Pain Points in Japan’s Energy Security
Japan's unique worries over energy security has good historical reasons...
A geography bereft of mineral resources. That unalterable reality gives rise to one of the mantras of Japan’s foreign and energy policies – the absolute need to secure a stable supply of energy resources. Looking across the world, Japan is about the only country that’s so principally concerned – obsessed – with energy security. Japan scholar Kent Calder called this phenomenon Japan’s “energy angst.”
But if trade in energy resources had always been smooth, if Japan had access to cheap resources from abroad without fail, it wouldn’t be suffering from energy angst. Added to its geographic impoverishment, what has exacerbated Japan’s worries over energy security are several traumatic episodes of energy crises.
In short, Japan’s energy angst is as much shaped by history as it is by geography.
Today we take a look at the most consequential energy crises for Japan (let’s call them the pain points in Japan’s energy security) and their effects.
Anti-Japan Oil Export Ban
Probably the first time in the 20th century that Japan felt the acute squeeze of its precarious position in the geopolitics of energy was when the United States declared a total ban on oil exports to Japan in 1941. The lead-up to this ban was the Sino-Japan War that broke out in 1937. In the 1930s, Japan was driven by its imperial ambition to bring China and the wider Asian region under its military rule. The Sino-Japan War was the bloody road that was supposed to pave the way to that fantasy.
But the war dragged on for years. The Imperial Japanese Army looked to expand southwards to procure resources from French Indochina in southern Vietnam and Cambodia and ultimately snatch victory. But the US, which had been backing China, sternly warned Japan against this plan, and in the summer of 1941 the Roosevelt administration began a total oil embargo.
At the time, 80% of the oil that Japan imported were from the US and the rest from the Dutch East Indies. The Dutch East Indies also froze its oil exports under pressure from the US. Oil, the most important resource for the Imperial Japanese Army, was weaponized.
These export bans directly triggered Japan’s attack on Pearl Harbor. As Ikuo Nakajima makes clear in his book Japan and Oil (in Japanese), a classified memo jointly crafted by the Imperial Japanese Navy and the Ministry of the Navy contained the following directive:
2) Measures to be taken by the Imperial Navy
6. The Imperial Navy must resolve to use force without delay in the following situations:
If the United States (Great Britain) prohibits the supply of oil
7. Conclusion
Military advances against Thailand and French Indochina must be made as soon as possible…
After the Second World War, when a team of American investigators asked Zenshiro Hoshina, former head of the Ministry of the Navy’s Military Affairs Office, “What was the proximate cause of the war between Japan and the US?,” he answered “the ban on oil exports. Without oil, it was impossible to bring an end to the war with China, and it was impossible to survive as a nation.”
“In sum, cutting the oil supply made the [Pacific] war inevitable,” concludes Nakajima.
1970s Oil Shocks
Needless to say, the Pacific War ended in a total devastation of Japan. But a confluence of factors - the support for Japanese industry by the US occupation, a cheap yen that helped exports, and the Korean War that boosted demand for Japanese manufactured goods – put Japan on a course of rapid recovery.
The decades between the mid-1950s and early 1970s was a time of political stability and economic growth in Japan, Europe and the US alike. Prosperity and energy consumption compose a double helix that mutually reinforce one another. Growing wealth of nations needed the bedrock of a stable energy supply, and growing economies meant an intensifying hunger for more energy. A country with an extremely low energy self-sufficiency rate, what made Japan’s rapid economic growth in these years possible was its reliance on oil imports. It was against this backdrop that the oil shocks of the 1970s shook the world’s sense of complacency..
The event that caused the First Oil Shock in 1973 was the surprise attack on Israel by a coalition of Egyptian and Syrian forces. In response to the US announcement of military support for Israel, the Organization of Arab Petroleum Exporting Countries (OAPEC) declared an export ban on the US and other countries it deemed hostile. Later in the decade, political instability in Iran culminated in the Iranian Revolution in 1979 and the birth of the Islamic Republic. Oil production in Iran plummeted, and the resulting spike in global oil prices caused the Second Oil Shock. This chain of events is nicely summarized in Hiroshi Ota’s article.
The oil producers of the Middle East understood the power of weaponized petroleum in the global political arena well before the 1973 export ban. With the establishment of the Organization of Petroleum Exporting Countries (OPEC) in 1960, the creation of OAPEC in 1968, and success of both organizations in bargaining with the major oil companies to increase oil prices and their share of the profits emboldened the Arab oil exporters. Muammar Gaddafi of Libya purportedly proclaimed “Oil is a weapon against imperialism and Zionism” (quoted by Akifumi Ikeda in Japanese, but I couldn’t find its source).
The two oil shocks sent shockwaves throughout Japan. Petroleum accounted for 77.4% of Japan’s primary energy supply, high compared to other countries. On top of that, 99.8% of its oil consumption was imported, and 77.5% of that relied on the Middle East. The price of electricity in Japan jumped by three-and-a-half fold between 1973 and 1985 as a result of the oil shortage.
Oil’s geopolitical risk taught a painful lesson. In response, Japan made a serious effort to reduce its reliance on oil in its electricity sector. As Waseda University’s Hironori Ayabe notes, “the oil-consuming world as a whole made progress on reducing dependence on oil and diversifying its energy sources. But for Japan, which relied heavily on imports from the Middle East, this was a life or death problem.” The oil shocks forced Japan to take its first steps toward strengthening its energy security.
In practical terms, this meant promoting energy efficiency and nuclear power, and increasing the share of coal-fired power generation in the overall energy mix. In 1974, the National Diet passed a set of three laws designed to develop and diversify the electricity market. These laws (p. 60-61) imposed a new tax on electric utilities, which was then extended as grants for the improvement of public facilities near power-supply sites.
These measures made it possible for the government to promote nuclear power. And it promoted it big time. In the 1970s, the number of nuclear reactors in Japan reached twenty, and by the mid-1990s it jumped to over fifty.
The government’s proactive stance toward coal-fired generation took the form of lifting the ban on importing cheap coal from abroad 1975. By opening the gates to coal imports, coal became an important part of domestic electricity generation
Fukushima Nuclear Accident
The third shock to Japan’s energy security should be familiar to readers with an interest in Japanese affairs. It’s the accident at the Fukushima nuclear power station as a result of the Great East Japan Earthquake on March 11, 2011.
The magnitude 9.0 earthquake was the most powerful ever recorded in Japan and the fourth most powerful in the world since modern record-keeping started in 1900. The tsunami that it triggered sent waves as high as 10m to the Miyagi and Fukushima prefectures, and almost as high as 40m to the Iwate prefecture further south. The direct damage of the tsunami was devastating. All told, almost 20,000 people died, over 2,500 people are still missing (p. 4).
One of those direct damages was its blow to the Fukushima nuclear reactors. The tsunami flooded the Daiichi Nuclear Power Station off of the Pacific coast, damaging the power supplies, destroying its cooling capabilities. The ensuing hydrogen explosions at three of the four reactors made the accident the worst nuclear disaster next to the Chernobyl meltdown in 1986.
Beyond the humanitarian crisis, the earthquake and nuclear disaster cast a long shadow on Japan’s energy policy. In a decision that was politically unavoidable, the government shut down all nuclear power plants after the accident. To compensate for the gap in electricity generation, other energy sources had to be significantly increased. That included renewables. In 2012, renewable energy (solar, wind, geothermal, biomass) accounted for a meager 1.6% of Japan’s overall energy mix. In an attempt to remedy this, Prime Minister Kan’s administration introduced a feed-in-tariff system in 2012, which guaranteed the purchase of renewable energy power at a specific price that’s revised every year based on prevailing socioeconomic conditions. It was designed to spur investments in renewable energy.
But what really filled the energy supply gap in the wake of the nuclear accident weren’t renewables, but fossil fuels. Fossil fuels increased from 62% of the electricity mix in 2010 to 88% in 2013, with the biggest increase coming from coal- and gas-fired power generation.
Regardless, the government (especially the LDP) has never given up on nuclear. It’s been making efforts to gradually increase the share of nuclear power since 2015 with the permission of the newly established Nuclear Regulation Commission to restart operations and the consent of local communities. According to the Basic Energy Plan that METI released in October 2021, the share of nuclear for the year 2030 is set to be between 20-22%. As a step toward this goal, the Nuclear Regulation Commission approved the government’s proposal to allow certain nuclear reactors to extend their operating life beyond the current limit of 60 years.
The War in Ukraine
The latest threat to Japan’s energy security will come as no surprise. It’s the war in Ukraine that’s dragging on as I write. As Russia began its irrational, inhuman, idiotic invasion of its western neighbor, leading democracies around the world quickly united around imposing economic and financial sanctions against the aggressor. In that series of sanctions, the double-edged sword that hurt both Russia and net energy importers were the restrictions on Russian energy. Russia’s status as a behemoth in the global natural gas and oil markets meant that these restrictions choked off supply, leading to a spike in energy prices across the world.
Japan relied on Russia for 4% of its oil, 9% of natural gas, and 11% of coal imports. Takeo Kikkawa of the International University of Japan points out that these percentages suggest a medium-level dependence on Russia: higher than the US and Canada and lower than many European countries. But more important than Japan’s direct reliance on Russia is its extremely low overall self-sufficiency rate of primary energy supply (think fuels that generate electricity and move machines and vehicles): a meager 12.1% in 2019, compared to a whopping 816.7% in Norway (!), 104.2% in the US, and 17.7% in Korea.
That means that even though Japan’s reliance on Russia isn’t particularly high compared to other industrialized countries, its dependence on energy imports in general is. And this matters, because energy prices across the board have gone up, forcing Japanese residents to pay more for their utility bills.
Japan’s response to this predicament traces the following logic. The war in Ukraine triggered an energy crisis in Japan because of Japan’s low energy self-sufficiency. The real solutions, then, should be to encourage energy production at home. Ideally that would mean wind, solar, hydro, geothermal power. But truly growing these renewable power sources would require deep-seated reforms of the power grid, and this will take too long. So as a short- to mid-term solution, it’s prudent to expand the share of energy sources that can utilize existing generation facilities. An obvious choice is to reactivate nuclear reactors that have been paused since the Fukushima disaster. On top of that, coal-fired power plants can substitute for Russian natural gas.
But increasing coal, the logic continues, is a clear contradiction with the Japanese government’s target of achieving net zero CO2 emissions by 2050. So to limit emissions from coal plants, politicians and large energy companies are hard at work to develop high-efficiency coal infrastructure, ammonia co-firing technology, hydrogen power plants, and carbon capture, utilization and storage technologies.
Yet questions surrounding the climate mitigation potential of these measures aren’t going away. Advocacy groups and energy think tanks, both inside and outside Japan, have raised deeply researched objections.
Plus, producing and supplying ammonia and hydrogen require international supply chains, and the government is actively working to establish them. Far from enhancing energy self-sufficiency, these alternative energy sources still subject Japan to the vicissitudes of diplomacy and geopolitics.
Leaning on existing fossil fuel infrastructure, nuclear reactor fleet, and developing new technologies might be legitimate means of averting high utility costs and geopolitical risks at the moment. But “decarbonizing” fossil fuels – especially coal – is a misnomer whose environmental impact lasts far longer than short- to medium-term. It’s still a heavy CO2 emitter that locks in emissions over decades of operation, which not only goes against international efforts to phase out coal, but worse yet, exacerbates the effects of the climate crisis that Japan’s already grappling with.
That Japan is a resource-poor country is a geographic reality. But the root of the nation’s “energy angst” is not as simple as the randomness of resource distribution. Through its recent history, its vulnerability as an overwhelming importer of energy has been exposed time and again, with each energy crisis solidifying Japan’s obsession over its energy security today.
Ever since the oil shocks of the 1970s, Japan’s energy security policy has prioritized greater diversification of its energy sources. That itself was a prudent goal. But since the Fukushima disaster, this policy of diversification has relied too much on fossil fuels and the politically and administratively difficult nuclear power. Truly strengthening a country’s energy security means to enhance energy self-sufficiency. To that end, isn’t the real answer to drastically increase the capacity of clean, renewable energy?