Quickly contain water leaks, radioactive contamination
Most of the nuclear fuel inside the No. 1 reactor at the Fukushima No. 1 nuclear plant has melted down.
Tokyo Electric Power Co., the plant operator, made this assessment after analyzing temperatures, pressure readings and other data taken from the reactor's central control room.
The fuel is estimated to have started melting about four hours after the plant was hit by the massive tsunami triggered by the March 11 earthquake. Most of the fuel melted and fell to the bottom of the reactor pressure vessel within about 15 hours of the tsunami striking the plant. The government and TEPCO previously believed that about half of the fuel had melted down.
Once deprived of electricity and water needed for cooling, nuclear fuel inside a reactor will overheat and quickly melt. There is no doubt that TEPCO's response to this emergency was flawed.
Both TEPCO and the government, which is responsible for nuclear plant safety regulations, must do some serious soul-searching over these shortcomings.
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Too little, too late
Countries using nuclear energy, including Japan, have tried to improve nuclear safety by adopting emergency countermeasures since the 1990s.
The opening of pressure-release vents at the reactor at the Fukushima plant soon after the tsunami was one emergency measure taken to try to bring the reactor under control. Opening the vent is meant to release pressure that builds up inside the reactor after the core cooling systems are knocked out. This, in turn, is meant to prevent the reactor core from being damaged and make it easier to inject cooling water into the reactor--and avoid a meltdown.
This was supposed to have been done at the Fukushima plant, but the vent was opened too late. The procedure began only after the meltdown started.
To ensure this situation does not occur again, surefire prevention measures should be put in place at other nuclear plants.
The nuclear fuel that fell to the bottom of the No. 1 reactor pressure vessel is being cooled by the continued injection of water from outside the reactor. At least for the time being, there is little likelihood that a large amount of radioactive material will be released into the environment.
However, it was found last week that the pressure vessel had been damaged and that water poured in to cool the fuel was leaking from the vessel.
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Prepare for the worst
According to a timetable compiled last month by the government and TEPCO to bring the nuclear accident under control, the No. 1 reactor would be cooled by filling the containment vessel with water. Now this plan has become impossible.
The leaked water is seeping into the reactor building's basement. Should the leak continue for several months, highly radioactive water could escape from the building.
An explosion damaged the upper section of the No. 1 reactor building soon after the tsunami. If rainwater enters the building through the damaged section during the upcoming rainy season, the amount of contaminated water will increase further. A new cooling method to replace the current injection of water needs to be found.
The possibility that fuel at the plant's Nos. 2 and 3 reactors also could melt down has been pointed out. Should this happen, these two reactors would leak more water than the No. 1 reactor has. Steps to prevent this scenario must be taken quickly.
Healthy money flow key to Tohoku recovery
To ensure a steady recovery from the March 11 disaster, a soundly functioning financial system--often called the economy's blood flow--is essential.
Areas that were damaged will need huge amounts of funds to repair and rebuild factories, stores and housing. Generous lending by local financial institutions is indispensable for this to be attained.
Banks in devastated areas saw their business deteriorate after the disaster, but they should not use this as an excuse to be reluctant to lend money. If necessary, public funds should be injected into these institutions to bolster their capital.
After the disaster, the government strengthened financial assistance for cash-strapped small and midsize companies, including offering low-interest loans from state-affiliated financial institutions. These steps could have some effect in preventing corporate bankruptcies, but they are far from sufficient.
In the business slump following the so-called Lehman shock of September 2008, many small and midsize firms used up their lines of credit and were unable to access additional aid.
Borrowing money for reconstruction on top of existing debts would saddle local firms with a dual financial burden.
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Listen to local needs
We want the government to listen closely to requests from people in the afflicted areas to further improve its financial assistance measures.
As economic activity in the devastated areas shifts from recovery to reconstruction, private financial institutions will begin to play a greater role. With their understanding of regional priorities and potentials--as well as long-standing connections with local businesses--regional banks, credit associations and shinkin banks are uniquely qualified to perform precise loan screenings and give proper management guidance to local companies.
Nonetheless, the situation the local banking institutions are in is severe. Of the eight regional banks based in Miyagi, Fukushima and Iwate prefectures, six are expected to report deficits for the business year ended in March. This was caused by the institutions' difficulty in collecting payments from borrowers in devastated areas, which led to a surge in losses from disposing of nonperforming loans.
If these institutions are to be able to expand their lending, it will be necessary to increase their capital. But with business deteriorating, it will be difficult for them to raise capital on their own.
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Lower legal hurdles
To deal with the situation, the Financial Services Agency plans to attain a legal revision in the current Diet session that would allow these institutions to beef up their capital with public funds. The revision would include a clause excepting banks in damaged areas from the usual conditions for an injection of public funds, such as submitting profit-planning progress records.
The revision also calls for exempting shinkin banks and credit associations that run into financial difficulty from repaying the public money if they agree to restructure their management.
The planned legal revision is expected to help ease private-sector resistance toward injections of public funds. We urge the government and ruling parties to realize these legal amendments as soon as possible.
The Sendai-based 77 Bank is among the regional banks that have decided to apply for public funds. Other banking institutions should actively look into applying for such funds for the benefit of the Tohoku economy.
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