Energy Bereft Japan goes Fracking

It is difficult not to feel sympathy for Japan's current energy dilemma.

In the early 1960s, hydrocarbon-deficient Japan eagerly embraced nuclear power, and the country now has 50 functioning reactors online, all of which two have been mothballed since the 11 March 2011 Fukushima Daiichi catastrophe, where an offshore earthquake followed by a tsunami destroyed Tokyo Electric Power Co.'s six reactor complex.

Even TEPCO refers to the incident as "The Great East Japan Earthquake."

Nuclear power provided roughly a third of Japan's electricity before the March 2011 "incident," and the Japanese government had planned to increase nuclear energy power's share to 50 percent before Fukushima. Despite substantial public opposition, the government has restarted two of the country's functioning reactors, while it attempts to address public concerns about nuclear safety.

But, where to make up the electricity deficit?

Fossil fuels? Oil, natural gas, coal?

Renewables - solar, wind power?

Finding substitutes for the shuttered nuclear plants' electrical output is a high priority for the Japanese government, which estimates that if Japan's 50 nuclear reactors were permanently closed, then Japanese power companies would suffer losses of $55.9 billion, with at least four companies declaring bankruptcy, according to the Japanese government's Agency for Natural Resources and Energy. Seeking to preserve the billions of dollars spent on the country's nuclear infrastructure over the last 50 years, Japan's biggest and most influential business lobby, the Keidanren, warns of disaster should all the country's nuclear power plants remain shuttered, with hundreds of thousands of jobs lost, while energy alternatives would be both more expensive and hampered by problems.

Japan Petroleum Exploration Co., or JAPAX, seems to have found an indigenous solution, one that will sit with Japanese environmentalists only marginally better than nuclear.

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Fracking.

Last week JAPAX announced that it had succeeded in extracting shale oil from the Ayukawa oil and gas field in Akita Prefecture, a first for Japan.

It that's good news for Japan seeking to wean itself off of foreign energy exports, then the bad news is that the shale oil reserves in the Ayukawa oil and gas field in Yurihonjo, Akita Prefecture are estimated at a modest 5 million barrels, roughly equivalent to a day's worth of Japan's annual oil consumption. Overall, Akita Prefecture's total shale oil reserves are estimated at a modest 100 million barrels. Even a JAPEX official admitted that shale oil production from the Ayukawa field would "have only a minor impact on Japan's energy supply and demand."

But the Ayukawa find raise larger questions beyond Japanese energy independence in the form of environmental concerns about the hydraulic fracturing procedure, issues that have radicalized American environmentalists against the expansion of the procedure in the U.S.
The issue of what chemicals are injected into fracking boreholes to facilitate the process of liberating the oil and natural gas trapped in the shale rock formations. U.S. companies have steadfastly refused to release information on the admixture of substances injected into their well, claiming that the information is company proprietorial knowledge and, as such not subject to public disclosure.

JAPAX's Ayukawa field used hydrochloric acid pumped into a shale rock layer about 1.1 miles deep to remove limestone that clogs cracks in the rocks in its efforts to obtain crude oil. In fact, JAPAX has been extracting oil and natural gas from the Ayukawa field since 1995.

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So, the issue for Tokyo is essentially - given the country's immense energy needs, is fracking a beneficial way to proceed to make up the country's energy shortfalls?

What is clear is that, in the wake of Fukushima, the Japanese electorate has become radicalized on the issue of environmental impacts of energy production - but JAPAX will undoubtedly argue that hydrochloric acid can disperse in underground water to negligible levels, unlike some of the substances used in the U.S.

In April 2011 a report issued by House of Representative members Henry Waxman of California, Edward Markey of Massachusetts and Diana DeGette of Colorado  found that known carcinogens used in the U.S. in the fracking process include benzene.

But for the Japanese public, not to worry, as off the coast of Aichi Prefecture test drilling has begun for methane hydrate, a natural gas found under the deep seafloor, and methane hydrate reserves in the seas around Japan are estimated to be equivalent to 100 years' worth of the country's natural gas consumption.

So, alternatives to Japan's shuttered NPPs exist - but the transition is not going to be cheap.

By. John C.K. Daly of Oilprice.com