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
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
-- 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
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 soon."
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
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