This Week's Update — The Times of Natural Gas – Security of Persian Gulf determines the fate of Japan's energy (13th February, 2012)
This Week's column and Articles
1) Since the Fukushima nuclear accident, the amount of electric power generation by nuclear in Japan has plummeted. The government and the power companies have increased the amount of generation by Liquid Natural Gas (LNG). This trend is likely to continue.
Mr. Akira Ishii, Chairman of Research Institute of Energy and Environmental, contributed “How we should prepare for the coming Era of Natural Gas". Mr. Ishii is a famous energy analyst in Japan. He predicts the energy conversion to natural gas in this column, and points out the problem of procurement costs of LNG that has been increasing in Japan.
2) We introduce a paper "Organizations under Large Uncertainty: An Analysis of the Fukushima Catastrophe" by Prof. Masahiko Aoki and Prof. Geoffrey Rothwell, Stanford Institute for Economic Policy Research.
This paper points out failures of coordination between organizations. It suggests a policy response that is to harness the power of “open-interface-rule-based modularity" by creating an independent nuclear safety commission and an independent system operator owning the transmission grid module in Japan.
3) Disposal of rubbles from the earthquake is delayed in Japan. The reason is due to concern by the minorities who fear spread of radioactivity in its processing. GEPR editorial staffs report "The earthquake rubble problem- Why has it become so serious? ―Confusion brought about from lack of knowledge on radioactivity " (coming soon).
This week's News
Since the nuclear accident in Fukushima last March, nuclear power plants have stopped operation one after another. There are 54 nuclear power plants in Japan. As of February 13th, only 5 plants are operating. Having finished the regular inspection of once a year, local people oppose its re-operation.
The Agency for Natural Resources and Energy reported that the current generation ratio of different power sources are 20% with oil, 40% LNG, 25% coal, 5% nuclear power, and 10% renewable energy at this time (estimated). Japan now relies heavily on LNG. In 2009, that ratio was 7.9% oil, 29.4% LNG, 24.7% coal, 29.2% nuclear power, and 9.1% renewable energy. And Japan imports 30% of LNG from the Middle East countries.
If Iran crisis in the Middle East occurs and the Strait of Hormuz is blockaded, oil and LNG price will violently fluctuate, and due to tension, stable supply of energy of the world and Japan is likely to be significantly impaired temporarily.
Foreign Affairs reported “How to Engage Iran-What Went Wrong Last Time — And How to Fix It".
Japanese government, analysts, and experts are concerned that the public opinion of the US to become strong against Iran.