Japan begins weaning from oil

Energy laws "obstructive": Fumiaki Watari, chairman of the country’s biggest integrated oil company, Nippon Oil Corporation, warned that unless the Alternative Energy Law and the New Energy Law were replaced they would "obstruct and crush all of the energy technology developments we could see in the foreseeable future".

Premise "wrong": He said the two laws, adopted after the 1970s oil shocks, were based on the premise that Japan should avoid and restrict, wherever possible, the use of fossil fuels. That encouraged petroleum refiners to develop innovative ways to use heavy and waste oils. Watari cites innovative projects undertaken by his company to use waste oils.

Total oil use efficiency not encouraged: One process, integrated gasification combined cycle, produces electricity by gasifying and burning industrial asphalt. "The Government’s plan shows that in 2030, Japan will still be more than 40 per cent oil dependent and, if that is the case, these current laws are obstacles to our efforts to develop new technologies to make the most efficient use of all oil," he said.

Imports still at 4.3m bpd: Japan, which has almost no indigenous fossil fuel resources, is a world leader in energy-efficient petroleum use and since 1973 has reduced the proportion of oil in its primary energy supply mix from almost 80 per cent to 48 per cent. Japan now imports about 4.3 million barrels daily.

New strategy: A new long-tem energy supply strategy adopted in March aims to reduce oil’s role to 42 per cent by 2030 and coal from 21 per cent now to 17 per cent. The strategy also calls for Japanese oil companies to build the share of imported supplies they control from less than 15 per cent now to 40 per cent in the next 24 years.

Push to buy into offshore fields: This is a demanding objective, requiring the companies to buy heavily into oil developments, particularly in Iran, Libya and the Caspian Basin. Iran’s planned 260,000 barrels per day southern Azadegan project, in which Japan’s Inpex Corp is earning a 75 per cent interest, is the most important project in this program.

The Australian, 6/9/2006, p.34

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