Political Tensions Run High, Energy Cooperation Deep in Japan-Russia Relationship

Russia detains Japanese diplomat . . .

Japan-Russia political tensions continue to rise with Moscow’s recent detention of a Japanese consul, Motoki Tatsunori, in the far eastern city of Vladivostok on September 26. Russian security services accused Tatsunori of trying to obtain information on Russia’s co-operation with an unnamed Asian country – co-operation supposedly to blunt the impact of Western sanctions. Moscow ordered Tatsunori to leave Russia within 48 hours, which could prompt retaliation by Tokyo. While political tensions between the two countries simmer, Japan and Russia continue to collaborate on energy, a relationship marked by the recent signing of an agreement for Russia to ship LNG from its Sakhalin-2 oil and gas project to Japan.

Seeking alternatives to Russia’s oil and gas . . .

Rising political tensions with Moscow, however, may prod Japan to accelerate its search for new sources of energy, both domestically and abroad, to reduce its reliance on Russia. Domestically, Japan plans to restart multiple nuclear power plants and explore new sources of domestic natural gas. Renewable energy will also play a more prominent role; the Toyota Tsuho corporation, for example, is planning to construct a wind power plant in Hokkaido. In looking beyond Japan’s borders, Mitsubishi Corp. is currently evaluating the “blue ammonia” project in the U.S., which has the potential to become the world’s largest producer of blue ammonia, a low-carbon fuel derived from a compound of nitrogen and hydrogen. Japan is also exploring new LNG partnerships with neighbouring countries, including Papua New Guinea.

Needing a reliable energy supply . . .

The international energy market is in turmoil as global energy supplies are being stressed by the decline in Russia’s oil and gas supplies to Europe. On September 27, the Nord Stream pipeline from Russia to Germany was damaged, leading to a loss of natural gas supplies. The supply shortages impacting Europe will have ramifications worldwide, with energy-importing countries feeling the brunt. With energy prices skyrocketing globally, Japan’s plans to expand its domestic and international energy capacity could alleviate domestic and global pressures on energy prices.

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