May 3, 2000
Ms. Carmen Ellyson
Board Operations Officer
Atomic Energy Control Board
280 Slater Street
P.O. Box 1046, Station B
Ottawa, Ontario K1P 5S9
Dear Ms. Ellyson,
We are writing in regard to the impending start-up of a major new Canadian nuclear facility, which has significant implications for global efforts to stop the spread of nuclear-weapons materials. It appears that the operating license for this facility has yet to be listed for discussion on the agenda of the Atomic Energy Control Board of Canada a very troubling situation, given the circumstances described below. We urge you to take up this matter promptly and to consider the recommendations we make at the close of this letter.
According to reports in the international trade press, Atomic Energy Canada Ltd. (AECL) and Nordion, Inc. plan to commence operation in June 2000 of their New Processing Facility (NPF) for medical radioisotopes.  As you may know, this facility was the object of considerable scrutiny at a special public meeting of the U.S. Nuclear Regulatory Commission (NRC) last spring. As we testified at that meeting, current plans for the NPF threaten to undermine two decades of progress in the international non-proliferation effort to eliminate civilian commerce in bomb-grade, highly enriched uranium (HEU).
Since 1978, the international Reduced Enrichment for Research and Test Reactors (RERTR) program has worked to eliminate commerce in HEU to reduce risks of this material being stolen or diverted for nuclear weapons. Annual trade has been slashed drastically from several tons annually to less than a few hundred kilograms, en route to zero. Dozens of research reactors have been converted from HEU fuel to low enriched uranium (LEU) fuel, which is unsuitable for weapons, and no new high-power Western research reactors have been built to use HEU fuel and started operations since 1978.
Recently, the RERTR program has been expanded to include phasing out HEU commerce arising from production of medical radioisotopes. Australia already produces such isotopes with LEU, Indonesia soon will join it, and others are researching this safer option. Helping to facilitate this initiative, a 1992 U.S. statute, known as the Schumer Amendment, prohibits export of HEU for use as targets in isotope production unless all of three conditions are met: the recipient cannot yet use LEU targets; the recipient has formally committed to convert to LEU targets as soon as possible; and there is an active LEU target development program to enable such conversion. NCI has communicated with all of the worlds current and prospective producers of medical isotopes, urging them to follow Australias example, and many are pursuing this option. (For further information on the progress of the RERTR program and NCIs strategy for facilitating the complete phase out of HEU commerce for isotope production, please see A Level Playing Field for Medical Isotope Production How to Phase Out Reliance on HEU, presented last year at the 22nd International Meeting on RERTR in Budapest, Hungary, available from NCI upon request or on NCIs website at http://www.nci.org/rertr99.htm.)
In the face of the prevailing international norm and U.S. nonproliferation law, AECL and Nordion still propose to commence operations using HEU targets in their new MAPLE reactors and NPF. If such production were to commence and then continue for the life of the new facilities, it would generate commerce of a ton or more of bomb-grade uranium. Canada would soon be responsible for more civilian HEU commerce than any other country in the world hardly consistent with Canadas commendable international leadership role in nuclear non-proliferation.
AECL, Nordion and Canada can avoid so undermining the international nonproliferation regime by converting from HEU to LEU targets as soon as possible. No modifications would be required to the MAPLE reactors. However, some modifications might be necessary to the NPF. As we testified before the NRC last spring, such modifications to the NPF would be much more feasible if carried out prior to starting up the facility, because after start-up the NPF will be radioactive and therefore much more expensive to modify. In addition, modifying the NPF prior to start-up would ensure against any interruption in the worlds supply of vital medical isotopes. While necessary modifications were being made to the NPF, isotopes could continue to be produced in Canadas NRU reactor and its associated processing facility. Following these modifications, the NPF could start-up using LEU targets or, if necessary, start with HEU targets and then convert to LEU targets when they became available without any interruption in the supply of isotopes.
The NRC agreed with our analysis in its order of June 2000, expressing the expectation that Atomic Energy Canada, Ltd. will cooperate fully with [the U.S. Department of Energys] Argonne National Laboratory to complete a feasibility study within three months to consider whether minor modifications could be made prior to the MAPLE reactors and their processing facility coming on line that would permit the use of LEU targets, or take other reasonable measures that would at least preserve the opportunity to move to LEU targets in the future. The NRC expected the study to be submitted within three months by September 2000 based on the testimony of AECL and Nordion that the study could be prepared in this period.
In addition, as we urged in our testimony, the NRC imposed conditions on its approval of AECL and Nordions license application for the export of HEU targets. The NRC directed AECL and Nordion, as well as the U.S. executive branch, to submit a yearly status report detailing the progress of the program and Canadian cooperation in developing LEU targets. Moreover, the NRC warned that, If the Commission should make a finding, following review of these periodic status reports and a public meeting if necessary, that the requirements of the Schumer Amendment are not being met, the Commission may modify, suspend, or revoke the license pursuant to Section 186 of the AEA and 10 CFR 110.52. The Commission also stated that the Executive Branch Reports should include assurances that the funds necessary to develop the LEU targets in a timely manner have been made available to Argonne National Laboratory. (We can provide you with copies of our testimony and the NRC order upon request. Also, the testimony is available on NCIs website at http://www.nci.org/pl-nrc-61699.htm, and the order at http://www.nci.org/nrc62999.txt.)
Recent troubling developments suggest that the applicant already is violating the terms of the NRCs order and does not intend to modify the NPF prior to start-up. First, the applicant has refused to cooperate with Argonne National Laboratory in conducting its feasibility study, so that there can be no independent check of the studys progress and conclusions. Second, the three-month study is already seven months overdue. Even if it were completed and submitted immediately, it does not appear there would be sufficient time to make modifications to the NPF prior to its planned start-up in June 2000. If the NPF does indeed start up prior to completion of the feasibility study and implementation of any necessary modifications to enable it to process LEU targets, AECL and Nordion are likely to argue against future modifications as prohibitively expensive because the NPF will be radioactive. A clear indication of this is provided by a recent press report, in which a Nordion representative was characterized as calling into question whether conversion to LEU ever would occur, because switching to safer, low-enriched uranium fuel would be too costly and too troublesome.  In addition, neither the Canadian companies nor the Canadian government has provided any hint of funding for the modifications necessary to convert to LEU targets. It thus appears that AECL and Nordion have little, if any, actual intention to convert to LEU targets.
Furthermore, AECL and Nordion already have inquired about modifying the terms of the license in two ways that would undermine the intent of the Schumer Amendment and the NRCs order. First, they sought to have the HEU exported in one or two large shipments, rather than conventional smaller annual shipments, to avoid annual NRC review of their progress on conversion. Second, they sought permission to have the HEU exported as metal rather than as fabricated targets. If this change were approved and a target-fabrication capacity were established in Canada, AECL and Nordion could arrange for the original batch of HEU to be recycled repeatedly, avoiding future license applications and thereby perpetuating commerce in U.S.-origin HEU for decades to come.
All of this strongly suggests a blatant attempt by AECL and Nordion to evade the requirements of U.S. non-proliferation law and the NRCs order, which condition exports of HEU targets to Canada on the existence of an active program to convert to LEU targets. If AECL and Nordion start up the NPF prior to modification or pursue other strategies that make conversion to LEU less feasible or less likely, the NRC would be compelled by U.S. law to terminate exports of HEU to these companies. Since 1992, the United States has refused to export HEU to several European research reactors because their operators refused to agree to the requirements of the Schumer Amendment. If AECL and Nordion pursue a strategy that results in termination of HEU supply from the United States, they could well be responsible for endangering the worlds supply of medical isotopes. Such an unfortunate outcome would be in no ones interest and can easily be avoided if the AECB exercises responsible oversight.
Accordingly, we urge you to take the following steps. First, the NPF should be placed on the agenda of the AECBs next meeting. Discussion should include the refusal of AECL and Nordion to abide by their commitments to the U.S. NRC and to support international non-proliferation efforts. Discussion also should address the possible consequences of such intransigence, such as termination of U.S. HEU exports to Canada, and the resulting impact on global supply of medical isotopes. Second, we urge you not to grant the NPFs operating license -- or if that license already has been granted, to suspend it -- pending completion of the aforementioned feasibility study and implementation by AECL and Nordion of any modifications determined by the study to be necessary to permit the NPF to process LEU targets as soon as they are developed.
If the AECB proceeds in this prudent manner, Canada can eliminate its commerce in bomb-grade uranium within five years, without any adverse impact on the supply of medical isotopes. However, if the AECB permits and facilitates irresponsible actions by AECL and Nordion, the result will be either an interruption in the global supply of medical isotopes or if Canada can find an HEU supplier willing to evade international nonproliferation norms the perpetuation by Canada of large-scale commerce in bomb-grade uranium. We urge you to take prompt action to avert either of these dangerous outcomes.
Alan J. Kuperman Paul L. Leventhal
Senior Policy Analyst President
Axworthy, Minister of Foreign Affairs, Canada
Christopher Westdal, Ambassador to the United Nations for Disarmament, Canada
Donald W. Campbell, Deputy Minister of Foreign Affairs, Canada
Paul Heinbecker, Assistant Deputy Minister for Global and Security Policy, Canada
Paul Meyer, Director General, International Security Bureau, Canada
Mark Gwozdecky, Director, Nuclear and Chemical Disarmament Implementation Agency, Canada
Eric Hoskins, Senior Policy Advisor to Minister of Foreign Affairs, Canada
Richard Meserve, Chairman, U.S. Nuclear Regulatory Commission
Richard Stratford, Non-Proliferation Bureau, U.S. Department of State
Leonard Spector, Office of Arms Control & Nonproliferation, U.S. Department of Energy
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