RPT-SPECIAL REPORT-Fuel storage, safety issues vexed Japan plant

PCO declined to comment on its fuel storage decisions and whether they contributed to the crisis.

"Our focus now is on responding to the situation at Fukushima," he said.

The TEPCO presentation noted that the utility had taken steps to increase storage capacity for spent fuel at the plant complex beyond its original design. Those included "re-racking" the pools in the reactor buildings to increase their capacity and then building a separate large, pool outside and a separate hub of metal casks that do not need to rely on electricity.

But the only significant open space left for storage remained inside the reactor buildings, according to the document. TEPCO had the capacity to more than double the number of fuel assemblies stored in the reactors from 3,998 at the time of the quake to 8,310 assemblies.

"They were headed for dense pack and that would have made the situation even worse," said Frank von Hippel, a Princeton University physicist and former U.S. adviser on nuclear security risks in the Clinton administration.

An official with Japan's Nuclear and Industrial Safety Agency, who asked not to be named because he was not speaking on behalf of regulators in a formal capacity, said officials would have to review safety policies on storing fuel inside reactor buildings.

"This is something that we are going to have to look at after what's happened," he said.

SAFETY MISSES, APOLOGIES, MORE MISSSES

When Toru Ishida, a powerful advocate for the Japanese nuclear power industry, decided to leave his government post in 2010 for private industry, he didn't have to change his commute much at all.

Ishida, who had been director general of the Ministry of Economy, Trade and Industry, the agency overseeing nuclear power, was hired four months after he left his regulatory post by TEPCO.

In a sign of the close ties between the utility and the government agency that serves as its biggest patron, the now-darkened TEPCO headquarters is just a few blocks from METI's drab complex in the Kasumigaski neighborhood that houses much of the government bureaucracy.

The practice of former bureaucrats dropping into high-paid private sector jobs after retirement remains both relatively common and controversial in Japan where it is known as "amakudari," or "descent from heaven."

But the Ishida case attracted so much notice when his hiring by TEPCO became public earlier this year, that then METI Minister Akihiro Ohata felt compelled to concede it could show the need for reform.

"Something should be done to reassure public concern about this," Ohata told reporters in January, while arguing that Ishida had been hired by TEPCO for his "capacity, experience and intelligence" and nothing more.

Critics, including the lawmaker Kono, said the hire illustrates the deep-seated problems in a system that has made METI both nuclear power's biggest backer and home to the safety agency in charge of its regulation.

METI has guided Tokyo Electric's investment in nuclear power and provided an implicit backstop and financing. At the same time, the utility has provided jobs for some senior METI officials like Ishida and a network of sympathetic politicians, Kono said.

"If this is a national policy, then the government has to be responsible entirely," he said. "If this is private enterprise, then we have to think about how to de-cartel this industry."

The Fukushima Daiichi plant is Tokyo Electric's oldest nuclear facility, and it has been the site of a series of high-profile safety lapses going back a decade.

In 2002, TEPCO admitted to safety regulators that it had falsified safety records at the No. 1 reactor at Fukushima Daiichi. In 2003, TEPCO shut down all of its 17 nuclear plants to take responsibility for the false safety scandal and a fuel leak at Fukushima.

In 2007, after a powerful quake hit the area near TEPCO's Kashiwazaki-Kariwa nuclear plant in Niigata, the utility was slow to report two radiation leaks and miscalculated the amount of radiation released in a third incident.

Japanese regulators have also come under fire. In 1999, a study commissioned by the U.S. Energy Department determined that workers at Japan's Tokaimura fuel plant had been given insufficient training before they accidentally touched off an uncontrolled nuclear chain reaction. Three workers were severely injured in the incident, which forced tens of thousands to evacuate.

Japan's Nuclear and Industrial Safety Agency was established in 2001 in part because of that criticism. But critics have questioned whether it has enough distance from the industry it regulates or the resources it needs. The agency's records show that it has about two field inspectors for each of Japan's 54 nuclear plants.

WHERE'S THE CEO

While the band of TEPCO workers risk dangerous doses of radiation as they struggle to prevent a catastrophic meltdown at the Fukushima Daiichi, the company's chief executive has all but vanished from the public eye.

Chief executive Masataka Shimizu has not made a public appearance in more than a week. He has yet to visit the crippled nuclear power plant north of Tokyo. And many Japanese, on a knife edge waiting to see if the nuclear power plant and its radiation leaks can be brought under control, are beginning to question how much he is in control of the crisis.

At his last news conference, a week ago, the 66-year-old apologised for the situation, before all but vanishing from public view. The company issued a statement from him on Saturday in which he expressed regret for "causing such trouble."

Shimizu is a consummate company man, joining the place where his father worked at the age of 23. At the country's biggest power supplier, he made a name for himself as a cost-cutter in the procurement side of the business, before becoming company president in June 2008.

Since the crisis, he has largely left it to TEPCO spokespeople in Tokyo to be the public face of the company and answer increasingly aggressive questions, and criticism, from reporters frustrated at the lack of information.

"He's making the low-ranking people do all the hard work," said Satomi Aihara, a 46-year-old Tokyo resident. "I wonder where he's hiding -- it makes me mad."

Even Prime Minister Naoto Kan has been unable to hide his frustration. "What the hell is going on?" he was overheard telling TEPCO executives last week.

TEPCO officials say their boss is busy behind the scenes.

"He's been leading the troops at headquarters," company spokesman Kaoru Yoshida said.

Japanese company chiefs may not be as closely associated with the successes of their companies as they are in the United States or Europe, but they are to any failures.

They are expected to take responsibility for shortcomings, scandals or disasters that happen on their watch, apologising profusely and often resigning.

Indeed, a former president and chairman of the company both stepped down after the 2002 safety scandal.

HAS U.S. DONE ENOUGH?

While TEPCO, its chief executive and regulators may face questions over the safe storage of spent fuel inside the Fukushima reactors, in the United States experts have urged spent fuel be stored away from reactors because of the risk of a terrorist attack.

A classified report by the U.S. National Academy of Science prepared in the wake of the Sept. 11, 2001 attacks, challenged the position of the U.S. nuclear industry that storing spent fuel in pools was as safe as storing it outside the reactor buildings in heavy casks of lead and steel that can also be reinforced with a massive concrete bunker.

About 23 U.S. reactors share the same General Electric "Mark 1" design as the Fukushima Daiichi reactors, which date back to 1971.

"When the plants were originally designed, it was thought that the spent fuel would remain on the sites only two or three months after they came