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GE Built Japan's Nuclear Reactor & Who's Responsible

by Jeffrey Taylor


GE's Chief Executive Jeffrey Immelt said the U.S. conglomerate will offer technical assistance to the Japanese government as the country, ravaged by an earthquake last week, grappled with a new explosion at a nuclear power plant.

GE supplied reactor No. 1 at the Fukushima Daiichi nuclear power plant 150 miles from Tokyo, where concerns have been mounting after an explosion at the reactor following Friday's quake and tsunami.

Three days later, there was a further explosion in the building housing the plant's reactor No. 3, supplied by Toshiba.

The battle to prevent a meltdown at the plant has suppliers of nuclear technology on edge, amid industry concerns that the dramatic images could set back what it had hoped would be a new wave of nuclear plant construction. Immelt said that the steel encasement of the reactors has yet to be breached, a critical element in preventing an even worse situation.

GE defended the design of the now-stricken reactor it supplied to Japan 40 years ago, saying its containment system is safe and reliable. Fukushima-Daiichi's unit 1 is equipped with a GE boiling water reactor with a Mark 1 containment system.

GE and its joint-venture partner Hitachi have been scrambling to gain a foothold in the race to build nuclear power plants as a clean alternative to fossil fuels and a way to match growing global energy demands. While GE helped pioneer the industry, the GE-Hitachi joint venture has only won a handful of reactor deals for projects around the world.

One place the partners had hoped to win business was India. GE has been instrumental in supporting a landmark civilian nuclear energy deal between the U.S. and India, which was approved by the Indian Parliament in the summer of 2008. But the agreement became bogged down after India passed legislation that placed liability for nuclear accidents on equipment suppliers, something that nuclear-equipment suppliers and legal experts say is out of step with international conventions and other nations' laws, where operators typically are held responsible.

Japan's nuclear liability law holds the utilities that operate nuclear plants responsible for all damages. The law, however, contains an exception for cases where "the damage is caused by a grave natural disaster of an exceptional character."

Jeffrey Taylor is the founder of Jeffrey Taylor Group, a holding company for various operating businesses. Taylor is the author of two textbooks for the equipment-leasing industry and his autobiography. His most recent book, Going from W2 to 1099, offers his perspective on starting a new business.