Speech at the 5th International CANDU In-Service Inspection Workshop and NDT in Canada 2014 Conference

Speech by Heather Kleb, Vice President, Canadian Nuclear Association
at the 5th International CANDU In-Service Inspection Workshop and NDT in Canada 2014 Conference
June 18, 2014

Good morning and welcome. I’m looking forward to talking with you, and to taking in some of this excellent conference. I see some old friends in the room. Many of you won’t know this, but my father worked in non-destructive testing for decades. So in some ways I’m right at home. It will be good to get caught up with you, and to compare notes.

We’re all interested in seeing what happens next in Ontario, now that the election has come and gone. I know that my colleagues are looking forward to seeing the government chart its course on electricity. We saw three very different approaches during the election campaign — yes to building new reactors, no to building new reactors right now, and no to building new reactors ever.

Well, whether we build new ones or not, the reality is that our industry stands to rebuild ten nuclear reactors in Ontario in the next two decades. An investment that will put billions of dollars into the pockets of skilled tradespeople. An investment that will ensure the safe, reliable provision of affordable, zero-carbon electricity for decades to come.

Another reality, we think, is that Ontario will need to build two new reactors — even with these ten rebuilt reactors. We think we’ll need two new ones to replace the Pickering generating station when it closes in about six years.

Whether it’s ten reactors or twelve, there is an important question here for our industry leadership. Is it enough to focus on building and rebuilding reactors in Ontario? Or should we do more? There are lots of opportunities and challenges, not just in Ontario, and not just in Canada.

That’s why our association and our members have been thinking at length about our approach to the next quarter century. In a world that steadily needs more energy, in a world that increasingly relies on scientific breakthroughs, where should the Canadian nuclear industry be?

Our vision is simple. We think Canada should continue to thrive as a nuclear leader.

That’s been our approach since 1941, when George C. Laurence designed one of the world’s first nuclear reactors right here in Ontario. Since 1947, when the NRX experimental reactor came into operation at Chalk River. Since 1973, when the Pickering A power plant came online, at that time the world’s largest nuclear generating station. Today we still have the world’s largest generating station at the Bruce site.

Not only have our nuclear reactors led the way in electricity, but they are also world leaders in nuclear medicine. The first cobalt-60 cancer treatment took place just down highway 401, in London, back in 1951. Since then Co-60 from Canadian reactors saved millions of lives.

And you already know very well the benefits that nuclear technology has brought to Canadian industry. Helping to build better cars, planes, and pipelines. Helping to improve materials science.

With all this progress, it would be easy to say that we have made our mark. Perhaps we could coast comfortably into the future just on the strength of refurbishing Ontario’s reactors.

But an approach like that would ignore some of the new challenges. It would turn our eyes away from our tremendous opportunities available at home and around the world.

That’s why the leaders of the Canadian nuclear industry came together more than a year ago to discuss our future — our opportunities and threats, our weaknesses and our strengths. We have charted our course, and already we have taken the first steps forward.

The industry’s vision comprises five elements.

First, we will complete the rebuild, or refurbishment, of ten reactors in Ontario according to the specifications for cost and delivery dates.

Of these ten reactors, six are at the Bruce nuclear generating station and four are at Darlington. These reactors entered service between 1978 and 1993. They are the workhorses of Ontario’s electrical supply, safely and reliably providing the foundation of Ontario’s electrical supply.

Refurbishing these reactors means opening them up right down to the core. Skilled workers will replace hundreds of pressure tubes and feeder pipes. Thousands of new welds will require examination. It’s demanding, precision, high-tech work that will take ten to 15 years and cost roughly $25 billion. About half will be paid to skilled workers, as this project will create about 5,000 jobs and support them for a decade at least.

In committing ourselves to meet the budget and delivery schedule, our industry acknowledges our previous challenges in project delivery. We have learned valuable lessons from refurbishing CANDU reactors in Ontario, New Brunswick and in foreign markets like South Korea. We know that we must meet Ontario’s expectations for cost and schedule, and we are confident that we can do exactly that.

In addition to rebuilding reactors, we will take up our second challenge, which is to connect Canadian nuclear suppliers with the global marketplace.

It’s a vibrant market, with 73 reactors under construction today, including five in the United States. In the next few years, construction will begin on a further 172 reactors worldwide. Many of these reactors will power the strong and growing economies of Asia. But many of these new reactors will operate in countries with no previous nuclear experience, like Egypt, Poland, Italy and Uganda. Even Saudi Arabia is considering the construction of 16 reactors, because the Saudis understand the world will eventually run out of oil and gas.

Third, we will develop a integrated and coordinated strategy for the long-term management of all used radioactive materials.

Some people call this waste. They’re right when they describe the mops and gloves, and used protective clothing, coming out of our power plants. But they wrongly apply the term “waste” to what we call used nuclear fuel — the uranium that comes out of our reactors.

Today we store this used fuel at nuclear generating stations, securely above ground. In a couple of decades we will probably store this used fuel deep underground. It is an asset if it can be recycled for use in reactors with new technologies. Today’s trash may well be tomorrow’s treasure.

Fourth, we will support a strong Canadian agenda in nuclear science, technology and innovation.

Canada’s nuclear leadership derives from a robust and diverse research network. It includes seven research reactors, the national nuclear laboratory at Chalk River, 30 Canadian universities and six research centres.

This network supports materials science, medicine, food safety and crop science. It exemplifies Canada’s capability as a knowledge economy. Today we are working within this network to develop a nuclear science and technology innovation agenda, and to define the investments that will turn nuclear research into nuclear applications.

And fifth, we will improve the supply of skilled nuclear workers. We know that many nuclear workers are approaching retirement. Also we lack enough younger workers to replace those who retire. Today we are working to define the gaps in our highly skilled workforce, and to invest in training and development. We are renewing and improving our relationships with universities, colleges and apprenticeship programs. And we are preparing to talk with governments about immigration, internal trade barriers, and other necessary policy changes.

These five points form the nuclear industry’s leadership vision. Refurbishments, exports, waste management, innovation, labour skills. All five elements, taken together, will help to keep Canada at the forefront of global nuclear technology.

Now, you are probably asking, “What’s this five-point agenda do for me?” Well, you will certainly share in the benefits of affordable electricity and clean air. You should also find economic opportunity.

Extending the lives of ten more CANDU reactors means recurring work during the refurbishment project and the decades beyond. We can easily see nuclear power plants like Bruce and Darlington still operating in 2040, 2050, perhaps even in 2060.

According to a study by the Canadian Manufacturers and Exporters association, the refurbishment project will put an additional $12 billion dollars into workers’ pockets, in a wide variety of skilled trades.

Let’s look at this project and appreciate its challenges. Each of the reactors must be opened up right to the core, the calandria, where the nuclear reaction takes place.

Today the two utilities, OPG and Bruce Power, are completing the definition phase of their project plans. The work will begin late in 2016, and take about three years per reactor. OPG expects to complete work on its four reactors within ten years, and Bruce, with six reactors, expects work to finish in fifteen years.

What will this cost? Again referring to the study by the Canadian Manufacturers and Exporters association, each reactor should require an investment approaching $2.5 billion. Roughly half will be paid to labour, and half for materials and supplies.

Across all ten reactors, then, the outlay amounts to some $25 billion, with roughly $12 billion paid to labour in return for 65,000 person-years of work.

The main challenge will be to avoid cost overruns and delays. We can meet this challenge. Refurbishments already completed at CANDU reactors at Bruce, Point Lepreau, and Korea give us confidence that we can meet deadlines and budgets.

For many companies in the nuclear supply chain, these projects will be plenty big, and the demand for skilled workers will be very high.

But in addition to that we expect to see further growth simply because nuclear applications are turning up in all sorts of industries. Canada has become a knowledge economy, a country in which science and technology find increasing application throughout industry. You already know about the wide and growing demand for the services that you provide. From my vantage point, it’s clear that you’ll have plenty of opportunity ahead of you even without the openings created by reactor refurbishment.

This leads me to the thought that you share the same challenge as the nuclear industry in general. The demand for nuclear skills is rising but, at the same time, many of the highly skilled people who built Ontario’s reactor fleet are about to retire. Now, it’s tempting to think that we could refurbish them along with their reactors, but we’re just not there yet. We’ll need to find new employees, and to retain them well into the future.

You face a similar challenge in your own line of work. And I understand from talking with some of you that the shortage of skilled technicians is steadily growing larger.

At the Canadian Nuclear Association, we’re working on that problem right now. Together with our members, we’re identifying the skills, knowledge and abilities that the nuclear workforce will need well into the 21st century. We’re talking with universities, colleges, and apprenticeship programs about developing graduates and life-long learning.

A key element in our strategic vision is the need to quantify this demand for skilled labour, so we can focus our discussions and target our investments. Together with our members, we are preparing to develop a labour force study that will provide our members with key insights into their recruiting and retention needs. We are starting that work right now, another step toward implementing our strategic vision.

You already know the amount of work required to ensure your own operations comply with regulatory requirements. And one has only to look at the rising number of administrative monetary penalties to know that nuclear safety is becoming ever more important in your clients’ workplace.

You know, I can recall the stories my father would tell me about being the only nuclear guy on the job site. You’ve probably seen the same thing. A company brings you in for a job. You’re the only person on site who understands radiation safety. And you’re exactly the person who will be held accountable for any radiation issue anywhere on the site. This is when it’s good to be able to call for support, so you can better explain nuclear issues to your client organization. Or even talk with the nuclear regulator.

I have spent much of my career in regulated industry. To me, competitive advantage requires the ability not only to understand and to comply with safety regulations, but also to manage the pace and extent of regulatory change. My colleagues and I are working on several initiatives today that will shape our future workplace, as well as yours.

For example, we have been talking at length with the federal nuclear regulator about the new system of Administrative Monetary Penalties levied under the Nuclear Safety and Control Act. You probably already know that violations can draw maximum fines of $25,000 for individuals and $100,000 for companies.

We have also been discussing how to apply these regulations flexibly, recognizing that one size cannot fit all nuclear operators. Also we have talked with the regulator about how operators can provide sufficient financial guarantees for the safe termination of their operations.

These initiatives will become steadily more important as the economy increasingly incorporates nuclear science and technology, and as reactor construction and refurbishment projects move ahead.

I won’t get into the details right now, but if any of you have questions about our work in managing these issues. I’ll be pleased to take them in a few minutes. Also, I’ll be available to talk throughout the conference.

So let me sum up by returning to the big picture, the vision. As you’ve heard, the nuclear industry faces an excellent future. Here in Ontario, we stand on the doorstep of a major public investment in rebuilding ten reactors. This project will put billions into workers’ pockets while providing affordable, reliable, zero-carbon electricity. Around the world, we are refurbishing reactors and building new ones, creating billions of dollars of opportunity.

The opportunities ahead of us are massive, and the challenges equally large. Our industry approaches these opportunities and challenges under the guidance of a strategic vision. It emphasizes above all the ability of skilled men and women like you and me to get it done. I’m confident that we will, and I look forward to working with you to make it happen.

Thank you.