June 2002

What a waste

The Guardian, 27 June 2002
By Paul Brown, environment correspondent

Original address: http://www.guardian.co.uk/Archive/Article/0,4273,4449297,00.html

[Posted 27/06/2002]

British Nuclear Fuels is to be broken up, forcing taxpayers to cover the huge costs of reprocessing and storing radioactive waste.

The dismemberment of British Nuclear Fuels will be announced by the government in a few days. This will leave the taxpayer to pick up the bill for dealing with 50 years of accumulated waste, and the profitable parts of the company will be privatised.

BNFL, which employs more than 10,000, is expected to announce a set of financial results on the same day which will confirm that the company is bankrupt. The bill for dealing with the waste exceeds £38bn, more than it can ever hope to generate in revenue.

Not that much will change quickly at Sellafield in Cumbria, the heart of the company's operation, where spent fuel from British and overseas nuclear reactors is reprocessed in two giant works. Unlike most bankrupt organisations, the nuclear industry cannot be closed down.

The reprocessing technology developed 50 years ago to provide plutonium and uranium for the UK's nuclear weapons programme is well past its usefulness for that purpose. The country no longer needs this material, but there is no other easy other way of disposing of the fuel and the old Magnox reprocessing works will have to continue until all the power stations are dismantled.

For the newer Thorp works, opened only in 1993, the economic argument for closing would appear stronger. BNFL has large contracts with utilities in Germany, Japan and with British Energy to reprocess fuel and the company claims it is still a money-earner, although critics disagree.

At the heart of the problem is the failure of the industry and successive governments over 50 years to deal with nuclear waste. No depository exists for high and intermediate level waste and the most dangerous has been held in liquid form in ageing waste tanks, vulnerable to accidents and more recently to terrorist attack.

So alarmed have the regulators become that they have placed limits on how much more waste can be produced, which means cutting back production. BNFL, which thought it could manage the problem by turning the heat producing liquid into safer glass blocks by a process called vitrification, has never made the technology work properly, and as a result has had to curtail its reprocessing activities. The business plan of 2000 is in disarray, and promises made to overseas customers of completing initial contracts for the Thorp reprocessing in 10 years cannot be kept. Cost overuns are kept secret.

All this is becoming more embarrassing for the government. Last November it was told that the liabilities of BNFL exceeded its assets and it could not legally be allowed to continue in business in its current form. In November Margaret Beckett, the environment secretary, told the Commons that a new government quango called the Liabilities Management Authority (LMA) would be set up to sort out the waste problem.

As part of the package all BNFL's assets including the reprocessing works would be transferred to the LMA, and the management side of the business would form a separate company, which ultimately could be privatised. BNFL would then charge a fee for managing the activities at Sellafield and elsewhere while the taxpayer picked up the bill for the waste.

Since November in public the nuclear industry has been gung-ho about its prospects, talking about building a new generation of six or maybe 12 power stations to replace the ageing ones that are closing down. But behind this rhetoric a closer inspection of the waste problem by ministers has shown escalating bills. In the past, because the bill for waste would not be incurred for five, 10 or even 50 years the cost of clean-up or disposal could be discounted by accountants. Now that the stations are closing and the clean-up must begin, this cannot continue. Current estimates put the bill for the taxpayer at £1.8bn a year for at least the next 20 years - no small headache for the Treasury.

And, unlike past administrations, this one cannot avoid the problem. Under the Ospar Convention, the Europe-wide pollution agreement, the government promised to steadily reduce nuclear discharges from Sellafield into the Irish sea until there are virtually none by 2020. This would involve the early closure of the BNFL's magnox reactors so the fuel can be unloaded and reprocessed and the works closed by 2012.

Already five Magnox stations are shut and the closing dates others brought forward by as much as seven years. Beyond this the future of the newer Thorp reprocessing plant has also to be decided. The key question for the government and the LMA is whether BNFL, privatised or in state ownership, should be allowed to continue managing the newer reprocessing plant and whether the plant is as profitable as it claims.

So far BNFL's pleas of "commercial confidentiality" have kept the public from finding out how the sums really add up - but with an ever growing bill for clean-up, will the LMA be given enough teeth to find out how much all this is really costing the taxpayer?

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