The Guardian, 27 June 2002
By Paul Brown, environment correspondent
Original address: http://www.guardian.co.uk/Archive/Article/0,4273,4449297,00.html
British Nuclear Fuels is to be broken up, forcing
taxpayers to cover the huge costs of reprocessing and storing radioactive
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?