Nuclear Power

A guest post by C. Douglas Lummis...

Margaret Harding of Iowa State University is currently conducting a lecture on the latest developments at Fukushima. She has thirty years of experience in the nuclear industry. She was Vice President of Engineering Quality at GE Nuclear Energy and is now a consultant to the nuclear power industry. She serves on Iowa State's Engineering College Industrial Advisory Council and has an undergraduate degree from Iowa State. This is a live lecture. There will likely be a very strong pro-industry bias in the presentation, but at least she might have some additional facts.

30 miles from Los Angeles!

Ben Bernanke has surrounded all of earth’s inhabitants within a Ring of Fire that will create a monetary earthquake that will very soon ravage the livelihoods of billions (the tremors have already started in MENA). While the headlines are now focused on Japan, the dominos continue to fall in the Middle East and Saudi Arabia and Iran seem to be fighting a proxy war in Bahrain. All of the themes I have discussed in earlier emails are only exacerbated by the Japanese quake as the response has been and will be to print infinite amounts of confetti money and try to secure resources to rebuild with it. The problem is that EVERY nation is doing the same thing. So worthless fiat is being expanded exponentially and will compete for real things and why should the holders of the necessities of life, gold and silver (real money and true financial security) as well as food and energy sell their goods for colored confetti or even worse digital entries in a bank account. If you don’t think the governments of all countries that posses massive resources will not export less and in order to keep more internally to quiet their restless populations you aren’t paying attention. This liquidation selloff in commodities since the Japanese earthquake is probably already over and I expect a HARD reversal to the upside to new highs in food and especially oil. The Asia Tapis benchmark is closed at just under $117/b last night and it a whopping 3% off of the high. Wholesale gasoline prices traded here in the U.S. are down about 4% from the high but are a terrifying 15% higher than a month ago. I expect another major surge in the price of oil imminently. Remember last week I wrote that I thought the Dow and gold would ultimately meet at around 5,000. Can’t imagine how this can happen? Watch the next few months. - Mike Krieger

Based on information provided by Japanese authorities, the IAEA can confirm the following information about the status of Units 1, 2 and 3 at Fukushima Daiichi nuclear power plant.

Japan's 9.0 earthquake is most likely a non-event for the crude oil, but the nuclear power basically has met its Deepwater Horizon.

Breaking news from Kyodo: the cooling system at Tokai, a third nuclear power plant now said to have cooling failures, has stopped according to the fire department. Tokai was Japan's first nuclear power plant. The plant has two reactors: a 1965 built Magnox-type 166MW, and a 1978 built Boiling Water Reactor generating 1100MW. As Wikileaks reports: "This Boiling Water Reactor  was the first nuclear reactor built in Japan to produce over 1000 MW of electricity. By some formalities in the paperwork, the unit is technically separate from the rest of the nuclear facilities at Tokai-mura, but it is managed with the rest of them and even shares the same front gate. The power produced at the unit is sold by both the Tokyo Electric Company and the Tohoku Electric Company." SkyNews adds that the cooling has failed at the bigger, BWR reactor.

Following a report earlier that the Uranium at the Fukushima Power Plant may have melted, we sadly bring you this video of the explosion at the Fukushima power plant.

Per CNN: Radiation level rising in Fukushima No. 1 nuclear plant turbine building, Kyodo News Agency reports.

That's not good.

As has been widely anticipated, Iran is currently in the last stages of preparation before pushing the On button for its brand, spanking new (and 20 years in the making) nuclear power plant. As Reuters reports: "Television showed live pictures of Iran's nuclear chief Ali Akbar Salehi and his Russian counterpart watching a fuel rod assembly being prepared for insertion into the reactor near the Gulf city of Bushehr." Yet despite Russia's guarantee that it would collect spent rods that could be used to make weapons-grade plutonium, Israel is not taking this development lightly at all, and as Jerusalem Post reported earlier, warned that "It is totally unacceptable that a country that blatantly violates decisions of the United Nations Security Council and the International Atomic Energy Agency, and ignores its commitment to the Non-Proliferation Treaty charter, will enjoy the fruits of using nuclear energy," according to Foreign Ministry spokesman Yossi Levy said. Which in turn has prompted Ahmadinejad to warn that a strike on Iran would be answered with "harsh and painful" response. All in all, just another Saturday in the middle east.

Some developments out of Iran, which after 35 years in delays is set to launch its first nuclear power plant, a fact confirmed by Ali Akbar Salehi, the country's atomic energy chief. This had been preannounced by Russia, which helped build the facility located next to the city of Bushehr. More surprisingly, Russia has formally announced that it would be the country supplying Iran with reactor fuel, effectively ignoring almost 4 decades of roadblocking by the West to bring the NPP project to a conclusion. Did Russia just (in)formally announce it is joining into a new axis with Iran?

The reason they call black swans just that is because they are unpredictable. A US bond auction failure is not a black swan as everyone talks about it; the bankruptcy of Europe, Japan, the UK and the US is not a black swan as it is inevitable; that futures will somehow turn green overnight even as they are solidly in the red currently is not a black swan: it is merely a few frontrunning algos working in tandem. However, a rerun of Chernobyl would be considered a pure, unadulterated black swan. Which is why we are following the situation at the PPL Susquehanna Nuclear Power Plant near Berwick where as WNEP 16 reports, "crews are are still trying to stop a freon leak in the unit one reactor
building. PPL officials said freon gas is leaking from an important equipment
cooling system inside unit one's reactor building. Workers were forced
to evacuate the area." Of course, local residents in the Wilkes-Barre region have not been told to evacuate: can't have something like panic now, can we - wouldn't be too beneficial for stocks, which as Greenspan said two weeks ago, are the only thing, not unemployment, not inflation, that matters to the Fed.

Nuclear energy makes the greatest comeback of all time. Not your father's nuclear power plant. Better start practicing your “hustle.”