Big Stories: Japan Energy Crunch

 Japan's Energy Crunch

The solar energy debacle in Japan, reported by Reuters, November 19, 2013. 

Random update: severity of Japan's energy crunch -- reported by Reuters, September 26, 2013

As expensive imported fuel has sent corporate electricity prices surging by more than a third since the Fukushima nuclear disaster, firms have scrimped and employees have grown used to sweaters in the winter and open collars in the summer.

Adding to the pressure, Japan is without nuclear power for only the third time since 1970 after the last of its 50 nuclear plants was closed for routine maintenance on September 15.

"Electricity fees will rise further and further," said Yukio Noguchi, a professor at Waseda University in Tokyo. "We are just at the beginning of the problem."

Before the massive 2011 earthquake and tsunami that wrecked the Fukushima nuclear plant and prompted the shutdown of the industry, nuclear power supplied about 30 percent of the energy needs of the world's third-biggest economy.

With no sign of the post-Fukushima power-crunch abating, most organizations plan to keep responding just as they've been doing: by cutting costs and trying to save more energy, a Reuters survey shows.

Japan and Natural Gas

Japan Japan snaps up US LPG exports to diversify supplies for trading, Platts:

Most Japanese suppliers and end-users have either locked in or are seeking to seal term contracts for LPG from the US to diversify supplies to meet steady demand, piling pressure on the Middle Eastern market and spurring global trade among Japanese firms, industry officials and traders said recently.

Major Japanese importers and traders such as Astomos Energy, Eneos Globe, TonenGeneral, Idemitsu Kosan and Iwatani Corp. have concluded multi-year term supply deals with Enterprise Product Partners. Refiner Showa Shell is also in talks with the US producer for a couple hundred thousand mt/year under a possible contract, sources familiar with the matter said. -- June 4, 2013

US grants export license to Freeport --> Japan.

Platt's feature: Japan eyeing New Mexico natural gas fields (the Permian and San Juan basins). Challenge: not enough pipeline from New Mexico to gulf coast.

In an interview Monday, Muramatsu said he was on a fact-finding mission to learn about opportunities for JOGMEC investment in New Mexico's upstream industry as well as the feasibility of moving gas from that state to the Gulf Coast, where it could be liquefied for export to Japan as LNG.

"There is a challenge for getting New Mexico's gas to the Japanese market because there is not so much (pipeline) capacity to the state of Texas," he said. "That will be a challenge for New Mexico's gas."

Currently only two LNG export terminal projects -- both located on the Gulf Coast -- have received approval from the US Department of Energy to ship gas to countries with which the US does not have a free trade agreement, which includes Japan.

The second approval was announced just last week, when DOE gave the go-ahead to permit the Freeport LNG Expansion and FLNG Liquefaction to export up to 1.4 Bcf/d over 20 years from the multi-billion-dollar facility on Quintana Island, Texas.

The project still is subject to environmental review and a separate approval from the Federal Energy Regulatory Commission.

Houston-based Freeport has agreements with BP and Japan's Osaka Gas and Chubu Electric Power for use of the facility and has said it planned to launch exports in 2017.

Prior to its approval of the Freeport project, the only other project to have won DOE approval to export LNG to non-FTA nations had been Cheniere Energy's Sabine Pass Liquefaction project in Louisiana.

Remember earlier story about Panama Canal expansion.