Japan Nuclear Energy Drive Compromised by Conflicts of Interest

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Hokuriku Electric Power Co.'s Shika nuclear power statio


Shika nuclear power station

Shika nuclear power station

A model of a control room

Chubu Electric Power Co.'s Hamaoka nuclear power station

Chubu Electric Power Co.'s Hamaoka nuclear power station

Dec. 13 (Bloomberg) -- On March 25, Hokuriku Electric Power Co.'s nuclear generating station in Shika, Japan, was rocked by an earthquake that wasn't supposed to happen.

Nine years earlier, Yoshihiro Kinugasa, the leading seismologist on Japan's nuclear licensing panel, signed off on a pre-construction study of the site. The report identified three fault lines, each less than 10 kilometers (6.2 miles) long, or just under the length regulators deemed threatening.

In 2005, Kinugasa switched roles and published a study with Hokuriku Electric engineers that rebutted neighbors' claims the plant was unsafe. After the quake, government scientists found the fissures were in fact a single fault of 18 kilometers that could produce more shaking than the plant was built to withstand.

A Tokyo Institute of Technology professor, Kinugasa has advised utilities, inspected plant sites and helped rewrite nuclear safety rules. His multiple roles show the conflicts of interest endemic in Japan's nuclear power industry, says Takashi Nakata, a Hiroshima Institute of Technology seismologist.

``The same people are making the rules, doing the surveys and signing off on the inspections,'' says Nakata, who sits on the science ministry's earthquake survey committee. ``The regulators just rubber-stamp the utilities' reports.''

Power company advisers dominated a panel responsible for rewriting Japan's nuclear safety rules, says Katsuhiko Ishibashi, a seismology professor at Kobe University who last year quit the body, saying the review process was rigged and ``unscientific.''

`Fundamental Improvements' Needed

Kinugasa and the regulators say they are independent.

``It's my job to give advice,'' Kinugasa says. ``I don't make decisions on safety. That's the regulators' job.''

Kinugasa, 63, has advised Japan's Nuclear and Industrial Safety Agency on every nuclear power plant permit since 1985, says Tomoyuki Tajiri, a spokesman for the agency.

Concerns about conflicts of interest were underscored July 16, when a 6.8-magnitude earthquake damaged the world's biggest nuclear power plant, run by Tokyo Electric Power Co., causing radiation leaks into the air and sea.

``If we don't make fundamental improvements in the engineering standards for nuclear power plants, Japan could suffer a catastrophic nuclear-earthquake disaster,'' Ishibashi says.

Japan imports virtually all of its oil and natural gas, so it is counting on nuclear energy to help meet increasing demand for electricity while cutting emissions of the greenhouse gases blamed for global warming. Japan's 55 nuclear reactors already generate more power than any nation other than the U.S. and France, and the country plans to boost its reliance on atomic energy to 40 percent of generation from 30 percent by 2030.

Faked Safety Records

Criticism of Japan's atomic industry stretches back to at least 1999, when two workers died from radiation poisoning after managers at a nuclear-fuel plant run by a unit of Sumitomo Metal Mining Co. allowed them to mix a uranium solution in steel buckets instead of government-prescribed safety vessels.

In 2002, whistleblowers revealed abuses that forced Tokyo Electric to say it had faked reports on repairs since the 1980s. The company's chairman and president resigned and all 17 of its reactors were shut by government inspectors.

Two years later, superheated steam from a burst pipe killed five workers at a Kansai Electric Power Co. nuclear plant. The pipe hadn't been inspected for 28 years, the Nuclear and Industrial Safety Agency reported.

To head off opposition to new reactors, the agency, known as NISA, demanded that power companies reveal any unreported safety breaches by the end of March 2007. In response, seven of Japan's 12 public utilities said they had falsified records for 30 years.

``If it were up to me, I'd add some intrusiveness to Japan's regulatory process,'' says Ken Brockman, a former director of nuclear installation safety at the International Atomic Energy Agency in Vienna and now a consultant at Talisman International LLC. ``The circumstances there raise question after question.''

Matter of Trust

The weakness of Japan's nuclear regulators is that they only step in when they see trouble, says Brockman, who also worked at the U.S. Nuclear Regulatory Commission.

``In Japan, they intervene when they have a reason not to trust anymore,'' he says. ``In the U.S. system, trust has to be continually verified.''

Responsibility for keeping Japan's reactors safe rests with the Ministry of Economy, Trade and Industry, which also oversees the effort to increase nuclear power generation. By contrast, France and the U.S. have independent regulatory agencies.

``We have built objectivity, fairness and neutrality into examining nuclear plant safety,'' says Akira Fukushima, deputy director-general for safety examination at NISA, an arm of the ministry. ``Separating our agency from the Trade Ministry isn't the issue.''

Regulatory Independence

The U.S. Nuclear Regulatory Commission was set up in 1975 as an independent agency. Until the commission was created, the Department of Energy both regulated and promoted nuclear power. France last year made its Nuclear Safety Authority autonomous.

``If you want to be a legitimate, credible and authoritative regulator then you need to be independent,'' says Mathias Lelievre, head of the agency's Paris division.

Japan mitigates conflicts of interest by having the Nuclear Safety Commission, which reports to the prime minister's office, review all plant applications approved by NISA, Fukushima says.

``Human errors can occur anytime to anybody,'' he says. ``That's why we double-check.''

The 1995 Kobe earthquake that killed more than 5,000 people focused Japan's attention on construction standards. In response, the prime minister's office appointed a panel of experts to strengthen the earthquake safety guidelines on which building codes for nuclear plants are based.

Outcome `Predetermined'

The problem was that a majority of the members also sat on committees of the Japan Electric Association, the main lobby group for power companies, says Ishibashi, the seismologist who quit the panel. Eleven of the 19 members served on association committees, says spokesman Yoshiyasu Araki.

The panel approved guidelines eliminating a requirement that all plants be built to withstand a 6.5-magnitude earthquake, reflecting demands made by the Electric Association in April 2005, Ishibashi says. Under the new rules, adopted in September 2006, plant safety will be judged on a case-by-case basis.

``We went around and around for five years, but the outcome was predetermined,'' Ishibashi says. ``The Japan Electric Association got its way.''

Araki says the change was necessary to accommodate evolving earthquake science. He defends the number of utility representatives on the safety panel.

``The regulations have to be made by the people who use them,'' he says. ``Nobody else has the expertise.''

`Same Pool of Fish'

Another former panel participant says Electric Association members have limited sway over nuclear policy, and their main task is to translate safety guidelines into building codes.

``That's a very low-level role,'' says Shunsuke Kondo, who is also chairman of the Atomic Energy Commission of Japan, a government research body that advises on nuclear energy policy.

Japan isn't unique in drawing nuclear regulators from a small group of experts, says John Large, a U.K.-based consultant who has advised Greenpeace on nuclear safety issues in Japan.

``Virtually every regulator in the world has a cozy relationship with the nuclear industry,'' Large says. ``This is a very incestuous industry where the regulator and the operator and the manufacturer are all drawn from the same pool of fish.''

While Japan has never suffered a failure comparable to the 1986 meltdown at Chernobyl in the former Soviet Union or the 1979 partial reactor failure at Three Mile Island in the U.S., the nuclear consequences of a massive quake in Tokyo could be devastating.

Tokyo Threat

Chubu Electric Power Co.'s Hamaoka nuclear plant stands on the Tokai fault that runs near Tokyo, Japan's capital, where more than a quarter of the country's 128 million people live.

Minoru Konagaya, co-author of the 2006 book ``The Capital That Was Erased by Radiation,'' used a model of the Chernobyl accident to show that meltdowns at Hamaoka's five reactors could kill as many as 8 million people and bring the world's second- largest economy to a standstill.

``Within eight hours Japan's strong westerly winds would carry a radiation cloud over Tokyo,'' says Konagaya, 36, a civil engineer who was part of a parliamentary delegation that investigated a failure of Hamaoka's emergency cooling system in 2001.

At the time, Konagaya was an aide to a lawmaker representing the prefecture where the plant is located. His concerns were sparked by plant managers' responses to the parliamentary group.

``They started with the premise that an accident couldn't happen,'' Konagaya says. ``For every one question, they had 10 answers. All they would say was that it was 100 percent safe.''

Worst-Case Scenario

Ishibashi says Konagaya's conclusions are a possible worst- case scenario.

``If a disastrous earthquake took place in the manner described in the book, it's not implausible that millions of people may lose their lives,'' he says.

Chubu Electric isn't aware of Konagaya's conclusions, says spokesman Noriyuki Narugami.

``We have made certain that the plant's earthquake engineering is safe,'' he says.

The damage an earthquake can wreak on a nuclear plant was shown in July at Tokyo Electric's Kashiwazaki Kariwa power station in Niigata prefecture.

Kazuyuki Takemoto, a former Kashiwazaki city councilman and longtime anti-nuclear activist, was working at home when the quake hit around 10 a.m. When he ran outside, Takemoto saw a neighbor climb from the ruins of his home.

Nuclear Leak

``The thing we had been warning against for 33 years had happened,'' says Takemoto, 57, whose house is 3 kilometers from the power station's seven reactors. ``All of our houses had collapsed, but we were more worried about the plant.''

At the facility, workers were struggling to contain a blaze in a transformer. Service roads buckled because of shaking that was as much as three times greater than the facility was built to withstand, Tokyo Electric reported.

Contaminated water from a cooling pool had sloshed into the sea through drains, because sealing plugs hadn't been installed. The radiation released was within authorized limits for public health and environmental safety, the IAEA said Aug. 17.

After the quake, Trade Minister Akira Amari said regulators hadn't properly reviewed Tokyo Electric's geological survey when they approved the site in 1974.

That report underestimated the length of the nearby fault and hence the earthquake risk, Amari said. Kinugasa sat on the licensing committees for four of the plant's reactors.

On Dec. 7, Tokyo Electric, Japan's biggest power company, said it knew from a 2003 study that an undersea fault near Kashiwazaki Kariwa could cause a magnitude 7 earthquake.

Kinugasa Controversy

Kinugasa's role in the nuclear power industry has been controversial for almost 20 years.

In 1988, when he was a science ministry geologist, advice Kinugasa gave to managers at a fuel-processing plant resulted in his boss being reprimanded by parliament. Prior to a licensing inspection at the facility run by Japan Nuclear Fuel Service Ltd., Kinugasa advised that the word ``active'' be deleted from a description of the fault running under the site, a company document shows.

``I didn't do anything wrong and that's why I wasn't punished,'' Kinugasa says.

A decade later, Kinugasa was on the regulatory committee that approved a second reactor at Hokuriku Electric's Shika plant after the nearby faults were estimated at less than 10 kilometers long.

`Money Before Safety'

At the time, 10 kilometers was a magic number for Japan's nuclear planners because the safety code deemed that a fault of that length could produce a quake of about 6.5-magnitude -- the minimum all Japanese reactors were required to withstand. A longer fault would have demanded that a reactor be built to more stringent, and expensive, specifications.

``Kinugasa was virtually the main expert specializing in fault-line study on the NISA licensing committee,'' says Haruo Yamazaki, a Tokyo Metropolitan University professor who once sat on the nuclear safety commission panel that reviewed license approvals by the frontline regulator. ``Ten years ago there were very few fault-line specialists.''

Many citizens in Shika, 600 kilometers northwest of Tokyo, weren't convinced. In 1999 they filed a lawsuit to close the plant's second reactor.

``We didn't trust the utility's claim that the faults were separate,'' says Tetsuya Tanaka, 64, a representative of the 135 plaintiffs. ``They were putting money before safety.''

`These Guys Are Fools'

With the case dragging on, Kinugasa and three Hokuriku Electric engineers wrote their 2005 paper reproducing the findings of the company's 1998 license application. The report ignored an administrative convention used by government geologists that said small faults within five kilometers of each other should be considered a single fissure.

Kinugasa says he didn't apply the five-kilometer rule because he used more sophisticated analysis and ``higher criteria.''

The paper didn't help Hokuriku Electric. In March 2006, the court ordered the company to shut down its second reactor, citing ``inadequacy'' in seismic design. While an appeal to the Nagoya High Court kept the plant running, it was closed four months later after cracks were found in its turbines.

This March, the area was hit by a 6.9-magnitude earthquake. The power plant suffered minor damage, according to Trade Ministry reports. After the quake, the Geological Survey of Japan investigated the ocean floor and found an active fault more than 18 kilometers long.

``Either Kinugasa's incompetent or he did it on purpose,'' says Nakata, the Hiroshima Institute of Technology seismologist. ``I think he did it intentionally, trying to match the finding to the magic number.''

Kinugasa rejects that allegation.

``There is no conclusive evidence that the faults are longer than I have said,'' he says. ``There's a group of idiots who are saying that I'm deliberately shortening the length of fault lines. These guys are fools.''

To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net; Shigeru Sato in Tokyo at ssato10@bloomberg.net

To contact the editors responsible for this story: Peter Langan at plangan@bloomberg.net; Willy Morris at wmorris@bloomberg.net

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