Noda, Obama back talks on U.S. shale gas exports to Japan

May 02, 2012

By TORU NAKAGAWA/ Staff Writer

The United States has agreed to continue negotiations on exporting shale gas to Japan to help plug Japan’s energy deficit following the disaster at the Fukushima No. 1 nuclear power plant.

The agreement came during a meeting between Prime Minister Yoshihiko Noda and U.S. President Barack Obama at the White House on April 30.

Consumption of liquefied natural gas (LNG) has increased in Japan as utilities have been forced to turn to thermal power.

Nuclear power plants have been taken off line since March last year.

Production of shale gas in the United States has increased markedly in recent years and now accounts for nearly 20 percent of total gas production there. Prices are roughly one-fifth those of LNG that Japan imports from the Middle East and Southeast Asia.

However, the United States in principle limits exports of shale gas to countries with which it has concluded a free trade agreement, and Tokyo and Washington do not have such an accord.

Seishu Makino, senior vice industry minister, visited the United States last autumn and asked for exceptional treatment.

That call was renewed by Noda in discussions with Obama.

Sources said Noda told Obama: “Japanese companies are very interested in importing (shale gas) from the United States.”

Obama reportedly said the United States would continue discussions to help Japan secure a stable energy supply.

A senior industry ministry official said progress had been made: “The leaders of the two countries acknowledged the significance of proceeding with discussions. It was a step forward.”

A U.S. decision on a waiver for Japan could be made this year. If approval is given, exports to Japan could begin sometime after 2015, once facilities to process the shale gas are completed.

In January, LNG accounted for 47 percent of Japan’s overall power generation, up from 38 percent in April 2011.

Japan’s LNG consumption is projected to increase to 90 million tons in fiscal 2012, up from 80 million in fiscal 2011 and 70 million in fiscal 2010.

By TORU NAKAGAWA/ Staff Writer
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Trading house Sojitz Corp. is extracting shale gas in Carthage, Texas. (Provided by Sojitz Corp.)

Trading house Sojitz Corp. is extracting shale gas in Carthage, Texas. (Provided by Sojitz Corp.)

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  • Trading house Sojitz Corp. is extracting shale gas in Carthage, Texas. (Provided by Sojitz Corp.)

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