Abe's Debt Bomb

Happy New Year. Out with the old, in with the new, or year going, year coming, as they say in Japan. This week: Prime Minister Abe prepares to detonate the debt bomb, spurious data on Japan’s “surging” fossil fuel use, and contemplating nuclear war without nuclear weapons.

The Fukushima Daiichi NPP catastrophe would pose enormous challenges to any country, even to one with the best material circumstances to respond to it. To understand why Japan is so dismally unable to decommission the site and give a better life to its victims, one has to take account of dire lack of human and financial resources that Japan has even for its normal functioning, let alone for recovery from a massive natural disaster and what may be the largest industrial accident in history.
The problem is that few people in Japan, from its leaders to its kindergarten students, are even aware of how bad things are. For the last twenty years, Japan has been living by borrowing the savings accumulated by the post-war generation that rebuilt the country. Since this borrowed money has allowed the nation to maintain a comfortable standard of living, few are aware of just how bad things are going to get. Pretty soon, the cheap supply of money will be gone.
One person with the professional credentials to alert the world to this coming crisis is J. Kyle Bass, founder of Hayman Capital in Houston, Texas. He is famous for having foreseen the subprime crisis and for having protected his clients from it. Since then he has been warning of the dangers of sovereign debt.
In a video of his keynote address at the AmeriCatalyst conference on October 1, 2012, Kyle Bass had much to say about the frightening day of reckoning that is in Japan’s near future. Notes on the parts of his keynote address pertaining to Japan are below:

1.           The quantitative analysis of the global debt crisis is already done. It is now only a matter of when and how the consequences will be realized.
2.           In the past ten years, total global credit market debt (sovereign obligations, corporate and household debt…,) has gone from $80 trillion to $200 trillion – this is 11% compound annual growth rate. This rate is way ahead of global population growth (1.2%) and GDP growth (3.8%).
3.           We know from history how this ends. This ends with war, which is economic entropy played to its logical conclusion.
4.           Global debt is 340% of global GDP.
5.           Post WWII, 48% of countries decided to restructure their debt.
6.           We have already seen social unrest over food and entitlements. What we have seen in Greece, for example, is not just a little social unrest.
7.           We all react to pessimistic forecasts with the optimism bias. We admit bad things will happen, but we think they will happen elsewhere to other people.
8.           Another sign that history is repeating itself in is in the recent expression of nationalism between China and Japan over the Senkakus, islands which, despite what you have heard, have no resources worth fighting for.
9.           Many people fail to see looming crises because they believe axiomatic truths (truths deemed to be true only because everyone repeats them) such as “real estate always goes up.” An axiomatic truth about Japan is that its debt doesn’t matter because “Japan is self-funding” – that it doesn’t borrow money outside Japan, so things will be alright. This is simply not true.
10.        We are slow to see crises coming because doomsday beliefs don’t help us, so we don’t want to believe them even though they may be accurate.
11.        The end won’t be announced. The people managing the crisis and making decisions in back rooms believe, “When it becomes serious you have to lie.” Their job is to promote confidence. [This is strikingly similar to what happens in a nuclear emergency. Preventing panic is believed to be a justifiable sin.]
12.        Japan has a debt to GDP ratio of 211%. This is far higher than some other developed nations that are considered to have serious problems with a ratio of around 100%.
13.        There is 1 x 10E+15 yen of debt in Japan [that’s a 1 followed by 15 zeros, or one thousand trillion. Or it’s 1.17 x 10E+13 US dollars at 85 yen/dollar, which is $11.7 trillion. US debt: $16 trillion, with a GDP and population both about 2.5 times those of Japan]. Japan's debt can never be repaid.
14.        There will be a bond crisis in Japan in the next 2 to 3 years.
15.        Japan now spends 10.5 trillion yen/year on interest, while it brings in only 42 trillion yen in revenue.
16.        If interest rates go from where they are now (less than 1% and very close to zero) to 2% or higher, Japan will be in default. Every yen of revenue will have to go to interest payments. This is very simple math that many smart people refuse to acknowledge.
17.        A trade surplus turns into corporate profits and wages which become savings that can be used to fund government bonds.
18.        Self-funding of deficit spending is possible only if the trade surplus is large enough. Japan is now showing trade deficits, but even a surplus can be insufficient if it is not big enough to fix the problem. The only choice is to print more money or be a capital importer. Both of these alternatives lead to higher interest rates on the national debt.
19.        Competition for foreign investment will be severe when Japan has to borrow internationally. Who will buy Japanese bonds at 0.5% if they can get higher returns by buying the bonds of other countries? In the past, investors settled for the low returns on Japanese bonds because of the strength of the yen and the economic stability of the country. These strengths will not exist in the future.
20.        The homeostasis of the past 20 years cannot continue. Japan is at the end of its rope.
22.        Similar problems exist elsewhere. The Asian trade surplus is at its lowest in recent history. The world is about to enter an era of sovereign restructurings.

Just before the recent Japanese election, Kyle Bass added to his October speech by writing on his blog about the ill-advised economic policy that the new prime minister, Shinzo Abe, wishes to follow: 

“Japan is already running a minus $100 billion trade balance…, and the country's GDP has been hit by Chinese boycott stemming from the Diaoyu/Senkuku islands dispute… We think Abe is a shoo-in. And he said he's going to do everything possible to get to 3 percent inflation. He doesn't even know what he wishes for because if he gets there, he detonates his debt bomb.
  When there's a press release put on the BOJ's website from the MOF, the BOJ and the government — that's analogous to Bernanke, Geithner and Hillary Clinton issuing a joint press release saying 'we're going to end deflation'. This is how it begins to happen. Their backs are against the wall. They have a full crisis. They absolutely have to change the manner in which they deal with their currency.”

Interestingly, for the past two weeks the Japanese media have been awash in the new axiomatic truth that because TEPCO stocks, and the stock market in general, responded favorably to Abe’s inflationary plans, this must mean that economic recovery is at hand. I heard this view repeated several times by people around me, even by my students who are, at all other times, blissfully ignorant of current events.

Spurious claims about fossil fuel imports

Kyle Bass’ analysis should be taken seriously, but the discussion needs to expand to the broader issues of environmental preservation and avoidance of conflict and social upheaval. Obviously, the implications are enormous. If every yen of government revenue has to go to service debt, that means there will be no money for education, health care, pensions, defense, and none for cleaning up the legacy of Japan’s fifty-year experiment with nuclear power. The debt bomb leaves nothing for decommissioning the wreckage of Fukushima Daiichi, nothing for decommissioning aging reactors, nothing for a final storage solution for the nuclear waste now in temporary storage. And definitely nothing for the 160,000 nuclear evacuees.
Furthermore, the fiscal crisis tempts policy makers to see further use of nuclear power plants as the solution to the trade deficit.  Nuclear fuel is indeed extremely cheap compared with the cost of importing fossil fuels. There are the future costs of decommissioning and spent fuel storage, but no one is going to worry about those in a crisis. As usual, push that one off onto future generations. The other large cost is construction of the plants, but that has already been done. In fact, all the money sunk into the nuclear industry could be considered as regrettable addition to the national debt, a lost opportunity to invest in renewables and energy efficiency. Even if everyone could agree that it was a horrible error to go down the nuclear road, the logic dictates that they might as well use the facilities that have been built.  On the other hand, it might be wiser to see the Fukushima catastrophe as a final warning about operating nuclear plants in a land riddled with seismic fault lines. The Japanese government risks destroying the whole country with another nuclear accident, but with their backs up against the wall, this is the sort of desperate kamikaze behavior politicians now favor.
In addition to the Fukushima catastrophe, the nuclear industry wasted trillions of yen in national treasure before 2011. One of the largest nuclear plants in the world, TEPCO’s Kashiwazaki, has been offline since the 2007 Niigata earthquake because of newly discovered fault lines that weren’t supposed to be there. Fault lines keep appearing under other existing reactors. The reprocessing facility in Rokkasho and the fast breeder Monju reactor have wasted trillions of yen also, without having ever produced any of their promised benefits.
It is a dangerous illusion to be tempted to go back to nuclear as a fix for the fiscal deficit. It is folly to carry on with a dangerous technology that has devoured, and will continue to devour, so much of the nation’s wealth.
Nonetheless, there is an emerging axiomatic truth that Japan needs to reduce fossil fuel imports in order to mitigate economic decline. It has been repeated often in the domestic and international media throughout 2012, but the numbers don’t seem to back up the claim.
OECD data reports that its member countries use the majority of fossil fuels for transport, heating and industrial applications, and non-energy uses such as plastics. I couldn’t find any data on Japan itself, but it is not likely to be much different from the average of OECD countries (which Japan belongs to). Before 2011, about 20-30% of Japan’s electricity was produced by nuclear energy, and after the shutdown of nuclear plants this had to be covered by increased use of fossil fuels. But electricity is not the biggest part of energy consumption. The International Energy Association reports, for example, “In 2009, heat represented 47% of final energy consumption [worldwide], compared with 17% for electricity, 27% transport; and 9% for non-energy use.”
Much of the reporting on the energy crunch caused by the loss of nuclear has framed it as a sudden 40% (or larger, the figures vary widly) increase in fossil fuel imports, but the increase of course has to be much smaller when it is seen as an addition to fossil fuel imports for all purposes, not only for electricity generation.
Japan gets all its fossil fuels through imports, and according to the World Bank, for the last decade in Japan, energy derived from fossil fuel accounted for about 81% of all energy produced. The rest came from hydro, nuclear and renewables. If this is the case, how could the loss of nuclear power cause such a crippling disaster for the balance of trade? At most, the increase in fuel imports would have been 10-15% if we imagine adding to the 81% figure above (assuming renewables and hydro would account for the remainder). If it had really been such a crisis, there would have been a conservation program aimed at reducing the biggest factor in fuel imports - consumption of fossil fuels for transportation and heating. There would have been fuel rationing in a real emergency. Instead, all the talk was of the need to conserve only electricity, and even that attempt wasn’t as severe as it could have been. The cigarette vending machines stayed on, and people were told to keep shopping to support the economy.
The Federation of Electric Utilities of Japan provided this data about the spike in fuel imports, comparing January 2011 and January 2012:

Mark Caine, a research officer at Research Officer at the London School of Economics, used the above table to write an obfuscating report about Japan’s energy crunch. It is typical of how the power companies and the media confused the public about how Japan consumes fossil fuels:

“The Federation of Electric Power Companies, an industry group representing Japan's largest electric utilities, has just released new data on Japanese fossil fuel imports for January 2012. The data reveal that last month, despite an overall drop in economy-wide energy use, Japan imported and consumed far larger quantities of fossil fuels than it did in January 2011 [italics added], before its earthquake, tsunami, and nuclear disaster upended its economy and energy system.”

He states, “Japan imported and consumed far larger quantities…,” but what is obscured here quite deliberately is the fact that this data refers not to fuel imports by Japan as a whole but to fuel imports by Japan’s electric utilities. Their purchases increased, but purchases for transportation and other uses did not. Later in the report he writes, “To meet surging demand for these fossil fuels, Japanese utilities increased imports of fuel oil by 165%, crude oil by 174%, LNG by 39%, and coal by 12%. It appears that much of this fuel was used for thermal power generation.” If not for thermal power generation, what might have these electric power companies used the fuel for? In any case, even if this sentence now uses the factually correct grammatical subject “Japanese utilities,” the numbers still seem suspicious. If nuclear used to account for 30% of electricity generation, how could its loss cause these increases of fossil fuel imports of over 150%? The government’s own charts show fossil fuel generated electricity going from about 60% to 80%, only a 33% increase (Japan Agency for Natural Resources and Energy. 2012 White Paper on Energy, p. 132). The public is clearly being deceived.
The hand-wringing over fossil fuel imports appears to be a well-crafted public relations trope that has succeeded in winning back some public sympathy for the restart of nuclear plants. However, the fact that Kyle Bass didn’t mention the energy crunch at all lends support to my theory that it is a cynical distraction. People who have been paying attention to Japan for a long time know that its severe demographic, economic and fiscal problems had started long before March 2011. For that matter, the nuclear industry had been bruised and battered for a long time as well. The one good thing about Fukushima Daiichi is that it woke people up to the overlooked hazards of other plants: Kashiwazaki, Shika, Hamaoka, Tsuruga, Mihama, Higashidori, Rokkasho, Monju – so many with newly discovered problems that even if the new Nuclear Regulatory Authority decides that some plants are safe to restart, the future costs of decommissioning all the unsafe ones will be staggering expenses lasting for decades.

Nuclear War without Nuclear Weapons

As if this sobering fact were not enough, I have to conclude with Kyle Bass’ rhetorical question (at 5:00 in the video referenced above): “You know how this ends, right?... This ends through war… it’s economic entropy played to its logical conclusion.”  A war among developed countries - for example, the U.S., Japan and China fighting over control of the South China Sea – is almost impossible to imagine. It would be like no war the world has ever known.
All wars since WWII have involved conflict between or within developing nations (which were often proxy wars between superpowers) or between superpowers and developing nations. One type of conflict that hasn’t happened in seventy years is direct conflict among superpowers and developed nations. When London, Tokyo and Dresden were being bombarded during WWII, there were no nuclear power plants. If there had been, Japan and Europe would have been rendered uninhabitable. We know what happened when Chernobyl exploded, and that it could have been more devastating if a second explosion had not been averted. The frightening question to contemplate concerns what would happen today if a similar conflict erupted between China and Japan, or any other pair or alliance of countries with nuclear power plants.
A modern war would proceed much like the 1990-91 Gulf War on Iraq. Before troops marched in, attackers would aim to soften up the enemy, to destroy infrastructure and the ability of the enemy to wage war. Electricity supplies would be knocked out, so nuclear power plants would be forced to rely on backup power, but it would be unlikely that they could keep it going long enough. Supplies of emergency diesel fuel would be unreliable, and the main grid might not be repairable while the country was under attack. If things got really ugly, there could be deliberate or accidental bombing of nuclear power plants or spent fuel storage sites. Some facilities are supposedly built to withstand air plane crashes, but consider the vulnerability of spent fuel storage, especially the ruins of Fukushima’ spent fuel pools.
The existence of four hundred nuclear plants around the world might be a deterrence in the same way that nuclear arsenals are. If hostile nations rationally assess the risks, they will be deterred from escalating tensions with any nation that has a civilian nuclear capacity, let alone one with nuclear weapons. During WWII, American forces began planning for the occupation of Japan while they were still bombing it, which is the reason they spared the Imperial Palace and a few other locations. In the same way, aggressors might refrain from creating a nuclear wasteland in a country they might want to exploit or occupy at some future date. Or they might refrain from creating a nuclear catastrophe that would impact wide regions beyond the countries involved in the conflict. On the bright side, another kind of deterrence lies in the fact that so many developed countries have little for aggressors to covet. It is doubtful that anyone would want to occupy and govern a country that has the nuclear fallout and wreckage of Fukushima Daiichi to clean up – a job that is to be done by a population that now needs more adult diapers than baby diapers. The recently elected Japanese hawks talk so much about the need for better defense, but they fail to see that this goal may have already been achieved. If you want to be safe from attack, wear an old coat and drive an aging, rusted car.

Further reading:

Martin Walker. "Japan's Looming Crisis." UPI.com. November 19, 2012.

Khosrow B. Semnani, Gary M. Sandquist. "The Next Chernobyl?" The New York Times. January 2, 2013.
A contrary view: 
Joe Weisenthal. "Kyle Bass's Most Famous Trade Is A Disaster, And It Is Never Going To Work Out." Business Insider. May 20, 2012.


The Reset Button

I’m taking a break from the typical doom-and-gloom story and trying to go with something more uplifting for this Christmas Day of 2012. Actually, it was just hard to think dark thoughts while I was enjoying a Mont Blanc aux marrons Christmas cake with my family on Christmas Eve, and it was hard to forget the story of the man who made it.
Naritoshi Satou was a fifth generation baker and owner of a patisserie in Ishinomaki, Miyagi prefecture. This town is famous now as one of the places hit hardest by the tsunami of 2011. He and his wife and four children survived by running to higher ground, but their bakery and their home were completely destroyed. They evacuated and stayed with relatives in Chiba prefecture, then quickly got to work rebuilding their lives in a new place. Four months after the earthquake-tsunami-meltdown disaster, their new patisserie in Narita, Chez Nari, opened its doors.
NHK News heard about them and did a report on their shop in the early summer of 2011. You can watch it here. Even if you don’t understand Japanese, it’s easy get the meaning from the images and fill in the blanks on their recovery story.
Chez Nari, Kozunomori 2-15-13, Narita-shi, Chiba-ken, Japan 286-0048
There are probably people back in Ishinomaki who think he abandoned the community that is trying to rebuild the town, but I suspect most people don’t resent him for the personal choice he made. Others might say there was a slightly insensitive twisting of the knife in the way NHK used one family’s story to fill the need for a feel-good story about the disaster. After all, not everyone had the social and financial capital to get out and start over somewhere else, and the promotion of stories like this carry an implication that victims don’t need government support or a systematic solution to their problems. The message could be taken as an admonition to just bootstrap, expect nothing and get on with your life.
These reservations aside, there is clearly something inspirational and instructive in Mr. Nari’s reaction to his situation. He quickly overcame the emotions and excessive sentimentality that can cloud the decisions of people faced with catastrophic changes in their circumstances. Even though he had roots in the community and in the family business going back 120 years, he realized quickly that the life he had known until then was definitively over. Rebuilding would be slow and uncertain, lasting through the formative years of all his children. Compensation from government and insurance companies would be an insulting pittance. In hindsight, it was an insane risk to live so close to the sea, and rebuilding in the same area would be even crazier. He chose not to spend his time in a temporary housing facility, ruminating over the past while waiting years for rebuilding plans to ferment within the layers of local, prefectural and national bureaucracies. Perhaps the best way to help the locals was to show them an example of someone making it in a new place.
Mr. Nari’s story is instructive on a deeper level as well. It’s not only about starting over in a new place with new people. It’s about doing what once seemed impossible, leaving behind ways of living and thinking that once seemed indispensable. It should be obvious that there is a larger lesson here about the fear we have of leaving behind our familiar ways of producing energy and solving the global financial crisis.
Best wishes and thanks to everyone who has read this blog since the summer of 2011. It has had 14,000 page views from countries on every continent. This is a small fraction of what a Justin Bieber video gets in an hour, but a thousand times more than the readership of my last research paper for an obscure academic journal. Comments pro or con are always welcome.  


The Air Conditioned Nightmare II

A few months ago, I wrote about Henry Miller’s travelogue The Air Conditioned Nightmare (written 1939-42, published 1945), and noted how striking it was that he had a prophetic sense of the ominous changes about to happen to the world. It was not just a matter of him being aware, like everyone at the time, that the world was hurtling toward a massive war for the second time in twenty-five years. He had been living in France during the years of the Great Depression, and when he returned to America and traveled across it by automobile, he actually didn’t pay much attention to the material poverty. Instead, he saw new machines and material comforts everywhere. Alongside the desperate joblessness he also saw people mad to acquire cars just so that they could commute to work and sit in air-conditioned offices all day. He was most aghast at the spiritual change in people:

"A great change had come over America, no doubt about that. There were greater ones coming, I felt certain. We were only witnessing the prelude to something unimaginable. Everything was cock-eyed, and getting more and more so. Maybe we would end up on all fours, gibbering like baboons. Something disastrous was in store - everybody felt it. Yes, America had changed. The lack of resilience, the feeling of hopelessness, the resignation, the skepticism, the defeatism - I could scarcely believe my ears at first. And over it all that same veneer of fatuous optimism - only now decidedly cracked." (p.13)

Henry Miller couldn’t have known about the top-secret Manhattan Project underway at the time, but he must have been aware of headlines of the early 40's reporting on the splitting of the uranium atom. These headlines appeared in The New York Times before the Manhattan Project got underway:

·   Vast Energy Freed by Uranium Atom; Split, It Produces 2 'Cannonballs,' Each of 100,000,000 Electron Volts Hailed as Epoch Making, New Process, Announced at Columbia, Uses Only 1-30 Volt to Liberate Big Force. Jan. 31, 1939.
·   The Week in Science; When Uranium Splits Doubtful Source of Power Cancer and X-Rays Neutron Possibilities News Notes. March 5, 1939.
·   Vision Earth Rocked by Isotope Blast; Scientists Say Bit of Uranium Could Wreck New York. April 30, 1939.
·   Release Largest Store Known on Earth A ‘Philosopher’s Stone’ When Separated in Pure Form It Can Yield 235 Billion Volts Per Atom of Its Own. May 5, 1939.
·   New Key is Found to Atomic Energy; Actino-Uranium Is Credited With Power to A Mixture of Physics and Fantasy. March 17, 1940.
·   Vast Power Source in Atomic Energy Opened by Science; Report on New Source of Power. May 5, 1940.
·   Third Way to Split Atom Is Found By Halving Uranium and Thorium; Scientists at University of California Say Cleavage Creates Much Energy -- Tokyo Men Also Report Uranium Fission. March 3, 1941.
·   Scientist Reaches London; Dr. N.H.D. Bohr, Dane, Has a New Atomic Blast Invention. October 9, 1943.
·   Research Institute is Seized in Denmark; Germans Are Expected to Work on New Secret Weapon. December 12, 1943.

(List of references made by Korean Minjok Leadership Academy)

This quote is from an article in Scientific American in 1939:

“The latter problem brings up an interesting and rather disturbing aspect of the case. These secondary neutrons constitute a fresh supply of ‘bullets’ to produce new fissions. Thus we are faced with a vicious circle, with one explosion setting off another, and energy being continuously and cumulatively released. It is probable that a sufficiently large mass of uranium would be explosive if its atoms once got well started dividing. As a matter of fact, the scientists are pretty nervous over the dangerous forces they are unleashing, and are hurriedly devising means to control them.
It may or may not be significant that, since early spring, no accounts of research on nuclear fission have been heard from Germany — not even from discoverer Hahn. It is not unlikely that the German government, spotting a potentially powerful weapon of war, has imposed military secrecy on all recent German investigations. A large concentration of isotope 235, subjected to neutron bombardment, might conceivably blow up all London or Paris.”

   In hindsight we can see that the nuclear age and the permanently militarized economy was Miller's premonition of “something unimaginable” that was being born. His insight might have been less prophetic and more just wise observation of changes happening in the world. However, in choosing his title, he couldn't have consciously known that the new technology of air conditioning would play such a crucial role in building atomic weapons. For how many people even today know that coolant technology has been essential to every nation that has enriched uranium for nuclear fuel and weapons?
Since the UN and nations of the world applauded themselves for signing the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer, they have all done a good job of not mentioning that uranium enrichment processes were exempted from the agreement. If you do internet searches for exemptions to the protocol, you’ll find some for asthma inhalers and other uses that account for trivial amounts, but you won’t find mention of the large consumption of CFCs (chlorofluorocarbons) used in uranium enrichment since 1987. It seems to have been tactfully left unmentioned in UN documents that were meant to tout the victory and not allow the public to question the judgment that nuclear was clean and green enough to be given a pass on its ozone depleting emissions. Although no one wanted to draw attention to the exemptions, CFC pollution by the nuclear industry has long been an open secret, and it is not denied by the polluters themselves.

have built an atomic bomb while under Allied Forces bombardment. Essential facilities like this would have been impossible to hide.
The additional problem with CFCs is that, as well as being ozone depleters, they are said to trap heat 10,000 to 20,000 times more effectively than CO2. Thus the carbon footprint of nuclear energy (mining, processing, construction of plants, cooling of fuel, decommissioning of plants, decontamination, transport of waste, storage of waste) takes a huge increase when you consider the energy used to run the cooling systems and the impact of leaks of coolant. A 2004 report from the Institute for Energy and Environmental Research described the recent history of American enrichment facilities this way:

"In addition to requiring a large amount of electricity during operation, the compressors in the gas diffusion facilities also generate a great deal of heat that requires dissipation. In U.S. plants this heat is dissipated through the use of ozone depleting chlorofluorocarbons (CFCs) such as the coolant CFC-114 (often referred to simply as Freon or Freon-114). The manufacture, import, and use of CFCs were substantially restricted by the 1987 Montreal Protocol on Substances That Deplete the Ozone Layer, which the U.S. is implementing through the 1990 Amendments to the Clean Air Act. As a result of these commitments, the manufacture of Freon in the U.S. ended in 1995 and its emissions to the air in the United States from large users fell by nearly 60% between 1991 and 2002. The emissions from the Paducah gaseous diffusion plant, however, have remained virtually constant over this time, falling just over 7% between 1989 and 2002. In 2002, the Paducah enrichment plant emitted more than 197.3 metric tons of Freon into the air through leaking pipes and other equipment. This single facility accounted for more than 55% of all airborne releases of this ozone depleting CFC from all large users in the entire United States in 2002. Due to the lack of additional manufacturing of Freon since 1995, the U.S. Enrichment Corporation [USEC] is currently looking for a non-CFC coolant to use. Likely candidates would still have heat trapping potential, and thus even if they were not as dangerous to the ozone layer, they would still remain a potential concern in relation to global warming and climate change."

-Arjun Makhijani, Ph.D., Lois Chalmers, Brice Smith, Ph.D. Uranium Enrichment: Just Plain Facts to Fuel an Informed Debate on Nuclear Proliferation and Nuclear Power. Institute for Energy and Environmental Research. October 2004. http://ieer.org/resource/reports/uranium-enrichment/

Since this time, USEC, the corporation that leases and operates the government-owned enrichment facility in Paducah, has not denied this history, but they claim to be moving toward a solution:

"Project sponsor USEC Inc. intends the American Centrifuge Plant to replace its existing energy-intensive, Cold-War era production facility. This transition will reduce greenhouse-gas emissions related to USEC’s existing enrichment technology by millions of tons annually."

The downside of this new, less energy-intensive technology is that once it is no longer exclusively possessed by one country, nuclear fuel enrichment becomes more small-scale and concealable. The US government and USEC have responded to public pressure to reduce the environmental impact of uranium enrichment, but they have very strong incentives to not share this technology. The benefit of the old technology is that it is so energy intensive and hot that facilities are difficult to hide from IAEA inspections. If the new technology were used by anyone other than its self-appointed guardians, uranium enrichment could become accessible to “rogue” states and non-state entities. If the new technology really does mitigate an old problem, it just creates a new one with equally unsettling implications.
However, the really unsettling thing about this issue is what it shows about our system of global governance. The UN proudly proclaims the following on its webpage entitled “ozone day”:

"In 1994, the United Nations General Assembly proclaimed 16 September the International Day for the Preservation of the Ozone Layer, commemorating the date of the signing, in 1987, of the Montreal Protocol on Substances that Deplete the Ozone Layer (resolution 49/114). Implementation of the Montreal Protocol progressed well in developed and developing countries. All phase-out schedules were adhered to in most cases, some even ahead of schedule. In view of the steady progress made under the Protocol, already in 2003, former United Nations Secretary-General Kofi Annan stated, ‘Perhaps the single most successful international agreement to date has been the Montreal Protocol’. His views are shared widely in the international community."

By the standards of all other international agreements, perhaps the Montreal Protocol is the most successful, but in light of what we know about the exemptions granted for uranium enrichment, it is clear that such agreements are made behind closed doors in an undemocratic process that leaves electorates and citizens uninformed about the issues in question. No one asked you if you thought the nuclear industry should be exempt from restrictions on CFC use, and the UN made no effort after the fact to inform you of its decision.
The decision to grant these exemptions must have been based on the “realism” that holds that nuclear disarmament is not going to happen and that the global investments made in nuclear power plants cannot just be written off in order to quickly halt destruction of the ozone layer.
No doubt, the UN must have turned to its own promoter of nuclear energy, the IAEA, to quantify the overall carbon and ozone impact of nuclear energy. Unsurprisingly, the IAEA would conclude that in spite of the negative effects of nuclear energy, the overall harm would be greater if the world had to produce electricity by other means.
Of course, opponents of nuclear do their own calculations and argue that nuclear energy has a much greater carbon footprint and ozone effect than the nuclear industry cares to admit. The negatives accumulate if one also considers the costs passed on to future generations for decommissioning, waste storage, decontamination and liability for accidents. The nuclear industry claims that money has been put aside for decommissioning and waste storage, but it is likely that the costs are going to be much higher than what has been put aside.
The public wasn't involved in this discussion at all when the Montreal Protocol was signed, although it is an interesting question to wonder what large environmental NGOs consented to and agreed not to discuss when compromises were worked out.
We can see in hindsight that the Montreal Protocol could have gone a lot further. It could have disallowed the exemptions for uranium enrichment and turned the world away from nuclear energy. It was, after all, just one year after the Chernobyl catastrophe. Now, twenty-five years later, when alternative energy sources are finally being developed on a large scale, it is clear that action should have been taken sooner. As much as the Montreal Protocol was a success in mitigating the worst damage to the ozone layer, it was a failure for continuing to support nuclear energy while missing an opportunity to promote alternatives.
We know about the exemptions for uranium enrichment only because of the relatively open nature of the United States government and the culture of citizen activism there. Argentina, Brazil, China, France, Germany, India, Iran, Israel, Japan, the Netherlands, North Korea, Pakistan, Russia, and the United Kingdom are the other known operators of enrichment facilities, but nothing seems to be published about their impact on global warming and the ozone layer, or what these countries are planning to do to limit the environmental damage.

UPDATE MAY, 2013: For an update on USEC, see Ecowatch's Countdown to Nuclear Ruin at Paducah. The federal government privatized the enrichment plant many years ago, and now that USEC has made as much money as it can, it is abandoning the toxic legacy for tax payers to deal with.

Further reading and notes:

  • "The Paducah Gaseous Diffusion Plant in Paducah, Kentucky, is the only U.S.-owned uranium enrichment facility in the United States. Owned by the U.S. Department of Energy, it is leased and operated by the United States Enrichment Corporation, a wholly owned subsidiary of USEC Inc. The plant employs about 1,200 people and produces low-enriched uranium fuel for commercial nuclear power plants in the United States and around the world."
  • A good analysis of the claims made on both sides of the issue about of CFC use in uranium enrichment:
  • A response to anti-nuclear activist Helen Caldicott's “distortions,” apparently written by a loyal employee of USEC.
  • Understanding the Cleanup Process at Paducah’s Gaseous Diffusion Plant
  • A likely justification for allowing enrichment facilities to continue operations was so that they could afford to carry out downblending – the process of turning highly enriched uranium from decommissioned weapons into less enriched uranium for nuclear power plants. The existence of weapons grade uranium does not, however, mean that it must be used up in nuclear power plants if a nation has good reasons to produce its electricity by other means. Nuclear waste, regardless of its level of enrichment, can be disposed of in the same way that spent nuclear fuel is disposed of.
  • In the list above of other known operators of enrichment facilities, South Korea is not listed, even though it has adopted an energy policy of strong reliance on nuclear energy. It is curious that it would choose this policy while being utterly dependent on a foreign country continuing to operate enrichment facilities. This underlines the falsity of claims by some nations that they can achieve “energy independence” while becoming reliant on a form of energy that requires massive infrastructure investments, raw material imports, and other forms of energy for cooling and backup in case of accidents.
  • John Warrick. "Paducah Plant Spewed Plutonium." The Washington Post. October 1, 2000. "The unsigned maps, bearing a handwritten date of Aug. 26, 1999, show a plant ringed with contamination that extends in some cases for well over a mile. The diagrams also show elevated levels of plutonium in the Ohio River, about two miles north of the plant."
  • Jean Harrington. "Splitting the Atom." Scientific American. October 1939.
  • Pavel Podvig. "The Fallacy of the Megatons to Megawatts Program." Bulletin of the Atomic Scientists. July 23, 2008.
  • Geoffrey Sea, "Countdown to Nuclear Ruin at Paducah," Ecowatch, May 22, 2013.


New Concerns about Tritium

I must be feeling homesick because my attention keeps going back to nuclear issues in Canada that are currently getting coverage in mainstream and social media. Or I might just be sick of thinking about the Gordian knot closer to my home that is the ruins of the Fukushima Daiichi NPP.
Canada’s CANDU (heavy water) reactors have a good record of safety and don’t face the seismic and flooding risks of some reactors south of the border. They have never had a meltdown, and if they do face a serious loss of power incident, they are said to have more passive safety and be easier to cool off and contain than light water reactors.
The major concerns that have persisted over the years have to do with tritium (a radioactive hydrogen isotope) releases and long-term storage solutions for nuclear waste.
CANDU reactors release 20 times as much tritium as American light water reactors, and so it is no random coincidence that the allowable limit for drinking water is higher in Canada – 7,000 Bq/L. CANDU reactors couldn’t operate if they had to adhere to the American limit of 740 Bq/L. The actual level of tritium in the Great Lakes is close to the natural level of the pre-nuclear age (about 10 Bq/L), but what the limit means is that when a release occurs and the local water is contaminated, the government of Canada thinks that it is alright for people to consume water with 7,000 Bq/L. It seems this level was set upon the assumption that such an intake level would not last for long.
Same lake, different standards of safety on the American and Canadian sides of it.
This high level is considered to be safe because tritiated water is assumed to have a short biological half-life of about ten days. It’s water, after all. You drink it in and it is quickly sweated out or passed in urine, then replaced by the next gulp of water. But it’s not that simple. There have always been lingering questions about how much tritium becomes organically bound (OBT-organically bound tritium) and what impact OBT could have on ecosystems.
If you remember anything at all about high school chemistry and biology lessons, you might remember that H figures prominently in organic compounds, and H gets into them ultimately through the breakdown of H2O, carbohydrates, fats and proteins. This is more of a factor in plant biology because the well-known simplified equation for photosynthesis is:
So while it is true that a lot of tritium will quickly be diluted and evaporated to insignificant levels, some of it will bio-concentrate and bio-accumulate. Animals eat the sugars and carbohydrates made by the plants, and tritium can end up staying inside human tissue much longer than the presumed ten-day biological half-life. It’s important to note also that the hydrogen atoms in DNA also get there from food and water taken in by organisms. There is evidence of tritium being bound in DNA molecules.
The effects remain debatable, but the recent findings on this matter, as reported by Tap Canada, have prompted calls for a review of standards for tritium. One study of marine life near British nuclear plants found tritium concentrated at 1,000 – 10,000 times the level of the surrounding sea water. This finding, and others, prompted the French Autorite de Surete Nucleaire (ASN) to call for an investigation on new approaches in relation to "possible hereditary effects." After the publication of the ASN’s White Paper on tritium, the ASN called for a monitoring committee and for nuclear operators to control their tritium emissions. There is little comfort given by this report when it states,

“Discharges of this element are forecast to increase due to expected changes in the fuel management methods used by the NPP [nuclear power plants], and also due to new tritium-emitting facilities, including new power plants that are to be built, and the ITER [fusion energy experimental reactor]project.

Did Ontario Power Generation get the message? It’s not like they haven’t heard it before. The concern raised by the ASN has existed ever since nuclear scientists had to start handling tritium. The International Institute for Concern for Public Health reported in 2006:

“Convinced of the dangers to health from tritium, the Toronto Board of Health and Toronto City Council have asked the Province to reduce the level of tritium allowed in the city’s drinking water. The Council then passed a resolution endorsing the 1994 ACES scientific advisory body to the Government of Ontario recommendation that the standard be reduced to 100 Bq/L immediately and then go to 20 Bq/L after five years.”

Another pressing concern in Canada is the imminent decision about long-term nuclear waste disposal. A newly formed group called Stop the Great Lakes Nuclear Dump has launched a petition drive to oppose Ontario Power Generation’s plan to build a Deep Geological Repository one kilometer from the shore of Lake Huron. The plan raises obvious questions about the safety of the water supply, the lack of public awareness of the proposal, and the suspiciously convenient location near the source of so much nuclear waste in Ontario, the Bruce Nuclear Generating Station, the largest NPP in the world measured by net power rating.

Further reading: Ace Hoffman's in-depth report on tritium.

Ian Fairlie. Radiation Risks of Tritium: Additional Notes for the Ontario Drinking Water Advisory Council (ODWAC)


How to Dismantle an Atomic Bomb

The members of U2 never answered the question posed in the title of their 2004 CD, but it turns out the answer to this seemingly intractable problem is pretty simple: do nothing. The plutonium pits and tritium initiators in hydrogen bombs go through natural deterioration that would render them useless if they were not constantly given very expensive upgrades. We could walk away from them and leave them in their silos and soon they wouldn't be bombs anymore. They would still be nuclear waste, and potential bomb material, but doing nothing would lead to effective disarmament within a short time.
We hear a lot of news about the need to continue with the reduction of nuclear stockpiles, and we imagine this means the danger of their detonation can be removed only by actively dismantling them and verifying that other nuclear powers are doing likewise. However, the public is largely unaware that atomic weapons need constant maintenance and refreshment in order to be usable. This has led to an impression that the remaining stockpile (admirably reduced since 1990 down to just a few thousand) is just an unfortunate legacy of the Cold War that we might as well keep as long as some countries want to keep theirs and others want to become nuclear powers. Yet it’s not so simple. The maintenance of a nuclear deterrent requires the high cost and risks involved in maintaining plutonium and tritium production lines.
This point becomes obvious if we think about the name of the most fearsome weapon: the hydrogen bomb (this discussion doesn't apply so much to the less coveted bombs made with enriched uranium). If the fissionable dreaded core of the weapon is made of plutonium, what has simple hydrogen got to do with it? Hydrogen became the moniker of the bomb because the radioactive isotope of hydrogen, tritium, is the initiator and booster of the fusion-fission explosion that allows a greater yield to be had from a given quantity of plutonium. But tritium has a relatively short half-life of twelve years, so it requires constant replenishment. The plutonium pits have a much longer half-life, but they quickly lose their effectiveness as well.
For American weapons, tritium was produced during the Cold War at the Savannah River Site in South Carolina, but in the 1990s it was deemed that existing supplies of tritium would be enough to maintain the reduced stockpile of weapons negotiated under the START treaty. But then in 2003 supplies were running low and the Watts Bar Nuclear Generating station, in Tennessee - a commercial nuclear power plant - supplied tritium for nuclear weapons. A new tritium extraction facility came on line in 2006 at Savannah River.
For 19 years, after the environmental catastrophe caused by the Rocky Flats plutonium production facility, the US had no capacity to produce new plutonium pits for its reduced but aging stockpile. It seems that in the early days, none of the nuclear powers, as they were building tens of thousands of weapons, stopped to wonder how they could afford to keep these arsenals fresh in the coming decades and centuries. A cynic (not I, of course) might say that the real reason both the US and the USSR wanted a reduction in stockpiles was that they were waking up to the astounding cost of maintenance. Even with the reduced numbers, all nuclear powers are faced with the same dilemma: how to finance being a nuclear power in perpetuity. How to maintain all the required civilian and military reactors supplying the tritium and the plutonium. How to maintain the technical skills and the art of crafting the perfect plutonium pit.
In 1993 the Los Alamos National Laboratory (LANL) was tasked with re-establishing the nation’s ability to produce plutonium pits, and it wasn't until 2007 that the first pit was completed. The laboratory’s website reported the process this way:

“Practice makes perfect pits,” says Putnam [former director of the Plutonium Sustainment Program]. Significant interruptions to the production cycle increase the risks of introducing deviations into the manufacturing process, which can lead to production errors, resulting in a considerable increase in the scrap rate, that is, a higher number of unusable pits. In addition, efficiency is lost. Pit manufacturing is a “use it or lose it” endeavor precisely because it requires constant production to maintain quality and increase efficiency. “Making pits is a process and an exercise in capability. If that capability is not used, it atrophies - becomes ‘rusty.’” says Tim George, deputy associate director for Plutonium Science and Manufacturing. Over the next few years, the program plans to build or assemble four to six pits a year for various scaled experiments and later disassemble them to practice production and to maintain a capability for the future. “Pit manufacturing is an art,” Putnam asserts.

To hear it described this way, one has to wonder why developed nations worry so much about smaller, impoverished states becoming a nuclear threat. The Los Alamos staff makes it clear that even for a nation the size of the USA, it is not certain the resources will always be available for maintaining a nuclear deterrent.
How much to spend is not an easy question in these days of global financial crisis, and neither party wanted to talk about it during the recent presidential election, even though the House of Representatives passed a defense authorization bill that devoted $160 million to a new plutonium plant in New Mexico that will make 450 or more plutonium pits per year.
Barack Obama began his presidency with a lofty goal of eliminating nuclear weapons, and he won the Nobel Peace Prize just for talking about this and saying a bunch of other fine words about the aspirations of the developing world. The new president’s stated intent contradicted the direction that the US was moving in with the resumption of production of plutonium pits at LANL. Thus, utter confusion reigns. No one knows if the future holds hope of disarmament or a resumption of Cold War weapons production. How much should a super power spend now to maintain a fleet of weapons created in the madness of the early Cold War years?

Molly at nucleardiner.com sums up the conundrum:

All federal tax revenue in 2011 was $2.2 trillion — less than one sixth of the total national debt. The $15 trillion debt amounts to $133,000 per taxpayer. A decision not to build the CMRR-Nuclear Facility could save around $6 billion over the next 10 years. Not expanding plutonium pit production could save tens of billions of dollars over the next half-century.

The choices are no different for other nuclear states that have to question the stupendous environmental and social costs of maintaining both nuclear weapons and the required fleet of civilian nuclear reactors that make weapons production economically feasible.

About a week after I posted, this article appeared in The Washington Post:
Walter Pincus. "How many nukes does it take to be safe?" The Washington Post. December 18, 2012.

Further Reading:

Pavel Podvig. "The Fallacy of the Megatons to Megawatts Program." Bulletin of the Atomic Scientists. July 23, 2008.