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This Week in Energy: At the Crossroads of Japan’s Energy Future

Japan’s 9 February gubernatorial elections are being billed largely as a referendum on the fate of the country’s nuclear energy future—an election that will shape the debate on whether Japan should continue its reliance on nuclear energy, at least for the next two decades.

The gubernatorial elections come as Abe administration is hoping to restart some nuclear power plants once the Nuclear Regulation Authority confirms that they are safe.  Challenging this plan is an alliance between former prime minister Morihiro Hosokawa and former prime minister Junichiro Koizumi, who are pushing an influential zero nuclear platform.

As such, and in this post-Fukushima environment, the nuclear issue has almost entirely hijacked the campaign, particularly for the Tokyo gubernatorial race, and the Abe administration is struggling to restore balance. As the administration would point out, other issues ranging from social welfare, employment, earthquake preparedness and the 2020 Olympic Games require much more campaign attention than they are getting at present.

The zero-nuclear position attributed to some 40% of Japan’s population is certainly understandable after Fukushima; nonetheless, the timing is simply not right. While great strides towards alternative energy resources are being made in Japan perhaps more than anywhere else in the world, just building the necessary infrastructure to supply a zero-nuclear power grid will take years, if not decades.

We have closely and with great interest followed Japan’s progress at nuclear alternatives, from the hungry momentum for expensive LNG imports to exploration for “fire ice”, among myriad renewable energy resources.

Liquefied natural gas has in the interim replaced nuclear energy as Japan’s primary source of power, driving up prices and inflating the country’s fuel bill significantly.

Japan purchased a record 87.3 million metric tons of LNG in 2012 for a whopping $57.5 billion, which is double what it paid in 2011, Bloomberg reports, citing Japanese customs data. The news agency also notes that Japan’s current-account deficit in November was the biggest in comparable data back to 1985.

“There is no doubt the nuclear shutdown is damaging the Japanese economy,” said Akira Yanagisawa, a Tokyo-based researcher at the Institute of Energy Economics, Japan, who predicts 16 units will restart. “Japan’s national wealth has been outflowing to countries that produce oil and natural gas.”

This, too, should be a key election issue as we near 9 February.

It is also important to note that the while the Abe administration seems to be portrayed in the media in a black-and-white manner of pro-nuclear, there is more to this story below the surface. The intent is not to see that Japan is reliant on nuclear power in the long term, or even in the medium term. What the administration recognizes is that in the immediate- and short-term, Japan still needs nuclear; its economy needs nuclear, and the next time around it will be safer and more secure.

As reported by The Japan Times, the Abe administration is now considering revising its draft energy policy to avoid potential misunderstandings about the country’s nuclear future. The draft energy policy is not intended to suggest that Japan will rely heavily on nuclear power in the medium to long term.  In fact, the draft policy explicitly calls for reducing nuclear dependence as much as possible.

The administration is presently putting the final touches on this draft energy policy—the first since the Fukushima disaster of 2011.

By. James Stafford of Oilprice.com




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