By MARI IWATA
Japan's demand for imported natural gas, which ballooned
after the 2011 Fukushima Daiichi nuclear disaster, is falling
-- and may deflate a lot further if the government succeeds in
getting dozens of idled nuclear reactors restarted.
Imports of liquefied natural gas in the first half of 2013
were down 2.7% to 43.4 million tons, the first half-yearly
decline since the nuclear accident more than two years ago, the
ministry of finance reported Wednesday. Last year, imports were
up 11%, to 87.3 million tons, after a 12% rise in 2011.
The reversal of the trend is bad news for companies developing
or planning LNG export facilities in locations as varied as
Australia, Russia, East Africa or North America. Japan is the
world's top LNG importer.
But bad news for gas producers could be good news for coal
miners in those same regions. With all but two of 50 licensed
reactors idle, what's currently capping Japan's use of imported
LNG -- which has been generating 40% of its electricity -- is
in part heavier use of coal.
Utilities have repaired some earthquake-damaged coal-fired
power plants and built new ones that can produce electricity
more cheaply than gas-fired plants. In April, Tokyo Electric
Power Co., operator of the Fukushima reactors, started making
electricity at two new coal-fired 1.6-gigawatt power stations.
Tohoku Electric Power Co. has restarted two coal units with a
combined two gigawatts of capacity since late last year.
The chief executive of one of Australia's largest miners,
Whitehaven Coal, said recently he is targeting Japan over big
buyer China for future thermal-coal sales because Japan's tight
environmental controls means demand
for high-quality, less-polluting Australian coal over cheaper
varieties from elsewhere.
"LNG demand may not fall sharply," said Tomomichi Akuta,
analyst at Mitsubishi UFJ Research & Consulting, "but it
won't rise any further even if nuclear power doesn't come back
What could turn the slippage in demand into a real tumble
would be the realization of the ruling Liberal Democratic
Party's enthusiasm for restarting reactors.
"It depends on when and how many reactors the authorities
approve," said Hidetoshi Shioda, analyst of SMBC Nikko
Securities. Japan's Institute of Energy Economics, a think
tank, last year forecast that restarting 26 reactors would cut
LNG demand 8.8% the following year.
Utilities have asked Japan's Nuclear Regulation Authority to
clear an initial 12 reactors for restart, on the grounds they
meet new safety regulations.
But there are hurdles, including public hostility.
Pro-nuclear Prime Minister Shinzo Abe may be flying high,
coming off a big election win Sunday for his ruling party, but
he hasn't managed to overcome the resistance to nuclear power.
A poll by Asahi newspaper a week ago showed 58% opposition to
restarting any reactors.
Dow Jones Newswires