In Japan, an LNG revolution looks to Canada – by Nathan VAnderklippe (Globe and Mail – January 21, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

TOKYO — It’s winter, and the grass is struggling to take root on the roof of a cavernous new underground tank on the shores of Tokyo Bay. Workers completed the tank, with its thick insulating concrete walls and brilliant stainless steel inner liner, in October. Soon after, it accepted its first load of liquefied natural gas (LNG), chilled to -162 C.

From the ground, it’s all largely invisible: only a slight mound struggling to turn green hints at the enormous energy stored below. “Nobody finds it interesting because you can’t see the tank. It’s hidden,” says Kunijiro Taguchi, a lifetime employee of Tokyo Gas Co Ltd. who now serves as an energetic corporate tour guide.

But in world energy markets, this addition to the Tokyo Gas Ohgishima LNG Terminal – the largest tank of its kind – is an unambiguous signpost of the broad energy transformation under way in Japan. Nearly three years after the Fukushima nuclear disaster, Japan is only part-way through the work of preparing for a rush of new overseas energy imports, one that stands to see tankers filled with Canadian LNG among the 69 ships each year that pour out their cargoes at Ohgishima.

In fact, for the Japanese government and one of the country’s biggest gas buyers, Canada is emerging as an increasingly favoured source for future energy.

“We are quite looking forward to having long-term relations with Canadian people and Canadian LNG,” said Toshiaki Koizumi, general manager for the fuel department at Tokyo Electric Power Co. (Tepco), Japan’s largest utility, whose disaster-stricken Fukushima power plant has left it scrambling for alternatives.

For Canada and in particular British Columbia, much rides on persuading global powers to sign contracts big enough to underpin building an industry that stands to become, in many ways, the West Coast’s own oil sands.

The waters between Japanese power plants and British Columbia gas fields are by no means completely clear: Japan’s buyers are nervous Canada won’t find enough workers to construct the giant citadels of steel required to export Pacific energy. They worry, too, about the looming new B.C. LNG tax – and they warn that LNG may not be the jackpot politicians have promised. In a world where Australia, Russia, Mozambique and the U.S. are all vying to sell ships stuffed with gas, a supply glut is a distinct possibility. If nothing else, bonanza pricing isn’t likely to materialize.

Yet from the Ohgishima LNG Terminal, one of several that keep Tokyo lights on, the need for imported energy seems obvious: last week, amid a chilly cold snap, Tokyo set a record for natural gas consumption. The previous record was set a year earlier. At Ohgishima, it was a high-stakes day: “Everything was at maximum levels. We had to be very careful in our operations,” said Hirota Tomomi, a general manager of safety at the terminal. “We had extra staff on standby, just in case.”

In 2010, nearly 32 per cent of Japan’s electricity came from nuclear. Today, it’s zero. Natural gas, in response, has swollen from 32 to 49 per cent of power generation. Japan is the world’s largest LNG importer.

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