Barring a last-minute surprise, something extraordinary will happen tomorrow in Japan. The country, which not long ago generated 30 per cent of its electricity at nuclear power plants, will be nuclear-free for the first time in four decades.
The last of Japan’s 54 nuclear reactors still online is scheduled to be shut down for stress tests and safety improvements. This seemingly routine maintenance will have an impact around the world – not least of all in the United States.
Since the meltdowns at the Fukushima Daiichi power complex last March, many Japanese have lost confidence in the nuclear power industry. The national government wants to reassure citizens that at least some of the reactors elsewhere in Japan that were shut down for safety inspections after the crisis can be brought back into safe operation. But Tokyo is wary of making any moves without local government and popular support, which are not forthcoming. Nearly 80 per cent of Japanese want nuclear reactors go away for good, according to a survey by the Japan Association for Public Opinion Research.
A permanently nuclear-free Japan is a real possibility. As the Fukushima Daiichi disaster showed, the country’s vulnerability to earthquakes and tsunamis poses a serious danger. Just last month, the nation’s nuclear watchdog, the Nuclear and Industrial Safety Agency, revealed that a nuclear power plant in northwestern Japan may be situated on an active fault. Like the United States, Japan also has yet to find a permanent storage site for nuclear waste, creating questions of long-term sustainability.
As the summer months approach, however, Japanese officials are considering what a nuclear hiatus will mean once the weather heats up. Last summer, large corporate users were required to cut consumption by 15 per cent, but business lobbies have warned that a repeat of those restrictions could drive some companies abroad.
To avoid serious shortages, Japan will need to turn to other sources of fuel. One of those is natural gas. In February, Japan imported 7.67 million tons of liquefied natural gas (LNG), a 22.5 per cent increase from a year earlier, according to the finance minister. More than half of that came from Nigeria.
This is where the U.S. comes in. Or where it might come in, if we can put together a reasonable energy policy.
With the boom in natural gas drilling in the Marcellus Shale region and elsewhere, the U.S., long an LNG importer itself, has built up a surplus of natural gas. U.S. production of natural gas has increased 26 per cent since 2006, according to Mark Perry, a professor of economics at the University of Michigan, Flint campus, and a scholar at the American Enterprise Institute.
Japan is well aware of this surplus. Sumitomo Corp., Japan’s third- largest trading house, and Tokyo Gas recently agreed to buy 2.3 million metric tons of LNG annually for 20 years from the American company Dominion Resources Inc.
The problem is that we do not yet have a practical means of getting large quantities of gas to Japan, or anywhere else outside North America.
For natural gas to be transported by truck or ship, rather than pipeline, it must go through a process of liquefaction, in which it is condensed to LNG. This process reduces the volume of the gas by a factor of 600, allowing it to be more economically transported. Then, before it can be put into pipelines or used, it must undergo a process of regasification. This means that natural gas being imported or exported must pass through special facilities.
Currently, the U.S. has exactly one export facility – in Kenai, Alaska. Dominion Resources plans to ship the 2.3 million metric tons of LNG it has contracted to sell annually through a new export terminal, to be added to the existing Cove Point import facility in Maryland. That project, however, still requires final regulatory approval and even then will not be completed before 2017. Cheniere Energy, meanwhile, has gained final regulatory approval for an export terminal in Cameron Parish, La., which could be operational as soon as 2015. Regulators are reviewing at least seven other proposed export sites.
Neither Maryland nor Louisiana is a particularly good place from which to send natural gas to Japan. But there are very few pipelines available to move gas from production areas in the East and Southeast to potentially better-situated export terminals along the West Coast. The pipeline issue means that even though there is one proposed export site in Coos Bay, Ore., the East and Gulf Coast terminals may provide the best short-term options.
If we can find a way to get our gas off the continent, the U.S is poised to play a key role in a worldwide energy shift.
Japan is not the only country to question the future of nuclear power in the wake of last year’s accident. In the immediate aftermath, German Chancellor Angela Merkel announced a plan to phase out her country’s nuclear power plants. Germany’s eight oldest reactors have already been taken offline. The remaining nine are scheduled to be shut down over the next 11 years. Werner Faymann, the chancellor of Austria, which voted against pursuing atomic energy in 1974, has said he hopes the German move will spread, initiating a Europe-wide exit.
Besides boosting our own economy and trade balance, increased U.S. natural gas exports would cut revenues to other, less-than- friendly energy exporting nations, including Iran, as countries around the world diversify their fuel sources.
For this export dream to become a reality, however, the American natural gas industry is going to need regulatory support. A recent meeting between Japanese Prime Minister Yoshihiko Noda and President Barack Obama provided one sign that the president may finally be listening.
None of this will have any impact on Sunday morning, when Japanese citizens wake up, many of them for the first time in their lives, to a country without nuclear power. In the immediate future, the Japanese will likely continue to face sacrifices and shortages. But they can prove to the world that, even when the last nuclear power plant shuts down, the turbines that power modern life can keep turning.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.