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After the triple blow of a massive earthquake, aftershocks, and a tsunami, much of the infrastructure in northeast Japan is reeling, and the energy sector is descending into a significant crisis.

Already, a casualty has emerged: The resurgence of nuclear power as an alternative energy source worldwide has taken a direct hit.

Japan has now introduced electricity rationing, as more and more nuclear-generated power comes off-line.

As of Sunday morning, four of the six nuclear power plants in the district suffered damage from the natural disasters, while technicians lost the ability to cool six nuclear reactors at two of those plants.

Three of those units are at the Tokyo Electric Power Co. Fukishima Dai-ichi power complex, where a hydrogen explosion occurred Saturday at Unit 1 and a separate explosion was feared likely at Unit 3.

Such explosions are in the outer building – not in the one surrounding the reactor core itself. The Japanese facilities have two complete structures separating the core from the outside world, unlike the 1986 Chernobyl disaster (where the plant had only a single encasement).

Nonetheless, the overriding concern in Japan is to prevent a meltdown at each facility.

If a full meltdown occurs, a huge, molten, radioactive mass would burn through both containments and all supporting structures, destroy the buildings, and release a mixture of highly radioactive particles to be spread by wind and rain.

How bad the aftermath would be depends on two things – how much radiation is released and the weather.

At least through Wednesday (March 16), the wind is blowing out to sea, rather than inland, toward population centers. That's good.

However, reports yesterday about the detection of highly radioactive cesium-137 and iodine-131 outside the Dai-ichi complex means a small amount of dangerous radioactivity has escaped. Experts believe that the radiation problem is thus far localized and minor. Nonetheless, upwards of 200,000 people have been evacuated from the area surrounding the Dai-ichi complex.

To prevent the meltdowns – the worst scenario reminiscent of the cinematic treatment in "The China Syndrome" (1979) – operators have been pumping in seawater in a last-ditch effort to cool down the reactor core. Absent another significant tremor de-stabilizing the plants even further, most specialists believe this will be successful.

But there will be some major costs.

For one thing, seawater corrodes the reactors, making them unusable. There will be significant downtime for other reactors, as detailed technical examinations take place, to say nothing of the massive cleanup required at a number of plants.

The largest damage, however, is to the credibility of nuclear power in general.

Nuclear Expansion Plans Are Likely to Be Delayed

This calamity is not about inadequate company oversight or technical deficiencies.

This is all about how Mother Nature can undermine even the best-laid plans of mere mortals.

As the larger Asian region begins to ascertain the damage done to the nuclear-as-remedy approach, major nuclear expansion plans in China, India, throughout East Asia, and in Australia are likely to be delayed. The same goes for the two new reactors under construction in Japan and the 12 more currently in the planning stage.

The real impact, however, is likely to be felt well beyond Asia.

According to London's World Nuclear Association, there are at present 442 reactors worldwide providing around 15% of global electricity. Plans are already announced to build more than 155 additional reactors, most of them in Asia, with 65 reactors currently under construction.

Back at the epicenter of the present disaster, the impact upon Japanese electricity volume is already wreaking havoc on factories attempting to jumpstart production.

In trading today throughout Asia, shares were tumbling on concerns that major companies would be unable to return to any normal level of production anytime soon.

The Tokyo Stock Exchange also suspended any trading in Tepco. The company is facing an avalanche of sell orders that would greatly exceed the exchange's 24% limit in the decline of share price.

Yet, despite the current sourcing problems, energy needs will certainly not abate.

LNG Is the Immediate Alternative

Prior to the earthquake, 54 nuclear reactors at 17 plants nationwide produced more than 30% of Japan's power. Japan has already requested additional electricity from Russia, but the rolling blackouts introduced today will continue throughout the country.

The immediate alternative source of power will be an accelerated usage of liquefied natural gas (LNG). Japan had traditionally been one of the two primary users of LNG (the other being South Korea).

More recently, LNG has been increasing in transport volume throughout the world, even establishing a northern European spot market to challenge long-term conventional pipeline prices from Russia and prompting Canada to revise the terminal under construction at Kitimat on the British Columbia coast to move LNG to Asia.

In the U.S., a similar move to turn excess shale gas into LNG for export is also afoot (see "A Solution for North America's Natural Gas Surplus," November 2, 2010).

Closer to Japan, the Gorgon and other northwestern Australian projects, along with those in Papua New Guinea and on Sakhalin Island off of the Pacific coast of Russia, are gearing up a rising volume of LNG for export.

Much of that increase is bound for China, where five receiving terminals are right now at various stages of completion, and three additional ones are in planning. Still, there is more volume that can be brought to market, and Japanese utilities have been actively locking in additional LNG consignments governed by multi-year contract agreements.

Japanese energy needs are tailor-made for a transition to LNG as a rising fuel source for power generation. The country had already embarked on a robust project to expand existing LNG terminals and build new ones well before the earthquake occurred.

These are not coming on-line in short order…

But neither are the problems with the Japanese nuclear network going away anytime soon.

Disclosure: None

Source: After the Quake: A Reappraisal of Nuclear and the LNG Option