AUSTRALIAN INSTITUTE OF MINING AND METALLURGY INTERNATIONAL URANIUM CONFERENCE<\/p>\n
ADELAIDE, JUNE 4\/19<\/p>\n
Australia is a treasure trove, a vast Aladdin\u00e2\u20ac\u2122s cave of energy resources, virtually unique in the world. We have huge deposits of petroleum and coal and the world\u00e2\u20ac\u2122s largest uranium resources. With the production of about 7000 tonnes last year, Australia ranks third among producers, behind Kazakhstan and Canada.<\/p>\n
But something\u00e2\u20ac\u2122s amiss. We can never agree on how the blessing can be enjoyed. On the contrary, subversive voices constantly rail against it. Uranium used to be the devil; now it\u00e2\u20ac\u2122s coal. Even natural gas has one foot in hell. Wind and solar are the new saints but, alas, they\u00e2\u20ac\u2122re asleep in heaven too much of the time.<\/p>\n
Contradictions abound. We export uranium all over the world but have legislation prohibiting nuclear power at home. Is it really a virtue to send fuel to the rest of the world for power plants we\u00e2\u20ac\u2122re too pure to have ourselves? For a nation dedicated to the rule of reason, or so we think, it\u00e2\u20ac\u2122s time to repeal that absurd legislation.<\/p>\n
The opposition to nuclear power, and its domestic proxy, uranium, reaches back a long way, to the 1970s when the great Alligator River ore bodies were discovered. It started in the United States, arising from the aftermath of the Viet Nam war, although its roots were in the British \u00e2\u20ac\u02dcBan the bomb\u00e2\u20ac\u2122 protests of the 1950s. Ralph Nader declared 1975 as the inaugural year of the nuclear debate.<\/p>\n
The debate in Australia, which took the form of whether uranium should be mined, shook the nation for several years. The anti-uranium lobby didn\u00e2\u20ac\u2122t stop mine development entirely but it did lead to government policies that prevented Australia from being the world\u00e2\u20ac\u2122s number one uranium producer, which it could have been.<\/p>\n
Without a doubt, the delays it caused enabled Namibia and Canada to develop deposits that took our place. Rossing had a grade of .7 of a pound, less than a tenth of the grade of Jabiluka, then the largest uranium ore body in the world.\u00c2\u00a0Saskatchewan\u00e2\u20ac\u2122s Key Lake, which got into production, was discovered four years after Jabiluka.<\/p>\n
Some of the policies were bizarre, even in the Coalition, which supported uranium. Here\u00e2\u20ac\u2122s one. Under the Fraser government, Pancontinental\u00e2\u20ac\u2122s Jabiluka ore body had achieved all the domestic approvals required for development, including an agreement with the Aboriginal people, which they enthusiastically supported at the time. But we needed export approval under the Atomic Energy Act.<\/p>\n
I approached the Minister for Natural Resources, Doug Anthony, who was empowered to grant approvals. At the time, we had marketing arrangements with Japanese, Korean, American, and various European utilities \u00e2\u20ac\u201c enough to finance the mine. We thought it politic to present the British contract first, which we did.<\/p>\n
The Minister said basically it was fine but that government policy required three price re-openers. Uranium contracts were usually for a term of five years with a pricing formula that gave some security to both buyer and seller. Doug Anthony disagreed with that, insisting there must be at least three times in the contract when the price had to be renegotiated.<\/p>\n
When I told the British that, they erupted, aghast at the uncommercial of it. Nevertheless, they agreed under sufferance to one price re-opener. When I took it to Doug Anthony he said: \u00e2\u20ac\u0153Tony I told you we need three\u00e2\u20ac\u009d.<\/p>\n
So I had to go back to the British. They were apoplectic; using epithets to describe the Australian government\u00e2\u20ac\u2122s understanding of how business is done that would astonish even a foul-mouthed comedian. But they agreed to a second re-opener.<\/p>\n
I remember well the day when I went to a phone booth in Canberra, put my coin in the slot and dialled Doug Anthony. He picked up the phone and listened to me saying, \u00e2\u20ac\u0153Doug I can get you two price re-openers but no more. The British say if our government does not accept that they will complain to their Foreign Affairs Department about how uncommercial we are\u00e2\u20ac\u009d.<\/p>\n
After a pause, he said, \u00e2\u20ac\u0153OK we can accept that. I\u00e2\u20ac\u2122ll instruct my departmental officers to prepare the approval papers for my signature.\u00e2\u20ac\u009d<\/p>\n
Hooray, I thought; we have it. No Australian government would dishonour an international contract, not even a Labor one that opposes uranium.<\/p>\n
However, before Doug Anthony had a chance to sign the approval, Malcolm Fraser called the March 1983 election and lost. The incoming Hawke government imposed the infamous Three Mines policy and Jabiluka was stymied.<\/p>\n
Later, at a dinner with Doug Anthony at his apartment in Canberra (just the two of us), he told me the reason for the price policy. His government was afraid that if the uranium price soared, as it had done in the past, Labor would accuse it of flogging off the nation\u00e2\u20ac\u2122s resources at bargain-basement prices.<\/p>\n
I went to Paris to tell Electricite de France that the new Labor government would not let Jabiluka go ahead. They were our biggest potential customers, willing to sign a contract worth hundreds of millions of dollars.<\/p>\n
I informed my friend, Jean Feron, the number two at EDF, of the news. After a brief silence, he shook his head sadly and said \u00e2\u20ac\u0153Vous etes trop riches\u00e2\u20ac\u009d \u00e2\u20ac\u201c you are too rich.<\/p>\n
But that was a long time ago. Uranium is not so contentious now. Both sides of politics support it, more or less, at least at the federal level. It\u00e2\u20ac\u2122s ironic that the new Satan is coal, for the American coal industry was a major funder of the early anti-nuclear movement.<\/p>\n
However, \u00e2\u20ac\u0153The Times They are A-Changing\u00e2\u20ac\u009d, as Bob Dylan\u00e2\u20ac\u2122s famous song said, and nowhere is that truer than in the field of energy.\u00c2\u00a0 The world is shunning fossil fuels in preference for clean energy forms. Nuclear power is one of these. It has the potential of being the world\u00e2\u20ac\u2122s largest baseload power supply that has zero CO2 emissions.<\/p>\n
After the public acceptance set- back of Fukushima, nuclear is powering ahead. It generates 11% of the world\u00e2\u20ac\u2122s energy from about 450 reactors across 30 countries. And 13 others are building new capacity.<\/p>\n
Nuclear is growing remarkably fast in China, with generation increasing by 25% in 2016 and 15% in the year after. An additional 47 reactors are under construction or planned.<\/p>\n
Throughout the world, over 400 new nuclear power plants are in that category or proposed.<\/p>\n
The French president, Emmanuel Macron, felt it necessary to promise in his election campaign to reduce France\u00e2\u20ac\u2122s reliance on nuclear from 75% to 50% by 2025. However, he has recently announced a ten – year delay in its implementation. \u00c2\u00a0That\u00e2\u20ac\u2122s effectively a reversal. The pressure is building on Germany to reconsider its phase-out policy imposed after Fukushima.<\/p>\n
The arguments against nuclear power haven\u00e2\u20ac\u2122t changed over the years. However, much has changed in the industry itself, and that has lessened their force.<\/p>\n
Old fears that civil use could lead to nuclear weapons proliferation have proved baseless. Proliferation has occurred but through technology transfers from existing weapons states at government level.<\/p>\n
Progress is being made in high-level waste storage. The technology has long since been proven but it\u00e2\u20ac\u2122s the NIMBY politics of selecting sites that’s the problem. Finland appears to have solved this \u00e2\u20ac\u201c the first in the world to do so. It has a site on its west coast, a construction licence and is building away.<\/p>\n
Australia is well endowed with stable geological formations that would be eminently suitable. In 2015, South Australia\u00e2\u20ac\u2122s Nuclear Fuel Cycle Royal Commission released a report with the opinion that nuclear waste could be safely and profitably stored in that state.<\/p>\n
Despite Chernobyl and Fukushima, nuclear\u00e2\u20ac\u2122s safety record compares unmistakably well against other industries, particularly coal and gas. And significant improvements have emerged over the years\u00e2\u20ac\u201c for example, passive cooling systems that cut in if the cooling circuit fails. That was the proximate cause of the damage at Fukushima.<\/p>\n
Misunderstandings about radiation need to be corrected, however. For instance, of the 2,000 deaths at Fukushima, only one was attributed to radiation exposure. The rest was due to panic during evacuation. And nuclear plants emit no more radiation than the granite at New York\u00e2\u20ac\u2122s Grand Central Station.<\/p>\n
Capital costs, however, are a concern. They account for 60% of the levelised cost of electricity. But operating costs are low. And uranium, as fuel, contributes only about 8%.<\/p>\n
In the1970\u00e2\u20ac\u2122s, nuclear was cheaper than coal, except where coal mines were near the power stations they fed. That changed when activists began attacking nuclear\u00e2\u20ac\u2122s economic advantage. Legal actions, regulatory over-reach, and interruptions of construction schedules were successful in driving costs up.<\/p>\n
Currently, steps are being taken to drive them down.\u00c2\u00a0 Since in the West, plant designs tend to be customized, the normal learning curve in technology has not applied to its fullest extent. Standardized designs could remedy this, as is happening in China, where levelised costs are less than half of what they are in the West.<\/p>\n
The efforts to reduce cost are achieving success. The World Nuclear Association in its update of nuclear economics says, \u00e2\u20ac\u0153Nuclear power is cost-competitive with other forms of electricity generation, except where there is direct access to low-cost fossil fuels.\u00e2\u20ac\u009d And the recently released report of the International Atomic Energy Association says nuclear\u00e2\u20ac\u2122s cost is competitive with solar and wind.<\/p>\n
An exciting area of innovation and one where the meaningful potential for cost reduction exists is in small modular reactors. They\u00e2\u20ac\u2122re defined as reactors of less than 300 MW. Their technology arose from nuclear installations in ships.<\/p>\n
Because the modules are made in factories to standard designs, economies of scale apply, design improvements are facilitated and the regulatory process is simplified. \u00c2\u00a0Passive safety systems requiring less redundancy further reduce costs. And shorter on-site construction times offer fewer opportunities for obstruction by activists, one of the major cost issues in the West.<\/p>\n
Also, their small size makes them less scary to the public.<\/p>\n
Since they have lower requirements for access to cooling water and are deliverable on trucks they can be used in remote areas. They\u00e2\u20ac\u2122re more easily financed than large plants and can be readily placed in brown-field sites where coal-fired plants are decommissioned.<\/p>\n
The Americans are taking SMRs seriously. Research is being generously funded by the Department of Energy and Silicon Valley is abuzz with entrepreneurs starting up companies to commercialize the technology. Eight companies forecast targets of nearly half the cost of conventional nuclear plants, on a proportionate basis.<\/p>\n
Late last year, public acceptance of nuclear power received a dramatic boost from an unexpected quarter \u00e2\u20ac\u201c endorsement in the special report of the Intergovernmental Panel on Climate Change. This could be a game-changer.<\/p>\n
Contrary to expectations from this spicy broth of green politics and allied science, the report gives a resoundingly supportive view of nuclear\u00e2\u20ac\u2122s role in mitigating global warming. It\u00e2\u20ac\u2122s particularly refreshing because the Green lobby, so influential in the IPCC, has been such an ostrich in the presence of nuclear.<\/p>\n
In calling for a heroic reduction in global warming of 1.5 degrees, the IPCC outlines pathways that could lead to it. It states, \u00e2\u20ac\u0153Nuclear power increases its share in most 1.5 degree pathways to 2050.\u00e2\u20ac\u009d The growth is based on an estimated two and a half times expansion in nuclear generation.<\/p>\n
The inescapable conclusion from the report is that without nuclear\u00e2\u20ac\u2122s contribution there would be no possibility of achieving the IPCC\u00e2\u20ac\u2122s objective. The authors must have decided the arguments against nuclear are overwhelmed by the urgency of its need.<\/p>\n
Otherwise, they would have condemned it as they condemned coal.<\/p>\n
The report states that nuclear\u00e2\u20ac\u2122s \u00e2\u20ac\u0153health risks are low per unit of electricity production and the land requirement is lower than that of other power sources.\u00e2\u20ac\u009d<\/p>\n
Land requirement is noteworthy because both wind and solar take up huge amounts of acreage. To match the electricity output of a 1000 MW nuclear station, which needs one square mile, solar would require 75 square miles and wind 360.<\/p>\n
Today, much publicity is being given to the devastating effect on electricity prices and availability caused by the rush to renewables due to the intermittence of their energy supply. With its steady, reliable and clean baseload, nuclear offers the ideal solution. The two sources are natural allies.<\/p>\n
The times they are a-changing for nuclear, and potentially therefore for uranium. Uranium is a cyclical commodity with high price volatility.<\/p>\n
In the early 1970s, uranium producers were so despondent they banded together to form \u00e2\u20ac\u0153The Club\u00e2\u20ac\u009d in London, which was accused of being a cartel, although such a cartel would have been legal at the time in its member countries.<\/p>\n
Its purpose was to manage production in order to encourage economic uranium prices. It led to the Uranium Institute, now the World Nuclear Association. Of course, ever since the Uranium Institute was established there has been no suggestion of antitrust activities. Lawyers present at meetings ensure that.<\/p>\n
In 1978, when Westinghouse was caught in a short squeeze the price skyrocketed. They had foolishly sold short 65 million pounds at $12 and the price went to several times that, forcing them to seek Chapter 11 bankruptcy protection.<\/p>\n
Ultimately the price collapsed, reaching an all-time low of $7 in 2001. It rose again in 2007 (helped by the flooding at Saskatchewan\u00e2\u20ac\u2122s Cigar Lake) to $138 and then fell into an abyss where it\u00e2\u20ac\u2122s currently languishing. At a spot price of $25 per pound, it\u00e2\u20ac\u2122s well below the $60 needed to develop most new mines. And mines throughout the world are being forced to cut production.<\/p>\n
While I\u00e2\u20ac\u2122m mindful of the adage, \u00e2\u20ac\u02dcPredictions are hazardous, especially about the future\u00e2\u20ac\u2122, I\u00e2\u20ac\u2122m confident in saying that if nuclear power grows as reasonably expected, especially in China, future uranium prices are likely to enter positive territory again. Given the inhibiting effect of low prices on supply, which has been dramatically curtailed, the market will mainly demand dependent.<\/p>\n
A turn in the cycle would send a long-sought signal to the Australian uranium industry and its patient investors.<\/p>\n
Nevertheless, the big challenge of improving public acceptance is still before us.<\/p>\n
Arduous though the task is to win hearts and minds, it must be undertaken. If not, a rollback we see threatened in some parts of the world, notably in Europe, will stall nuclear progress. In the USA there are as many people opposed to nuclear as support it \u00e2\u20ac\u201c not a situation for complacency.<\/p>\n
Because the polls show that women in the aggregate tend to be less supportive of nuclear than men, it would be wise to encourage more female advocacy.<\/p>\n
The IPCC\u00e2\u20ac\u2122s endorsement should be central to nuclear\u00e2\u20ac\u2122s case. It has the potential to recast the entire energy debate. If the world\u00e2\u20ac\u2122s premier organization on Climate Change says that its target cannot be met without nuclear, how could anyone concerned about global warming oppose it?<\/p>\n
Those who disapprove of nuclear, therefore, will have to rethink their position. They may not like nuclear but at the very least they would have to see it as the lesser of two evils.<\/p>\n
The task then is to spread awareness of the report. Acceptance of its nuclear conclusions could even reduce somewhat the toxic polarity in the Climate Change debate.<\/p>\n
Already the report is having an effect. Last month a group of about 100 Polish environmentalists and scientists, relying on the Climate Change basis of the findings, wrote an open letter to Germany asking it, as a neighbour, to reconsider its nuclear phase-out policy.\u00c2\u00a0 And, more recently, 80,000 international scientists joined in a declaration stressing the need for nuclear to combat Climate Change, citing the report.<\/p>\n
All this exciting progress in the nuclear industry \u00e2\u20ac\u201c in safety improvements, waste disposal, cost reduction, small modular reactors, is passing us by in Australia.<\/p>\n
Technology doesn\u00e2\u20ac\u2122t stop just because a government doesn\u00e2\u20ac\u2122t like it.<\/p>\n
At the very least, the Luddite prohibition that has denied us the torch of progress for almost 19 years should be repealed.<\/p>\n
We should no longer allow our government to say to us about a science that most of the world has embraced, \u00e2\u20ac\u0153Thou shall not benefit from it, ever.\u00e2\u20ac\u009d<\/p>\n
Let science dispel ill-placed fears and wild imaginings, and let our politicians give us the freedom to advance, along with the rest of the world.<\/p>\n
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AUSTRALIAN INSTITUTE OF MINING AND METALLURGY INTERNATIONAL URANIUM CONFERENCE ADELAIDE, JUNE 4\/19 Australia is a treasure trove, a vast Aladdin\u00e2\u20ac\u2122s cave of energy resources, virtually unique in the world. We have huge deposits of petroleum and coal and the world\u00e2\u20ac\u2122s largest uranium resources. With the production of about 7000 tonnes last year, Australia ranks third…
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