• 4 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 7 minutes Middle East on brink: Oil tankers attacked off Oman
  • 11 minutes CNN:America's oil boom will break more records this year. OPEC is stuck in retreat
  • 14 minutes The Latest: Iranian FM Says US Cannot Expect To ‘Stay Safe’
  • 1 hour The Pope: "Climate change ... doomsday predictions can no longer be met with irony or disdain."
  • 1 hour Coal Boom in Asia is Real and a Long Trend
  • 2 hours The Plastics Problem
  • 17 hours China's President Xi To Visit North Korea This Week
  • 6 hours Hydrogen FTW... Some Day
  • 9 hours GM Considering Electric Hummer
  • 5 hours As Iran Nuclear Deal Flounders, France Turns To Saudi For Oil
  • 20 hours OPEC, GEO-POLITICS & OIL SUPPLY & PRICES
  • 23 hours Why Is America (Texas) Burning Millions of Dollars Per Day Of Natural Gas?
  • 19 hours Forbes: Giant Floating Solar Farms Could Extract CO2 From Seawater, Producing Methanol Fuel.
  • 13 hours The Magic and Wonders of US Shale Supply: Keeping energy price shock minimised: US oil supply keeping lid on prices despite global risks: IEA chief
  • 23 hours Fareed Zakaria: Canary in the Coal Mine (U.S. Dollar Hegemony)
  • 21 hours Hormuz and surrounding waters: Energy Threats to the World: Oil, LNG, shipping markets digest new risks after Strait of Hormuz attack
  • 16 hours Russia removes special military forces from Venezuela . . . . Maduro gone by September ? . . . Oil starts to flow ? Think so . .
Alt Text

Oil Industry Banks On Shaky Plastic Bet

Oil companies are hedging the…

Alt Text

Oil Markets Shrug Off Gulf Of Oman Tanker Attacks

Tensions in the Middle East…

Alt Text

Small Crude Build Sends Oil Lower

Oil prices continued to fall…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

The Value of Empty Space - Japan Secures Oil Supply

Here's an interesting one in the realm of oil security.

As we've discussed, Japan is using a lot less oil these days. In the last year, Japanese consumption dropped 800,000 barrels per day.

That's leaving the country's petroleum infrastructure under-used. Nippon Oil plans to idle 20% of its refineries by 2015.

Oil storage facilities are also sitting empty. And the Japanese government is getting creative in putting this "empty space" to productive use.
The plan is to use spare storage to guarantee secure oil supply.

The pilot for this scheme came in June 2009. Japan's Ministry of Economy, Trade and Industry signed an agreement to "borrow" 600,000 kiloliters (3.8 million barrels) of oil storage from Nippon Oil (no terms have been released for the agreement).

The government then turned around and offered the storage space to Abu Dhabi National Oil Corporation. On very favorable terms (it's unclear if ADNOC is being charged at all for the space).

On December 21, ADNOC delivered its maiden shipment of 300,000 kiloliters of Abu Dhabi crude to the facility. The firm will use Japan as a "foothold" in Asia to conduct oil trading. Having oil stocks closer at hand to China, Japan and other Asian nations allows ADNOC to act quickly when attractive prices appear in these markets.

Here's the kicker. In exchange for providing storage, Japan gets priority purchase rights in case of an energy emergency. If oil suddenly gets scarce, the Japanese have dibs on nearly 4 million close-at-hand barrels.

Not a bad use of empty space.

Here's to making something from nothing.

By. Dave Forest of Notela Resources




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment





Oilprice - The No. 1 Source for Oil & Energy News