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110311JapanEarthquakeTsunami

14 Nov 11

The Great Kanto (East Japan) Earthquake
By N. Vreugdenhil and SP Wolfe
On 11 March 2011, a major earthquake hit eastern Japan in a region known as Tohoku. The quake was also felt very strongly in the Kanto area, including the capital of Japan, Tokyo. The quake was the largest tremor to hit the area in a century. It not only disrupted business and personal life, it triggered a tsunami that hit the east side of Japan’s main island of Honshu with waves over nine meters high. Historical records indicate that it has been more than a thousand years since a tsunami of this monstrous size hit the Pacific coast of Japan.

This double disaster created a third disaster when the tsunami took out cooling equipment and backup power systems and crippled four nuclear reactors at the Fukushima #1 power plant (which is about 280 km NE of Tokyo). With the cooling systems down, three of the reactors overheated and released massive amounts of radioactive material into the air, ground and water around the plant. The fuel storage pools at three more reactors that had been inactive at the time of the quake also lost cooling and some of their water boiled away in the days after the quake, causing further concern.

It took several weeks of heroic and at times desperate action by the Japanese and U.S. military, emergency services, and the plant’s operator, Tokyo Electric (TEPCO) to restore power and cooling to the plant and bring temperatures of all the reactors and storage pools back under control. During this time, the three active reactors are believed to have melted down at least partially, but it is not yet known whether any of the highly radioactive fuel escaped into the surroundings. At this moment over three thousand people from TEPCO and supplier companies are working daily at the site to restore full control and begin the massive cleanup.

Over the next several months, the priority is to seal off the damaged reactors to avoid any further leaks. After that, the plant will be cleaned up and fully de-commissioned in stages, a process that is expected to take up to three decades to complete. At this moment, new leaks of radioactive material have been largely stopped, but decontaminating the area around the plant will also take many years.

Following the earthquake, sketchy reporting and fears of nuclear meltdowns created a rush of both Japanese and foreign nationals to the airports. Initially, many businesses went west to the Osaka area, with others going to the largest southern island of Kyushu. One Japanese singer used her Twitter account to encourage her fans as if she was in Japan, but it turned out she was tweeting from the United States. Most people and businesses have now returned to Tokyo.

Over a thousand aftershocks continued from March, eventually settling down as the fall months set in. The nuclear fears, however, created concerns about the contamination of food and groundwater. Citizens rose to the occasion, creating websites to measure and report radiation levels of locations all over the country with a legion of Geiger counters.

The government has also rolled out a nationwide program of radiation measurement and reporting, inspection of agricultural and other products to ensure no contamination, and decontamination of sites with elevated levels of radiation detected. Interestingly, most radiation hotspots that have been detected in areas distant from Fukushima have turned out to be unrelated to the nuclear plant, instead being long-forgotten deposits of radium from the era when that substance was widely used in medical treatments and wristwatches.

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Gaining control of any nuclear reactor that has experienced a full or partial meltdown is no easy task. It has taken months for the Tokyo Electric Power Company (TEPCO, the power plant operators) to get the catastrophe under control. However in November, the manager of the Fukushima plants confirmed that temperatures in the three reactor vessels had dropped back below 100 degrees C and that they were cautiously optimistic about meeting their commitment to achieve stable cold-shutdown status by the year’s end.

The question remains, is Japan safe? The immediate area (within 20 km) around the Fukushima remains off-limits to the public and several other areas within 30-50 km have also been evacuated after elevated levels of radiation were detected. Although the level of radiation in these areas does not pose any short-term risk to health, long-term exposure would be a concern. Venturing into any of those areas is definitely a bad idea. Other areas, including Tokyo itself, are safe enough as no unsafe levels of radiation have been detected and even trace levels of radiation are now declining in all areas.

Shipments of agricultural products from several parts of Fukushima and other prefectures in the area of the nuclear plant have been stopped, and all food products are inspected for radiation at several points before reaching any supermarket. Food on sale in Tokyo or other cities is safe to eat, including products from Fukushima and other quake-affected prefectures.
Water supplies in Tokyo and all other cities in Japan are being constantly monitored, and do not contain any detectable level of radioactive materials. It is perfectly safe to drink and use.
One issue that continues to bear watching is the electricity supply. Before the quake, Japan had 54 operational nuclear reactors, providing approximately 30 percent of its electricity supply.

As a direct result of the disaster, the six reactors at Fukushima #1, as well as four more at the undamaged but nearby Fukushima #2 plant, are not available. In addition to that, one other nuclear plant in Shizuoka has been shut down by the government due to concerns about its vulnerability to future earthquakes. Also, local municipalities all over the country have been resisting giving approval to restart reactors after routine maintenance checks. At this moment, only 18 reactors are operational, and each of these will eventually run into the same issue with local startup approval.

The national government has launched a program of safety checks and “stress-test” simulations to ensure that nuclear power plants are safe even in the face of major quakes and tsunami. They have also procured massive amounts of natural gas from the Middle East to make up some of the shortfall. That, combined with draconian consumption reduction measures, got the country through the heat of summer without major blackouts. But it may be another one to two years before the national power supply returns to a normal level of capacity and reliability.

Business and daily life in the thriving Tokyo metropolis are largely back on track, with the shortages experienced after the quake being largely resolved. People are also moving past the phase of “restraint” that many were observing in the first few months, and going out to enjoy a meal in a restaurant, a weekend trip to a hot-spring resort, or a game of golf, baseball, or soccer with friends.

Is Japan safe? Yes, and in fact tourism to “cool Japan” is starting to pick up again after several months of international travelers staying away due to fears of radiation. Tourism to the Tohoku area continues to be heavily impacted, though, as there is still a lot of work to do on reconstruction and cleanup.

If you are doing business in Japan, you have the benefits of sales in the world’s third-largest economy. If you are not in Japan yet, it might be time to seriously consider entry. There are day-to-day opportunities as demonstrated by companies such as Michelin, Toys ‘R’ Us, AIG, Citibank, BASF, IBM, NCR, P&G, Cisco, State Street Bank, Unilever, as well as many others. There are also new opportunities created by the triple disasters that Japan went through in March. The nuclear cleanup and reconstruction effort will continue for years to come, but Japan is not a market a good business can easily ignore.