OTC '18: Japanese official details country’s LNG role, clarifies nation’s energy mix
HOUSTON -- At an Offshore Technology Conference (OTC) topical breakfast in Houston on Wednesday, Takuma Iino Deputy Director of the Petroleum and Natural Gas Division at Japan's Ministry of Economy, Trade, and Industry, said that LNG has become even more important in the country’s energy mix. “This is due to the March 2011 earthquake in northeastern Japan, which crippled the Fukushima No. 1 nuclear power plant, and which has been shut down ever since (due to core meltdowns in some of its reactors). We have had a significant shortfall in our nuclear power ever since, and this has changed our energy mix.”
Thus, to replace the power generated by nuclear facilities, Japan has had to boost its use of natural gas, mostly via greater shipments of LNG, as well as its overall use of fossil fuels. “We have seen the share of our energy usage provided by fossil fuels go from 92% in 1970 to 82% in 2010, but then back up to 92% in 2015. We are hoping to cut that back to 76% in 2030, by instituting use of renewables.” Indeed, the category of “other energy” in Japan’s mix has gone from 8% in 1970 to 18% in 2010, only to slide back to 8% in 2015. If renewables are embraced, according to METI plans, then this share would jump to 24% in 2030.
One of the more intriguing things in Mr. Iino’s discussion of Japan’s energy mix is that within the fossil fuels category, the use of coal never wavers from 2015 to 2030, unlike many other nations worldwide. According to his presentation, coal usage was 21% of the 92% fossil fuel consumption in 1970 and then rose to 23% in 2010 and 25% in 2015. Even in 2030, the METI plan calls for a 25% share. This statistic was begging for an explanation, but none was forthcoming form Mr. Iino. Meanwhile, oil, which constituted 40% of the 82% fossil fuel category for Japan in 2010, and 45% of the 92% in 2015, is expected by METI to fall to just a 33% share within 76% in 2030.
And when it comes to natural gas, even this fuel is expected to see its share of the Japanese energy mix fall from 25% in 2015 to just 18% in 2030. This certainly seemed to be contradict the remainder of Mr. Iino’s remarks, which painted a very sunny picture of Japan’s commitment to LNG. “Natural gas demand in East Asia could potentially expand about 2.5 times between now and 2030,” said the deputy director. “So, in the fall of 2017, to further encourage expansion of the LNG market, Japan committed to a $10 billion investment and a 500-person building. And we think the investment is justified, when you consider that despite appearances to the contrary, the LNG share of the total global gas market is only 10%. And it only covers 15% of Asian gas consumption. Again, this does not sound like a government that intends to slim down its gas usage by 2030, despite the energy mix figures.
In closing his remarks, Mr. Iino noted that in addition to the previously noted commitments, Japanese companies are also involved in four U.S. LNG export operations/projects. This include Sabine Pass, Freeport, Cove Point and Cameron.
The breakfast program was opened by Ian Steff, Deputy Assistant Secretary for Manufacturing at the International Trade Administration of the U.S. Department of Commerce. Steff told the crowd that U.S. oilfield equipment exports will total about $18 billion this year. “We’re working hard to reduce the regulatory burden in the United States, and I’m happy to report that we’re following through on the President’s promise,” said Steff. He said that the Commerce Department has established an Advocacy Center, which helps to expedite oil and gas equipment exports.
