Alberta pressed on nuclear energy issue

Plans filed for four reactors in Peace River area, forcing Stelmach government to establish nuclear policy in face of strong opposition

Gary Park

For Petroleum News

Ready or not, Alberta Premier Ed Stelmach has little choice but to grasp the nuclear nettle, as pressure builds for the provincial government to explore renewable energy options to power its oil sands sector and lower its greenhouse gas emissions.

His hand is being forced by Bruce Power LP, the only private operator of nuclear plants in Canada, which has rolled out plans to build a C$10 billion complex with up to four reactors capable of producing 4,000 megawatts (one-third of Alberta’s current electrical generating capacity) in the Peace River area of northwestern Alberta.

The Bruce Power consortium of five partners, with TransCanada holding a 31.6 percent stake, has filed an application with the Canadian Nuclear Safety Commission to prepare a 960-acre site, with the first power scheduled for delivery in 2017.

In the interim, the company will embark on a three-year environmental assessment and consult with nearby communities.

The announcement comes on the heels of Bruce Power’s acquisition of Energy Alberta Corp., a private company that planned to build a C$6.2 billion nuclear reactor in northern Alberta.

Stelmach declined to say whether his government would endorse Bruce Power’s plan, pending the selection of a “very knowledgeable” panel to study the nuclear issue, which is drawing strong opposition from environmentalists, some of whom fear that seismic activity near a nuclear reactor could result in contamination of aquifers that residents rely on for water supplies.

However, Stelmach has promised to have a government policy in place this year.

A government spokesman said federal Environment Minister John Baird’s latest plan targeting the oil sands as a key sector to reduce greenhouse gas emissions, is “definitely one of the issues that needs to be considered.”

The challenge facing Alberta was outlined during the recent election campaign when Armand Laferrere, chief executive officer of AREVA Canada, a French-based manufacturer of nuclear reactors, estimated that unless some alternative solutions are found the oil sands could burn 47 trillion cubic feet of gas over the next 22 years, the equivalent of 153 years of current gas exports to the United States.

“You would have gobbled up about 80 percent of Canada’s gas reserves by 2030,” he said.

Reiner Kuhr, a management consultant, told an oil sands conference last fall that two German-designed modular reactors could support 100,000 barrels per day of bitumen production from thermal recovery projects in addition to generating electricity.

But, along with Kuhr, Ashley Finan, a nuclear engineering graduate of the Massachusetts Institute of Technology, said that before any nuclear plant is built in Alberta there must be a regional energy policy.

Kuhr said that based on gas prices starting at US$7 per million British thermal units and escalating over 30 or 40 years, one of the German reactors could achieve a net saving of C$1 billion to C$2 billion in natural gas, while the value of carbon dioxide displacement at C$15 per metric ton would contribute another C $200 million.

However, he said that even with government and industry backing, a nuclear reactor could not come onstream before 2017, ruling out any oil sands projects already in the planning stages.

An MIT study comparing the economics of nuclear power and natural gas for steam generation indicated nuclear energy would have a breakeven gas price of C$6.75 per million Btu, but would offer the considerable advantage of removing 3 million metric tons per year of carbon dioxide emissions from a 100,000 bpd steam-assisted gravity drainage oil sands plant.

Although Energy Alberta had exclusive rights with the Canadian-government’s Atomic Energy of Canada Ltd’s CANDU reactors, Bruce Power has made it clear it does not want to be tied to that arrangement.

Chief Executive Officer Duncan Hawthorne said the willingness of manufacturers such as Areva, GE Hitachi Nuclear Energy, Westinghouse Electric and Atomic Energy of Canada to financially backstop the project will be important.