IEEJ analyst expects Japan海角吃瓜网檚 energy consumption to rise in 2015 after four years of decline
Japan海角吃瓜网檚 total energy consumption, buoyed by a mild economic recovery, could begin growing again in the current financial year starting 1 April 2015, according to an analyst at the Institute of Energy Economics, Japan (IEEJ).
海角吃瓜网淗elped by weak oil prices, the resurgent industrial and transportation sectors will raise Japan海角吃瓜网檚 energy use by about 1.2% in FY2015, but it will still fall short of FY2010海角吃瓜网檚 consumption by about 7%,海角吃瓜网� said Senior Economist Akira Yanagisawa.
Following the 11 March 2011 destruction of the Fukushima Daiichi nuclear complex, Japan海角吃瓜网檚 energy use plunged as the government and industries responded to the loss of the country海角吃瓜网檚 entire nuclear power capacity 海角吃瓜网� that supplied nearly 30% of its electricity 海角吃瓜网� by sharply curtailing daily activities. The already sluggish Japanese economy fell into recession in the last financial year ending 31 March 2015.
In a recent report, Yanagisawa said Japan海角吃瓜网檚 consumption of coal, naphtha and electricity will be boosted by a recovery in the nation海角吃瓜网檚 iron, steel, automobile and petrochemicals production. He expects Japan海角吃瓜网檚 diesel and heavy fuel oils consumption to decrease as the nation continues switching over to natural gas.Japan海角吃瓜网檚 energy use shrank last year on a combination of nationwide conservation efforts, an increase in the consumption tax and cooler weather.
海角吃瓜网淓lectricity and city gas use will increase, while kerosene and heavy fuel oil will continue declining amid the fuel switch,海角吃瓜网� said Yanagisawa. He has forecast a gradual decline in the use of oil for electricity generation, with LNG taking up the slack alongside a partial resumption of the country海角吃瓜网檚 nuclear energy capacity. Electricity generated by nuclear and alternative energy sources are seen to account for more than 10% of power supply in FY2015.
Lower energy prices provide respite
The 60% collapse in oil prices since mid 2014 has given the Japanese economy a much-needed respite after years of being weighed down by the high cost of imported energy. From 2000 - mid 2014, Brent crude prices traded mostly between US$100 - 120/bbl, while LNG cargoes were sold to Japan at four to five times the levels before the tsunami-earthquake tragedy.
Burdened by the high cost of oil and gas imports, Japan海角吃瓜网檚 merchandise trade deficit surged 11.4% to a record 楼12.78 trillion in 2014. Imports climbed 5.7% to 楼85.89 trillion to outpace a 4.8% rise in exports to 楼73.11 trillion.
The IEEJ estimates that a US$10/bbl rise in the oil price reduces the country海角吃瓜网檚 GDP by 0.3% while shrinking its trade balance by 楼2 trillion and reducing private consumption, which accounts for 60% of the domestic economy.
It expects the Japanese economy to grow by 1.8% in FY2015, thanks to a combination of low energy prices and Tokyo海角吃瓜网檚 expansionist economic policies to boost private consumption, investments and exports through a weaker yen.
China could open up oil and gas storage sector to foreign participation
China could open up its tightly held oil and gas storage and pipelines sector to foreign investment as the next phase of the national plan to enhance domestic energy security.
Officials are discussing the idea海角吃瓜网檚 implementation after it was first raised last year amid growing fears over safety, health, and environmental threats posed by the rapid expansion of the country海角吃瓜网檚 storage and pipe infrastructure. Beijing also wants foreign expertise and capital to help it quickly expand the nation海角吃瓜网檚 strategic oil and gas stockpiles to take advantage of low energy prices.
Under pressure to meet the country海角吃瓜网檚 fast-rising energy demand, China海角吃瓜网檚 state-owned firms have been racing to build storage terminals along the coast and linking them through pipelines to refineries, ports, and petrochemical plants, as well as oil and gas fields across the country. Safety, environmental, and health standards were largely ignored, resulting in the construction of thousands of kilometres of pipelines that Beijing now fears could become a security threat in the future.
After extensive discussions, the National Energy Administration (NEA) announced last December that it would consider allowing foreign and private companies to participate in the construction, development and operation of China海角吃瓜网檚 LNG terminals, in addition to oil storage and pipeline facilities.
Although China has made impressive strides in building up the first phase of its strategic petroleum reserves to more than 100 million bbls since 2009, the government believes the industry can do better. In July 2014, Beijing set the stage for increased foreign participation when it signed a memorandum of understanding with the US government to co-operate on managing its strategic petroleum reserves.
US Energy Secretary Ernest Moniz signed the agreement with NEA Chief Wu Xinxiong in Beijing, paving the way for the world海角吃瓜网檚 two largest energy consumers to jointly deal with global oil supply disruptions and price volatility. Having overtaken the US as the world海角吃瓜网檚 leading oil importer, China is increasingly vulnerable to supply shocks, although this concern has dissipated in recent months on account of the oil price collapse.
Part 3 coming soon!
Written by World 海角吃瓜网海角吃瓜网� correspondent Ng Weng Hoong, and edited from a published article聽by
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