Energy gap from nuclear stoppage will drive Tokyo and Washington closer

By Feng Zhaokui Source:Global Times Published: 2012-12-24 12:35:00

Illustration: Liu Rui
Illustration: Liu Rui

The Fukushima earthquake last year in Japan struck a heavy blow to the country's nuclear power industry. Currently, only one-fifth of Japan's nuclear reactors are under operation. With anti-nuclear campaigns continuously rising, Japan has entered into a period of denuclearization.    

The shutdown of a group of 43 nuclear reactors has driven a quickly soaring demand for thermal power generation in Japan. Japan has to significantly increase its oil and gas imports. In the era of denuclearization, Japan is very likely to carry out a more active energy diplomacy.

Judging by the energy diplomacy that Japan implemented after the oil crisis in 1973, Japan's energy diplomacy in the denuclearization era will feature it trying to expand import sources of fuels for thermal power generation, paying more attention to natural gas imports and seeking to realize natural gas import through pipelines. It will use Russia and North America as the main import markets.

Due to the turbulence in the Middle East, fluctuations in the prices of oil and its supply often upset people. Turning to natural gas could help Japan diversify its sources of energy supply and get rid of its dependence on Middle East. We can predict that in the next few years Japan will rely on natural gas to bridge the denuclearization energy gap. 

Among those natural gas suppliers, Qatar, the largest liquefied natural gas (LNG) production country in the world, is unlikely to provide a steady supply due to the influence of the Middle East situation on it. Therefore, Japan will certainly pay more attention to the US, which is undergoing a shale gas revolution, and Russia's Sakhalin Island in the Far East.

However, a submarine pipeline is needed when importing LNG from Sakhalin. Japan will have to promote the project that connects Sakhalin and Tokyo, in which a 1,400-kilometer-long submarine pipeline will be constructed via Hokkaido. On the Russian side, Japan is not its only LNG market, and it could also sell LNG to other countries, so it is not taking an active role in constructing the pipeline.

With the territorial disputes between Russia and Japan intensifying in recent years, a bilateral summit talk scheduled this month has been cancelled, which shows that the political environment needed for large-scale energy cooperation is missing at the moment.

Under these conditions, Japan has to rely on the US. But to import gas from the US, a country must have signed a free trade agreement with the US. Japan hasn't qualified yet, although the upcoming Trans-Pacific Strategic Economic Partnership (TPP) may well offer an opportunity.

At present, the price of natural gas in Asia and Europe is much higher than in the US. It's very profitable for US enterprises to export their natural gas to other countries. But there is also some opposition against developing shale gas, holding that exporting natural gas will drive domestic energy prices up.

Therefore, if Japan asks the US to export natural gas, the US is very likely to set intensifying the US-Japan alliance and Japan's participation in the TPP as preconditions. The US-Japan alliance will be intensified in the future due to the energy issue, and Japan is the more passive side in the arrangement, China should understand this clearly and make preparations to deal with such a situation.

The author is deputy president of the China Association of Sino-Japanese Relations.

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