AECL and China National Nuclear Corporation signed an Agreement on Nuclear Energy Cooperation, during President Hu s visit to Canada in September 2005, as called for by the MOU. These are important steps in further strengthening Canada s bilateral nuclear relations with China. Generation IV On February 28, 2005, Canada signed an international commitment as part of the Generation IV International Forum (GIF), an initiative that provides a framework for conducting long-term multi-lateral R&D to develop Generation IV nuclear energy systems. The impetus behind GIF is

8 - 8 - to develop nuclear reactor designs (for deployment beyond 2025) that address the challenges facing nuclear technologies today. Canada is one of 11 members of GIF, and has been active in developing the GIF policy framework and providing technical expertise.

9 RADIOACTIVE WASTE MANAGEMENT Policy Framework for Radioactive Waste In July, 1996, the Government of Canada announced its Policy Framework for Radioactive Waste. The Framework sets the stage for the further development of institutional and financial arrangements to implement long-term solutions for radioactive waste in a safe, environmentally sound, comprehensive, cost-effective and integrated manner. The Policy Framework specifies that the federal government has the responsibility to develop policy, to regulate, and to oversee radioactive waste producers and owners in order that they meet their operational and funding responsibilities in accordance with approved plans. The Framework recognizes that there may be differences in approaches and arrangements for the different waste types in Canada, i.e., nuclear fuel waste, low-level radioactive waste and uranium mine and mill tailings. Nuclear Fuel Waste The Nuclear Fuel Waste (NFW) Act came into force on November 15, The Act requires nuclear utilities to form a Nuclear Waste Management Organization (NWMO). Under the Act, the NWMO s mandate is to propose to the Government of Canada approaches for the long-term management of nuclear fuel waste, and to implement the approach that is selected by the Government. The NFW Act also requires the utilities and AECL to establish trust funds to finance the implementation of the selected long-term nuclear fuel waste management approach. On November , the NWMO submitted to the Minister its final study of options for the long-term management of nuclear fuel waste. The NWMO presented four options, namely the three listed in the NFW Act (long-term storage at the reactor sites, central shallow or below ground storage and geological disposal) and a fourth option called the Adaptive Phased Management Approach which combines various aspects of the three listed options within a flexible and prudent decision-making process over the long term. The latter was the recommended option. The NWMO reported that, should the government adopt its recommendation, it intends to begin the site selection process by focusing on the provinces that are directly involved in the nuclear fuel cycle, namely Ontario, Québec, New Brunswick and Saskatchewan. The NWMO has also indicated that it would be developing the site selection criteria in consultation with the public and will eventually be seeking municipalities who volunteer to explore future partnerships. The federal department of Natural Resources has initiated a government-wide review including participation of the independent nuclear regulator, the Canadian Nuclear Safety Commission. A ministerial recommendation will be developed for the Governor in Council to select one of the approaches for the long-term management of nuclear fuel waste among those set out in the NWMO study. The decision is expected in Low-Level Radioactive Waste

10 All ongoing low-level radioactive waste from nuclear power production is presently stored at reactor sites. OPG, Hydro-Québec, New Brunswick Power and AECL all operate on-site storage facilities. AECL also provides a waste storage facility for smaller producers on a fee-for-service basis. To date there has been no pressing need for early disposal of low-level radioactive waste (LLRW) as waste volumes are small and the interim storage is judged to be safe. The major nuclear utility in Canada, OPG, and AECL together produce about 70% of the annual volume of low-level radioactive waste in Canada. OPG s low-level radioactive waste is safely stored on an interim basis at the Western Waste Management Facility at the Bruce Nuclear Power Development (BNPD). In April, 2002, OPG and the Municipality of Kincardine signed a Memorandum of Understanding to jointly study options for the long-term management of the wastes at the BNPD site. Since that time, Kincardine Council selected the concept of a deep geological repository for the wastes as their preferred management option and, in October 2004, entered into a hosting agreement with OPG for the facility. The project is now proceeding through an environmental assessment and regulatory review phase which is expected to last six to eight years. AECL has compiled an inventory of the legacy radioactive waste and decommissioning liabilities at its research sites and developed a comprehensive strategy to deal with the liabilities and clean up the sites over the long term. The strategy includes the construction and operation of the infrastructure required to characterize, treat and manage over the long term all of AECL s low-level radioactive waste, and is estimated to cost $6.8 billion (2005 dollars) over a 70-year period, with a net present value of $2.75 billion. AECL submitted the Chalk River Laboratories component of the long-term strategy, which constitutes more than 70% of the overall strategy in terms of cost, to the CNSC in March 2005, and has committed to submitting a 5-year implementation plan for the start-up phase of the long-term strategy in early The Government of Canada has fully recognized the costs of implementing the strategy in the Public Accounts of Canada, and is considering how best to implement the strategy. Port Hope Area Wastes The bulk of Canada s historic low-level radioactive waste is located in the southern Ontario communities of Port Hope and Clarington. These wastes, and contaminated soils amount to roughly two million cubic metres, and relate to the historic operations of a radium and uranium refinery in the Municipality of Port Hope. In March 2001, the Government of Canada and the local municipalities where the wastes are located entered into an agreement on community developed proposals to address the cleanup and long-term management of these wastes, thereby launching the Port Hope Area Initiative (PHAI). The proponent for the PHAI, on behalf of the Government of Canada, is the Low-Level Radioactive Waste Management Office (LLRWMO). This body was established in 1982 as the federal agent for the management of historic waste and is responsible for implementation of the PHAI. The PHAI will involve long-term management of these historic wastes in two newly constructed,

11 above ground mounds in the local communities. The $260 million project will take about twelve years to complete. The current phase of the PHAI involves environmental assessment and regulatory review and is expected to be completed in Ongoing public consultation remains a priority and municipal consent is required to complete this phase, which is well advanced. The proposal for one of the new waste management facilities has received the necessary municipal consent, and the environmental assessment underway is expected to be completed in The other waste management project is undergoing further studies at the request of the local municipality. Licensing decisions will take place after the environmental assessment process is complete. Cleanup, waste facility construction and waste emplacement would take place in the following five years, after which the facilities would continue to be monitored and maintained for the long-term. Uranium Mine and Mill Tailings In Canada, about 225 million tonnes of uranium mine and mill tailings have been generated since the mid-1950s. These comprise about two percent of all mine and mill tailings in the country. Most of the existing uranium tailings are located in the provinces of Ontario and Saskatchewan. Of the total of twenty-four tailings sites in Canada, only three in Saskatchewan continue to receive waste material. Uranium tailings are decommissioned on-site. The mining industry, in cooperation with provincial and federal governments has, over the past two decades, funded a comprehensive research program on acid rock drainage. Technologies developed under this program have been successfully applied to the decommissioning of uranium tailings in the provinces of Ontario and Saskatchewan, in addition to other sites across Canada. With regard to financial responsibility for decommissioning and long-term maintenance of the tailings, the CNSC requires that present-day operators provide financial assurances that decommissioning of uranium facilities will take place in a responsible and orderly manner in the short- and long-term. Where a producer or owner cannot be identified, cannot be located, or is unable to pay, responsibility for decommissioning would rest with the Canadian federal and provincial governments. In January 1996, a Memorandum of Agreement (MOA) on cost-sharing for management of abandoned uranium mine tailings was signed between the federal and Ontario governments. The MOA recognizes that present and past producers of uranium are responsible for all financial aspects of the decommissioning, and long-term maintenance of uranium mine sites, including the tailings. In the case of abandoned sites, the MOA outlines how governments will share the long-term management responsibilities and associated costs. A similar agreement between the federal and Saskatchewan governments is currently in development. Decommissioning The CNSC requires that all nuclear facilities be decommissioned in accordance with regulatory requirements. Nuclear facilities include CANDU power reactors, prototype/demonstration power reactors, research reactors, nuclear research establishments, facilities involved in mining,

12 processing and fabricating uranium into fuel for power reactors, major radioisotope processing and handling facilities, and radioactive waste management facilities. Planning for decommissioning activities should be initiated at the earliest stages in the design of facilities and refined during their operating life. Under the Nuclear Safety and Control Act, the CNSC can require financial assurances from facility operators to demonstrate that sufficient funds will be available for decommissioning activities.

13 Appendix 1 CANDU REACTORS - CAPACITY FACTORS 2004 UNIT C.F. % UNIT C.F. % UNIT C.F. % Bruce Darlington % Bruce Gentilly % Bruce % Pickering Bruce % Pickering Argentina Embalse China Qinshan 1 Qinshan 2 n/a n/a n/a Bruce % Pickering Bruce % Pickering % Bruce % Pickering % Bruce % Pickering % Darlington % Pickering % Darlington % Pickering % Darlington % P. Lepreau 77.5% Romania Cernavoda % South Korea Wolsong 1 Wolsong 2 Wolsong 3 Wolsong % 92.9% 94.3% 95.4% Average of Domestic Units Average of Foreign Units Average All Units 79.3% 92.5% 82.3% Source: Nucleonics Week, Volume 46, Number 6, February 10, 2005.