Craig Wilkins, Conservation Council of South Australia, at parliamentary Nuclear Inquiry

p.55 Mr WILKINS: Yes, I thought I would just give a brief summary mainly around the economics, the safety and the consent issues before we perhaps have a larger conversation after that. Essentially, we are keen to talk about the very specific proposal to make money by importing high-level nuclear waste into Australia and, by doing so, to turn our state into the largest nuclear waste site in the world. For us, the devil is very much in the detail.

Our impression, from the public conversation, is that most people think this is an ‘out of sight, out of mind’ idea, where we bury the waste deep in the outback and that is it. The reality is very different. Before we get there, ships containing that high-level waste enter South Australian waters through the South China Sea and other problematic areas, entering our prawn and tuna fishery areas and other aquaculture zones, going past tourism hotspots, every 24 to 30 days for 70 years. That is a huge amount of transport.

The waste will be unloaded into a purpose-built port built somewhere on our coastline—probably around Whyalla is the most likely bet. Then it is transported to a site around five kilometres or 10 kilometres from our coastline where it will sit for decades above ground, and up to 72,000 tonnes will be left there over that 80 years of the span of the proposal. So, this isn’t out of sight, out of mind. It will be a very prominent feature of our landscape, and it will require a level of security infrastructure and cultural impact around that which I think will change fundamentally parts of our state.

The royal commission is very candid that the only way it stacks up economically is if they import around 50,000 tonnes over the first 17 years of the proposal and have it sitting there. So, we actually transfer the risk and responsibility first before we know if we can actually build and operate the ultimate repository.

Around the economics, there are three major concerns, but there are actually more than that: it is around the estimates, the revenue, the risk of cost blowouts and the likelihood of competition. Essentially, the biggest problem around all of this is that there is no international market for high-level nuclear waste. The permanent transfer of waste, and all the responsibility to manage it, has never happened before. There is no market, and so we have to rely on assumptions and modelling on this willingness to pay.

There is a whole series of critiques around how Jacobs has gone around that. I would perhaps point you to page 299 of the royal commission report, where they have done various sensitivity analyses of some of those. But there are real scenarios where, if that willingness to pay is not as great as they suggest, and the price we are able to attract is less, we can actually lose money out of this.

Then, on the cost side, this is an industry which is notorious for blowouts. When I spoke to the citizens’ jury on Sunday, I used the example of the Clinton power plant in the US, which went 10 times over cost. What other industry can get away with that? It is phenomenal. Two to three time cost overruns are common in Finland and other parts of Europe. France’s estimation of their waste disposal cost has gone from $22 billion in 2005 to $45 billion in 2016. There is a real sense that everything always costs twice as much as you think.

 Jacobs, the consultants, as you know, did the costings for the royal commission, and they have suggested an uncertainty in costs for them of around 100 per cent, yet they have only built in models of a CAPEX overrun of 50 per cent. So, they have assumed that it could be up to 100 per cent, but their modelling has only priced the 50 per cent overrun, and that makes a huge difference to the impact, especially when we are talking about first-of-a-kind builds. On the radio this morning, it was about the EPAS, and we have the RAH—there is all this history where, when you are talking about first-of-a-kind technological building, things always cost more and take longer than you think.

There is the issue of competition. We believe the Jacobs report doesn’t seriously examine the fact that we are hoping to charge premium rates for decades and assume that no other country will jump in and undercut and drive the price low. It is fascinating that there is a lot of people who suggest that Generation IV reactors are just around the corner and, if that was to happen, that is the fuel that is regarded as a resource for these Generation IV reactors. Why would anyone pay us to take it and permanently store it in South Australia when they can keep it and use it as a fuel for their own power production?

Then there is insurance and underwriting. Essentially, no private company will ever underwrite this. This will be a state government responsibility, but the cost is around $30 billion to actually build. Is this something South Australia can do? Probably not, so therefore it is probably the Australian government that will have to underwrite it, and there is an assumption that that will carry on and that countries will not change their minds.

p.56 When you look at examples like in the US, with Yucca Mountain in Nevada, they went a huge way down the path of making a decision about what to do and then they changed their minds after about $13 billion worth of investment. Then there are assumptions of future interest rates for the future fund, a lack of contingency for accidents, the issue of horizontal fiscal equalisation, and so on, and so on, and so on. There are so many assumptions built into Jacobs’ modelling which, when you add them all up, just make this an incredibly risky venture financially.

 I find it really interesting that a country like the US is not taking up this opportunity. They are the most entrepreneurial country in the world and they have a huge need to solve their own problems. They have similar attributes to us in terms of geology. It is the birth place of Elon Musk, Bills Gates, Larry Page and Steve Jobs—people who know how to make a buck—and they are choosing to turn their back on $457 billion worth of potential benefit? I find that really, really surprising.

It is remarkable that the royal commission only used one consultant to do this. Basically, all this conversation, all this energy and momentum, is based on the work of one consultant. Surely we deserve a second opinion. I actually put in an FOI request to see if Treasury had been consulted by the royal commission, and they hadn’t. I would perhaps suggest that that is a logical next step—to get some other modelling from Treasury to see if this is actually viable. On such an important issue surely we would need to have more than just one opinion.

On safety: the question is: can we do it safely? The truth is that no one knows. Not one country has worked out how to store high-level nuclear waste for the length of time it remains dangerous to humans. Finland is building theirs, but it will not actually receive the waste until next decade. So we are not even sure of safe construction yet—the completion of safe construction—let alone safe operation.

The only real-life experience anywhere in the world of a deep repository of nuclear waste is the waste isolation pilot plant in New Mexico. I am not sure if you are familiar with that story, but in 2014, after just 15 years of operation, there was a fire alongside an unrelated rupture of a barrel—there were systems failures, workers were exposed to radiation. The site was closed down for four years. It’s still closed down and the clean-up cost is estimated to be about half a billion dollars. So that is the only real-life experience, anywhere in the world, of this kind of thing.

p.57 When I have raised this at various times, and others have raised it, the response has been, ‘Well, that is a different kind of waste.’ Yes, it is, because the WIPP is actually intermediatelevel waste not high-level waste. It is not even the most dangerous waste. But even if it is, it is a different kind of waste.

The key aspect of the story is the fact that at the root of it was a simple human error, and no technology has ever been developed that is, essentially, idiot proof, especially around the interface between human beings and complicated technology. For me, there is a fatal flaw which is emerging throughout this whole debate. There is all this talk about—and if we look once again in the royal commission’s report—Switzerland, Finland and Sweden, and those fantastic European countries and how safe they are and how wonderful they are.

So you have this real core expectation being raised around that this is going to be a Rolls Royce version, a gold standard version, yet we are also trying to make windfall profits out of this. There is an essential tension there: we can have that rolled gold safety, possibly, but it will cost a lot of money. Then there is also the expectation to make a motza out of it as well, and that is a fatal flaw. We don’t know if we can have both. I seriously doubt we can.

To give you an example of where it is in terms of the detail, it is around the thickness of the dry casts. There is all this talk in the royal commission report around the Swiss, who have around 12 to 14 centimetre-thick versions of all the dry casts. But Jacobs, for the sake of their modelling, have said, ‘Let’s use the Holtech system which is far thinner and is the one used in the US.’ There have been community concerns around how thin it is, in terms of its viability. So we have been costed a cheaper version, but we have been sold the more expensive absolute rolled gold. We were promised a Rolls-Royce, we are perhaps going to be delivered the Fairlane, and that, I think, is a real breach of trust for the South Australian public around this.

 I will just finish around consent. There is a breakdown of social consent and community consent. Social consent is regarded as a broad, general feel around whether we should proceed, and then we actually choose a site and get local community consent. We think that is deeply problematic because a lot of the concerns only emerge when we actually get to the site, in terms of what the local community feels and wants.

 My biggest concern about all of this is that we will keep on kicking the can along the road, investing hundreds of millions of dollars to investigate something which, ultimately, will come unstuck because of that need to have community consent, which the royal commission has been very clear about. There is a huge risk in terms of kicking this can along the road until we have identified the location. Finland had a conversation for over 30 years to get to this point. We are having this rushed conversation in a matter of months to have a similar decision point.

Then there’s the issue of traditional owners. It is almost bordering on a racist belief that when they say no to this, and their opposition has been consistent for a long time, it is because they don’t understand, and if only they knew more information they would have a different view. I believe they actually understand far better than our culture in terms of how to live sustainably for generations. They are still dealing with the legacy of the fallout from Maralinga. That is like a raw wound for many communities. They are still having intergenerational impacts. This royal commission, and the federal process, is like a thumb being stuck into a wound at the moment amongst many of those communities.

 Ultimately for me, it’s around the opportunity costs. We are going to spend a lot of money playing in this space when the numbers won’t stack up, the community won’t like it, the safety isn’t sure, and what else could we be doing with our time and energy? I might leave it at that. ……file:///C:/Users/User/Downloads/TRANSCRIPT%20OF%20EVIDENCE%20HEARD.pdf