TEPCO CDS Surges 92 bps Wider At 133 As Japan Government Announces Will Release 3 Days Worth Of Oil Reserves

Tyler Durden's picture

Our expectation that TEPCO CDS will fly this morning has just been confirmed with a market indicated 92 bps wider from Friday close at 133 bps. We expect this number will soon be at multiples as the fall out to the company is increasingly exposed to the market: to wit - news from Kyodo that the fuel rods at Reactor number 2 at Fukushima (which has so far not exploded) have now been fully exposed. Should there be a trifecta of explosions at Fukushima, TEPCO will likely not survive the public fury aftermath. And in related news, the Japanese government had just announced it will release 3 days worth of oil reserves. Per Wikipedia, Japan has the world's second largest strategic reserve, with state controlled reserves of petroleum at eleven different locations totaling 324,000,000 barrels.

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bingaling's picture

Kyodo news now reporting 30 centimeters of water recovered at reactor 2 now ???I have no idea what that means . I assume it means the fuel rods are partially covered /exposed ???

TheGreatPonzi's picture

It means that you've got to run, and fast. 

After the failure of the cooling systems, TEPCO started using seawater to cool down the reactor (which is at approximately 4,000 degrees Celsius). 

The heat appears to instantly vaporize the water. If the water level goes to zero centimeter, then boom. As simple as that.

This is the main weakness of nuclear reactors: they can't survive without water.

bingaling's picture

Yeah I think you are right as a fire has broken out near thermal fuel area there . Some brave sonofabithchez working there . Can you imagine ?

TheGreatPonzi's picture

" Some brave sonofabithchez working there . Can you imagine ?"

If there are still biological people working there, they are probably burning alive. 

disabledvet's picture

natural gas, baby!  and to think "it's at rock bottom prices" right now.  of course "it's an interesting story transporting it."  piece of cake, really...

FoieGras's picture

"market indicated 92 bps wider from Friday close at 133 bps. We expect this number will soon be at multiples"

Author is loading up on CDS? He should if he's so sure. Easy money.

sangell's picture

Supposed to rain tonight and tomorrow in that part of Japan. Cold too. Hard Rains A Gonna Fall! 

BeeTee's picture

Have a heart....and you Tyler...

These people are really struggling with the worst catastrophe since WWII and you see this as a money-making opportunity?  

Some of the comments on this site make me sick!






Vlad Tepid's picture

This is a site dedicated to the news and views surrounding the making of money.  Only the insane deny the catastrophic human tragedy here.  We all acknowledge it.  Half the posts are dedicated to it. The other halfare dedicated to doing what we do: trying to scratch out a living for us and ours by being the best informed.  For the a**holes, Tyler has given us the junk button and God has given us a finger for scrolling past.

New_Meat's picture

guessing here.  Fukushima-Daichi plant is going to be sacrificed, including the two units under construction.  Fukushima-Daini plant highly likely same.  All of TEPCO nuclear units will be shut down for "inspection" which will be for significant structural damage (high seismic accelerations and geotech shifts fracturing the unit's mat). 

Gonna be a long time before the nuclear units are back up, well after the T&D infrastructure can support return to service.

- Ned

sushi's picture

Japan has the world's second largest strategic reserve, with state controlled reserves of petroleum at eleven different locations totaling 324,000,000 barrels.


Problem is the lack fuel for the distribution pumps. The key to the fuel locker is in the control room at Fukushima Daichi Unit # 3.

GoldbugVariation's picture

This type of nuclear reactor is a large closed-circuit plumbing system.  The fuel-rods are self-heating and so keeping them covered with cooling water is essential, until such time as they can be removed one by one using robot arms (which is tricky/impossible if they're partly melted because they will be deformed).  If water levels have fallen dangerously low then it means there are cracks and leaks.  To counter the leaks, new water has to be pumped in to the system continuously.  Normally this would be pure (de-ionised) water.  When the pure water has run out, then the engineers have to use ordinary water from the water main, from a river or from the sea (worst choice) - all fairly low tech with hoses and pumps.  Seawater is the last-resort safety measure because it wrecks the systems, mainly because of the salt in seawater, meaning this nuclear reactor can never be used again.  But having access to that last-resort safety measure is one reason why large nuclear plants are often built close to the sea (or large rivers).

If the fuel rods are exposed then they are not properly cooled and so they will quickly become very hot indeed, until they melt.  Even if they don't melt, there are nasty chemical reactions when uranium at 4000 degrees meets sea-water.  Hydrogen built-up is unsurprising.

The engineers are currently using portable diesel generators for powering the water pumps, and I think I read that the generators cut out on reactor 3 for a couple of hours last night, which I would guess is probably why there was that explosion on reactor 3 this morning.

I think I read that on reactor 2, they switched from deionised water to seawater this morning.  I don't know why there was a 2.5 hour period when the fuel rods were fully uncovered but I would guess probably that's because it took time to switch to pumping seawater.  You could say "human error" but I would give these guys credit, they have probably been working without sleep for 48 hours, in life-threatening conditions and a fearsome environment due to radiation leaks, dealing with multiple systems failures while at the same time worried about their families who might be earthquake victims or evacuees.

I would guess it's likely that the reactor 2 fuel rods have partially melted now due to the full exposure, same as on reactors 1 and 3, so a risk of an explosion on reactor 2 at some point.  But things seem to be back under control for now, they have 2 metres depth of water in reactor 2.

There will not be a complete melt-down or really bad (Chernobyl style) disaster so long as they can keep on doing what they are doing at the moment, that's to say pumping seawater into all 3 reactors at a rate high enough to match any leaks.  They will have to do that indefinitely, at least until they can find a way to start getting the fuel rods out of there using robot arms - so days or weeks.  Quite a lot depends on the pumps and generators not failing now.  One would assume they are busy helicoptering in back-up pumps and back-up generators today, that's what I'd be doing.

One possibly scary thing is that this is 'only' around 100 miles from Tokyo, less if you count the large urban area surrounding Tokyo.  If there is a melt-down, 100 miles is not very far at all in nuclear accident terms.

Caveat: I have a bachelor's degree in nuclear physics but that was a long time ago and although I know quite a lot of the theory, I have no practical experience of any of these things.

uhb's picture

Meltdown in all three Fuckushima reactors looming... source www.faz.net (in german)