CHAPTER II - ENERGY SECURITY

Summary

Japan's nuclear crisis triggered by the recent earthquake and tsunami has raised fundamental questions about the future of the global energy industry and energy security.

The tsunami that crippled the Fukushima Daiichi nuclear power plant on 11 March 2011 unleashed fears of massive radiation in the surrounding Japanese countryside. While the Japanese government has established a 20-kilometre exclusion zone around the plant, many governments have advised their citizens to keep at least 80 kilometres away.

Although the earthquake and tsunami probably took more than 25,000 lives and has caused the displacement of thousands more, world attention has been focused on the dramatic efforts to prevent a nuclear meltdown. The mood in Japan has shifted against the use of nuclear energy and Prime Minister Naoto Kan has shied away from clarifying whether Japan will proceed with the earlier planned construction of 14 nuclear plants.

China has delayed the construction of new nuclear reactors, the ruling Christian Democrats in Germany lost an important state election over the nuclear issue and Southeast Asian states, which were once eager to climb on the nuclear power bandwagon, have begun re-thinking their stance on the issue. France is pushing for international standards on nuclear safety. These developments occur even though there have been only two fatalities so far from radiation leaks in Fukushima.

Shifting Oil Trend

The Fukushima incident took place when it appeared that the nuclear power industry was on the cusp of a period of growth. Increasingly, states appeared to be turning more to nuclear power in an era of rising fuel prices, concerns about the greenhouse gas effects of fossil fuels and a slowdown in production of hydrocarbons. Even in our part of the world, crude oil production has declined. Production levels in Malaysia and Brunei have flattened and Indonesia has become a net importer.