Alaska’s Department of Natural Resources and the Japan Bank for International Cooperation signed a memorandum of agreement to explore ways Alaska resources, particularly natural gas, might be developed and exported to Japan.
Dan Sullivan, the state’s natural resources commissioner, and JBIC Managing Director Koichi Yajima signed the MOU on Sept. 11 in Tokyo. “We are pleased to begin this formal dialogue with JBIC,” Sullivan said afterward.
“The agreement we’ve signed focuses on opportunities for Japanese companies and JBIC to become involved in resource development projects in Alaska—in particular, a large-volume [LNG] pipeline and export facility,” he indicated.
Sullivan was in Japan to speak on Sept. 10 at the opening session of the Japanese government’s second LNG producer-consumer conference, which attracted more than 800 participants from 50 countries, including senior executives from some of the world’s largest energy companies and utilities, and senior government officials from several Asian countries.
His schedule there during the week included meetings with senior officials from Mitsui & Co., Osaka Gas Co., Tokyo Gas Co., Anadarko Petroleum Corp., Resources Energy Inc., BP-Asia Pacific, ExxonMobil Corp., Apache Corp., Korea Gas Corp., DOWA Metals & Mining Co., and Sumitomo Metal & Mining Co.
Sullivan also was scheduled to meet with senior Japanese government officials from the Ministry of Economy, Trade and Industry, Japan (METI), JBIC, the Japan National Security Council, and Japan Oil, Gas & Metals National Corp.
“The goal of this trip was to build upon the extensive engagement that the Parnell Administration has undertaken in the past few years to develop strong relationships with the world’s leading LNG buyers, their governments, and consumers,” Sullivan said.
His trip came as experts in Washington emphasized the importance of the US moving more aggressively to supply more LNG to Japan. It not only is a major US trading partner, but is also a critical player in the region, noted US Rep. Michael R. Turner (R-Ohio), who chairs the House Armed Services Committee’s Tactical Air and Land Forces Subcommittee.
“Exporting more LNG to Japan is one way the US can bolster Japan’s security,” he said in remarks Sept. 11 to an American Enterprise Institute conference on energizing the US-Japan relationship through more energy exports.
Turner introduced HR 580, the Expedited LNG for American Allies Act, on Feb. 6. The bill would expedite approval of applications to export LNG to other North Atlantic Treaty Organization members; Japan, for as long as the Treaty of Mutual Cooperation and Security between it and the US remains in effect; and any other foreign country if the US Secretary of State determines that such exports promote US national security interests. US Sen. John Barrasso (R-Wyo.) introduced similar legislation Jan. 31 in the Senate.
“Normally, we knock on other countries’ doors, asking them to lower their barriers,” Turner said. “Here, we’ve erected our own barrier and are knocking on our own door. It’s absolutely incredible that we look to assets we have here and find there’s a barrier to our exporting them.”
“It’s no secret Japan has an energy problem, but the news is getting worse,” said Gary J. Schmitt, co-director of AEI’s Marilyn Ware Center for Security Studies, during a panel discussion that followed Turner’s remarks.
It’s possible that only nuclear power will provide only 35% of its total electricity once it recovers from the Fukushima disaster, and its high oil-indexed natural gas prices and reliance on Russian and Middle Eastern LNG suppliers are troublesome, he observed.
More US LNG exports to Japan would benefit both countries, Schmitt maintained. “It’s much better for Japan to have part of its supplies coming from a trusted ally like the US instead of from countries vulnerable to political instability,” he said.
Alaska potentially could be a major LNG supply to Japan, he continued. “The total amounts of reserves there are tremendous, and there’s a direct export route to Japan and North Korea,” Schmitt said. “But it’s not happening as quickly as it should. While US corporations have talked about building a pipeline and export facility, they’re moving slowly. A Japanese delegation visiting Alaska expressed strong interest in possibly investing, but said things need to move faster.”
Japanese companies already have invested in the Freeport LNG liquefaction and export terminal in Texas as well as other US projects, noted Dan Blumenthal, AEI’s Asian studies director. “Both Japan and the US will benefit from the shale gas revolution,” he said. “Japan already has begun to demand henry Hub prices for gas it imports from other suppliers.”
“If the US doesn’t begin to move expeditiously, the money required to finance these facilities may move elsewhere and we’ll miss this opportunity,” said Schmitt. “If we snooze, we lose.”
Contact Nick Snow at firstname.lastname@example.org.