20120930-IEA-Oil_and_Gas_Emergency_Policy_Japan_2013_update_19页_1mb

Japan Energy Overview Summary

Core Content

Japan is heavily reliant on imported energy, with oil and natural gas being the two most significant energy sources. The country has a well-established emergency oil and gas stockpiling system, and its energy policy emphasizes diversification, flexibility, and preparedness for supply disruptions.

Key Figures and Trends

• Oil Consumption: In 2011, Japan's oil demand was 4.48 mb/d, increasing from 4.47 mb/d in 2010 due to the Great East Japan Earthquake. In 2012, it reached 4.73 mb/d.
• Import Dependency: Over 99% of Japan's oil demand is met through imports, with crude oil accounting for the majority.
• Refining Capacity: In 2012, Japan had 27 refineries with a total crude distillation capacity of 4.5 mb/d, which had decreased from 5.3 mb/d in 2000.
• Stock Levels: At the end of January 2013, Japan held 591 million barrels (mb) of oil stocks, equivalent to 166 days of net imports. Around 72% of these stocks were crude oil.
• Natural Gas: The share of natural gas in Japan's TPES increased from 17% in 2010 to 22% in 2011. In 2012, Japan's natural gas demand reached 124 bcm (340 mcm/d).
• Domestic Production: Japan's domestic natural gas production was around 3.3 bcm in 2012, and oil production was only 16 kb/d, equivalent to 0.3% of total consumption.

Main Points

1. Energy Outlook

• Japan's total primary energy supply (TPES) decreased sharply from 497 Mtoe in 2010 to 458 Mtoe in 2011 due to the Great East Japan Earthquake.
• Oil remains the largest energy source, accounting for 45% of TPES in 2011, followed by coal (23%) and natural gas (22%).
• Nuclear energy was a significant source before the 2011 earthquake, but its share dropped after the Fukushima disaster, with only two units operational in 2012.

2. Oil Market Features and Key Issues

• Import Composition: In 2012, Japan imported 4.8 mb/d of oil, including 3.5 mb/d of crude oil, 209 kb/d of NGLs and feedstocks, and 1.2 mb/d of refined products.
• Crude Oil Sources: Saudi Arabia was the largest supplier of crude oil (33%), followed by UAE (23%), Kuwait (8%), Qatar (6%), Russia (5%), and Iran (5%).
• Demand by Sector: In 2010, the transport sector consumed 38% of total oil, the industry sector 30%, and the transformation/energy sector 16%.
• Demand by Product: Demand for all oil products decreased from 2003 to 2012, with gasoline down 5%, diesel down 18%, and heating/other gasoil down 41%.

3. Oil Supply Infrastructure

• Refineries: Japan has 27 refineries with a total capacity of 4.5 mb/d. The main products are gas/diesel oil (25%), gasoline (25%), other middle distillates (15%), residual fuel oil (13%), naphtha (9%), and LPG (4%).
• Transportation: Oil is transported via coastal tankers, tank trucks, and railroad tankers. There is only one oil pipeline in Japan, used for jet fuel.
• Storage: Japan has over 900 mb of storage capacity, with 72% of public stocks in crude oil. JOGMEC manages government emergency stocks, while industry holds 70-90 days of daily consumption.

4. Emergency Policy for Oil

• Stockholding Obligation: Japan meets its IEA obligation by holding government stocks and imposing a minimum industry stockholding of 70-90 days.
• Stock Release: The METI can order the release of public stocks during supply disruptions, and the process can take 10-15 days. The Oil Stockpiling Act allows for the loan of public stocks to the market.
• Compliance and Penalties: Non-compliance with stock obligations can result in fines up to 3 million yen or one year in prison.

5. Natural Gas Market Features and Key Issues

• Demand Growth: Natural gas demand increased from 26 bcm in 1980 to 124 bcm in 2012, driven by electricity generation.
• Supply Diversification: Japan imports natural gas from 31 LNG terminals, with Malaysia being the largest supplier in 2011 (18% of imports).
• Sectoral Consumption: In 2011, the transformation sector was the largest consumer (64%), followed by commercial/other (16%) and residential (9%).

6. Natural Gas Supply Infrastructure

• Storage Capacity: Japan has around 10 bcm of natural gas storage capacity, spread across 31 LNG terminals.
• Infrastructure Map: The country's natural gas infrastructure is primarily based on LNG terminals and lacks cross-border pipelines.

7. Emergency Policy for Natural Gas

• Demand Restraint: Considered a secondary response measure, it can be used in case of severe supply crises. It includes both light-handed (information sharing, energy saving) and heavy-handed (fuel use restrictions, allocation) measures.
• Fuel Switching: Not considered a primary emergency response due to limited capacity (2.5 kb/d in 2010) and lack of legal authority to enforce fuel switching.
• Stockholding: Industry holds commercial stocks equivalent to 20-30 days of consumption, while the government manages emergency stocks.

Key Information

• Japan's energy policy focuses on oil and natural gas due to their dominance in the energy mix.
• The country has a robust emergency stockpiling system, including both government and industry obligations.
• Natural gas use in power generation increased significantly in 2011 due to nuclear outages.
• Oil demand is heavily influenced by the transport and industry sectors, with the chemical industry being a major consumer.
• Japan's energy security strategy emphasizes diversification of supply sources and flexible emergency responses.