SocGen on a ‘reasonable worst case scenario’ at Fukushima

It’s a worse-case scenario — Japan’s “slow motion” Chernobyl.

But not necessarily an unreasonable one.

And Societe Generale’s Friday research is based on comments from UK chief science officer professor, Sir John Beddington, who said in a Wednesday press conference:

“Let me now talk about what would be a reasonable worst case scenario. If the Japanese fail to keep the reactors cool and fail to keep the pressure in the containment vessels at an appropriate level, you can get this, you know, the dramatic word “meltdown”. But what does that actually mean? What a meltdown involves is the basic reactor core melts, and as it melts, nuclear material will fall through to the floor of the container. There it will react with concrete and other materials … that is likely… remember this is the reasonable worst case, we don’t think anything worse is going to happen. In this reasonable worst case you get an explosion. You get some radioactive material going up to about 500 metres up into the air. Now, that’s really serious, but it’s serious again for the local area. It’s not serious for elsewhere even if you get a combination of that explosion it would only have nuclear material going in to the air up to about 500 metres. If you then couple that with the worst possible weather situation i.e. prevailing weather taking radioactive material in the direction of Greater Tokyo and you had maybe rainfall which would bring the radioactive material down do we have a problem? The answer is unequivocally no. Absolutely no issue. The problems are within 30 km of the reactor.

Still — SocGen’s Takuji Okubo figures there’d be little economic activity in that 30 kilometre contamination area around Fukushima for some time.

As a point of interest Tokyo is 250km away from the plant. Kiev, Ukraine’s capital, is 130km away from Chernobyl. Anyway, here’s SocGen’s assessment:

On balance, we would argue that loss of 20% of Fukushima prefecture’s production capacity in the “worst case scenario” is a good assessment. As a percentage of national productive capacity, 1.5% * 20% = 0.3%. Readers may get an impression that 0.3% is too small. That is not necessarily the case. The loss of 0.3% of production capacity signifies that 0.3% of JPY 2450 trillion of capital stock is lost. That’s an economic damage of JPY 7.4 trillion, about 50% increase from what we estimate as JPY 10-20 trillion economic damage from the current earthquake/Tsunami disaster. If we are to widen Sir John Beddington’s assumption of 30km to 50 km, it would become more than half of Fukushima prefecture and one could argue that the permanent loss is 0.75%, bringing the economic damage up to JPY 18 trillion from the nuclear accidents alone.

So that’s a 50 per cent increase to the damage from the earthquake/tsunamis.

Now damages from radioactive contamination are not covered by insurance companies (though nuclear plant damage is). If there are any, they will be a burden on the Japanese government. How big a burden? SocGen’s Okubu isn’t sure just yet.

But just to return to that Chernobyl analogy — about 5 to 7 per cent of Ukraine’s government spending is estimated to have been allocated to Chernobyl-related benefits and programmes. Not a paltry amount then — though in that particular case, the then-Soviet government initially tried to cover-up the accidents, which meant rsidents weren’t evacuated until some 36 hours after the explosions happened.

Japan has already evacuated residents — but – says SocGen:

However, there are reports that those currently working at the Fukushima nuclear power plants are already under significant radiation risk. Tepco, the general power operator, reportedly requested to evacuate their employee from the facility and the government reportedly refused the request. While the number affected and degree of health damage is likely to be much smaller than what happened in the Chernobyl, it remains to be seen how seriously these workers’ health are affected.

Related links:
Who are the Fukushima 50? – LA Times
Anime explains nuclear crisis – Global Voices
Radioactive contamination – the uninsurable - FT Alphaville
A nuclear primer from BarCap - FT Alphaville

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