BRITISH NUCLEAR FUELS PLC History

Address:

Dalton House, Risley
Warrington, Cheshire WA3 6AS
England

Telephone: (0925) 832 000
Fax: (0925) 822 711

State-Owned Company
Incorporated: 1971 as British Nuclear Fuels Limited
Employees: 15,327
Sales: £1.04 billion (US$2.02 billion)

Company History:

British Nuclear Fuels plc (BNFL) produces fuel for all of the nuclear power stations in the United Kingdom and is a worldwide supplier of uranium fuel for civilian applications, primarily the generation of electricity. BNFL is one of only two companies in the world equipped to offer a complete nuclear fuel cycle service to its customers. Fuel is produced at the Springfields plant; enriched at the Capenhurst plant; transported by BNFL subsidiaries to Europe and Japan; then reprocessed and recycled at the company's Sellafield plant in Cumbria. In addition to its fuel cycle activities, BNFL also manages two nuclear power stations in England and Scotland. In recent years, in the wake of governmental and public concern over its safety record, more efficient management of waste products has become a company priority.

Although it operates with the structure and profit objectives of a publicly listed company, all of BNFL's shares are owned by the British government, and it is to the government that the company pays its annual dividend. Until 1971, BNFL was the Production Group of the United Kingdom Atomic Energy Authority (AEA), with which it maintains close links. By changing the status of the Group to that of public limited company, the government hoped to increase management flexibility and promote commercial activity. In this regard, BNFL has scored a notable success, showing solid profits and a steady increase in export sales. On the other hand, ongoing research into the causal link between exposure to low-level radioactivity and various human cancers has prompted politicians and members of the public to press for the closure of some BNFL sites, or at the very least a halt to further expansion.

The history of British Nuclear Fuels is inextricably linked to the development of a comprehensive nuclear energy program in Britain. The American bombing of Hiroshima and Nagasaki, which precipitated the end of World War II, furnished proof of the devastating military potential of nuclear technology. However, with the formation of the United Kingdom Atomic Energy Authority (AEA) in 1954, the peaceful civilian applications of the technology were given a new prominence. Nuclear power's potential as a cheap, safe alternative to coal-fired electricity was especially alluring in the difficult years following World War II, when supplies of fossil fuels appeared to be diminishing and oil prices were increasingly unstable. A prototype reactor was built at Calder Hall in picturesque Wordsworth country after the war, and experimentally connected to the national electricity grid as early as 1953. At the historic United Nations Conference held in Geneva in 1955, Britain established its lead in reactor technology by announcing a plan to construct twelve gas-cooled reactors within ten years which would provide the United Kingdom with fifty percent of its electricity needs by 1975. Early projections indicated that nuclear power could compete with coal, still in short supply as a result of the war.

In 1956, Queen Elizabeth formally opened the fully operational Calder Hall reactor, to an overwhelmingly positive reception in the press. The reactor was built to a gas-graphite design perfected in Britain and nicknamed 'Magnox.' Like coal and oil-powered power stations, the Calder Hall station generated electricity through a steam-driven turbo-generator. Unlike traditional power stations, however, heat in the nuclear power plant was the result of nuclear fission, the controlled splitting of uranium atoms in a chain reaction. A relatively small amount of fuel produced a tremendous amount of heat. The British government remained loyal to the Magnox gas-cooled design in spite of the reservations of a minority of AEA engineers, who expressed doubts about both the economic viability and safety of the new industry. Dissenters included Sir Christopher Hinton, widely regarded as the 'father' of British nuclear power, who was later to urge in vain that the United Kingdom adopt the American water-cooled system.

Sir Christopher's fears were dramatically realized on October 10, 1957, when the core of the number one reactor at Calder Hall, near Windscale, caught fire and burned for over a day, showering radioactive ash over the surrounding area. When milk from local dairy herds was found to be contaminated, it was dumped into the sea on a daily basis for several weeks, but surprisingly this was the only visible precaution taken in the immediate aftermath of the incident. At the time, the AEA rushed to assure an anxious public that radiation levels were still only a tenth of that considered dangerous. It was not until the 1980s that a report was released suggesting that the level of radiation near Windscale after the accident was up to 40 times greater than had originally been claimed. Reactors one and two were shut down for gradual dismantling, or decommissioning, over the next decades, but additional reactors at the site continued to operate, albeit with stricter safety standards. The accident at Windscale--the first nuclear accident at a commercial facility and, until Chernobyl, the most serious--gave rise to international concern that the price of nuclear-generated electricity might be too great. Nevertheless, Calder Hall is still operated by British Nuclear Fuels, and the company's larger Windscale site, now under the name Sellafield, also houses an important reprocessing and recycling facility.

By the early 1960s, it had become clear that initial cost projections for nuclear electricity were much too optimistic. Accordingly, countries which had a nuclear power program in place were forced to increase their efficiency through the introduction of new technological processes. In the United States in the late 1950s, Westinghouse and General Electric had successfully developed an alternative type of reactor system which interacted with pressurized water rather than the gas-graphite coolant of British reactors. Dubbed 'light water reactors,' these designs eventually came to dominate, although the British retained their advanced gas-cooled reactor (AGR) technology for many years. In retrospect, many industry professionals admit that this decision may have set the British program back almost a decade, although opinion is still divided on the relative merits of the systems. In spite of an ambitious British export drive, only two gas-cooled reactors were sold to foreign customers over the years, one to Japan and the other to Italy.

Meanwhile, Britain was developing expertise in other aspects of the nuclear fuel cycle. A uranium enrichment plant had been opened in Capenhurst on the west coast of England in 1952. The plant used a gas centrifuge system to isolate highly fissionable ('richer') Uranium 235 atoms from heavier Uranium 238 atoms. The desired level of enrichment was achieved by repeating the procedure in a series of centrifuges. British Nuclear Fuels subsequently developed and marketed this process through Urenco, a joint venture with Dutch and German companies incorporated in England in 1971.

In the early 1960s, the Atomic Energy Authority added a reprocessing and recycling facility to its Calder Hall reactor at Windscale. The development of this plant enabled the British to reprocess spent nuclear fuel from overseas, a profitable enterprise given that up to 97 percent of used material is recoverable, either as reclaimed uranium or as plutonium, which is a valuable fuel in its own right. In turn, reprocessing of foreign and domestic fuel gave rise to a transportation division which included both a fleet of specially-designed ships and customized flat-beds for use with locomotive engines. As of the early 1990s, British Nuclear Fuels had not recorded a single accident resulting from the transportation of radioactive materials.

In 1971, the Production Group of the Atomic Energy Authority broke off from its parent and was renamed British Nuclear Fuels Limited. The new company, while government-owned, was charged with developing the nuclear cycle along more commercial lines. Its specific responsibility was the production of nuclear fuel for all of the United Kingdom's atomic power plants, and the reprocessing of spent fuel. Originally, the plant at Windscale was capable of reprocessing only fuel from Magnox reactors. Since the Windscale site included the pioneering Magnox design Calder Hall reactor, British Nuclear Fuels was assigned its management, together with another first-generation reactor at Chapelcross.

By the early 1970s, researchers in a number of countries were working on a new generation of reactor called the 'fast-breeder' reactor. Prototypes, which used a mixture of uranium and plutonium, were said to be one hundred times more efficient at energy conversion than traditional reactors. The Atomic Energy Authority built an experimental reactor in Dounreay in the north of Scotland, and BNF provided the necessary fuel for early trials of the technology. Public concern about the fast-breeder program soon surfaced, however, focusing on a number of issues. First, while the reactor was undoubtedly more efficient, it was less stable than traditional facilities. Second, the bomb-grade plutonium which British Nuclear Fuels provided for fission purposes was transported overland, and this was viewed in some quarters as an open invitation to terrorism. Finally, at £1 billion, the program was extremely expensive. As a consequence of these reservations, the fast-breeder program was put on hold. Permission was given, however, to begin development of a £600 million (US$1.17 billion) expansion to the Windscale reprocessing plant. The expansion was the forerunner of a new complex costing £1.85 billion (US$3.61 billion) which would eventually open in 1992 under the name THORP (Thermal Oxide Reprocessing Plant). THORP would be capable of processing spent fuel from a variety of reactors, including AGRs and light water reactors. With an order book filled a decade in advance, THORP was considered one of British Nuclear Fuels' most profitable enterprises. In addition, since it processed considerable amounts of foreign fuel, it was less susceptible to domestic budget cuts than other BNFL operations.

During the fast-breeder reactor debate, the anti-nuclear movement in Britain had been much more concerned with the security risk posed by plutonium production and transportation than with the safety risk posed by the day-to-day operation of nuclear facilities. The talents and energy of high-profile organizations such as the Campaign for Nuclear Disarmament were directed primarily at limiting the proliferation of military hardware in Britain. As a result, in spite of the Windscale accident in 1957, and a second leak in 1976, BNF had rarely been publicly challenged on its safety record during its first three decades of operation. A series of government reports concluded that the AEA, and later British Nuclear Fuels, operated well within the guidelines set by the International Atomic Energy Agency.

In 1983, however, an independent local television station produced a documentary about Windscale--recently renamed Sellafield--which aired nationally in November of that year. Entitled Windscale: The Nuclear Laundry, the documentary presented a compelling case for the link between nuclear discharge from the Windscale reprocessing plant, and an abnormally high incidence of childhood leukemia among residents of Seascale, a small village about one-and-a-half miles from the facility. British Nuclear Fuels was given an opportunity to defend its position at the end of the documentary, and did so vigorously. The company did not deny the presence of radioactive substances in the waters off the coast of Cumbria, but rejected any claim that the levels were high enough to cause cancer. The leukemia clusters, BNFL maintained, were not statistically significant. Nevertheless, public confidence was rattled, and the British government promptly commissioned Sir Douglas Black, a former president of the Royal College of Surgeons, to conduct an investigation into the Yorkshire Television allegations. BNFL countered with an announcement that £80 million (US$156 million) was being invested in a treatment plant to reduce by 90 percent the amount of caesium in its waste effluent. By 1985, the annual level of caesium discharges into the Irish Sea had dropped to less than 5,000 curies, from a peak of 150,000 curies in 1975.

With the announcement that the government had launched an inquiry, British Nuclear Fuels suddenly found itself subjected to intense public scrutiny. Within several weeks of the original documentary, the British press reported that an investigation was to be carried out by an expert panel into the deaths of more than one hundred people who had died of cancer after working at Sellafield. As part of an agreement between BNFL and its trade unions designed to avoid lengthy and costly court cases, the panel would decide whether or not compensation should be offered to relatives of the deceased employees. A total of six families from the original one hundred were subsequently offered compensation, although the company refused to admit liability, claiming that, as good employers, they could not 'ignore the possibility of small numbers of cases where an individual's employment with the company may have been a factor in his contracting a cancer.' During the next decade, a modest number of additional cases would be decided in the plaintiffs' favor.

To make matters worse, in November 1983, a radioactive slick from BNFL's discharge pipeline drifted ashore on the scenic Cumbrian coast, causing fifteen miles of beach to be closed for a period of several months. Investigation showed that the slick was the result of a miscommunication between shift managers, one of whom inadvertently opened a tank containing radioactive effluent. In two government reports published in early 1984, British Nuclear Fuels was accused of inadequate monitoring procedures and poor communication. As a direct result of the criticisms, BNFL implemented a sweeping reorganization of its board and a restructuring of the Sellafield management. The Black Report, which appeared in July 1984, corroborated the cancer figures that the Yorkshire television documentary had presented. While unable to prove a direct causal link between contaminated Sellafield discharges and leukemia clusters in nearby villages, the Black Report nevertheless concluded that the incidence of cancer was simply too high to be a random occurrence. Black recommended a full-scale medical study. In 1986, events took an international turn when the Irish Prime Minister, Dr. Garrett FitzGerald, expressed his concern that radiation leaks might also be affecting Irish citizens living directly across the sea from the Sellafield plant. Dr. FitzGerald's fears were dismissed by the British government, but they were an indication that the ground swell of negative publicity might seriously jeopardize future development of the nuclear power program.

In an attempt to restore some luster to its image in the late 1980s, British Nuclear Fuels embarked on an aggressive publicity campaign which stressed the safety and reliability of nuclear power. A Visitor Center was opened at the Sellafield plant which in 1990 alone attracted 130,000 visitors, including numerous school groups. Channels of communication with both press and public were improved through a wide range of free films, books, and exhibitions. On the technological front, due to enhancements in waste management technology, the level of discharge into the Irish Sea dropped dramatically from 1985 onward, and new research attempted to eliminate the radioactive component of Irish Sea discharge completely. In 1990, the Washington office of BNFL Inc. opened its doors in an effort to solicit waste management business in the United States. In February 1991, BNFL was pleased to welcome the Secretary of State for the Environment to Sellafield for the opening of its new £240 million (US$468 million) Vitrification Plant. Vitrification is the process by which highly active liquid waste is reduced in volume and converted to stable glass form. The plant represents British Nuclear Fuels' concerted effort to address criticisms of its fuel reprocessing procedures. Nevertheless, waste management looks set to remain the most controversial of the company's many activities.

British Nuclear Fuels' relationship with its main domestic customers, nuclear power station operators, changed significantly at the beginning of the 1990s when the government announced plans to privatize the electricity industry. At first it appeared that nuclear power plants would also be privatized, although they were later grouped together in a new state-owned company called Nuclear Electric (NE). NE, together with a sister company, Scottish Electric, expressed concern that the reprocessing activity that British Nuclear Fuels had undertaken on their behalf for years was no longer economically or environmentally desirable. After tough negotiations, contracts worth a total of £15.7 billion (US$30.62 billion) over fifteen years were signed guaranteeing both customers fixed-price fuel from BNFL. The issue of reprocessing, however, remained unresolved. The privatization of the rest of Britain's power industry was also significant in that it revealed hidden costs in nuclear power plant operations. In spite of early optimism, they appear to be much more expensive to run than fossil-fuel alternatives.

Company literature reminds us that three enriched uranium pellets, each the size of a thimble, provide electricity equivalent to four metric tons of coal; that a passenger 'flying at a typical cruising altitude would receive four times as much radiation in an hour as he would receive from the entire nuclear industry in a year'; and that British Nuclear Fuels is by far the largest employer in West Cumbria, winning a 1991 award for community relations. The fact remains that the precise relationship between radioactive materials and malignancy is still not fully understood. Until it is, lawsuits on behalf of cancer victims may overshadow the many benefits of nuclear power which British Nuclear Fuels is at pains to promote. The company's future success depends on the outcome of such lawsuits, as well as on a commitment to maintaining a technological edge in a highly sophisticated industry.

Principal Subsidiaries: International Nuclear Fuels Limited; BNFL Enrichment (Plant and Equipment) Limited; BNFL Enrichment (Operations) Limited; BNFL Enrichment (Operations-UK) Limited (96%); BNFL Enrichment (Operations-Europe) Limited (Netherlands and Germany; 2%); Pacific Nuclear Transport Limited (62.5%); BNFL Inc. (US); BNFL Enrichment (Investments-US) Limited; BNFL Enterprise Limited; Centec GmbH (Germany; 33%); Urenco Limited (33%); Nukleardienst GmbH (Germany; 50%); UK Nirex Limited (42.5%); United Reprocessors GmbH (Germany; 33%); Nuclear Transport Limited (33%); NTL-Nukleare Transportleistungen GmbH (Germany; 33%); NTL-Société Nucl&eacutere Pour Les Transports Lourds SARL (France; 33%).

BRITISH NUCLEAR FUELS PLC History

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