Nuclear Meltdown

The earthquake and tsunami that struck Japan on Friday is a disaster from which Japan may need years to recover.  It is a disaster, however, from which the Japanese and by extension world nuclear industry may never fully recover.  The meltdowns at up to six reactors that the Japanese are now struggling to contain are of a scale that easily rivals that of the last two major disasters, Three Mile Island and Chernobyl.  What is different is that the Japanese meltdowns are occurring a quarter century after Chernyobyl in a country, unlike the former Soviet Union that has substantial transparency.

A generation after the last two disasters, there is an expectation that nuclear facilities are far safer.  And while the Chernobyl disaster was detected by radiation levels observed in Sweden before the Russians acknowledged there was a problem, the entire world is now glued on efforts to halt the Japanese meltdowns.  Years after Chernobyl the health impact is still shrouded in uncertainty.  The union of workers who cleaned up at Chernoybl estimates that 10% of its members or 60,000 people died in the cleanup alone--not counting the long term helath effects of the radiation cloud that spread across Europe.  We will probably never know the true impact of Chernyobyl.  In contrast, what happens in Japan over the next few days, months and years, will be highly visible to the entire world and that cannot be positive for the nuclear industry.

The challenge of nuclear energy is akin to the Black Swan problem identifed by Nicholas Taleb in his book of the same name.  Nuclear accidents are unlikely.  But when they occur, they can be catastrophic.  In a world of quarterly returns and every day crises, few people have time to worry about the equivalent of 25 or 50 year floods.  When they occur, however, society reacts.  In the United States, Three Mile Island effectively imposed a moratorium on nuclear power that remains largely in effect today.  It is hard to believe that something similar will not occur in Japan. And, indeed, notwithstanding positive comments by Sunday TV shows this morning about not rushing to judgment on nuclear power here in the US, it is certain that countries everywhere will carefully scrutinize any nuclear power projects going forward.

While the world's attitude toward nuclear will not be the same after Fukushima, it is equally unlikely that the world will quickly disband its nuclear power capacity.  The reason is that despite the immense cost of nuclear energy and requirement for state support--especially in light of the Fushimaya disaster, it is unlikely the private market will ever fund a nuclear reactor without government loan guarantees and assumption of liability in the future--there are no quick alternatives.  Indeed, energy--not only electricity generation--but also oil continues to be a strategic business wrapped in national security.  It is no accident that the first energy ministerial did not occur until this year (at the behest of the Energy Secretary Chu), so deeply is energy caught up in state security--and as we see in Japan, state civil preparedness. 

However, the longer term interest of the United States and, indeed, all other countries, is to remove energy from the calculus of government strategy.  The way to do that is by making it abundant, harmless and cheap. Former CIA director Jim Woolsey likes to use the example of a commodity that was once more strategic than petroleum--salt.

In the 19th Century prior to the invention of refrigeration and the advent of automobiles running on gas, salt was a key strategic commodity.  So highly prized was this compound used to preserve food, that nations fought wars over it and its supply was a matter of national importance.  However with the invention of affordable refrigeration in everyone's home, salt ceased to be a strategic commodity.  The once precious crystals are now available for free in shakers in every restuarant.  Meanwhile, virtually everyone has a way to preserve their food at home--in the form of a refrigerator.

Can we do the same with energy?  Distributed generation of electricity--of the scale that Germany has achieved with its feed in tarriff, combined with a way to store it--has the promise to wean us off centralized generation of power and the risks associated with the nculear variety.  If transportation moves toward electric sources, it has the potential to wean us off oil as well. 

It will not happen overnight.  But the disaster in Fukushimaya should remind us of the complexity not only of nuclear energy but of huge, centralized generation, cause us to question huge government subsidies of this form of power subject to catastrophic interruption--not to mention health impacts and encourage us to step up efforts to develop, a distributed, democratic, resilient, system of energy provision that makes power cheap, abundant and safe.