In this paper Stuart Speding, Head of Practice at RPS Energy, looks at the immediate aftermath of the earthquake and tsunami in Japan and the examines the long-term impact on the country's energy industry.
The focus of this paper is primarly on the downstream oil and petrochemical industries, although it also takes a broad perspective of the potential impact of the disaster on the country's energy industry as a whole.
With very limited natural resources of its own, Japan is highly dependent on fossil fuel and other energy imports. Nuclear power was seen as an increasingly strong delivery vehicle for the country's electricity needs, but these plans have now been severely, if not permanently, halted by the aftermath of the earthquake and tsunami.
According to the paper, coal and LNG importers, particulary Australia and Indonesia, are set to benefit while the country's oil refining capacity is likely to be back on line "fairly quickly" with some key exceptions. Damage to petrochemical installations could have a serious impact on global naphtha prices.
