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Image Courtesy Union of Concerned Scientists
The Fukushima Daiichi power plant, like other nuclear plants in Japan, removes fresh fuel from a reactor and parks it for weeks or months in a less-protected "spent fuel" pool during maintenance.  This standard practice at Japanese nuclear plants appears to have been a significant contributor to the tsunami-induce disaster at the Daiichi facility.  

When the 9.0 magnitude earthquake and tsunami struck, all of the fresh fuel at the plant's Reactor No. 4 had been removed and stored in a pool that must remain filled with cooling water. That pool became one of the biggest problems for plant operator Tokyo Electric Power Company, or Tepco, after much of the protective water dissipated, threatening fire and widespread radiation release.

At the time of the quake, Reactor 4 was offline and not generating power amid annual maintenance. As part of that, five months ago Tepco relocated all the fuel rods from inside the reactor to what's called a spent-fuel pool, a concrete holding tank that is less robustly protected than the reactor itself. The active rods were in that pool when the March 11 quake struck. When the tsunami wiped out the plant's emergency generators, the water in the spent-fuel pool adjacent to the No. 4 reactor could no longer circulate, and fresh water could not be pumped in. Rods in the pools began to overheat, causing the water to evaporate as steam and exposing parts of the radioactive rods to the air—a critically dangerous situation. The heat spawned fires and the roof above the pool was partly destroyed, letting radiation out.

The Japanese argue it's safer to move all the fuel to the pool, but the practice of full-core discharge caused a problem, in the case of the tsunami.  They believe the practice of removing still-usable fuel and stowing it in the spent-fuel pool can be done safely if ample water is available and sufficient space is maintained between the rods.

In the U.S., reactors shut down for refueling typically retain most of their fuel in the thick steel reactor pressure vessel that provides much more protection against a radioactive release. During refueling outages, when operators swap out depleted fuel for fresh fuel and do other maintenance, these rods are shuffled around in a process somewhat akin to rotating tires on a car to even out the wear.  In the U.S., only the most worn-out rods typically are removed and transferred to a spent-fuel pool for storage, where they can stay for decades. Thus, U.S., pools hold only the oldest spent fuel, which is also the coolest in terms of temperature and radiation.

Outdoor Dry Casks: Image UCS
  By contrast, at Tepco and other utilities, it's common to temporarily remove all the fuel rods. The freshest are eventually moved back to the reactor pressure vessel and supplemented with new rods to replace the oldest ones, which are left in the storage pools.

Rods can be left in pools for many years for two reasons. First, they need to cool down. Second, no nation has yet solved the problem of what to do with large stockpiles of used nuclear fuel. As a result, much of it remains in utility holding pens. (WSJ, 3/21/2011)