Re: [GRRN] Nuclear Accident at Tokaimura, Japan

Doug Koplow (
Mon, 11 Oct 1999 12:15:12 -0400

That there should be cost pressures related to nuclear power is not =
surprising. Despite massive subsidies at every stage of the fuel cycle =
for the past fifty years, from uranium extraction and processing, to plant =
construction, liability insurance, and waste disposal, electricity =
produced from nuclear power remains extremely expensive and uncompetitive =
with other forms of power.

The situation in the US may be somewhat different than that in Japan. =
This is because of transitional payments for "stranded costs" associated =
with existing plant infrastructure. Much of the stranded costs are =
associated with overpriced nuclear generating assets. However, because =
the owners of these high-priced assets will recover at least most of their =
money from ratepayers, they may be under less pressure to cut corners now. =

The question going forward is whether the marginal costs of the nuclear =
assets in the US (treating most of the physical plant as "sunk") are low =
enough to compete in the marketplace without large, further cost cutting. =
The answer is not clear. The operating costs of older plants have tended =
to rise much more than anticipated, suggesting that many plants will not =
be competitive. In addition, the cost to decommission the plants at the =
end of their useful life has continued to rise steeply.

If the plants are nowhere near competitve, they will shut down, and the =
environmental challenge will shift to ensuring proper closure and =
long-term management of the radioactive debris. If they are nearly =
cost-competitive on a marginal cost basis, cost cutting pressures may =
create safety risks. =20

There are also potential safety issues with the newly privatized uranium =
enrichment enterprise which should be watched closely.

Doug Koplow
Industrial Economics, Inc.
2067 Massachusetts Avenue
Cambridge, MA 02140
tel: 617/354-0074
fax: 617/354-0463

>>> "RecycleWorlds" <> 10/11 11:55 AM >>>
Not directly on the subject of recycling, but of overwhelming
importance to everyone nonetheless--

The October 8, 1999 issue of the Wall Street Journal has a must read
article, "Pressure to Cut Costs at Plant Played a Role in Mishap," (at p.
A17) replying to published reports indicating that the accident at the
nuclear fuel processing plant when a critical mass occurred releasing
massive amounts of radiation in Tokaimura -- an event which government
protocols assumed was impossible -- was due to human error.

In fact, according to this article, it was the crushing pressure to
remain competitive in the face of financial threats that arose in the new
era of deregulation when the "Ministry of International Trade and Inudstry
ushered in a measure that forced power companies to cut rates an average
4.21% in 1996 and an additional 4.67% in 1998" that led the middle
management of the company, JCO, with the almost certain tacit approval of
the president, to revise the standard procedures set in regulations for
fuel processing in order to cut costs, including pouring unstable
quantities of uranium oxide in pails. For, "feeling the long-term squeeze
on their profits [from foreign competitors], the power companies began
turning oversees for cheaper nuclear fuel [than JCO's]...'Pressure began
building up all around us and we had to start thinking of cost-cutting,'
says JCO's Mr. Ujikhara. Right about this time, JCO started simplifying
government-prescribed procedures for processing the fuel."

If this sounds hauntingly reminescent of something, it should. The
U.S. is undergoing a massive shift to deregulation of our electric utility
companies, including the 104 nuclear reactors that they own.

Is there any reason to not expect the same kinds of financial =
on the operation of those reactors here as Japan experienced? Indeed, the
financial pressures while utilities were protected in the cocoon of
regulation were already very troubling.

Turn your mind back to 1979 and the near catastrophic accident at =
Mile Island when a pressure relief valve stuck open and was incorrectly
recorded in the instrumentation. That fluke sequence was not
unpredictable. In fact it had happened three times previously in other
reactors, which just fortuitously happened to be at partial power at the
time preventing a meltdown from occuring. And that sequence was not
unnoticed by the engineers at GE which built that model reactor. And =
line engineers duly reported the possiblity of a catastrophe if the
sequence recurred in a plant at full power to management.

Why, didn't management react by sending alerts to all of the other
utilities with GE reactors of that design to shut down and make the
necessary corrections. Because, they replied to the Blue Ribbon
investigation, the reports were erroneously submitted on yellow instead of
the proper pink paper for emergency situations.

Do you believe that? Not very likely. The probable real story: there
were so many of these reports that if they were to react to every one of
them, the capacity factor of the units would plummet and sales would
suffer. Consequently, the policy had been, apparently, to punt and hope
and pray nothing bad happened.

Well it did at TMI and it will again. And deregulation is all but
certain to insure that it does sometime, somewhere.

Admiral Rickover -- the "father" of the nuclear navy -- once intoned
that he supported nuclear power for the navy because they would spend what
it takes to make it safe, but he opposed it for private industry because =
the continuing pressure to cut costs.

We would do well to apply that admonition today.

Peter Anderson
RecycleWorlds Consulting
4513 Vernon Blvd. Ste. 15
Madison, WI 53705-4964
Phone:(608) 231-1100/Fax: (608) 233-0011

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