Japan¿s new energy policy poses challenges to Indonesia

Jakarta (The Jakarta Post/ANN) - As Japan¿s biggest trading partner in the energy sector, Indonesia is poised to benefit from Japan¿s new energy mix policy following the March 2011 earthquake and its impact on the country¿s nuclear energy programs.

Such a situation, however, may be short-lived as Japan vows to maintain the trajectory for increased energy efficiency and lower carbon emissions with or without its nuclear power, says Economy, Trade and Industry Minister Yukio Edano.

"Coal and gas for power generation ... I think in the short run will increase. Various countries have different policies and positions on those underground resources. So, we will talk with respective authorities.

"Regarding underground resources, the shale gas in North America is most interesting to Japan....In the immediate future, the availability of shale gas is the greatest interest for us," Edano told The Jakarta Post last week.

Shale gas is a type of natural gas extracted from shale through technology called hydraulic fracturing, which allows gas producers to safely recover natural gas from deep shale formations.

At present, Indonesia is still far away from developing shale gas exploration. The ministry¿s director general for oil and gas, Evita Herawati Legowo, said that preparations were underway for the creation of a legal framework for shale gas development, with around 15 joint study proposals received so far.

One of the companies applying for the joint study was US-based ExxonMobil, which planned to cooperate with a local company, she said. For the technology, she went on, Indonesia would learn from the US, which had been very successful in developing shale gas.

The government has identified potential shale gas reserves in three basins in Sumatra (Balong shale, Telisa shale and Gumai shale), two basins in Java, two basins in Kalimantan and one basin in Papua (Klasafet formation).

Shale gas development aside, Indonesia has been struggling to meet growing domestic demand for natural gas. This has resulted in growing political pressure to reduce exports particularly in the form of LNG to Japan, Indonesia¿s biggest buyer. Recently, upstream oil and gas regulator BPMigas head Raden Priyono said LNG export contracts to Japan would be slashed from 12 million tons (MT) to 3 MT per annum following their expiry in 2010 and 2011.

Japan¿s Kansai Electric Power, Chubu Electric, Kyushu Electric, Osaka Gas, Toho Gas and Nippon Steel Corp. are among companies that would be affected by the reduction in Indonesian exports of LNG. Their contracts cover gas from East Kalimantan, presently the source of around 90 per cent of Japan¿s LNG imports from Indonesia.

Energy experts said problems surrounding the investment climate continued to hamper Indonesia¿s energy production and export capacity.

Aware of increasingly tighter imports and coupled by the recent natural disaster, Japan would finalize a new energy mix doctrine this summer to address those challenges, with nuclear energy at the core of the debate, Edano said.

Based on 2009 figures, nuclear power contributed 29.2 per cent to Japan¿s energy supply, almost in parity with LNG at 29.3 per cent,

which was the largest. Prior to the earthquake, Japan planed to improve energy self-sufficiency by 2030 with nuclear power contributing 53 per cent of generated output and renewable energy increasing to 21 per cent.

Edano said the initial targets would not be reachable in light of rising public concern on the safety of nuclear technology following the catastrophic impact of the earthquake and the tsunami on the Fukushima nuclear power plant.

"After all, the disaster was very big in magnitude. Therefore, at least in the foreseeable future, it will be difficult to build new nuclear power plants, and the government wants to reduce our dependence upon nuclear power generation," Edano said.

The operator of the Fukushima plant, Tokyo Electric (Tepco) said it would post a group net loss in the year to March 31 of 695 billion yen (US$8.32 billion) due to the worst nuclear disaster since Chernobyl.

Most of Japan¿s nuclear reactors are shut down over public safety fears and may not re-open in time for the peak summer months. Edano has threatened to block $13 billion in public funds for Tepco unless the government gets more say in running the company.


Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Shorter hours for rail lines tomorrow
    Shorter hours for rail lines tomorrow

    The Metro Rail Transit (MRT), Light Rail Transit (LRT) and the Philippine National Railways (PNR) will have shorter hours tomorrow for the replacement of defective railroad tracks during the Holy Week. …

  • Noy increases allowances for cops, soldiers
    Noy increases allowances for cops, soldiers

    President Aquino has signed a joint congressional resolution raising the daily subsistence allowance for both members of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP). Presidential spokesman Edwin Lacierda said Aquino signed last March 27 the merged Joint Resolution 2 of the Senate and Joint Resolution 26 of the House of Representatives. Speaking to reporters, Lacierda yesterday said the daily allowances of police officers and soldiers were raised from P90 …

  • Oil firms raise gas prices today
    Oil firms raise gas prices today

    This year’s Holy Week break will be accompanied by an increase in local pump prices after oil companies announced yesterday a P1.10 per liter hike for gasoline and P0.60 per liter for diesel effective today. “Phoenix Petroleum Philippines will increase the prices of gasoline by P1.10 per liter and diesel by P0.60 per liter effective 6 a.m. of March 31, 2015 to reflect the movements in the prices of refined petroleum products in the international market,” said Phoenix Petroleum, an independent …

  • DFA denies dropping Phl claim to Sabah
    DFA denies dropping Phl claim to Sabah

    The Philippines has never offered to drop its Sabah claim in exchange for Malaysia’s support for Manila’s arbitration case against China over the West Philippine Sea issue, the Department of Foreign Affairs (DFA) said yesterday. “In the context of our friendly bilateral relations, our two countries have been for years exchanging ways on how to address the issue of the extended continental shelf (ECS) in the South China Sea,” Foreign Affairs spokesman Charles Jose said in explaining the DFA’s …

  • Pagcor remits record high P5 B to national treasury
    Pagcor remits record high P5 B to national treasury

    The Philippine Amusement and Gaming Corp. (Pagcor) has remitted P5 billion in cash dividends to the National Treasury, fully settling all its arrears incurred in the last several years. Pagcor chairman and chief executive officer Cristino Naguiat Jr. said with this year’s remittance, the state-owned gaming firm has fully settled all remaining arrears in cash dividends that were incurred by the previous administration since 2005. Pagcor’s cash dividends to the National Treasury under its …

  • Maysak moves closer to Phl
    Maysak moves closer to Phl

    The typhoon with international name Maysak slightly accelerated as it moved closer to the Philippines yesterday, threatening to dump rains over eastern Luzon this weekend, the state weather bureau said. Rene Paciente, senior weather forecaster of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), said Maysak was spotted at 2,175 kilometers east of Mindanao as of 1 p.m. yesterday. Paciente said based on their latest forecast, Maysak is likely to affect …

  • Phl gets P2-B climate projects from Germany
    Phl gets P2-B climate projects from Germany

    The Philippines is getting 41 million euros or around P2 billion from the International Climate Initiative (ICI) of Germany that will fund 10 bilateral projects to address the impact of climate change. Climate Change Commission (CCC) vice chairman Lucille Sering yesterday met with Norbert Gorissen – head of the International Climate Finance of the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety – to discuss the projects, some of which will be …

  • Metro sizzles at 35º Celsius
    Metro sizzles at 35º Celsius

    While the start of the summer season has yet to be declared by the state weather bureau, Metro Manila experienced its hottest temperature so far this year at 35.1 degrees Celsius last Sunday. Rene Paciente, senior weather forecaster of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), yesterday said the highest temperature was recorded around 3 p.m. at the Science Garden in Quezon City. Meanwhile, PAGASA recorded yesterday the hottest temperature in …


Should Aquino be held accountable over the Mamasapano operations?

Poll Choice Options