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The economic case for nuclear power in Japan

By | December 17, 2012, 4:46 AM PST

Strait Talk. Former IEA boss Nobuo Tanaka says blockage of sea lanes like the Strait of Hormuz could have disastrous economic consequences for Japan, unless the country pursues nuclear power.

WARSAW — Japan is headed for a possible economic catastrophe if it does not pursue nuclear power.

So said Nobuo Tanaka, the former director general of the International Energy Agency (IEA), in an address to the World Nuclear Power Briefing 2012 Europe conference here last week.

Tanaka noted that geopolitical uncertainties in the Middle East could double the price of oil and natural gas.

That would have disastrous consequences for Japan, which is the world’s third largest importer of oil according to the U.S. Energy Information Administration, and which currently relies heavily on liquefied natural gas imports to help replace power capacity lost to the shutdown of 52 of the country’s 54 nuclear reactors following meltdowns at the Fukushima Daiichi plant in March, 2011.

Tanaka said that as the U.S. grows more energy independent, it will have less incentive to patrol sea lanes including the Strait of Hormuz in the Persian Gulf - through which much of Japan’s oil and a fair amount of its natural gas flow. An Israeli air strike on Iran would also adversely affect supply and prices.

“If blockage (of Hormuz) happens, the oil price will double and then the Japanese current account surplus will disappear very quickly and even go to a huge deficit,” said Tanaka, who headed the Paris-based IEA from 2007 to 2011, and who is now a global associate for energy security and sustainability with Japan’s Institute of Energy Economics.

He foresaw the country’s surplus flipping from a $108 billion surplus in 2011 to at least a $72 billion deficit, which, he said, would undermine confidence in Japanese bonds and lead to a flight of capital and manufacturing.

“So this may lead us to a significant - not energy crisis - but an economic crisis or catastrophe,” said Tanaka.”The best way to at least reduce the risk is starting nuclear reactors at this moment. But the current government is in no way promoting that.”

Tanaka’s presentation last week preceded the election to power over the weekend of Japan’s Liberal Democratic Party under the next prime minister Shinzo Abe. The LDP is expected to be more favorable to nuclear than the Democratic Party government it will replace.

The outgoing government, led by Prime Minister Yoshihiko Noda, has waffled over a commitment to phase out nuclear by 2040.

For more on Nobuo Tanaka’s presentation, see my post at the Weinberg Foundation.

Photo of Nobuo Tanaka by Mark Halper.

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Mark Halper

About Mark Halper

Mark Halper is a contributing editor for SmartPlanet.

Mark Halper

Mark Halper

Contributing Editor

Mark Halper has written for TIME, Fortune, Financial Times, the UK's Independent on Sunday, Forbes, New York Times, Wired, Variety and The Guardian. He is based in Bristol, U.K.

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Mark Halper

Mark Halper

Mark has no financial holdings in the companies he writes about. He occasionally travels at the expense of companies or their press relations agencies in order to report on a company or industry event related to it; Mark will prominently disclose this information when appropriate. This relationship will have no influence on his coverage. Companies he covers do not get to review columns in advance, or select or reject topics.

He writes for SmartPlanet and is not an employee of CBS.

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-2 Votes
+ -
Utility Gangs Rules Japan?
Living in North America, it has been an amazing "journey" since 3/11/11 following the daily developments in Japan and the slow realization, that in reality, the Japanese people have ZERO say in the running of their Country especially where Nuclear Energy is concerned because those in charge are merely figure-heads for the "Utility Gangs" that are "calling the shots" as they say in the USA!

This is not just a Japanese problem, President Obama did not even mention Nuclear Energy in his acceptance speech at the DEM convention, yet soon after, the DOD sent a group to Japan to "urge" Japanese Leaders to embrace the use of nuclear energy and gave Japan got a modern Patriot antimissile system as a Thank You gift!

"How would any Country pay for a Trillion Dollar Eco-Disaster like Fukushima if (In Japan's case, another one) one occurred in your Country?"

The answer is important because Fukushima proved to all of us, that Nature can destroy any land based nuclear reactor, any place anytime 24/7/365 for any number of "reasons" such as any one or more of these:

~ Tornado strike?
~ Earthquake?
~ Human error?
~ Tsunami?
~ Power outage?
~ Pipe break?
~ Test gone wrong?
~ Old fuel issues?
~ Terrorist attack?
~ Hurricane?
~ Plane crash?
~ Heavy rains/River floods?
~ Metal Fatigue?
~ Nuclear Ransom?
~ Solar Flair?
~ EMP?
~ Lightning?
~ Dam Failure?
~ Fire?
~ Operator suicide?
~ Jihadist?
~ CME?
~ Carrington Effect?
~ Cyber-warfare?
~ Meteror?
~ Aliens?
~ Volcano/Eruption?
~ Stuxnet ?
~ Bad Luck?
~ Murphy's Law?

... Just a few of the ways Nuclear Power Plants (NPP's) can FAIL.

Now adding "insult to injury" the burning of radioactive debris in Japan, is spreading Globally and adding to the radioactive pollution in the air we all breathe, so it is no longer "JUST" a Japanese problem!

Unless the Japanese people demand their Leaders follow Germany's example of going NN Nuclear NW, they are allowing their Leaders to put their entire Country, the Children of Japan and their Japanese Way of Life at RISK, in order generate profit for their "Utility Gangs".

As I see it, these "Utility Gangs" are waging a "Fiscal War" against the people of Japan, too many of which, are now only starting to realize they are not only under attack but they are losing the ability to live in a safe, healthy, GREEN environment.
Posted by CaptD
17th Dec
0 Votes
+ -
Dummy
ALIENS????
Posted by Rovanton
17th Dec
0 Votes
+ -
Yes, Aliens
We have that problem here in Roswell, NM
Posted by kralspaces
18th Dec
+3 Votes
+ -
incredible
So 200,000 people died in Hiroshima and Nagasaki from direct nuclear detonation and yet today millions of people live there, apparently with out ill effect. So the death of 0 people from Fukushima Daiichi is even worse than the death of 200,000, the logic is incredible.

The single biggest tragedy in energy production was in China, the Banqiao hydro dam, it killed 171,000 people. Since hydro clearly has the capacity to kill huge numbers of people, should we shut it down. Hydro is the backbone of all renewable energy. Biomass+hydro about 5 times wind+solar.

Look for "LLNL energy graph" to get a sense of US energy use.

That's about 10KW or equiv to 60 barrels of oil/yr per person.

So subtract all fossil fuels, nuclear, hydro, biomass (its polluting), and you have almost nothing left but wind, solar, geothermal, about 1.5% of our current energy use.
Posted by energy_guy
17th Dec
0 Votes
+ -
Renewables
So subtract all fossil fuels, nuclear, hydro, biomass (its polluting), and you have almost nothing left but wind, solar, geothermal, about 1.5% of our current energy use.

All it takes for wind, solar and geothermal to supply 100% of the energy needs is to build out the infrastructure. There are no technological barriers to doing that and really no financial barriers either.
Posted by riverat1
18th Dec
0 Votes
+ -
I disagree on one key point.
Currently, with the exception of hydro, the implimentation and ongoing operational costs of renewable power, specifically solar, wind and tidal, is cost prohibitive to the point where the rapid wide scale implementation needed to facilitate the rapid decommissioning of fossil fuels and nuclear power would be financially catastrophic on the average global citizen.

Take for example President Obamas proposed cap and trade plan. The basic plan was to drive up the cost of fossil fuels with taxes and feed that money into building renewable power sources. The root of the plan was taxing fossil fuels until renewable energy sources were competative with them.

The problem with the plan was the predicted price tag of $1,200 per year, per person in the US to pay for the higher fuels cost. Or $4,800 per year for the average family of 4. $1,200 was the CBOs low estimate.

Based on some of the Congressional plans put before it the CBO found costs to be as high as $1,700 per person, per year.

The hit was to be spread across the household budget with higher costs predicted for all major expenses. Heating, cooling, electricity, food, and gasoline to get to work were taking the largest hits, With a trickle down impact on the costs of almost everything else in their lives.

As usual the Republicans were blamed for the bill not passing, but the reality is the cost of the plan was so toxic that the President could not even muster enough support for it among the controlling majorities of Democrats in the House or the Senate. The annual cost would have devastated low and middle income households and the democrats knew it.

I have said it before and I will continue to say. I support a shift to cleaner power sources based on the very real health issues clear power will address. The need for clearer air and water are indisputable.

But using global warming as a rally cry is missing the bigger picture. The runaway use of dirty coal power in 'developing' nations allowed by international climate change aggreements will kill us all with toxic air and water long before the seas rise to any degree with rising global temperatures.

Clean renewable power can only happen when it will not financially destroy the average citizen. Clean power must be cheap power if it is to save the world and better the overall standard of living for mankind.

Unless you are in the minority mindset that as a species, humans should discard all technology and become a largely immobile, non polluting, self sustaining agrarian society.

Then the poverty driven goals of todays renewable energy policies will work well for you as people starve and populations shrink.
Posted by Hates Idiots
Updated - 24th Dec
0 Votes
+ -
Got it Backwards
What's astonishing about the Japan situation is how MUCH "voice" the people had over whether the nuclear plants operate. Who would have ever thought that a nation would respond to a problem at one plant by shutting down all the rest of their (undamaged) plants, and not letting them restart (for a long time, or possibly forever)? Can't think of any other example in any other industry (e.g., US or Russia shutting down all nuclear plants after TMI or Chernobyl, shutting down the entire world's oil tanker fleet (permanenetly) after Exxon Valdez, or shutting down all US (or world) offshore oil drilling after the Gulf spill, shutting down all air travel after a major crash, or shutting down all toxic chemical operations, in India or the world over, after Bhopal).

Part of what allowed this rather unique reaction is that in Japan, plants have to get the permission of local political officials to restart, even after something as mundane as a routine maintenence outage. After Fukushima, these politicians, fearing anti-nuclear sentiment from voters, refused that permission. In other words, "the people" have an unprecedentedly LARGE voice, and degree of control over such industrial operations and energy policies, in Japan.

This is a situation that is largely unthinkable in almost all other advanced coutries, which are governed by the rule of law, as opposed to the whims of the "mob". In most countries, industries don't have to worry about being suddenly closed down someday if the public gets up on the wrong side of the bed and suddenly decides that they don't like them. At a minimum there is a large amount of due process, if not compensation. Countries where huge industrial/corporate assets can be seized at any moment, by the govt. or by public whim are are generally shunned as awful places to do business, and their populations suffer (economically) accordingly. They're generally referred to as "banana republics".
Posted by JimHopf
17th Dec
0 Votes
+ -
chicken little
I see chicken little is alive and well. Or perhaps CaptD is the little boy still crying wolf.
Posted by ruellej@...
17th Dec
0 Votes
+ -
Nuclear Power
IF it was my decision, the only way I would consider it is if it was a CANDA reactor burning Thorium or yellow cake (natural, unenriched uranium). Plus as a CANDA reactor it can take all of those fuel rods sitting in those ponds and burn off all the light water reactors "spent" rods. Its a very versatile safe reactor compared to the light water "melt down" reactors. They just don't have the marketing arm GE does...the Chinese are already using CANDA reactors to burn Thorium and are quite happy with them.
Posted by halfafrog
17th Dec
0 Votes
+ -
Really?
You would only "consider" nuclear if it were a thorium-fueled CANDU (it's not CANDA)?

That, despite the fact that the world is still mostly powered by fossil fuels, which are several orders of magnitude worse than light water reactors in terms of public health and environmental impact? Light water "meltdown" reactors have only had a single meltdown, and significant release of pollution, over their entire 40+ year history; an event whose total impact on public health is less than the DAILY impact from worldwide fossil fuel use.

BTW, the meltdown risk of CANDU reactors is no lower than that of LWRs. The use of unenriched uranium also has nothing to do with meltdown risk.
Posted by JimHopf
17th Dec
-1 Votes
+ -
Do the Japanese love Nukes?
Or is it the money that overwhelms the industry and the regulators - sounds like US.
Posted by affordablecomputerguy@...
17th Dec
+3 Votes
+ -
education
I think the LDP will have to do some hard explaining to the population, just as the French did decades ago. No oil, no gas, no coal, no choice. It seems clear to me that when you understand how much energy we use, it becomes blindingly obvious but most greens and antinukes are oblivious and in complete denial of energy consumption.

Well for Japan, every citizen uses about 5.381KWt (wikipedia) continuous about the same as the UK or EU personal avg or same as 30 barrels of oil/yr each. Even before Fukushima, it was still mostly from fossil fuel, not turning those nuclear plants back on means Japan imports considerably more oil and NG. The friction with China doesn't help, ironically over possible fossil fuels near an Island no where near the Japan mainland but quite close to Taiwan.

This would be an ideal time to start a LFTR program in Japan and develop inherently safe nuclear designs.
Posted by energy_guy
Updated - 17th Dec
0 Votes
+ -
nuclear a common denominator for china and japan?
After all, it seems that while China has been positive to nuclear energy all the time Japan will recover from its Fukushima catastrophe with more nuclear energy as well. It looks as we have no opportunity at all to learn from the hints that nature gives us as its hits back.

Not very happy to say this. Not a very smart planet, indeed.

best

Ismo
Posted by ikantola
17th Dec
+2 Votes
+ -
Smart Planet, Actually
Given that nuclear's public health risks and environmental impacts are far smaller than those of fossil fuels (universal scientific consensus on that), the fact that Japan has not completely lost its mind, and will probably restart most of the reactors, is very good news for "the planet". Japan's current actions of spending huge amounts of money to replace nuclear with (far more damaging) fossil-fueled generation borders on being an environmental crime.
Posted by JimHopf
17th Dec
0 Votes
+ -
Fukushima and the other Ticking Nuclear Time Bomb!
Fukushima fuel pool #4 is the top short-term threat to humanity and a little recognized major National Security issue for the USA. Japans Defense Science and Technology Institute recently stated: The recent Magnitude 7.3 earthquake is especially alarming. An earthquake with a magnitude of eight or over could soon strike the country. The Japanese Earthquake Agency has confirmed a Magnitude 8 Aftershock Alert.

The building housing reactor 4 was severely damaged by an explosion caused by the meltdowns, sparking concern the remaining structure could collapse in another big quake. The fuel rods, exposed to the air, might then burn and release massive amounts of radiation into the atmosphere.

A massive release of radioactivity from Fukushima fuel pools remains a time bomb: No matter where we are on this planet, our lives are still threatened every day by a Unit 4 fuel pool left hanging 100 feet in the air. At any moment, an earthquake we all know is coming could send that pool crashing to the ground. Harvey Wasserman

An M8 aftershock, based on historical Japanese major quake data, has an 80% weight of occurring today, with that weighting reaching 100% by September 2016.

Chris Canine, Chemist and Radiation Safety Instructor and former Fukushima Daiichi Worker: I believe the country (Japan) will be evacuated if No. 4 fuel pool collapses Should be hundreds or thousands of people working furiously every day.

With one more (major) earthquake
Posted by Mark Goldes
17th Dec
+1 Vote
+ -
nonsense
Could you just stick to promoting your idiotic ideas on magnet motors instead of promoting this nuclear holocaust nonsense about which you know nothing.

I did a bit of research on this meme, seems you get your nonsense from Robert Alverez a supposed expert on nuclear waste. Lets uncover his true history, he dropped out of a music major, hung out with anti nuke activists, somehow wormed his way into the DOE, got busted for growing commercial amounts of pot. Now he makes stuff up about which he knows nothing, presenting himself as an expert from his ips site. Its rather incredible that know nothings can get to do so much damage.

search for "fukushima doomsday robert alvarez Japan probe"
Posted by energy_guy
17th Dec
0 Votes
+ -
With a grain of salt.
The Japanese are already sitting on a lot a radiation so a little bit more of it won't do that much damage to their health and whatever levels they have today will stay there for another million years, so, "it's that all there is my friend? then let's keep dancing..."
Posted by David Traversa
20th Dec
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