Canada-U.S. enrichment negotiation continues as MDS sues AECL, feds

How far backward can Canada bend to win U.S. approval for its aim to import and own uranium enrichment technology? Pretty far, it seems. The federal government surrendered Canada’s dominant position in the international medical isotope market in May when it told Atomic Energy of Canada Limited (AECL) to cancel work on the Maple reactor program.

This move prompted a lawsuit by MDS, the world’s largest distributor of medical isotopes. MDS had a supply arrangement with AECL to market the Maples’ output had the reactors ever entered production.

The lawsuit accuses AECL, and the Canadian government, of jeopardizing one of MDS’s main sources of income. The suit attaches a potential liability to AECL, a federal crown corporation. This could further diminish AECL’s value should the federal government decide to sell it.

The feds scrapped the Maples in part because of excessive development costs resulting from technical-safety problems that AECL had so far been unable to solve.

But a deeper strategic reason is that the Maples were originally designed to use high-enriched uranium (HEU) targets. Because of concerns over the proliferation-sensitivity of HEU, most responsible nations have agreed to stop using it. Accordingly, AECL and MDS tried beginning in 2000 to figure out a way to convert the reactors to operate with low enriched uranium targets (see article).

AECL appears to have concluded that this conversion would be too expensive. According to the CBC, AECL told the feds as early as November 2007 that it wanted to scrap the project. The feds, involved at the time in negotiating the terms under which Canada would join the Global Nuclear Energy Partnership, vetoed this suggestion.

The worldwide shift away from HEU has been common knowledge since the 1990s. It would have figured in any scenario planning within AECL, MDS, or the federal government. So why were the Maples scrapped only in May 2008?

Possibly to produce timely media reminders of Canada’s sacrifices at the altar of anti-proliferation. Canada has been negotiating with the U.S. over permission to develop a domestic enrichment industry (see article). Doesn’t the Maples decision, which along with the possibility of losing the Ontario power reactor competition jeopardizes AECL’s very existence as a reactor manufacturer, prove we are a team player on nuclear issues?

The global anti-proliferation regime is undergoing a revolution. The U.S.-India civilian nuclear deal is the biggest event in the revolution so far, but other nations, including Canada, are looking to press their advantage while the time is ripe.

Canada’s fuel enrichment aspiration may signal a shift in strategy in this vein. Canada wants to be an energy superpower. Our moves so far indicate we want this to be based above all on value-added fuel. The question is, even at the expense of reactor manufacturing (see article)?

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12 years ago

I cant get away from the feeling that it might be a smart move for Canada to sell nuclear fission fuel and the expertise needed to handle it throughout. Our involvement in the nuclear power industry is awfully narrow at present, and we could benefit by having more things and services to sell.

I cant get away from the feeling that AECL is in big trouble. They seem to have the same disease that GM does – they just cannot wrap their minds around the lighter and cleaner concepts that are now driving the market. Consider the chemically controlled fission system from Hyperion Power Generation

combined with the heat driven electricity generator from Johnson Electro-Mechanical Systems

Put these together and you have a really inexpensive electricity source with no moving parts and no operational safety issues. Remember what the transistor did to the tube oriented electronics industry? Well, its happening again. The only thing holding back this revolution is the thin wall of excessive government regulation that makes innovation almost impossible. When that wall finally breaks you will see an amazing transformation of the nuclear power technology. I dont think AECL is ready for this.

Steve Aplin
12 years ago

Very interesting, Randal. It’s tough being a crown corporation and continually having to persuade politicians to fund this or that. Not that I think a privatized AECL would be more responsive to these opportunities, since profit-driven shareholders are just as, if not more, tight-fisted than fiscally conservative governments. I think AECL has focused pretty well, given the constraints it operates under. I would love to read the MCs and submissions it sends up the line, but a government source tells me these are ultra-secret.

12 years ago

AECL is operating in a hesitant and secretive manner, largely due to the bad publicity from enviro-alarmists. In this fear driven atmosphere one cannot expect our only human scientists and engineers to be outgoing, expansive, and optimistic. They really need some fresh air and hope in there.

An example of this lack of expansiveness there has recently been some discussion about new icebreakers for Canada. Clearly such ships should have reactors on board. This point was raised by someone and quickly snuffed out be every official and politician in sight. Did AECL jump in and defend the idea? Not that I heard. Someone has to speak for the positive side if there is going to be any progress. AECL just does not have the moxy left to fight such battles. It looks like we are going to get polluting, oil burning ice breakers as a result. What a lost opportunity!

That is how I see it.