Japan is a nation that's known for being high-tech, and if you've ever traveled there and seen urban districts like Shibuya, Shinjuku, and Akihabara, you'll know what I mean by that. (Also, if you're in Akihabara, I know of a little hole-in-the-wall eatery that sells the best tonkatsu in Tokyo.) High-tech societies require energy, of course: Lots of reliable, affordable energy. They also require a lot of raw materials that can only be derived from one source: Petroleum.
Japan also has a reasonably new Prime Minister, Sanae Takaichi, a sort of Japanese Donald Trump; this is a woman who is a heavy-metal drummer in addition to being a politician, which you have to admit is pretty cool. And here's the best part of that: Under PM Takaichi's urging, Japan is moving away from "green energy" and back to traditional, and reliable, sources.
Not long ago, Japan stood before the world pledging to become a paragon of decarbonization. Government papers were filled with talk of hydrogen corridors, offshore wind farms, and electric vehicle subsidies.
To satisfy international climate lobbies, Japan planned for years to phase out coal. Operations at coal-fired power plants were restricted to only 50% capacity. Political leaders spoke solemnly of a “moral duty” to achieve “carbon neutrality” by 2050, pledging a 60% cut in greenhouse gas emissions by 2035 and a 73% cut by 2040, both measured from 2013 levels.
But as geopolitical reality intruded, this stance dissipated.
As the old song goes, the times, they are a-changin'.
Japan is preparing to formalize a new energy‑first posture in a revised strategy to be unveiled in August. Greater weight will be given to the security of fossil fuel supplies. Imports are already increasing from the United States, Canada, Mexico, Central and South America, Africa, and other parts of Asia. The prime minister anticipates avoiding altogether shipping through Hormuz.
For the first time, crude oil from the United States has arrived directly in Japan: Cosmo Oil recently brought into Tokyo Bay 910,000 barrels of U.S. crude. Japan Petroleum Exploration plans to quadruple its oil and gas output over the next decade—up to 180,000 barrels of oil equivalent per day by 2035—backed by $7.3 billion in exploration and production spending, with over 50% that money going towards U.S. assets.
This is a great new acknowledgement of reality by the Land of the Rising Sun.
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Japan already does a lot of trade in petroleum. With global oil prices moderating, for now at least, Japan is taking the opportunity to stock up. Early indications about the new plan for Japan's energy portfolio do still include a nod towards "green" sources, though. So, not all the way out of the woods, yet.
Details of the policy package remain unclear. But the new plan may place greater emphasis on oil security and its diversification, given that Takaichi has been promoting the recently introduced Power Asia framework, which aims to ensure stable oil supply across Asia, as well as the well-established green transformation (GX) strategy, which is focused on energy security, economic growth and decarbonisation.
Japan's primary oil company, the Japanese Petroleum Exploration Company, Ltd., (JAPEX) is planning to quadruple Japan's petroleum trade by 2036. That's a considerable boost.
Japan Petroleum Exploration (Japex) announced on April 22 that it plans to quadruple its oil and gas output over the next 10 years, citing energy security concerns. The company plans to invest 1.16 trillion yen ($7.3 billion) in exploration and production (E&P), with over half of that money going toward assets in the United States. Their larger goal is to quadruple oil and gas output, from 45,000 barrels of oil equivalent per day (BOE/d) in 2025, to 180,000 BOE/d by 2035.
Finally, Japan will also be upgrading and replacing nuclear generation capacity, and coal isn't off the table, either. It's a new day for Japan's energy industry.
This all represents a great move for Japan's future. A high-tech society like Japan cannot operate without reliable, affordable energy, and "green" sources won't do the job for a nation as energy-hungry as Japan. Japan has thousands of factories hungry for not only energy but also raw materials. Japan's aging society will rely more, not less, on technology in the coming years. Fortunately, Japan has a long tradition of technological excellence; if you've ever traveled in a modern Japanese city, like Tokyo, Kyoto, or Osaka, you will have seen how high-tech has woven its way into almost every aspect of Japanese urban life.
Now, the concerns about climate change are being set aside. Japan seems to have realized, as the United States has, that the global climate has always changed and will always change, regardless of what humans do - or don't do. What Japan isn't doing is trying to deindustrialize, to move backwards in that high-tech lifestyle for which they are deservedly famous. That's a good sign for Japan's future.
Now, if they could just do something about its plummeting birth rate...
