A proposal to substitute nuclear power for gas-fired generation has been laughed out of the northern Alberta oil sands — literally.

Alberta Energy Minister Murray Smith drew a hearty collective chuckle from a capacity crowd at a Calgary conference held by Ziff Energy Group with a blunt response to overtures by Atomic Energy of Canada.

The manufacturer of Candu reactors has since May advocated installing them to serve oil sands complexes as an economic alternative to their reliance on electricity and heat from power stations fired by natural gas. Smith delivered his rejection in a joking manner, but also made it clear he was not kidding.

He told the crowd he was baffled that anyone could seriously make a business proposition with potential to sterilize a 5,000-year supply of oil if there was an accident, sabotage or a terrorist attack. Smith told reporters “we would be very concerned with respect to security of the facility” because fallout from a nuclear accident would render the oil sands region off limits for generations.

Smith said the Alberta regulatory system remains open to applications to build power stations. But risks are taken into account — and if a nuclear plant ran into trouble, “you could conceivably sterilize oil production approaching a million barrels per day.”

By contrast, Smith rated work on other alternatives to gas-fired power as “quite interesting.” He said the intriguing possibilities include clean-coal technology as well as fuels made from heavy-oil and coke byproducts of the oil sands process.

The scale of future oil sands demand for natural gas remains one of the industry’s larger unknowns, with Canadian analysts predicting it has potential to eat up all the forthcoming deliveries of 1.2-1.8 Bcf/d via the proposed Mackenzie Valley pipeline. TransCanada PipeLines president Hal Kvisle said he expects to see gas production grow by 1 Bcf/d in British Columbia. The big question is whether the new supplies will only travel a short distance east across Alberta to be consumed by oil plants, Kvisle said.

Regardless of the source of future additions to gas supplies, oil sands plants are rated as a major factor in domestic Canadian demand.

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