By Arnie Saiki

A little over a year since the Fukushima Daiichi meltdown in Japan, Japanese Prime Minister Yoshihiko Noda announced the shutdown of the last of the country’s 50 usable nuclear reactors. However, as the Mainichi Daily News reports, Japan will also be spending billions of dollars importing extra oil and gas to meet its energy demand, which will produce a projected 180-210 million additional tons of emissions this year.

Whatever economic benefits Japan has gained from nuclear energy have now been washed away with the Fukushima debris into the Pacific Ocean. With a looming trade deficit and its currency trading at its weakest against the dollar, economic recovery will “be hit hard against the background of increasing energy imports,” says Masaaki Kanno in a recent New York Times article. Japan, the world’s third-largest economy after China and the United States, has also encountered opposition from the Big Three U.S. automakers as well as by U.S. lawmakers confronting longstanding barriers to Japan’s auto and insurance markets.

When Obama met with Noda in April, the White House released a fact sheet on the U.S.-Japan Cooperative Initiative, which launched three new programs in the area of “clean energy” that employs both public/private development and deployment of clean energy technologies. In his remarks at their joint press conference, Obama thanked Prime Minister Noda for updating him on his “reform efforts liberalizing trade and playing a leading role in Asia Pacific's economy,” and for Japan’s continued interest in joining the Trans-Pacific Partnership (TPP). In addition Obama added, “that their shared vision also calls for the strengthening of energy cooperation, and discussed expanding liquid natural gas (LNG) exports from the United States to Japan.”

The United States currently has a glut of natural gas, which has caused natural gas prices to fall. Now that Japan is in the market to fill its energy needs, commodity energy traders and natural gas investors are scrambling for opportunities in the Far East. The TPP represents a new way for these energy interests to meet the Far Eastern demand.

Heavyweights on the Sidelines

The 12th round of negotiations for the TPP has just concluded in Dallas, Texas. Often referred to as the NAFTA of the Pacific, the TPP is what Obama describes as a “landmark, 21st Century Trade Agreement” that improves on and rectifies past problems in U.S. trade and investment treaties. Nine countries are currently negotiating the TPP: the United States, Australia, New Zealand, Chile, Peru, Brunei, Vietnam, Malaysia, and Singapore. Despite large protests at home against accession into the TPP negotiations, Japan, Canada, and Mexico are also expected to join. Although the negotiations are being held in secret, leaked documents confirm that contrary to democratic practice, the documents connected to the negotiations will remain secret for four years after being signed or dismissed.

The United States is leading the negotiations and has a great deal of influence over the outcome of the agreement, which covers a vast range of subject matter, including tariffs on goods, trade in services, labor and environment, telecommunications, intellectual property, and possibly, in so far as Dallas is concerned, energy-- natural gas and oil.

Oil and gas exploration and production are among the most established industries in Texas, and the Barnett Shale natural gas reserves—just below the Dallas/Ft. Worth area -- covers more than 5,000 square miles across north central Texas. The Barnett Shale may be the largest onshore natural gas field in the United States, containing more that 40 trillion cubic feet of natural gas. According to the Texas Economic Development Division, the cumulative economic benefits of Barnett Shale from 2001-2011 include $80.7 billion in commodity output for the state.

The natural gas industry promotes the economic and environmental benefits of natural gas exploration, despite the controversial methods of extracting the gas. Fracking is a process that utilizes a massive volume of water, sand, and chemicals injected underground at high pressure to break up rock formations and allow oil or gas to flow up the well.  Even though the natural gas industry promotes itself as a green, “clean-energy” alternative to oil – a viable substitute to nuclear energy – personal testimonies have revealed how dirty fracking really is, while environmental impact studies remain controversial and inconclusive.

Severe environmental degradation and adverse health risks are two of the reasons most often cited for challenging fracking, and both France and Bulgaria have banned the practice as clean energy advocates push for more environmentally friendly renewable energy systems.

Japan and Natural Gas

Six months after Fukushima, former Japanese Prime Minister Naoto Kan was looking to force power utilities to buy power generated by renewable energy sources at fixed prices, promoting wind, solar and geo-thermal. Now, Noda is emphasizing liquid natural gas imports from the United States. According to the Asahi Shimbun, Noda told Obama, “Japanese companies are very interested in importing shale gas from the United States.” Environmental groups, however, would rather see Japan invest in renewable energy systems. These renewable systems, the Japanese environment ministry argues, will help the country cut its carbon emissions by 25 percent of 1990 levels by 2030. “If Japan has the motivation, it can do this,” says Sei Kato, the deputy director of the environment ministry’s low carbon society promotion. “We have the technological know-how.”

Further, Japan has other energy options for purchasing natural gas from China or Russia, countries not included in the TPP. The China-Russia partnership has its own tremendous reserve of oil and natural gas that it sells on the open market from Pacific ports near Vladivostok and soon from North Korea’s Rajin-Sŏnbong port. Both locations are a stone’s throw from Japan compared to the vast distance required to ship liquid natural gas from the Gulf States through the Panama Canal.

Currently, the Natural Gas Act stipulates that the Department of Energy (DOE) must approve the export of natural gas to countries with which the United States has free trade agreements. If there is no FTA in place, the DOE has to conduct a careful public analysis to determine whether exports are in line with U.S. public interest before granting a license. Furthermore, the DOE is considering applications to export approximately 20 percent of the total domestic gas supply. This volume of exports would affect domestic gas and energy prices, warns the Sierra Club in a letter to U.S. Trade Representative Ron Kirk.

Large-scale international energy investments are looming on the horizon, but it remains unclear how the TPP will treat LNG exports. With so much on the line, the TPP negotiators must release the texts disclosing these agreements – before the next round of TPP negotiations in July in San Diego.

 

Originally published by Foreign Policy In Focus

Japan, Nuclear Energy, and the TPP | Global Viewpoint