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Archive for April, 2011

Are ‘enviros’ evil,or trying to protect property + reassert control over behemoths? New Zealand Navy + Petrobras vs. Maori fishermen

April 27th, 2011 No comments

A quick show of hands:

  • How many of you think that the recent protests by New Zealand “greens” and Maori fishermen against Government-licensed oil exploration activities by PetroBras is evidence of a blind envirofascist hatred of mankind?
  • How many of you cheer on the “capitalist” exploration and development of government-owned resources by big and state-entanged corporations, over the quaint claims to “fishing rights” by locals?
  • How many of you think that PetroBras and its shareholders are the real victims of these protests?
  • How many think it’s a sign of how government “ownership” of public resources leads to zero-sum politicization of decisions, and of decisions that are tilted toward activities that provide revenues to government, while shifting risks to local communities and individuals?
  • Does anybody see any parallels with BP and the Gulf?  With the crony capitalism supporting Tokyo Electric, the operator of the Fukushima nuclear plants?

I posted a few tweets on this topic, which I copy below in chronological order:

 TokyoTom

NZ Navy intervention in oil protest “disgusting” – Maori MPs |     
 TokyoTom 

Maori Sovereignty? “Maori feel the pollution risk to the water+fish stocks is too great”   
 TokyoTom 

Maori skipper detained by Navy warship for defending ancestral fishing waters from Oil Drilling  
 TokyoTom 

Maori fisherman: “We are defending tribal waters+our rights from reckless Govt policies”   
 TokyoTom 

“opening up natl parks+our coastline to transnationl corps shows contempt+will face fierce+sustained local resistance”
 TokyoTom 

Petrobras protest+Maritime Rules  |clear frm+ tht Gov ‘ownership’ leads to poor risk mgt+theft frm communities
 TokyoTom 

“Gov has awakened some sort of taniwha.We’re all virgins at doing this.We never fight”   
 TokyoTom 

“April 11: NZ Navy ships+Air Force planes begin monitoring the protest along with police”   
 TokyoTom 

“after the licence was given-in what way is that consultation? It isn’t, not even close”    
 TokyoTom 

Te Karere Ipurangi » Blog Archive » Oil surveys damage sea creatures organs – ECO    
 TokyoTom 

MP says it is a disgrace…wrong for NZ citizen to be threatened by Defense for opposing a deal btwn gov+foreign oil co
 TokyoTom 

NZ Gov happy w discretion to act unilaterally 2increase Gov revenues+to ignore locals  
 TokyoTom 

In NZ as in ,locals trying to exercise community crtl treated as ‘terrorists’    
 TokyoTom 

Rikirangi Gage to  “We are defending tribal waters+our rights frm reckless Gov policies”  
 TokyoTom 

AUDIO:Rikirangi Gage of te Whānau-ā-Apanui vessel radios captain of  oil survey ship  

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On Feel Sorry for BP Day, Coast Guard reports blasts Transocean's Deepwater Horizon, a Marshall Islands flagship. Somehow role of Govt as irresponsible resource owner is overlooked

April 23rd, 2011 No comments

Yesterday, on Feel Sorry for BP Day (we all know that BP is just another victim of fishermen,other purported victims and Government, right?), the WSJ provided coverage of a Coast Guard report blasting Transocean, owner of Deepwater Horizon, a Marshall Islands flagship owner of the rig that blew up and sank last year, leaving an oil will that has greatly affected the Gulf of Mexico and the health and livelihoods of many thousands of people.

Somehow, both the Coast Guard and the WSJ reporters managed to overlook the 800 lb. gorilla in the room: namely, the role of Government as irresponsible resource owner. How convenient!

These days, even supposedly ‘capitalist’ new organizations don’t seem to have any grasp of how profoundly “non-capitalist” is our energy sector, which is heavily tied to government as resource owner and pollution-permit authorizer.

Here’s the link.

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WSJ article makes clear that dealing with nuclear power plants in crisis mode is very much experimental

April 23rd, 2011 No comments

I ran across an interesting WSJ piece today that I Tweeted as follows:

=EXPERIMENT: Tepco Let  Pressure Soar to Twice Design Limit Before Venting that then Exploded WSJ

Here are some excerpts of the WSJ article,”Reactor Team Let Pressure Soar

The operator of Japan’s stricken nuclear plant let pressure in one reactor climb far beyond the level the facility was designed to withstand, a decision that may have worsened the world’s most serious nuclear accident in a quarter century.

Japanese nuclear-power companies are so leery of releasing radiation into the atmosphere that their rules call for waiting much longer and obtaining many more sign-offs than U.S. counterparts before venting the potentially dangerous steam that builds up as reactors overheat, a Wall Street Journal inquiry found.

Japan’s venting policy got its first real-world test in the chaotic hours after March 11’s earthquake and tsunami knocked out cooling systems at the Fukushima Daiichi nuclear-power complex. By the first hours of March 12, an emergency was brewing inside the plant’s No. 1 reactor.

By around 2:30 a.m., the pressure inside the vessel that forms a protective bulb around the reactor’s core reached twice the level it was designed to withstand. Amid delays and technical difficulties, it was another 12 hours before workers finished releasing radioactive steam from this containment vessel, via reinforced pipes, to the air beyond the reactor building.

About an hour later, the reactor building itself exploded—a blast that Japanese and U.S. regulators have since said spread highly radioactive debris beyond the plant. The explosion, along with others amid overheating at reactors 2, 3 and 4, contributed to radiation levels that led to mandatory evacuations around the plant and the government’s admission that the Fukushima Daiichi disaster ranks alongside Chernobyl at the top of the nuclear-disaster scale.

Experts in the U.S. and Japan believe the venting delay may have helped create conditions that led to the blast. In one possible scenario, pressure built so high that it damaged gaskets and other parts of the venting system, through which highly explosive hydrogen gas leaked from the core into the reactor building. It was Japan’s cautious approach to venting, an outgrowth of its profound concern over nuclear contamination, that may well have made the accident worse, they say.

Containment vessels can withstand higher pressures, some studies have indicated. Among these are studies conducted in the 1990s by Japanese operators and equipment manufacturers, in preparation for Japan’s first set of severe-accident protocols, that say such vessels can withstand twice the design pressure. Many Japanese operators have adopted this as their benchmark for releasing contaminated air.

Tepco spokesman Yoshikazu Nagai confirmed that if there is a risk of releasing radiation, the company doesn’t vent until pressure hits roughly twice the design limit. “Venting is a last resort,” Mr. Nagai said.

General Electric Co., the designer of the vessel at Fukushima Daiichi, said it is unaware of any such Japanese studies or venting protocols.

The International Atomic Energy Agency said it doesn’t have specific guidelines on venting and doesn’t comment on the appropriateness of actions taken in member countries.

U.S. protocols on handling accidents at similar reactors call for venting before pressure exceeds the design level. The same protocol is followed by plant operators using similar types of reactors in Korea and Taiwan, industry experts in those countries say.

I am reminded of the article by Bill Keisling on the Three-Mile Island that I cross-posted earlier; here’s a relevant excerpt for those of you who missed it:

Rule 1: Commercial atomic energy technology is a pseudo-science and is not based on proper scientific experimentation.

As we recently witnessed during the multiple nuclear accidents at the Fukushima nuclear power plant, a damaged reactor (or reactors) often has broken controls, computers systems, and gauges that make monitoring a runaway nuclear reaction difficult, if not impossible.

Confusion and fright in the control room(s) at the time of emergency create what can almost be called A Fog of War. Indeed, war it is. They’re at war with a runaway nuclear reactor.

At Fukushima, as on Three Mile Island, operators wished they could simply peer into the containment building with their own eyes and dispense with the broken alarms, computers and gauges that tell them nothing, and often mislead them.


‘The nuclear power industry naturally doesn’t think very much of troublesome nitwits like Galileo, Francis Bacon, René Descartes, Isaac Newton, and their ridiculous, old-fashioned ideas about experimentation, reproducible results, and scientific method.’


But that’s only a small part of the problem. Truth is, no one really understands the behavior of tons of melted nuclear fuel in a reactor.

For a variety of reasons, the commercial nuclear power industry and its government regulators never conducted a single experimental meltdown of a full-size nuclear reactor.

So, until one melts, no one knows how a runaway reactor will behave.

As most of us remember from high school, scientific knowledge has advanced over the centuries because of what’s called the Scientific Method.

The Oxford English Dictionary defines the Scientific Method as “a method of procedure that has characterized natural science since the 17th century, consisting in systematic observation, measurement, and experiment, and the formulation, testing, and modification of hypotheses.”

In simple words, real-world experiments must be designed to test a hypothesis, and results must be reproducible.

As we know, cars and planes are rigorously tested and crashed all the time, in all manner of ways, in all sorts of conditions. That’s how designers and regulators learn how these complicated machines behave in real-world accidents, and whether they’re safe.

Not so nuclear reactors. For a variety of reasons, including half a century of financial and political considerations, regulators in the United States side-stepped or outright ignored the issue of full-scale reactor safety testing, and continue to ignore it to this day.

This inescapable and troubling fact is entwined with the history of atomic power regulation in the United States. 

Perhaps it’s time for us to try the experiment of ending all government support for nuclear power, “public” utility monopolies, and corporations in general (which could not exist in their present form without state grants of limited liability to shareholders)? Maybe then – when investors and power companies are faced with a greater share of the actual risks generated by their businesses – we will see a more responsible and prudent form of capitalism, one that generates true wealth, and noty simply moral hazard and risk-shifting, plus profits for a few?

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Ayn Rand Center promises to have fun with man-hating enviros for Earth Day, so for fun I sent them a note

April 13th, 2011 No comments

A little birdy Tweet by the Ayn Rand Center for Corporate Individual Rights told me that the ARCs Voices for Rent-Seekers Reason blog is “Gearing up for Earth Day”, so of course I had to go take a look.

Here’s some of what I found:

As Earth Day (April 22) approaches, the Ayn Rand Center wants to help you understand the destructive campaign environmentalists have pursued for decades against energy production.

… [It is] clear that environmentalists are not so concerned about carbon emissions—they fight against every form of practical, cheap energy regardless of whether it emits CO2 (like fossil fuels) or not (like nuclear and hydro).

As ARC fellow Dr. Keith Lockitch explains …

 

the basic moral premise at the root of environmentalism is the premise that nature is something to be left alone—to be preserved untouched by human activity.

… This moral animus against human “intrusion” upon nature creates a basic conflict between the goals of the environmentalist movement and the needs of human life.

 

The blog post ends with a promise that (emphasis added)

on Earth Day, which is on Friday, April 22, we will be hosting a live Q&A session from our headquarters in Irvine, CA, where resident fellows Keith Lockitch and Alex Epstein will answer any questions you have about Earth Day, environmentalism, the recent nuclear scare in Japan, and related issues.

Besides some inaugural encounters at Mises Daily and the Mises Blog with Objectivist Dr. George Reisman,  readers might like to note that I previously commented on some of Keith Lockitch’s work relating to aid and development.

It certainly should not surprise my regular readers for me to note that I find the gist of the ARC post to be largely irrelevant, and productive only in the sense of offering a self-deceptive defense of a profoundly corrupted and statist ‘free market’.  Citizens of all stripes have every right to want to fight with others over:

  • how valuable government-owned resources (public lands, lakes and waters and marine resources) will be used or protected (as no private transactions to otherwise express preferences are possible);
  • levels of air, land and water pollution that governments will license companies to emit (rather than enforcing rights to prevent trespassing by others to person and property);
  • what energy sources that ‘the government-licensed and -regulated companies we call ‘pubilc utiities’ will invest in (at guaranteed rates) and what conservation measures they will embark on (as preferences can not be expressed via free transactions in competitive markets) – including nuclear power; and
  • what risks to the public at large (and what political activities) we wiill allow those massive and politically powerful risk-shifting and commons-privatizing machines we call corporations.

While I strive for an optimism that self-described principled libertarians will aim for a constructive engagement with people who are understandly dissatisfied with a system profoundly skewed by government, sometime my cynicism gets the better of me.

I already regret the following note that I sent via the comment form to the ARC bloggers, but hey, who knows?

Sadly, it looks like far from a ‘principled’ examination of the very negative roles that government plays in the destruction of resources and the other environmental and human rights issues that concern environmentalists, ARC wants to attack motives.

Examine the role of govenment owership of resources in destruction of the Gulf of Mexico, in overfishing and in fostering political battles for control of use of ‘public lands’? Doesn’t seem ARC is interested.

Examine the role of government in licensing polluting coal plants, stripping govt-owned lands for coal, owning TVA and others which have large fly-ash pollution, and licensing mountain-top remval practices that destroy the rivers shared by others? Will ARC sympathize and point to government refusal to protect private property (thus leading to political battles over regulations), or simply bash enviros?

Will ARC examine the negative role of government in granting monopolies to utility companies, thereby leading to wasteful pricing and lack of choice -as well as costly crony capitalism in the case of nuclear power, which gets rate guarantees and liability waivers?

Will ARC examine the role played by government in creating corporations in the first place, in a form that embeds moral hazard and exacerbates ‘agency problems’, by legislatively telling shareholders they have no liability for the damages the legal fiction they own might cause to others? Will  ARC even notice how abuses arising from the corporate form have given rise to the modern, corrupt regulatory state?

I’m on pins and needles, just waiting to see how principled and productive ARC is going to be!

By the way, I had some comments for Keith a couple of years ago: Not #Climate Change Welfare, But Capitalism and Free Markets? A few thoughts: TT’s Lost in Tokyo http://bit.ly/h60o8O #tcot #p2

I AM hoping for productive comments that address the role of government (and of the commons-destroying corporations they’ve created) rather than the motives of those nasty ‘capitalism’-hating enviros.

Sincerely,

TT

http://mises.org/Community/blogs/tokyotom/default.aspx
http://twitter.com/Tokyo_Tom
https://www.google.com/profiles/TokyoTomSr

“The first principle is that you must not fool yourself – and you are the easiest person to fool.”
Richard Feynman

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A guest post by investigative reporter & Three-Mile Island gadfly Bill Keisling on "The Fukushima Experiment"

April 7th, 2011 No comments

I’ve run across a very interesting post on problems with nuclear power and the “crony capitalist” nuclear power industry and government interface, by a veteran freelance Pennsylvania journalist/gadfly who started writing about ConEd’s Three-Mile Island facility well before it experienced its famous melt-down.

Bill Keisling is a dogged hunter of local corruption, a prolific author, blogger (at his website Yardbird.com) and videomaker (see, for example, his expose on how Pennsyvania college students were housed on a former Department if Defense nuclear watse sie).

Bill kindly gave me permission to cross-post his piece below, which I copy in its entirety.from his website, which I encourage readers to visit. I think his views provide very useful context.

  

 big wave at fukushima by mr. ok cola

The Fukushima Experiment

A nuclear meltdown survival guide

Japan’s Tepco utility executives and government officials are alternately accused of covering-up, withholding information, or downplaying the severity of their nuclear accident.

Truth is, as many of us nuclear meltdown veterans know, those utility executives and officials are as much in the dark as the rest of us.

If you live within two hundred miles of a nuclear power plant, consider this: If the plant suffers a meltdown, no one on earth will be able to tell you what to expect.

Welcome, then, to the Fukushima Experiment …

 

by Bill Keisling

 

Posted March 28, 2011 — The nuclear meltdowns at Japan’s Fukushima Daiichi atomic power plant reignited deeply personal memories for many of us in central Pennsylvania who lived through 1979’s Three Mile Island incident.

Some argue that the technological or natural causes of these two nuclear accidents differ greatly. Yet aspects of both are stunningly similar: both events caused world-wide hysteria and panic, followed by general condemnation of utility executives and government officials for their supposed mishandling or misunderstanding of the crisis.

 


The nuclear accident on Three Mile Island was a life-changing experience for me, and many others. In 1979 I was a young editor of a community magazine. I was actually the first writer/journalist to arrive at the gates of Three Mile Island the morning of the accident, on March 28, 1979. That morning I had both personal and professional reasons for being there.

The community newspaper I edited, Harrisburg Magazine, had, in the months leading up to the Three Mile Island accident, uncovered myriad problems at the nuclear power plant. We’d documented the willingness of state and federal regulators to look the other way so that the substandard and unsafe power plant could operate.

In August 1978 we even published a cover story detailing a possible disaster scenario involving these unresolved problems at the power plant titled, “Meltdown: Tomorrow’s Disaster at Three Mile Island.”

The owner of the power plant, Metropolitan Edison, was not amused. The electric utility responded by seeking a congressional investigation of our small magazine. Met-Ed almost ran us out of business.

Several months later, early on the morning of the accident, I got a call from a friend telling me that there was some sort of leak at the power plant and that a nuclear site emergency had been declared. I threw my camera and tape recorder into the car and drove the dozen or so miles to the gates of Three Mile Island.

There wasn’t much to see. To the naked eye, the two reactors and the four cooling towers sat placidly as ever on the island. From the gate nothing seemed particularly wrong, or out of place. A small amount of stream rose from two of the massive cooling towers.

The guards at the gate did their best to ignore me. I asked a guard what was going on but he brusquely refused to answer any questions. I pointed to a radiation monitor he wore on his jacket — a dosimeter — and asked what the instrument read.

“It doesn’t matter now,” he told me with a nervous break in his voice.

Shortly thereafter I was standing at the gate when scared nuclear workers began evacuating the plant. The guards hurriedly passed hand-held Geiger counters over each employee’s car, checking for radiation.

This, it turns out, wouldn’t be that much different from events at the gates of the Fukushima Daiichi nuclear power plant in March 2011. An American software engineer working at Fukushima witnessed terrified Japanese nuclear workers trying to escape by climbing over the nuclear plant’s fence following the earthquake.

As for myself, back in 1979, at the gates of Three Mile Island, my first impulse was to run. I later wrote about the moment in my novel, The Meltdown:

It made you think this wasn’t such a good place to hang out.

The main gate opened, the cars streamed out. They came one after another to the highway and turned right, wasting no time, tires spinning in the gravel. I heard one of the drivers say to another, ‘We’re all supposed to go to the substation down the road to be tested for contamination.’

Forty or fifty cars streamed from the plant, stopped momentarily to be swept by Geiger counters at the gate, then barreled up the road out of sight. All the while the cooling towers hung in the background.

Some sort of wild frightening premonition swept over me.

The idea came to me to put five hundred miles between me and this place. I turned and started back to my car. I only took two or three steps, then I stopped. Maybe I should call some friends, I thought. Let them know the reactor’s about to melt. It would be a kind, a thoughtful thing to do, a kindness I’d appreciate from a friend. But I wouldn’t be able to reach most of the people I knew.

At that moment I made a fateful decision that, for me, was life changing. I’d realized there was no place in the world to run from a nuclear accident. I couldn’t possibly warn all my friends and family. My life would be destroyed with the people and the town that I knew.

So sorry: American and Japanese utility executives employ different approaches to breaking bad nuclear news. Met-Ed’s Jack Herbein wagged his finger and told us to Talk to the Hand in 1979; Tepco execs offered deep bows (bottom). Herbein photo by Bill Keisling.


I turned to face the power plant, and planted my foot firmly in its path. I decided at that moment to understand what was happening, and to try to understand why it happened.

In the ensuing minutes, hours, and days, I saw it all, much of it first hand.

I followed the procession of cars evacuating the power plant gates to a nearby observation center. There I listened, watched, and interviewed scared workers. Things I saw that morning forever burn my memory.

One middle-aged nuclear worker sat nervously inside the touristy observation center waiting to be screened for radiation contamination. His hands shook violently and uncontrollably. He held his hands out in front of himself and watched them shake. He stared at his own shaking hands as if they were someone else’s hands, and not his own.

It was bedlam all around us at the observation center. Rad-suited crews swept the grounds for radiation leaks. One hyper worker knocked through the pandemonium gasping, “There’s been a mix up somewhere here!”

Helicopters carrying out-of-town newsmen and cameramen spun down from the sky. By the minute, before my eyes, it grew into an international incident.

Before long a helicopter carrying a utility executive landed on the lawn of the observation center. Jack Herbein, Met-Ed’s vice president for generation, convened an impromptu news conference on the back lawn.

Jack Herbein was normally a polished and controlled utility executive. That day he memorably told the television cameras that everything was “under control.”

“There’s nothing to worry about,” Herbein told us. “Just a little water spilt on the floor.”

We followed Herbein inside the observation center. I yelled over the din at him, inquiring whether this was a nuclear core meltdown.

Herbein looked straight at me, but didn’t answer. His eyes betrayed shock, and fright. He turned and hurried back to his helicopter and choppered away.

Within days, Met-Ed’s Jack Herbein would find himself at ground zero of an international uproar.

The accident just wouldn’t go away. Utility executives and government officials tried their best to play things down. Then, a few hours later, more wrenching bad news would leak from the power plant.

The reactor’s 150-plus tons of nuclear fuel might be melting. The governor ordered an evacuation of children and pregnant women. A potentially explosive hydrogen bubble was detected in the reactor. Things clearly weren’t “under control.”

TMI Jack Herbein by Bill Keisling

Met-Ed’s Jack Herbein stands on milk box to scold world press: ‘I don’t know why we need to tell you every little thing that we do!’ Tepco execs in 2011 offer still more apologetic deep bows to evacuees. Jack Herbein photo by Bill Keisling. Click photo or here to enlarge.


Four days after the initial accident on Three Mile Island, on Saturday, March 31, 1979, at a press conference in nearby Middletown, wearing the same rumpled suit he’d been in for days, an exhausted Jack Herbein of Med-Ed stood on a milk carton to boost himself above a mountain of microphones to bray at the immense polyglot mob of the world’s news media, “I don’t know why we need to tell you each and every little thing that we do!”

That one moment of frustrated pique cost Met-Ed, and Jack Herbein, all public sympathy.

But was Jack Herbein covering up, or was he simply as much in the dark as the rest of us?

 

More than three decades later it’s deja vu all over again, but this time fighting the dark are executives with the Tokyo Electric Power Co., operators of Japan’s runaway nuclear reactors at the Fukushima Daiichi nuclear power plant.

Tepco utility executives are alternately accused of covering-up, withholding information, or downplaying the severity of their nuclear accident.

Truth is, as many of us nuclear accident veterans know, those utility executives are as much in the dark as the rest of us.

Lessons from Three Mile Island in 1979 go a long way to explain what’s happening in 2011 in Japan.

In the years following the Three Mile Island accident much was learned about what the utility did, and did not know at the time of the 1979 reactor meltdown in Pennsylvania.

It became painfully obvious that the control room operators, the utility executives, and the government overseers of Three Mile Island simply did not know at the time what was happening inside their damaged nuclear reactor core.

Why they did not know is really the heart of the matter, and the thing we should consider.

In the event of a runaway nuclear reactor (politely called a “power excursion” by the industry), Tepco executives in Japan, like their counterparts in Pennsylvania, don’t have the foggiest idea what may happen when their reactors melt.

If you live within two hundred miles of a nuclear power plant, consider this: If the plant suffers a meltdown, no one on earth will be able to tell you what to expect.

Having spent decades looking into all this, I thought I might save those interested in researching the Fukushima nuclear disaster valuable time and trouble by providing a short list of the most important points I’ve learned about nuclear power accidents.

Decades of research can be boiled down to a few key observations or rules that until now I’ve kept in the back of my head.

I here offer my list as a time-saving primer to others:

Rule 1:

Commercial atomic energy technology is a pseudo-science and is not based on proper scientific experimentation.

As we recently witnessed during the multiple nuclear accidents at the Fukushima nuclear power plant, a damaged reactor (or reactors) often has broken controls, computers systems, and gauges that make monitoring a runaway nuclear reaction difficult, if not impossible.

Confusion and fright in the control room(s) at the time of emergency create what can almost be called A Fog of War. Indeed, war it is. They’re at war with a runaway nuclear reactor.

At Fukushima, as on Three Mile Island, operators wished they could simply peer into the containment building with their own eyes and dispense with the broken alarms, computers and gauges that tell them nothing, and often mislead them.


‘The nuclear power industry naturally doesn’t think very much of troublesome nitwits like Galileo, Francis Bacon, René Descartes, Isaac Newton, and their ridiculous, old-fashioned ideas about experimentation, reproducible results, and scientific method.’


But that’s only a small part of the problem. Truth is, no one really understands the behavior of tons of melted nuclear fuel in a reactor.

For a variety of reasons, the commercial nuclear power industry and its government regulators never conducted a single experimental meltdown of a full-size nuclear reactor.

So, until one melts, no one knows how a runaway reactor will behave.

As most of us remember from high school, scientific knowledge has advanced over the centuries because of what’s called the Scientific Method.

The Oxford English Dictionary defines the Scientific Method as “a method of procedure that has characterized natural science since the 17th century, consisting in systematic observation, measurement, and experiment, and the formulation, testing, and modification of hypotheses.”

In simple words, real-world experiments must be designed to test a hypothesis, and results must be reproducible.

As we know, cars and planes are rigorously tested and crashed all the time, in all manner of ways, in all sorts of conditions. That’s how designers and regulators learn how these complicated machines behave in real-world accidents, and whether they’re safe.

Not so nuclear reactors. For a variety of reasons, including half a century of financial and political considerations, regulators in the United States side-stepped or outright ignored the issue of full-scale reactor safety testing, and continue to ignore it to this day.

This inescapable and troubling fact is entwined with the history of atomic power regulation in the United States. In brief, here’s the story, with footnotes and references for those who want to follow along at home:

After the war with Japan ended in 1945 with the dropping of atomic bombs in Hiroshima and Nagasaki, the US found itself the world’s sole possessor of the secrets of atomic energy.

To take these secrets from the hands of the military and deliver them to the civilian population, the United States Congress passed the Atomic Energy Act of 1946. This legislation forbade any entity but the US Government from creating atomic energy, and disallowed international cooperation involving any atomic secrets. To oversee the peacetime atom, the Atomic Energy Commission (AEC) was created, and Harry Truman appointed five commissioners. A statute of Congress created the Joint Committee on Atomic Energy on August 2, 1946. This joint committee would police the AEC, and authorize all appropriations to the commission. 1

The EBR-I experimental reactor in Idaho was the scene of both the first atomic generation of electric power and an early reactor meltdown.


History was made almost five years later. Four, 200-watt light bulbs began to glow when 12 control rods were lifted away at the Experimental Breeder Reactor Number One (EBR-I) in Idaho Falls, Idaho. Sixteen technicians signed their names on a wall there, beneath this notation: “Electricity Was First Generated Here From Atomic Energy on December 20, 1951.” EBR-I seemed all the more remarkable because it was a breeder reactor and, it was said, could safely produce more fuel than it burned. 2

Mamie Eisenhower christened the Nautilus, the world’s first nuclear powered submarine, on January 21, 1954. The public loved it. Still, many Americans were anxious to give private industry an opportunity to split atoms. The Atomic Energy Commission was seen as an island of socialism in the sea of free enterprise.

Dwight Eisenhower signed the Atomic Energy Act of 1954 on August 30 of that year. The “Atoms for Peace” program was launched. Private enterprise could now exploit nuclear power, the AEC would begin to award contracts to businesses, and the poor nations of the world were promised atomic power. 3

The bubble burst in November of 1955. The tiny EBR-I reactor had been experiencing power fluctuations and, while trying to discover the cause of the problem, technicians attempted to bring the core to within a few degrees of melting temperature. At half power, fuel rods holding the Uranium-235 fuel began to bow inward, increasing the core’s reactivity. A “power excursion” occurred, and the reactor began to run away, its gauges climbing off scale. With a split second to spare, a technician commanded a “blanket” of U-238 bricks surrounding the fuel rods to drop away, stopping the power excursion.

An explosion was barely avoided, but the core, capable of producing 1.4 megawatts of heat output, had melted. 4


‘Lloyds of London would not write a policy protecting a nuclear power plant’


Insurance companies, which had been trying to assess the feasibility of insuring commercial reactors, were more squeamish than ever. Utilities considering building nuclear power stations discovered their investments could not be insured. Lloyds of London, known for taking risks on just about anything, would not write a policy protecting a nuclear power plant. Insurance companies throughout America began writing nuclear exclusion clauses into homeowners’ policies, preventing insurance payments for any nuclear related loss. The entire insurance industry pooled together would provide no more than $65 million worth of coverage for a nuclear power plant. 5

Hoping to win the insurance industry’s confidence, the Joint Committee on Atomic Energy authorized the AEC and the Brookhaven National Laboratory to prepare a study on the effects of a major accident at a 100- to 200-megawatt electrical output reactor.

In March 1957, the study, entitled “Theoretical Possibilities and Consequences of Major Accidents in Large Nuclear Power Plants,” Or WASH-740, was released. WASH-740 did not make the insurers rest easier. The Brookhaven laboratory estimated that in the event of a worst possible accident, 3,400 people would die, 43,000 would be injured and seven billion dollars worth of damage would be done. Commercial nuclear power production was now at a standstill. 6

Because the private insurance wasn’t enough, the utilities now settled for a bit of socialism. Senator Clinton Anderson and Congressman Melvin Price introduced legislation that provided for $495 million worth of government coverage — an arbitrarily arrived at amount — in addition to the $65 million private insurance pool. The Price-Anderson Amendment to the 1954 Atomic Energy Act became law in September 1957. The last hurdle apparently out of the way, private industry was, again, off and running to create fission energy. 7

In Pennsylvania, Metropolitan Edison and its fellow utilities of the General Public Utilities Corporation, along with the Pennsylvania State University and Rutgers University, created the Saxton Nuclear Experimental Corporation. The AEC approved a construction permit for a 20-megawatt thermally rated reactor in Saxton, Pennsylvania, in 1959. 8

The SL-1 experimental reactor being lifted from its containment building following its deadly 1961 accident.


But tragedy visited another experimental reactor on January 3, 1961. At about nine in the evening, three technicians were performing a maintenance operation on the SL-1 reactor in Idaho Falls, Idaho. The SL-1 was one of 17 test reactors scattered across 892 square miles of Idaho desert at the AEC’s National Reactor Testing Station. The tiny SL-1 was meant to produce electricity for about a dozen homes in arctic military bases. For some time the reactor’s nine control rods had been acting up, as had other reactor functions.

The SL-1 had been shutdown for about a week in expectation of major repair work, its control rods pushed firmly down and disconnected from the mechanical control rod drive. The number nine control rod was the most important. It was the only rod that could start the chain reaction when lifted away. To ensure that the cadmium control rods would not stick or jam, technicians had been “exercising” them, lifting them a few inches, then returning them. That night three technicians were standing on top of the reactor, reconnecting the control rods to the mechanical drive. The number nine control rod had to be lifted four inches by hand to be connected to the machinery.

During this operation the rod was lifted too far. In a fraction of a second the reactor became critical, a power excursion followed, and an estimated 1,500,000,000,000,000,000 atoms split.

By the time help arrived, one man was found dead. A second technician was rushed outside, but was so radiated that he had to be examined by a doctor wearing protective clothing. The second man quickly died. The third technician was found dead on the ceiling of the reactor building. A piece of control rod was jammed through his groin, pinning his corpse to the ceiling at the shoulder.

For twenty days, the bodies were packed in water, alcohol and ice, while scientists tried to cleanse the dead tissues of uranium. Finally the men were buried, but their heads and hands had to be removed and buried with other nuclear wastes. 9


‘A third technician was found on the ceiling of the reactor building. A piece of control rod was jammed through his groin, pinning his corpse to the ceiling at the shoulder.’


The Atomic Energy Commission reached another crossroad in 1964, when construction permits for the first big, pressurized and boiling water reactors were granted. A utility could make an appreciable profit on its investment when smaller reactor designs were made larger, taking advantage of economies of scale. Pressurized water reactors rated at thousands of megawatts of heat output would soon be operating.

To estimate the damage of a serious accident at a large commercial reactor, the Joint Committee on Atomic Energy authorized the AEC and the Brookhaven laboratory to update the 1957 WASH-740. The results were shocking.

Instead of 3,400 deaths, there would be 27,000; instead of 43,000 injuries, there would be 73,000; instead of $7 billion worth of damage, a “worst possible accident” at a new pressurized or boiling water reactor would cause $17 billion in damages. To make matters much worse, Brookhaven statisticians determined that an evacuation would make no appreciable difference in the number of people killed.

The study indicated that a landmass the size of the Commonwealth of Pennsylvania could be rendered uninhabitable; that is, if the reactor were to be built, say, in central Pennsylvania.

Fearing this updated WASH-740 report would create an outcry at a very sensitive time, the AEC withheld this report from the public. 10

A draft of the updated WASH-740 report would not be released until June 1973, after both the Three Mile Island and Fukushima nuclear power plants were designed, considered for licensing, or built.

About the same time the WASH-740 update was being prepared, an “internal report” of the National Reactor Testing Station was also being drafted. This report called for a six-year minimum, intensive testing program to be conducted with the large reactors.

The NRTS report recommended that full-scale destructive testing be included in these reactor tests. The 1964-65 report was not released to the public until 1974; its findings too were ignored by the AEC.

The BORAX-1 experimental reactor seen undergoing a power excursion. When it finally blew up, scientists pointed out ‘uncertainties of extrapolation.’


Power excursion testing previously had been conducted inside tiny reactors. The BORAX-1 test reactor was only 1/500th the size of the larger, commercial reactors approved after 1964. By pulling the control rods of the BORAX-1, power excursions were created, and water was vigorously expelled from the coolant system, causing the reactor to shut down. But when an excursion test designed to melt the core was conducted in 1954, a “somewhat unexpected” steam explosion occurred, destroying the reactor and tossing a one-ton piece of equipment 30 feet into the air. 11

The Argonne National Laboratory reports that BORAX-1 “was deliberately destroyed in July 1954. Fuel plate fragments were scattered for a distance of 200-300 feet… The final test revealed that the predictions of total energy and fuel plate temperatures had been considerably too low. Instead of the melting of a few fuel plates, the test melted a major fraction of the entire core. The discrepancy was attributed to the uncertainties of extrapolation. The results of this energy liberation in the way of peak pressures and explosive violence lie in a region where there had been no previous experimental data.”

In other words, you can’t predict how a big reactor may behave from experiments conducted with much less fuel in a smaller reactor.


‘The National Reactor Testing Station report recommended that full-scale destructive testing be included in reactor tests.

The 1964-65 report was not released to the public until 1974; its findings were ignored by the AEC.’


Additional power excursion tests were conducted in the early 1960s on the Special Power Excursion Reactor Test, or SPERT-1 test reactor. In his book Nuclear Power: Both Sides, physicist Michio Kaku writes, “In some of the experiments we ran on the SPERT reactor we deliberately withdrew the control rods rapidly from the core. Without the control rods to absorb and regulate the neutrons from the fission process, the chain reaction would spin quickly out of control, and power levels would rise from zero to 30,000 megawatts (30 billion watts) in less than one-hundreth of a second. The cooling water would boil furiously, causing a steam explosion. On one occasion in 1962 I had the dubious distinction of deliberately blowing up the SPERT-1 reactor.” 12

The AEC officially reported that the SPERT-1’s core failed to explode during the “severest test that could be performed,” but the AEC did not mention that the SPERT-1 had faulty fuel rods, which terminated the power excursion by expelling fuel powder and coolant. No SPERT-1 power excursion test was then conducted with corrected fuel rods.

Both the BORAX-1 and the SPERT-1 test reactors, moreover, had several design differences from the larger, commercial reactors. When test reactors were built with a similar design to the larger reactors, power excursion experiments that could damage the fuel were deliberately avoided.

Instead, the AEC relied on calculations. “Design basis accidents,” and “worse possible accidents” were computed, but never verified by proper, scientific experimentation.

The AEC assumed sophisticated, though unverified, reactor theory to be fact. One reason for relying on these unproven calculations was that it was much less expensive over the short-run to do so than destroying a commercial size reactor, which could cost hundreds of million dollars, if not more.

Another reason for this unorthodox “un-scientific method” was that power excursion testing with reactors containing 100 tons or more of uranium could have serious environmental consequences.

So the nuclear industry continued to bank on the unproven hypothesis that a large, commercial reactor could be operated with little or no danger of explosion. 13

This deliberate blunder was one of the great scientific errors of twentieth century technology.

In contrast, Albert Einstein’s theories of relativity, the foundation of modern atomic science, continue to be subjected to painstaking experimentation. 14

Still, a good bit of the scientific laziness, lack of curiosity, and outright intellectual dishonesty of the nuclear regulators simply was a ruse to protect the finances of the nuclear industry.

As we see, the illusion of reactor safety and nuclear finances go hand-in-hand. Real-world experimental data which undermines the perceived safety of nuclear power plants is a threat to the insurability, and thus the financial viability, of the power plants. So over the decades real-world experiments that would impeach the safety of nuclear plants simply were never performed, were suppressed, or were played down by nuclear regulators.

Some blamed the problem on the mission and culture of the Atomic Energy Commission to both regulate and promote atomic energy.

Supposedly addressing this problem, Congress passed the Energy Reorganization Act of 1974, which abolished the Atomic Energy Commission. The AEC was replaced by the Nuclear Regulatory Commission (NRC), and the Energy Research and Development Administration (ERDA). The NRC now would supposedly only regulate, while ERDA would promote nuclear energy, especially reactor development.

Yet, in the decades ahead, the NRC would continue to avoid full-scale experimental reactor meltdown tests in favor of costly computer models, fantasy reports, and ivory tower academic studies. There would be Bull Shit, More bull Shit, and bullshit Piled Higher and Deeper (in scientific and academic parlance, BS, MS, and PhD).

Nuclear reactor safety study became a colossal thought experiment. Reactor safely would exist only in the minds of their creators, and not in the real world, supported by reliable, controlled and reproducible scientific data.

Heaven and earth: Inside Fukushima’s Unit 2 control room in late March 2011, where events dismissed by the nuclear industry as ‘highly unlikely’ are an every day real-world nightmare for struggling operators and citizens.


Over the decades (and to this day) the NRC and the nuclear industry continued to cook up their own imaginary projections, involving narrowly defined “likely scenarios” and “analyses” devised by industry cheerleaders wearing tin-foil hats. These fairy tales are then supposedly bolstered with equally imaginary computer models.

In the 1970s, the NRC commissioned, for example, the infamous Rasmussen Report, or WASH-1400, as a follow-up to the discredited and suppressed WASH-740 reports.

The Rasmussen Report, also called “The Reactor Safety Study,” was soon also widely discredited within the scientific community. A subsequent review by the NRC conducted by Professor Harold Lewis of the University of California concluded that, “the uncertainties in WASH-1400’s estimates of the probabilities of severe accidents were in general, greatly understated.”

This led to other imaginary and sugar-coated Candyland reactor safety “studies,” including 1982’s CRAC-II, and 1991’s NUREG-1150.

“CRAC-II is both a computer code (titled Calculation of Reactor Accident Consequences) and the 1982 report of the simulation results performed by Sandia National Laboratories for the Nuclear Regulatory Commission. The report is sometimes referred to as the CRAC-II report because it is the computer program used in the calculations,” Wikipedia relates.

“The CRAC-II simulations calculated the possible consequences of a worst-case accident under worst-case conditions (a so-called “class-9 accident”) for a number of different U.S. nuclear power plants. In the Sandia Siting Study, the Indian Point (NY) Energy Center was calculated to have the largest possible consequences for an SST1 (spectrum of source terms) release, with estimated maximum possible casualty numbers of around 50,000 deaths, 150,000 injuries, and property damage of $274 Billion to $314 Billion (based on figures at the time of the report in 1982)…. CRAC-II has been declared to be obsolete and will be replaced by the State-of-the-Art Reactor Consequence Analyses study.”

The NRC itself would later discredit and issue a disclaimer of both the CRAC and NUREG “studies.” The NRC disclaimer of CRAC-II and NUREG-1150 reads as follows:

‘The U.S. Nuclear Regulatory Commission has devoted considerable research resources, both in the past and currently, to evaluating accidents and the possible public consequences of severe reactor accidents. The NRC’s most recent studies have confirmed that early research into the topic led to extremely conservative consequence analyses that generate invalid results for attempting to quantify the possible effects of very unlikely severe accidents. In particular, these previous studies did not reflect current plant design, operation, accident management strategies or security enhancements. They often used unnecessarily conservative estimates or assumptions concerning possible damage to the reactor core, the possible radioactive contamination that could be released, and possible failures of the reactor vessel and containment buildings. These previous studies also failed to realistically model the effect of emergency preparedness. The NRC staff is currently pursuing a new, state-of-the-art assessment of possible severe accidents and their consequences.”

In other words, after spending tens of millions of dollars in wasted resources to produce sham results, the NRC bureaucracy naturally resolved to spend tens of millions of more dollars to produce even more imaginary and far-fetched sham results. How reliable are these computer models?

In a timely article in the March 28, 2011 New York Times, John H. Broder, Matthew Walk and Tom Zeller point out, “American nuclear safety regulators, using a complex mathematical technique, determined that the simultaneous failure of both emergency shutdown systems to prevent a core meltdown was so unlikely that it would happen once every 17,000 years. It happened twice in four days at a pair of nuclear reactors in southern New Jersey.”

One imagines such a computer model in 2005 also setting the odds as “slim to none” of a black politician with a middle name of “Hussein” being elected president of the United States. The point is, the history of the world is filled with long shots with slim chances of overturning established norms. That in fact is what history is all about.

The NRC’s ‘State-Of-The-Art Reactor Consequence Analyses,’ or SOARCA, doesn’t even consider the consequences of accidents involving spent nuclear fuel pools, like those presumed to be now burning in Fukushima.


As mentioned, the NRC’s current search for a “state-of-the-art” study is called, appropriately enough, “State-Of-The-Art Reactor Consequence Analyses,” or SOARCA. (Not to be confused, gentle reader, with SCROTUM, which, in nuclear parlance, refers to the biological equipment by which operators are held by runaway reactors.)

NRC’s SOARCA website proclaims, “The project uses computer models and simulation tools to conduct in-depth analysis of two operating nuclear power plants, a boiling-water reactor and a pressurized-water reactor,” the types found in Fukushima and on Three Mile Island, respectively.

The SOARCA study further claims to consider “the highly unlikely event of a severe reactor accident.”

But, as Hamlet tells Horatio, “There are more things in heaven and earth than are dreamt of in your philosophy.”

SOARCA, it should go without saying, does not contemplate actual severe, real-world environmental catastrophes like the 9.0 earthquake and tsunami which unexpectedly destroyed multiple reactors and spent fuel pools at Fukushima, or myriad other events which the NRC considers “highly unlikely.”

The NRC’s SOARCA website further explains that the study does not take into account such events as “terrorist acts.” Nor, it goes without saying, does SOARCA consider what happens in the event of war, when one or more of the world’s 400-plus atomic reactors is damaged by combatants, leaving undisciplined Third World operators struggling to control a runaway reactor(s) and spent fuel pools.

Moreover, the SOARCA “study” doesn’t even consider the consequences of accidents involving spent nuclear fuel rod pools, like those now burning in Fukushima.

The NRC’s SOARCA FAQ page states:

Are accidents at spent fuel pools considered in this study?

No. The project focuses on evaluating the very unlikely severe accident scenarios that may occur at operating power reactors and, as such, it does not consider spent fuel pools.

Of course, on the real planet earth, and not the fantasy Game Boy simulations of the nuclear industry, if you are unlucky enough to work as a nuclear control room operator when a fire breaks out in one or more spent fuel pools, as it did in Fukushima, spewing highly radioactive smoke and throwing explosive debris several hundred feet into the air, thus preventing you from controlling your already damaged nuclear reactor(s), you’ve got a problem on your hands not considered by SOARCA. Then again, in the “highly unlikely” event that your reactor(s) blow up, spewing highly radioactive steam and throwing explosive debris several hundred feet into the air, thus preventing you from putting out a fire in your spent fuel pool(s), you’ve got an altogether different “highly unlikely” event(s) on your hands, Pilgrim.

What, me worry? NRC inspectors reported that ‘At times during various shifts, in particular the 11:00 pm to 7:00 am shift, one or more of the Peach Bottom (Pennsylvania) operations control room staff (including licensed operators, senior licensed operators and shift supervision) have for at least the past few months periodically slept or have been otherwise inattentive to licensed duties.’


That’s when, as we see in Fukushima, your SCROTUM is in serious danger, and, like those eminently professional and enlightened nuclear workers seen scaling the fence to escape Fukushima, you better, in nuclear terminology, SCRAM the reactor(s).

If, however, you cannot SCRAM fast enough, you should then consider the time-honored emergency inventory and communications procedure known in nuclear circles as KYSAG, or Kiss Your Sweet Ass Goodbye.

(I realize these terms are complicated and technical to the lay reader, but obtuse technical jargon is important to the nuclear industry.)

Or, if you’d prefer, like the supremely calm, collected, and laid-back control room operators at various American nuclear power plants, you can avoid much of the unnecessary stress of these “highly unlikely” events by simply going to sleep in the control room every night.

One man’s nuclear nightmare, after all, is just another man’s sweet dream, baby.

Which brings us to the next rule.

Rule 2:

Commercial atomic energy is based on voodoo economics.

With the vexing realities of nuclear industry finances, insurance, and what to do with thousands of tons of highly radioactive spent fuel rods, atomic reactor pseudo-science merrily intersects with the voodoo economics of the nuclear industry.

Because spent nuclear fuel must be safety stored for tens of thousands of years, no one can agree where to put it, or how to pay for the storage, and so the spent reactor fuel piles up at nuclear power plants in the U.S. and around the world.

The NRC and the nuclear industry wisely choose to simply ignore this nettlesome problem. Hey, if you can’t solve it, why talk about it?

 

Call it “highly unlikely,” and move on.

Also in the category of nuclear voodoo economics are the shrewd nuclear industry investors who wisely refuse to themselves finance or insure new nuke plants, and instead insist that taxpayers pick up the tab. President Barack Obama, in fact, has promised the nuclear industry $36 billion for this very purpose in 2011.

These nuclear industry subsidies have been harshly criticized for decades. The bottom line is this: if it came down to risking their own money, nuclear investors would have nothing to do with nuclear reactor technology.

At Three Mile Island Unit One’s licensing hearing way back in November 7, 1973, for instance, Pennsylvania Insurance Commissioner Herbert Denenberg testified about the $560 million ceiling on insurance payments as mandated by the Price-Anderson Act.

“The plant owners will undoubtedly deny that this capping of benefits and liability represents any real material value to them, or conversely, any real cost to the public,” he said.

“They will point proudly to the fact that no member of the public — as opposed to workers in or associated with the activity of the industry — has been killed, and no catastrophic accidents have occurred, in 17 years of experience with nuclear reactors.

“And they will assert that on the basis of this safety record and their continuing zeal to make reactors uncommonly safe, the public would be foolish to worry about the financial consequences of an accident costing more than $560 million or, for that matter, any major accident at all.


‘If pressed, they will admit that a catastrophic accident is both conceivable and possible.

It will be the general public who must bear the cost.’


“All these arguments by the utilities are irrelevant, of course. The utilities do not take their own assurances about safety seriously enough to place their corporate necks on the line by renouncing their exemption from liability for a catastrophic accident, and in fact, they insist on the continuance of this exemption as a condition of their operating nuclear plants.

“If pressed, they will admit that a catastrophic accident is both conceivable and possible. And if such an accident occurs, the fact is that it will be the general public — and not the utilities and the reactor manufacturers — who must bear the cost.”

So let’s all learn a valuable lesson from the shrewd nuclear investor, and let’s be realistic here: endangering millions of lives; permanently polluting hundreds of square miles with uranium fission by-products; squandering billions of dollars of good money after bad: honestly, what else is government for?

These shrewd investors know that the true life-cycle costs of nuclear plants make them economically unviable.

Which brings us to Rule 3.

Rule 3:         

Be thankful the nuclear power industry is doing its level best to destroy the nuclear power industry. These guys are pros at it.

If nuclear industry executives are not scientists, and if they are not economists, what exactly are they?

Would I lie to you, sugar?


They are public relations and lobbying professionals, bullshit artists and bologna merchants, and, thankfully, highly incompetent ones at that.

Rest assured, the nuclear power industry is doing its level best to destroy the commercial nuclear power industry, and nobody does this better than they do.

Over the decades, the nuclear power industry has built a proven track record for ceaselessly working to destroy itself, without the help of a single anti-nuclear activist.

Rule 4:        

You are the experiment: In the event of a nuclear meltdown, use the opportunity to point out that this catastrophe once again proves the inherent safety of atomic energy.

As I’ve previously noted, the nuclear power industry naturally doesn’t think very much of troublesome nitwits like Galileo, Francis Bacon, René Descartes, Isaac Newton, and their ridiculous, old-fashioned ideas about experimentation, reproducible results, and scientific method.

Which is not to say that scientific data from real-world, full-scale nuclear meltdowns are not being collected.

Mountains of data — some useful, much of it not — have been, and will continue to be, amassed from the nuclear accidents at Three Mile Island, Chernobyl and, now, Fukushima.

The Three Mile Island Experiment: graphic of Unit 2 reactor core damage.


Some five years after the meltdown on Three Mile Island, the damaged Unit 2 reactor was finally cool and clean enough to be popped open, like a festive foie gras in a dead Christmas goose.

Giddy industry representatives got to peer inside, like kids who can’t wait for Christmas, and who wonder what Santa brought.

Much to the surprise and delight of the nuclear industry, half the 150-ton core at Three Mile Island was found to have melted before solidifying into radioactive rubble at the bottom the reactor vessel.

And you probably thought that 150 tons of 5,000 degree F. molten uranium might melt through the stainless steel reactor vessel, burn through the concrete floor of the containment building, and give someone a hot foot on the other side of the planet, didn’t you? (This does however beg the question of whether, in China, the uninformed talk about The Pittsburgh Syndrome.)

The well-paid nuclear industry spin doctors wasted no time, of course, pointing out that this embarrassing melted pile of rubble inside TMI’s Unit 2 reactor was “proof” that nuclear plants are safe.

The scientific problem with using data from these real-world accidents — aside from the ethical problem of using uninformed humans in their homes as guinea pigs — is that these “results” are irreproducible, and therefore unscientific.

We’ll never know, for example, precisely how much coolant water was dumped on the damaged Fukushima reactors and spent fuel pools, and in what controlled circumstances, before and after the terrified reactor operators ran for their lives, and tried to jump over the fence, and so on.

In other words, more bad science.

Perhaps we can one day prove conclusively that large, commercial nuclear reactors will not melt down, but merely fizzle and pop for an extended period of time, as did Unit Two on Three Mile Island. Nevertheless, this is not the sort of knowledge we should acquire from experiments conducted with innocent victims in their backyards.

Speaking of ignorant fools, we now come to Rule 5.

Rule 5:

They’re building a better model fool every year.

The ancient Greeks had a single word for all this. It’s a word for what they believed was the greatest of all human follies: hubris.

Hubris, as we use the word today, implies mere arrogance or pride. But to ancient Greeks, hubris was a legal term and, some say, the greatest single crime one could commit in the ancient Greek world, not unlike our own treason or, in religious societies, blasphemy.

In Greek tragedy, a protagonist who acted with hubris foolishly ignored human limitations and challenged the gods and their rules, inviting ruin and retribution at the hands of vengeful gods like Nemesis.

Agamemnon, for one example, was tempted by ruin with the suggestion that he walk on a divine tapestry.

In other words, as the ancients and Charlie Murphy warn us, keep your dirty feet off God’s white leather sofa, unless you want to get your ass kicked.

That it’s sinkable is unthinkable: Like the White Star Line’s Titanic, the Zeppelin company’s promotions prominently boasted that no passenger had ever been injured on one of their airships.


The oceans and junk yards of the world are littered with Titanics, Hindenburgs, Unit 2 reactors, and the scrap of other infallible machines that their creators boasted could not sink, melt, fall from the sky, or otherwise fail.

To get around this historical fact, nuclear engineers are fond of saying that their machines, in fact, are perfect: it’s the human element, the foolish human operator, they’ll tell you, that’s at fault.

The nuclear industry today boasts that it can, in fact, without any proper scientific experimentation at all, produce a fool-proof machine!

Trouble is, those fools are so damned crafty.

And, as one nuclear regulator worrisomely intimated to me recently, “They’re building a better model fool every year.”

Whether the nuclear industry can successfully build a better fool-proof machine to keep up with this year’s better model fool is any fool’s guess.

Fools have been around a long time, and I’m betting on the fool. Hell, in the United States of America fools control not just one, but two political parties, both houses of Congress, and the judiciary.

So let’s be brutally realistic here. You can’t underestimate the fool.

Even the smart money’s betting on the fool. Why do you think nuclear investors don’t want to risk their own damn money? They’re not fools.

I defer to that celebrated nuclear combat veteran, philosopher, action figure, and low-fat hamburger grill marketer, Mr. T:

I pity the fool.

But it would be foolish of us to blame everything on the fool in the nuclear control room.

Contrary to nuclear industry spin, foolish control room operators were not at fault for the Three Mile Island meltdown. Foolish regulators cooperated with foolish utility executives to operate a foolishly complex, leaking nuclear reactor with faulty components and miscalibrated controls that badly confused the already foolish control room operators.

Which brings us to Rule 6.

Rule 6:

People don’t like or understand atomic energy:
E=MC2 is not a recipe for comfort food

More than 30 years later, my thoughts keep returning to the nuclear worker from Three Mile Island whose hands I watched shake uncontrollably on the morning of the meltdown.

Make no mistake, those control operators were scared. But the nuclear worker I watched that day wasn’t scared for the future of the atomic power industry, his job, or even for his life, as far as I could see.

He trembled with the instinctive fear of having encountered an unknown monster, in an unknown country. His was the fear of the Lilliputian running for his life when Gulliver finally wakes up.

D’oh! Fear of over-sized unknown monsters is the oldest story of the western world. It’s Homer, not just Homer Simpson.


It’s Ray Harryhausen’s 7th Voyage of Sinbad meeting the Cyclops. It’s the oldest story of the western world: The Iliad and The Odyssey. It’s Homer, not just Homer Simpson.

These operators were scared, as people always are, by the unknown, and the unpredictability of the unknown they don’t control.

E=mc2, contrary to popular belief, is not a free lunch. It’s a conversion formula, describing the equivalence of energy to mass, and the resulting enormous energies released from the interaction of very small, invisible particles. Enormous also, in commensurate scale, are the consequences, and our responsibilities.

It’s hard for human beings to grasp Einstein’s dreadful formula on any human scale.

Some nuclear industry proponents foolishly compare atomic energy to garden variety chemical reactions, like fire.

But we humans evolved with fire. The taming and handling of fire, it’s believed, helped to make us human. The use of fire, we’re told, began long ago with our evolutionary ancestors, before we humans even emerged as a species.

Writing in Science magazine in 2009, Professor David Bowman and his collaborators tell us, “The spread of highly flammable savannas, where hominids originated, likely contributed to their eventual mastery of fire. The hominid fossil record suggests that cooked food may have appeared as early as 1.9 (million years ago), although reliable evidence for controlled fire use does not appear in the archaeological record until after 400,000 years ago.”

Think about it. Our use and understanding of fire sets us apart from every other animal on the planet. Every other species on earth naturally fears fire. In a forest fire, animals instinctively run or burrow for their lives. We, on the other hand, jump into forest fires from airplanes.

Imagine the horrible cries of our hairy ape ancestors swinging in the trees when the first one of us picked up a burning stick, and felt its warmth, and watched it burn, and brought it home.

Of course, some of our ancestors burned themselves to a crisp playing with fire, as we still do. As the authors of the above paper caution, “the evolution of adaptations to fire remains a difficult topic to explore because traits that increase the rate of occurrence of fire, or of recovery following burning, are not unambiguously the result of natural selection.”

In other words, I suppose, burning yourself and your home to a crisp may decrease your chance of finding a soul mate.

Still, even to this day, what more could one want for one’s man cave than fire, flame-broiled meat, fire-brewed beer, and a fiery, large-screen tv?

Can the same ever be comfortably said for nuclear fission? Will splitting atoms ever match the gentlemanly art of grilling meat or shooting defenseless animals with a fire stick? I sincerely doubt it.

That’s not to say that some of us haven’t tried to jump the evolutionary gulf by constructing our very own backyard nuclear reactor.

Columbus of the Atom: Dave Hahn, The Radioactive Boy Scout, in police mugshot.


Lest we forget that modern day Columbus of the Atom, Dave Hahn, of suburban Detroit, Michigan, better known as the Radioactive Boy Scout. In the late 1980s Mr. Hahn famously sought an Eagle Scout Badge by building an atomic breeder reactor from tin foil and salvaged radium paint in his mom’s backyard garden shed.

Mr. Hahn’s misadventure reads like the American nuclear industry’s answer to Chairman Mao’s Great Leap Forward.

Mr. Hahn, posing as a high school science teacher, phoned up the nuclear industry and the NRC, who were only to glad and happy to offer him invaluable advice on achieving an atomic chain reaction in his own backyard. (Refer again to Rule 5: A better model fool, and Rule 3: The nuclear industry needs no help taking care of its own fools.)

Mr. Hahn’s homemade backyard nuclear reactor indeed started to heat up, and soon badly radiated his neighborhood. His face was left permanently pocked with radiation burns.

In the end, Dave Hahn was forced to tear down his backyard nuclear reactor before it went critical, lest he create His Own Private Fukushima. Unfortunately for the evolutionary progress of mankind, the U.S. Environmental Protection Agency was neither very amused nor supportive, and designated Mr. Hahn’s mom’s backyard a Superfund Cleanup Site.

The point is, and Mr. Hahn’s experiments notwithstanding, we’ve had millennia and more to understand and adjust to fire. Our natural affinity for quotidian chemical reactions like fire has been hard-wired into us by hundreds of thousands of years of evolution.

Not so nuclear energy. Nuclear reactions are largely immune from standard human observations and inhabit a counter-intuitive realm outside our understanding of time and our other natural senses.

Splitting atoms will always be the work of a stranger in a strange land. Our best nuclear physicists understand this, and even use the language of explorers and mystics to announce their mysterious doings.

Enrico Fermi sustained the first atomic chain reaction in 1942. To announce his successful criticality experiment (conducted with Fermi’s trademark meticulous scientific procedure, by the way) one of Fermi’s lieutenants sent a coded message to the chairman of the U.S. National Defense Research Committee:

“The Italian navigator has landed in the New World.”

“How were the natives?” Fermi’s man was asked.

“Very friendly,” came the reply.

We now know that “the natives” simply were pretending to be friendly. In reality, the unstable uranium atoms and their by-products were killing Enrico Fermi.

Fermi died at age 53 of stomach cancer. He developed cancer from radiation poisoning while constructing his large “pile” reactor built from heavy graphite bricks and uranium beneath Stagg Field, the football stadium at the University of Chicago. Several of his assistants would also die of cancer.

Which brings us to Rules 7 and 8:

 

Rule 7:

There are no ‘safe’ levels of radiation.

The best current thinking about the risks of radiation exposure are expressed by what’s called the linear no-threshold model, first expressed decades ago by the late Dr. John Gofman, and later endorsed by groups as varied as the National Academy of Sciences and the United Nations Committee of the Effects of Atomic Radiation, the latter of which reports:

“the Committee believes that an increase in the risk of tumour induction proportionate to the radiation dose is consistent with developing knowledge and that it remains, accordingly, the most scientifically defensible approximation of low-dose response.”

In simple words, no amount of radiation is good for you. This includes natural background radiation.

This makes lots of intuitive sense. We now realize, for example, that tumors and melanomas can be produced from too much exposure to sunshine, and that a breakdown in the earth’s ozone layer can increase this risk.

So the idea that additional man-made radiation is safe is scientifically unsupportable.

So forget about that favorite ploy of the nuclear industry, comparing doses from nuclear meltdowns to dental or chest x-rays, or MRIs. None of it’s good for you.

Take, for another example, the lessons learned from Rule 8:

 

Rule 8:

Theoretical physicists live to a ripe old age, experimental physicists die of radiation poisoning. Ergo, stay away from nuclear accidents.

Albert Einstein checks for coated tongue: Hysteria = e = mc2


Students of history and nuclear physics know that theoretical physicists like Albert Einstein and Stephen Hawking, who work with mathematical calculations and who seldom venture near radioactive isotopes, live to ripe old ages.

Experimental physicists, like Marie Curie and Enrico Fermi, on the other hand, who work with the isotopes, have a tendency to die of radiation poisoning and cancer.

The same applies for journalists and landscape oil painters.

Therefore, Sanjay and Anderson, resist the urge to visit the vicinity of a nuclear power plant meltdown. Take it from me: you may get a by-line and a nice story exposing the apparent lies and confusion of the nuclear industry, but you’ll spend years worrying that you may have caused your body real harm.

Is a by-line, a story, or a book worth the risk? No.

 

The bottom line:
What can we predict from the Fukushima Experiment?

Less than three years after Enrico Fermi succeeded in building a nuclear reactor, physicists working on the first atomic bomb detonation in Alamogordo, New Mexico, on July 16, 1945, placed wagers among themselves about whether the first nuclear explosion, aptly code-named Trinity, might ignite the earth’s atmosphere or otherwise destroy our planet.

Gambling for their clothes and risking a lethal dose: Alamogordo A-bomb test.


J. Robert Oppenheimer, witnessing the awesome horror we mortals brought in the desert that night, famously quoted the ancient Bhagavad-Gita: “Now, I am become Death, the destroyer of worlds.”

And so we humans dare play with the fire of stars, and attempt to calculate inscrutable quantum probabilities, while the great mass of us can’t comprehend the simple 2 + 2 addition of balancing a household, or a national budget.

For me, the nuclear accident in Fukushima, Japan, permitted me to revisit and re-examine the wild, rollercoaster ride of emotions and perceptions I experienced during my own hometown’s nuclear disaster in 1979. I was able to see that my own response and impressions to a nuclear meltdown are universal and natural, and not held by myself alone, or other immediate victims.

Some of the similarities of both nuclear accidents are obvious: the utility executives who seem clueless about what’s going on inside the reactor and who seem unable to provide reliable information to the public or to speak truthfully about it; the government officials who seem equally clueless about what’s going on in the reactor and who send equally mixed signals; and the spectrum of equally posturing talking heads in the media who alternatively predict Armageddon, and then offer the incident as proof that nuclear energy is safe and friendly.

As we see with the ongoing Fukushima incident, a nuclear accident causes the whole planet to go wild with hysteria, not unlike our ancestors must’ve screeched from the trees when one of us first stepped up to a burning stick to curiously stare and wonder at the warmth of its blaze.

It seems to me that all humanity is in the same uneasy predicament I found myself contemplating on the morning of the Three Mile Island accident, when I had to decide in a split second whether to run, or to turn back to face an unknown monster. In so turning, I suppose, we not only confront our feeble humanity, we’re charting our destiny by the stars.

We have no choice but to turn and plant our foot firmly in the path of the horrible thing, and resolve to carefully try to understand it, and truthfully try to explain it to others.

That’s what made us, and makes us, human beings.

A simple uneasy truth remains: when a nuclear reactor melts, we find ourselves in the same unknown country of Fermi, Oppenheimer, and their associates, and the horrified control room operators at Three Mile Island, Chernobyl, and the Fukushima Daiichi nuclear power plants.

There is one haunting fact that is as accurate today as it was on July 16, 1945, when scientists lay in the sand of Alamogordo, New Mexico, protecting their eyes, awaiting the results of the first nuclear bomb test.

No one knows what will happen.

 

 

 

 

 

 

 

Bill Keisling is the author of two books on the Three Mile Island accident, and one book on solar energy. He covered the Three Mile Island accident for Rolling Stone, The Progressive, and Harrisburg magazines.

 


 

Additional notes and references:

1. The Atomic Energy Commission, by Corbin Allardice and Edward Trapnell, Praeger Publishers, 1974, page 32 and pages 163-168.

2. We Almost Lost Detroit, by John Fuller, Reader’s Digest Press, 1975, page 9.

3. The Atomic Energy Commission, by Corbin Allardice and Edward Trapnell, Praeger Publishers, 1974, page 32 and pages 44-77.

4. The Accident Hazards of Nuclear Power Plants, by Richard Webb, The University of Massachusetts Press, 1976, pages 187-189.

5. Nuclear Power: The Bargain We Can’t Afford, by Richard Morgan, Environmental Action Foundation, 1977, Chapter 5, Hidden Costs.

6. We Almost Lost Detroit, by John Fuller, Reader’s Digest Press, 1975, pages 57-61.

7. Nuclear Power: The Bargain We Can’t Afford, by Richard Morgan, Environmental Action Foundation, 1977, page 38.

8. The Blair Press, Blair, Pennsylvania, April 25, 1979, page 13.

9. We Almost Lost Detroit, by John Fuller, Reader’s Digest Press, 1975, pages 104-115.

10. We Almost Lost Detroit, by John Fuller, Reader’s Digest Press, 1975, pages 159-164.

11. The Accident Hazards of Nuclear Power Plants, by Richard Webb, The University of Massachusetts Press, 1976, pages 66-73.

12. Nuclear Power: Both Sides, the best arguments for and against the most controversial technology, by Michio Kaku and Jennifer Trainer, W.W. Norton & Co., 1982, page 21.

13. The Accident Hazards of Nuclear Power Plants, by Richard Webb, The University of Massachusetts Press, 1976, pages 66-73.

14. Einstein: Profile of the Man, by Peter Michelmore, Dodd, Mead and Company, 1962, pages 8-11; see also, Einstein, by Hilaire Cuny, Paul S. Eriksson, Inc., 1962, pages 81-84.

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Post-tsunami radio clip of Jerry Taylor/Cato discussing the past and future of US nuclear power

April 7th, 2011 No comments

In the wake of the troubles at TEPCO’s Fukushima nuclear power plants, on March 18, 2011, Jerry Taylor of the Cato Institute discussed the past and future of U.S. nuclear power on WOR’s The John Gambling Show.

I note that Taylor has really only scratched the surface of the problems relating to nuclear power. For example, far from governments simply shifting the risks of nuclear power cost over-runs to ratepayers and taxpayers, this incentive structure actually compounds financial risks, as the contractors do not have to bear the amount of cost over-runs, and the utilities can put their hands into the pockets of others.

Further, Taylor has not addressed the further subsidies provided in the form of Federal liability caps and by “limited liability” state corporation laws that leave shareholders without ANY liability for damages that nuclear accidents may cause others – as has now materialized in Japan. Just as we have seen in our financial sector, the result is a loss of personal “skin in the game”, a concomitant reduction in critical oversight, unleashed moral hazard, poor decision-making and then hand-wringing and blame-shifting when the “black swans” come home to roost.

Here is the link to 10-minute clip (which Cato has so thoughtfully made easy to share, but unfortunately seems too big to upload here)

[View:http://mises.org/Community/themes/mises2008/utility/:550:0]

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Jerry Taylor/Cato at Forbes: "Nuclear power quite simply doesn't make economic sense."

April 7th, 2011 No comments

 I’m a fan of Jerry Taylor, an even-handed, level-headed guy working out of the Cato Institute who sometimes almost (but not quite) comes across as a radical envirofascist. (My earlier posts referencing him are here.)

Jerry’s Cato bio says he “is among the most widely cited and influential critics of federal energy and environmental policy in the nation … a frequent contributor to the Wall Street Journal and National Review and appears regularly on CNBC, NPR, Bloomberg Radio, the BBC, and Fox News. His op-eds on public policy have appeared in the pages of The Washington Post, The New York Times, The Los Angeles Times and most other major dailies.’

Jerry and his collegaue Peter Van Doren have a new piece out at Forbes.com and Cato Institute on nuclear power; Jerry has kindly given me permission to cross-post it in its entirety here.

[Just added: Allow me to I note that Taylor has really only scratched the surface of the problems relating to nuclear power. For example, far from governments simply shifting the risks of nuclear power cost over-runs to ratepayers and taxpayers, this incentive structure actually compounds financial risks, as the contractors do not have to bear the amount of cost over-runs, and the utilities can put their hands into the pockets of others.

[Taylor also does not address the further subsidies provided in the form of Federal liability caps and by “limited liability” state corporation laws that leave shareholders without ANY liability for damages that nuclear accidents may cause others – as has now materialized in Japan. Just as we have seen in our financial sector, the result of these government interventions is a loss of personal “skin in the game”, a concomitant reduction in critical oversight, unleashed moral hazard, poor decision-making and then hand-wringing and blame-shifting when the “black swans” come home to roost. 

[Nuclear crony capitalism is just the tip of the iceberg of the vast, rotten and still metastasizing crony-capitalist mess that limited liability corporation laws have engendered: http://mises.org/Community/blogs/tokyotom/archive/2011/03/31/does-state-created-corporations-mean-we-are-stuck-with-a-wonderfully-confused-39-capitalist-39-mess-of-more-statism.aspx]

This is how the Taylor and Van Doren piece appears at Cato (emphasis added)

Nuclear Power in the Dock

by Jerry Taylor and Peter Van Doren

This article appeared on Forbes.com on April 5, 2011.  [TT: Here’s the Forbes link.]

The unfolding nuclear emergency in Japan has prompted a reconsideration of nuclear power here in the United States. Surprisingly, the political faith in nuclear power appears to be relatively unshaken at the moment, with opinion leaders on both the left and right cautioning against overreaction and politicians in both parties swearing continued fealty to the federal campaign to jump-start new construction orders.

This is unfortunate — not necessarily because nuclear power plants are a catastrophic meltdown waiting to happen — but because nuclear power makes no sense from an economic perspective and the political campaign to ram these plants down the market’s throat threatens catastrophic harm to both taxpayers and ratepayers.

The fact that nuclear power can’t come within light-years of passing a market test is painfully obvious to all who wish to see. Consider the feds are presently telling banks that if they loan money to a utility company to build a nuclear power plant and the loan subsequently goes bad, the U.S. Treasury (that is, you) will compensate the bank for up to 90% of its losses. And yet the banks still refuse to loan. For principled supporters of a free market, that should be information enough about the merits of this commercial enterprise.

There are all sorts of reasons why banks are saying “no” to nuclear. Two in particular, however, stand out.

First, nuclear energy is not even remotely competitive in power markets with gas-fired or coal-fired electricity now or in the foreseeable future. Even the more optimistic projections of new nuclear power plant costs — such as those forwarded by MIT — find that nuclear’s production costs over the lifetime of a new facility are about 30% above those for coal or natural gas-fired generators. So while we can only speculate about new plant construction costs (we haven’t tried building one for more than 30 years) and estimates vary a great deal, all parties agree on one thing: Nuclear is substantially more expensive than conventional alternatives at present.

That’s particularly the case when one figures in the revolution in natural gas extraction, which has significantly lowered the cost of gas-fired power. Exelon CEO John Rowe recently told the press that natural gas would have to cost more than $9 per million BTUs before nuclear power plants could compete — about double its current price and far north of the $5.3 per million BTU price over the next 5 to 10 years that forecasters predict for the future. MIT’s nuclear energy study, by comparison, projects a $7 per million BTU natural gas price (which makes nuclear energy seem more competitive than it actually is), but of course, the MIT study was based on 2007 data that failed to fully reflect the revolutionary advances in hydraulic fracking.

It’s worth noting, moreover, that nuclear’s hefty price tag would be even heftier if government subsidies were to fall by the wayside. One economist calculates that existing nuclear subsidies are equal to one-third or more of the value of the power produced. Tufts economist Gilbert Metcalf estimates that nuclear power plant operators face a negative 49% tax rate. Hence, banks betting on nuclear power are also betting on the longevity of such breathtaking taxpayer largesse — a risky bet indeed.

Second, the risk of cost overruns and, thus, defaulted loans are higher than the politicians would have us believe. Most of the nuclear power plants built in this country have cost three times as much to build as utilities initially advertised at the onset of construction.

While the industry swears that this is a thing of the past, new power plants being built in Finland and France by Teollisuuden Voima and Electricite de France, respectively — the only nuclear power plants being built right now in free-market energy economies — are already coming far above their advertised cost. The Finnish plant — which was supposed to cost only 3 billion euros — is already 2.7 billion euros above cost and is four years behind schedule. The French plant fairing a bit better, only 1 billion euros over budget and two years behind schedule.

The fact that both of these projects deploy state-of-the-art reactors built by French nuclear giant Areva — arguably the most experienced nuclear power company in the world — speaks volumes. Accordingly, both the Congressional Budget Office and the Government Accountability Office expect about 50% of any future U.S. loans to default.

So why are utilities trying to build these things in the first place? Well, most aren’t. Those few utilities that are interested in going ahead do business in states where construction costs are automatically plugged into the rate base. So in theory at least, risks would be transferred from the utility to the ratepayer with utilities at least guaranteed to break even. Even so, the increasing cost gap between nuclear and gas-fired power makes it unclear whether any of these generators will actually get built.

As Peter Bradford, a former member of the U.S. Nuclear Regulatory Commission and former chair of the New York and Maine utility regulatory commissions, puts it, “In truth, the nuclear renaissance has always consisted of the number of plants that government was willing to build.” Regardless, federal attempts to jump-start the industry — as Herculean as they have been — haven’t come even close to closing the competitive gap with gas-fired generation. Events unfolding in Japan are unlikely to change that. And for that, at least, we can all be thankful.

Jerry Taylor and Peter Van Doren are senior fellows at the Cato Institute.

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A guest blogger on 'black swans' and Japan: tsunamis of bad news and ill winds for the US?

April 6th, 2011 No comments

Via an email from “OathKeepers”, I’ve just come across an interesting essay by one Brandon Smith (blogging as “Giordano Bruno”). Smith is the head writer and co-founder of neithercorp.us, a website which “specializes in alternative macroeconomic analysis as well as studies in mainstream media disinformation.” His articles are featured regularly at Infowars.com, Oathkeepers.org, Zerohedge.com, survivalblog.com, and G. Edward Griffin’s realityzone.com. Smith describes himself as :

a staunch Constitutionalist, free market champion, and proponent of sound money. In 2011, he is launching his new Alternative Market program in tandem with Stewart Rhodes of Oathkeepers with the aim of building gold, silver, and barter based systems in towns and cities across the country that will allow average Americans to finally take a lead role in the movement against globalism, providing for themselves what the current corrupt fiat system does not.

Supporting true, tangible community, enacting State sovereignty legislation, and promoting solid, decentralized local economies will be Brandon Smith’s primary focus in the foreseeable future

Here is the first part of a fairly long essay which I excerpt because of its connection to Japan; the rest of the essay is here. (The emphasis added is mine.). I note that while I find the content interesting, this cross-posting is not an endorsement.

Migration Of The Black Swans

By Giordano Bruno

Neithercorp Press – 3/31/2011

The phrase “Black Swan” is really making the rounds these last few months. Uttering the term a year ago would have earned you a collection of confused looks and a general attitude of disinterest. Now, people behave as if they had learned about economic shockwave events and the global domino effect when they were in kindergarten. The problem is that when this kind of terminology hits the mainstream, in most cases it comes prepackaged with dumbed down and diluted definitions which promote an inadequate, cartoonish understanding of the circumstances.

To be sure, most Americans are well aware that the world’s political and economic foundations are about as stable as fresh pudding under a heat lamp. The problem is that they are now being conditioned by the mainstream media to view the idea of collapse as “cinematic”; a kind of live action fantasy in which we all get to play the part of the audience, watching safely from the dark in our cushy theater seats with a bag of overpriced popcorn, Dolby surround sound, and a hot date to keep us company during the boring parts. Three years ago, even mentioning the idea of a breakdown in society or a financial catastrophe beyond a minor recession earned you the label of “doom monger”; a rather inept and naïve attempt on the part of the MSM to silence any economic analysis that stepped outside the establishment Keynesian framework. Today, I turn around to look at a magazine stand at the airport and right in front of me is Newsweek openly declaring “Apocalypse Now”!

Is the mainstream finally catching up to the alternative media? No. The MSM is merely adopting pieces of our common language and twisting them to fit a more globalist friendly viewpoint. Because our readership is growing exponentially, and our traffic is skyrocketing while corporatized news sources are floundering, the MSM is losing its ability to obscure our fact based journalism with their over funded and highly sterilized adaptation of reality. So instead, they attempt to co-opt our particular vocabulary, and our news focus, while adding their own subtle spin and sensationalism. When people not familiar with the alternative media and the more in-depth information we provide talk about a “Black Swan event”, a depression, hyperinflation, etc., their concept of the implications of such disasters is far different than ours. They are living in the Disney version of financial and social Armageddon.

Of course, when the curtains raise, the previews are over, and the show begins, none of us will be lounging comfortably outside these calamities to simply watch. We will all be inexorably involved, whether we like it or not. So, carry on with the media war we must. Educating the masses on the ENTIRE story behind international events and their consequences continues to stand as a top priority, until that final straw caves the camel’s back and disseminating the truth becomes a needless exercise in pointing out the horrifyingly obvious.

First, let’s examine the veiled reverberations of recent “Black Swan” events, the wider view of the chain that ties them together, as well as what we should expect in the near future in the wake of their aftermath…

Fukushima Mon Amour

If I could choose only one tragedy to be categorized as a textbook example of a Black Swan, it is the earthquake and subsequent tsunami off the coast of northern Japan which led to the current and precarious meltdown of the nuclear reactors at Fukushima. Now, the immediate concerns of Western nations, especially citizens of the U.S., have automatically turned to the threat of radioactive fallout traveling across the Pacific. Unfortunately, radioactivity is the least of our troubles in the face of Japanese nuclear core exposure. Again, Japan is currently the number three economy in the world, and the effects of the Fukushima incident have contributed to the possibility of a full spectrum crisis.

First, we must always keep in mind that incidents in areas like Japan or the Middle East are NOT the direct cause of global economic or social turmoil; they are only trigger points for an avalanche that has been building for the past three to four years. If Fukushima had occurred in 2007, international markets would have easily absorbed the blow, but today, economies everywhere have been so weakened by the implosion of the banker created derivatives bubble and the inflationary fiat measures of private organizations like the Federal Reserve that they no longer have the capacity to shield themselves from unexpected catastrophes. Big banks have been playing a massive game of Jenga with the global economy, pulling one support after another until the whole construct begins to sway and tremble. One gust of wind, one tremor, one wrong move, and the whole thing comes crashing down. If you want to place blame for the chaos we are about to see in the aftermath of Fukushima, be sure to place it where it belongs; on the doorstep of corporate monstrosities like the Fed, Goldman Sachs, JP Morgan, HSBC, etc.

Second, Japan’s official debt to GDP ratio now stands at 225%, way above the limit usually attributed to a country on the verge of complete debt destruction. The cost of rebuilding the areas damaged by the tsunami alone is estimated at around $300 billion. My primary concern in light of Japanese instability, though, is the severe weakening of their export markets. Japan is almost entirely reliant on its export capacity to support its ailing economy, meaning they are dependent on other countries to continually purchase their goods. However, in 2008, Japanese exports were pummeled, and have not improved anywhere near levels reached previous to the credit collapse, at least according to initial numbers for 2010:

http://www.bloomberg.com/news/2010-11-24/japan-export-growth-slows-more-than-forecast-as-economy-loses-trade-boost.html

The earthquake and nuclear meltdown of 2011 have sealed Japan’s fate. It could take ten, twenty, even thirty years for them to recuperate from this setback. Manufacturing in the Asian nation has already deteriorated at the fastest pace in nearly a decade:

http://www.bloomberg.com/news/2011-03-30/japan-manufacturing-shrinks-most-since-2009-in-first-sign-of-quake-impact.html

Japanese food exports are being shunned by international markets for fear of radioactive contamination. Prime Minister Naoto Khan [ed. : should be “Kan”] is now pleading with the WTO to urge its members to avoid curbing imports of Japanese goods, claiming that the government is on top of the Fukushima situation:

http://www.reuters.com/article/2011/03/30/us-japan-quake-idUSTRE72A0SS20110330

This hardly appears to be the case though. Reports of radioactive iodine 10,000 times safe levels in the water table below Fukushima have surfaced; reports which the Tokyo Electric Power Company is now vaguely stating “may be incorrect”:

http://www.bloomberg.com/news/2011-03-31/japan-reviewing-water-tests-showing-iodine-at-10-000-times-limit.html

The secrecy surrounding Japan’s nuclear meltdown is highly disconcerting and reminiscent of the Chernobyl incident in 1986, which the Soviet Union also refused to report honestly. Nearby cities were completely uninformed as to the true danger of the meltdown, and the international community was without a clue as to the extent of the radiation until Sweden, nearly seven hundred miles away, discovered radioactive particulates in its atmosphere. The problem with a containment breach in a nuclear plant is that it releases a steady stream of radioactive materials into the environment until the plant is finally buried under tons of concrete, lead, boric acid, and sand, as opposed to a nuclear weapon, which detonates, irradiating surrounding particles, which then dissipate after around two weeks. Fukushima, if left uncontained, could spew radioactivity for decades. The Japanese government does not seem to be providing forthright information about the real jeopardy involved.

Of course, if they were forthright, there would certainly be alarm amongst the citizenry, but even more so, a flight of investment dollars from Japanese industry and stocks. The only equity in Japan which seems to be attracting investment is the Yen itself, which skyrocketed against the U.S. dollar at the onset of the crisis:

http://www.rttnews.com/ArticleView.aspx?Id=1577203

The Yen has climbed steadily against the dollar since the early 1970’s, from 300 yen per dollar, to only 80 yen per dollar after Fukushima. I find it interesting that now, during times of financial uncertainty, global investors would rather pour their savings into the currency of a country that is about to be radioactive, rather than put their savings into the U.S. Greenback! What does that tell you about the level of trust the world currently has in our currency?

Being that Japan is a dedicated export economy, the higher the Yen goes, the more strenuous the exchange rate, and the less other countries will buy from them. G7 nations have since attempted to artificially knock down the rise of the Yen, but their efforts have yielded little success. The Yen still stands at around 83 per dollar. Hardly an improvement that will make Japanese exports more viable.

So, where is this all leading…? High speed deflationary depression for Japan. But that’s not all! The ASEAN trading bloc, led by China and fueled by the rising Yuan, has been pushing Japan to join the fold for years. Japan has been less than receptive to the proposition for numerous cultural, political, and financial reasons. But now, with the complete downfall of the country underway, and their export capability crumbling, Japan may go begging to join ASEAN. Already, ASEAN is beginning to offer help in Japan’s rebuilding process:

http://ph.news.yahoo.com/asean-benefit-japan-reconstruction-20110329-054529-485.html

What does this mean for the U.S.? It means the Japanese will likely begin a progressive dump of their vast reserves of U.S. Treasuries and dollars, replacing them with Yuan bonds. Its means a severe devaluation of the dollar in the near future along with the possible end to its World Reserve Currency status. It means hyperinflation in America. This is the true nature of a Black Swan event. It is not a single incident, but a chain reaction that spreads like cancer through an economic system, leading to broader misfortune than anyone dared imagine.

Once Upon A Time In The Middle East

The effects of the revolutionary fervor in the land of OPEC are a bit more obvious than those caused by Japan, at least, for the most part. Crude oil is now climbing towards $107 per barrel at the publishing of this piece. World markets are swinging wildly like a cheap carnival ride. Political alliances (especially between the U.S. and its primary oil suppliers) are becoming strained. The dollar’s peg to oil is now under threat. But this is really no surprise. As we have discussed in past articles, it is exactly what happened to the British Empire in the early 1950’s when it attempted to strong arm Middle Eastern governments and maintain the oil trade under the Pound Sterling. Eventually, the British became embroiled in Arab conflicts and revolts they could not possibly untangle, and their main debt holders (one of which was the United States) threatened to dump British Treasuries and the pound sterling as the world reserve currency. Sound familiar….?

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A precis of David Stockman's Apocalyptic views about our rotten monetary/fiscal/government situation

April 6th, 2011 No comments

I just ran across David Stockman‘s July 31, 2010 Four Deformations of the Apocalypse piece at the New York Times, and post a few excerpts here.

I like what Stockman says, but he is far too kind to the GOP, the Fed and the Wall Street and other elites who have profitted by shifting risk to the rest of society.

The nation’s public debt … will soon reach … a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase. …

Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too. But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance — vulgar Keynesianism robed in the ideological vestments of the prosperous classes.

This approach has not simply made a mockery of traditional party ideals. It has also led to the serial financial bubbles and Wall Street depredations that have crippled our economy. More specifically, the new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one.

The first of these started when the Nixon administration defaulted on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world. Now, since we have lived beyond our means as a nation for nearly 40 years, our cumulative current-account deficit … has reached nearly $8 trillion. That’s borrowed prosperity on an epic scale.

It is also an outcome that Milton Friedman said could never happen when, in 1971, he persuaded President Nixon to unleash on the world paper dollars no longer redeemable in gold or other fixed monetary reserves. Just let the free market set currency exchange rates, he said, and trade deficits will self-correct.

It may be true that governments, because they intervene in foreign exchange markets, have never completely allowed their currencies to float freely. But that does not absolve Friedman’s $8 trillion error. Once relieved of the discipline of defending a fixed value for their currencies, politicians the world over were free to cheapen their money and disregard their neighbors.

When the dollar was tied to fixed exchange rates, politicians were willing to administer the needed castor oil, because the alternative … would cause immediate economic pain… But now there is no discipline…

The second unhappy change in the American economy has been the extraordinary growth of our public debt. … This debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party’s embrace, about three decades ago, of the insidious doctrine that deficits don’t matter if they result from tax cuts. … [T]he new tax-cutters … hooked Republicans for good on the delusion that the economy will outgrow the deficit if plied with enough tax cuts. …

The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector. …Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation. …

But the trillion-dollar conglomerates that inhabit this new financial world are not free enterprises. They are rather wards of the state, extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives. They could never have survived, much less thrived, if their deposits had not been government-guaranteed and if they hadn’t been able to obtain virtually free money from the Fed’s discount window to cover their bad bets.

The fourth destructive change has been the hollowing out of the larger American economy. Having lived beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore. In the past decade, the number of high-value jobs … has shrunk by 12 percent… The only reason we have not experienced a severe reduction in nonfarm payrolls since 2000 is that there has been a gain in low-paying, often part-time positions in places like bars, hotels and nursing homes.

It is not surprising, then, that during the last bubble (from 2002 to 2006) the top 1 percent of Americans — paid mainly from the Wall Street casino — received two-thirds of the gain in national income, while the bottom 90 percent — mainly dependent on Main Street’s shrinking economy — got only 12 percent. This growing wealth gap is not the market’s fault. It’s the decaying fruit of bad economic policy.

The day of national reckoning has arrived. We will not have a conventional business recovery now, but rather a long hangover of debt liquidation and downsizing… Under these circumstances, it’s a pity that the modern Republican Party offers the American people an irrelevant platform of recycled Keynesianism when the old approach — balanced budgets, sound money and financial discipline — is needed more than ever.

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A great David Stockman interview at Reason on TARP, the Fed, tax cuts, crony capitalism and our casino economy

April 6th, 2011 No comments

It’s 42 minutes long, but well worth a listen. (A short version is here.]

It ‘s nice to see Stockman become an Austrian economics thinker, but I must say that I think he really pulled his punches by failing to cooment on the fact that most of our failing government/Fed policies have all been SUCCESSES – successful in benefitting particular favored interests and successful in making government more powerful

I copy below the clip the explanation uploaded at YouTube by Reason.tv.

[View:http://www.youtube.com/watch?v=Lq9NwyQSzhk:550:0]

Uploaded by on Jan 3, 2011 [emphasis added]

At the very start of the “Reagan revolution,” David Stockman exposed the myth that Ronald Reagan and the modern Republican Party are dedicated to small government.

In 1981, the 35-year-old Stockman gave up his Michigan seat in Congress to become Reagan’s budget director. A vocal critic of what he continues to call the “welfare-warfare state,” Stockman had signed on because he believed in the limited government rhetoric that Reagan espoused. Once inside the White House, Stockman quickly became disenchanted, and gave an interview to journalist William Greider that became the basis for an explosive Atlantic Monthly article in which Stockman admitted that Reagan’s spending cuts had been a “Trojan horse” used to justify tax cuts. In his 1985 memoir, The Triumph of Politics, Stockman chronicled Reagan’s reluctance to fulfill his campaign promise of shrinking the size and scope of government and balancing the budget. The result? The gross federal debt tripled while Reagan was in office.

Last fall, Stockman was the GOP-defector du jour once more, arguing against extending George W. Bush‘s tax rates in the New York Times, on 60 Minutes, the Colbert Report, Parker-Spitzer, ABC, NPR, and MSNBC. Stockman’s argument – that it’s irresponsible to cut taxes when cumulative U.S. debt is steadily mounting as a percentage of GDP – is based on the simple principle that balanced budgets come only when revenues actually meet expenditures. If we’re not willing to actually shrink government spending, he says, then we should pay full freight now, rather than forcing our children and grandchildren to foot the bill down the line.

Here’s what didn’t come across in Stockman’s media blitz: Since writing The Triumph of Politics he says he has “completed his homework” by reading libertarian economists such as Ludwig von Mises, Friedrich Hayek, and Murray Rothbard. He thinks TARP was a big-government boondoggle and the bailouts of GM and Chrysler unconscionable. Stimulus spending is a hoax. He sees the abandonment of the gold standard in favor of floating exchange rates as the root cause of both the country’s fiscal problems and the 2008 financial crisis. He says that Rep. Ron Paul (R-Texas) is the only politician today “who gets it” and he’s hopeful that Paul’s growing power may begin to shed light on “the scholastic arrogance” of the Federal Reserve. He’s still against the welfare-warfare state and he thinks government should be cut down to size.
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Reason.tv’s Nick Gillespie sat down with Stockman for a wide-ranging discussion that touched on tax cuts, monetary policy, TARP, Ronald Reagan, his tenure as a Michigan Congressman, and the gold standard. The complete 42-minute interview is here.

If you’re in a hurry, check out the eight-and-a-half minute cut with selections from the same interview: [here]

Camera by Jim Epstein and Hawk Jensen. Edited by Epstein and Joshua Swain.

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