An energy advisor for the Japanese government has said that the country may begin importing cheaper supplies of fuel from the U.S. in order to cut its costs of liquefied natural gas (LNG) by roughly 10%. Senior economist Akira Yanagisawa with the Institute of Energy Economics Japan (IEEJ) say that if the country, already seen as the world’s largest consumer of LNG following the suspension of nuclear reactors, were to purchase the fuel at $9 per million British thermal units (Btu), it would result in saving of 600 billion yen (approx. $6.49 billion).
After the March 2011 earthquake and tsunami led to the Fukushima nuclear crisis and a complete shut down of all but two of Japan’s reactors, the use of fossil fuels like LNG have nearly replaced that of atomic energy. As a result, 2012 saw the spending of 6 trillion yen ($64.3 billion), double what was spent the year before, on importing a record high 87.3 million metric tons of gas. Just last week the energy research company World Gas Intelligence reported that prices of LNG to Northeast Asia have risen to $19 per million Btu.
Yanagisawa says that Japan could maximize its savings by importing inexpensive fuel from the United States. Import prices could be drastically reduced with a price of $9 per million Btu, and Yanagisawa says that’s after adding $2 for shipping and $4 for liquefaction fees. As Japan does not yet have a free trade agreement with the U.S., there is only one LNG facility, operated by Cheniere Energy in the state of Louisiana, that has the Department of Energy’s approval to export fuel to the country.
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