Going without insurance is described as "going naked" in insurance industry lingo. Going without insurance for the worst hazards in the nuclear power industry is business as usual.
One need not look back very far to see the problem. In March 2011, the Fukushima-Daiichi nuclear power plant disaster, triggered by an earthquake followed by a tsunami that overwhelmed all of Japan's safeguards, melted down three reactors, displaced 160,000 people and caused an estimated $250 billion in damages and other still-unfolding economic consequences.
Today, in the United States, we have 104 operating nuclear plants producing electricity. The owners, operators, and government regulators who oversee them say an event like Fukushima will not happen here. And even if it did, they insist, there is enough liability insurance in place to cover the damages. The actual amount of that insurance coverage: just $12.6 billion.
You don't need an advanced degree in calculus or risk analysis to see that something doesn't add up, and to start feeling a bit...naked. But when it comes to nuclear insurance, naked is the fashion designed for the American public.
A catastrophic accident in the US could cost way more than $12.6 billion. A worst-case scenario study in 1997 by the Brookhaven National Laboratory estimated that a major accident could cost $566 billion in damages and cause 143,000 possible deaths. Another such study, by Sandia National Laboratories in 1982, calculated the possible costs at $314 billion. Adjusted for inflation, that would put both estimates close to the trillion dollar range today. So $12.6 billion wouldn't cover much.
After Fukushima, which was only the second worst such accident behind the 1986 Chernobyl meltdown in the former Soviet Union, the US Nuclear Regulatory Commission and its staff scrambled to reappraise the adequacy of their own safety regimens for nuclear power plants. And they re-examined the sufficiency of the limited insurance available to indemnify the American people against property damage, loss of life and other economic consequences of nuclear accidents. Then the NRC hastened to publish the "lessons learned" from the Japanese catastrophe to show they were on top of things. Though the previously existing US system had been described as virtually fail-safe, federal regulators found that improvements were possible after all and ordered that they be made.
But one not so small thing remained unchanged, post-Fukushima: the tightly capped insurance system. Of course, raising the amount of insurance required to operate nuclear plants would be expensive. The nuclear industry, which provides 20 percent of all of the country's electrical power, is not eager to incur additional expenses like higher insurance premiums for more coverage. Oh, but the nuclear power industry doesn't actually pay premiums on most of the insurance coverage that supposedly is available (more about that later.)
First, a little history. After solving the scientific and technological issues of splitting the atom, the biggest problem the nuclear industry faced in its infancy was obtaining accident insurance coverage. Without insurance, investors were unwilling to provide start-up capital. But the insurance industry was nervous. After all, this was back in the 1950s, and who knew then how safe -- or dangerous -- this new power source might turn out to be? So insurers were refusing to assume unlimited levels of liability.
But President Dwight D. Eisenhower was determined to develop "Atoms for Peace," and he worked with a cooperative Congress to remove all roadblocks. Their solution to the insurance obstacle was a new federal law, the Price-Anderson Act of 1957, which simply imposed federally-decreed limits on liability from accidents at non-military nuclear facilities. The law, amended several times since then, allowed the creation of insurance pools to cover accidents. Today the plan has two tiers. The first tier is a $375 million insurance policy for which each nuclear plant must pay premiums ranging between $500,000 and $2 million a year, depending on plant size and other factors. If a plant has an accident and $375 million is not sufficient to cover resulting damages the second tier kicks in and all the other plant operators around the country must chip in up to $111 million each to indemnify victims until the $12.6 billion cap is reached.
By the way, if you live near a nuclear plant, or even many miles away, you cannot buy your own private insurance policy to protect your home against nuclear accidents, thanks to the Price-Anderson law.
The nuclear industry and the insurance industry both understood the hard realities of the risk. In testimony to the Senate Energy and Natural Resources Committee on May 24, 2001, John L. Quattrocchi, then senior vice president for underwriting at the American Nuclear Insurers pool, put it bluntly: "The simple fact is there is always a limit on liability -- that limit equal to the assets of the company at fault."
Meanwhile, corporations that own nuclear plants have devised spin-off schemes, erecting legal firewalls to protect the parent company if their limited-liability subsidiary actually operating the plant goes under as the result of an accident.
Pennsylvania's Three Mile Island nuclear power plant suffered a partial meltdown in March, 1979. Victor Gilinsky was the senior sitting member on the Nuclear Regulatory Commission when that accident happened. According to Gilinsky, now retired, "There is no insurance for an extreme event."
Now, as scientists warn of climate change, rising sea levels, stronger hurricanes and a host of other environmental threats related to global warming it might not be unreasonable to re-examine protections afforded the public. Small-scale accidents at nuclear plants continue to happen. A big one, like Fukushima or worse, may have a low probability level. But it isn't impossible.
True, nuclear plants contribute little or no greenhouse gas emissions to the overburdened atmosphere compared to the coal-fired plants that add so much to global warming. But there is another factor to consider when weighing the nuclear option. Originally licensed for 40 years of operational life, most US nuclear plants are approaching or have already exceeded that period. So far, 73 such plants have been given 20-year extensions, and with retrofitting and extensive upgrades, some are expected to function to an age of 80 years. Lets all keep our fingers crossed.
Miles Benson is a correspondent for Link TV's Earth Focus. He has a distinguished career as a daily print journalist. From 1969 till his retirement in 2005, was a correspondent for the Newhouse Newspaper group, which included 30 daily newspapers. He covered the US Congress for 15 years and then the White House for 16 years, wrote a weekly political column and covered national politics and public policy.
After careful consideration, we have decided that it is time to make changes in the format of Mosaic: World News from the Middle East. To accommodate this change, we are now extending the current hiatus indefinitely while we retool and do the necessary fund raising to grow and expand the program concept, and to cover our production costs. New reports will no longer be available online or on Link TV. The Mosaic archive of all past shows will remain at LinkTV.org/Mosaic.
Change is never easy. We have heard your thoughts and concerns during this time of transition -- and we share a passion for the legacy of this program and the vision that helped to create it. Mosaic has always been a concrete demonstration of Link TV's core mission, reaching beyond borders and presenting non-mainstream perspectives in the hopes of connecting people and cultures.
In this time of global conflicts, misconceptions, and lack of trustworthy information, we believe a program like Mosaic remains an essential value. We now ask for your support and patience, as we create a new format that will include voices from the region, thoughtful analysis and insight, and a careful examination of social media within the different cultures of the Middle East and North Africa. Our intention is to bring you a program in concert with the news from the region and the new information technologies available to help make sense of a rapidly changing world.
Thank you for all of your support, your honest feedback, and your understanding. We will continue to keep you informed as new plans emerge.
Japan's NHK World NEWSLINE program reported on the two disasters to hit Asia this past week. The first report aired April 24, and covered the latest garment factory collapse in the Bangladeshi capital of Dhaka. The second report LinkAsia covered this week aired April 23, and focused on the response to the earthquake in China's Sichuan province.
The upper part of the commercial building suddenly collapsed during the busy morning period. The structure housed a clothing factory, bank and a shopping center. Many people are feared trapped inside. Workers at the factory were starting their shifts and some shops were already open. More than 100 people are reportedly hurt. Soldiers and citizens are helping with the rescue operation. Local media say a crack was detected in the wall of the building on Tuesday, but people were still allowed to go inside.
The response to the Sichuan earthquake is an important test for China's new president Xi Jinping. Five years ago, the former government was widely criticized for its poor response to an earthquake, which also occurred in Sichuan Province. That quake killed nearly 70,000 people. For more on the Chinese government's response to this latest earthquake, here's NHK.
The quake is the first large natural disaster since President Xi took office last month. He swears that his government will do everything possible to help survivors. Officials are also making sure the public knows about the government's efforts.
Premier Li Keqiang traveled by helicopter to the stricken areas on the day of the quake. He instructed rescuers to do all they could to save lives. His visit was reminiscent of the one by his predecessor Wen Jiabao. The former premier visited Sichuan years ago just hours after another huge quake hit the region. He tried to show the government's readiness to support survivors.
Authorities are highlighting other aspects of the government's response to the latest earthquake. Chinese media have been reporting in detail on the rescue effort. State run tv has broadcast repeated footage of the military's operations along with images of people receiving relief goods. Officials seem to want to show the public that the government's response is going well. An expert in risk management with a government affiliated think tank says China's leaders are paying more attention than ever to disaster response.
The disaster is not the only matter at home that China must address, the country's also struggling with a widening wealth gap and the recent outbreak of a new strain of bird flu. Compared to when the 2008 quake struck, people in China can now share information more quickly. Over 500 million Chinese are said to have internet access. Public discontent can spread in an instant.
A posting on China's version of Twitter is critical of the government's earthquake response. It says officials have failed to make use of lessons from the disaster 5 years ago. Wang says authorities need to quickly share information with the public. He says that's crucial for social stability.
China's leaders were harshly criticized for the slow response to the last earthquake in 2008. People were also angered by regional disparities in reconstruction efforts. Members of President Xi's government are keen to avoid making the same mistakes.
(LinkAsia: March 22, 2013)
And finally, on a lighter note, it's springtime in Japan. Cherry blossom season, a big event in Japan, is just about over. But there's another rite of spring. This one is in Kyoto, the old capital. It involves a lot of heavy lifting. Here's Japan's national broadcaster, NHK.
NHK World NEWSLINE
Airdate: March 21, 2013
It doesn't get any busier than this in the Old Daigoji Temple. Contestants try to lift a giant rice cake, or mochi. The women's weight is 90 kilograms. The men's: 150 kilograms. They hold it for as long as possible, making an offering to the gods with their physical strength. Serious challengers can train at a mochilifting center. They stopped by on their way from work. Tires are used instead of cakes. Mieko Tanaka manages the center. Twenty-five years ago, business troubles were getting her down. So she entered the event for the first time. On her third attempt a few years later, she came in first.
Mieko Tanaka, mochi-lifting center:
You learn not to be discouraged. That's what attracts people to this event.
Mika Kitagishi is entering the event for the first time, to cheer up her sick father. The event demands not only upper body strength, but also balance. The trick is to lift the tray at least 85 centimeters and hold it at just the right angle. In the end, it comes down to mental strength, to bear pain and numb leg.
Mika Kitagishi, participant:
I hope when my father sees me pushing myself to the limit, it will cheer him up.
This is the second year Nobuaki Kanaoka has trained here. He is an interior decorator, and his business is suffering. But he enters the contest to get the strength to face the economic slump. The day of the contest arrives. Kitagishi, wishing for her father•s good health. She mustered all her strength, but not her balance.
I did my best, but it wasn't enough. Still, I'll tell my father I want him to be healthy this year.
Now it's Kanaoka's turn.
One minute, two minutes...
I might collapse tomorrow, but I will hold on a little longer. We're challenging our limits, right?
Two minutes and thirty-nine seconds. Kanaoka finishes second.
Second place gives me a completely positive outlook. The training for this contest will give me the energy to face challenges at work.
They make an offering of physical strength. They're granted inner strength. That, plus the satisfaction of challenging themselves to the limit.
Who gets to eat all that mochi after they are done lifting? I love mochi! That's our show for this week. I'm Thuy Vu. See you again.
(LinkAsia: March 15, 2013)
Moving on now to Japan, the country's in an energy crunch. Ninety-nine percent of Japan's crude oil and natural gas are imported. Virtually all its nuclear reactors were closed after the Fukushima disaster two years ago. So the country’s scrambling to find new energy sources to keep the lights on. They may have found a new source deep in the ocean. Here’s Japan's public broadcaster NHK.
NHK World NEWSLINE
Airdate: March 11, 2013
Kaho Izumitani, Reporter:
Researchers in Japan have been hunting for methane hydrates since the 1990s. They estimate the deposits discovered in the Pacific could cover the country’s gas needs for 14 years.
And that’s not all. They’ve found evidence of methane hydrates elsewhere in Japanese waters. Some experts say the total amount could provide natural gas for the next century.
The fact that natural gas can be extract within the Japanese exclusive economic zone is a huge advantage for Japanese industry.
The push to find new sources of energy got stronger in 2011 after the nuclear accident in Fukushima. Only 2 of 50 commercial nuclear reactors are generating power right now because of tougher restrictions.
Utility companies are importing more natural gas to fire thermal power plants. That’s caused Japan’s trade deficit to balloon to a record high. It grew to more than 70 billion dollars last year.
Along with methane hydrate, businesses are looking for other energy sources. Workers at a drilling company succeeded last October in extracting shell oil from rock layers deep underground in northern Japan.
Researchers also have their eye on the water’s off Sado island in the Sea of Japan. Oil and natural gas reserves could be sitting nearly 3,000 meters below the seabed. Government officials plan to start test-drilling there in April.
But for now, it’s the revelations about methane hydrate that are fueling excitement in Japan. Experts caution that scientists soon need to create technology to stably extract the gas and reduce costs.
I hope Japan can start production in about 10 years. Many countries are watching how Japan extracts gas from this new resource and whether the method works. If Japan cooperates with other countries as a leader, it can contribute to the world.
Japan is considered a resource-poor nation, but it’s rich in technological know-how. The government and industry hope they can tap that resource and secure safe and stable source of energy that will last for generations. Kaho Izumitani, NHK World, Tokyo.
All this week, Japanese have been marking the second anniversary of the earthquake and tsunami that killed more than 20-thousand people and displaced hundreds of thousands on Japan's northeast coast. The anniversary reverberated in New York as well. Masaaki Suzuki conducted his Baroque Orchestra in memorial concert for victims of the tsunami and last winter's big storm in the American northeast. Here's NHK.
NHK World NEWSLINE
Airdate: March 11, 2013
300 people gathered at a church in Manhattan on March 11. It’s the second anniversary of the earthquake in Japan. The orchestra performed Bach in memory of the victims. It also prayed for the reconstruction of the affected areas.
"I thought it was very beautiful, and I think it’s a very nice gesture that these two different countries are getting together to support the people that had to go through both of these traumatic experiences."
Maestro Suzuki says he is happy because he could finally show his appreciations to Americans for their support.