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Japan: Japan Energy Profile 2012






Japan Energy Profile 2012

Japan has few domestic energy resources and is only 16 percent energy self-sufficient. Japan is the third largest oil consumer in the world behind the United States and China and the third-largest net importer of crude oil. It is the world's largest importer of both liquefied natural gas (LNG) and coal.


In light of the country's lack of sufficient domestic hydrocarbon resources, Japanese energy companies have actively pursued participation in upstream oil and natural gas projects overseas and provide engineering, construction, financial, and project management services for energy projects around the world. Japan is one of the major exporters of energy-sector capital equipment and has a strong energy research and development program that is supported by the government, which pursues energy efficiency measures domestically in order to increase the country's energy security and reduce carbon dioxide emissions.

On Friday, March 11, a 9.0 magnitude earthquake struck off the coast of Sendai, Japan, triggering a large tsunami. The earthquake and ensuing damage resulted in a shutdown of 6,800 MW of electric generating capacity at four nuclear power stations that have a total capacity of 12,000 MW (some plants previously offline for maintenance). Other energy infrastructure such as electrical grid, refineries, and gas and oil-fired power plants were also affected by the earthquake. Japan likely will require additional natural gas and oil to provide electricity, however power demand may be dampened at least in the short term as a result of the destruction of homes and businesses. According to some industry estimates, fuel oil and natural gas consumption could increase by up to 238,000 bbl/d and 1.2 Bcf/d, respectively, depending on the combination of fuel substitution.

Map of Japan


Total primary energy consumption in Japan is over 22 quadrillion British thermal units. Oil is the most consumed energy resource in Japan, although its share of total energy consumption has declined from about 80 percent in the 1970s to 46 percent in 2009. Coal continues to account for a significant share of total energy consumption, although natural gas and nuclear power are increasingly important sources. Japan is the third largest consumer of nuclear power in the world, after the United States and France. Hydroelectric power and renewable energy account for a relatively small percentage of total energy consumption in the country.


25/11/2010 Oil and Gas Report Q4 2010

The latest Oil & Gas Japan Report forecasts that the nation will account for 13.59% of Asia Pacific regional oil demand by 2014, while not contributing significantly to regional supply. Regional oil use of 21.42mn barrels per day (b/d) in 2001 is set to reach a forecast 27.15mn b/d in 2010, then to rise to around 30.21mn b/d by 2014. Regional oil production was around 8.35mn b/d in 2001 and is forecast to average an estimated 8.82mn b/d in 2010. It is set to increase only slightly to 8.89mn b/d by 2014. Oil imports are growing rapidly, because demand growth is outstripping the pace of supply expansion. In 2001 the region was importing an average of 13.07mn b/d. This total will rise to a projected 18.32mn b/d in 2010 and is forecast to reach 21.32mn b/d by 2014. The principal importers will be China, Japan, India and South Korea. By 2014 the only net exporter will be Malaysia.

In terms of natural gas, in 2010 the region will consume an estimated 496bn cubic metres (bcm) and demand of 625bcm is targeted for 2014. Production of a forecast 415bcm in 2010 should reach 522bcm in 2014, which implies net imports rising from around 81bcm to 104bcm. This is thanks to many Asian gas producers being major exporters. Japan’s share of gas consumption in 2010 is an estimated 17.88%, while it provides no meaningful share of production. By 2014, it is expected to be consuming 15.28% of the region’s gas.

We continue to predict a 2010 OPEC basket oil price level of US$83.00/bbl. This equates to Brent at just under US$85.00, WTI at almost US$87.60, Urals averaging US$83.60 and Dubai at US$83.55. The 2011 OPEC assumption is US$85.00/bbl, rising to an average of around US$90.00 in 2012 and beyond.

For the whole of 2010, we are currently assuming an average global jet fuel price of US$95.50/bbl, compared with around US$70.66 in 2009. The 2010 average global gasoil price, calculated by BMI, is US$92.67/bbl, against US$68.96 in 2009. The 2010 average naphtha price is estimated at US$83.09 – compared with US$59.30/bbl in 2009. For global unleaded gasoline, BMI is now forecasting an average US$95.66/bbl in 2010, up from around US$70.17/bbl in 2009.

Japanese real GDP is assumed by BMI to increase by 1.9% in 2010, and we foresee average annual growth of 1.3% in 2010-2014. There is little domestic upstream activity, with local state and private firms concentrating on international exploration efforts. The outlook for domestic oil and gas production therefore remains poor. Oil consumption is forecast to fall between 2010 and 2014, implying demand of 4.10mn b/d by the end of the forecast period. The country should be consuming 96bcm of gas by 2014, all of which will be imported in the form of liquefied natural gas (LNG).

Between 2010 and 2019, we are forecasting a reduction in Japanese oil consumption of 7.43%, with demand slipping steadily to the end of the period and the country using 4.05mn b/d by 2019. Gas consumption is expected to rise from an estimated 88.7bcm in 2010 to 100.4bcm by 2019. All of Japan’s gas will continue to be imported in the form of LNG.

Mining is of little importance. Virtually all the known deposits are small, low quality and difficult to mine. There are, however, many mines that operate on a small scale. Together, they produce a broad range of metallic and nonmetallic minerals, but total production is small compared to the overall needs of the nation's minerals. Coal, generally of low quality, is the most abundant mineral resource and is produced in large enough quantities. For its energy needs, Japan is heavily dependent on imports, especially oil ..