GE design of Fukushima Dai-ichi containment buildings did not allow for venting of hydrogen.

GE, the company that boasts that it “brings good things to life,” was the designer of the nuclear plants that are blowing up like hot popcorn kernels at the Fukushima Dai-ichi generating plant north of Tokyo that was hit by the double-whammy of a 9.0 earthquake and a huge tsunami.

The company may escape tens or hundreds of billions of dollars in liability from this continuing disaster, which could still result in a catastrophic total meltdown of one or more of the reactors (as of this writing three of the reactors are reported to have suffered explosions and partial meltdowns, and all could potentially become more serious total meltdowns with a rupture of the reactor container), thanks to Japanese law, which makes the operator--in this case Tokyo Electric Power Co. (TEPCO) liable. But if it were found that it was design flaws by GE that caused the problem, presumably TEPCO or the Japanese government could pursue GE for damages.

In fact, the design of these facilities--a design which, it should be noted, was also used in 23 nuclear plants operating in the US in Alabama, Georgia, Illinois, Iowa, Massachusetts, Minnesota, Nebraska, New Jersey, New York, North Carolina, Pennsylvania and Vermont--appear to have included serious flaws, from a safety perspective.

The drawings of the plants in question, called Mark I Reactors, provide no way for venting hydrogen gas from the containment buildings, despite the fact that one of the first things that happens in the event of a cooling failure is the massive production of hydrogen gas by the exposed fuel rods in the core. This is why three of the nuclear generator buildings at Fukushima Dai-ichi have exploded with tremendous force blasting off the roof and walls of the structures, and damaging control equipment needed to control the reactors.

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This may explain why people in India are reportedly rethinking GE’s bid for a big piece of the country’s proposed market for $150 billion in new nuclear power plants in that country, and why it may not be so easy for GE and other nuclear plant builders to escape liability for their products in the future.

Back in November, President Obama was in India pushing that country’s government to pass legislation exempting GE from liability for nuclear “accidents.” That idea is probably not going to go very far now.

Jeffrey Immelt, the chairman and CEO of GE and a big friend of Obama’s (he was named to an unpaid post as “jobs czar” by the president earlier this year, despite the company’s long record of exporting US jobs to places like China and India), says it’s “too soon” to assess the impact on the company’s nuclear business prospects of the nuclear “accidents” in northern Japan.

He’s certainly right about that (though investors aren’t waiting: the stock was down 3.5% today alone by noon, following the second hydrogen gas explosion). At this point only two of the buildings housing the six troubled reactors has blown up, and TEPCO has only lost control of the cooling systems in three of the six, and also, so far, only three have suffered partial meltdowns. Things could get a lot worse if one or more goes into full meltdown, or if one or more of those waste “ponds” blows up.

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Immelt, who is on a planned business trip to India, said that almost 60% of group revenue would come from overseas sales this year, a ratio that is set to increase. He has said that GE's business portfolio is the best since taking charge of the company 10 years ago, with its focus on infrastructure and a more targeted financial services business after shrinking the GE Capital unit and trimming media and security holdings.

The planned India visit comes at a delicate time for GE's nuclear power generation joint venture with Hitachi Ltd. (HIT, 6501.TO) in the wake of Japan's devastating earthquake and tsunami. Older-technology reactors built by GE are involved in the accident at a Japanese nuclear plant after cooling systems failed, and the unfolding drama has rekindled debates over the safety and design of modern reactors.

India has identified two sites for plants using U.S. nuclear technology, but is coincidentally finalizing a framework for handling liabilities in the event of an accident, a process likely to be influenced by the fallout from the Japanese accident.

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