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Cablegate: Embassy Ottawa

VZCZCXRO6675
RR RUEHGA RUEHHA RUEHQU RUEHVC
DE RUEHOT #0673 1372058
ZNR UUUUU ZZH
R 162058Z MAY 08
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC 7872
INFO RHEBAAA/HQ DEPT OF ENERGY WASHDC
RUEAEPA/HQ EPA WASHDC
RUEAUSA/DEPT OF HHS WASHDC
RUCPDOC/USDOC WASHDC
RUCNCAN/ALL CANADIAN POSTS COLLECTIVE

UNCLAS OTTAWA 000673

SENSITIVE
SIPDIS

DEPARTMENT FOR WHA/CAN, OES, EB/ESC, AND ISN
DOE FOR P&I, NE AND NNSA
EPA FOR OFFICE OF THE ADMINISTRATOR AND INT'L AFFAIRS
COMMERCE FOR 4320/ITA/MAC/WH/ONIA - WORD
HHS for Office of Global Health Affairs

E.O. 12958: N/A
TAGS: TRGY TBIO PGOV ENRG CA
SUBJ: Canada's Nuclear Sector: AECL scraps isotope reactor
program

REF: OTTAWA 0156

Sensitive, but unclassified. Not for distribution outside USG
channels.

1. (SBU) In a stunning reversal, Atomic Energy of Canada Limited
(AECL) announced on May 16 it is discontinuing development of two
new reactors which were meant to lay the foundation for renewing
Canada's medical isotope business. That business had been severely
shaken when the half-century old "NRU" reactor currently in use was
shut down for over a month in November-December 2007 by the CNSC,
Canada's nuclear regulator, for safety reasons (reasons later
contested by the government) (reftel).

2. (U) The proposed Maple 1 and Maple 2 reactors were more than
eight years behind schedule and well over budget. AECL had invested
over C$500 million in them, and as recently as late January they
were still expected to enter service within a year.

3. (U) Production of molybdenum-99, the input for medical isotope
exports by AECL customer MDS Nordion, will now rely solely on the
55-year-old NRU reactor in Chalk River, Ontario (two hours west of
Ottawa). This AECL-MDS relationship is the origin of about half of
all isotopes used in diagnostic nuclear medicine procedures
worldwide. Such isotopes have half-lives of a few days or less, so
stockpiling is impossible and prolonged interruptions in reactor
service can create shortages in health care systems.

4. (SBU) AECL's odds of participating in the pending
nuclear-industry renaissance have been hampered by a lack of
confidence in the money-losing, government-owned reactor firm to
deliver on promises and stay in the game for the long term.
Cancellation of the Maple project not only represents a huge
financial loss, but also a huge loss of credibility for AECL as a
supplier, and may even spell the beginning of the end of Canada's
reactor industry. Embassy will follow up with further analysis.

WILKINS

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