Monday 21st September 2020

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The Fukushima effect

Nuclear expert Thomas Drolet discusses the disaster, the aftermath and the outlook for uranium

by Greg Klein

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This is part one of a two-part interview. Read part two here.

Paladin Energy TSX:PDN had no sooner consigned its Kayelekera mine in Malawi to care and maintenance when Cameco Corp TSX:CCO scrapped its 2018 production target of 36 million pounds U3O8. Both companies attributed their gloomy February 7 announcements to uranium’s pathetic price. Discouraged producers, however, contrast sharply with optimistic explorers. With that in mind nuclear energy expert Thomas Drolet granted a wide-ranging interview covering several aspects of the uranium space. Part one focuses on Japan.

With a “big electrical utility background,” the chemical engineer’s CV shows an impressive 42-year list of qualifications, positions and achievements. “About half my career has been spent in nuclear energy,” he says. “I also have a background in natural gas, combined cycle gas turbines, coal-fired generation, hydro-electric and geothermal….. I’ve covered the whole area of energy.”

Nuclear expert Thomas Drolet offers his insight into the disaster, the aftermath and the outlook for uranium

Both an expert and an advocate, Thomas Drolet
has devoted half of his career in energy
to nuclear power.

Among other career highlights, he served as president/CEO of Ontario Hydro International, where he gained considerable insight into nuclear’s global picture. His work has taken him around the world, including Chernobyl, Three Mile Island and Fukushima. A sought-after consultant and public speaker, he also serves on the advisory board of Lakeland Resources TSXV:LK.

Not surprisingly, Drolet attributes uranium’s current price woes “almost entirely” to the Fukushima Daiichi disaster. “Some 20% of the world’s major large reactors are lost to production,” he points out. All 55 Japanese reactors have been shut down, six permanently. “That caused a huge inventory of unused fuel and contractually committed fuel for long-term supply with nowhere to go. They can repackage that, and some has been repackaged and used elsewhere. But excess inventory caused by Japan is the number one reason for low uranium prices.”

Related to that is “the absolute pause that happened in the world after March 2011. There was a gigantic pause button pushed in China, in India, and to some limited degree in Russia. That meant a lot of the long-term supply contracts were leading to excess inventories in other countries.”

Drolet’s first-hand experience emphasized to him the “truly catastrophic” nature of Fukushima Daiichi. “The design and configuration was woefully wanting,” he says. The seawall couldn’t block the wall of water, even though a tsunami of that height had already been predicted as a potential hazard. The emergency power system, located below the seawall, crapped out. Backup power failed too. Battery power sustained some systems, but only for a few hours. Meltdowns and explosions caused enormous destruction.

Drolet maintains “that particular location” was the wrong place for that particular model, a Mark I BWR (boiling water reactor) of 1960s vintage. Japan has about a dozen similar models “but none of them are in risky locations like Fukushima.” The United States has several more “but they’re well inland and have undergone major NRC regulatory-demanded design changes,” he adds.

The Mark I was a Generation II reactor. The 1990s and early 2000s saw strong improvements with Generation III models in China and elsewhere, Drolet explains. Now Generation III-plus features passive safety shutdown systems that don’t require electricity or even operators to continue cooling if an accident causes a shutdown.

Still, past mistakes have left Japan with a cleanup task nothing short of astonishing. “It will take 12 to 15 years to totally bring Fukushima Daiichi back to a brownfield condition. Of the government and TEPCO cost estimates, the biggest I’ve seen in print is about $60 billion. My opinion? Double that.”

Yet he’s convinced the country will return to nuclear energy, although not as quickly as some predict. “My experience in Japan suggests there’s a gigantic tug of war happening,” Drolet says. “At one end is the Abe government and its ministries, which are determined to try to bring the reactors back. Why? Because of the sheer cost of replacement fuels, of having to build LNG plants, coal-fired power plants and to some limited degree renewable power plants. All of that means they want to bring back viable power sites.”

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