The Fall of the House of TEPCO

Every good drama needs its villain, and in the nuclear crisis afflicting Japan that role has been filled by Tokyo Electric Power, aka TEPCO. The once-proud firm has let down its neighbors, customers, regulators, employees, shareholders, and the general public in Japan (and the world, as the Fukushima radiation plume drifts across America and beyond). It has fallen far and hard, with terrible consequences for all its constituencies and permanent damage to its reputation.

It has been a long way down for a company that was long a pillar of the Japanese business establishment, its executives playing key roles in Keidanren (the powerful business organization often called the headquarters of Japan, Incorporated). Its forerunner, Tokyo Electric Lighting, was Japan's first electric utility, established only 15 years after Japan left behind feudalism. Nationalized during the war effort, TEPCO was reconstituted under its present name in war-devastated Tokyo of  1951.

As Japan built its postwar economic miracle, TEPCO was at the center of planning for the vast industrial installations that sprang up, needing gigantic amounts of electricity to produce the industrial bounty that made Japan a rich nation. Industry consumed as much as 80% of the electricity generated in Japan by the 1970s, when TEPCO ranked as the largest private electric utility in the world (it ranks fourth today, and industry's share has declined).

Some of TEPCO's more venerable fellow establishmentarians in Japan, such as Mitsui, Sumitomo, or Kikkoman, are more than 400 years old, true products of a feudal system in which enterprise was organized along familial lines, run by a family, and known as a "house" (ie, in Japanese). But as an integral part of the postwar industrial community, TEPCO shared many of their organizational characteristics.  During the period Japan was playing catch-up to the West, the structures and practices they adopted were superbly effective. With a well-defined problem, consensus-based group decision-making became a finely-tuned machine for producing superior products at low cost. But when problems are surrounded by unknowns, consensus-based decisions are slow, and often paralyzed by fears of danger or problems unknowable.

Who's in Charge Here?

Astonishingly, TEPCO's president, Mr. Masataka Shimizu, has vanished from the public eye. Stranded in Western Japan when electric power was cut to the railways, he did not visit company headquarters until a day later, and then, following a news conference with a public apology (but no resignation, as is customary for the head of a company which has disgraced itself in Japan), he disappeared to the public, foregoing even a visit to the Fukushima facility. Managing director Akio Komori, was photographed openly weeping after a press conference in Fukushima, an extraordinary loss of composure for a senior executive in Japan.

Has TEPCO had a collective nervous breakdown? Thanks to the tight lid being kept on information, we have no real way of knowing what is going on inside its organization, but judging by results, incompetence is flourishing. But even beyond the immediate crisis, TEPCO has a severely compromised track record in the management of its nuclear program, leading to the inescapable conclusion that the firm lost its way some time ago, perhaps as a result of the rush to switch to nuclear generation, a national policy priority in the wake of the Arab Oil embargo of 1973, known as the "oil shock" to the Japanese. Whatever the cause, TEPCO's nuclear program has been bedeviled with bad planning, incompetence, and even fraud.

Nuclear Scandal

TEPCO was the center of an enormous scandal in 2002, when the government of Japan revealed that the firm had been guilty of routine falsification of inspection records for its nuclear reactors. As would be expected as a matter of honor, the company's president, chairman, and executive vice presidents resigned to take responsibility.

"There is no room for excuses," TEPCO President Nobuya Minami said on Monday, as he announced he would leave his post in mid-October.

"I deeply regret the incident and cannot apologize enough for it."

Eventually, the company admitted that in over 200 instances, between 1977 and 2002 it had submitted false data to authorities. The falsification included, most seriously:

at least 29 cases of falsified reports on cracks or signs of cracks in devices in the core structure of 13 reactors at the utility's Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture and the No. 1 and No. 2 Fukushima atomic plants in Fukushima Prefecture. [emphasis added]

Kashizawa-Kariwa (KK), the largest nuclear power plant in the world with 7 reactors (compared to Fukushima's 5), suffered a 6.6. magnitude earthquake in July, 2007, which resulted in leaks of radioactive substances into the air and into the Sea of Japan.  As in Fukushima, the company was very tight with information, causing, much public dissatisfaction. It admitted to 50 instances of  malfunctions, damages and mistakes, later expanding the list to 63. It also misreported amounts of water released and the radioactivity involved, later coming clean. Among other problems, low level radioactive waste had been stored in 400 steel barrels, 40 of which tipped over, lost their lids, and discharged their contents.

Although the amounts of radioactivity were not large enough to be dangerous, the plant was shut down for inspection and repair, with various units being phased on line in 2009. The company suffered a massive financial hit, because of the necessity to purchase fossil fuel to replace the output of the idled plant (thereby aggravating an already tight oil market), and recorded substantial net losses in 2007 and 2008.





In the face of this disaster, the company actually cut maintenance expenses, despite the many inadequacies in its practices uncovered in the KK incident.



Simply put, TEPCO lost huge piles of money, and to recover, cut staff and maintenance expense. Management decided to foist risk upon the general public, in order to fatten the bottom line. There is no way around this uncomfortable reality.

The shoddy practices with regard to nuclear inspection continued even after the reporting scandal of 2002 and KK showed-up the company's inadequacies. Reuters reported Monday:

In a report submitted to Japan's nuclear safety agency on February 28, Japan's largest power utility, Tokyo Electric Power Co, said it had failed to inspect 33 pieces of equipment in the six reactors at the Fukushima Dai-ichi complex.

The equipment missed in scheduled inspections included a motor and a backup power generator for the No. 1 reactor, the firm said in a report available on a company Website. (snip)

The failure of backup power systems is a key element of the current crisis, which has prompted a massive effort to contain radiation from the stricken plant.

In its response to the Tokyo Electric report, Japan's Nuclear and Industrial Safety Agency gave Tokyo Electric until June 2 to draw up a corrective plan for the plant, the utility's oldest nuclear facility, dating back to the 1970s.

Where are the robots?

A utility like TEPCO in the ordinary course of things would be expected to employ robotics for servicing and maintaining nuclear power plants, yet so far as we know, no robots have yet been deployed to undertake tasks like spraying water on overheating fuel rods.

"I don't know that we have any such devices," said Hiro Hasegawa, a spokesman for plant operator Tokyo Electric Power Company (Tepco), when asked whether robots were being used at Daiich.

Japan, renowned as the most robot-obsessed nation on earth, reportedly has sought assistance from the United States:

In their desperation, Japanese authorities have turned to Massachusetts-based iRobot for help. The Special Ops division of Japan's Self-Defense Forces apparently asked for assistance from the U.S. military contractor, and four robots were en route to Japan Friday, according to IEEE Spectrum.

Not having a robot to deploy is unforgivable, given the fact that Japan is an earthquake-prone country. Red Adair invented the use of robot vehicles armed with high pressure water cannons from two sides to force back flames from burning oil wells, and drive explosives in, sealing wells shut. There should have been such machines available for use in TEPCO's reactors, and there is no technical reason why they could not have been at the ready.

The most worrisome aspect of the Fukushima disaster is the presence of plutonium as a fuel in Unit 3, which suffered the bigger of the two explosions, a blast so intense that it damaged Unit 4 next door.  Is it prudent of Japan, with all its earthquakes, to be burning plutonium in its power plants? It is far riskier than other nuclear fuels.  Japan is trying to be a good member of the world community by taking on this burden, but geology is a reality as severe as radiation.

Keep in mind that a disaster like Fukushima's explosions could have been caused by a North Korean missile. TEPCO wouldn't have known how to respond to that any better than it has responded to the tsunami-induced disaster.

What Next?

While much attention has been focused on Libya, aftershocks continue in Japan. The epicenters of the aftershocks have been moving southwest toward Tokyo, and everyone is waiting for the 8.0 aftershock, one order of magnitude lower than the first one, but still a number 8. The Kanto Plain surrounding Tokyo is home to 35 million people. Tokyo has obligingly sent its high pressure water cannons -- the kind used to put out high rise fires -- up to Fukushima. They are continuously spraying the #3 plant with such a truck. It is unmanned, but every three hours a crew suffers some exposure, refueling it. A robot should be doing this, and the truck should have been there days earlier.

I hope and pray that TEPCO will overcome its own shock, and respond more adequately than it has so far. I also hope and pray that no 8.0 aftershock will hit Tokyo, causing further damage. But if hopes and prayers were adequate measures, then TEPCO's laxity and lack of foresight would not be an issue today.

The Fukushima disaster is a genuine tragedy in the Greek sense, for at its center is a fatal flaw: hubris. TEPCO and its regulators were prideful in their presumed ability to handle dangers inherent in their operations. They did not adequately take into account the possible magnitude of earthquakes, the possibility of a tsunami (and tsunami is a Japanese word), and utterly failed to live up to its responsibilities as operators of a facility containing the most dangerous substance on earth.

Thomas Lifson is editor and publisher of American Thinker. He has lived in Tokyo and paid his electricity bills to TEPCO.

All TEPCO charts from "TEPCO Factbook 2010"
Every good drama needs its villain, and in the nuclear crisis afflicting Japan that role has been filled by Tokyo Electric Power, aka TEPCO. The once-proud firm has let down its neighbors, customers, regulators, employees, shareholders, and the general public in Japan (and the world, as the Fukushima radiation plume drifts across America and beyond). It has fallen far and hard, with terrible consequences for all its constituencies and permanent damage to its reputation.

It has been a long way down for a company that was long a pillar of the Japanese business establishment, its executives playing key roles in Keidanren (the powerful business organization often called the headquarters of Japan, Incorporated). Its forerunner, Tokyo Electric Lighting, was Japan's first electric utility, established only 15 years after Japan left behind feudalism. Nationalized during the war effort, TEPCO was reconstituted under its present name in war-devastated Tokyo of  1951.

As Japan built its postwar economic miracle, TEPCO was at the center of planning for the vast industrial installations that sprang up, needing gigantic amounts of electricity to produce the industrial bounty that made Japan a rich nation. Industry consumed as much as 80% of the electricity generated in Japan by the 1970s, when TEPCO ranked as the largest private electric utility in the world (it ranks fourth today, and industry's share has declined).

Some of TEPCO's more venerable fellow establishmentarians in Japan, such as Mitsui, Sumitomo, or Kikkoman, are more than 400 years old, true products of a feudal system in which enterprise was organized along familial lines, run by a family, and known as a "house" (ie, in Japanese). But as an integral part of the postwar industrial community, TEPCO shared many of their organizational characteristics.  During the period Japan was playing catch-up to the West, the structures and practices they adopted were superbly effective. With a well-defined problem, consensus-based group decision-making became a finely-tuned machine for producing superior products at low cost. But when problems are surrounded by unknowns, consensus-based decisions are slow, and often paralyzed by fears of danger or problems unknowable.

Who's in Charge Here?

Astonishingly, TEPCO's president, Mr. Masataka Shimizu, has vanished from the public eye. Stranded in Western Japan when electric power was cut to the railways, he did not visit company headquarters until a day later, and then, following a news conference with a public apology (but no resignation, as is customary for the head of a company which has disgraced itself in Japan), he disappeared to the public, foregoing even a visit to the Fukushima facility. Managing director Akio Komori, was photographed openly weeping after a press conference in Fukushima, an extraordinary loss of composure for a senior executive in Japan.

Has TEPCO had a collective nervous breakdown? Thanks to the tight lid being kept on information, we have no real way of knowing what is going on inside its organization, but judging by results, incompetence is flourishing. But even beyond the immediate crisis, TEPCO has a severely compromised track record in the management of its nuclear program, leading to the inescapable conclusion that the firm lost its way some time ago, perhaps as a result of the rush to switch to nuclear generation, a national policy priority in the wake of the Arab Oil embargo of 1973, known as the "oil shock" to the Japanese. Whatever the cause, TEPCO's nuclear program has been bedeviled with bad planning, incompetence, and even fraud.

Nuclear Scandal

TEPCO was the center of an enormous scandal in 2002, when the government of Japan revealed that the firm had been guilty of routine falsification of inspection records for its nuclear reactors. As would be expected as a matter of honor, the company's president, chairman, and executive vice presidents resigned to take responsibility.

"There is no room for excuses," TEPCO President Nobuya Minami said on Monday, as he announced he would leave his post in mid-October.

"I deeply regret the incident and cannot apologize enough for it."

Eventually, the company admitted that in over 200 instances, between 1977 and 2002 it had submitted false data to authorities. The falsification included, most seriously:

at least 29 cases of falsified reports on cracks or signs of cracks in devices in the core structure of 13 reactors at the utility's Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture and the No. 1 and No. 2 Fukushima atomic plants in Fukushima Prefecture. [emphasis added]

Kashizawa-Kariwa (KK), the largest nuclear power plant in the world with 7 reactors (compared to Fukushima's 5), suffered a 6.6. magnitude earthquake in July, 2007, which resulted in leaks of radioactive substances into the air and into the Sea of Japan.  As in Fukushima, the company was very tight with information, causing, much public dissatisfaction. It admitted to 50 instances of  malfunctions, damages and mistakes, later expanding the list to 63. It also misreported amounts of water released and the radioactivity involved, later coming clean. Among other problems, low level radioactive waste had been stored in 400 steel barrels, 40 of which tipped over, lost their lids, and discharged their contents.

Although the amounts of radioactivity were not large enough to be dangerous, the plant was shut down for inspection and repair, with various units being phased on line in 2009. The company suffered a massive financial hit, because of the necessity to purchase fossil fuel to replace the output of the idled plant (thereby aggravating an already tight oil market), and recorded substantial net losses in 2007 and 2008.





In the face of this disaster, the company actually cut maintenance expenses, despite the many inadequacies in its practices uncovered in the KK incident.



Simply put, TEPCO lost huge piles of money, and to recover, cut staff and maintenance expense. Management decided to foist risk upon the general public, in order to fatten the bottom line. There is no way around this uncomfortable reality.

The shoddy practices with regard to nuclear inspection continued even after the reporting scandal of 2002 and KK showed-up the company's inadequacies. Reuters reported Monday:

In a report submitted to Japan's nuclear safety agency on February 28, Japan's largest power utility, Tokyo Electric Power Co, said it had failed to inspect 33 pieces of equipment in the six reactors at the Fukushima Dai-ichi complex.

The equipment missed in scheduled inspections included a motor and a backup power generator for the No. 1 reactor, the firm said in a report available on a company Website. (snip)

The failure of backup power systems is a key element of the current crisis, which has prompted a massive effort to contain radiation from the stricken plant.

In its response to the Tokyo Electric report, Japan's Nuclear and Industrial Safety Agency gave Tokyo Electric until June 2 to draw up a corrective plan for the plant, the utility's oldest nuclear facility, dating back to the 1970s.

Where are the robots?

A utility like TEPCO in the ordinary course of things would be expected to employ robotics for servicing and maintaining nuclear power plants, yet so far as we know, no robots have yet been deployed to undertake tasks like spraying water on overheating fuel rods.

"I don't know that we have any such devices," said Hiro Hasegawa, a spokesman for plant operator Tokyo Electric Power Company (Tepco), when asked whether robots were being used at Daiich.

Japan, renowned as the most robot-obsessed nation on earth, reportedly has sought assistance from the United States:

In their desperation, Japanese authorities have turned to Massachusetts-based iRobot for help. The Special Ops division of Japan's Self-Defense Forces apparently asked for assistance from the U.S. military contractor, and four robots were en route to Japan Friday, according to IEEE Spectrum.

Not having a robot to deploy is unforgivable, given the fact that Japan is an earthquake-prone country. Red Adair invented the use of robot vehicles armed with high pressure water cannons from two sides to force back flames from burning oil wells, and drive explosives in, sealing wells shut. There should have been such machines available for use in TEPCO's reactors, and there is no technical reason why they could not have been at the ready.

The most worrisome aspect of the Fukushima disaster is the presence of plutonium as a fuel in Unit 3, which suffered the bigger of the two explosions, a blast so intense that it damaged Unit 4 next door.  Is it prudent of Japan, with all its earthquakes, to be burning plutonium in its power plants? It is far riskier than other nuclear fuels.  Japan is trying to be a good member of the world community by taking on this burden, but geology is a reality as severe as radiation.

Keep in mind that a disaster like Fukushima's explosions could have been caused by a North Korean missile. TEPCO wouldn't have known how to respond to that any better than it has responded to the tsunami-induced disaster.

What Next?

While much attention has been focused on Libya, aftershocks continue in Japan. The epicenters of the aftershocks have been moving southwest toward Tokyo, and everyone is waiting for the 8.0 aftershock, one order of magnitude lower than the first one, but still a number 8. The Kanto Plain surrounding Tokyo is home to 35 million people. Tokyo has obligingly sent its high pressure water cannons -- the kind used to put out high rise fires -- up to Fukushima. They are continuously spraying the #3 plant with such a truck. It is unmanned, but every three hours a crew suffers some exposure, refueling it. A robot should be doing this, and the truck should have been there days earlier.

I hope and pray that TEPCO will overcome its own shock, and respond more adequately than it has so far. I also hope and pray that no 8.0 aftershock will hit Tokyo, causing further damage. But if hopes and prayers were adequate measures, then TEPCO's laxity and lack of foresight would not be an issue today.

The Fukushima disaster is a genuine tragedy in the Greek sense, for at its center is a fatal flaw: hubris. TEPCO and its regulators were prideful in their presumed ability to handle dangers inherent in their operations. They did not adequately take into account the possible magnitude of earthquakes, the possibility of a tsunami (and tsunami is a Japanese word), and utterly failed to live up to its responsibilities as operators of a facility containing the most dangerous substance on earth.

Thomas Lifson is editor and publisher of American Thinker. He has lived in Tokyo and paid his electricity bills to TEPCO.

All TEPCO charts from "TEPCO Factbook 2010"