WHY OIL COSTS MORE: CASE STUDY – JAPAN
Why? Because anything that adds extra stress on a market with little marginal supply drives spot buyers toward profit-taking. Although potentially recession-inducing for the Japanese economy, this is not a lot of extra burden on Asian and world fossil fuel markets. But it's enough to get the traders going.
(6th in the WHY OIL COSTS MORE series: KAZAKHSTAN, SAUDI ARABIA, NIGERIA, VENEZUELA, INDIA, CHINA)
Nuke plant shutdown strains Asian markets
September 7, 2007 (Oil and Gas Journal)
WHO
Tokyo Electric Power Co., Tomoko Hosoe, senior consultant, Facts Global Energy
WHAT
Due to the shutdown of the Kashiwazaki-Kariwa nuclear power plant following an earthquake, Tokyo electric will have to generate Japan’s electricity from Liquified Natural Gas (LNG) and fuel oil imports, much more expensive sources.
The Kashiwazaki-Kariwa nuclear power plant: 7 reactors + 1 earthquake = lots of fossil fuel importsWHEN
- The June earthquake has left the nuclear plant shut down since June 26.
- The nuclear facility is not expected to reopen before March 2008 and may not return to full operation until June or later.
WHERE
The Kashiwazaki-Kariwa nuclear energy plant is on Japan's north-west coast in the Niigata prefecture. Some reports contend the plant was built on the fault which caused the quake.
WHY
- The Kashiwazaki-Kariwa nuclear power plant produced 8.2 gigawatts of electricity.
- Tokyo electric will require 1.3 million tonnes of LNG and 87,900 barrels of oil/day (bpd) above normal imports.
- Projected 2007 LNG imports: 18.8 million tonnes; 2006 : 16.8 million tonnes.
- Projected 2007 oil imports: 180,900 bpd; 2006: 69,000 bpd.
- Japan’s increased demand is expected to have a dramatic impact on fossil fuel prices in Asia.
LNG prices were already trending upward. (click to enlarge)QUOTES
Hosoe: "An additional 2-3 million tonnes of LNG, which need to be secured from the spot market in 2007-08 in a very tight LNG market, is a serious problem…"
posted by Herman K. Trabish @ 7:47 AM
1 Comments:
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I don't mean this in a bad way, of course! Ethical concerns aside... I just hope that as technology further innovates, the possibility of uploading our brains onto a digital medium becomes a true reality. It's a fantasy that I dream about every once in a while.
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