Privatizing AECL might be at best a mixed blessing

According to media reports, the federal government is in "advanced negotiations" with General Electric Co. to sell a large share of Crown-owned Atomic Energy of Canada Ltd.

The Toronto Star article quotes unnamed "sources" as saying Natural Resources Minister Gary Lunn has been leading the privatization discussions along with AECL's new chair, Michael Burns.

Of course, there's precious little likelihood that the current Ontario government will announce any decision before the Oct. 10 provincial election, and the best we could hope for is that the McGuinty Liberals will at least include something in their campaign platform.

Just why the government has dilly-dallied so long on the question of new nuclear stations is a bit of a mystery, since no one really close to the industry has any doubt that there's an urgent need for at least one new four-unit station, with the Darlington Generating Station the most reasonable site.

As we see it, conditions at home and abroad are just about ideal for something more adventurous than simply a twinning of the Darlington plant, which would add some 3,600 megawatts to the province's generating capacity.

As we understand it, AECL engineers are just itching to provide the superiority of a "second generation" CANDU design, featuring reactors capable of producing at least 1,000 MW.

The problem, of course, is that new technology always brings with it potential risks, and historically the federal government agreed to share the risk when Ontario Hydro agreed to build the first two really large nuclear units at the Pickering Generating station.

When Ontario Hydro agreed to let AECL build the first commercial-scale nuclear plant at Douglas Point, the design was fully 10 times that of the Chalk River station - which had not yet proven itself - 200 megawatts. And under the agreement between the federal and provincial agencies, AECL would be on the hook if power from the new facility was costlier than that from Hydro's coal-fired Lakeview Generating Station.

Today, in the midst of a global warming crisis, there's little doubt that nations around the world will be looking at nuclear power as at least a lesser of evils, with potentially a lot more reliability than other "green" forms of electrical energy such as wind and solar.

In the circumstances, any delay in approving construction of at least one reactor featuring the new CANDU design is surely inexcusable, and the best approach would seem to be the same type of teamwork between the federal and provincial governments as we witnessed back in the 1960s.

Accordingly, a key question to be asked is whether privatizing AECL, a Crown agency since the early 1950s, will help or hinder such a development.

One source described in the Star article was quoted as saying the U.S. giant "is very confident that this is a done deal."

The CANDU reactor technology, which uniquely involves the use of ordinary uranium and heavy water, rather than enriched (weapons grade) uranium and ordinary water, is found today in 22 power reactors in Canada, most of them in Ontario where the Crown corporation's workforce is approaching 4,000.

But internationally, AECL has been a struggling underdog in a market increasingly dominated by three global giants - GE, Areva and Westinghouse, all of which use variations of the reactor designs found in nuclear submarines.

A strategic partnership with GE is seen as potentially shifting much of the financial risk of nuclear projects away from Canadian taxpayers, keep the CANDU design and its proud heritage alive, and protect Canadian jobs in a nuclear-power sector on the verge of a renaissance.

For its part, GE would gain new intellectual property related to reactor design, waste storage and fuel recycling, as well as access to a talented pool of nuclear engineers.

Such a deal would require cabinet approval, and the government may yet decide to open the process to other bidders, particularly France's nuclear giant Areva Group.

The deal would hinge on the Ontario government's commitment in one of the few areas where manufacturing jobs aplenty could be assured.