Courtesy of Karl Denninger, The Market Ticker
Beware the Ides of March?
Oh, probably not. The bad stuff already happened.
Let’s recap in terms of where we are.
First, the good news. The second plant, containing four reactors about a dozen or so kilometers from the one that has been the subject of all the reporting, has reached cold shutdown on all four reactors. The destroyed pump motors (from the tsunami) were replaced and the plant is stable. That part of the story, barring some sort of new issue, is over. Note that a couple of days ago this plant was on the verge of a full-scale disaster.
Reactors #1 and #3 have suffered core damage. The containment, however, is intact at both. Both buildings (outer building, intended to keep the environment out, not nuclear things in) have been damaged The reactors in both cases are shut down and the problem is residual decay heat, which has to be managed.
Reactor #2 is a more troubling situation. The core at #2 was apparently fully exposed for some period of time. When they attempted to cool it with an emergency process using seawater, they ran into serious challenges including valves that refused to respond. Unfortunately the most-serious of these challenges was a hydrogen explosion in the torus under the reactor, which serves as a place to condense steam. This blast blew a decent amount of contaminated water out of the plant and into the immediate environment, spiking radiation levels. The levels in the immediate area of #2 and #3 (where the blast occurred reached 400mSv, which is quite dangerous. That amount of radiation, in an hour’s time, can cause acute symptoms and if taken for more than a couple of hours can kill. This is a serious situation but the radiation levels are now coming down substantially, indicating that whatever did occur it did not result in a persistent external containment breach.
Reactor #4 was the subject of much hype yesterday. There was a fire coincident in its initiation with the explosion at Reactor #3. Immediately every conspiracy site on the Internet assumed that the cause was an uncontrollable and catastrophic fuel pool fire. There is no evidence consistent with this theory. Most-important is that radiation levels at that plant were measured at 100mSv, which is high but not immediately dangerous, 1/4 of the level around #2/#3, and emergency workers can tolerate an hour or so without acute effects. The evidence is strong that this was an industrial (not nuclear) fire and more-importantly there were later reports that the fire is out. Were the "worse-case" scenario occurring that fire could not be extinguished. To the point at hand, were you to simply walk within 50 ft of an exposed, unshielded used fuel rod of this sort you would almost-certainly take a lethal radiation dose.
Any claim that such an event is occurring that does not include a report that radiation levels are off the charts at that plant and well into the "immediate danger to life" zone should be taken with a huge grain of salt. In fact, I’ll go further – any such claimed report without the requisite backstop of the reported radiation level to substantiate it is almost certainly the product of someone attempting to run an "anti-nuke" hard-left disinformation line and you should immediately and permanently discard everything they say from that point onward as being intentionally dishonest. This particular failure mode is one of the "nightmare" scenarios that a handful of scare-mongers have run for more than 20 years. The potential is real but the facts are that as long as you can get water back into the pool via any means even if it boils off it’s not a disaster or even particularly troublesome. The phase change from liquid water to steam requires enormous amounts of energy and dissipating that energy is good, not bad, since that’s exactly what you want to happen. These are open pools and you can fill them with anything that provides water. No pressure is required unlike a reactor vessel where you must pump in fresh water against the pressure inside. So long as you can put in new water faster than it boils off there’s no emergency and these pools are huge – most are roughly the size of a basketball court in dimensions and 30-40′ deep, which means it takes a very long time for the water to boil off to the point that the fuel is exposed. A fire engine that can pull from any convenient source (including the sea, which happens to be right there) is sufficient to refill the water level.
The bigger issue is the containment on #2. If the explosion in the torus damaged the containment then there is a long-term containment problem. It’s not a likely cause of an emergency that is going to irradiate huge swaths of Japan, but it will make cleanup a major problem and instead of dismantling may require, in the long term, permanent encasement instead.
At this point one must assume that units 1-3 are damaged beyond repair, #4 has an unknown amount of damage due to fire, and #5 and #6 appear, at this point, to be stable.
There is a near-real-time monitoring site with a number of radiation gauges available here – when it works. It’s obviously not intended for heavy use, and of late it’s getting it and is highly unreliable. The site under question is not available but the next one south is, and it’s showing levels that are materially above background. To put this in perspective, however, that level is still about 1uSv/hr, which is 1/50th of the "full scale" value on most common geiger counters. It’s not good by any means, but it’s also not immediately threatening.
The longer-term lesson from the events at this point appear to be:
- The physical integrity of the plant was fine. They all survived levels of shaking that were dramatically beyond what was expected without any material amount of damage.
- The electrical integrity is a different matter. There’s a problem here in reliance on that source.
The obvious issue here appears to be a sufficient supply of clean fresh make-up water (without reliance on utility) and electrical power (without reliance on utility or local backup which could be damaged.) The astounding part of this is that during such a disaster you have lots of available energy in the form of steam pressure you don’t want in the plant. Why someone didn’t consider this and include an emergency steam turbine sufficient to run the high-pressure feedwater and circulation pumps to a heat exchanger that could dump the heat, completely without electrical power, is beyond me. Such a system would require nothing other than physical plant integrity to be maintained, could be designed as a purely mechanical system with no reliance on electrical power, and would have avoided all of the core damage. Sadly, such a mechanism was missing. This needs to be re-thought such that safety factors can be maintained during a full-on "station blackout" from an electrical perspective. The glib way to look at this is "Murphy is a bastard and no matter how idiot proof you make something, he comes up with a better idiot."
On the economic front the Bank of Japan did what it always does – print money. This allegedly "stabilized" the money markets. It did nothing of value for the Nikkei, which was down about 10%, and worse intraday. The risk now in terms of financial markets turns to the fact that repatriation has to take place in order to fund rebuilding. Remember that there’s a huge tsunami that wiped out big swaths of infrastructure and killed a huge number of people. If the death count isn’t well north of 10,000 (and possibly a lot higher) I’m going to be astounded. The tsunami, along with the quake, has left a lot of the nation’s infrastructure in questionable condition. Anything buried (e.g. gas lines, etc) in the affected areas has to be considered compromised until it can be inspected and verified. There is no current estimate on the total economic damage but clearly it is going to be extremely severe. In short, economically the nuclear issue is likely "small ball" yet it’s receiving nearly all the attention. This, I believe, is a serious error.
One must assume that the Japanese insurers are all insolvent. One must also assume that many global reinsurance outfits may be impacted. And since the BOJ’s first act was to print, there is the possibility of a speculative attack by outside financial interests such as hedge funds aimed at either the equity markets or the bond market in Japan.
The BOJ has no good tool set for this circumstance. Printing is an attempt to offset deflationary and contractionary impacts in a ZIRP world. The BOJ of course has maintained ZIRP in an attempt to stop deflation (without success) for more than a decade now. But these sorts of disasters tend to be seriously-destabilizing events both in the short and long term.
In the short term they’re likely to produce a serious contractionary force along with a collapse in government tax funding. The risk is that if you print into that, as the BOJ is doing, the possibility of a severe, sustained and successful speculative financial attack go up materially. This would then cross-link to the United States since Japan owns a huge passel of US Treasury bonds.
It will be quite interesting to see what comes out of Bernanke’s mouth this afternoon. The baseline expectation is no change in outlook or rates, but one cannot discount the possibility of some sort of coordinated action by both him and the BOJ. Such a desperation move is dangerous, however, as any sort of speculative attack aimed at Japan that gets coupled back into the United States, given our deficit and budget situation, could result in extremely bad effectshere.
I’m quite sure he knows this, and for that reason I expect nothing other than a sentence or two acknowledging the "new stress" in the markets and that they’re "monitoring" it.
We’ll see.
