Japan’s Energy Policy after Fukushima : Nuclear or Not ?

Perspectives Internationales 26/10/2012 0

On March 11th, 2011, a 9.0 magnitude earthquake struck the coast off Japan’s Tohoku region, provoking a tsunami and a nuclear crisis at Fukushima power plant. In the aftermath of the Fukushima meltdown, Prime Minister Kan Naoto[1], in a televised statement in July 2011, called for a Japan that meets its energy needs without nuclear power plants (Japan Times 2011). This essay argues that, in the short and mid-term, it is unlikely that Japan will forgo nuclear energy as a result of several constraints on Japan’s energy policy, as explained below. Even the successor of Kan Naoto, Prime Minister Noda Yoshihiko, announced that decisions on operational reactors and those already under construction will be made on a ‘case-by-case’ basis (Vivoda 2012, 141-142).

High dependence on imported energy resources

In the wake of the two oil shocks in the 1970s, Japan decided to launch an ambitious nuclear program in order to diversify its energy sources and to reduce its dependence on oil imports. A high priority was assigned therefore to improve energy efficiency and to substitute natural gas and nuclear power for oil in the production of electricity. As a result, Japan’s oil demand was reduced significantly by the mid-1980s. Facing the virtual absence of natural resources and worried about the security of its foreign oil supplies, Japanese governments have considered nuclear power as the central pillar in this policy to reduce Japan’s dependence on the importation of oil. Before the Fukushima catastrophe, 30 percent of electricity and 13 percent of primary energy was supplied by the 54 nuclear power plants operating before March 11th (Vivoda 2012, 137-138).

Yet, before the crisis, whereas oil accounted only for 7 percent of the production of electricity, it still represented 40% of primary energy supply (Vivoda 2012, 138). The high dependence of Japan on the Middle East for its oil imports is symbolized by the fact that nearly 90 percent of Japan’s oil comes from the Middle East. Overall, Japan’s dependence rate on imports for its energy represents 96 percent compared to those of the United States and Britain, 35 percent and 27 percent respectively. To sum up, Japan is the developed country most dependent on imported energy resources, mostly from MENA (Middle East and North Africa). The current crisis has exacerbated this vulnerability (Miyagi 2012, 289).

Indeed, with the gradual closure of nuclear plants, the value of Japan’s imports of LNG (Liquefied natural gas), crude oil and petroleum products increased respectively by 37.5 percent, 21.3 percent and 39.5 percent. Japan recorded its first trade deficit since 1980 mainly due to an increase of 25.2 percent in the value of fossil fuel imports. The impact on Japanese business can be seen in the fact that corporate customers in and around Tokyo were expected to face an increase of 18 percent for electricity prices around April 2012. Given that residential and industrial electricity prices are much more expensive in Japan than in other developed countries, if nuclear plants do not restart quickly, Japan risks a serious erosion of the competitiveness of its companies and electricity shortages(Vivoda 2012, 136). This was the rationale for the decision of Prime Minister Noda in June 2012 to order the reactivation of two nuclear reactors, whereas the 48 remaining nuclear plants remain closed (New York Times 2012).

Japan has also to face the increasing competition for supplies of fossil fuels by its Asian neighbours, mainly China and India. As these two countries have grown rapidly over the past two decades, their energy needs can be expected to continue to expand in the future, leaving Japan confronted with an intense competition to secure long-term oil supply contracts with suppliers in the Middle East and other regions of the world (Vivoda 2012, 136).

Nuclear lobby

The second constraint on Japan’s future energy policy is represented by the nuclear lobby. Traditionally, energy policy has been the realm of METI (Ministry of Economy, Trade and Industry), a ministry which has close ties to the business community, as illustrated by Nippon Keidanren, the umbrella organization for major corporations and nation-wide industrial federations. In particular, METI has maintained close relationship with the 10 regional utility monopolies in Japan which generate more than 85 percent of Japan’s electricity. As a consequence of this monopolistic situation, electricity prices are much more expensive in Japan than those in the USA and Europe. The rate of nuclear energy generation ranges between 21 percent and 45 percent among the ten utilities. Each regional utility manages its own nuclear power plants with the Okinawa Electric Power Company an exception. All these monopolies favour only a marginal role for renewable energy. Their lobbyists have always opposed more ambitious renewable energy goals. Against this background, any plan to phase out or reduce the nuclear plants in Japan is bound to face considerable opposition from the utility companies. Even in the face of societal and local opposition to nuclear energy, as seen in the example of the governor of Fukushima, Sato Yuhei, who has sworn to make the prefecture a nuclear-free zone, the powerful nuclear lobby cannot be expected to abandon its cause (Vivoda 2012, 139).

Allies of the regional utilities include the industrial energy users who largely favour nuclear generation of electricity because it is the cheapest source of electricity in Japan, followed by coal and LNG. Fearing that Japanese industry may lose its competitiveness because of rising electricity prices, the chairman of Nippon Keidanren, Yonekura Hiromasa, has made several calls for the government to restart idled nuclear reactors. This business confederation released a survey in April 2012 showing that 71 percent of manufacturers feared that power shortages would result in production cutbacks, while 42 percent intended to reduce domestic capital spending. Based on valid answers from 87 member companies, 96 percent foresaw declines in earnings. Fifty-five percent aimed to reduce capital spending and 38 percent to boost spending on overseas plants and equipment (Kyodo News International 2012). These figures demonstrate that a large segment of Japanese industries strongly continues to advocate electricity produced by nuclear energy.

The nuclear lobby has traditionally cultivated very close ties with influential politicians through generous campaign contributions that far exceed the financial resources available to environmental groups. In addition, the practice of amakudari [2] is still common and can lead to collusion between METI and the business community. In recent years, METI has had to face competition from the bureaucracy of the Ministry of Environment (MOE) to shape energy policy and strategy. Even if MOE’s stance has been endorsed by the Ministry of Foreign Affairs (MOFA), which has been an advocate of the Kyoto Protocol, METI remains the dominant actor in Japanese energy policy-making (Duffield and Woodall 2011, 3748).

In addition to the collusion between METI and nuclear power companies, the agency responsible for regulating Japan’s nuclear sector, NISA (Nuclear and Industrial Safety Agency), has had very close contact with the nuclear operators, jeopardizing its own independence. NISA depends administratively on METI which has advocated strongly the case for nuclear energy in Japan, leading to a conflict of interests. In August 2011, for instance, the decision of the Japanese government to create a new regulatory body separated from METI has to be interpreted as a first step towards the creation of a firewall between an independent regulatory structure, the Japanese bureaucracy and the nuclear industry. This new structure combines the functions of NISA and the Nuclear Safety Commission, a special Cabinet advisory board (Vivoda 2012, 141). Inaugurated in September 2012, it is too soon to assess the effects of the creation of this new regulatory body, the Nuclear Regulatory Commission (NRC).

It is worth recalling that in June 2010, the Japanese cabinet adopted a new Basic Energy Plan (BEP). This new plan set a number of ambitious targets and detailed the measures required to achieve those targets. The main aims were to double Japan’s energy independence ratio and the percentage of electricity produced by renewable energy and nuclear energy as well as reducing by 30 percent CO2 emissions, all by 2030 (Duffield and Woodall 2011, 3741). More precisely, the plan aimed to increase the number of nuclear reactors by 14, giving Japan at least 67 power reactors by 2030. The electricity produced by nuclear energy was to increase from around 30 percent to more than 50 percent. The ambitious targets of this plan were criticized as unrealistic, even before the Fukushima catastrophe. It is evident that this crisis changed entirely the situation for the application of the 2010 BEP (Takubo 2011, 20).

Japanese Public opinion

The last constraint on the future energy policy of Japan is represented by public opinion. In contrast to the two constraints above which support the continuation use of nuclear energy, Japanese public opinion has been opposed to the production of electricity by nuclear plants since a series of accidents in the 1990s. The March 11th nuclear crisis, although the most serious, has not been the only reactors accident in Japan. Indeed, several nuclear accidents took place in Japan during the 1990s. For example, two workers were killed during the 1999 accident in Tokaimura. This led Japanese public confidence in the management of nuclear plants to decrease. Before the 1999 Tokaimura accident, 21 percent of Japanese people felt “very uneasy” about nuclear power. Afterwards, this figure reached 52 percent. The October 1999 Japan Public Opinion Company survey indicated that only 11 percent agreed with government plans to increase the share of nuclear power. The majority (51 percent) was in favour of the maintenance of current nuclear plans whereas 33 percent preferred a reduction in, or end to, nuclear power (Vivoda 2012, 138).

Not surprisingly, in the aftermath of the Fukushima crisis, the opposition of Japanese people to nuclear energy has been reinforced. Various surveys demonstrate the actual rejection of nuclear power by the Japanese public. For example, in an Asahi Shimbun poll in June 2011, a massive majority (74 percent) of respondents indicated their preference for a gradual phase-out of nuclear energy. Only 14 percent were opposed. Sixty-four percent of respondents hoped that in the future renewable energy, such as wind and solar power, would replace nuclear electricity. In addition, several public demonstrations have taken place in the main Japanese cities since Fukushima (Vivoda 2012, 139) leading Prime Minister Kan Naoto to call for a nuclear-free future for Japan in July 2011.

Even if Prime Minister Noda does not want to discard nuclear power and seems to prefer to keep it at 15 percent of the nation’s total energy production, he cannot ignore demands from the public which overwhelmingly backs a full phase-out by 2030. Indeed, in open forums nationwide, the two alternatives to zero-nuclear, either 15 percent or 20-25 percent suggested by the government, were rejected by the public. Facing pressure from the public, the Noda government announced in September 2012 a major reversal of Japan’s energy policy, pledging to pull the plug on nuclear power by the 2030s (Asahi Shimbun 2012).

Conclusion

This essay has argued that the future energy policy of Japan has to deal with three constraints represented by the high dependence of Japan on imported energy resources, the nuclear lobby and Japanese public opinion. While the former two push for electricity generated significantly by nuclear energy, Japanese public opinion clearly favours the phase-out of nuclear plants. Japan’s energy policy is at a crossroads. Even if the current administration pledged last September to close existing reactors by the 2030s, and not to build new ones, few details have been given on how to achieve this aim. Under pressure from the business community, as in the case of Nippon Keidanren, the Noda administration added a last-minute clause which allows leeway toward renouncing the policy entirely (Asahi Shimbun 2012). This is a clear example of the two opposite policies supported respectively by Japanese public opinion and the Japanese business community and the difficulties of the administration in satisfying them. More generally, it is these three constraints and their conflicting relations, in particular between public opinion and business confederations, which will determine the future energy policy of Japan.

Nicolas Garvizu

 

Bibliography

Asahi Shimbun. 2012. “INSIGHT: How firm is the no-nuke policy? It contains get-outs, contradictions.” September 15. Accessed October 22, 2012.

http://ajw.asahi.com/article/0311disaster/fukushima/AJ201209150070

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http://www.japanfocus.org/-Andrew-DeWit/3831

Duffield, John S. and Woodall Brian. 2011. “Japan’s New Basic Energy Plan.” Energy Policy 39:3741-3749.

Huenteler, Joern; Kanie, Norichika and Schmidt, Tobias S. 2012. “Japan’s Post-Fukushima Challenge – Implications From the German Experience On Renewable Energy Policy”. Energy Policy 45:6-11.

Japan Times. 2011.“ Japan must ditch nuclear power: Kan.” July 14. Accessed October 22, 2012.

http://www.japantimes.co.jp/text/nn20110714a1.html

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http://www.reportlinker-news.com/n037777543-article/Keidanren-chief-renews-call-for-restart-of-nuclear-plants.html

Miyagi, Yukiko. 2012.“Japan’s Middle East Policy: ‘Still Mercantile Realism’.” International Relations of the Asia-Pacific 12(2):287-315.

New York Times. 2012.“ Japan Public Still Divided as 2 Reactors to Be Opened.” June 16. Accessed October 22, 2012.

http://www.nytimes.com/2012/06/17/world/asia/japans-prime-minister-orders-restart-of-2-nuclear-reactors.html?_r=1

Takubo, Masa. 2011. “Nuclear or not? The Complex and Uncertain Politics of Japan’s Post-Fukushima Energy Policy.” Bulletin of the Atomic Scientists 67(5):19-26.

Vivoda Vlado. 2012. “Japan’s Energy Security Predicament Post-Fukushima.” Energy Policy 46:135-143.

Nicolas Garvizu is a current PhD student at the School of East Asian Studies (University of Sheffield). His PhD attempts to assess Japan’s soft power by taking up the case of popular culture and, in particular,the role of Japanese companies as agents in the dissemination of soft power through their export of Japanese popular culture.


[1] Throughout this essay, Japanese names are given in the correct order, namely the family name first and the first name second.

[2] When METI bureaucrats and other government officials retire from bureaucratic positions and begin a second career in private- or quasi-governmental companies.

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