By Mari Saito
TOKYO (Reuters) - Japanese authorities, now struggling to contain leaks of radioactive groundwater from the wrecked Fukushima nuclear plant, were urged two years ago by U.S. experts to take immediate steps to prevent groundwater contamination but decided not to act on the advice.
The advice to the embattled operator was outlined in a memo to government officials just two months after the accident, but then shelved, according to two officials who participated in the discussions and documents prepared by both governments and the utility.
Tokyo Electric Power (Tepco) successfully lobbied against a proposed barrier wall because the cost could have stirred speculation it would be driven into bankruptcy.
A Tepco spokesman said there had been concerns about the feasibility of the proposal to block the flow of water into the reactors, as well as the impact on fragile investor confidence.
Problems containing contaminated water at Fukushima have mounted over the past month, and the government of Prime Minister Shinzo Abe has promised about $470 million to fund the first part of a plan developed by Tokyo Electric to stop radiated water from spilling into the Pacific.
Abe, who is set to visit Fukushima on Thursday, vowed to bring the problems under control as part of Tokyo's successful bid for the 2020 Olympics. His Liberal Democratic Party was not in power at the time of the disaster.
Other officials have been harshly critical of the utility's stop-gap management of the contaminated water problem, with trade minister Toshimitsu Motegi likening it to "a game of whack-a-mole".
BARRIER PLAN THWARTED
A review of consultations just after the March 2011 earthquake and tsunami that triggered the disaster shows how Tepco thwarted the earlier plan to minimize water contamination.
Charles Casto, a representative of the U.S. Nuclear Regulatory Commission (NRC) who was based in Tokyo from March 2011 to early 2012, said discussions about the need for a barrier to block groundwater began as early as April.
"It was obvious to us that there was great deal of groundwater intrusion into the plant, and we shared that with the Japanese government," he said.
"At the time, they didn't believe there was a significant amount of groundwater getting into the plant."
Tokyo Electric has said construction of a barrier wall in the first months after the accident would have been difficult because of still-high radiation levels at the plant.
"Cost wasn't the only reason for not moving ahead," said Yoshikazu Nagai, a spokesman.
"The wall raised a number of technical questions that made it unclear whether it was feasible. For that reason, there was concern that it would be recognized as a liability and push the company closer to insolvency."
A memo prepared by Tepco and submitted to Japanese officials in June 2011 said the cost of building a barrier wall to contain groundwater would have risked rattling investor confidence.
In the memo, the utility urged the government to refrain from announcing a commitment to build such a wall in June 2011, as a group of Japanese officials working with Tepco and U.S. experts had determined would be best. It suggested the cost could be near $1 billion.
"There is a strong possibility that the market will conclude that we are moving a step closer toward insolvency or headed in that direction," said the memo.
A copy of the memo was reviewed by Reuters. Tokyo Electric confirmed its authenticity. The existence of the memo was reported by the Asahi newspaper on Wednesday. The NRC consultations have not previously been detailed.
Tetsu Nozaki, the chairman of the Fukushima fisheries federation, said the revelations show Tepco was acting to protect corporate interests.
"If they don't have a crisis, they can't move forward. I think that's a problem," he said.
WATER, WATER EVERYWHERE
In July, Tepco reversed months of denials and admitted that 300 metric tons of groundwater that has mixed with radioactive material may be flowing out to the sea every day. Last month, the utility said 300 metric tons of highly radioactive water had leaked out of a hastily built storage tank.
The effects of the contaminated water on fish around Fukushima remains a concern, experts say, but the amounts of radiation released are negligible once they disperse into the vast Pacific.
Some 330,000 metric tons of contaminated water - enough to fill more than 130 Olympic swimming pools - has been pumped into storage pits and above-ground tanks.
The utility needs to keep pouring water over the reactors to keep fuel in the cores from overheating. But that has been complicated by the estimated 400 metric tons of groundwater that seeps into the area from higher ground each day.
In May 2011, Sumio Mabuchi, a lawmaker in the then-ruling Democratic Party of Japan, led a government task force that compiled a list of five options for the design of a barrier to control groundwater at Fukushima.
The group consulted with the NRC's hydrology team, records reviewed by Reuters show. In a May 11, 2011 memo, the U.S. experts urged Tepco to develop a longer term "groundwater monitoring and remediation strategy".
Specifically, they said the utility should build first near the high ground above the reactors and start pumping out groundwater before it could reach the site. Such a strategy would "assure that contaminated groundwater is contained", the memo said.
Allison Macfarlane, who became NRC chairman last July, declined to comment on Tepco's early response to the groundwater problem and the advice of U.S. experts at the time.
"I don't have enough information to comment on that. My relationship is with the nuclear regulators in Japan," she said.
Mabuchi said he visited Fukushima in June 2011 and discussed the outline of the wall discussed with the NRC with the plant's then chief manager, Masao Yoshida.
Yoshida, who died in July, became a national hero when he ignored an order to stop pumping seawater into the reactors in the immediate wake of the disaster. He was credited with helping to bring the station under control.
But Mabuchi said Japan's then-Trade Minister Banri Kaieda accepted Tepco's argument that the costs of the wall would be too high. Kaieda was not immediately available for comment on Wednesday, his office said.
Kaieda has said that he was concerned about preserving the utility's ability to pay for compensation for thousands of nuclear evacuees.
Tepco announced on June 17, 2011 that it was pushing ahead with a study of the wall project but refrained from committing to build it.
Mabuchi called that a lost opportunity. "We had finished technical considerations two years ago and this wall would be done by now," he said.
But Lake Barrett, a newly appointed Tokyo Electric advisor and retired U.S. nuclear regulator, said it would have been impossible for the utility to deal with groundwater just after the disaster because its safety promises lacked credibility.
Barrett said he had also urged a plan to address water contamination by diverting groundwater around the reactors to the sea as early as 2011. But he said Tokyo Electric would have created a political firestorm by moving ahead with the step.
"If they had proposed to discharge water that close to the accident, all hell would have broken loose," he said. "They were incapable of doing it, and they couldn't do it. But Japan as a group should have done it."
(Additional reporting by Kentaro Hamada in Tokyo and Ros Krasny in Washington; Editing by Alex Richardson)