Examination of Witnesses (Questions 80-96)|
MONDAY 26 NOVEMBER 2001
80. And, lastly, which is, obviously, there
were concerns last year from Japan about the data falsification
incident, with the MOX fuel; what firm orders have you got now
for MOX fuel, firm orders?
(Mr Bonser) Again, I apologise, I do not know the
detail on that. I believe, at the time, our document went into
81. We are coming up to Sellafield; perhaps
you would have the information for us when we arrive?
(Mr Bonser) Yes, we can certainly do that.
82. If you could give it to us then, because
there has been some concern, actually, that Japan is not really
ready for this?
(Mr Beveridge) Yes; and there are two pages to this,
and we need to be precise in our answer, which we can do when
you come to Sellafield. But there were letters of intent from
a range of our customers.
83. But that is not the same as a firm order?
(Mr Beveridge) And it is not the same as a firm contract,
and, obviously, we need to
84. Perhaps you will be prepared for us to want
to go into this when we come to Sellafield?
(Mr Bonser) Certainly.
85. Just putting it in perspective, how much
of this intermediate-level waste is sort of sitting around in
the raw, unprocessed, unconditioned form, and just how are we
on the timescale? Because, in your evidence, in paragraph 1.11,
you say: "The management of over 40 years worth of legacy
wastes should be viewed as a national issue..."; right, so
we ought to be doing something about it but nothing has happened,
following the previous line of questioning. In paragraph 1.10,
we are told: "Interim safe stores already exist...",
but then you have challenged that assumption by telling us these
stores are degrading, because all this material is sitting there
and causing that to happen. And then, back to paragraph 1.11,
you tell us that: "The seven year delay, implicit in the
proposed consultation,...is potentially damaging to the short
and medium term actions which must be taken to ensure the safe
management of legacy wastes." And that is all backed up by
the Inspectorate, who tell us, and I quote: "We would like
to see all licensees conditioning radioactive waste for passive
storage and moving away from the storage of potentially mobile
waste." There seems to be an awful lot of confusion, and
a lot of people sitting on hands, a lot of people not doing anything,
when clearly there is a problem to be solved. So why this huge
(Mr Beveridge) There are a few issues in there, if
I could try to deal with them sequentially. How much waste is
there in this legacy form waiting to be treated, it is about 45,000
cubic metres of this intermediate-level waste, which is about
a quarter of the total UK inventory that will require to be disposed
of in the fullness of time.
86. Sorry, can I just stop you; when you say
it is a quarter of the inventory, that is a quarter of what exists
at the moment?
(Mr Beveridge) No, it is a quarter of the total that
will exist and will need to be disposed of.
87. So, in other words, that is taking every
source of radioactive material which would have to be disposed
of, including Magnox, AGR, PWR, decommissioned nuclear submarines,
the whole shooting-match?
(Mr Beveridge) Yes; although some of those wastes,
like nuclear submarines, are not currently an equation because
MoD has not decided whether to
88. Okay; but a quarter of that, as you were
(Mr Beveridge) Is in this raw, untreated form. And
where we say interim safe storage is demonstrated is where we
have the waste that is generated by our current reprocessing operations
today is treated fairly promptly, and it tends to be, if it is
intermediate-level waste, it is placed in cement, in stainless
steel drums, and placed in modern stores, built to the highest
and latest standards. So we have got a demonstrated interim safe
storage model there, which arises from the wastes from reprocessing
today. Where these legacy wastes have come from is the original
military programme and the early Magnox programme, from the fifties,
sixties and seventies, and that is stored in this raw waste form,
in older silos, and it needs to be retrieved. There is actually
a lot of activity going on in this area at the moment, it is not
that everyone is sitting on their hands, but we do have some difficulties
associated with the current waste policy framework. And if I can
just tease one of them out, as an example, you are quite right,
the HSE/NII wants us to proceed with retrieving these legacy wastes,
putting them in some empty drums and getting them into a passively
safe state, and that is something we have no issue with, we want
to get on with that too. We do have another main regulator, who
regulates us on discharges to the environment, the Environment
Agency, and, there, their current regulatory approach, which is
out for consultation at the moment, is quite an aggressive and
progressive reduction of discharges, giving that reduction process
primacy over arguments of risk benefit or cost benefit. And the
issue we find ourselves in is that, sometimes, for some of our
more difficult waste streams, it is not possible to meet both
those requirements. And one of the things that we would like to
see, from this review of waste management policy, is whether the
Government can set a framework within which all the regulators
can work, some high-level objectives about the retrieval of these
89. Okay. We have talked about security matters,
and, obviously, there is a great deal of speculation in the press
about the robustness of any of our nuclear facilities, including
Sellafield, to withstand, for example, a repeat of the terrible
events in the United States on 11 September. I appreciate you
cannot go into enormous detail about any further enhancements
of security, but just try to give us some kind of picture of the
robustness of the systems, the storage facilities, against, perhaps,
firstly, that kind of outrageous attack, and then, secondly, perhaps,
what kind of risks would people face, if they sought to assault
the storage, with a view to getting hold of this material, it
sounds pretty nasty stuff to the layman, but there are desperate
people who will do desperate things?
(Mr Beveridge) Obviously, we cannot go into details.
But the first thing to say is that, since September 11, there
is another regulator in this area, which is the Office of Civilian
Nuclear Security, which is sponsored by the DTI. And, with advice
from NII, they have been very active with companies such as ourselves
in terms of reviewing security arrangements since 11 September,
both on sites and in relation to transport of nuclear materials,
and we cannot go into the details of what is coming out of that,
but we have been co-operating very fully with that and taking
the steps that are required by that regulator. In terms of, to
give you a feel for what these facilities are like, and what people
would face, if we take Sellafield, most of the waste there is
fairly intensively radioactive, and, certainly, in our interim
safe storage facilities, and many other facilities, the actual
geometry, the concrete walls are extremely thick and it is very,
very difficult to actually get access to this material. The security
arrangements, we have all our sites that have special nuclear
material are guarded by the United Kingdom Atomic Energy Authority
Constabulary, who have the appropriate armed-response capability,
and so on. So there is defence in depth, if you like, at all our
facilities, depending on precisely what the material is and what
sort of form it is in.
90. I will not probe you further on that, because
I appreciate it may put you into some difficulties. I would like
to move on to the press discussion, the speculation, on the Liabilities
Management Agency. Just help us to have an understanding of the
sums of money that are involved; figures like £85 billion
have been kicked about, it is an almost unimaginable sum of money.
Have you got £85 billion sitting in your balance-sheet; who
picks up the tab? Is it a proper figure?
(Mr Bonser) As you say, Mr Jack, there are a number
of numbers that are floating around. My understanding is that
the £85 billion is a figure which includes all liabilities,
whether they are MoD, BNFL, UKAEA, it probably has the civil BE-type.
I think that is an all-encompassing number. I am not absolutely
sure about what is in that sum, actually, but I think that that
is an attempt to bring everything together and say, `well, look,
there is a total picture'. In terms of BNFL, no, we do not have
that unimaginable number, but we do have something like £10
billion in our balance-sheet. Now that amount of money, it is
not precisely that, but let us say £10 billion, comes from
engineers, operators, scientists, independent people, including
our auditors, reviewing the best estimates that the people concerned
and the people who understand what is there can make of an uncertain
cost; and that uncertain cost is not just to do with dealing with
the wastes today, but is guessing, estimating, I should have said,
what the costs will be in 20, 30, 50, in some cases, 100 years,
for dealing with the various types of waste. Now there are various
assumptions put in, for example, we try not to, in fact, we do
not, guess new technologies coming along, we say `you treat this
material, you treat these buildings, you take the buildings down
using current technology;' but, nevertheless, these are estimates
that people make and there is uncertainty around those numbers.
Having worked out what the estimates are, because they are over
such long timescales, you then have to discount the costs back
to today's money, and the £10 billion represents, I think
it is, 92 per cent of the amount of money you would need today,
if it were to grow with, I think it is, 2.5 per cent interest
over the forthcoming years, in order to meet all those liabilities.
Now the reason it is 92 per cent and not 100 per cent is that
some of the facilities we are talking about are still working
and operating in a commercial way, and on a year-by-year basis
we add money into that fund to top it up from the 92 per cent
to 100 per cent.
91. So, as far as the 92 per cent is concerned,
I presume that is a debt, or a liability, which is wholly underwritten
by the Government?
(Mr Bonser) At the end of the day, I guess the answer
to that is yes, in that the Government is 100 per cent owner of
BNFL. And that £10 billion is in two major parts; one is
cash and investments, as it were, that BNFL has put to one side
from its operations, and there is another part which came when
we took over the Magnox power stations, which is in the form of
a letter from Government.
92. So, with a suspicious mind, would I be right,
or wrong, in saying that, if any Chancellor of the day wanted
to save a bob or two in the back pocket, he just keeps pushing
to the right having to deal with any of this problem?
(Mr Bonser) Yes.
(Mr Beveridge) I think one of the interesting things
that the Government are looking at, as part of the Liabilities
Management Authority process, which they announced in their UKAEA
quinquennial review, earlier in the year, is funding mechanisms
and whether you set up segregated funding or not, hypothecation
of funding. And I think we would be very interested in the conclusions
of that, because that could provide some mechanisms to safeguard
funds that are available for this purpose.
93. Can I move us on to the regulation of radioactive
waste, and the various arguments there have been to perhaps unite
the various regulators under one body, the ways in which changes
to regulation can take place to make the thing perhaps more robust,
more easy to see where responsibility lies, instead of split between
Environment Agency and others. What changes would you like to
see in the way in which the regulatory regime for radioactive
waste is actually operated?
(Mr Bonser) The main change that we would like to
see is the one that George mentioned earlier, which is really
trying to get a consistent regulatory philosophy for regulating
radioactive waste. At the moment, we see that the NII and the
HSE work on what is known as a Tolerability of Risk basis, where
they look at what is the risk of what is going on but is that
tolerable or not, and there are three main regions of tolerability:
a level where this is clearly so small that you need not do anything,
it is completely tolerable as a risk by society.
94. By society or by science?
(Mr Bonser) By society; and it is about looking at
how tolerable is a risk by society, and inevitably there are judgements
coming. And, at the other end, that that is clearly intolerable,
so you must not do it. And the region in-between is the so-called
ALARP, `as low as reasonably practicable' region, where, yes,
you can do it, provided you drive it down as low as reasonably
practicable. Now that is the sort of philosophy, there is much
else to it but that is the broad philosophy that sits within HSE
and NII. Within EA, at the moment, there is much more emphasis
placed on things like our OSPAR and Sintra commitments, which
lead to the primacy of discharge reductions, you have got to reduce
the discharges year on year, not relating that back to the risk
of those discharges to individuals or communities. And we find
that that difference in philosophy is the main thing we would
like to see addressed. And it is after that that we would then
start to consider other things, like do we want one or two regulators;
and my own view is that two regulators can work, one regulator
can work, but it is the consistency of regulation that makes it
extremely difficult, as an operator.
95. But part of this whole process is sort of
almost an incestuousness, on the one hand, and sort of diversity,
on the other, from your own point of view, with Nirex and BNFL,
and then the regulators, and everything else. In terms of the
Environment Agency's contribution, do you accept the fact that,
very often, they probably reflect more of what public opinion
might be, in terms of waste management, and such?
(Mr Bonser) First of all, with regard to Nirex, Nirex
was set up deliberately as part of the industry and by the industry
at the time, that may or may not be the right way forward, but
it was deliberately set up that way, and is subject to NII and
EA, as regulators, as they start to carry things out, if and when
they get to the point of building a repository. So they will be
in the same position of being regulated, later on. Things have
moved towards a position where some people describe it as a pseudo-regulator,
because of the `letters of comfort' approach which is now being
followed, but it does not have regulatory, it is not a regulator,
in the formal sense of the word. In terms of the public trust,
and so on, I think, public perception, and so on, it is an area
which is quite important to think hard about what you mean by
that, because, if, by public perception, you mean what you read
in the newspapers, I am not sure that is necessarily public perception.
And I think it is quite important, in this area, I am sure in
many other areas but certainly in the nuclear field, to find out
what the public feel, via, I do not know, opinion polls, or whatever,
there are lots of ways of getting to a wider public than just
the interest of the public. And then who the public trust, within
that, have you got the latest information on that, which areas
(Mr Beveridge) No, I have not.
(Mr Bonser) But, certainly, Government and industry
do not necessarily come top of that list, and regulators
96. Nor scientists?
(Mr Bonser) Nor scientists; scientists, industry,
regulators. And the green groups, the pressure groups, come higher,
in general terms. And, in terms of the regulator, my guess is,
and it is only a guess, I am not sure that if you ask the public
what they thought about the NII, they would say `who is the NII?'.
Now that is not because they are necessarily not doing a good
job in giving the public information, but I am not sure that there
is a public perception of the NII or the EA, as regulators in
this particular field. It is not a criticism, it is just a personal
Chairman: Gentlemen, thank you very much indeed.
We are going to see you up in Sellafield, so further questions
we will put to you then. Thank you very much.