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Posted by Mark Halper

Straight talk. Former IEA boss Nobuo Tanaka says that as the U.S. relies less on Middle East oil, the flow to other countries could come under threat if the Strait of Hormuz becomes more volatile.

WARSAW – Japan needs nuclear power to avoid a potential economic catastrophe that could result from Middle East conflict, the former head of the International Energy Agency argued here this week.

Nobuo Tanaka, who was executive director of the Paris-based IEA  from 2007-2011, said that the United States’ rising energy independence and its decreasing reliance on Middle East oil could give the U.S. less incentive to patrol the Strait of Hormuz – the Persian Gulf sea lane through which 17 percent of the world’s crude petroleum passes, and on which Asian countries are increasingly relying.

“If blockage happens, the oil price will double and then the Japanese current account surplus will disappear very quickly and even go to a huge deficit,” Tanaka said in an address to the World Nuclear Power Briefing 2012 conference in Warsaw. Japan is the world’s third largest importer of oil according the U.S. Energy Information Administration.

THERE GOES THE ECONOMY

Tanaka outlined a potential flip from a ¥9 trillion ($108 billion) current accounts surplus in 2011 to at least a ¥6 trillion ($72 billion) deficit that could undermined confidence in Japanese bonds and lead to a flight of capital and manufacturing.

“So this may lead us to a significant – not energy crisis – but an economic crisis or catastrophe,” said Tanaka, who is currently a global associate for energy security and sustainability with Japan’s Institute of Energy Economics (IEE). “The best way to at least reduce that risk is starting nuclear reactors at this moment. But the current government is in no way promoting that.”

The government has uncertain intentions to abandon nuclear power by 2040,

Japan has temporarily shut down all but 2 of its 54 reactors following preventable meltdowns in 2011 at the Fukushima Daiichi nuclear plant triggered by the tragic tsunami and earthquake. The 54 had provided about 30 percent of the country’s electricity, and it’s not clear how many of them will start up again.

EXPENSIVE GAS

The country is relying more on expensive natural gas imports and oil to replace some of the shuttered nuclear capacity, according to the U.S. EIA.

But Tanaka said nuclear would help Japan offset the price of importing natural gas and keep the country economically competitive with countries like the U.S., which is benefiting from its own low priced natural gas and potentially from high priced exports.

“We have paid 5 times more on gas price than the U.S, and 50 percent more than European price,” Tanaka said. “One of the solutions is to use nuclear power. Then we have some leverage in the negotiations for gas price.”

He also said that end user price for renewable electricity in Japan will be “very high,” and noted that abandoning nuclear would destroy Japan’s energy security.

ALTERNATIVE REACTORS

To overcome public opposition to restarting nuclear in Japan, he said that the country must consider new types of reactors.

His favourite: The integral fast reactor such as the Experimental Breeder Reactor II developed at Argonne National Laboratory in the U.S. and abandoned in 1994. Fast reactors can use nuclear waste as fuel.

They face challenges. Some experimental fast reactors have been prone to malfunction. Japan’s test reactor Monju, for example, is currently shut down after a fuel replacement device fell into it in 2010.

The cost of reprocessing fuel – such as at Japan’s Rokkasho reprocessing plant – can also be extremely high. But Tanaka said that the industry could potentially solve that problem by replacing the conventional PUREX reprocessing method with a “pyroprocessing” technique.

Fast reactors are gaining popularity elsewhere. Both China and Russia plan significant deployments.

Photo by Mark Halper

 

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