Moltex’s nuclear ransom note should be rejected

Moltex Energy Canada Inc. — a startup company from the U.K., now based in New Brunswick — has sent the provincial government a ransom note. The company wants “more than $250 million in public funding” to develop its small modular nuclear reactor (SMR).

Speaking to the media, the company’s CEO warned “New Brunswick needs to decide if it’s in or out, because it’s a big commitment.” So far, Moltex has received $50.5 million from Ottawa, $10 million from New Brunswick, and $1 million from Ontario Power Generation.

We recommend rejecting the ransom demand for more.

Citing an old saying, economist John Maynard Keynes once observed: “Owe your banker £1,000 and you are at his mercy; owe him £1 million and the position is reversed.” So far, Moltex has received a little over $60 million and is acting as if the federal and provincial governments are already at its mercy. Another $250 million, and these governments will really be on their knees.

How does Moltex have the confidence to make this demand? Ultimately because these governments have drunk the Kool-Aid offered by a nuclear industry that has been moribund for decades but is still powerful enough to be invited to sing its own praises at House of Commons committee hearings.

Almost exactly 30 years ago, the last new nuclear reactor began producing electricity for the grid. None has been built in Canada since. Desperate to reverse its declining fortunes, the nuclear industry began touting a new generation of reactors it dubs SMRs, using the climate crisis as a cover.

This pitch caught the fancy of Ontario, New Brunswick, Saskatchewan, and Alberta, whose governments signed a memorandum of understanding in 2019 to aggressively promote SMRs as a climate change solution. The following year, the Natural Resources Canada minister stated there is no path to net zero without nuclear power. Despite much evidence to the contrary, the federal government continues to argue that SMRs are needed for climate action. That mistaken belief in SMRs is what allows companies like Moltex to get public funding and demand more.

The $250 million will certainly not be the last demand. Consider NuScale, the SMR design furthest along in the U.S. regulatory process. In 2012, when NuScale estimated “it will cost (US)$500 million to obtain approval for its reactors from the Nuclear Regulatory Commission,” the company had already invested US$100 million in technology development.

Fast-forward to a decade later: NuScale reports that the “cumulative capital invested to date” is US$1.4 billion, with a net loss (i.e., expenditure) of US$49.6 million just in the third quarter of 2022. And NuScale still has not obtained approval to build its first proposed SMR, projected to start operating in December 2029. Assuming all goes well, NuScale might spend more than $2.5 billion, five times the original estimate, before even starting construction.

NuScale is a pressurized light-water reactor design — the most widely deployed reactor design globally. In contrast, Moltex is proposing a reactor design cooled with molten salt. The last time anyone built one of these was at the Oakridge Laboratory in the United States — in the 1960s. That failed experiment provides evidence of how well such reactors might operate: long story short, we can expect lots of problems with molten salt reactors, while they operate and for decades thereafter as society grapples with the radioactive legacy of the nuclear waste they would produce.

A recent report by the U.S. National Academies of Sciences, Engineering and Medicine found that SMRs like the Moltex design will face significant challenges, even for deployment by 2050, and that building such reactors at a large commercial scale will continue to need substantial government and industry investments for decades after that.

The Moltex design has an additional problem: it requires another untested technology to produce the fuel needed for its SMR. Based on a February 2021 presentation to the U.S. National Academies committee, this new technology appears similar to the pyroprocessing process tried for two decades at the Idaho National Laboratory. That experience was meant to prove the viability of pyroprocessing; instead, the significant cost overruns and schedule delays demonstrated “the numerous shortcomings of this technology.”

All these potential problems make the path forward for Moltex long and hard — and very expensive. The NuScale experience suggests that developing an SMR design to the point of securing a licence to build it could cost up to 10 times what Moltex is asking for. Caving to Moltex’s demand now means falling deeper into a very deep money pit.

The graveyard of nuclear history is littered with reactor designs that were never constructed because they would not have worked. Throwing more money at Moltex will not guarantee success. Wouldn’t the best response be to stop now?

This article previously appeared on the website of Canada’s National Observer on February 28, 2023.

Susan O’Donnell, PhD, is an adjunct research professor in the environment and society program at St. Thomas University, a social scientist with expertise in technology adoption, and an activist and core member of the Coalition for Responsible Energy Development in New Brunswick.

M.V. Ramana is the Simons Chair in disarmament, global and human security and a professor at the School of Public Policy and Global Affairs at the University of British Columbia in Vancouver. He is the author of The Power of Promise: Examining Nuclear Energy in India (Penguin Books, 2012) and co-editor of Prisoners of the Nuclear Dream (Orient Longman, 2003).