An astonishing global burden was laid on the mostly elderly residents of rural Japan by the head of the International Energy Agency, perhaps unwittingly, in a keynote address to the Liquefied Natural Gas Producer-Consumer Conference last week.
If Japan quickly restarts its huge fleet of mothballed nuclear reactors, said IEA head Fatih Birol, the world’s biggest importer of LNG will need to ship in considerably less of the stuff, leaving more (Birol suggested 10bn cubic metres) available in the market. That would loosen some price pressures and grant Europe a chance of making it through a wintry energy crunch.
That feels spot on. And, usefully for the odds of the argument to be tested sooner rather than later, Japan’s prime minister Fumio Kishida stunned everyone in August with what looked very much like a plan to accelerate the restart of more than a dozen reactors and explore the construction of new ones.
All good in theory. But there is a huge job of local suasion still to do, and both Birol and Kishida may be reckoning without the leaden drag of Japan’s old nemesis: another debilitating “lost decade”.
Though the concept itself is sometimes disputed, the first identified Japanese “lost decade” was economic. It began with the tumultuous crisis of Japan’s stock and property crashes in 1990 and ended with the start of its banking and bad loans crises in 2000. The intervening years were “lost” in the sense that a great many measures that might have prevented the second crisis and laid the groundwork for a great revitalisation were left undone in a fug of policy paralysis, fear of public backlash and complacency.
Something similar has happened since 2011. The Fukushima nuclear disaster was the initial shock. The consequent shutdown of Japan’s entire reactor fleet was matched by a near complete shutdown of serious public debate on restarting them, and protracted failure to prepare the optimal regulatory, technical and financial environment for that event. And now, a decade later, Japan faces what should have been an avertable crisis.
Because, for all its comparative political bravery, Kishida’s nuclear rebirth announcement was, indisputably, an act of crisis management. Two big factors have exposed the folly of Japan’s decade-long prevarication on nuclear restarts. The first — and the one that has truly rattled government, industry and the general public — was how squeaking close Tokyo came to a blackout earlier this year and, given continuing capacity constraints, how high the risk of one remains.
The second factor is geopolitical. As one very senior Japanese politician explained to the FT last week, a country does not itself have to be on a war footing to feel the consequences of war footing elsewhere. Russia’s invasion of Ukraine, with its impact on LNG markets, has forced Japan (and everyone else) to redefine what was once considered a globally traded commodity as a strategic material.
The availability of a large nuclear fleet is the obvious offset. The problem that may well prevent it happening at any speed has been shaped by the past 10 years. Four features of Japan’s lost nuclear decade stand out, much of it the creation of political squeamishness on the issue.
The first is that the regulatory body responsible for certifying the safety of the restarts has carried out its work at a snail’s pace, in a political environment where enough public support for a rapid series of restarts was never anticipated.
The second is that the government has not come up with an alternative to a regime in which private sector power companies bear all the liability for safety — a straitjacket that risks undermining the economics of Japan’s nuclear future.
A third thing perhaps irreparably eroded over the past decade, confide senior industry executives, has been Japan’s once deep stratum of nuclear engineers. The past 10 years have evaporated the new generation of engineers a more fully restarted industry needs.
But the overarching effect of this lost decade has been a void where there should have been meaningful dialogue between the government, the nuclear industry and the general public. Polls may indicate broad swings of public fear or support for restarts. But resistance could still be high despite the crisis. While Kishida’s announcement set a national agenda, the restarts themselves will be decided by local governors in rural, ageing prefectures where they are the prime election issue.
For 10 lost years, Japan has avoided telling these voters the immense responsibility they bear — a responsibility that has not only ballooned due to Japan’s own reticence, but which, as Birol points out, now has global ramifications.