A very good introduction to shale gas comes from Asahi Shimbun, Japan's second largest newspaper, in a series that covers the US, Europe, China and Japan in well balanced detail that we can only dream about from the UK press. Given that the UK insists that gas prices will inevitably rise from Japanese demand, this provides a good reality check. Who are you going to trust? Those who say UK energy prices will inevitably rise based on Japan LNG  demand, or the Japanese themselves.

The usage of renewable energies also needs to increase, yet renewables will not be able to meet Japan’s huge energy demand any time soon. As a result, the country will remain heavily dependent on gas for the foreseeable future.

This makes the shale gas boom especially good news for Japan.

Another way of looking at it is that if the shale gas boom is good for Japan, it is catastrophic for the constantly rising gas price scenario spun by DECC, Centrica, CBI, the BBC and even the FT. Yet here we have a newspaper with a circulation (7 million) that the UK press could only dream about, especially since the Shimbun is a serious quality newspaper. The other contrast is how the Japanese government, especially post Fukushima when it has to promote national recovery on one hand and finds itself the majority shareholder in companies like Tokyo Electric Power on the other, is happy to talk up the national interest instead of being a disinterested observer as in Europe.

Let’s now assume that Japan can acquire all its gas at this price by 2020. As gas rates are partly determined by the cost of raw materials, the average Japanese household would shave around 5,000 yen off its annual gas bill. With costs having risen to such high levels, this would certainly provide a boost to family finances. It could also help rein in rising electricity bills to some extent.

Shigeru Muraki, executive vice president at Tokyo Gas Co., believes this could be possible.

“In Asia the cost of natural gas is linked to crude oil prices, but we need to cap price fluctuations as much as possible," he says. "If the public and private sectors in gas-consuming countries can work together, it should be possible to lower gas prices.

We can only hope that the national interest of the UK, and those of the Euro zone will start seeing the narrow interests of subsidy junkies are not to be confused for much longer with either the national interest, or those of the planet. Japan is learning that lesson, but we still have some way to go:

Since the accident at the Fukushima No. 1 nuclear plant, Japan has been hemorrhaging money for imports as energy costs soar. Energy saving is, of course, important, but Japan will still need to secure resources from elsewhere. To do so, it will need to keep a close watch on global changes, try to see a few steps ahead and act accordingly. Otherwise, there may indeed be a high price to pay.

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  • Andy

    This comment really doesn't belong here, but it is too good not to share. This week on the EIA website, it is US-Canada energy trade week and in the This Week in Petroleum report the EIA has this to say about US-Canada trade in black gold:<br /><br />Licenses for export of crude oil to Canada are regularly requested, and BIS is obligated by statute to approve such requests so long as they meet the requirement that the crude oil be processed in Canada, rather than stored and then re-exported.<br /><br />As noted, exports of crude oil from the United States have been increasing and, at 58,000 bbl/d year-to-date through August, are on pace to be the highest since 1999, when the United States exported 118,000 bbl/d of crude oil, more than half of which came from Alaska. Most of the growth in export volumes has come from North Dakota. Year-to-date through August, North Dakota has exported 25,000 bbl/d of crude oil to Canada, up from just 2,000 bbl/d in 2007. Prior to the growth in North Dakota exports, the largest volumes came from Michigan for processing in refineries in Sarnia, Ontario. Other significant export flows from the United States to Canada have come from New York. Prior to 2007, licenses were also granted to export Alaskan North Slope crude to the Pacific Rim countries, most notably South Korea. Some limited volumes have also gone to Latin American countries such as Mexico and Costa Rica.<br /><br />Since 2011, applications received by BIS to export crude have increased along with the increase in light sweet crude production from tight oil formations in Texas and North Dakota (Eagle Ford and Bakken). As light sweet crude oil production in the United States continues to increase, applications to export crude oil are also likely to rise.<br /><br />Note that North Dakota (another name for Bakken Shale) is finding a market by export to Canada? Also note that while New York cannot now do the same, they used to in the past.<br /><br />No one uses the term but there really is a North American Energy Trade Union in petroleum, gas, and electricity. And no one outside the industry really notices unless there is a blackout on the border.

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  • Jim South London

    After Fukeshima the Japanese are coming to Britain to build their new Nuke Power Stations .<br /><br />The environmentalists never thought Shale would be a safer alternative in Earthquake prone Japan.

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