Japanese Energy Death Spiral

Interesting article, reflecting on the amount of damage done by lack of trust in the Japanese energy sector:

Nobuo Tanaka's hair is on fire. The immediate past executive director of the International Energy Agency is on a mission attempting to alert officials in the United States, Japan, Europe, China and elsewhere that post-Fukushima Japan may be approaching an energy death spiral.

Tanaka's argument is mathematical at its core. He argues that if Japan does not find a way to 'turn on' its now shuttered nuclear energy reactors, not only will Japan's already sluggish economic condition be crushed with much larger oil and gas imports from Russia, Southeast Asia and the Middle East -- but because of the costs and risk uncertainty -- Japan's powerful manufacturing base may begin pulling out of the world's third largest economy.

...Without domestically produced nuclear energy -- for which Japan has stockpiled for decades the world's largest non-weaponized highly processed plutonium reserves -- Japan falls about 10% or half a million barrels of oil short of what it must have.

Japan has 54 nuclear energy reactors -- only two of which are running at the moment and both of which are scheduled for regular check ups and will shut down either late this month or in early May 2012. As regular maintenance has required shutting down plant after plant, none of Japan's governors has allowed the nuclear energy plants to be returned to operation.

On top of the post-Fukushima nuclear plant disaster, global tensions with Iran are threatening Japan's dependence on Iranian oil exports, which Japan's share amounts to about 300,000 barrels a day.

...Tanaka told me that one high-ranking Chinese official recently approached him asking if and when Japan would turn its nuclear reactors back on -- as Japan's massive energy needs now were disrupting supply patterns and costs and could affect China's energy investment picture if Japan's needs were to become structurally permanent.

...His warnings matter -- and yet Japan's political leaders, he believes, have not honestly talked with the Japanese public about the hard choices it faces and a possible economic unraveling that comes with the status quo national nuclear energy allergy.

Tanaka thinks that the U.S. could play a constructive role in helping Japan weather its challenges -- not just in exporting cheaper LNG but it helping bridge the 'trust gap' between Japanese citizens and their government.

The former senior Japan Ministry of Economy Trade & Industry official joked that the only place in the world where an elected legislature may be less popular with its citizens that the US Congress is Japan -- where government incompetence and false statements made during and after the earthquake, tsunami, and nuclear plant disasters have collapsed Japanese trust in their officials. And trust wasn't high before these incidents.

Tanaka realizes that there is a legitimate debate to be had about the safety and management of Japan's nuclear energy facilities and that standards need to be improved and a national conversation has to take place -- but that a total rejection of nuclear energy will send Japan over a cliff as deindustrialization is triggered by energy shocks.