Japan's Competition for Energy – 99 Problems

As the European benchmark Brent oil futures return above $100 a barrel, Japan is also scrambling to find new energy and fuel sources, while striving to achieve their emission goals.

Known for its thriving entertainment industry and popular cuisines, Japan is also a huge net oil and gas importer. The island nation has long struggled to search for natural resources on its land and waters, the 120+ million population made it the fifth-largest oil consumer and fourth in importing natural gas.

However, it is located next to the world’s largest oil consumer – China, although both countries (and more) have long-standing water conflicts in the East China Sea, especially when oil and natural gas deposits were discovered in the region. Nonetheless, Japan has a couple of operational oil and gas fields, though they are far from enough to meet domestic demands.

Japan has to import almost 80% of the oil and gas consumed every day, while producing little more than 100,000 barrels. The earthquake-induced Fukushima nuclear disaster in 2011 also left a collective trauma in Japanese society, proposals involving nuclear energy and radioactive materials are met with fierce resistance from local communities, thus removing nuclear energy as a viable option.

Out of necessity, Japan diversified its portfolio and introduced a multitude of alternative energies, such as tidal, wind, and especially solar. In Maniwa city of the Okinawa prefecture, thinned wood became an unexpectedly green fuel, with less carbon emission than conventional fossil fuels.

Hydrogen blasted its way into the scene as the “chic” energy – being clean and efficient. Japan found rich methane hydrate deposits – also known as “fire ice” near its coasts, which can be converted into methane gas, finally as hydrogen. The main obstacle to embracing the “fire ice” would be the technical difficulties presented for safe and stable extraction, otherwise causing pollution and safety issues.

However, it was simply not enough, coal power plants are the staple in Japan’s energy sector. There were plans to develop and expand coal-fire power units in Indonesia and Bangladesh, where emission standards are less stringent, using them to meet Japan’s demand. Those plans were ultimately scrapped for financial and environmental concerns, but the problem remains.

Luckily, Japan still has one trick up its sleeve: ammonia. The notoriously pungent gas can act as a substitute fuel in coal power plants, and it is considered to be a clean and efficient option as well. For other coal power plants, carbon capture technology is used to reduce emissions.

Albeit being a great alternate fuel in itself, the production of ammonia is primarily carbon-intensive too, thus Japan is dedicated to expanding a “greener” manufacturing process in order to achieve economies of scale.

Ammonia is a middle-term option at best, renewable energy is still the long-term solution for fostering Japan’s energy independence. The nation’s two separate and incompatible power grids are the unsolved conundrum of its power infrastructure. Until a massive overhaul or a technological breakthrough come to the rescue, Japan is likely to keep competing with Europe for oil and gas. Check the latest crude oil price here.