Westinghouse tries to avoid nuclear fallout

Mar 20 - McClatchy-Tribune Regional News - Erich Schwartzel Pittsburgh Post-Gazette

The nuclear industry has always specialized in the "What ifs?" that no one wants to think about: terrorist attacks, computer crashes, earthquakes.

The force of Japan's largest earthquake in decades has turned the hypothetical into an unfolding reality, forcing a nuclear industry banking on a lucrative future to grapple with a new what if: What if this sets us back another 30 years?

That's the question being asked at Westinghouse Electric, the Cranberry-based company that planned for a 2011 busy with site construction of its AP1000 reactors in the United States and abroad as nations look for cleaner sources of energy. The calamity at Japan's crippled nuclear reactors, the inability of engineers to control the disaster and the subsequent calls for moratoriums on nuclear plant construction have forced Westinghouse to take on a public relations disaster, construction delays and possible new regulations.

First things first: Did we mention those reactors in Japan were designed by General Electric?

Over that first weekend following the earthquake in Japan, Westinghouse communications personnel hunkered down and began drafting talking points to use in response to the new scrutiny they knew was coming. Ed Cummins, Westinghouse vice president and chief technologist for new plant technologies, was tapped to be the company's voice, to keep all messages in the same key.

Westinghouse responded to the spectacular failure of the Japanese boiling water reactors by saying that the AP1000 model, its flagship product, is a safer alternative that would have responded differently to the tsunami's waves. In fact, the accident "may make the AP1000 displace other plants in China," a major market for nuclear power, said Mr. Cummins.

But the company must walk a thin line between trying to project optimism and seeming uncaring about Japan's catastrophe.

On Monday, the company pledged that the "nuclear renaissance will continue." Later in the week, the corporate line was more tempered and the emphasis placed on outreach and sharing information.

"We need to relay some concerns," explained Jim Ferland, president of Westinghouse's Americas operations, on Thursday. "But second, with an event like this, it does call out the differences" between the technologies.

The shift in tone could be attributed, in part, to the growing public concern.

Vaughn Gilbert, the company's chief public relations representative, has been fielding scores of calls and hundreds more emails that seem to keep his thumb permanently attached to his BlackBerry's scroll bar. And it's not just the usual media types. Every opinion is getting in touch: pro-nuke, anti-nuke, questioning.

The stakes are high in terms of which of those public perceptions of nuclear power prevails. AP1000 symbolizes a new future for Westinghouse, a company founded in 1886 that at one time represented a plethora of subsidiaries specializing in everything from refrigeration to television at CBS.

The nuclear arm of Westinghouse was sold to British Nuclear Fuels in 1998, which sold it to Toshiba in 2006. Since then, Westinghouse's annual revenue has boomed. Its 2007 revenue was $2.2 billion, which grew to $3.2 billion in 2008 and then $4.2 billion in 2009.

This year, the company surged ahead $500 million for 2010 revenue of $4.7 billion. The company employs about 3,300 workers in the Pittsburgh region, most of whom work out of a 2-year-old campus in Cranberry that is already running out of room.

Most of the company's growth can be credited to the AP1000 and its planned construction in southeastern portions of the United States and several sites in China. That construction time line -- and the expected revenue dependent on it -- has been muddied by the uncertainty in the industry.

Four sites already under construction in the United States moved forward with production this week. But for the ones slated to start later this year, Mr. Ferland acknowledged that there'd most likely be a "slight" delay as politicians and regulators sort out the lessons to learn from Japan.

The owners of those under-construction sites have been calling Mr. Ferland this week, he said, for two reasons: to share the scattered information on Japan's unfolding drama, and to talk through the safety issues that have become a paramount concern.

"They say, 'Tell me again why the AP1000 will be better able to handle something like this?' " said Mr. Ferland.

Other clients still in early talks are "taking a step back, digesting the info," said Mr. Ferland.

Regulatory delays will come in getting permits issued for sites, said Mr. Cummins. "But part of that is politics," he said.

When a nuclear disaster hits, everyone is a regulator because everyone is a constituent. World leaders and members of Congress have already called for more scrutiny on the industry just at a time when it seemed poised for a comeback after 24 years of anxiety spurred by meltdowns near Harrisburg and in Eastern Europe.

"We were getting a perfect storm here," said Mr. Cummins.

Another slowing factor could be Wall Street's reaction to the crisis, said Forrest J. Remick, a professor emeritus of nuclear engineering at Penn State University and the commissioner for the U.S. Nuclear Regulatory Commission from 1989 to 1994.

Asian markets have consistently tumbled over the past week, but Mr. Remick said it is U.S. banks that could help decide America's future in nuclear energy.

If banks determine a nuclear reactor to be a risky investment, it could become harder for utilities to borrow money to build the plants.

They aren't cheap: An AP1000 costs more than $4 billion.

If past experience is a guide, the plants will become even more costly post-Japan. Requirements can change as regulators react to new public concerns.

After the Sept. 11 attacks raised the possibility of a plane flying into a reactor, the NRC expanded the anti-aircraft guidelines to include all sites, not just those near airports.

Westinghouse outfitted the AP1000 design with steel plates on the inside and outside of the reactor, each about three-quarter-inch thick and attached to 3 feet of re-enforced concrete. The change added $10 million to $20 million to the cost of each plant.

There are significant precedents for disasters elsewhere leading to changes in nuclear industry regulations, said Mr. Remick.

After a mentally unstable man drove through the gates at Three Mile Island near Harrisburg during Mr. Remick's tenure, stronger enforcements started lining the border at all plants. And after terrorists bombed the World Trade Center in 1993 by driving into its underground parking garage, the basement parking garages of nuclear plants were outfitted with more security, he said.

Reactors are "like fortresses" now, said Mr. Remick, but the magnitude and effects of some disasters can't be anticipated.

Since the tsunami swept away the power sources that sat outside the reactors in Japan, Mr. Cummins said to expect changes to the systems designed to protect the power sources. He could see new regulations that require concrete barriers or even revised design plans that move the electrical units inside.

The crisis in Japan is full of cruel ironies: That a country ravaged by foreign-born atomic power during World War II would find itself ravaged again by its own nuclear creation; that water swept away a G8 country's stability and is now being used to douse its reactors and stave off further meltdown.

Westinghouse is watching to see if another irony hits: That the industry finally close to convincing the world of promised energy independence is forced to start over.

Erich Schwartzel: eschwartzel@post-gazette.com or 412-263-1455.