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Government's Best FriendOld news, right? Well, not quite. The Fukushima disaster was, how should we put it, oh, yes, a disaster! Human error, design error, human arrogance, human… human… human. You name it they have it. The story is simple. Earthquake produces tsunami. Tsunami hits poorly designed reactors. Reactor 1, 2 and 3 go into meltdown. Reactor 4 fails and later on suffers an explosion. Reactors 5 and 6 do not seem to be operating properly. If you are interested in the whole sordid affair, go to Wikipedia and search for "Fukushima Daiichi nuclear disaster" That's not the point. The point is that although most people have already forgotten about it, the radiation contained in it has not forgotten us. It keeps going and going and going. This "manmade" disaster so far has caused and costed:

300.000 evacuated

1600 deaths due to evacuation or its consequences

Japan lost 30% of its generating capacity

Unusual conservation measures are in place including power rationing

Conversion to nuclear-free generation (i.e. gas, oil, solar, etc.) will cost billions.

A clean-up effort which is expected to last decades and the current estimates (1 Trillion USD?) are nothing but best guesses since even the most basic tools for the task are yet to be invented.

A radioactivity release in the order of 10% to 20% of Chernobyl's…and counting

In the most contaminated areas females exposed as infants face a 70% higher risk of developing thyroid cancer and a 7% increase for leukemia.

It is estimated the accident will cause 130 cancer deaths.

The Pacific ocean between Japan and US is now contaminated with Cesium 90 (albeit at a low concentration).

Many evacuees are exhibiting psychological symptoms similar to those of people exposed during the Chernobyl incident (including stress which produces psychosomatic events).

All reactors are destroyed and most of them are leaking radiation. A coffin-like "solution" such as the one that failed in Chernobyl may be proposed.

We could go on and on and on forever. Basically, it is bad but it could have been horrible. Well… there is still time.

INSURANCE

What has this to do with insurance and subsidies? Excellent question. Let's begin by saying that without massive government subsidies nuclear reactors would have never happened. Yes, the bomb may have happened but there is a vast difference between building a bomb and building a reactor. Tons upon tons of money must be invested to jump from one to the other. So much money indeed that it would probably had never happened should private enterprises would have had to finance all the research by themselves. For example, in Germany alone its nuclear reactors have costed German people about 200 billion EUR since the 1950's. And Germany essentially bought turn-key reactors; they did not do most of the research!

In most countries nuclear generation is in the hands of the state, which means that they don't have to worry about insurance. Any government organization may be considered liable for accidents caused by it, but the truth is that in most countries there are liability-limiting laws in place. What this essentially means is that should a nuclear accident happen, you will only be compensated to a minimum degree. Furthermore, this also means that the apparatchiks in charge of said reactors have no personal incentives to avoid accidents. Sure, they may lose their jobs but since they are government jobs, what are the chances?

But what about in few selected countries? Again, in Germany the owners of nuclear reactors have unlimited liability beyond whatever their insurance covers (about 256 million EUR). However, German nuclear companies have self-insured up to 2.5 billion EUR. Impressive, right? Well… no. What is 2.5 billion EUR compared to about 1 Trillion USD clean-up in Fukushima? About 0.375% of all the cost. Who pays the "other" 99.625 % should anything happen? You guessed it, German taxpayers!

In an Austro-Libertarian system damage liability would be strictly dealt with through contractual arrangements. If you want nuclear electricity you must sign a contract waving most (if not all) of potential radioactive liabilities. How many people do you think would be that stupid? How many potential customers do you think nuclear reactors would have? Not many. Do you think that between the research costs, the construction costs and the potential unlimited liability any company would be stupid enough to build nuclear reactors? Of course not!

But what in Fukushima? Well, insurance companies did insure the reactors, but not for damage caused by earthquake shock, fire following earthquake and tsunami. Insurance companies are not that stupid. Again, who is going to pay for all the ongoing damages and the unknown future as the plants continue to deteriorate and leaks become more severe over the years? You guessed it, the Japanese taxpayer. Japan "nationalized" all the losses.

How did this happen? Where did this idea of government-limiting liabilities came from? The usual suspects, the US. In the 50's insurance companies simply refused to insure nuclear reactors due to their potential limitless liabilities. And so the "nuclear" industry lobbied the US government to put limitations laws in place. From that point on, most other countries did the same. A case of monkey see, monkey do? Absolutely!

And what is happening now in US? Insurance companies have begun to notify their clients that damage of any kind related to radiation is excluded. They have learned the lesson and fully understand that the potential liabilities are limitless. That's right, limitless. It is not even possible to calculate the damage that a severe nuclear accident can cause, not only because of its extension in geographical terms, but because of its effects over very long periods of time. Considering this, do you actually believe that should government subsidies and liability limitations and willingness to be the "insurer of last resort" would not exist, companies would be so stupid as to get into the nuclear reactor business? Of course not!

FUKUSHIMA AGAIN

With this cheerful view, we now return to Fukushima. It so happens that there is still plenty of nuclear material that has not been "inactivated". There are pools containing fuel rods that require continuous cooling. The boron between the rods (a nuclear reaction poison) is gone. There are three reactors that suffered meltdown and their fuel is in unknown configurations. The removal of this fuel is expected to begin in 2025… although we would not hold our breath. This date is tentative and assumes that unknown technology will be available at the time…right!

The entire decommissioning process is estimated to last "only" 40 years… right!

Neat, right?

BACK TO INSURANCE

Most "ecological" groups and movements are of the opinion that nuclear reactors should be banned. The most progressive and "enlightened" ones believe that nuclear "polluters" should pay for their pollution. Neither of those groups are correct. Nothing can be fixed by decree or laws; this is just silly. What is required is simply for market forces to reassert themselves. It is an issue of insurance, not an issue of pollution or tax or generation costs. If companies in the business of building, maintaining and operating nuclear reactors suddenly face full liabilities, they will simply pull the plug and walk away. How do we know this? Because it threatened the entire nuclear industry in US in the 50's. Again, this is not political-fiction or economic-fiction; this is reality. It did happen in the past.

But if this did indeed take place, who is to blame? Governments. Governments are, again, the enablers of these calamities. To the point is that even if nuclear generation companies are left on their own and they simply walk away, we, the taxpayers, are still stuck with cosmological costs for the cleanup (yes, cosmological and not astronomical since by comparison astronomical numbers are too small). Do this calculation. Figure out how many nuclear reactors are in your country. Then multiply that number for about one Trillion USD over the next 20 or 30 years or so. That is approximately how much is going to cost to fully "decommission" each nuclear reactor. Why so expensive if we assume that there will be no accidents? Because the term "decommissioning" is misleading. Basically what we need to do is to dismantle a highly radioactive building, piece by piece, and bury its remains deep, deep, somewhere where no geological or ecological or manmade events will alter its contents for…oh… "only" a few million years or so. Give or take. Nevermind that so far no country on earth has found a suitable solution to the problem. The closest that any one made it was Finland with its Onkalo spent nuclear fuel repository (search Wikipedia if you are interested) which is supposed to begin operations around 2020…if many technical solutions can be found…solutions that are constantly being determined to be deeply flawed.

BUT WE NEED THEM!

Well… no. The argument that the entire world would collapse if we would to turn all nuclear stations off is correct. What is not correct is the assumptions that all things are equal. Look, this is simple. The world lost 65 years researching, perfecting and building nuclear reactors, reactors that are not economically viable. There isn't a single reactor anywhere in the planet that would produce profits should there not have been massive government subsidies and liability limitations.

What then?

Simple, technology would have evolved in a different path. New energy-savings initiatives would have been developed. New sources of energy would have been created. Yes, we know. You believe that this nothing but mumbo-jumbo. It is not. There is plenty of evidence "out there" that fusion reactors with almost zero residual radiation are not only viable but easy to build. There is plenty of evidence "out there" that many other sources of energy exist. These sources are simple, such as the permanent magnet electric generators, or complex, such as the many energy generators which have been suppressed (and their inventors mysteriously died or disappeared). And we have not even mentioned alternative mainstream sources such as solar, wind, eolic, geothermal and so on.

All these sources would have been developed over the lost 65 years (yes, lost not last). We would be living in an energy paradise by now, with distributed sources in every house; not centralized pollution centres which is what we have today.

CONCLUSION

It may seem strange but in a free market environment it is extremely likely that the Fukushima disaster would have never happened. As a matter of fact, it is extremely likely that no nuclear-electric industry would exist. This is quite funny because although most green or ecological movements continuously bitch and complain against nuclear generation stations, they also bitch and complain against the free market… free market that would have prevented all this mess to begin with. And in a twist of irony, they are finally coming full circle and realize that no profit means no nuclear industry! All they need is for the free market to impose its own rules and for this to happen, all that is required is for governments to step aside! What a revolutionary idea; get rid of governments and things begin to solve themselves! We tell you, these green movements are populated with geniuses!

There is, of course, another possibility. More of the same. More government intervention. More government shielding. More government enablement of idiotic concepts and ideas. You may like it. For all we know you may even enjoy it. Just one thing, when you are deported to far, faraway places because your house becomes radioactive due to the next "accident", don't come to us looking for a respirator. We will be using it ourselves.

Note: please see the Glossary if you are unfamiliar with certain words.

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