By Eric Watkins
LOS ANGELES, April 25 – Japan’s government, faced with continued popular displeasure over any suggestion of renewing the country’s nuclear power facilities, is in a quandary over its energy policy.
Just this week, Japan was urged by the head of the Organization for Economic Cooperation and Development to resume the operation of nuclear power plants once their safety has been confirmed.
“You cannot substitute 30% of installed capacity overnight,” said OECD Secretary General Angel Gurria, referring to the amount of Japan’s energy supply generally provided by nuclear power.
Japan’s nuclear reactors were largely shut down following the March 2011 earthquake and tsunami disaster that crippled the Fukushima nuclear facility and shuttered all but one of Japan’s nuclear plants.
The country’s only nuclear power plant now operating is the No. 3 reactor at Hokkaido Electric Power Co.’s Tomari plant in Hokkaido, and it is scheduled to go offline on May 5 for routine checks.
WORLD ENERGY FORUM
Gurria’s remarks followed a report by the World Economic Forum which warned Japan against turning away from nuclear power too quickly, saying that any rapid change would “jeopardize Japan’s energy security and increase its dependence on fossil fuel imports.”
Japanese leaders are fully aware of the dilemma they face. If Japan’s nuclear reactors are not turned on by summer, the country will see a severe shortage of power during the hottest time of the year.
Kansai Electric Power Co. recently said its supply of electricity will be 16.3% less than maximum demand in August, while the ratio of supply shortage was put at 3.1% for Hokkaido Electric Power Co. and 3.7% for Kyushu Electric Power Co.
That’s won’t sit well with voters. Yet Japan’s leaders know that switching on the reactors is also highly unpopular, given a new poll by Nikkei Inc. and TV Tokyo Corp. that showed support for the government dropping 5 percentage points since last month to 29%.
PLUMMETING POLL RESULTS
More to the point, the poll shows a link to the government’s decision to restart two idled nuclear reactors at Kansai Electric Power Co.’s Oi plant: 54% criticized the decision, while only 30% favored it.
Across the nation, 46% of those polled said the bare minimum of nuclear plants should be brought back online, while 29% said that operations at all nuclear plants should be suspended. Only 20% favored gradually reactivating nuclear facilities whose safety has been confirmed.
The division over nuclear energy runs right through the Fundamental Issues Subcommittee, a panel of experts under the Advisory Committee for Natural Resources and Energy at the Ministry of Economy, Trade and Industry which has been tasked with establishing Japan’s future power and energy framework.
In March, six panel members supported the complete elimination of nuclear power in Japan by 2030, while nine members endorsed a plan to maintain the current level of nuclear power generation.
LNG TO THE RESCUE
Japan’s government is seeking a way of the problem through increased imports of liquefied natural gas (LNG) – especially from the US.
“We are going to fully support” projects that aim to export US LNG to Japan, said Japan’s Minister of Economy, Trade and Industry Yukio Edano, a view that was underscored by Hirobumi Kawano, president of Japan Oil, Gas and Metals National Corp.
“Japanese companies are looking at US shale gas from a long-term point of view,” Kawano told The Financial Times. “They want to liquefy it and export it to Asia and Japan.”
The longer range hope of the Japanese lies in the believe that the US shale gas revolution will yield supplies of LNG that are far cheaper than anything to be found among suppliers in Asia-Pacific.
But even that belief may have to be revised.
DECREASED PRICE SPREAD
According to Standard and Poor’s Ratings Services, the potential for US LNG exports could be limited because of the possibility that the current large spread between US and Asian gas prices could decrease in the future.
In the long term, S&P expects that the price spread between US gas and oil-linked Asian LNG prices could be reduced, which would make the economics of additional US LNG export projects less attractive.
That may not matter to Japan’s politicians, who are more immediately concerned with the long, hot summer to come. But Japan will soon have to resolve its impasse over nuclear energy.
After all, a long cold winter will soon be at hand.
© Glamma Productions 2012