JAPAN IN FLUX:Japan's fears of oil dependence exaggerated, study says

An about-face in Japanese public opinion against more nuclear power could lead to higher imports of oil and other fuels. But a recent study suggests Japan's fear of dependence on imported oil and its effects on energy security are exaggerated.

Karen Broyles
OGJ Online

Nuclear accidents have led to an about-face in Japanese public opinion about nuclear power and could cause oil demand to rise, raising old fears about dependence on energy imports. But a new study suggests that Japan's fears about energy security are exaggerated and that existing energy policies could actually damage the Japanese economy.

Selling nuclear power "has become difficult from both an economic and public relations standpoint," said Amy Jaffe, energy research coordinator for a yearlong study of Japan's energy policy by the James A. Baker III Institute of Public Policy at Rice University, Houston. Jaffe presented the findings of the study in Houston last week.

Japan is rethinking its energy policy after an accident at the Tokaimura nuclear power plant on Sep. 30, 1999. That accident changed the public's perception of power plants. After the incident, 52% of Japanese citizens polled said they felt "very uneasy" about nuclear power, up from 21% who felt that way prior to the accident.

Prior to the accident, Japan had plans to build 20 more nuclear power plants and curb its dependency on oil imports. The Japanese government was unable to get the public to go along with that energy program, however. In response to public outcry, the government in March set up a committee to study how the future development of nuclear energy should proceed in the country. Construction plans for several proposed facilities has been either cancelled or postponed.

Over the past 5-10 years, the government could deal with the public's negative opinions through public education. But changes in voting laws that allow some voting for individuals, not parties, plus alternate sources of information accessible over the internet and freedom of information and disclosure laws, have made it difficult for the government to convince the public that nuclear power plants are safe and necessary.

Energy dependency
The world's fourth largest oil consumer, Japan imports more than 80% of the oil it uses. The Japanese government and people have been painfully aware of the vulnerability created by that dependence.

The Baker Institute study noted how energy security "has played an important�and sometimes overriding�role in Japanese foreign and domestic policy," from its expansionist role in World War II to its "activist industrial policies of the 1970s and 1980s."

"Markets do behave differently in times of war, but their concerns [about supply security] are exaggerated," said Jaffe. But even if some type of blockade were to occur, "There are many, many sea routes that lead to Japan. They couldn't be totally blocked off from supply."

Japan's energy demands are expected to dramatically increase, rising from 480 million tonnes/year of oil equivalent in 1995 to 673-717 million tonnes/year by 2015. However, the changing political scene, including the strengthening of ties between Japan and the US since the end of the Cold War, have reduced the chances that Japan will be unable to obtain oil or other fuel supplies.

The study also points out that Japan's economy has managed to grow at good rates, even during the oil price shocks of the 1970s and 1980s and the Gulf War in the early 1990s. Annual import bills of more than $50 billion haven't stopped Japan from running yearly trade surpluses double or more that level. When Japan experienced economic trouble during the 1990s, "it was during a period of relatively low international energy prices," researchers say.

The study suggests that Japan's energy security concerns are overstated and that the cost of sustaining elements of its traditional energy-security policy�notably a highly regulated, administered rather than market-conforming domestic energy sector�may have become unacceptably high. The argument that nuclear power is preferable because it is produced domestically is weakened by the costs of maintaining plants, risks of earthquakes, and disposal costs for fuel.

Other fuel sources
Alternatives include natural gas, imported in either gaseous or liquid form. Gas could be imported to Japan via a pipeline transmission system linking Japan with the Sakhalin Islands on Russia's East Coast, the study reports, and the feasibility of a gas transmission grid for the country should be studied. Large supplies of LNG from Southeast Asia�particularly in Indonesia�could be imported into Japan, Jaffe says. Fears the country will pay premium prices for LNG are no longer justified, she argues, because so many suppliers are competing to sell LNG.

Japan's oil use is down to 55% of total energy consumption in 2000 from 77% in 1973 thanks to a shift to nuclear power, gas, and other energy sources, plus a move away from heavy industry. Even if supplies are cut off, in the past, the resulting oil shortages have been short in duration, according to the study's authors. And in times of shortages, OPEC countries have covered Japan's shortfall.

Other approaches could include creating a regional group to coordinate energy policies and build an oil stockpile. While a great deal of enmity exists among countries in the region, creating a joint agency could build common ground in energy, the environment, or other geopolitical issues, says Baker Institute Director Edward P. Djerejian. He noted cooperation among Japan, Russia, and China would be crucial to maintaining political peace in the region.

The continued presence of the US military in Southeast Asia also should assist in maintaining regional stability, according to the Baker study, and ensure that Japan receives outside energy supplies should China threaten military action. The authors estimate China will need about 20 years to develop a navy that can compete with the US fleet, giving the US the luxury of a "wait and see" attitude in its China policies. The study concludes China is unlikely to represent a military threat to the sea lanes leading to Japan.

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