Strong domestic supply chain an advantage as Canada moves ahead with new nuclear

From the MacDonald Laurier Institute

By Sasha Istvan

Canada has two major advantages. We produce uranium and we have an established supply chain.

The pledge from 22 countries, including Canada, to collectively triple nuclear capacity by 2050 drew cheers and raised eyebrows at the United Nations Climate Change Conference last fall in Dubai. Climate commitments are no stranger to bold claims. So, the question remains, can it be done?

In Canada, we are well on our way with successful and ongoing refurbishments of Ontario’s existing nuclear fleet and planning for the development of small modular reactors, or SMRs, in Ontario, New Brunswick, Saskatchewan and most recently Alberta.

The infrastructure required to generate nuclear energy is significant. You not only need engineers and technicians working at a plant, but the supply chain to support it.

Over five decades worth of nuclear generation has allowed Canada to build a world class supply chain. Thus far it has focused on servicing CANDU reactors, but now we have the potential to expand into SMRs.

I first became interested in the CANDU reactor after working as a manufacturing engineer for one of the major fuel and tooling suppliers of Ontario Power Generation and Bruce Power. I witnessed firsthand the sophistication and quality of the nuclear supply chain in Ontario, being particularly impressed by the technical expertise and skilled workers in the industry.

The CANDU reactor is the unsung hero of the Canadian energy industry: one of the world’s safest nuclear reactors, exported around the world, and producing around 60 per cent of Ontario’s electricity, as well as 40 per cent of New Brunswick’s.

Having visited machine shops across Ontario, it’s evident that Canadians should take pride that the expertise and technology required for the safe generation of nuclear energy is available here in Canada.

As Canada looks to grow its nuclear output to achieve net-zero goals, its well-established engineering and manufacturing capabilities can make it a leader in the global expansion of nuclear energy as other nations work to make their COP28 declaration a reality.

Canada has two major advantages. The first is that it is a globally significant producer of uranium. We already export uranium from our incredible reserves in northern Saskatchewan and fabricate unenriched uranium fuel for CANDU. Canadian uranium will be an important ingredient in the success and sustainability of a nuclear renaissance, especially for our allies.

The second is that we have an established and active supply chain. While new nuclear builds have slowed dramatically in the western world — a result of the fallout from Chernobyl and Fukushima, as well as competition from cheap natural gas — Bruce Power and OPG are in the midst of major refurbishments to extend their operations until 2064 and 2055, respectively.

Bruce Power has successfully completed the first unit refurbishment on schedule and within budget, with ongoing work on the second unit. OPG has accomplished refurbishments for two out of its four units at Darlington, with the latest unit completed ahead of schedule and under budget. These multibillion-dollar refurbishments have actually grown our nuclear supply chain and demonstrate that it’s firing on all cylinders.

SMRs are the next phase of nuclear technology. Their size and design make them well suited for high production and modular construction. Investing in the supply chain for SMRs now positions Canada for significant economic gains.

OPG plans to build four GE-Hitachi BWRX-300 reactors, with the first slated for service as early as 2028. This first-of-a-kind investment will help identify and overcome design challenges and develop its own supply chain. That will benefit not only their project but those that follow suit.

SaskPower is planning to proceed with the same SMR design, as well as the first pilot globally of the Westinghouse eVinci microreactor; New Brunswick is moving ahead with the ARC-100, both for its existing nuclear site at Point Lepreau as well as in the Port of Belledune; and OPG and Capital Power recently announced a partnership to explore a nuclear reactor in Alberta, including the potential for the BWRX-300.

While the bulk of the nuclear supply chain is currently located in Ontario, other provinces have already been investing in the development of local capacity.

All this activity sets Canada up to leverage first-mover advantage and become a significant global provider of BWRX-300 components. Canada will not only see the economic benefits during initial construction but also through sustained demand for replacement parts in the future.

Nuclear energy has already made a significant contribution to the Canadian economy. In 2019, a study commissioned by the Canadian Nuclear Association and the Organization of Canadian Nuclear Industries showed that the nuclear industry accounted for $17 billion of Canada’s annual GDP annually and has created over 76,000 jobs.

Notably, 89 per cent of these positions were classified as high-skilled, and over 40 per cent of the workforce was under 40. This study, conducted before the announcement of SMR plans, was followed by a more recent report from the Conference Board of Canada on the economic impact of OPG’s SMR initiatives. The study found that the construction of just four SMRs at OPG could boost the Canadian GDP by $15.3 billion (2019 dollars) over 65 years and sustain approximately 2,000 jobs annually during that period.

Public perception of nuclear is improving. In 2023, the percentage of Canadians wanting to see further development of nuclear power generation in Canada grew to 57 per cent compared with 51 per cent in 2021.

As well, the Business Council of Canada has voiced its support for nuclear expansion, emphasizing Canada’s strategic advantages: political and public backing across the spectrum, coupled with a rich history of nuclear expertise.

Nuclear energy is dispatchable, sustainable and a proven technology. As nations move to achieve their climate goals, it has one other major benefit: a supply chain that is wholly western and in Canada’s case almost totally domestic.

While the critical minerals and manufactured goods required for batteries, wind and solar energy rely heavily on China and other politically unstable or authoritarian countries, nuclear provides energy independence. Canada is well positioned to help our allies improve their energy security with our strong, competitive nuclear supply chain.

Sasha Istvan is an engineer based in Calgary, with experience in both the nuclear supply chain and the oil and gas sector.

Related Topics:#MacdonaldLaurierInstitute #NucleanEnergy #SashaIstvan #SmallModularReactors

Up Next

The Cost to Western Canada if Steven Guilbeault Copies Biden’s Assault on LNG

Don't Miss

Opportunity knocks for Canada to become key LNG supplier as U.S. pauses projects

Todayville

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

Federal government’s GHG reduction plan will impose massive costs on Canadians

Alberta / 9 hours ago

Alberta awash in corporate welfare

Crime / 9 hours ago

Everything you need to know about the failed assassination attempt of Donald Trump

Economy

Federal government’s GHG reduction plan will impose massive costs on Canadians

Published on July 26, 2024

Todayville

From the Fraser Institute

By Ross McKitrick

Many Canadians are unhappy about the carbon tax. Proponents argue it’s the cheapest way to reduce greenhouse gas (GHG) emissions, which is true, but the problem for the government is that even as the tax hits the upper limit of what people are willing to pay, emissions haven’t fallen nearly enough to meet the federal target of at least 40 per cent below 2005 levels by 2030. Indeed, since the temporary 2020 COVID-era drop, national GHG emissions have been rising, in part due to rapid population growth.

The carbon tax, however, is only part of the federal GHG plan. In a new study published by the Fraser Institute, I present a detailed discussion of the Trudeau government’s proposed Emission Reduction Plan (ERP), including its economic impacts and the likely GHG reduction effects. The bottom line is that the package as a whole is so harmful to the economy it’s unlikely to be implemented, and it still wouldn’t reach the GHG goal even if it were.

Simply put, the government has failed to provide a detailed economic assessment of its ERP, offering instead only a superficial and flawed rationale that overstates the benefits and waives away the costs. My study presents a comprehensive analysis of the proposed policy package and uses a peer-reviewed macroeconomic model to estimate its economic and environmental effects.

The Emissions Reduction Plan can be broken down into three components: the carbon tax, the Clean Fuels Regulation (CFR) and the regulatory measures. The latter category includes a long list including the electric vehicle mandate, carbon capture system tax credits, restrictions on fertilizer use in agriculture, methane reduction targets and an overall emissions cap in the oil and gas industry, new emission limits for the electricity sector, new building and motor vehicle energy efficiency mandates and many other such instruments. The regulatory measures tend to have high upfront costs and limited short-term effects so they carry relatively high marginal costs of emission reductions.

The cheapest part of the package is the carbon tax. I estimate it will get 2030 emissions down by about 18 per cent compared to where they otherwise would be, returning them approximately to 2020 levels. The CFR brings them down a further 6 per cent relative to their base case levels and the regulatory measures bring them down another 2.5 per cent, for a cumulative reduction of 26.5 per cent below the base case 2030 level, which is just under 60 per cent of the way to the government’s target.

However, the costs of the various components are not the same.

The carbon tax reduces emissions at an initial average cost of about $290 per tonne, falling to just under $230 per tonne by 2030. This is on par with the federal government’s estimate of the social costs of GHG emissions, which rise from about $250 to $290 per tonne over the present decade. While I argue that these social cost estimates are exaggerated, even if we take them at face value, they imply that while the carbon tax policy passes a cost-benefit test the rest of the ERP does not because the per-tonne abatement costs are much higher. The CFR roughly doubles the cost per tonne of GHG reductions; adding in the regulatory measures approximately triples them.

The economic impacts are easiest to understand by translating these costs into per-worker terms. I estimate that the annual cost per worker of the carbon-pricing system net of rebates, accounting for indirect effects such as higher consumer costs and lower real wages, works out to $1,302 as of 2030. Adding in the government’s Clean Fuels Regulations more than doubles that to $3,550 and adding in the other regulatory measures increases it further to $6,700.

The policy package also reduces total employment. The carbon tax results in an estimated 57,000 fewer jobs as of 2030, the Clean Fuels Regulation increases job losses to 94,000 and the regulatory measures increases losses to 164,000 jobs. Claims by the federal government that the ERP presents new opportunities for jobs and employment in Canada are unsupported by proper analysis.

The regional impacts vary. While the energy-producing provinces (especially Alberta, Saskatchewan and New Brunswick) fare poorly, Ontario ends up bearing the largest relative costs. Ontario is a large energy user, and the CFR and other regulatory measures have strongly negative impacts on Ontario’s manufacturing base and consumer wellbeing.

Canada’s stagnant income and output levels are matters of serious policy concern. The Trudeau government has signalled it wants to fix this, but its climate plan will make the situation worse. Unfortunately, rather than seeking a proper mandate for the ERP by giving the public an honest account of the costs, the government has instead offered vague and unsupported claims that the decarbonization agenda will benefit the economy. This is untrue. And as the real costs become more and more apparent, I think it unlikely Canadians will tolerate the plan’s continued implementation.

Author:

Ross McKitrick

Professor of Economics, University of Guelph

Economy

Kamala Harris’ Energy Policy Catalog Is Full Of Whoppers

Published on July 25, 2024

Todayville

From the Daily Caller News Foundation

By DAVID BLACKMON

The catalog of Vice President Kamala Harris’s history on energy policy is as thin as the listing of her accomplishments as President Joe Biden’s “Border Czar,” which is to say it is bereft of anything of real substance.

But the queen of word salads and newly minted presumptive Democratic presidential nominee has publicly endorsed many of her party’s most radical and disastrous energy-related ideas while serving in various elected offices — both in her energy basket-case home state of California and in Washington, D.C.

What Harris’s statements add up to is a potential disaster for America’s future energy security.

“The vice president’s approach to energy has been sophomorically dilettantish, grasping not only at shiny things such as AOC’s Green New Deal but also at the straws Americans use to suck down the drinks they need when she starts talking like a Valley Girl,” Dan Kish, a senior research fellow at Institute for Energy Research, told me in an email this week. “To be honest, she’s no worse than many of her former Senate colleagues who have helped cheer on rising energy costs and the fleeing American jobs that accompany them. She doesn’t seem to understand the importance of reliable and affordable domestic energy, good skilled jobs or the national security implications of domestically produced energy, but maybe she will go back to school on the matter. No doubt on her electric school bus.”

During her first run for the Senate in 2016, Harris said she would love to expand her state’s economically ruinous cap-and-trade program to the national level. She also endorsed then-Gov. Jerry Brown’s harebrained scheme to ban plastic straws as a means of fighting climate change.

Tim Stewart, president of the U.S. Oil and Gas Association, told me proposals like that one would lead during a Harris presidency to the “Californication of the entire U.S. energy policy.” “Historically,” he added, “the transition of power from a president to a vice president is designed to signal continuity. This won’t be the case, because a Harris administration will be much worse.”

But how much worse could it be than the set of Biden policies that Harris has roundly endorsed over the last three and a half years? How much worse can it be than having laughed through a presidency that:

— Cancelled the $12 billion Keystone XL Pipeline on day one.

— Enacted what many estimate to be over $1 trillion in debt-funded, inflation-creating green energy subsidies.

— Refused to comply with laws requiring the holding of timely federal oil and gas lease sales.

— Instructed its agencies to slow-play permitting for all manner of oil and gas-related infrastructure.

— Tried to ban stoves and other gas appliances.

— Listed the Dunes Sagebrush Lizard as an endangered species despite its protection via a highly-successful conservation program.

— Invoked a “pause” on permitting of new LNG export infrastructure for the most specious reasons imaginable.

— Drained the Strategic Petroleum Reserve for purely political reasons.

As Biden’s successor for the nomination, Harris becomes the proud owner of all these policies, and more.

But Harris’ history shows it could indeed get worse. Much worse, in fact.

While mounting her own disastrous campaign for her party’s presidential nomination in 2020, Harris endorsed a complete ban on hydraulic fracturing, i.e., fracking. She later conformed that position to Biden’s own, slightly less insane view, but only after being picked as his running mate.

Consider also that while serving in the Senate in early 2019, Harris chose to sign up as a co-sponsor of the ultra-radical Green New Deal proposed by New York Rep. Alexandria Ocasio Cortez. It is not enough that the Biden regulators appeared to be using that nutty proposal and climate alarmism as the impetus to transform America’s entire economy and social structure: Harris favors enacting the whole thing.

As I have detailed here many times, every element of climate-alarm-based energy policies adopted by the Biden administration will inevitably lead the United State to become increasingly reliant on China for its energy needs, in the process decimating our country’s energy security. By her own words and actions, Harris has made it abundantly clear she wants to shift the process of getting there into a higher gear.

She is an energy disaster-in-waiting.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.