Japan’s nuclear hurdles to have knock on effect on oil imports

The country is the world’s third-largest oil importer, after the US and China, and is the single most important buyer of oil from the UAE.

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Japan’s latest obstacles to getting its nuclear power industry back on track will have a knock-on effect on its energy imports in the coming year.

The country had been making progress towards restarting its 43 nuclear reactors, all of which were shut down following the “triple disaster” in 2011, when an earthquake and tsunami led to the meltdown at the Fukushima-Daiichi plant. It was the worst nuclear accident since Chernobyl in Ukraine.

The latest setback to the government’s efforts is opposition to the experimental Monju fast-breeder reactor in Tsuruga, Fukui Prefecture, where residents have sued the Nuclear Regulation Authority to have its permit cancelled because of safety concerns, Japanese news agencies reported yesterday.

The aim of the Monju plant is to move Japan closer to being self-sufficient in nuclear fuel and accelerate the restart of its nuclear fleet. While previous legal challenges to Monju have been overcome, public faith in the nuclear industry has plummeted after Fukushima resulting in a growing protest movement.

Before Fukushima, nuclear power supplied about 27 per cent of Japan’s electricity needs and it had been on track to reach 40 per cent by 2017, according to the World Nuclear Association.

The loss of nuclear power over the last few years has cost Japan dearly in additional fossil fuel imports, which had been in structural decline before the disaster.

Japan had to spend an additional US$270 billion for fossil fuel imports in the three years after the Fukushima accident, or 58 per cent more than in the three years before the disaster, according to the Ministry of Economy, Trade and Industry (Meti).

The country is the world’s third-largest oil importer, after the US and China, and is the single most important buyer of oil from the UAE, which accounted for about 20 per cent of Japan’s oil imports of 4.3 million barrels per day last year.

So far, only two nuclear reactors – at the Sendai plant in Kagoshima Prefecture – have been restarted.

The next test for the industry will be the Takahama plant, also in Fukui, where residents have played a legal cat-and-mouse game all year to keep the two reactors from restarting.

The operator, Kensai Electric, Power plans to restart them at the end of January but is still awaiting a final court ruling on an injunction.

With nuclear offline, Japan’s imports of liquefied natural gas reached a record 86 million tonnes last year. But Meti forecast in September that would drop to 62 million tonnes a year by 2030, assuming the nuclear fleet was restarted.

Such a sharp decline in demand from the world’s largest LNG importer would be bad news for an already heavily oversupplied Asian LNG market. Any slowdown in the nuclear restart would be a reprieve.


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