VZCZCXRO0808
RR RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHFK #0009/01 0400542
ZNR UUUUU ZZH
R 090542Z FEB 06
FM AMCONSUL FUKUOKA
TO RUEHC/SECSTATE WASHDC 0162
RUEHKO/AMEMBASSY TOKYO 0168
INFO RUEHKSO/AMCONSUL SAPPORO 0065
RUEHNAG/AMCONSUL NAGOYA 0064
RUEHOK/AMCONSUL OSAKA KOBE 0073
RUEHNH/AMCONSUL NAHA 0067
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHDC
RUEAEPA/HQ EPA WASHINGTON DC
RUEAIIA/CIA WASHDC
RUEHC/DEPT OF INTERIOR WASHDC
RUEHFK/AMCONSUL FUKUOKA 0180

UNCLAS SECTION 01 OF 03 FUKUOKA 000009 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG EMIN ECON SENV SOCI PGOV TRGY JA
SUBJECT: NUCLEAR ENERGY POLITICS IN WESTERN JAPAN:  KYUSHU ELECTRIC'S 
PLUTHERMAL PROJECT 
 
 
Sensitive but Unclassified - Not for Internet Distribution. 
 
SUMMARY 
 
¶1. (SBU) With Saga Governor Yasushi Furukawa's declaration 
February 7 that he believes pluthermal (plutonium-thermal) 
technology is safe, Kyushu Electric Power Co. (Kyuden) is close 
to securing final approval from local officials to initiate 
pluthermal power generation at its Genkai No. 3 Reactor in Saga 
Prefecture.  Kyuden would be the first Japanese utility to 
implement such a project, in which recycled plutonium-uranium 
(MOX) fuel is burned in a light-water reactor.  The company has 
held a long series of explanatory meetings for area residents to 
emphasize the need for and safety of pluthermal technology. 
Still, alleviating local anxieties has proven tougher than 
anticipated.  Kyuden's experience underscores the continued 
unease many Japanese have toward nuclear power, and illustrates 
the evolving nature of relations between central government and 
local authorities in today's Japan.    End summary. 
 
FINAL PROJECT APPROVAL LIKELY AS EARLY AS MARCH 
 
¶2.  (U)  On February 7, 2006 Saga Governor Yasushi Furukawa told 
reporters at a news conference that, after careful consideration 
of central government safety measures and Saga prefecture's own 
research, he had concluded that a proposed pluthermal project at 
Kyuden's Genkai No. 3 nuclear power plant is safe.  While the 
project must still be endorsed by the Genkai Town Council and 
the Saga Prefectural Assembly, the governor's announcement 
provides a critical boost to Kyuden's hopes of securing final 
approval as early as March.  Kyuden needs to begin procurement 
and facilities preparations very soon if it is to meet its goal 
of initiating pluthermal power generation by JFY 2010. 
 
WASTE DISPOSAL, ENERGY SECURITY CONCERNS ARE DRIVERS 
 
¶3. (U) Plutonium-thermal ("pluthermal") technology is not new. 
Used in Europe for years, it consists of extracting waste 
plutonium from spent fuel rods and combining it with uranium to 
form new fuel, which can be burned in conventional light-water 
reactors.  Considerations over nuclear waste disposal and the 
greater strategic concerns about energy security have recently 
spurred Japanese interest in pluthermal technology.  Since 
operations at Japan's prototype "Monju" fast-breeder reactor in 
Fukui Prefecture were put on hold following a December 1995 
accident, the Ministry of Economy, Trade, and Industry (METI) 
has instead been pushing pluthermal technology as part of its 
"nuclear fuel cycle" strategy.  METI aims to effectively reuse 
fuels that are otherwise discarded, thus slowing the growth of 
Japan's nuclear waste stockpile. 
 
¶4. (SBU) Compared to uranium, pluthermal MOX fuel is much more 
expensive due to processing costs.  However, Kyuden contends 
that the technology is cost effective when long-term savings 
from reduced waste storage and potential environmental harm are 
factored in.  National energy security is also a consideration. 
With global demand for uranium now outstripping production and a 
real possibility that world stockpiles may become depleted, the 
GOJ and regional utilities are eager to reduce dependence on 
imported uranium fuel.  This is particularly true for Kyuden, 
which generates a higher percentage of electricity from nuclear 
power than any other utility in Japan (45% versus 30% on 
average). 
 
¶5. (U)  While Kyuden is closest to actual implementation, Tokyo 
Electric Power (TEPCO) and Kansai Electric Power (KEPCO) also 
have prior METI approval for pluthermal projects, and 
applications from other utilities are pending.  Meanwhile, in 
January 2006 eleven power companies, including power 
wholesalers, announced long-term plans to burn as much as 6.5 
tons of reprocessed plutonium annually in 16-18 nuclear power 
plants across Japan beginning in JFY 2012, following the GOJ's 
basic policy outline for expansion of pluthermal technology. 
 
DESPITE ASSURANCES, COST AND SAFETY CONCERNS PERSIST 
 
¶6. (U) METI approved Kyuden's pluthermal proposal in September 
2005, certifying that it met GOJ safety requirements.  To 
proceed, Kyuden must get final approval from communities in 
proximity to the Genkai plant and from Saga Prefecture.  Since 
first announcing the project in 2004, Kyuden has held over 200 
explanatory meetings for area residents.  The company, which 
 
FUKUOKA 00000009  002 OF 003 
 
 
operates six nuclear reactors in Kyushu (four at the Genkai 
site), has emphasized its exemplary 30-year safety record in 
nuclear power generation. 
 
¶7. (U) At the insistence of Saga Prefecture, METI sponsored its 
own public symposium in October 2005, inviting nuclear power 
specialists to discuss the "necessity" and "safety" of 
pluthermal technology.  However, the conference did not succeed 
in fully allaying concerns about the process.  Pro-pluthermal 
experts claimed that plutonium recycling would reduce enriched 
uranium use by 15-20%.  Their opponents insisted that only one 
percent of plutonium could be extracted from spent fuel, and 
noted that the price of imported MOX fuel is currently about 
four times that of uranium.  Skeptics point to a March 2004 
controversy in which the Natural Resources and Energy Agency, 
fearful of derailing the country's nuclear recycling goals, 
attempted to cover up a report showing that the cost of 
reprocessing nuclear fuel is two to four times higher than 
storing it in waste facilities. 
 
¶8. (U)  While the October symposium did not fully examine safety 
concerns about pluthermal technology, experts are split on the 
issue.  Opponents argued that MOX fuel is inherently unstable 
and that the reprocessed rods are prone to breakage, thereby 
increasing the likelihood of accidents.  They also tried to make 
the political case that because plutonium can be employed in 
nuclear weapons, its greater use in nuclear power generation may 
facilitate any future GOJ efforts to develop a domestic nuclear 
weapons capability.  Proponents dismissed these fears as highly 
exaggerated.  They countered that the "plutonium use leads to 
nuclear weapons" notion is too simplistic, adding that 
pluthermal recycling actually degrades plutonium to less than 
weapons grade. 
 
¶9. (SBU) Recognizing the continued public uncertainty, Saga 
Governor Yasushi Furukawa directed the prefecture to sponsor its 
own forum on pluthermal safety issues. 
Following that symposium in December, the governor said the 
safety and necessity of the project had been thoroughly 
discussed, setting the stage for his February 7 announcement. 
Saga prefectural officials appear generally satisfied with 
Kyuden's plan from a safety standpoint, and tell post they have 
a good, longstanding relationship of mutual trust with the 
utility.  On the other hand, the officials are much less 
charitable about the central government's handling of the issue. 
 For instance, Governor Furukawa has openly complained that, for 
a policy the GOJ claims is in the national interest, Tokyo has 
done little beyond asking local jurisdictions for their 
cooperation.  Most of the work to allay public concerns has been 
abdicated to the utility companies themselves, he noted. 
 
IF THE SCIENCE DOESN'T PERSUADE THEM, MAYBE THE YEN WILL 
 
¶10. (SBU) According to post's Kyuden contacts, Genkai Town 
officials appear inclined to give their approval for the 
project.  The latest wrinkle, however, is opposition from the 
much larger city of Karatsu.  Through a January 2005 merger with 
several smaller communities, Karatsu moved its boundaries much 
closer to the Genkai plant, and some 27,000 new Karatsu 
residents (four times the population of Genkai Town) now live 
within 10 kilometers of the facility.  Kyuden has a "safety 
agreement" with Genkai Town and Saga Prefecture dating from 1972 
which requires these jurisdictions' approval for new nuclear 
power projects at the site.  There is no such agreement with 
Karatsu, and while the city is pushing to be included, both 
Kyuden and Saga officials are resisting this added complication. 
 
 
¶11. (SBU) In December, the Karatsu City Assembly set up a 
"Pluthermal Special Committee" which will issue a formal stance 
on the Kyuden project by the end of the current fiscal year 
(March 2006).  Kyuden suspects that money, not safety, may be 
the biggest consideration for Karatsu officials.  They told post 
that under the current system, Genkai Town has received about 
Yen 18.7 billion ($170 million at Yen 110/$) in GOJ subsidies 
over the last 30 years.  In addition to large property and 
corporate taxes, Kyuden itself reportedly made a one-time 
payment of at least Yen 3 billion ($27 million) to the town as a 
"cooperation fee" to deal with local opposition groups.  Local 
observers speculate Karatsu wants access to this gravy train for 
itself. 
 
 
FUKUOKA 00000009  003 OF 003 
 
 
COMMENT 
 
¶12. (SBU) The GOJ and the Japanese power industry hope that a 
successful launch of Kyuden's pluthermal project will give 
momentum to the GOJ's "nuclear fuel cycle" initiative, and odds 
are that Kyuden will soon win local approval to proceed.  Still, 
in discussions with post, Kyuden officials don't hide their 
exasperation with opposition groups who refuse to accept 
Kyuden's and METI's detailed explanations as to why pluthermal 
technology is safe.  Noting that plutonium is already a natural 
by-product of current generation methods, one Kyuden manager 
attributed the opposition to an "irrational" fear of nuclear 
energy among some Japanese that no science-based reassurances 
may be able to change.  Yet, opinions are divided even among 
nuclear experts over the technology.  The Kyuden official 
admitted that a series of safety lapses in recent years at other 
Japanese utilities' nuclear power plants have cost the industry 
serious public trust. 
 
¶13. (SBU)  The project also illustrates the evolving nature of 
central government/local relations in today's Japan.  A Genkai 
plant manager told post that had this project been proposed 20 
or 30 years ago, GOJ approval and Kyuden safety assurances would 
have been sufficient basis to forge ahead.  These days, however, 
local sentiments cannot be ignored - and officials in places 
like Karatsu City know it.  In an ironic twist to the GOJ's 
policy of pushing local communities to merge in order to promote 
"Chiho-Bunken" (delegation of power to local governments), 
Karatsu is now taking advantage of its bigger, post-merger 
position to try to extract greater concessions from the GOJ and 
Kyuden.  Japan may remain highly centralized, but Tokyo 
authorities and influential companies are finding that they no 
longer call all the shots.  End comment. 
WONG