Status, as of this point on the reactors, is as follows:
Let's look at the two "bookend" scenarios, understanding that actual results could fall anywhere between these two. The first has a utility feed restored to the plant over the weekend. This immediately takes units #5 and #6 off the field in terms of potential risk of release. That is, in the most-severe ("run like hell") scenario you now have two plants that have a high degree of confidence of being ok with minimal or no manual intervention for extended periods of time. It also brings a high degree of stability to all the reactors except for #3, and makes very likely prevention of any material problem with the cooling pools in terms of radioactive release. This leaves us with the already-released materials and the mess to clean up at the plant - not a small problem by any means, and unit #3 could still prove very troublesome to fully stabilize. However, this "bookend" likely ends the risk of significant release of further radioactive material to the environment.
The second, or "unmitigated disaster" scenario likely begins with one of the fuel pools melting down and violating the inner liner of steel (the part that is watertight.) This will cause an immediate and massive spike in radiation levels throughout the plant area as molten fuel contacts other things in the plant infrastructure, including things that are wet or concrete, and disassociating it due to heat (a chemical blast-like dispersion event that sprays molten radioactive material all over the immediate area.) That will effectively terminate all attempts to deal with the problem as the only mitigation factor remaining is "run like hell."
Incidentally, as I said a couple of days before when people started running claims that as massive pool fire and/or breach had already happened, unless you can find the massive and pervasive spike in radiation levels plant-wide, including on the ground, the initiation of that worst-case scenario hasn't occurred. Yes, radiation levels are going to be high (very high in fact) directly over the pools, as the water level is down and in addition Units #1-3 have been releasing pressure from their cores into the atmosphere (that's "straight up" for those who have reading comprehension problems.) The pools are open on the top and as such you'd expect very high levels directly above them with water below normal levels. But a fuel pool void of water that melts down and either violates the water-tight liner (made of steel) or worse, ignites, is going to spray fission products everywhere, and they're going to be hotter (radiologically) than a pistol. There's no way you're going to mistake that for anything else nor can it be hidden.
The "good" scenario effectively ends the radiological emergency. The "aw crap" one has to be presumed to ultimately lead to release of all of the Curies in the spent fuel pools, although it will take quite some time for it to happen and the overwhelming majority of the release will be at the plant itself. That event would poison (permanently) a material diameter of land around the plant, perhaps out to a few miles, and the "thou shalt not enter" line would remain for a long period of time (decades or more.) I'd hazard a guess that a radius of 10-20 miles from the plant would be rendered uninhabitable for a very long time (10+ years) and agriculture would be impossible within perhaps another 20-30 miles due to uptake of deposited material into plants. The number of people killed outright would be relatively small (most of them workers at the plant and others attempting to prevent the occurrence) but cancer risks would also rise materially, likely resulting in a few thousands to tens of thousands of cancers over the next 30-50 years. Even basic cleanup and encasement operations would likely not be possible for months - and maybe longer, with the ultimate "mitigation" strategy being encasement in sand and concrete, much as it was Chernobyl.
To put this in perspective, however, there's almost-certainly far more than 20,000 people dead right now from the tsunami, as the official dead and missing numbers are, at last report, in excess of those numbers.
In short, in terms of property damage, this is anywhere from kinda bad (right now) to really awful ("the nightmare") In terms of loss of life in a time-dependent manner it almost-certainly won't be as bad as the damage already done from the tsunami. Let's keep our heads on about the realities of nuclear accidents - even very severe ones: Dying from radiation is not more-dead than dying from a tsunami that buries you under 30' of water and a collapsing building. Both are unfortunate losses of life tied, directly and indirectly, to a natural disaster.
Even in that worst-case scenario there will be no material radiological impact to the United States. Yes, you'll be able to measure the radiation increase in background level, if you try hard enough with sensitive instruments. But it will means nothing in terms of health risks. If you're currently paying hundreds of dollars for Potassium Iodide tablets, you got robbed - those are $10-15 any day of the week (except when sellers and fear-mongers can scare you) and you got rooked by someone playing to your fears. (It's even worse if you took them - that's a very bad idea unless there's an actual imminent exposure, as there is real health risk associated with dosing yourself with these things.)
The last few days have generated a flurry of hate-mail to my inbox and more than a few scaremongers have been "unfriended" from my Facebook page and accounts have been killed on the forum. These individuals are outraged that I won't join them in an immediate demand to a halt on all nuclear activity in the United States and worldwide, and that I remain steadfast in my "pro nuclear power" stance.
On the facts, however, no other stance makes logical sense. I'm up for a debate at any time on the merits of one proposal over another when it comes to energy, as with virtually any other topic I cover. But what I have no time for is the shopworn "never let a crisis go to waste when you can inflame the public" scaremongering that many people are running both in this country and elsewhere.
One individual attempted to make the argument that nuclear power was "too expensive" because of subsidies and therefore we should not use it. Left unsaid were the options he proposed - he clearly had none. But the root of the argument was dishonest, because all other forms of energy are heavily-subsidized as well. Oil has a monstrous subsidy that by reasonable assumption could be up to half of our military budget (to secure its international supply for our use.) Coal, oil and natural gas have much of their supply coming from federal land (that's owned by all of us) yet companies are allowed to exploit and profit from the fuel dug or drilled out of the ground (that's a subsidy.) Hybrid vehicles have a huge subsidy, as does geothermal, solar and wind power, with all of those being direct and visible. Ethanol from corn is subsidized. Hydroelectric is monstrously subsidized - beyond the obvious (permanent loss of land in the impounded area) large projects such as the Hoover Dam are literally government-owned.
We currently get about 20% of our power from nuclear energy. Nuclear energy, coal and hydroelectric are the only realistic "base load" (available all the time) generation sources we have available to us. Most if not all of the suitable hydroelectric sources have been exploited. Coal, even so-called "clean coal", still causes emissions into the atmosphere and waste generation. Expansion of coal for energy will require more and more intrusive environmental steps, including strip-mining.
There is no free lunch, in short. At the base of economic prosperity is energy security. Without it there's nothing. We live in a first-world nation in no small part because every time we turn on the switch on our wall, the lights come on. If we intend to keep this status we must expand energy production at least at a per-capita rate to account for population expansion and economic growth. This is a daunting task for the same reason that all exponential functions present challenges.
Nuclear power is the only known source of energy available to us to meet this challenge. Those who argue otherwise must be forced to show their work, proving that their claimed paths forward can meet the alleged promises. This is not about what we want to do, it is what we must do.
Civilian nuclear power in the United States has an enviable, but not perfect, safety record. There are many who argue that up to 20,000 deaths can be attributed to coal power plants annually on their emissions alone in the general population, ignoring industrial accidents at the plants themselves. Over the last 40 years the number of US civilian deaths due to nuclear power generation has been zero.
We will eventually have a serious nuclear accident here. It is inevitable. However, simply on the numbers, adjusting for the power production mix between coal and nuclear, we would have to have an accident that killed 400,000 people before the score were merely "even" in terms of "deadly impact." Even a "worst-case" scenario is so unlikely to ever close this gap that there simply is no argument against nuclear power on the safety merits available to anyone who looks dispassionately at the facts, instead of the hype and fear intentionally peddled by far too many in the media and elsewhere.
I would prefer liquid-salt thorium reactors for a number of reasons, with the largest advantages coming from higher overall thermal efficiency, passive safety and the enormous amount of available fertile fuel for the units. We literally have over 1,000 years of proved and known fuel for this cycle in the United States. But at the same time we must exploit conventional nuclear power and both deal with the reprocessing and storage issues that are raised. Reprocessing dramatically shrinks permanent storage requirements yet we refuse to do so as a sop to those who fear proliferation. Yet the fact of the matter is that any nation that has light-water power reactors has not only the ability but the inevitability of plutonium production - and it can be diverted to non-peaceful use. We cannot avoid these facts and as such our own refusal to deal with both reprocessing and permanent storage is also dishonest, amounting to back-door attempts to kill the industry.
Likewise, if the required standard on safety is perfection then we can never meet it and this too is a back-door attempt to kill the industry. Again, if you're for that, just be honest enough to say so outright instead of lying about your intentions. You must also then account for the harm that will come to us economically and whether you're willing to accept that as well.
I've yet to hear any of those arguing for the cessation of nuclear power put forward a means of replacing it that will work with less risk. This means, of course, they're advocating not replacing it at all. That, in turn, means radical cutbacks in our energy availability right here, right now, in the United States both today and tomorrow. The comforts you enjoy today but were uncommon or unavailable as recently as the 1950s and 1960s - central air conditioning in every house for one - will disappear. Industrial power use will have to fall dramatically, and so will our productivity. Consider what we look at as essentials these days - walking to our car in a lit parking lot late at night, street lights in our towns and on our highways and more. These expectations will go unfulfilled. If this is what you're proposing then be honest about it and let's have the debate. Those who argue this point aren't honest because they know they'll be run out of town on a rail immediately should they actually explain what they intend the outcome to be.
I fully support imprisoning those who tamper with safety records and otherwise commit fraud - here and elsewhere. If such an event leads to death, the people responsible - all of them - should stand trial for negligent homicide. But this is not an argument against nuclear power - it is an argument for accountability.
Now let's talk economics.
In any scenario there is going to be a massive capital repatriation. This has already begun to some extent. The Yen had a major spike Wednesday night, the G-7 "intervened" Thursday and instability in the FX markets is likely to continue. Japan has been a net exporter (and thus net buyer of Treasuries and other sovereign and foreign debt) for quite some time. This is almost-certain to at least halt and these flows may reverse.
A substantial part of high-tech manufacturing is reliant in one form or another on Japanese factories. There are severe power shortages in Japan right now for obvious reasons - close to 10 Gw of capacity is offline just in those two nuclear installations that got in trouble! About 3.5Gw of that, even in the good scenario, cannot be brought back online for as much as ten to fifteen years as the plant involved has been destroyed and will have to be replaced. This will cripple both recovery and industrial production, yet the political environment surrounding nuclear power may preclude the restart of even the undamaged plants.
Energy is everything when it comes to economic progress, including during recovery and rebuilding efforts of this sort.
Now let's talk about translation effects.
First, if you're looking for "plays", the obvious ones are food commodities. Japan just got reamed on production. Also, distillate (diesel fuel) might be a decent play. These are needs, not wants. There have already been monster moves in some of the Japanese construction companies, so you may be late, but if you're looking for a trade that's the obvious one. In the FX markets everyone expects the BOJ to print like crazy and trash the Yen. I'd be cautious with that expectation - weakening the currency will make imports expensive and Japan needs the opposite right now since they need to import materials to rebuild, but instability does not help them. The G-7 has already decided to intervene and did Thursday night. Expect more game-playing in the foreign-exchange space over the coming months.
More important in my opinion is the potential for disruption in capital flows and what it may do here in the United States. I don't expect this risk to be realized by many for a couple of weeks to a couple of months, but there's a decent chance it's coming. If it does and cascades through China we could find ourselves with a forced half to our profligate government spending. That would be very bearish for the US economy and stocks.
On the higher-risk end of the risk scale (less likely but more dangerous) are potential dislocation factors. If Japan has the catastrophic outcome, which is low probability but high impact, there's real trouble - especially if the government gets destabilized.
If the really awful outcome does occur, there's a non-zero chance of a market crash Monday. It's a bad time in terms of the calendar - we're coming off Options Expiration and while there's been a good bit of roll, there's always more risk on a Monday immediately following OpEx. In addition the potential failure of one or more major Japanese banks cannot be ruled out, and we squandered the opportunity to mitigate the interconnection risk among our banks and others with the abortion known as "Dodd-Frank." There were unconfirmed reports of inability to settle transactions early last week - if that turns into reality and cascades, especially if Tokyo is roiled by a serious radiation scare whether warranted or not destructive financial effects could spread very rapidly.
Murphy is a bitch. He has a way of showing up in threes when it comes to disasters, although I've never figured out why. We had Christchurch hit, which was #1 and now we have the Japanese earthquake and tsunami. If we get one more bad natural disaster in the wrong place in short time-sequence from here.....
Finally, a word about governments. You've now seen government idiocy on display once again exactly as we did with Katrina. When backed against the wall the sure bet is that the government will lie. They especially lie when they don't know what the truth is rather than honestly tell you "I don't know." Governments are also very slow to coordinate and act from places where they have actual authority when there are immediate, critical needs that must be addressed right now in order to prevent wider disasters. When power was lost at the nuclear plant Japan's defense forces could have been immediately brought in, generators and fuel secured, and emergency power restored. Engine-driven seawater pumps that can move massive amounts of water are standard items and could be flown in from anywhere within 12 hours and sited by chopper. There was a lot of landmass in Japan that was not damaged, and while big generators are not exactly Home Depot items the lack of immediate response in taking over from TEPCO and instituting immediate restorative action for necessary utility services to those units is the proximate cause for the Japanese being in as much trouble as they are. Remember that immediately following the scram and loss of power from the tsunami there was no radiation release and thus workers could have done whatever was necessary anywhere in the plant - including wiring up emergency electrical controls. They literally had a couple of days and squandered that time.
Thursday night an allegation surfaced that President Obama attempted to condition emergency technical assistance immediately following the event on a political outcome - specifically, the de-commissioning of one or more of the nuclear plants. This is a ridiculously incendiary allegation. If it's true then we tried to extort the Japanese government and force them to permanently close electrical generation facilities necessary for their economic health in exchange for assistance during an active and emergent crisis. If the allegation is false then the Japanese Government has severe internal problems that could ultimately lead to it's destruction - someone in the political machine there was willing to accuse one of their largest trading partners and a nation that is heavily intertwined with US Treasury financing of extortion for internal political purposes. There's no good outcome possible out of something like this being reported all over the Asian media (and it was); there's only "bad" and "really bad."
What this means is that when, not if, things go sideways you have had a demonstration in bright lights and bold neon paint that governments will at best do nothing useful and at worst will expend resources in the wrong places compared to the most-important agenda items toward stabilization of the situation at hand.
In short when things go pear-shaped you will either help yourself or you will suffer from whatever circumstance arises.
If you are not prepared - today - for serious economic and civil trouble please become so on an expedited basis. If you prepare for this possibility and everything calms down over the next few months you've lost nothing. You're still prepared and can remain so at little or no additional cost. Sound sleep is its own reward and you can only enjoy that if you are confident that you are able to handle what may be served upon you to the best of your ability given the range of possibilities.
If things don't calm down, well, look to the example found through Japan - and how ineffective Japan's government was in the first hours getting the most-important things done right damn now to prevent the now-bad outcomes from being realized.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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