Allocution prononcée lors de la conférence et foire commerciale de la Chambre de commerce de Port Hope et du district

Allocution prononcée par Heather Kleb, vice-présidente, Association nucléaire canadienne
lors de la conférence et foire commerciale de la Chambre de commerce de Port Hope et du district
le 24 octobre 2013

Good morning and thank you for that introduction. It’s great to see a strong turnout for this event, and I’m looking forward to meeting you over the course of the day.

I understand that a number of you are already familiar with the nuclear industry, and you probably have a good idea about who we are at the Canadian Nuclear Association. I also understand that many of you here today are new to the nuclear industry, and that you may be wondering whether this industry represents opportunities for your company.

I will tell you that our industry is filled with opportunities, right here in Port Hope, elsewhere in Ontario, across Canada, and around the world. The nuclear industry is in a growth phase globally, and we are preparing for a round of major investments here at home.

So you’ve picked a great time to check us out!

Let me begin my remarks with a plug for my association. The Canadian Nuclear Association represents about 100 organizations across the full range of the nuclear fuel cycle. We serve them by advocating for the nuclear industry. We talk with the federal and provincial governments. We talk with the Canadian public. And we talk with each other about our industry’s opportunities and challenges. So, the C-N-A is able to offer a perspective on all aspects of the industry.

Those aspects are wide indeed. Our members mine and mill uranium in Saskatchewan. They send it here to Ontario where our members turn uranium into fuel for reactors. Cameco operates a fuel processing facility here in Port Hope, and another in Blind River. And nearby in Peterborough and Toronto, G-E-Hitachi also produces fuel pellets and bundles.

Fuel from these facilities power 19 nuclear reactors here in Canada, and hundreds more around the world. The 19 Canadian reactors include one in New Brunswick. The others are all here in Ontario – four at Darlington, six at Pickering, and eight in Bruce County.

In Ontario, OPG, a Crown corporation, owns all of the reactors, and operates ten of them. Bruce Power, a private consortium, operates the remaining eight. Many people don’t realize this, but the Bruce station is the largest nuclear energy generator in the world.

All of the reactors in Canada are CANDUs, designed right here in Ontario. Two years ago, the federal government sold the reactor design and maintenance business to SNC-Lavalin. Its subsidiary, CANDU Energy, maintains reactors here in Canada, as well as in six other countries, including China and India. And it is selling new reactors in a growing global market, which I will say more about in a few minutes.

At the back end of the fuel cycle, our members manage both used fuel and waste. You may have heard about the Deep Geologic Repository that OPG has proposed to build in Kincardine, at the Bruce nuclear site. This project is now in the hands of federal regulators, and we are waiting to learn if OPG will receive the required approvals. The DGR’s economic benefits would be substantial, with an $800 million investment plus about 650 jobs during construction. Once the DGR is operating, OPG expects to employ about 125 people full time.

You may also have heard of the Nuclear Waste Management Organization. It is working on this DGR project, but also a separate project to build a deep geological repository that would store our industry’s used fuel.

Today that fuel sits in safe, secure storage at our nuclear generating stations. However, since 2002 the industry has been developing a long-term storage plan, and looking for a suitable host community across Canada. The job of selecting and approving that site could take another ten or 15 years. And then construction would begin on a project estimated at $21 billion, with well over 1,000 construction jobs.

That’s an overview of the Canadian nuclear industry. Let me give you some statistics that can tie it all together. Our members directly employ 30,000 Canadians. We indirectly employ another 30,000 through our industry’s suppliers. These companies manufacture major equipment and components and provide engineering services and support. Overall, we create about $6.6 billion dollars of economic activity annually.

As you can see, we’re a mature industry, a viable industry, and a source of a great number of opportunities.

Those opportunities exist here at home, and we’ll hear more about them in the breakout panels later today. Those opportunities also exist across Ontario, across Canada and around the world.

Let me provide some context for you.

The main use of nuclear energy today is to generate electricity. With the world’s population growing rapidly, the global market for electricity is also growing in step. Today we number about seven billion people. Looking forward to 2040, United Nations forecasters expect the global population will rise to nearly ten billion.

As we add another three billion people to this planet, we will certainly need more electricity.

We all know the story on China. With a population today approaching 1.4 billion, it has more people than any other country. Its fast-growing economy represents a massive opportunity for the energy industry.

But China’s rate of growth has its limits. The more that it develops, the more its population structure comes to resemble our own. Just like us, the Chinese population is growing relatively older. And as people move into their senior years, their demand for energy slows down as well. We are already beginning to see that pattern in China. The United Nations tells us that if fertility rates remain stable, then China’s population growth will probably peak in 2030.

Now as China’s population growth slows down, other countries will move to centre stage.

Today India has the second-largest population. By 2030, it will pass China and become number one in population size. More importantly, it will continue to grow well into the future. And its demand for energy will continue to rise dramatically.

And then there is Africa, which has very little electrical infrastructure. Today the continent is home to one billion people. According to the United Nations, that number will rise by 2030 to 1.7 billion. It will match India in population growth. Not only will there be more people but, as they move into the middle class, their electricity consumption will grow dramatically.

So here we find one of the essential elements in any calculation about the energy industry. The world’s population will continue to grow strongly. Most of that growth will take place in the developing world. And most of that developing world lacks the energy infrastructure that it will need.

The next question to think about is what this population growth will mean for the governments of these countries in terms of their energy infrastructure.

How much infrastructure will they need?

It’s instructive to consult the World Energy Outlook just published by ExxonMobil. As one of the world’s largest oil and gas companies, ExxonMobil takes a strong interest in future energy markets. Their World Energy Outlook suggests that the demand for electricity in the developing world will soar.

Let’s look again at those three areas I described a minute ago — China, India and Africa. According to ExxonMobil’s energy forecast, China’s energy demand will double by 2040. In India, it quadruples. And Africa’s energy demand will rise even faster, at an estimated 335 percent. These are huge increases in electricity demand.

In fact, on a global basis, ExxonMobil tells us that electricity demand will rise by about 16-thousand terawatt hours. Now, that number is difficult to imagine on its own. Think of it this way. The United States today uses about four thousand terawatt hours of electricity. So the world demand forecast means we’d be adding the equivalent of four Americas. That’s huge.

What about the supply side of this picture? Which fuels will be needed to meet that demand? Today the world runs largely on coal. It’s the number one fuel. It’s cheap and readily available.

However, leaders in developing nations have begun to realize that coal is cheap only if you don’t count the hidden health costs of pollution and climate change. When you price those factors into the mix, then coal becomes the energy world’s number one problem.

Coal produces the emissions that drive climate change. In fact, no other fuel produces as much greenhouse gas as coal, and many jurisdictions have begun moving to coal substitutes. You may not realize this, but next year marks a milestone for Ontario. The province will stop using coal for electrical generation. That’s really significant, because Ontario will become the first jurisdiction in North America to abandon coal altogether. And the reason why we can do that is nuclear energy. With all 18 reactors up and running, we’re producing enough electricity to completely displace coal.

To be sure, other substitutes are available. Renewable energy sources like solar, wind and hydro are attractive, and they hold great promise for the future. But for now they aren’t completely reliable sources of power. The sun doesn’t always shine, the wind doesn’t always blow, and rivers run slower in the fall than in the spring. What these renewable energy sources need most is a way to store electricity so they can supply power at night, or when it’s calm, or when rivers run low. Over time, better storage technology may allow these intermittent power sources to improve their reliability. But until that happens on a massive scale, these technologies are not suitable for what we call base load generation — the always-on, 24/7 power that we all rely on.

When countries are looking for a reliable electricity source for base load production, there are really only three possibilities. The first of these is hydro generated from a continuous supply. Think Niagara Falls. A steady, very powerful source of power. But there aren’t very many hydro sources like that around the planet. And so the developing world faces a choice between natural gas, and nuclear power.

Very probably, they will choose both.

Natural gas is very attractive when compared to coal, and to the renewables. Its performance on greenhouse gas production is better than coal’s. If you compare gas and coal on their emissions per kilowatt-hour, you’ll see that gas emits half as much greenhouse gas as a coal plant. That is still a lot of greenhouse gas, but to a world burning coal, that’s a very attractive improvement.

If you compare gas to renewables, it also has the answer to their problem of intermittency. Natural gas is a very flexible source of power that is available when needed. As electrical demand rises during the day, power utilities can switch on more renewable energy sources and, if they’re not available, fall back on natural gas.

So it’s no surprise that ExxonMobil forecasts that natural gas by 2040 will produce about 30 percent of the world’s electricity supply, compared to about 20 percent today.

But what about nuclear’s role in this mix? Will the world need more nuclear power than it does now?

If you listen to the media, you’ll hear stories about how nuclear is on its way out. The media will tell you that nuclear is too expensive to build, too dangerous to operate, and that country after country is getting out of nuclear energy.

Again, this is a good place to look at the facts.

Today, there are about 430 nuclear reactors installed in 31 countries. Soon that number could more than double. India alone has six units under construction, 18 planned and 39 proposed. China has 28 under construction, 53 planned, and 118 proposed.

In fact, around the world, 70 reactors are being built today. By built, I mean that the concrete has been poured, and construction is underway.

Another 173 are planned. By planned, I mean the projects have been approved, the financing has been arranged, and the reactors should begin to operate within the next ten years.

On top of that, firm proposals exist for another 314 reactors. By firm proposals, I mean that specific proposals exist for specific sites, and that these reactors could begin to operate within 15 years.

So here we see the real picture on new nuclear capacity. Again, 70 reactors now under construction, 173 planned, and 314 on the drawing boards. This picture is certainly not the one that you see in the media.

In fact, were we to close all the nuclear power plants operating today, and then open all the plants proposed, planned and under construction worldwide, we would exceed today’s nuclear generating capacity by about 65 percent.

Clearly, wherever one stands on the electric power mix of the future, a new generation of nuclear is arriving.

Welcome to the nuclear renaissance.

Now, what does this all mean for Canada?

Broadly speaking, there are several different sources of business for potential suppliers. First, all of the companies generating electricity have ongoing needs for maintenance and project management.

The same holds true for any nuclear facility, including the seven research reactors at universities and at the national nuclear laboratory at Chalk River.

You can learn a great deal about these projects directly from the companies and organizations that are carrying them out.

You might also consult another group like ours, the Organization of Canadian Nuclear Industries. O-C-I represents the supply chain. It has about 170 members who manufacture major equipment and components, and provide engineering services and support for the nuclear power plants in Canada and abroad.

A second opportunity arises from Ontario’s need for two new nuclear reactors.

Now, if you’ve been following the news in the past couple of weeks, you may have seen Ontario’s energy minister announce that work on these reactors has stopped. The minister said that there isn’t enough growth in electricity demand to warrant construction.

Some people have said that the announcement marks the end of nuclear construction in Ontario. But we see the announcement differently. To us at the C-N-A, it seems clear that Ontario’s demand for electricity will pick up, sooner or later. And when it does, building two new reactors will be the safe, reliable and affordable way to provide the electricity that Ontario needs. Our industry will be ready when the time comes.

There was another opportunity in the minister’s announcement.

Mr. Chiarelli said the province is still going ahead with refurbishment at the Darlington and Bruce sites. What that means is that reactors that have been reliably producing power for 25 years or so are due for mid-life updates that will extend their lives by another 25 or 30 years.

This will represent a major opportunity for Canadian industry. Consider this study by Canadian Manufacturers and Exporters (CME). They found that refurbishing four reactors at Darlington and six reactors at Bruce Power would create more than 10,600 jobs lasting just over ten years.

In all, renewing the lives of these ten reactors would grow the Canadian economy by roughly $3.1 billion dollars annually. Over eleven years of refurbishment, that’s over $30 billion dollars and over 100,000 person years of employment just from the refurbishment projects – without counting plant operations.

Once you count plant operations, that’s nearly $30 billion dollars in equipment, material and supplies, and another $30 billion plus in direct labour income. So, as you can see, refurbishment will represent a very serious piece of work.

Now, how does all of this affect you here in Port Hope? With the clean-up initiative, this promises to be a busy place. Already work has begun on the waste-water management facilities here, as well as at Port Granby. And the work on the waste mound will require years of labour and investment.

We all know that the clean-up initiative carries a serious budget. The federal government has committed $1.28 billion in direct spending. That money means investment in equipment, materials and supplies, as well as local labour. I have seen estimates of one thousand jobs. As someone who used to work here in Port Hope, on these very projects, I find these projections very exciting.

After all, this project is about more than numbers. It’s about creating an opportunity right here in Port Hope and at Port Granby.

You know, many Ontario towns have been hurt by a broad decline in manufacturing. Many young workers have had to leave their home towns and move on to where the jobs are. But you’ll soon be able to say that there are better jobs here at home. For many young people, there won’t be a need to move on to another town. Instead, they can stay here, another generation, like their parents, building for the future.

Not only that, but the skills and knowledge that arise from this project have lots of application elsewhere. In the world of nuclear, waste management is a very big business. Here’s something to think about. The federal government ran nuclear operations for decades at places like the Chalk River labs in Ontario, the Whiteshell labs in Manitoba, and three prototype reactors in Ontario and Quebec. All told, decommissioning these sites will take up to 70 years – that’s seven-zero. The budget for this Nuclear Legacy Liabilities Program is about $7 billion dollars. There will be jobs enough for three or four generations. And what better way to get into that market than by gaining experience on the Port Hope Area Initiative.

So I’m looking forward to hearing an update today about the local opportunities. As you can probably tell, I’m excited about the program. I’m looking forward to all of the breakout sessions. And I’ll flag just two of them in particular.

If you’re interested in contracting and procurement opportunities, then you’ll meet some of the key players at 1 pm. Folks from AECL, Public Works Canada, and the Chamber of Commerce will all be there. I’m also looking forward to the 2:45 pm session on spin-off opportunities. Those are just two of a dozen sessions coming your way. You’ll certainly have opportunities to learn a great deal more about the Port Hope Area Initiative.

I’d also encourage you to visit the trade show, and to stick around for the reception tonight.

This is an excellent networking opportunity. I would like to congratulate the Port Hope and District Chamber of Commerce for putting it together. I also applaud the sponsors for making it all possible.

To sum it all up, I have talked about a great number of things, but the central idea that ties it all together is this. The nuclear industry is healthy, and growing. Our growth isn’t fast, or hurried.

Everything in the world of nuclear takes time. Most other businesses deal in quarters and years. We deal in years and decades. But we are making steady progress, and preparing for years of steady work.

This morning I’ve shown you how nuclear energy will contribute to growing electrical demand around the world and here at home. And I have discussed some of our needs for people with a broad and diverse mix of skills. We need engineers, scientists, technicians, skilled trade and technology workers, and professional managers. We need those people at all stages of their careers, from entry level through to executive leadership. We need you as employees, and as contractors. And we can keep you busy for decades.

Getting involved in the local clean-up of low-level radioactive waste may be exactly the right idea for your business. In opening that door you also open your business to opportunities both here in Port Hope, and looking after Canada’s legacy liabilities.

I’ve described the billions of dollars of business that we anticipate with Ontario’s refurbishment plans. And there will be billions more available as the nuclear renaissance takes hold around the planet.

I think the future looks very, very bright.

Thank you for inviting me to speak with you today. I’d be pleased to take any questions.