Iku Tsujihiro is an MA candidate in the Security Studies Program (SSP) at the School of Foreign Service, Georgetown University. She focuses on the U.S.-Japan economic and energy security alliance, U.S. military operations in the Indo-Pacific, and nuclear deterrence in Northeast Asia. Currently, she is a research intern for Hudson Institute’s Japan Chair Policy Center. She is selected to be on the Center for Strategic and International Studies’ Nuclear Scholars Initiative (NSI) Fellowship. Divergent Options’ content does not contain information of an official nature nor does the content represent the official position of any government, any organization, or any group.

Date Originally Written: February 7, 2024.

Date Originally Published:  March 18, 2024.

Author and / or Article Point of View:  The author believes that the Japanese government should act quickly to reopen Japan’s nuclear power plants to sustain energy affordability and strengthen energy security. 

Background:  On October 7, 2023, the war between Israel and Hamas broke out. Within two weeks of the war, the price of oil per barrel increased 7%[1]. If a large-scale oil disruption were to happen due to the war, or greater turmoil in the Middle East, the global oil supply could shrink to 6 to 8 million barrels per day, inflating the price up to $157 a barrel. Japan imports 80-90% of its oil from the Middle East[2]. The conflict between Israel and Hamas exposed the fragility of the Japanese energy security and oil supply chain. Without alternative oil suppliers outside of the Middle East, Japan’s energy security is at risk. 

Significance:  The conflict in the Middle East poses a great threat to the Japanese energy security due to Japan heavily importing oil from the Middle East. Japan lacks natural resources and domestic production to establish stable energy security. Prior to 2011, Japan generated 30% of its electricity from nuclear power plants[3]. However, the Fukushima nuclear power plant accidents following the major earthquakes and tsunami reversed the nuclear powerplant investment effort of the Japanese government. After Fukushima, Japan shut down many nuclear power plants, resulting in dependency on other energy sources, such as oil. In 2022, Japan consumed around 3.5 million barrels per day, which made up about 40% of the total energy supply[4].

Option #1:  Japan currently imports 30% of its oil from Asia Pacific countries including South Korea, Australia, Singapore, and others[5]. Japan can increase imports of oil from Indonesia, Malaysia, Thailand as they are the top oil producers in the region. These countries can produce about 1.75 million barrels of oil per day[6]. This is the region Japan can turn to, if interested in diversifying the supply chain of oil. 

Risk:  One of the major risks for this option is Japan not getting the oil it needs from these countries.  Due to the doubling of Southeast Asian economies since 2020, the domestic demand for oil has been increasing 3% every year[7]. For this reason, these countries could be less inclined to export domestically produced oil to other countries. 

Gain:   In addition to the benefit of mitigating the supply chain risk, Japan has interests in promoting partnerships with Southeast Asia for various reasons including infrastructure projects and deterring China’s influence in the region. Japan can further increase its presence and influence in the region by creating stronger economic relationships through oil imports, which would benefit Japan and Southeast Asian partnerships in other areas. 

Option #2:   To replace and make up for some energy produced by the oil imported from the Middle East, the Japanese government can continue to invest in nuclear energy. More than ten years passed since the nuclear power plant incident in Fukushima. The Japanese government has slowly but steadily moved towards restoring nuclear energy. After the incident, all the nuclear power plants operations were halted. Tokyo Electric Power Company applied for 27 of the power plants to pass the safety tests. 17 of them passed the tests; however, only 10 of which are now operating[8]. The Japanese government can allow the 17 power plants that passed the test to operate. Japan also recently adopted a new policy on nuclear reactors, which prolongs the nuclear reactors’ longevity to over 60 years limit[9]. This prolonging is implemented to encourage the rebooting of the remaining power plants and to buy some time while the government develops new generation reactors. 

Risk:  The downside of this option is the anti-nuclear sentiment that remains in the Japanese public. The 2011 incident implanted fear in people’s hearts about nuclear power plants accidents causing radioactive pollution. Even though good regulations can promote safe use of nuclear energy, the Japanese public is still unwilling to reopen some power plants[10]. Moreover, it would be difficult to convince some cities or towns to host additional nuclear power plants even if the government desired to construct new ones. 

Gain:  This option can achieve Japan’s carbon neutrality goal of 2050 and reduce 46% greenhouse gas emission by 2030. Additionally, as a part of the Green Growth Strategy, Japan has decided to invest $15 billion in green projects. In terms of strategic competition, the Japanese government can invest more in nuclear energy rather than the renewable energy such as wind, solar, hydropower, since renewable energy is heavily reliant on the Chinese market[11]. As Japan attempts to decouple from and decrease its reliance on Chinese economy, nuclear energy is a strategic option. Plus, domestic production of energy will reduce Japanese dependence on the global energy. Furthermore, nuclear energy will decrease the current energy price which the average households are struggling to abide by[12].

Other Comments:  Both options may also be pursued simultaneously.  Japan could secure oil from countries closer to it and more stable than the Middle East, which will provide the time Japan needs until its existing nuclear reactors can be restarted and additional nuclear reactors built.

Recommendation:  None.

Endnotes:

[1] Gill, I., & Kose, M. A. (2023b, October 31). The Middle East conflict is threatening to cripple a fragile global economy. Brookings. https://www.brookings.edu/articles/the-middle-east-conflict-is-threatening-to-cripple-a-fragile-global-economy/

[2] International Energy Agency. (2022, August 18). Japan Oil Security Policy – analysis. IEA 50. https://www.iea.org/articles/japan-oil-security-policy  

[3] World Nuclear Association. (n.d.). Nuclear Power in Japan. Nuclear Power in Japan | Japanese Nuclear Energy. https://world-nuclear.org/information-library/country-profiles/countries-g-n/japan-nuclear-power.aspx

[4] U.S. Energy Information Administration. (n.d.). Japan. U.S. Energy Information Administration – EIA – independent statistics and analysis. https://www.eia.gov/international/analysis/country/JPN

[5] Ibid. 

[6] Carpenter, J. W. (n.d.). The biggest oil producers in Asia. Investopedia. https://www.investopedia.com/articles/markets/100515/biggest-oil-producers-asia.asp

[7] International Energy Agency. (n.d.). Key findings – southeast asia energy outlook 2022 – analysis. IEA. https://www.iea.org/reports/southeast-asia-energy-outlook-2022/key-findings 

[8] Yamaguchi, M. (2022, December 22). Japan adopts plan to maximize nuclear energy, in major shift. AP News. https://apnews.com/article/russia-ukraine-business-japan-climate-and-environment-02d0b9dfecc8cdc197d217b3029c5898 

[9] Ibid.

[10] World Nuclear Association, “Nuclear Power in Japan.”

[11] Russel, C. (2024, January 11). China dominates renewable energy and coal power forecasts. Reuters. https://www.reuters.com/business/energy/china-dominates-renewable-energy-coal-power-forecasts-russell-2024-01-11/ 

[12] Obayashi, Y. (2023, May 6). Japan approves energy firms’ household power price hike | Reuters. Reuters. https://www.reuters.com/world/asia-pacific/japan-approves-energy-firms-household-power-price-hike-2023-05-16/