The Myth of Extra Fossil Fuel Imports Devastating the Japanese Economy

“If asked whether we should increase our reliance on caviar to fight world hunger, most people would laugh. Relying on an overly expensive commodity to perform an essential task spends too much money for too little benefit, while foreclosing more promising approaches. That is nuclear power's fundamental flaw in the search for plentiful energy without climate repercussions, though reactors are also more dangerous than caviar unless you're a sturgeon.”

−   Peter A. Bradford,

former commissioner of the U.S. Nuclear Regulatory Commission*

For almost three years, those with vested interests in the Japanese nuclear industry have promoted a false notion that the extra fossil fuel imports required by the loss of nuclear energy are going to devastate the Japanese economy. The data has been distorted and exaggerated, and the nuclear crisis has been scapegoated for the serious economic, fiscal and demographic crisis that has been forming since long before 2011.

In the last nine months of 2011, with no electricity produced by nuclear, consumption of fossil fuels went from 81.58% to 89.64%. But that increase was caused by an event that came in the third month of the year, so if we extend this trend for three more months, we get an annualized increase up to 92.24%. This jump from 81.58% to 92.24% represents a 13% increase.

Chart 2

(Chart 2 shows the same data as in Chart 1: As it is taught in my son’s grade 8 math textbook, you can manipulate a graph so that a change in a pattern looks a lot more dramatic than it really is.)

So how bad is a 13% increase in fossil fuel imports to the balance of trade and the fortunes of the nation? It’s not small, but it is not quite the devastating change in circumstances that it has been portrayed as. Consumers and middle class workers are forced to absorb such shocks all the time. For example, they have to take salary and benefit cuts, and mortgage rates can increase by 13% on short notice (a seemingly tiny change from 2.500% to 2.825% is a 13% increase). Corporations also have to routinely deal with swings of 10% or more in currency values. And who remembers the rampant speculation in world oil prices in 2007 that sharply drove up fuel costs for everyone, without a nuclear shutdown as the cause? These sorts of price fluctuations are common, and governments usually expect individuals and businesses to just roll with the punches.

I’ve been watching reports about Japan’s energy crunch for the last three years, and I haven’t seen a single report in the commercial media that put fossil fuel consumption in its proper context with something like the simple graph shown above. The data wasn’t hard to find, but reporters have preferred to go along with the official line that the loss of nuclear energy is hammering the economy and causing a steep rise in carbon emissions. It’s funny how no one seemed to worry about the failure to meet emission targets before 2011.

There is an additional factor which casts doubt on the claim about the necessity of nuclear energy. If the extra fuel imports were the critical factor in economic recovery, why would the Japanese government embark on a deliberate policy of currency devaluation? The currency has lost over 20% of its value since 2012, which means the Abe government thought this extra cost could be absorbed along with the 13% extra already paid for fuel imports.

If the extra fuel purchases really are such a problem, there are numerous ways to reduce them. Some analysts think that Japan has maxed out on efficiency gains, but they are usually foreign energy experts who have never seen a Tokyo electronics store with hundreds of appliances and air conditioners switched on just for demonstration purposes. Or they have never seen the state of home heating in the countryside. If you want to know about the state of Japanese energy efficiency, come spend the oshogatsu holiday in a traditional Japanese wooden home.

In addition to efficiency gains, we could consider the taboo topic of restricting consumption. If a nation really is in a crisis, it might be reasonable to ask citizens to drive 10% less, for example. However, no one has figured out how to keep people employed while eliminating arbitrarily defined non-essential uses of energy. Once one starts asking about the necessity of vending machines and illuminated billboards, one quickly comes to grim existential questions about the energy expended in almost all economic activity. Very few people would be left standing if we really had to think hard about what is essential.

Finally, another strategy is to get serious about developing alternative energy and ways to store it. With or without nuclear energy, and with or without climate change (since fossil fuel is a finite resource), renewable energy has to be expanded dramatically.

All of this is obvious to anyone disinterested (that is, not uninterested but free from selfish motive or interest) in the Japanese nuclear and power industries. Westinghouse-Toshiba, GE-Hitachi, Areva-Mitsubhishi, the electric utilities, and the politicians who do their bidding have attempted a great con over the last three years in selling the myth that the Japanese economy will be doomed without nuclear energy and nuclear technology exports. It is the opposite, though. Japan is doomed with them. The risks are too great in a nation of earthquakes, volcanoes and tsunamis, while the rewards – a 13% reduction in fossil fuel imports − are too small to matter. The share of energy produced by fossil fuel is so large that it is pointless to worry about the small increase or the sacrifices that will be needed for a few years before new technologies and new patterns of production and consumption emerge.

*

Wall Street Journal Reports: Energy. “Should the World Increase Its Reliance on Nuclear Energy?” The Wall Street Journal, October 8, 2012.