By the OGJ Online Staff
HOUSTON, Mar. 14�Japan should reconsider its energy security strategy, which is outdated given changes in international market forces and global politics, a spokesman for Cambridge Energy Research Associates recently told a Japan Ministry of Foreign Affairs seminar.
Speaking in Tokyo earlier this month, Denis Eklof, CERA senior director of Asia Pacific Energy, said Japan should implement strategies geared toward preventing supply disruptions and mitigating negative impacts of any disruptions.
"All of Japan's security-related programs began in the early 1970s through the mid 1980s, when the primary energy security concerns were the threat of the use of the 'oil weapon' by the Organization of Petroleum Exporting Countries and the potential for supply disruptions resulting from the volatile Middle East political situation," Eklof said.
Currently, Japan has among the highest-cost energy sectors of industrialized countries with few indigenous resources, he said, calling for Japan to strike a balance between the efficiency of its energy sector and its energy security costs to government and energy industry.
Japan's energy strategy also needs to consider China's changing situation, Eklof said, adding CERA estimates China's oil demand growth will average 5%/year for the next two decades.
China will shift from an energy exporter to an importer, raising concerns among some industry observers about the security of supplies to China's neighbors.
But Eklof said, "The prospects are good for the emergence of a China that is an increasingly integrated player in global oil markets�a China that sees energy security as a question of reliable access to economically priced resources, rather than political control over them."
Japan's most effective energy security strategies will be aimed at international efforts to reduce the likelihood of political or military interruption of supplies, institutional efforts to strengthen energy markets, and indirect efforts to promote development of new commercial energy sources, he said.
A more aggressive approach to deregulation and restructuring is another element of an energy security strategy, he said, adding that Japan could learn from the California example.
"Japan should not hold back on its deregulation process because of the failure in California," Eklof said. "Rather it should learn from the example and forge its own plan�a plan that will support and contribute to the resurgence and vigor of the overall Japanese economy."
CERA advises major international companies, financial institutions and organizations on energy markets, geopolitics, industry trends and strategy.
