The overreaction and stoked fears about the events at Fukushima continues. One month ago today, I wrote an article titled Nuclear plant issues in Japan are the least of their worries that exposed my ignorance of the differences between various kinds of containment designs and was a bit too optimistic about the eventual releases of radioactive material to the environment. I was not fully aware of the potential for energetic, but brief hydrogen explosions and I overestimated the time it would take for a used fuel pool to approach dangerously low levels if it is not forcibly cooled.
However, if you plotted my admittedly over optimistic evaluation against the dire predictions from a host of others and then against the actual measured impact on public health, that optimism does not look so far off of reality. There was more material released to the environment than I predicted and there were times when radiation levels at the plant site were hazardous to untrained or unprotected workers who did not take precautions to minimize their exposure, but so far not a single worker or member of the public has suffered more than a skin burn from radiation at the plant or radioactive materials leaked to the environment.
As my friend Margaret Harding likes to point out, if nuclear plants fail, they are designed to fail slowly, giving sufficient time to implement protective measures. Despite the thousands of gallons of ink, tons of newsprint, and hours of talking heads babbling about the catastrophe and the mistakes made in the response effort, the Japanese government and the responsible utility have done a reasonably effective job in protecting the public from harm.
A few prominent people with questioning attitudes have looked at the reality of the consequences and compared that reality to all of the horror stories they have heard over the years about meltdowns. At Fukushima, there were three reactors whose cores have apparently melted and there is at least one used fuel pool that contains significantly damaged fuel. The reality is so different from the dire predictions that people like George Monbiot, Mark Lynas and Stewart Brand, have provided public commentary indicating that Fukushima has actually improved their view of the utility of nuclear energy.
In contrast, there is still a wide spread effort to maximize the fear, uncertainty and doubt about the long term effects of the accident. This is an area where it can get very frustrating. The legal requirement of corpus delicti (proof that a crime has taken place) before an assertion that the nuclear industry has harmed the public gets obfuscated by those who lean on the scientifically unsupportable Linear No Threshold (LNT) assumption to claim increased rates of cancer sometime in the distant future.
I have been paying attention to the financial press since before I purchased my first shares of an individual company – while I was still in college. There have been hundreds of columns and analytical reports by companies like UBS and Accenture that have tried to help investors figure out who loses and who benefits from the after effects of the destruction – by a natural disaster – of six large nuclear plants in Japan.
One of the main beneficiaries is predicted to be the global liquified natural gas (LNG) business. That hugely capital intensive enterprise had been hurting for a couple of years because global prices were below the level needed to repay the hundreds of billions of dollars spent to develop capacity in places like Qatar, Russia and off the coast of Australia. LNG prices have been under pressure since the 2008 recession reduced demand. The price weakness (good for consumers, bad for producers) increased as TEPCO gradually reduced LNG purchases by restoring some of the 2007 earthquake-affected units at Kashiwazaki-Kariwa.
The global coal export business will also benefit. Japan purchases a significant portion of its coal from Australia, but as that country diverts more coal to help supply the power deficit in Japan, other suppliers from South Africa and the US will find more opportunities and higher prices. I have already heard radio advertisements from the CEO of my local utility in Virginia warning customers to expect higher bills as the price of fuel continues to increase, partially as a result of events half way around the world.
The renewable energy business has also worked hard to portray the events at Fukushima as a reason to invest in their unreliable and expensive sources of electricity. This screen shot is not atypical of the kind of material that you can find with Google searches that link Fukushima and renewable energy.
The more I read about all of the businesses that hope to benefit from the aftermath, the more convinced I become that at least some of the hype is coming from the people who will benefit the most from a widespread overreaction that includes actions like the German shutdown of 7 operating nuclear power plants.
The leaders of companies in the LNG business – some of the richest and most media savvy companies in the world – have a fiduciary responsibility to their shareholders to maximize profit. How likely do you think it is that they will follow through on the temptation to exaggerate the need for more expensive internal reviews, more regulations, more safety features, and more caution about building new nuclear plants? How hard do you think it is for the purchasers of large blocks of advertising to influence media coverage?
There is hope. Reality is on our side. There are also value investors out there who recognize that Fukushima does not change the basic calculus of energy – we need reliable energy that is as gentle on the planetary systems that sustain us as possible. We cannot continue on the path we are on for too much longer, and there are no other options that are as safe, clean, affordable and reliable as well-managed nuclear energy systems.
Disclosure: I work for a company that is making substantial investments in increasing its nuclear energy related capabilities. I have also made significant additions to the nuclear focused portions of my personal portfolio during the past month.
Update (posted at 0519 on April 12, 2011) – A British friend who posts as @ionactive on Twitter recently expressed his rage about the choice of a photo of mangled cars to illustrate a story titled Japan Nuclear Disaster Put on Par With Chernobyl.
Japan Nuclear Disaster Put on Par With Chernobyl | Look at PIC, outrageous shite report, Radiation mangles cars ?
I sent the Keith Bradsher, one of the authors of the piece, the following note.
Keith – I know that writers do not pick the photos used to illustrate their stories, but can you ask your editors why they picked a photo of mangled cars to illustrate your article titled “Japan Nuclear Disaster Put on Par With Chernobyl”?
How did the events at Fukushima destroy automobiles? The caption is accurate, but associating the photo with the story is yellow journalism worthy of the National Enquirer, not the New York Times.
Publisher, Atomic Insights
The Economist (Apr 12th 2011) – Japan’s nuclear crisis: It’s the worst; it’s also not so bad