Japan’s major trading houses – traditional institutions in Japan which are key to the country’s energy sector – have revealed that they will continue with their investments on shale gas deposits in the United States despite the reduction on gas quantity estimates and numerous writedowns in the value of the sector as a whole this year.
Leaders of Japan’s major trading houses, including Mitsubishi Corp., Mitsui & Co., and Itochu Corp. among others, continued to give their a vote of confidence in the long-term possibilities for shale gass drilling in the United States and Canada, this even after the sector saw more than USD$600 million in writedowns over the last two years. “North American shale is still very attractive,” said Mitsubishi President Ken Kobayashi in a news conference on Thursday. “There is an enormous infrastructure and market on top of the gas resources in the United States and Canada, with its access to the Atlantic Ocean, could also be a stable supply source compared to say Russia or the Middle East.” The appeal of North American shale resources, which for a time was touted as the new big thing in the energy sector, has been dented these past years by discoveries of other deposits in other territories. There is also the possibility that transport costs could increase as the administrators of the Panama Canal are set to increase rates for passage.
Ever since the Fukushima nuclear disaster and the subsequent mothballing of almost all nuclear reactors in Japan, utility companies have been looking to North American shale gas to diversify their fossil fuel sources as alternative sources of thermal energy. The prospect of North American shale gas is also potentially a strong bargaining chip for Japanese utilities to get better prices from oil and gas sellers in the Middle East, Australia and Southeast Asia.
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