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Japan Covets Russian Gases

SAKHALIN-2 LNG tanks Japan, in a desperate bid to fill its energy and environmental needs, is coveting resource-rich and energy-inefficient Russia's plentiful natural gas and surplus greenhouse gas (GHG) emission credits.

Japan's imports of liquefied natural gas (LNG) from the Sakhalin-II project off Russia's Pacific coast are expected to start early next year. Japan also hopes to import the fuel from the adjacent Sakhalin-I project.

Meanwhile, Tokyo and Moscow agreed at the weekend to kick off talks on ways to fight climate change, including Japan's possible purchases of Russia's surplus GHG emission credits -- or rights to emit carbon dioxide (CO2) and other heat-trapping GHGs -- to reach its GHG emission reduction goal under the Kyoto Protocol on curbing global warming. Russia has the world's largest reserves of natural gas. It is also said to have the largest amount of surplus GHG emission credits.

Resource-poor Japan's drive for natural gas, as well as oil, has shifted to high gear, as the world's second-largest economy is increasingly concerned about its medium- and long-term energy security amid spikes in prices and intensifying global competition, fueled by China's increasing needs, for hydrocarbon resources.

For Japan, which imports almost all of its oil and natural gas, ensuring stable supplies is a matter of life or death. Japan remains by far the world's largest importer of LNG, buying about 40 percent of global imports.

Meanwhile, the country boasts the world's most energy-efficient economy and is proud of the fact that the Kyoto Protocol was negotiated and born in the nation's ancient capital in 1997. Even so, Japan is increasingly feeling the heat over the Kyoto Protocol as the major emitter of CO2 is struggling to reach its CO2 and other greenhouse gas reduction goals under the treaty.

Failure to fulfill its commitment under the treaty would not only represent a loss of face for the nation but deal a blow to its clout in the world of environmental diplomacy.

The issue is particularly sensitive for Japan, which wants to take the leadership role in efforts to establish a new and effective international framework, now under negotiation, to replace the Kyoto Protocol, which expires in 2012.

Prime Minister Yasuo Fukuda unveiled his climate initiative, dubbed "Cool Earth Promotion Program," in a speech at the World Economic Forum in Davos, Switzerland last month. The Japanese initiative includes, among other things, a pledge by Tokyo to provide US$10 billion in aid over five years to developing countries to help them combat global warming.

The first -- and probably most important -- test of Japan's diplomatic finesse will come in early July when it hosts this year's summit of the Group of Eight (G-8) major nations. Climate change is expected to top the agenda at the G-8 summit, which will bring together leaders from the United States, Canada, Britain, Germany, France, Italy, Russia and Japan. Japan also plans to invite to the summit leaders from such leading developing countries and CO2 emitters as China and India.

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