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“The reality is that if Japan suddenly quits its Russian LNG purchases, Japan would have to compete for supplies in the spot market. Japan is buying LNG on long-term contracts probably at around $9 to $10 per MMBtu. Yesterday we saw the Asian LNG spot contract JKM approach $85 per MMBtu — an absolutely astonishing amount. If you would like decarbonisation to happen, there are a lot of hard choices to make.”

Listen again to Yuriy Humber and Mayumi Watanabe of Japan NRG discussing how procurement of fuels in import-dependent Japan — the world’s fifth largest energy-consuming nation — colours the view from Tokyo towards Russia’s military assault on Ukraine.

Yuriy and Mayumi (who authored this excellent piece on Japan’s energy transition) spoke at length about the difficult energy choices facing Tokyo. Japan is grappling with many of the same trade-offs as other advanced economies committed to ‘net zero’ emissions by 2050, but is taking arguably a more pragmatic approach.

This means adapting the existing energy system with retrofit technologies such as carbon capture and futuristic e-fuels, while incrementally growing renewables capacity. But every pathway is beset by bottlenecks, and progress to restart nuclear power plants post-Fukushima — arguably Japan’s best defence against runaway commodity inflation — has become a tortuous and divisive process.

If you want a rounded view of Japan’s fascinating energy situation as the world veers deeper into a prolonged energy crisis, this 47-minute show is for you.

Take me to the show | ショーを聞く

If you’re pressed for time, here are a few hand-picked highlights:

‘Don’t expect Japanese companies to divest from Russian energy projects’ — 2m 20s
‘High prices are driving Japanese businesses to improve energy efficiency ‘ — 1m 22s
Why is Japan taking so long to restart its nuclear plants? — 2m 20s
Japan prefers energy system adaptation over re-invention — 2m 16s
‘Japan’s amazing wind and solar plan is hobbled by bottlenecks’ — 1m 53s
‘Don’t take Japan’s “yes to decarbonisation” at face value’ — 1m 23s

Japan’s reticence towards Russian divestments stands in stark contrast to Western oil and gas companies. Only today, Shell announced its intention to withdraw from the country and stop buying spot cargoes of crude oil. It is even shuttering its service stations and aviation fuels and lubricants operations in Russia. This recent article digs into the geopolitics of the wave of Russian divestments:

Energy Flux

The Great Russian Energy Divestment

Western oil majors are fleeing Russia. Having bankrolled Moscow’s bellicose expansionism for years, Big Oil has finally taken the moral high ground. A fire sale of meaty assets looms, creating a golden opportunity for state-owned Chinese enterprises. Sanctions and divestments look set to trigger a great transfer of wealth from Western capital holdings to the People’s Republic of China…

a year ago · 2 likes · Seb Kennedy

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The world is on the cusp of arguably its most dangerous energy crisis in living memory. Get original perspectives on how extreme commodity price volatility is accelerating tectonic shifts in energy policy, investment and geopolitics. Try premium membership for free for a week:

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Above all, thanks for reading and listening.

Seb

‘Japan won’t divest from Russian energy…