Implications of Japanese Earthquake
March 14th, 2011J writes:
Kevin,
Would you comment on what the situation in Japan means for the rest of the world.
I have been trying to get my head around what has happened, and what is still happening, but I’m not able to do it. Millions of Japanese are without water, food and electricity. Some of the largest Japanese corporations are shut down. Some areas of Japan are experiencing rolling blackouts due to the loss of electricity production from several nuclear power plants, two of which may be melting down. Ten thousand people may be dead in Miyagi Prefecture alone.
The bullet points that demonstrate how extremely serious this is could go on and on.
But something dawned on me as I was looking at the situation today:
I can’t even begin to consider what the global implications of this will be. Japan is the third largest economy in the world. Where do we even start when considering the international implications?
What I want to start to do, with your help, even through the emergency situation is ongoing, is to try to start thinking about what the international implications of this disaster are going be. Pick any area you like (economic, political, military, food, energy) and feel free to take a stab at it. I think we would all appreciate links to good information, but since this is so huge, I’m honestly not sure anyone is really going to be able to “see through” this with any level of accuracy.
Initial ideas: Commodities like iron ore, copper and lumber seem like no brainers to watch. But how is the electricity, lost from the down nuclear power plants, going to be replaced? Coal and natural gas?
Japan was already dangerously reliant on food imports before the disaster. How much farmland has been washed over by (salty) sea water that probably picked up unknown amounts of industrial pollutants as the tsunami moved inland? As Japan rebuilds, is inflation everywhere else going to accelerate?
Questions, questions.
Personally, the electricity generation question is the one I’m most curious about. How does Japan keep-the-lights-on, so to speak, going forward?
—Update—
With 11 nuclear reactors out of action in the wake of the quake and rolling blackouts going into effect in the Kanto region, disruption to power supplies is a major wild card in the near and medium term.
Japanese trading houses and the government have been working to secure fuel for utilities’ spare generators to make up for the shortfall; there were reports over the weekend that Russia may boost shipments of liquefied natural gas and coal.
Based partly on California’s experience with rolling power cuts in 2003, during which manufacturers were largely able to cope with the downtime, Nomura estimates that if the power cuts extend through April, the negative impact will amount to 0.29% of GDP.
The Japanese government set a goal last year of increasing the share of zero-emission power sources from 34% to 70% by 2030, with nuclear power a key contributor: Plans call for constructing 14 new reactors nationwide in the next 20 years. Given the traumatic events involving Tepco’s Fukushima nuclear reactors, there’s a good chance that the public will demand a different approach–and not only in Japan.
Expect Japan to build more power plants fueled by liquefied natural gas. Japan is already the world’s largest importer of LNG; it’s likely to put upward pressure on prices in years to come.
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Japan’s earthquake has left a gaping hole in the nation’s power capacity that looks set to last months, threatening to make economic recovery far more feeble than hoped.
The first rolling power cuts in the history of the giant Tokyo Electric Power Co (TEPCO) have already closed many plants, with Toyota shutting down until at least Wednesday.
Rolling three-hour blackouts have wrecked the clockwork precision of Japan’s railways while a thousand schools across Tokyo cancelled classes. Even Tokyo’s ubiquitous neon signs have gone dark, a big blow to confidence in a country that lives by routine and order.
With a new explosion at a nuclear plant in Fukushima threatening a far more serious radiation leak, the power shortage will not get better anytime soon.
“It looks like Japan could be in a “power down” state for a protracted period,” said Stephen Roberts, Nomura’s chief economist for Australia. “That’s what makes it different from other major quakes.”
“People tend to compare it to Kobe and assume a “v”-shaped recovery, but Kobe never caused this level of power disruption,” he added. “It means any proper recovery could be delayed right out to the fourth quarter.”
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There is certainly still plenty of unused manufacturing capacity in Japan, but far less when it comes to power supply.
Analysts at Australian investment bank Macquarie estimated the earthquake and resulting tsunami took a quarter of TEPCO’s total capacity of 65 gigawatts, shared between nuclear and oil.
In all some 15 nuclear plants were shut down, and it was not clear how many would re-start or when.
“We think power supply shortages and rations are likely to continue in TEPCO’s supply area for months rather than weeks,” the analysts wrote in a note to clients.
And the growing crisis at the Fukushima plant brings into question Japan’s whole experiment with nuclear power, which provides about one-third of total generating capacity.
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Nomura’s Stephens said there was perhaps scope to ramp up power output at some of Japan’s oil and coal plants, though at great extra cost. Japan’s increased demand for coal, oil and LNG for generation would also add to upward pressure on resource prices and so to inflation risks elsewhere in Asia.
But even then it was unlikely to be enough to make up the current shortfall in power.
“If this lasts to the summer, which is more than possible, there is no way the system could supply the power for air conditioning,” he warned. “Tokyo in summer, without air con? Doesn’t bear thinking about.”
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More: From Gas to Gadgets: Japan’s Disaster Means Higher Prices
Nikkei Down Nearly 5%
March 14th, 2011Bloomberg: Bank of Japan Will Add $146 Billion to Stabilize Markets After Earthquake
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Pump It: Bloomberg: Japan Adds $86 Billion to Stabilize Markets After Quake:
The Bank of Japan began pouring cash into the banking system after the nation’s most powerful earthquake on record, while later today it may keep its asset- purchase plans unchanged as officials gauge the longer-term effect on the world’s third-largest economy.
Governor Masaaki Shirakawa told reporters late yesterday he’s ready to unleash “massive” liquidity, and the BOJ said today it will pump 7 trillion yen ($86 billion) to maintain financial stability. Economists said officials will likely decide to keep longer-term credit programs at a total of 35 trillion yen. The bank’s main interest rate has already been cut to near zero as policy makers last year sought to end the nation’s deflation.
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Trade is orderly. Rolling blackouts will exclude central Tokyo, where the Tokyo Stock Exchange is located.
Down 527.47 (5.14%)
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Monitoring…
-501.09 (4.89%)
Yen Rallies on Repatriation
March 14th, 2011Via: Reuters:
The yen rallied broadly early in Asia on Monday but quickly pared gains in volatile trade as nervous traders waited to see what action Japanese officials will take to keep markets calm after Friday’s massive earthquake and tsunami hit the country.
The Japanese currency had risen sharply on Friday on talk of repatriation flows as the disaster unfolded. On Monday, the country is battling to prevent a nuclear catastrophe and to care for millions of people without power and water.
“People would be concerned the BoJ will flush the financial system with liquidity today and if the yen continues to strengthen too far, it’ll come into the market to intervene,” a trader at a U.S. investment bank said.
Bank of Japan Governor Masaaki Shirakawa has said the central bank will provide huge amounts of liquidity to the banking system on Monday to keep markets stable.
The dollar skidded to a low around 80.60 yen on trading platform EBS, compared with 81.87 yen late in New York on Friday, before quickly halving those losses to last stand at 81.42 .
The drop in dollar/yen triggered a wave of stops that also saw yen crosses caught up in the volatile trade. The euro fell more than 1 percent to a low around 112.62 yen , before bouncing back to 113.40.
A senior finance ministry official reiterated that Japan would take decisive measures on currencies if needed, when asked about the yen’s strengthening against the dollar in the wake of Friday’s devastating earthquake.
More: Reuters:
Shaken by the prospect of nuclear meltdown after a devastating earthquake and tsunami, Japanese investors will dump overseas assets on Monday and bring their money home to help finance reconstruction.
Positioning for this could send the dollar plummeting versus the yen on Monday and lead to a sharp slide in Treasuries since U.S. government bonds are a favorite asset of Japanese investors, market analysts said.
Stocks also are likely to come under pressure.
Japanese insurers will probably sell some of their most liquid foreign assets such as U.S. Treasuries so they can respond to the worst disaster since World War Two.
The crisis could lead to insured losses of nearly $35 billion, risk modeling company AIR Worldwide said, making it one of the most expensive disasters in history and nearly as much as the entire worldwide catastrophe loss for the global insurance industry.
Probably No Civil or Criminal Charges Over Lehman Brothers’ Activities
March 13th, 2011*Shaking head* *Mumbling incoherently*
Via: Wall Street Journal:
The U.S. government’s investigation into the collapse of Lehman Brothers Holdings Inc. has hit daunting hurdles that could result in no civil or criminal charges ever being filed against the company’s former executives, people familiar with the situation said.
In recent months, Securities and Exchange Commission officials have grown increasingly doubtful they can prove that Lehman violated U.S. laws by using an accounting maneuver to move as much as $50 billion in assets off its balance sheet, which made it appear that the securities firm had reduced its debt levels.
SEC officials also aren’t confident they could win any lawsuit accusing former Lehman employees, including former Lehman Chief Executive Richard Fuld Jr., of failing to adequately mark down the value of the large real-estate portfolio acquired in Lehman’s takeover of apartment developer Archstone-Smith Trust or to disclose the resulting losses to investors, according to people familiar with the matter.
Some Airport X-Ray Body Scanners Radiation Levels Are 10 Times Higher Than Expected
March 13th, 2011Via: WSTP:
The Transportation Security Administration announced Friday that it would retest every full-body X-ray scanner that emits ionizing radiation – 247 machines at 38 airports – after maintenance records on some of the devices showed radiation levels 10 times higher than expected.
The TSA says that the records reflect math mistakes and that all the machines are safe. Indeed, even the highest readings listed on some of the records – the numbers that the TSA says were mistakes – appear to be many times less than what the agency says a person absorbs through one day of natural background radiation.
Even so, the TSA has ordered the new tests out of “an abundance of caution to reassure the public,” spokesman Nicholas Kimball says. The tests will be finished by the end of the month, and the results will be released “as they are completed,” the agency said on its website.
EMERGENCY JAPAN: 9.1 MAGNITUDE EARTHQUAKE
March 11th, 2011Rolling Blackouts Begin Monday
Via: Reuters:
Tokyo Electric Power Co said on Sunday that it would conduct its first-ever rolling blackout from Monday to help prevent an unexpected large-scale power outage after a powerful earthquake shut two nuclear plants indefinitely on Friday.
Blackouts will be conducted in turns at five areas in nine prefectures that it serves, as TEPCO expects peak power demand of 41 million kilowatts for Monday, exceeding supplies by 10 million kw.
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Times of India: Toll May Cross 10,000 in Miyagi Alone
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Big Picture Gallery: Japan: Earthquake Aftermath
Breathtaking devastation.
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Two Japanese Nuclear Reactors May Be in Meltdown
Via: CNN:
While saying there are no indications yet of dangerously high radiation levels in the atmosphere, a Japanese government official said Sunday that there is a “possibility of a meltdown” at two of the country’s nuclear reactors.
Chief Cabinet Secretary Yukio Edano told reporters that officials still do not know if there have been meltdowns in the No. 1 and No. 3 reactors at the Fukushima Daiichi’s nuclear facility in northeast Japan. But as they attempt to cool down radioactive material and release pressure inside the reactors, he said authorities were working under the presumption that such meltdowns have taken place.
“We do believe that there is a possibility that meltdown has occurred. It is inside the reactor. We can’t see. However, we are assuming that a meltdown has occurred,” he said of the No. 1 reactor. “And with reactor No. 3, we are also assuming that the possibility of a meltdown as we carry out measures.”
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“If this accident stops right now it will already be one of the three worst accidents we have ever had at a nuclear power plant in the history of nuclear power.”
Via: CNN:
Another expert said enough was known to conclude that Saturday’s nuclear events in Japan rank high on the list of similar incidents. “If this accident stops right now it will already be one of the three worst accidents we have ever had at a nuclear power plant in the history of nuclear power,” said Joseph Cirincione, an expert on nuclear materials and president of the U.S.-based Ploughshares Fund, a firm involved in security and peace funding.
He said only the 1979 partial meltdown of a reactor core at the Three Mile Island nuclear plant in Pennsylvania and the 1986 Chernobyl disaster in the Soviet Union were worse.
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EMERGENCY: JAPANESE AUTHORITIES PREPARING TO DISTRIBUTE IODINE
Reuters has the story up now.
Via: Reuters:
Japanese authorities have told the U.N.’s atomic watchdog they are making preparations to distribute iodine to people living near nuclear power plants affected by Friday’s earthquake, the Vienna-based agency said.
Iodine can be used to help protect against thyroid cancer in the case of radioactive exposure in a nuclear accident.
After the 1986 Chernobyl disaster, thousands of cases of thyroid cancer were reported in children and adolescents who were exposed at the time of the accident. More cases are expected.
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This is verbatim off the Reuters liveblog:
And in confirmation of what was being speculated earlier, Japanese authorities have told the IAEA they are making preparations to distribute iodine to people living near the nuclear power plants. Iodine can be used to help protect the body from radioactive exposure.
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Quake Moved Japan Coast 8 Feet; Shifted Earth’s Axis
Via: CNN:
The powerful earthquake that unleashed a devastating tsunami Friday appears to have moved the main island of Japan by 8 feet (2.4 meters) and shifted the Earth on its axis.
“At this point, we know that one GPS station moved (8 feet), and we have seen a map from GSI (Geospatial Information Authority) in Japan showing the pattern of shift over a large area is consistent with about that much shift of the land mass,” said Kenneth Hudnut, a geophysicist with the U.S. Geological Survey (USGS).
Reports from the National Institute of Geophysics and Volcanology in Italy estimated the 8.9-magnitude quake shifted the planet on its axis by nearly 4 inches (10 centimeters).
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Astonishing Tsunami Footage on CNN
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“Coolant” = “Billion Dollar Kill Switch”
Via: Cringley:
Tokyo Electric Power Company isn’t saying much. Utilities tend not to and Japanese utilities are notoriously secretive. But we got a clue to what’s happening from U. S. Secretary of State Hillary Clinton, of all people, who remarked that the U. S. military was delivering “coolant” to the stricken reactor.
“Coolant?” wondered aloud all the CNN and Fox News nuclear experts looking for a lede for their stories. “What is she talking about, coolant?” This is a boiling water reactor and the coolant is water. The U. S. Air Force isn’t needed to export water to Japan.
This shows the limits of cable news experts and maybe experts in general, because Hillary isn’t the kind of person to choose the wrong words. She said “coolant” and she meant “coolant.” Though she may not have known she was saying so, she also meant the reactor was dead and will never be restarted.
A boiling water reactor does just what it sounds like — it boils water to make steam that drives a turbine generator. This is as opposed to a pressurized water reactor that uses the nuclear reaction to heat a coolant that never really boils because it is under high pressure, then sends that coolant through a heat exchanger which heats water to make steam to drive the generator. Boiling water reactors are simpler, cheaper, but generally aren’t made anymore because they are perceived as being less safe. That’s because the exotic coolant in the pressurized water reactor can contain boric acid which absorbs neutrons and can help (or totally) control the nuclear reaction. You can’t use boric acid or any other soluble boron-laced neutron absorbers in a boiling water reactor because doing so would contaminate both the cooling system and the environment.
That’s why the experts didn’t expect it because they are still thinking of how the plant can be saved, but it can’t be.
Though the boiling water reactor has already been turned off by inserting neutron-absorbing control rods all the way into the core, adding boric acid or, more likely, sodium polyborate would turn the reactor off-er — more off than off — which could come in really handy in the event of a subsequent coolant loss, which reportedly has already happened. But that’s a $1 billion kill switch that most experts wouldn’t think to pull.
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U.S. AIR FORCE DELIVERS COOLANT TO FUKUSHIMA NUCLEAR POWER PLANT
Aren’t the reactors at Fukushima Daiichi water cooled? Uh, something is very strange here.
Via: Economic Times:
Washington: The US has transported coolant to a Japanese nuclear power plant affected by the massive earthquake, as it quickly moved naval and air assets along with humanitarian relief material for the tsunami-hit areas of the country.
“We just had our Air Force assets in Japan transport some really important coolant to one of the nuclear plants,” Secretary of State Hillary Clinton announced yesterday, as Tokyo declared a state of emergency for five of its nuclear reactors at two atomic power plants in northeastern coast of Japan, where an 8.9-magnitude quake struck yesterday.
Japan is very reliant on nuclear power and they have very high engineering standards, but one of their plants came under a lot of stress with the earthquake and did not have enough coolant, she said.
“So Air Force planes were able to deliver that. So we’re really deeply involved in trying to do as much as we can on behalf of the Japanese and on behalf of US citizens,” Clinton said.
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Video of Ground Cracking Open, Water Being Pushed Up, Chiba City
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MARKET WATCH: FUKUSHIMA NUCLEAR REACTOR COULD BE MELTING DOWN
Japanese nuclear authorities warned that a nuclear reactor could be experiencing a meltdown Saturday, a day after its cooling mechanism was damaged by the country’s most powerful earthquake in more than a century, according to various media reports in Japan.
Government officials said they were pouring water into the Fukushima Daiichi No. 1 nuclear reactor to stop the meltdown, Dow Jones Newswires reported.
The Tepco reactors are about 150 miles north of Tokyo, and about 40 miles from the epicenter of the 8.9-magnitude earthquake that struck northeastern Japan a day earlier.
Japanese authorities declared a nuclear emergency on Friday evening, and then ordered thousands of residents within 10 kilometers of the plant to evacuate. Some 20,000 people evacuated from the areas around the plants on Saturday, Kyodo reported.
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Star Advertiser: Quake Magnitude Raised to 9.1
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Boston Globe: Big Picture Gallery
An 8.9-magnitude earthquake hit off the east coast of Japan early today. The quake — one of the largest in recorded history — triggered a 23-foot tsunami that battered Japan’s coast, killing hundreds and sweeping away cars, homes, buildings, and boats. Editors note: we’ll post more as the story develops…
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AFP: Radiation 1000 Times Higher than Normal at Fukushima Nuclear Power Plant
A JAPANESE safety panel says radiation is 1000 times above normal at a nuclear plant in the country’s northeast, Kyodo news agency reports.
Japan’s Government has put the radiation level at the Fukushima plant eight times above normal and has stated that there is only “a possibility of a radioactive” leak from the reactor.
People within 10km (6 miles) of nuclear plant have been ordered to evacuate.
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LA Times: Hundreds of Bodies Found in Sendai
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BBC: Huge Whirlpool Created After Japan Quake
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Telegraph: Millions Stranded in Tokyo
Millions of people in greater Tokyo are stranded far from home after Japan’s biggest earthquake on record shut down the capital’s massive subway system.
Sirens wailed through Tokyo, television helicopters flew overhead and people rushed to the city’s ubiquitous 24-hour convenience stores, quickly emptying shelves of bento boxes, sandwiches and instant noodle cups.
Countless workers, who had fled violently swaying office blocks, found themselves stuck far from their families, and unable to speak to them because the overloaded mobile phone system could not carry most calls.
“I have no idea how I’ll get home,” said an 18 year-old woman waiting outside Ginza subway station.
She described how ceramics shattered around her in a department store when the huge quake hit mid-afternoon.
The government used loudspeaker alerts and television broadcasts to urge people to stay near their workplaces rather than risk long walks home, as highways leading out of the city centre were choked and hotels quickly booked out.
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Reuters: Japan: Trying to fix Nuclear Plant Cooling Problem
Japan said on Friday a cooling function at Tokyo Electric Power’s Fukushima Daiichi nuclear plant was not working after a major earthquake but that it was trying to get backup power for cooling.
The government has declared an emergency situation as a precaution but there was no radioactive leakage and no damage from the cooling problem was expected at this stage, Chief Cabinet Secretary Yukio Edano told a news conference.
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JAPAN DECLARES NUCLEAR EMERGENCY
Japan declares ‘nuclear emergency’ as attempts to cool reactor at northern plant are ‘not going as planned’ – official via NHK
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Utah Legislature Backs Gold and Silver as Legal Tender; Full Value of Metal, Not Just Face Value
March 11th, 2011Via: Salt Lake Tribune:
The Senate gave final approval Thursday to a bill taking the first step to recognize gold and silver as legal tender in the state.
It voted 16-7 to pass HB317, and sent it to Gov. Gary Herbert for his signature.
The measure would recognize as legal tender gold and silver coins issued by the federal government — not just their face value, but also their value in gold and silver or to a collector.
It would not require anyone to accept them, however, but make it an option. It also would exempt sales of such coins from capital gains tax. It also would order the state to study whether Utah should establish an alternative form of legal tender, such as one backed by silver and gold.
“It will put some pressure on the federal government. That’s the goal here because right now we have a dollar that’s just running away with inflation and our hope is that this is a little bit of a shock that’ll say we want to deal with inflation,” Senate Majority Leader Scott Jenkins, R-Plain City, Senate sponsor of the bill, said in earlier debate. He gave senators gold chocolate coins on Thursday before debate.
Saudi Arabia: Police Broke Up Protest; Used Stun Grenades, “Rubber or Live Bullets”
March 10th, 2011Monitoring…
Via: Reuters:
Saudi police used force to disperse a demonstration by minority Shi’ites on Thursday, injuring up to four people on the eve of a day of protests called for on social media, witnesses and activists said.
Shots were heard near a protest by around 200 Shi’ites in the town of Qatif in Saudi Arabia’s Eastern Province, home to some of the world’s largest oil fields and a large Shi’ite minority.
Florida: Proposed Legislation Would Make Photographing a Farm Without Permission a Felony
March 10th, 2011Via: New York Times:
Photographers — perhaps including some ghosts from Farm Security Administration days — are astir at news of a bill introduced by State Senator Jim Norman of Florida that would make it a felony to take a picture of a farm without the owner’s permission:
A person who photographs, video records or otherwise produces images or pictorial records, digital or otherwise, at or of a farm or other property where legitimate agriculture operations are being conducted without the written consent of the owner, or an authorized representative of the owner, commits a felony of the first degree.
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Reader JM sent this in.
Via: Photo Radar:
Introduced by State Senator Jim Norman, a Republican, the bill is intended to curb the activities of animal rights activists, who take photos and videos of farms for campaign purposes. The bill would apply to all photographers.
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PhotoRadar searched Florida public records and found that Sen. Norman received $195,297 in donations during his 2010 election campaign, with agricultural, agri-chemical, construction and real estate firms among the top contributors.
NATO Kills Cousin of Afghan President Hamid Karzai
March 10th, 2011Via: BBC:
A relative of Afghan President Hamid Karzai has been mistakenly killed by Nato troops in southern Afghanistan, officials say.
Yar Muhammad Khan was at his home in Dand district near Kandahar city when he was shot dead in an overnight raid.
Nato says it is investigating the incident.
Hundreds of Afghans took to the streets of the capital, Kabul, last week to protest about civilian deaths at the hands of foreign forces.
”There were operations taking place near his house. He was killed by mistake. He was not a target,” Ahmad Wali Karzai, the brother of President Karzai and head of Kandahar’s provincial council, said.
It comes just days after President Karzai lashed out at US-led forces over the recent accidental killing of nine boys by US forces in eastern Kunar province.
