An expensive farce? Analysis of South Australia’s Nuclear Fuel Chain “Issues Paper 1”

The paper appears to be totally confused by what is a cyclic process. For example, the phrase “once-through” cycle is an oxymoron and reprocessing spent fuel is just that, not recycling. These terms come from the nuclear industry’s spin doctors.

Nowhere in this Issues Paper is information given on Government funding of the nuclear industry either directly in the form of grants and through government supplied services such as exploration, testing, environmental, and occupational health and safety services or indirect in the form of administrative services associated with the nuclear industry. We have no way of telling, for example, whether government expenditure has been recouped through royalties.


NUCLEAR FUEL CYCLE (sic) ROYAL COMMISSION

ISSUES PAPER ONE
EXPLORATION, EXTRACTION AND MILLING (of Uranium and Thorium),  critique by Dennis Matthews, 20 Apr 15 

This, the first issues paper of the SA Government’s commission into expanding SA’s role in the nuclear industry, will confirm the worst fears of those who suspect that this commission is an expensive farce funded by the taxpayers of SA , and that the decision to expand the nuclear industry in SA is an ALP-LP-nuclear industry done deal.

The issues paper is the product of the SA Government’s mining bureaucracy, a bureaucracy that has a long history of a gung-ho environmental vandalism in the name of development. In the days when uranium mining was being considered at Roxby, Beverley and Honeymoon it was called the Dept of Mines & Energy but was known in the environment circles as the Dept of Mines & Mines, there never was any interest in anything form of energy other than coal, gas, oil and uranium.

Thanks to the Australian Democrats we got the Renewable Energy Target (RET) which overnight led to significant investment in wind energy in SA. We then got an even better result in the form of rooftop solar, the ultimate challenge to the fossil-nuclear fuel lobby and to multinational energy corporations in general. Not surprisingly the Liberal-Labor duopoly is now trying to reverse this challenge to big business’ control over electricity generation. To a ruling duopoly, which has given us widespread privatisation of essential services, consumer control over electricity generation is anathema.

The issues paper has four sections.Under BACKGROUND the paper describes in broad terms the geology of SA in respect to deposits of uranium and thorium. The latter are described as “common, naturally occurring radioactive metallic elements in the Earth’s crust.” There is no mention of the associated radioactive elements such as radium and gaseous radon.

The fact that uranium and thorium are commonly occurring and natural appears to be intended to make the reader feel at ease. It is worth pointing out that many dangerous, toxic substances such as asbestos, lead, cadmium, mercury, and arsenic are also common and naturally occurring.

Because of its carcinogenic nature and because the industry successfully denied that it was a problem for many decades, asbestos is particularly relevant to the exploration, extraction and milling of uranium and thorium.

The use of radioactive thorium mantles for gas lamps used in enclosed spaces such as houses and tents was still common practice in the 1980’s. Such mantles were readily available in hardware and camping stores. When in use these radioactive mantles deteriorated forming a fine radioactive dust.

In this section, mention is made of existing uranium mines in SA but there is no mention of the associated social or environmental problems.

Section A. EXPLORATION also makes no mention of social and environmental costs.

Despite the fact that significant exploration occurred around about 1980 in relation to the Roxby Downs, Beverley and Honeymoon deposits no data is given on the expenditure. Instead the graph “South Australian uranium exploration expenditure” (Figure 3) starts in 1999-2000 with the first noticeable expenditure (about $2mill) occurring in 2003-04, rising to a peak of about $190mill in 2007-08 and falling to about $4mill in 2013-14. There is no information given as to whether the data in Figure 3 is in real $ (say 1992 $) nor whether it is private or government-funded expenditure.

Nowhere in this Issues Paper is information given on Government funding of the nuclear industry either directly in the form of grants and through government supplied services such as exploration, testing, environmental, and occupational health and safety services or indirect in the form of administrative services associated with the nuclear industry. We have no way of telling, for example, whether government expenditure has been recouped through royalties.

Section B. EXTRACTION AND MILLING talks about Radium Hill, Roxby Downs, Honeymoon, Beverley and Four Mile but no mention is made of radioactive waste dumping at these sites.

Honeymoon is said to have operated until 2013 and Beverley until 2014 but no mention is made of when they started operating or of the social, environmental and economic costs to the people of SA. Nor is any mention made of the fact that in 1983 the SA Government withheld permission for the Honeymoon and Beverley mines. It took 20 years for these projects to be resurrected only to be turned off within a decade.
The paper gives the irrelevant figure of an “estimated” 13,800 people “involved” directly in SA mining activities in 2012. No reason is given for using 2012 data instead of the latest figures which are probably lower.

The paper then goes on to state

“It is difficult to estimate the employment figure attributable to uranium extraction and milling alone as multiple commodities are extracted at Olympic Dam and figures are not separated in reported information.”

Presumably the Commission has the power to require that BHP Billiton provides this information.

On the basis that Olympic Dam is the largest employer in the SA mining industry and that uranium is a by-product of extracting copper then employment attributable to uranium extraction and milling in 2012 is probably of the order of less than 200.

Quoting a figure of 13,800 in the context of an issues paper on the nuclear industry is therefore highly misleading.

It is stated that international demand for uranium is primarily driven by its use in electricity generation. This conveniently overlooks the fact that the demand and price for uranium are influenced by the supply and demand for uranium to be used in weapons, including nuclear bombs and weapons containing high concentrations of uranium and its radioactive fission products (so-called “depleted” uranium or DU weapons). This becomes apparent when concentrated fissile uranium (so-called “highly enriched” uranium or HEU) from dismantled nuclear weapons is released onto the uranium market.

According to issues paper 395 nuclear power stations (reactors?) are currently in operation, that 66 reactors are under construction, and another 165 planned. No timelines are given for either the construction or the planning. Given the past history of the nuclear industry, these figures should be viewed with considerable scepticism.

The paper then goes on to state that almost 200 reactors are due to be decommissioned “in the next 25 years”.

The net result of these figures is that there is highly unlikely to be any net expansion of the nuclear industry and no increase in demand for new uranium in the foreseeable future.

The paper quotes the International Energy Agency (IEA) as saying that the expansion of the nuclear industry “depends on listening to, and addressing public concerns, about the technology.”

The South Australian Government has chosen to ignore the advice of the International Energy Agency, and exclude public concerns from its inquiry and the inquiry commissioner has made a pre-emptive strike against such concerns by implying that they are emotional.

The paper appears to be totally confused by what is a cyclic process. For example, the phrase “once-through” cycle is an oxymoron and reprocessing spent fuel is just that, not recycling. These terms come from the nuclear industry’s spin doctors.

Figure 4 purports to show global uranium production (supply?) and demand. The production curve starts in about 1956 whilst the demand curve starts in 1947 with the demand curve much higher than the production curve until about 1986 when the production curve rapidly falls below the demand curve. This suggests that the excess demand from 1947 to 1986 was for nuclear weapons and the excess production from about 1990 to 2013 was due either to nuclear weapons material being put on the open market, or to stockpiling.

It is claimed “the interaction of these (production and demand) factors has been reflected in the traded price of uranium oxide [Figure 5].”
Figure 5 is unusual in several ways. Firstly, it doesn’t cover the same time period as Figure 4, it only gives prices from 1982 whereas the production-demand curves start in 1947.

Secondly, for spot prices, rather than the normal weekly values it uses yearly averages. This has the effect of smoothing out the erratic behaviour of the spot price and reducing the peaks in spot price. For example, the large peak which occurred in April 2007 at a spot price of USD136 /lb is shown in figure 5 as occurring in 2007 at $USD90/lb.

Thirdly, Figure 5 shows average US, Canadian and Australian export prices but not the more relevant average South Australian export price.

Fourthly, the price is expressed in current $ rather than real $, which makes it difficult to compare prices and to detect trends in the real value of the export.

The paper refers to the fact that the price on US long term contracts have increased in the last decade. Not only are the USD not real $ but the apparent increase is from a very low base and, according to figure 5, did not exceed (even in current $) 1982 values until about 2006. In real $, prices did not recover to 1982 values until much later. As a consequence, the vast majority of South Australian uranium was sold at rock bottom prices.

SECTION C. RISKS AND OPPORTUNITIES contains only a small amount of material that addresses issues that the International Energy Agency thinks are vital to the future of the nuclear industry. The fact that the commission is trying to ignore these issues means that millions of dollars of South Australian taxpayers is probably being wasted on a futile exercise. This is occurring at a time when the SA Government is crying poor and is looking at new ways of raising more money from taxpayers.

The crucial deficiency of this section is that the commission only wants to consider new or different risks for the health and safety of workers and the community, and new environmental risks or increased existing risks. This presupposes that existing risks are acceptable, an assumption that has no rational or scientific basis and which is the crux of what the International Energy Agency says must be addressed.

When it comes to South Australian finances the paper estimates only one figure on only side of the ledger, the royalties paid to the South Australian Government in 2013-14. It makes no attempt to estimate total royalties starting with commercial extraction of uranium at Roxby Downs in 1988, or the direct financial cost to the South Australian Government, or the net direct financial benefit to the South Australian Government.

Bearing in mind that all mineral resources belong to the people of South Australia, it is crucial that we be told what is the direct net financial return (if any) that we have received per kilogram of exported uranium.

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