Hot Garbage Grifters: SNC-Lavalin’s Plan to Turn Nuclear Waste into Long-Term Gold
Opinion & Analysis
On the anniversary of the 2011 Fukushima nuclear disaster, investigative journalist Paul McKay reveals that the trade in radioactive waste is becoming a lucrative opportunity for SNC-Lavalin and its U.S. partner.
If it is true that one person’s garbage can be another’s gold, then Montreal-based multinational SNC-Lavalin and its new U.S. partner, Holtec International, plan to be big global players in what promises to be a very lucrative, long-term business: handling highly radioactive nuclear wastes until permanent disposal methods and sites might be found, approved, and built.
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That problem is pressing because the volume of spent reactor fuel is cresting in the U.S., Canada, Europe, China, India, Russia, and Japan. There are also hundreds of intensively contaminated reactors which must sooner or later be entombed, dismantled, chopped up by robots, then sent in special, sealed containers to interim storage sites somewhere.
But no country in the world has yet found a proven, permanent solution for the 250 million kilograms of spent fuel now in limbo in storage pools and canisters, let alone the atomic furnaces which created them. There are now about 413 operable civilian reactors in 31 countries, and another 50 under construction.
Physics tells us precisely how “hot” atomic garbage is. Every commercial power reactor—regardless of model, type, country, or owner/operator—contains the radioactive equivalent of many atomic bombs locked within its spent fuel, reactor core, pumps, valves, and extensive cooling circuits.
To illustrate this, consider that only a small fraction of the “fission inventory” at the Fukushima nuclear site escaped during the terrifying March, 2011 accident. All operating civilian reactors eventually create and contain more than 200 such “hot” elements and isotopes. Known as transuranic elements, actinides, and activation products, they comply with the laws of physics but defy ordinary definitions of danger, technological assurance, and even human-calibrated time itself.
Some fission products transmute or decay within days, while others (like plutonium-239) can take 24,000 years or more to lose half their deadly mass. As this happens alpha, beta, or gamma radiation is constantly emitted, which in turn can directly damage living cells and organs. Many of these particles can accumulate like silent assassins in the food chain, then strike later.
Worse, they have the ability to invade human bodies by mimicking needed minerals like the calcium, potassium, magnesium, or iron we find in milk, meat, or vegetables. Worse still, they can impair human reproductive organs, causing health damage and intergenerational genetic defects. If exposed, adult women are more vulnerable to radiation than men, because they have one lifetime store of ova while male sperm is replenished over time. Children are most vulnerable of all, because they produce especially defenseless cells at a torrid rate as they grow.
And finally, the “hot” inventory of every reactor contains some irradiated elements which will remain latently lethal for hundreds of centuries or more. Each has its own emission signature and decay rate. The fissile isotope Uranium 235, for example, will lose half its mass after 700 million years.
This is not speculative; it is a matter of fundamental physics and biology. Fukushima illustrated why achieving even a 98% containment success rate means catastrophic consequences. The risk of any such failure for millennia to come is an embedded liability for every power reactor operating today, and for its spent fuel legacy.
So it bears examining just who is taking charge of the most dangerous garbage on Earth. Enter SNC-Lavalin and Holtec International.
Canadians might recognize century-old SNC-Lavalin as a venerable engineering giant, but with past decades of technical success and corporate gravitas ruined by 21st century bribery, fraud, and corruption scandals, and by recent convictions of employees and executives for corporate malfeasance.
In 2013, following sordid proof of bribery and kickback schemes from Libya to Bangladesh, the World Bank banned SNC-Lavalin and its 100 global affiliates from bidding on contracts for 10 years. The company is also facing criminal charges for its tactics to win a new hospital construction contract in Montreal, and another criminal probe related to a Montreal bridge contract. A reputation that was once impeccable now may be irredeemable.
SNC-Lavalin also has a well-documented history of manipulating compliant federal and Quebec politicians, and securing endless subsidies, concessions, sweetheart loans, and preferential tax and legal treatments sanctioned by both Liberal and Conservative prime ministers. In 2018, the federal election watchdog reported the company had made more than $117,000 in illegal political donations (the lion’s share of which went to the Liberals) by secretly conscripting employee donations and routing them through obscure pathways. In January 2019, a disgraced company executive pleaded guilty to orchestrating the illegal election finance scheme.
Most recently, the federal minister of justice and attorney general, the top law enforcement official in the country, is alleged to have lost her cabinet post after she rebuffed efforts by Prime Minister Justin Trudeau and his top advisors to have her waive potential criminal penalties (which would preclude SNC-Lavalin bidding on federal contracts for 10 years) in favour of fines and anti-corruption measures. That followed a recent, under-the-radar revision of the federal Criminal Code to allow for such corporate leniency, for which SNC-Lavalin lobbied repeatedly.
In 2011, under the former Stephen Harper government, SNC-Lavalin managed to acquire key commercial nuclear contracts, intellectual property, and personnel of the federal Crown corporation Atomic Energy of Canada Ltd. (AECL). The purchase price was C$15 million (plus possible future royalty payments to Ottawa) for an entity into which Canadian taxpayers had sunk more than $17 billion during six previous decades.
Why would the Canadian engineering company pay even that much, when global nuclear growth was barely 1% last year, and capital investment in renewable power generation (nearly US$300 billion in 2016) is more than double that for new nuclear and fossil-based generation (coal, oil, gas) combined? Wasn’t that fatal trend already obvious?
Perhaps it was. But perhaps someone in Montreal also cunningly calculated that there might be much more money to be made during the demise of the global nuclear industry, like a company specializing in dangerous demolitions, or removing asbestos). Because the cumulative volume of atomic garbage is still climbing—and especially since Fukushima, governments and utilities are willing to pay extortionate sums to remove nuclear wastes from densely-populated areas and keep them out of sight for decades or more.
If there are few rivals in that “hot garbage” business, all the better, because that will fetch more contracts at higher prices. Then fortune will favour the brazen.
Such a business model also apparently appeals to U.S.-based Holtec International. It has not designed, financed, or built typical nuclear power plants. Instead, it has created a global contracting business supplying nuclear replacement parts, equipment, and services. For two decades, a core business has been providing concrete casks for spent fuel storage.
During that time, Holtec paid a US$2-million fine related to bribery payments to a convicted federal utility manager, and was the subject of scathing safety reviews by a U.S. quality assurance engineer who was later terminated for suspected whistleblowing. A federal Nuclear Regulatory Commission specialist in nuclear cask safety, Dr. Ross Landsman, contemporaneously concluded: “As far as I am concerned, Holtec has no quality assurance. This is the same kind of thinking that led to the NASA Space Shuttle disaster.”
More recently, Holtec has pursued its plan to buy now-defunct U.S. reactors, cut and gut their radioactive innards, then send the scrap along with the spent fuel to a 1,000-acre property it has acquired in remote New Mexico. But the proposed site is facing stiff public and political opposition, because Holtec also plans to store wastes from many retired reactors there.
In 2014, Holtec received promises of US$260 million in New Jersey state subsidies to move its headquarters 12 miles to South Camden, and modernize a vast shipyard building at an estimated cost of US$320 million. The subsidies are contingent on creating 320 permanent jobs, and are to be dispensed over 10 years.
Last September, police formed a protective barricade at the plant entrance after Holtec founder Krishna P. Singh complained to a business journal: “There is no tradition of work in [Camden] families. They don’t show up to work. They can’t stand getting up in the morning and coming to work every single day. They haven’t done it, and they didn’t see their parents do it. Of course, some of them get into drugs and things. So, it’s difficult.”
Back in Canada, SNC-Lavalin is leading a consortium Ottawa belatedly convened to clean up Canada’s first nuclear research and reactor site at Chalk River, Ontario. The “hot garbage” there includes contaminated buildings, instruments, pipes and clothing. Reactors at Chalk River and nearby Rolphton await entombment. An estimated one million cubic meters of atomic wastes are slated to be buried near the upper Ottawa River. Even some former AECL scientists have condemned the planned mega-dump.
The site is 200 kilometres upstream of Parliament Hill, where the $15-million deal to sell key AECL assets was approved. But SNC-Lavalin was indemnified from liabilities in that deal, and the federal government retains ownership of the Chalk River property, buildings, and contaminated materials. So the private consortium is now being paid nearly $1 billion each year by federal taxpayers to manage and bury radioactive wastes at Chalk River, and to operate labs to conduct nuclear research there.
The controversial company has also embedded itself in the Ontario nuclear power sector by way of its Trojan horse purchase of AECL assets. That federal Crown company held key CANDU reactor design patents, decades of crucial calculations and technical drawings, and employed remnants of the irreplaceable cadre of nuclear physicists, chemists, and engineers needed to repair, rebuild, and run Ontario’s nuclear fleet.
Once these assets were bestowed upon SNC-Lavalin by Ottawa, it had the leverage to negotiate lucrative contracts with Bruce Power and Ontario Power Generation (OPG), guaranteeing a major share of work related to $26 billion in combined nuclear power plant reconstruction costs during the next decade. Under the $13-billion Darlington refurbishment contract, up to 93% of any project cost overruns will be borne by the province of Ontario (sole owner of OPG), not SNC-Lavalin or allied private contractors—which gives a big, influential engineering firm with no discernable competition very little incentive to bring the project in on budget.
Those two $13-billion contracts involve removing and replacing major CANDU reactor components. That experience, in turn, will leave the company uniquely positioned to eventually decommission Canada’s fleet of reactors, and handle a projected 5.4 million spent fuel bundles. That work will cost another estimated $23 billion (in 2015 dollars), which reactor operators will be compelled to collect from power consumers and preserve for that use.
In America, Holtec has homed in on similarly alluring pots of “hot” honey, only there they are much, much bigger. That’s because nearly 100 commercial reactors in the U.S. are facing eventual retirement, and federal laws force the utilities that own the reactors to collect a constant stream of payments from consumers to cover plant decommissioning and spent fuel disposal costs. Those multi-billion-dollar pools of money have grown over time, but American utilities cannot draw from them without regulatory approval.
But there is no licenced federal facility in all of America to permanently immobilize and bury the “hot” spent fuel currently being stored at some 80 sites, and only one federal disposal site in South Carolina which will accept both nuclear weapons waste (including military reactors) and a rare few dismantled civilian reactor cores.
Think plugged toilet. Think Fukushima, because Japan has no permanent nuclear waste disposal site. So spent fuel bundles there were stacked in improvised swimming pools—outside the crucial containment shell. Think Pickering, Ontario, where decades of spent fuel is accumulating in swimming pools and concrete canisters because Canada has no approved final disposal site for “hot garbage”.
Everyone in the civilian nuclear business—from reactor operators to their regulators—understands that they might be one extended pump system failure, blackout, earthquake, extreme storm, or cyber-attack away from a public health catastrophe. They are desperate for some saviour to make it all go away.
Re-enter SNC-Lavalin and Holtec. Last summer, instead of competing as rivals, they created a joint venture to collaborate on “hot garbage” contracts across the continent. To the great relief of reactor operators and regulators, their subsidiary CDI is promising to buy defunct nuclear plants, dismantle contaminated components, then ship those and spent fuel bundles in concrete canisters to its isolated New Mexico property. All, CDI claims, at a price and speed individual utilities could not hope to achieve on their own.
For the U.S. utilities, such a deal would get rid of their worst liability nightmare in a hurry and clean up their bottom line, because CDI would get paid from the dedicated funds utilities are forbidden to use for any other purpose. For state utility regulators and the federal Nuclear Regulatory Commission, it would banish the problem to one remote patch of scrubland, far away in the U.S. southwest.
Emphasis on “one”. If the Holtec site in New Mexico does receive final approval, the CDI joint venture will have sole access to the first and only such private facility in North America. Naturally, owning the only toilet in town would confer an effective monopoly, giving the two joint venture partners enough leverage to win most future nuclear disposal contracts, while cashing in as platinum-priced plumbers.
But even if Holtec’s proposed US$2.4-billion project in New Mexico gets licenced and built, and the CDI joint venture does a booming business sending “hot garbage” there from some 80 sites in 35 states, Ernest Hemingway’s curt counsel to “never confuse movement with action” applies here.
The New Mexico facility will not be designed or licenced as a permanent disposal site. Holtec’s sealed canisters will not be designed or licenced to hold nuclear wastes for more than a few decades. And if recent troubles are any indication, some might not last a year—let alone decades.
Holtec and the federal Nuclear Regulatory Commission have now locked horns over the integrity of its newest sealed containers at the San Onofre nuclear complex, 60 miles north of San Diego. It was shut down in 2013, after breakdowns and repair costs made it uneconomic to operate.
Now, the utility owner is prepping the reactors for dismantling at a cost of US$4.4 billion, and some 3.6 million pounds of hot spent fuel waste remains on the site. This year, most of the San Onofre fuel bundles were expected to be transferred from an indoor swimming pool to an outdoor morgue, where new Holtec caskets waited on a ridge overlooking the Pacific Ocean.
However, Holtec made design changes to its casks without notifying the utility or the federal regulator. Only a few had been filled before workers noticed a loose bolt which could jam hot fuel bundles, or puncture the metal cask lining, or prevent future inspections or removal of spent fuel. Work was stopped for 10 days and the NRC was notified. It in turn ordered Holtec to stop supplying casks with the modified design, but many had already been delivered to other nuclear plant sites.
Then fuel transfers were halted again because inexperienced Holtec employees allowed a 50-ton Holtec canister—filled with hot spent fuel bundles—to be dangerously misaligned as it was being lifted by a crane and inserted into a vault at the San Onofre site. The NRC reprimanded Holtec sharply for lax training and oversight related to the incident.
The episodes illustrate the vanishingly small margins of error when dealing with nuclear wastes. Luckily, no leak or accident occurred at San Onofre. But the errant four-inch stainless steel bolt (and the unauthorized cask design change by Holtec) was discovered only by chance, just as 43 identical Holtec casks were waiting to be filled at San Onofre. Others had already been filled at nuclear sites from New England to Alabama.
The shape-shifting lethality of “hot” fission products, and their immutable longevity, tests the limits of not just human technology, but most measures of human conduct.
Once it’s created, such “hot garbage” demands all companies involved be immune to greed, bribery, cutting corners, masking quality control failures, or deceiving safety auditors.
It requires regulators that are relentlessly vigilant, trained to detect flaws and complacency, impervious to bribes or coercion, and who place a far higher priority on public safety than on reactor performance, career promotions, pleasing the boss, or pay raises.
It requires politicians who refuse to dispense favours, subsidies, or serial excuses to preferred players, and who always keep the lethality and longevity of nuclear wastes foremost in their minds when making related policy.
This matrix of perfection, of course, does not exist anywhere on this planet.
So there have been horrific accidents such as Chernobyl and Fukushima. Nuclear plants like San Onofre have been built atop known earthquake faults, a stone’s throw from the Pacific Ocean. In France, massive reactor core containment vessels were belatedly found to be defective—years after startup. In 2016, the French national nuclear safety authority found that a state-owned forging company had falsified quality control reports for four decades while as many as 400 defective parts were supplied.
At the eight-reactor Pickering nuclear complex, located in Canada’s densest population corridor, the plutonium locked inside spent fuel bundles is equal to that embedded in 11,000 nuclear weapons. Even more atomic waste is lurking at the eight-reactor Bruce complex and four-reactor Darlington plant in Ontario, and at the Point Lepreau reactor in New Brunswick.
The Fukushima tragedy, physics, and biology tell us the only tolerable nuclear containment breach rate is zero per cent. For forever. Yet the “hot garbage” keeps piling up, even though it can imperil our biosphere for centuries. This is not just tempting fate. It is giving it the middle finger.
Paul McKay has won Canada’s top awards for investigative, business and feature reporting multiple times, and is the author of two books about nuclear technology and policy. This report was researched and written pro bono. No funding from any source was sought or received.