Lessons from the Fukushima Disaster

By Marin Katusa, Chief Energy Investment Strategist

December saw several new reports about the earthquake- and tsunami-induced Fukushima Daiichi nuclear disaster, so we thought it might be useful to assess what these new reports add to our understanding of the tragedy. And a tragedy it was: Lives were lost in the hydrogen-gas explosions that blew three of the reactors buildings to pieces; 160,000 people are still evacuated from the surrounding region; and the nuclear power industry took a well-deserved beating as each explosion and radiation reading reignited the public's fears of uranium, radiation, and nuclear energy in general. Those fears bled 30% from the price of uranium and prompted several countries to abandon nuclear power. It seemed as though the budding renaissance of nuclear power had failed.

Now, almost ten months later, we know that the nuclear power industry remains alive and well (please see our mid-December Dispatch about the

Hatamura's panel also hammered TEPCO and the government for failing to keep the public properly informed. "Information on urgent matters was delayed, press releases were withheld, and explanations were kept ambiguous."

The 506-page report includes many more details, but what is most pertinent is the conclusion. Hatamura's team argues that the Fukushima disaster shows the need for "a paradigm shift in the basic principles of disaster prevention" at nuclear power plants. "It's inexcusable that a nuclear accident couldn't be managed because a major event such as the tsunami exceeded expectations."

And with that they hit the nail on the head. The Fukushima disaster does not mean that the world should turn away from nuclear power. Instead, government regulators around the world need to learn from what happened at Fukushima and strengthen their safety guidelines, because it was a preventable event.

Just because it is in a scientific journal doesn't make it true

Here's a catchy way to start a press release:

An estimated 14,000 excess deaths in the United States are linked to radioactive fallout from the disaster at the Fukushima nuclear reactors in Japan, according to a major new article in the December 2011 edition of the International Journal of Health Services.

The release goes on to describe how this peer-reviewed study shows that a "plume of toxic fallout arrived over American shores" just six days after the tsunami, causing as many as 18,000 deaths.

Catchy, perhaps, but totally bogus. Within 24 hours >Scientific American poked so many holes in the 'study' it could have been a sieve. Basically, the study's authors started with an attention-grabbing conclusion - that babies are dying because of Fukushima radiation - and worked backward from that, torturing the data to fit their claims. Among the litany of errors were two key faults:

• Since the entire argument is premised on the arrival of a toxic plume of Fukushima fallout six days after the earthquake, one would expect evidence of radiation. Alas, there is none. In fact, the Environmental Protection Agency (EPA) found radioactivity in very few samples in the weeks and months following the disaster. To sidestep this problem, the authors say that "clearly the 2011 EPA reports cannot be used with confidence" - in other words, the authors are saying that the radioactivity is there, just the authorities didn't find it, and we too can't provide any evidence of it.
• The authors' method of calculating the number of deaths supposedly attributable to Fukushima is an incredible example of terrible use of statistics - unjustified extrapolations leading to correlations that are immediately assumed to be causations. Not surprisingly, the authors (who are antinuclear activists not affiliated with any research institution) conclude from this game of juggl e the numbers that the plume arrived on US shores, instantly spread across the entire country, and started killing people immediately.

No journal should have ever published the study. Without a doubt, radiation from Fukushima is dangerous - the 160,000 people still unable to return to their homes can attest to that. There may well be some negative health effects in North America. But this 'study' provides zero evidence and serves only to add misinformation to a very important debate.

[What's not open to debate is that, sooner or later, energy prices are destined to increase dramatically. That is creating a target="_blank">Imperial Says Kearl Project Costs Rise above C$28 Billion (Reuters)

This article is about Imperial Oil's decision to go ahead with a C$8.9-billion expansion of its Kearl oil sands project despite costs climbing by almost a quarter; more generally it is an article about how companies are pouring money into the Canadian oil sands. The oil sands are the third-largest crude oil storehouse in the world behind Saudi Arabia and Venezuela, but they are the largest reserve open to private investment - and companies just keep on investing. Imperial Oil, which is majority-owned by Exxon Mobil, gave the green light to the second Kearl expansion even though the first C$10.9-billion expansion will not begin operating until late in 2012 and despite the cost of producing from the Kearl reserve having climbed to C$6.20 per barrel of reserve from C$5 per barrel. Similarly ambitious plans from other oil sands operators are raising fears the projects will again begin to compete for scarce skilled labor and materials, sparking another round of inflation like the one that took place prior to the recession and routinely caused project costs to double.

target="_blank">Sanctions Imposed on Iran (Reuters)

On December 31st President Obama signed into law new sanctions against financial institutions dealing with Iran's central bank. Since Iran operates its oil export business through its central bank, the law gives the United States the ability to significantly hamper Tehran's ability to sell oil on international markets. The bill gives the White House discretion to issue waivers and includes a two-to-six-month warning period; and US officials say Obama will discuss with international partners how to impose the measures without causing major oil market disruptions. Nevertheless, it is a major move and one that Iran - which has been carrying out naval exercises in the Gulf of Aden to practice its ability to blockade the Strait of Hormuz - will not like. There are now sanctions against Iran from several countries as well as from the United Nations, and this Reuters article lays them out nicely.