longbrained
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An Iran war is going to be more devastating on Japanese economy than the Tsunami last year.
Iran crisis with no nuclear energy 'disastrous' for Japan: Tanaka
Washington (Platts)--23Mar2012/459 am EDT/859 GMT
If a crisis over Iran curbs the supply of liquefied natural gas while Japan's nuclear fleet is shut, it could cause an economic impact greater than that from the March 2011 earthquake, the former executive director of the International Energy Agency said Thursday.
With 20% of its gas and 80% of its oil coming through the Strait of Hormuz, Japan would face a "disastrous impact" from a crisis in the Middle East, said Nobuo Tanaka, now a global associate at Japan's Institute of Energy Economics. He spoke at an event in Washington sponsored by the Center for Strategic and International Studies.
All of Japan's 54 nuclear reactors could be shut by early may for periodic maintenance and testing, Tanaka said. In Japan, those routine outages cannot end without approval from prefecture governments, which have declined to give that approval for any reactor, leaving 52 of 54 nuclear units shut.
Iran has threatened to block the Strait of Hormuz if it attacked by Israel over its nuclear program, causing oil prices to rise.
An earthquake and tsunami a year ago in Japan killed more than 16,000 people and slowed the country's economy. LNG imports increased 25%, and the additional costs of fossil fuels to make up for declining nuclear capacity may have totaled more than $35 billion, CSIS said in a report Monday.
"This is a very important test of crisis management for our government," Tanaka said. The Japanese government is reviewing the so-called "stress tests" ordered by regulators before any Japanese reactor can restart. If approved by government ministers, the decision to restart the first three units will go to governors of prefectures, perhaps as soon as next month, Tanaka said.
The continued lack of nuclear power generation in Japan affects global LNG prices because it has spurred demand, he said.
Japan is reliant on Qatar for natural gas imports, mostly in the form of LNG, Eurasia Group analyst Leslie Palti-Guzman said at the event. The country has been able to secure additional LNG cargoes in the past two years as the US and Canada have become self-sufficient in natural gas and additional supplies have come online. However, 30% of LNG supply, including that from Qatar, would be disrupted if the Strait of Hormuz is blocked, she said.
"Qatar has become the go-to supplier in times of emergency," Palti-Guzman said.
An energy policy expected to be released in June may provide a government fund for Japanese utilities to jointly purchase equity stakes in upstream LNG projects, Palti-Guzman said. Japanese utilities could pool to negotiate with producers in countries like Canada and Mozambique to acquire shares of projects and secure supply. Such acquisitions will be encouraged by the energy policy review as part of government efforts to develop a stable supply of LNG, which fuels much of the country, especially in the absence of nuclear electricity.
Large quantities of new LNG supply are expected to come online after 2015, from both established producers and new exporters like the United States, Canada, Mozambique and Israel, Palti-Guzman said.
The new energy policy is expected to reduce reliance on nuclear energy and promote renewable electricity generation through feed-in tariffs, the CSIS report said.
Iran crisis with no nuclear energy 'disastrous' for Japan: Tanaka - Electric Power | Platts News Article & Story
Iran crisis with no nuclear energy 'disastrous' for Japan: Tanaka
Washington (Platts)--23Mar2012/459 am EDT/859 GMT
If a crisis over Iran curbs the supply of liquefied natural gas while Japan's nuclear fleet is shut, it could cause an economic impact greater than that from the March 2011 earthquake, the former executive director of the International Energy Agency said Thursday.
With 20% of its gas and 80% of its oil coming through the Strait of Hormuz, Japan would face a "disastrous impact" from a crisis in the Middle East, said Nobuo Tanaka, now a global associate at Japan's Institute of Energy Economics. He spoke at an event in Washington sponsored by the Center for Strategic and International Studies.
All of Japan's 54 nuclear reactors could be shut by early may for periodic maintenance and testing, Tanaka said. In Japan, those routine outages cannot end without approval from prefecture governments, which have declined to give that approval for any reactor, leaving 52 of 54 nuclear units shut.
Iran has threatened to block the Strait of Hormuz if it attacked by Israel over its nuclear program, causing oil prices to rise.
An earthquake and tsunami a year ago in Japan killed more than 16,000 people and slowed the country's economy. LNG imports increased 25%, and the additional costs of fossil fuels to make up for declining nuclear capacity may have totaled more than $35 billion, CSIS said in a report Monday.
"This is a very important test of crisis management for our government," Tanaka said. The Japanese government is reviewing the so-called "stress tests" ordered by regulators before any Japanese reactor can restart. If approved by government ministers, the decision to restart the first three units will go to governors of prefectures, perhaps as soon as next month, Tanaka said.
The continued lack of nuclear power generation in Japan affects global LNG prices because it has spurred demand, he said.
Japan is reliant on Qatar for natural gas imports, mostly in the form of LNG, Eurasia Group analyst Leslie Palti-Guzman said at the event. The country has been able to secure additional LNG cargoes in the past two years as the US and Canada have become self-sufficient in natural gas and additional supplies have come online. However, 30% of LNG supply, including that from Qatar, would be disrupted if the Strait of Hormuz is blocked, she said.
"Qatar has become the go-to supplier in times of emergency," Palti-Guzman said.
An energy policy expected to be released in June may provide a government fund for Japanese utilities to jointly purchase equity stakes in upstream LNG projects, Palti-Guzman said. Japanese utilities could pool to negotiate with producers in countries like Canada and Mozambique to acquire shares of projects and secure supply. Such acquisitions will be encouraged by the energy policy review as part of government efforts to develop a stable supply of LNG, which fuels much of the country, especially in the absence of nuclear electricity.
Large quantities of new LNG supply are expected to come online after 2015, from both established producers and new exporters like the United States, Canada, Mozambique and Israel, Palti-Guzman said.
The new energy policy is expected to reduce reliance on nuclear energy and promote renewable electricity generation through feed-in tariffs, the CSIS report said.
Iran crisis with no nuclear energy 'disastrous' for Japan: Tanaka - Electric Power | Platts News Article & Story
