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Page added on February 23, 2012
Japanese Govt in talks with U.S. to import natural gas
The government has asked the U.S. government to grant permission for the export of liquefied natural gas (LNG) produced in the United States to Japan, according to sources.
The government is trying to diversify energy supply sources to cope with shortfalls in energy supply after the shutdowns of nuclear reactors in the nation and the recent decision to reduce imports of Iranian oil.
The United States regards LNG as a strategic material and restricts exports of the product.
At the request of Japan–a key U.S. ally–the two governments have commenced talks so Prime Minister Yoshihiko Noda and U.S. President Barack Obama can reach an agreement on exporting LNG during Noda’s scheduled visit to the United States in spring.
According to the sources, the Japanese government is asking the U.S. government to permit the export of LNG produced by private manufacturing projects in the states of Louisiana and Maryland.
U.S. production of natural gas is on the rise thanks to technological advances. The two states’ projects are projected to result in exports of 17 million tons of LNG a year.
If permission is granted, exports of LNG to Japan will likely start in 2016. It would mark the first export to Japan of LNG produced on the U.S. mainland, with the exception of Alaska.
Mitsubishi Corp. and other trading companies, power utilities such as Chubu Electric Power Co., as well major gas companies such as Tokyo Gas Co., have expressed interest in the projects.
The U.S. government restricts exports of LNG produced on the U.S. mainland to countries that have not signed free trade agreements with the United States due to fears of a surge in gas prices in the country.
Under the Natural Gas Act, companies must obtain permission from the Energy Department to export domestically produced LNG.
Permission is quickly granted to countries that have signed FTAs with the United States. For countries without an FTA, the department makes a decision after reviewing whether it would serve national interests.
So far, there has been only one case in which permission was granted for exports to such a country.
The Japanese government recently announced it will reduce imports of Iranian oil after the United States imposed sanctions on Iran.
4 Comments on "Japanese Govt in talks with U.S. to import natural gas"
Plantagenet on Thu, 23rd Feb 2012 12:42 am
If the US sanctions on Iran result in Japan needing energy to replace Iranian oil, the least the USA can do is help Japan out by supplying it with LNG.
JohnRM on Thu, 23rd Feb 2012 1:45 am
There shouls be little doubt it anyone’s mind that an agreement will be reached on this matter.
BillT on Thu, 23rd Feb 2012 3:25 am
By 2016…who knows what the world will be like then? No one. And, I would bet a months income that the delivery will be much later then 2016, if at all. A collapse of the Western economy is likely to happen before that, changing everything.
Meanwhile, Japan will buy oil from Iran as long as they can. They have no other choice.
Kenz300 on Sat, 25th Feb 2012 4:55 am
Seems like with all the high technology companies in Japan they would be developing the next generation of solar energy, wind power, and wave energy offshore. Too much reliance on one source, nuclear, has put them in a bind. They need to diversify their sources and types of energy. I am surprised that they have not pursued second generation biofuels made from algae, cellulose and waste. While none of these are a silver bullet they can all be solutions made in Japan and lessen the need for imports of energy.