Terrie's Take 983 - The Real Cost of the Fukushima Daiichi Melt Down, e-biz News from Japan

Terrie's Take terrie at mailman.japaninc.com
Mon Mar 11 20:20:36 JST 2019

* * * * * * * * * TERRIE'S TAKE - BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term
technology and media entrepreneur living in Japan.

General Edition Monday, Mar 11, 2019, Issue No. 983

- What's New --  The Real Cost of the Fukushima Daiichi Melt Down
- News -- U.S. to quintuple bases charges to Japan?
- Corrections/Feedback -- Bureaucracy holding Japan back
- Travel Picks -- Shochu in Kagoshima, Monkeys in Kyoto
- News Credits

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+++ The Real Cost of the Fukushima Daiichi Melt Down

Today is the seventh anniversary of the Great East Japan Earthquake, and
some days from now for the hydrogen explosions at the Daiichi power plant
in Fukushima, which spewed radioactive particles over a large swathe of
Fukushima prefecture and as far away as Shizuoka and its green tea
plantations. Thus we thought it appropriate to take a look at the cost of
cleaning up the mess.

The Japan Center for Economic Research (JCER), a Tokyo-based think tank
related to the Nikkei newspaper, recently released an update report stating
they think the cost of cleaning up the Fukushima Daiichi power plant has
now risen to around JPY81trn, if the government persists in its current
track of trying to completely remove the tons of melted down nuclear fuel
at the bottom of reactors 1, 2, and 3. This is a hugely more expensive
estimate than the JPY22trn put forward by the Ministry of Economy, Trade,
and Industry {METI) some years ago. Why the 370% difference? It seems that
the JCER team calculates that the treatment and disposal of contaminated
water will be far more costly than the government estimates, to the order
of JPY40trn versus JPY8trn. As can easily been seen from aerial
photographs, the government cost estimate of JPY8trn for containing the
1.09m tons of contaminated water produced so far (stored in 900 tanks), let
alone another 35-40 years (or 200 years, depending on who you talk to) of
similar containment, then treatment, then release, does seems unreasonably

For an overview of the main cost estimation differences between the JCER
quote and the METI one:

* Decommissioning reactors - JPY11trn(METI - JPY8trn)
* Decontamination of site & surrounding areas - JPY20trn (METI - JPY6trn)
* Compensation to victims - JPY10trn (METI - JPY8trn)
* Treating and disposing contaminated water - JPY40trn (METI - JPY0)

The JCER report did say that if the government simply enclosed the failed
power plant with a concrete sarcophagus, as was done in Russia, then the
remediation cost would probably drop to around JPY35trn. However, the
government appears committed to completely remove the nuclear debris and
other site contamination, as a show of solidarity with locals who otherwise
would never be able to return home. As is so often true with politics,
though, this is probably less a case of worrying about a few thousand
people in nearby towns than it is a signal to all the other local
communities around Japan who have allowed a nuclear power plant to be built
nearby. If the worst happens, the government has your back. And so in
return, those same local communities are expected to vote for resumption of
nuclear power.

The JCER report says that these clean up numbers show the true cost of
nuclear power and that there needs to be a more serious debate at national
level about whether Japan should continue with nuclear. The LDP as the
party-of-the-status-quo is unfortunately "married" to the fiefdom structure
of Japan's power utilities, who despite incompetence and in some cases
criminal liability, remain incredibly powerful politically. Equally
unfortunate is that only nuclear offers a sufficiently compact and
energy-rich power source so as to allow these entrenched regional elites to
not have to share the golden goose with other companies or worse still (in
the case of alternative power sources like solar) with the public. This
political reality is in addition to the fact that burning hydrocarbons that
have to be imported, also makes nuclear compelling from an economic point
of view.

But what we find interesting is that neither JCER nor METI seem to be
trying to quantify the full economic impact of the Daiichi disaster.

[Article continues below...]

------ Terrie's Slow-Poke Cycling Tour - Kyushu -------

Last year we threatened to run a cycling tour for readers, but got too busy
to actually do it. So this year we're making amends. The first tour, which
will happen in the third or fourth week of April (just before Golden Week)
will be a 5-6 day ride in Kyushu - most likely in the Nagasaki region. This
tour, and a Hokkaido tour in late August or early September, will have a
common format.

1. The tours are potluck, not professionally run. No complaining. Jokes and
helping each other out are mandatory.
2. There will be no support cars or spare bikes or guides. Instead, we use
Google maps and take the most scenic routes to arrive at our hotels each
3. Our bags will be relayed by couriers so you can ride light. Yes, we will
have inner tubes and other basic spare parts.
4. Terrie is a slow poke, so while we will indeed be covering 80km-100km a
day, it will take 6+ hours each day, with plenty of time for lunch, photos,
drinks, etc.
5. No hill climbing! Terrie is allergic to tall mountains.
6. Although the rides will run 5-6 days, people wanting to cut out at 3
days will be able to do so.
7. Our bikes will go with us on the Shinkansen. Terrie can show you how to
prepare and break your's down for simple transport.
8. If you don't have a road bike, you can rent one at
https://www.gsastuto.com/. [Excellent supplier, great prices.]
9. Anyone over 16, any gender, welcome.
10. There will be a JPY20,000 organizing fee per rider.
11. Other costs will all be at cost. Usually this works out to about
JPY13,000/day plus Shinkansen tickets.

If you're interested in a long, slow, fun, potluck cycling tour in Japan,
contact Terrie today and he will work with you and the rest of the group to
set the final dates and routes.

For more information, email: terrie.lloyd at japantravel.com

[...Article continues]

For example, one of the biggest importers of primary produce from Japan is
Hong Kong. It's 7.5m people consumed about JPY50bn worth of seafood
exported from Japan in 2013 (most recent data we could find), second only
after China as a source for product. Of this JPY50bn in sales, none is from
Fukushima, because all marine produce from Fukushima is banned from import
into the Territory due to radiation fears. The producers in Fukushima have
been working mightily to overcome these concerns by checking radiation
levels to a degree that no other country does, and for three straight
years, levels were well below international limits (the max reading from
6,000 samples annually was 50 becquerels per kilo, versus the government
max allowable level of 100 becquerels per kilo), and so it seemed that the
marine environment along Fukushima's coastline was recovering. Then, like a
bolt from the blue and certainly a reminder just how little control TEPCO
has over contamination leakage, a skate fish was caught in January this
year that measured 161 becquerels per kilo. Thus, it is highly unlikely
that HK or Taiwan, or any of the other 6 countries and regions still
banning Fukushima marine products, will relax this ban any time soon.
Furthermore, it is also unlikely that urban housewives in Tokyo will want
to buy Fukushima marine products for the rest of this year either.

Then there is the weird and impenetrable accounting of the prefecture's
financial performance. According to the government, the Tohoku Gross
Regional Product (GRP) in 2013 was JPY32trn, up 3.3% from the year before,
and so one can assume that the impact of the earthquake wasn't that bad.
Indeed, the government stats unit offers a note saying the GRP increased
"...mainly due to demand driven by reconstruction." What's concerning,
though, given that a lot of the Tohoku reconstruction funding will end in
2021, is that if you deduct the spending on reconstruction, which for
Fukushima Prefecture alone over the last 6 years has been JPY32trn, you can
roughly calculate that by dividing the Tohoku GRP by 3, Fukushima GDP is
actually down by about JPY1trn annually over its pre-earthquake
performance. We don't understand why this economic impact isn't being built
into the JCER/METI estimates. OK, if it's being too harsh blaming all of
this fall on the Daiichi power plant, then what about just lopping off the
losses for tourism?

http://bit.ly/2VMZR4d [Reconstruction costs for Fukushima, as of 2017]

Thanks to an awesome introduction from the Safecast.org folks, several of
us visited the Fukushima Daiichi plant locale, gaining access to the
exclusion zone back in February. To get there, we first had to travel
through the previously excluded zones, such as Odaka, the town immediately
to the north of the power plant, but which escaped the worst of the fall
out in the days immediately following the explosion. We visited locals and
discussed the economic situation with them and each place we visited, the
story was the same. The young people have left the area with their children
and have put down roots in other parts of the country. Thus, in places like
Odaka, a "young" person is now someone in their 60's, and the few shops and
services that have re-opened are supplied by people of these ages.

The population of the area has plummeted from around 30,000 prior to the
explosions to around 2,000 people now. To be sure there are some valiant
attempts to breathe life back into the area. Just last week the Economist
ran a story about an evacuee who returned to Odaka and recently opened up a
surf shop there. He states in the article that Odaka has arguably the best
waves in Japan (if you stand on the coast near the Fukushima power plant,
the wave breaks are actually amazing) and that if not for the melt down at
the plant, Odaka would surely have been chosen for the surfing competition
for the Tokyo Olympics. Yet another economic loss among many, for the area
that isn't in the JCER/METI calculations.

The current exclusion area is an ellipse of about 10km x 20km that embodies
the wind drift on the day of the reactor housing explosions, and although
you can drive right through on Route 6 (opened up several years ago), each
byroad is blocked by police and access is restricted to locals and pass
holders only. We did in fact score a couple of passes and were guided to a
look out right opposite the plant, where an old folks home used to be.
Getting so close, you get a clear impression of just how vast the tank farm
is, and how much more it is going to cost to deal with another 35-200 years
of contaminated water.

In Japan, according to IEEJ, the rough cost of producing power by nuclear
is around JPY6 per kilowatt hour, while the cost of oil-fired electricity
is about JPY9 per kilowatt hour (LNG is apparently only JPY4 but
conversions are needed to run the new fuel), wind is JPY10, and solar is
about JPY30. Japan consumes about 858 Terawatt (TW) hours of electricity
annually, meaning that it is costing the country an extra JPY700bn (about
US$6.2bn) to not be using nuclear and using oil instead. In fact, LNG is
half the price of nuclear, so the case could be made to simply switch all
nuclear to LNG to save money. Comparing this against the clean up, Japan
could use imported oil for another 20+ years and still be cheaper than
having another nuclear power station accident of this magnitude, while
using LNG would be a permanently cheaper solution. So this is really the
true cost of using nuclear in such a geologically unstable country as Japan.

Also not included in the JCER or METI calculations is the health impact on
the local population. Much has been made of the fact that there has been
little increase in cancer deaths  and therefore the impact on physical
health appears to have been minimal. In terms of psychological health on
the other hand, the mere thought of the Daiichi power plant and possible
radiation contamination still induces fear in a prefectural population of
1,862,705 This fear has been strong enough to drive 115,458 people, about
6% of the population, to leave the prefecture permanently. Also, while
cancer deaths have been downplayed, we had a personal reminder that even at
14.5uSv (microseiverts) per hour which we experienced within the restricted
zone (500m from the plant) is still not healthy. One of us, with a
previously healed skin cancer wound on the wrist coincidentally experienced
a suddenly red swelling and itching of that same skin area that lasted for
a week before subsiding after return to Tokyo. Maybe just a coincidence,
but then again, maybe not - and we were only in the restricted zone for a
couple of hours.

...The information janitors/


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* Using our quotation and itinerary systems to produce the customer
* Interacting with customers and consulting them on choices and areas of
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* Writing original content (articles) about destinations and activities
* Assisting us with German social media

For more details: jerome.lee at japantravel.com


+++ NEWS

- Size of freelance market in Japan is surprising
- Chinese government crackdown on luxury goods hurts sales in Japan
- Facial recognition at pachinko parlors?
- U.S. to quintuple bases charges to Japan?
- Fukushima produce still feared abroad

=> Size of freelance market in Japan is surprising

Some interesting stats coming out of one of Japan's two largest freelancer
marketplaces recently. According to Lancers' here are over 1m freelancer
workers in the country, up 5% on 2017, and that a further 20m people are
doing freelance or moonlighting work. Officially, the number of people who
pay tax on a second job is about 7m people, around 11% of the workforce.
This compares to about 20% of the U.S. workforce having second jobs. ***Ed:
This pretty much points to the fact that while Japanese companies are
restricting salary increases for their staff, enterprising (or desperate)
employees are making up for it by leaving the office early so they can
check in to their after hours jobs.** (Source: TT commentary from forbes.com,
Mar 09, 2019)


=> Chinese government crackdown on luxury goods hurts sales in Japan

Chinese New Year is usually a peak selling period for Japanese department
stores targeting Chinese tourists looking to fill their suitcases for
friends and family back home - but not this year. Instead, spending per
shopper fell 8.4% to JPY63,000 as Chinese customs authorities started
cracking down on luxury spending abroad. In particular, the border
authorities are checking the bags of regular travelers who don't have a
visible means of income matching declared goods. These shop-and-carry
freelance agents for consumers back home are known as "Daigou" and account
for a large portion of luxury imports made by Chinese travelers returning
home. It's estimated that there are up to 200,000 amateur Daigou resident
in Japan (i.e., most of the students studying here). Worldwide the Chinese
spend about US$294bn while traveling, about 33% of overall tourist
shopping. (Source: TT commentary from asia.nikkei.com, Mar 09, 2019)


=> Facial recognition at pachinko parlors?

Although it won't be law (yet) the government is going to request horse
racing, boat and bicycle racing, and pachinko operators to install facial
recognition systems at their entry points, to detect gambling addicts and
restrict admission to them. The facial recognition systems would be
connected to a central database that sets a maximum that a person can spend
at each outing. In addition, the new guidelines will remove ATMs from
gambling sites and require operators to modify their advertising messaging,
so as to not encourage addicts. ***Ed: Sounds like it could be a good
system, but apart from the Japan Racing Association (JRA), which governs
horse racing and which is concerned about public image, we doubt that most
pachinko parlor operators are going to do more than pay lip service to
this. The LDP's coalition partner needs to push the government harder to
pass a law with teeth if they really want to curb gambling addiction.**
(Source: TT commentary from japantimes.co.jp, Mar 08, 2019)


=> U.S. to quintuple bases charges to Japan?

The Trump government has come up with a new way to extract cash from its
allies, in the form of charging more for maintaining armed forces in Japan,
South Korea, and Germany. The new charge rate is dubbed "Cost Plus 50", and
will require each host country to cover the full cost of maintaining U.S.
troops in their jurisdiction PLUS a 50% premium for the privilege.
Apparently the idea is mostly Trump's, who brought it up at South Korea on
his visit there. His staff have tried to tamp down the idea which
apparently sent “shock waves through the departments of Defense and State.”
***Ed: While it is true that Japan and other countries receive significant
confidence from the armed presence that the U.S. provides, if faced with an
extra JPY2trn in fees it's likely the Japanese (and other countries) may
simply ask the U.S. to reduce its presence. Rather than boots on the ground
anyway, what the Japanese really want is the nuclear umbrella. If the U.S.
pushes too hard it risks encouraging Japan to step up its own rearmament,
as well as removing an "unsinkable air craft carrier" forward base. The
same situation applies to Germany, whose Ramstein air force base serves a
critically strategic role in the Middle Eastern and East European
theaters.** (Source: TT commentary from stripes.com, Mar 08, 2019)


=> Fukushima produce still feared abroad

Although the government and primary produce authorities have had a thorough
food quality checking process in place for years now, the mere name of
Fukushima as the prefecture the products are sourced from prevents food
exports to China, Hong Kong, the United States, Taiwan and South Korea and
3 other countries/regions. In particular the restrictions to distribution
to Hong Kong hurt, as the territory is otherwise the largest importer of
Japanese primary produce - paying top dollar for what it regards as
Japanese quality. While the number of countries banning Fukushima produce
is well down from the peak of 54 countries following the Daichi power plant
disaster, the image that Fukushima is stuck with of being an irradiated
danger zone still persists. In a recent consumer perception survey a full
77% of Chinese respondents “actively avoided” food from Japan, 54% did so
from Taiwan, 29% from the U.S. and 26% from the U.K. ***Ed: Of course it
has to be said that this is not a foreign phenomenon. Most people we know
still actively avoid anything grown in Fukushima, even though it's pretty
clear that most if not all produce passing inspection is now safe to eat.
We don't see this situation changing for at least a generation. Yet another
cost caused by the Fukushima disaster.** (Source: TT commentary from
the-japan-news.com, Mar 10, 2019)


NOTE: Broken links
Some online news sources remove their articles after just a few days of
posting them, thus breaking our links -- we apologize for the inconvenience.



No upcoming events this week.


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=> In Terrie's Take 982 we gave an update on vacation rentals and how the
government managed to kill a useful tourism sector. A reader in the tourism
real estate business writes about the hopelessness of Kasumigaseki
bureaucracy even in the remotest parts of the country.

**** Reader:

Thanks so much for your journalism and providing a viewpoint that the the
mass media doesn't give us. My business experience in Japan has been good
mainly because of my real estate investments. However, my Number One reason
for lack of expansion and general frustration has always been the
government's restrictive regulation or apathy towards any new ideas. They
have one standard answer to any request out of the ordinary, which is "NO"
or on a slightly more subtle level, "It's not our department." Even for
stuff that isn't out of the ordinary, finding a government office that will
take responsibility is almost impossible.

Here are a couple of examples from my local area of Niseko, Hokkaido.
Approval of a adventure-based tree tops rope course I had planned at a
nearby forest was withheld 14 years ago for no particular reason. Then, as
soon as another adventure company working closely with Tokyu Resort, a
massive real estate developer, applied, their project was approved in
record time - in the same area that I applied for, no less...!

Perhaps of more importance to the community is the problem Niseko visitors
have getting taxis. Every winter there is a shortage, and as a result
holiday makers have to rent a car, which they naturally park on the side of
the road most of the time, blocking traffic  around hotels and short-term
rental properties. It would make SO much more sense if Uber or Grab were
allowed to operate here.

Lastly, it's getting extremely difficult for property owners in Niseko to
recruit local staff and/or to sponsor in foreign skilled staff - especially
operations managers. As a result, I have seen so many local businesses
either give up their growth plans or in some cases simply give up on
opening in Niseko in the first place. Given that most of the customers here
are non-Japanese, how does this restrictiveness help Japan in any way?



=> Shirakane Ishigura Museum, Kagoshima
Exploring a shochu distillery

There are few places better to taste and learn about shochu (the Japanese
alcohol typically made from rice, barley, sweet potatoes, buckwheat or
brown sugar) than Kagoshima. In the southern part of Kyushu, the sweet
potato is the base ingredient of choice and there are hundreds of
distillers offering tours, tastings, and varieties for sale.

In Aira, near Kagoshima Airport, Shirakane Shuzou Co., Ltd. has been
distilling shochu at its family ishigura (stone storage house) since 1869.
Steeped in history, the ishigura was declared a tangible cultural property
in 2001 and today is the site of a museum offering opportunities to
experience shochu culture firsthand.

For residents of Kagoshima, shochu is an iconic local specialty product,
and the museum’s engaging exhibits explain why. A series of displays,
artifacts and models show the prefecture’s history of sweet potato imports
and how this led to the practice of making and drinking shochu. It also
details Shirakane Ishigura’s traditional manufacturing process.

But the ishigura itself is not only famous for its shochu. It was also the
resting place for local samurai who revolted against the imperial
government in the Satsuma Rebellion of 1877. Their leader, Saigo Takamori,
bought shochu from Shirakane Shuzou Co., Ltd. to energize his soldiers and
to use it as antiseptic for the wounded.


=> Monkey Park Iwatayama in Kyoto
Feed, walk with snow monkeys year round

"Don’t stare into the monkeys’ eyes." This is sound advice before visiting
Kyoto’s monkey park: a mountainside where I hiked among wild monkeys,
merely a visitor to their home. After hearing about Monkey Park Iwatayama
(sometimes it has an Arashiyama in the name), it was an attraction I knew I
had to see while in Kyoto in April. The park is located in Arashiyama, one
of Kyoto’s busiest tourist areas, and is easily accessible by train. It
boasts about 120 snow monkeys, which are also called “Japanese macaque.”
They are native to Japan, and, yes, these are the type of monkeys seen in
iconic photos bathing at hot springs in winter.

While the monkeys are human-fed (even tourists have a chance to feed them),
they are still wild, the park assures. The “don’t stare” and "don’t touch"
warnings should be followed, though, I witnessed the friendlier monkeys
come just centimeters away from visitors.




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Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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