With no prospects that nuclear energy will provide Japan, the world's third largest economy, with enough power, all eyes are on oil and gas. Wedge, a Japanese news magazine, notes that the country's power plants will have to be moved away from dangerous areas. All nuclear plants may be shut down by the spring of next year, they note.
What will be the damage to Japan's economy?
Also, Friday and Gendai, Kodansha's "big hand media magazine" (oote media, 大手メディア）are suddenly concerned what will happen if more nuclear reactors are shut down, but they still show more naked female flesh... Yet in the past few weeks, lots of facts about what is going on at Fukushima Daichi... Reducing energy consumption is at least on the main-stream media agenda.
Sunday Mainichi is showing the devastation in Tohoku to remind people that this is going to be a very unusual summer.
Meanwhile, of course, there are immediate global repercussions (but NHK does not mention that increased use of oil and gas in Japan will influence the market):
NHK has learned that the International Energy Agency is finalizing talks to release emergency oil reserves of its oil-consuming member nations to help stabilize crude oil prices. The autonomous organization of 28 major oil consuming countries, including Japan and the United States, is said to be close to securing agreement for the coordinated operation.Thursday, June 23, 2011
The release operation, the first of its kind since 2005, is being planned ahead of an expected rise in gasoline use in the northern hemisphere during the summer holiday season. Rising crude oil prices since January, due mainly to the political upheaval in northern Africa and the Middle East, have put a brake on global economic growth. Observers say that the move is aimed to appease the United States, as gasoline prices there are hovering at high levels.
The IEA, founded in response to the oil crises of the 1970s, obliges its member nations to set aside emergency reserves of crude oil and gasoline equivalent to the amount they import in 90 days.
NHK World: IEA asks for release of emergency oil reserves
If Japan starts to import a lot of oil & gas, do expect prices to rise. What we can do here of course is to reduce our energy consumption, and set a model. 2011 is going to be that kind of year. Everywhere. Already on March 11, Reuters noted that Japan quake may up gas demand:
LONDON | Fri Mar 11, 2011 12:20pm ESTSnap Analysis: Japan quake may push up gas demand
LONDON (Reuters) - Emergency shutdowns of Japanese nuclear plants in the wake of an earthquake on Friday are likely to increase demand for liquefied natural gas by the world's biggest LNG consumer, driving up gas prices around the world.
The closure of four of Japan's nuclear plants, which between them can generate up to 11 gigawatts of electricity when fully operational, may also push up its demand for fuel oil and coal.
By Friday afternoon in London, hours after the quake hit, there was little certainty over how much fuel Japan will need or even be able to import, with parts of its coastal energy infrastructure battered by the quake and ensuing tsunami.
"The temporary shutdown of four nuclear plants will result in increased demand for fuel oil and spot LNG to make up for the shortfall in electric power generation," analysts at Bernstein Research said.
"While LNG demand will increase in the near term, one uncertainty is the damage to LNG-receiving terminals on the east coast."
British wholesale gas prices quickly surged on news of the nuclear shutdowns early on Friday as the biggest earthquake in Japan since records began revived memories of previous Japanese LNG buying sprees spurred by nuclear plant problems in the world's third largest atomic energy user.
"Such a reduction in nuclear generation is likely to increase the demand for spot LNG cargoes by Japan... provided there has been no damage to LNG regasification terminals, or gas-fired generation facilities in Japan," Barcap said in a research note on Friday.
"The potential for increased LNG demand out of Japan leads us to see upside risks to UK gas prices, as spare cargos would likely head to Japan first," the investment bank said.
The shutdown of 17 of Japan's 54 reactors in August 2002, for safety inspections, led to an 11-percent increase in Japan's LNG demand in the year that followed, according to Bernstein, while the three-year closure of the country's biggest atomic plant, the 8-GW Kashiwazaki-Kariwa power station, from 2007 drove up LNG spot market prices sharply around the world.
"The last time the nukes were off, the spot cargo LNG prices rocketed," a UK power and gas trader said as UK gas prices for the coming summer raced to a record high of 60.75 pence on expectations of less super-cooled gas being delivered to north west Europe.
Coal sellers who typically fuel about a quarter of Japan's power supply should also see more sales -- increasing the country's emissions of climate warming carbon.
Independent LNG analyst Andy Flower said it would take up to 11 million tons of LNG to replace 11 GW of nuclear power generation over a year period, equal to nearly 15 percent of the maximum output of the world's biggest LNG supplier Qatar.
Fuel oil suppliers could boost sales into a market that has sidelined oil-fired power plants to a marginal peak supply role when the country's increasing number of cheaper gas plants and nuclear reactors cannot meet demand.
The extra demand for imports in a country that already imports about 85 percent of its energy could also boost shippers across Asia and beyond.
"With the disaster in Japan it is hard to see freight getting softer as the beleaguered country may well need gasoil from its neighbors to provide power while the nuclear plants are down," shipping brokers E.A. Gibson said in a note Friday.
In contrast to gas, which surged in the world's benchmark gas market in Britain, oil prices fell sharply. Japan imports nearly half of all its energy as crude, mostly from the Middle East -- shook
"Short term the disruption in activity will be clearly negative for Japanese oil demand, but you may find that post the initial impact of the tsunami, there will be a need to deliver oil products to demand if you suffer loss in refinery output," Harry Tchilinguirian, BNP Paribas' head of commodity markets strategy, said.
With 4 million homes without electricity as darkness fell, the extent of the damage to the four nuclear power stations was unclear, as was the state of the Shinminato LNG import terminal near Sendai City, which saw some of the worst damage and largest fires break out along the waterfront.