Operation Epic Fury has had some splashback in global energy markets; prices of crude oil and natural gas alike are up, and may not moderate much until the scrap with Iran is wrapped up for keeps. Some countries are dependent on imported natural gas for their electrical generation needs, and some of those countries are now looking back at some alternatives.
One of those countries is Japan. Japan's climate scolds and renewable energy advocates appear to have seen this price spike as a good time to push for more solar panels and bird-killing windmills, but it seems Japan is taking another path: coal and nuclear power. The scolds aren't happy.
Rising geopolitical tensions in the Middle East have once again exposed Japan’s dependence on imported fossil fuels, particularly liquefied natural gas (LNG) transiting through the Strait of Hormuz. Recent price increases have compounded concerns about supply security and fuel import costs.
The Japanese government has responded to these challenges by reducing LNG use through increased coal-fired generation and restarting nuclear power plants, positioning these sources as providers of stable and affordable domestic supply.
This approach may result in unintended consequences. As coal and nuclear generation expand within Japan's constrained power system, they may displace domestic renewable energy — an alternative capable of delivering equivalent energy security benefits at lower cost. This displacement could increase curtailment, undermine investment in new renewable capacity, raise consumer costs, and impede progress toward decarbonization. Japan risks addressing one energy security challenge by reinforcing the conditions that created it.
Here's the problem with this evaluation: Domestic renewable energy won't replace the traditional sources. If the entire "alternative" energy schemes, in all their various forms, have taught us anything, it's that we can't replace constant, reliable, high-density energy sources with intermittent, unreliable, low-density, and expensive energy sources. The laws of physics are pesky things when it comes to energy.
Watts Up With That's Eric Morrell notes that the problem Japan is having has a lot to do with another Pacific power: Australia.
Instability in the Aussie gas export market may also be playing a part in Japan’s move to diversify away from gas.
It’s not just Aussie gas availability which is experiencing an uptick in political interference. Australia also recently considered a surprise new tax on gas exports, a proposal which was narrowly rejected, for now – possibly because of the risk of widespread demand destruction, as nations like Japan re-evaluate whether Australia is a reliable trading partner.
Australia’s Prime Minister Albanese also boasted recently about using Australian food exports as leverage to secure more fertiliser and fuel for Australia. Using food as a bargaining chip may have further upset Asian trading partners, trading partners who like Japan are likely already questioning whether Australia is still a reliable trading partner.
These aren't the moves of friendly trading partners, particularly not the threats of using food exports as a lever. Fortunately, when it comes to coal, Japan has other options.
Coal for Japan can be sourced from Australia, but there are other options. Indonesia is also a large scale exporter of thermal coal. By embracing coal and especially nuclear, Japan insulates itself against Australian sovereign risk, against Australia’s increasingly unstable conduct of international diplomacy and commerce.
Japan also needs to get its nuclear power program dialed in. After the Fukushima disaster — and trust me, I traveled through that region less than a year after the tsunami, and "disaster" is not any exaggeration — understandably, many in Japan are looking askance at more nuclear generation. But future instances of what happened at Fukushima can be addressed by adopting one simple solution: Don't build nuclear power plants in areas that are possible tsunami zones. Granted, that may be a little more difficult than it sounds; Japan isn't a large country, it's heavily populated, and much of the country is mountainous, but it's nevertheless possible.
Japan's move towards more reliable power, no matter how much it upsets the climate scolds (and we'll take that as a bonus), is part of a larger movement. The scolds are losing ground. The nations of the world have spent trillions trying to address this claimed crisis, all to no measurable effect. The dire predictions of scolds ranging from Al Gore to Greta "Doom Pixie" Thunberg just plain haven't materialized. Even "green" Germany is seeing a push to re-start their nuclear power industry.
Read More: Climate Change: Trillions Spent, and Now We See Nothing Gained
AfD Strikes Back: Reopen Germany's Nuclear Plants, Scrap Green Energy Mandates
Of course, in the long term, there's an even better alternative for Japan: natural gas from the United States. The Alaska natural gas pipeline will, when completed, bring natural gas from the North Slope to the terminal at the Kenai Peninsula town of Nikiski, and Japan is almost certainly watching that development with keen interest, as are (doubtless) other Pacific rim nations, like South Korea.
It's a new day in the energy world. The more the climate scolds shout about the upcoming climate disaster that never seems to materialize, to warn us about dire consequences that always seem to be in the future, the more they expect us to give up our air conditioning, our clothes dryers, our automobiles, the more support they lose. The energy picture of the near future belongs to traditional sources: Gas, oil, coal, and nuclear power. Japan gets that. The Trump administration gets that. And that's a pretty good start to returning some sanity to this business.
