The nuclear industry has a number of guilty secrets.

The aftermath of the accident at Fukiyama Nuclear Power Station in Japan exposes one of those guilty secrets.

During court proceedings, the Tokyo Electric Power Co. (TEPCO) defended a lawsuit from Fukushima Prefecture golf club, just 45 kilometers west of the stricken plant.  TEPCO argued that it did not have to clean up radioactive contamination on the golf course because it no longer “owned” the radioactive substances. As reported in the Japanese newspaper Asahi Shimbun, a spokesperson from TEPCO said, “Radioactive materials (such as cesium) that scattered and fell from the Fukushima No. 1 nuclear plant belong to individual landowners there, not TEPCO.”  If successful, the company stood to save $160 million in clean-up costs.

While the court did not buy this argument, TEPCO won the day when the judge ruled that cleaning up radioactive contamination was the responsibility of the central and local governments.  The case is going to a higher court, with both sides unhappy with the judgment.

What TEPCO tried to do in this instance made good commercial sense. Any costs avoided by dodging responsibility to clean up to the community meant a win for them.

This is one of the guilty secrets of hazardous industries worldwide. Whenever an accident occurs, corporations try to avoid as much of the financial responsibility as they can. This is the case with the nuclear industry and in just about any other industry where a mishap can cause billions of dollars of damage. The strategy, often successful, is to transfer the costs to the taxpayer.

In the case of the nuclear industry, the public pays in other ways. In the US, for example, the new killer industry is protected from paying the full cost of the clean-up in case of an accident by the Price-Anderson Nuclear Industries Indemnity Act.  This piece of legislation indemnifies nuclear powers companies so that all costs above $12.6 billion are covered by the federal government. By having the government underwrite their liabilities, the power utilities have been able to negotiate a much lower insurance premium.  That means more money in their pockets, compliments of the taxpayer. In effect, the government has provided a hidden subsidy.

The other guilty secret of the nuclear power industry is its claim that it has created a truly “fail-safe” system that is technically credible. This claim is quite false.

Firstly, there are rare, but not unpredictable, events that require designers to incorporate specific safety measures. In the case of the reactors at Fukushima, no provisions had been made to anticipate the impact of a tsunami, which disabled the backup systems that were supposed to stabilize the reactor after the earthquake.

What is significant about the accident at Fukushima is that it occurred in one of the most advanced economies in the world, which holds out little hope that less technically sophisticated countries aspire to build their own network of nuclear power stations.

After Fukushima, regulators and the industry have reviewed safety design requirements, and in all likelihood will ask power utilities to upgrade their “fail-safe” systems.  Rather than reducing the risk, it may well increase it, which is another guilty secret that the nuclear industry prefers not to publicize.

As they build ever-more complex “fail-safe” systems, this very complexity creates its own problems.  In 1984, Charles Perrow showed in his book on technological risk, Normal Accidents, that in highly complex systems, a seemingly harmless malfunction leads to another and another.  Such problems can cascade through the system, causing a major incident, which in retrospect could not have been foreseen.  Most worrying, Perrow demonstrated how the Three Mile Island nuclear accident followed this pattern.  So next time a nuclear engineer gets on TV to proclaim that the industry has the best safety systems of all industries, there is good reason to believe that we are being sold a pup.

7 Comments for this entry

  • Audrey says:

    It is such a shame how so many large companies try to avoid as much financial responsibility as possible when an accident occurs. Being the case with a nuclear industry is very shocking to me. As they are multi billion dollar businesses and should have pay their own way through insurance to cover all possible accidents. It definitely not be tax payers’ responsibility.

  • If we’re really serious about climate change, then there seems little choice to nuclear energy. I know that there are problems, but surely we’re clever enough to get around them.

    • Harry says:

      Belle, nuclear energy has become like a security blanket. If all else fails we can fall back on the nuclear option. The problem is that this becomes a self-fulfilling prophecy and governments only half-halfheartedly consider alternatives knowing that it has fall back position.

  • Elliot says:

    Right on Belle! I agree with your comment, totally.

  • Ian Orchard says:

    You are omitting the Canadian experience which has not experienced any major upsets with its CANDU process. Keep in mind that the process is distinct from US, Europe, Russia and Japan.

  • Teresa Gunn says:

    Doesn’t the taxpayer, in effect, pay one way or another? –either in increased up-front costs for power or after-the-fact, via taxes (for the government to cover the costs) Perhaps leaving the government to foot the bill for cleanup is less costly in the end, since that cost is only paid if an accident actually happens -?

    • Harry says:

      Teresa, you’re right that the taxpayer usually pays in the end. However, if nuclear power reflected the true cost (including full insurance against accidents), then it is unlikely to be an economic option. In this way the market limits the risks that the taxpayers/consumers are exposed to.

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