According to diplomatic sources in Washington, the United States government is at the concluding stages of approving shale gas exports to Japan. It is expected that America’s Energy Department will give conditional approval for the time being, and then it will proceed to examine Japanese companies and their shale gas export projects. The approval is expected to come as early as this April.
It would be a much welcomed development for Japan if the shale gas exports will be approved this summer. Currently, the liquefied natural gas (LNG) imports have been rising after the suspension of all nuclear reactors, except two, due to the devastation that the Fukushima Daiichi nuclear power plant brought about in 2011. Last year, Japan has been recorded as the number one LNG importer in the world, with a record 87.3 million tons imported.
In the U.S., LNG prices have been falling because of a sharp increase in shale gas output. Almost 20 applications for shale gas export projects—some of whom are Japanese utility firms—have been filed with the U.S. government. For the longest time, the U.S. has been cautious of dealing with countries with whom it has no free trade agreements. It only allows export projects to proceed if it finds after examination that it would be for the public good. But, sources said, because there are concerns that prices for shale gas might rise because of expanding exports, and also that environmental issues might arise if gas development would be continued, it has decided to suspend examinations on shale gas projects.