Japan caught in difficulty: natural gas and rare earths

[mohawk70]

http://www.ncpa.org/sub/dpd/index.php?Article_ID=23446&utm_source=newsletter&utm_medium=email&utm_campaign=DPD


Japan has always had difficulties with natural resources shortages.

So ... in a blind panic, a country that once prided itself on education ... has shut down its low-cost nuclear energy system.

They CAN buy natural gas/LNG, but they really don't have the money.

[Rockdale]

Mohawk, if it's one thing that Japanese have, it's money.  The country has an economy which hasn't grown to any extent since the bubble burst around 1990 and they have a population which is actually starting to slowly decline in numbers due to a low birth rate and no immigration.  But when it comes to cash in the bank, they are on top of the world.  Which is why they can with no difficulties carry a national debt of twice the annual GDP as well as have interest rates over many years at practically zero percent.  It was very fortuitous for the world wide natural gas industry that the Japanese turned to natural gas to replace the power they lost by shutting down most of their nuclear power industry just when shale gas created the glut.

[mohawk70]

The shale natural gas "glut" is in the United States.

We don't export any natural gas from our glut to Japan.

[The ONLY natural gas LNG export facility in North America is in Anchorage, Alaska ... and most all of that now stays in Anchorage because the local officials have decided on applying local price controls to natural gas, and they cannot decide what to allow the natural gas producers to charge for new natural gas production.]

So, there is a shortage of natural gas in Alaska ... in the neighborhood of the export facility on Kenai.

An Australian company is using some legal deal to drill across the street from WalMart and intends to export that natural gas.

[Whatever]

But Japan is hurting because their cleanup of the rubble from the earthquake and tsunami is going so slowly.

And because they cannot run their industry to generate income because they don't have enough electricity because they shut down their nuclear generators ... and their non-nuclear generators don't generate enough electricity.

[Rockdale]

Mohawk, your premise that Japan can't afford to import natural gas is ridiculous.  Japan is certainly a rich enough country that it can pay for energy imports.  They don't like to spend what they are spending right now to replace lost nuclear power with imported LNG, but it would be news to most anyone in Japan that their economy is about to collapse.  There was a lot of scare talk generated by the pro-nuke people that Japan couldn't survive without its normal output of electricity but two years and counting after Fukushima that clearly isn't the case.  Belt tightening in terms of conserving electricity and good luck with the weather has allowed the Japanese to muddle through even if a lot of Japanese would prefer not to literally sweat it out in their hot and humid summers.  I'm quite aware of the fact that the US is not geared up yet to export natural gas in the form of LNG.  I don't think there is anyone on this forum who has expressed more frequently the idea of the necessity of exports in order to gain fair pricing than myself.  I'm sure the Japanese are quite capable of having a rational national debate about nuclear power, and I expect that they will eventually reopen a significant portion of their nuclear power plants even if many will stay shut down for good.  As to the incident at Fukushima, the other week there were news stories about the passing away of the chief engineer of the plant.  By all accounts he had stayed behind to deal with the crisis when many others had panicked and fled the site, with the top management of Tokyo Power close to ordering the complete abandonment of the plant.  He died of cancer in his 50's.

[DSWIS]

But as you should be aware we will sell LNG to japan in 2015 & 2017 with long term contracts.

Chubu Electric and Osaka Gas signed contracts last summer to use Freeport's liquefaction facility, with each committed to use 2.2 million metric tons of its LNG capacity a year to process natural gas they buy in the North American market. Osaka Gas also has a 10% stake in Freeport LNG Development, the facility's operator.

Freeport is the second LNG project the Obama administration has approved for exports to non-FTA countries after the Sabine Pass, La., which it approved in May 2011 and is slated to start exporting in 2015.

The $10 billion Freeport LNG project is scheduled to start commercial operations in 2017. Participation from existing LNG sellers such as Qatar, Russia and Australia will be necessary to augment that supply till U.S supply is available.

The annual Japanese LNG requirement is constrained by the nation's current maximum infrastructure capacity of 30 import terminals.

Another four LNG import terminals are under construction in the country and should be in operation by 2014 and 2015.

And in the interim, Japan will purchase & develop interest in Papua New Guinea, Mitsubishi Corp. was among international companies to acquire stakes in natural gas discoveries and exploration blocks last year.
http://blogs.wsj.com/moneybeat/2013/05/23/japan-steps-up-interest-in-papua-new-guineas-gas-riches/

So diversification will be the path, minus many Nuclear plants that will be priced out by regulations.

[macal]

  I like facts. Cheers to you. Dwis. We need to export, as much as I would like to keep it here. The transportation thing isn't really happening. Gotta sell some gas.

[mohawk70]

But as you should be aware we will sell LNG to japan in 2015 & 2017 with long term contracts.

Chubu Electric and Osaka Gas signed contracts last summer to use Freeport's liquefaction facility, with each committed to use 2.2 million metric tons of its LNG capacity a year to process natural gas they buy in the North American market. Osaka Gas also has a 10% stake in Freeport LNG Development, the facility's operator.

Freeport is the second LNG project the Obama administration has approved for exports to non-FTA countries after the Sabine Pass, La., which it approved in May 2011 and is slated to start exporting in 2015.

The $10 billion Freeport LNG project is scheduled to start commercial operations in 2017. Participation from existing LNG sellers such as Qatar, Russia and Australia will be necessary to augment that supply till U.S supply is available.

The annual Japanese LNG requirement is constrained by the nation's current maximum infrastructure capacity of 30 import terminals.

Another four LNG import terminals are under construction in the country and should be in operation by 2014 and 2015.

And in the interim, Japan will purchase & develop interest in Papua New Guinea, Mitsubishi Corp. was among international companies to acquire stakes in natural gas discoveries and exploration blocks last year.
http://blogs.wsj.com/moneybeat/2013/05/23/japan-steps-up-interest-in-papua-new-guineas-gas-riches/

So diversification will be the path, minus many Nuclear plants that will be priced out by regulations.

Cheniere:   as early as late 2015

http://www.lngworldnews.com/usa-cheniere-logs-net-loss-liquefaction-projects-on-track/?utm_source=LNG+World+News.com&utm_campaign=383420204c-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_c166323d3e-383420204c-215271677

[mohawk70]

Japan's economy may be #3, but it's been flat since 1995 ...  twenty years ... 24 years flat according to this study:

http://www.businessinsider.com/japan-economy-disaster-2013-5

After the collapse of what might still be the largest economic bubble in history, in 1989, Japan is still mired in a 24-year non-recovery. Nominal GDP in 2011 was almost exactly what it was 20 years earlier, in 1991 (MeasuringWorth.com). You can find other ways to measure nominal GDP which indicate limited growth; but compared to the US and China, nominal growth in Japan has been paltry.

Read more: http://www.businessinsider.com/japan-economy-disaster-2013-5#ixzz2atc1gn99



http://theeconomiccollapseblog.com/archives/the-japanese-financial-system-is-beginning-to-spin-wildly-out-of-control

... and Japan's approach to tsunami disaster recovery [slow cleanup work and shutting down their nuclear power stations] is just making the economy worse.



http://www.marketwire.com/press-release/japanese-nuclear-reactor-restarts-may-impact-future-lng-imports-industrial-info-news-1814937.htm


If Japan's nuclear power comes back online, its record LNG consumption may decrease back to pre-earthquake levels.

[mohawk70]

  I like facts. Cheers to you. Dwis. We need to export, as much as I would like to keep it here. The transportation thing isn't really happening. Gotta sell some gas.

The "transportation thing" can't happen as long as the EPA has rules and regulations that prevent "the transportation thing" from happening.

BUT, maybe, if you call your governor, he can encourage the use of methanol / flex fuel and also the use of CNG ... check your YouTube and also   www.energyvictory.net

Do some reading  of Robert Zubrin and also Robert Bryce and also Korin & Luft.

And then take what you learn from them and pass that along to your governor for him to put into effect ... AND THEN YOU WILL SELL NATURAL GAS.

[DSWIS]

You change the playing field by Government coordination in Congress to jump start incentive cost for infrastructure build out. And guess what??

They will build the product for consumers to digest! 

An EPA rule to change and allow uneducated mechanics to pollution, isn't going to see a Landslide of purchased retrofit LNG's on the street. That will not get us there, we need mass production as our industries are capable of.

People will not risk losing their warranty on new vehicles retrofitted by back ally mechanics. If you want to test your own skills the EPA will not stop you if you retrofit a vehicle vintage of 2000 and back! 

[Rockdale]

Using natural gas in a substantial way in the transportation sector is certainly a key ingredient to more consumption and better prices.  But I think any meaningful increase is going to involve heavy trucks rather than passenger vehicles.  The average tractor trailer used for interstate commerce puts on close to 100,000 miles per year while the average passenger vehicle logs about 12,000 miles.  And of course the fuel consumption per mile for the heavy trucks is vastly greater.  There's some encouraging signs that the trucking industry is making the switch to natural gas in some form due to the favorable economics of cost per mile.  The big hurdle seems to be the cost of conversion and the lack of adequate refueling points.

[mohawk70]

You change the playing field by Government coordination in Congress to jump start incentive cost for infrastructure build out. And guess what??

They will build the product for consumers to digest! 

An EPA rule to change and allow uneducated mechanics to pollution, isn't going to see a Landslide of purchased retrofit LNG's on the street. That will not get us there, we need mass production as our industries are capable of.

People will not risk losing their warranty on new vehicles retrofitted by back ally mechanics. If you want to test your own skills the EPA will not stop you if you retrofit a vehicle vintage of 2000 and back! 

Last I heard, people who fix cars, who modify cars, who work on boat engines, who work on lawnmowers and chain saw engines are not required to be licensed by the EPA.

Speak for yourself, but there is nothing special about working on an engine to change it over or convert it to burn CNG.

Or propane.

Check with YouTube.


Every other country in the world does these conversions routinely.

Any shade tree mechanic or hammer mechanic can do it.

Buy the parts in a store or on the internet.

Not rocket science.

[DSWIS]

Yes and point being....a few thousand home conversion kits isn't going to make a hill of beans in demand. And EPA rule changes are not going to change the course of demand for home installations to personal vehicles.

If you want to save money for the common citizen. Purchase a kit and install on a 2000 vintage or older vehicle for now. The only certification required would then be a emissions test. And no fines if you pass. No re-certification in following years, as I understand.

Although kits for truck fleets may  be available. I doubt the common business corp. will undertake after market installations and suffer warranty issues.

One other point to note is as cross industry infrastructure is paid down by large corporate interest. It will take some of the sting out from personal  passenger vehicles from absorbing large tax burdens placed on fuel. When the build out happens you will see the Auto industry expand more tooling dollars to offer products to the population.

Mo, be my guest to change any implement you like to conversion. But honestly, how many common folk do you think will undertake such a feat? This will not do much for NG demand is the point I have made.

[mohawk70]

Yes and point being....a few thousand home conversion kits isn't going to make a hill of beans in demand. And EPA rule changes are not going to change the course of demand for home installations to personal vehicles.

If you want to save money for the common citizen. Purchase a kit and install on a 2000 vintage or older vehicle for now. The only certification required would then be a emissions test. And no fines if you pass. No re-certification in following years, as I understand.

Although kits for truck fleets may  be available. I doubt the common business corp. will undertake after market installations and suffer warranty issues.

One other point to note is as cross industry infrastructure is paid down by large corporate interest. It will take some of the sting out from personal  passenger vehicles from absorbing large tax burdens placed on fuel. When the build out happens you will see the Auto industry expand more tooling dollars to offer products to the population.

Mo, be my guest to change any implement you like to conversion. But honestly, how many common folk do you think will undertake such a feat? This will not do much for NG demand is the point I have made.

Might be more than a few thousand.

Keep in mind that although you personally might not be comfortable with the idea of diagnosing an automotive mechanical issue or perhaps be a subscriber to Popular Mechanics or Home Handyman, hundreds of thousands of people are subscribers ... which is the reason here in the United States we have huge chains of Home Depots, Lowe's, Ace Hardware Stores, ... AND ... NAPA auto parts stores.   

Americans are irrepressible Do-It-Yourselfers.

Maybe not like in places like France or Iran.

But here in the U.S. of A., yes.


And warrantee issues may not be as important for truck operators as you might think.

[I get the idea from your word-choices that perhaps you are not actually from around here:  One other point to note is as cross industry infrastructure is paid down by large corporate interest.   ]


My goodness, in Pakistan they are downright passionate about CNG:

http://www.thefrontierpost.com/article/199156/



http://www.cngunited.com/


Pakistan is #2, right after Iran!

https://en.wikipedia.org/wiki/Natural_gas_vehicle

[DSWIS]

My personal diagnostic abilities are not in question to settle any argument to my ability or suggestive rebuttal. And your normal concept of reply's to double dare any responder to try your suggested affirmations seriously drifts off debate.

And in subject to "Not from around here" IS accurate. As I do not reside in PA. But I can assure you my home is not on Planet Mars!

My response's are clear in respect to logical rebuttal. But if insult drift reassures your affirmation to solidify, your image of no one should counter your suggested path to the U.S. by differing of opinion. You leave yourself in that same quagmire our leadership currently expresses by stalemate.

So again for your suggested point to the subscriber of Popular Mechanic. Some 1.5 million (Large)with supposed scientific prowess. How many do you believe will get off their duff and purchase these retrofit kits you claim are straight forward and have the most basic of mechanical knowledge? And have the spare time to take the initiative, after a full work week of politics to undertake this project? While I might add the risk of warranty rejection, the first time into the dealership for service, if installed on a 2001 or newer vintage.

This was your quote, not mine. "Americans are irrepressible Do-It-Yourselfers"

Also on this quote....."And warrantee issues may not be as important for truck operators as you might think."
I don't just think. I was personally at many Peterbilt & Kenworth dealerships to sample the Service Dept. As we required feedback to the redesign product lines on the road now. And warranty purchases as I know statistics, are very high for a 3-Year / 300,000 Mile Extended Vehicle Warranty On All New Class 8 lines.

And for PACCAR, I can tell you this much. They are in the market to sell new product lines with CNG & LNG. and not to allow competing installers prevail. So it kind of goes without saying. They are not interested in competing with aftermarket kits and warrantying them as well! 

Oh, by the way it is very funny you should use Pakistan as an example for CNG usage. Read this article it is a prime example of special interest influencing the government on continued usage or direction to CNG. 
http://www.channelnewsasia.com/news/business/cng-industry-in-pakistan/763668.html