IEEJ：May 2017○ｃIEEJ 2017
Special Bulletin
A Japanese Perspective on the International Energy Landscape (324)

May 19, 2017

Overview of 2nd IEEJ/APERC International Energy Symposium
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanOn May 18, the second IEEJ/APERC International Energy Symposium took place at the Grand
Prince Hotel Takanawa in Tokyo. This followed the first such symposium that was held last year tomark the 50th Anniversary of the Institute of Energy Economics, Japan (IEEJ), and the 20thanniversary of the Asia Pacific Energy Research Center (APERC). The number of participants in thesecond one totaled more 300 on a registration basis. In the symposium titled “Threats andOpportunities under the Uncertain Energy Situation,” distinguished fellows at the IEEJ and famed
Asia Pacific energy experts made presentations and panel discussions in three sessions. In thefollowing, I would like to summarize impressive points in each session.
The first session dealt with the new U.S. administration and its influences on energy andenvironmental policies. The key point in the session was that even more than 100 days after theinauguration of the Trump administration, even experts have difficulties in estimating influences andeffects of energy, environmental and other policies of the new administration due to theirunpredictability and uncertainty. A participant in the first session discussions noted that Donald
Trump was viewed by some people as “disruptor-in-chief” instead of “commander-in-chief of theU.S. military.” On the new administration’s engagement with and influences on the Middle East
issue, one of the key issues exerting great influences on the international oil market, participants
made interesting arguments under the acknowledgement that the U.S.-Saudi relationship, the fate of
the Iran nuclear agreement and U.S. policy on Iran, the proposed transfer of the U.S. embassy toJerusalem and other challenges and their developments could gravely affect the stability of theMiddle East and the international oil market.
In regard to the new U.S. administration’s environmental policy, discussions focused on its
engagement with the Paris Agreement and problems involving the U.S. Clean Power Plan. It wasnoted that no details have been given about the policy, while it is undoubtedly expected to go in adirection different from that for the previous Obama administration. Whatever the environmental
policy would be, one participant said, carbon dioxide emissions would continue a downtrend withcheap natural gas replacing coal and with renewable energy spreading under state policy support anddeclining generation costs. This means that the new administration’s environmental policy, thoughattracting much attention, would have only limited actual impacts. While some participants doubted
any serious impacts of other energy policies of the new administration, one participant called forpaying attention to possible Alaskan oil and gas development and the Iran policy, both of which canbe game changers.
1

IEEJ：May 2017○ｃIEEJ 2017

The second session covered climate change and zero-emission energy (nuclear and renewableenergy). A basic acknowledgement in the session was that while Japan and the United States areplagued with great nuclear challenges for different reasons including the Fukushima accident inJapan and gas price falls under the U.S. shale revolution (and Toshiba Corp.’s financial crisis forboth), nuclear is a useful option for reducing carbon emissions from various viewpoints including
cost efficiency. A view given in the session was that it would be important to pursue advanced
technologies and promote initiatives for tackling backend problems after enhancing and securingsafety as the key priority. Another interesting view presented there was that while it is decisively
important to diffuse understanding about radiation based on scientific and objective facts to prevent
any excessive or emotional reaction, the diffusion is still insufficient in Japan and the world.
One of the energy-related developments attracting the most attention at present in the world is afast decline in renewable energy power generation costs. Based on the development, participants inthe session placed their hopes on renewable energy’s greater share of the future world energy mix. A
presentation given in the session focused on China’s renewable energy policy target and outlook.
However, the expansion of renewable energy power generation is common to emerging anddeveloping countries and developed economies such as Japan, the United States and European
countries. In considering how far renewable energy power generation will expand in economicallyfeasible way, we may have to pay attention to “integration costs” that would be required whenintermittent renewable energy power generation increases its share of the energy mix. All
low-carbon options including renewable and nuclear energy will undoubtedly become important for
cutting greenhouse gas emissions substantially in the world in the future.
The third session discussed how to ensure national security and economic efficiency, and fossil
fuels’ relevant roles. Major energy outlooks in the world commonly note that fossil fuels including
coal, oil and gas will retain the most important position in the energy mix through around 2040 in
Asia and the world. As low-carbon initiatives are implemented to drive the advancement of energy
technologies, however, growth in demand for fossil fuels in particular for coal will be held down.
One participant in the session noted that how to enhance price competitiveness for gas, known as arelatively cleaner fossil fuel, would exert great influences on future gas market growth. It wasconfirmed that each fossil fuel faces problems such as how to realize investment to secure supply inline with demand growth, as well as energy security challenges including the volatile Middle Eastern
situation.
Separately, there were interesting arguments on oil and liquefied natural gas markets. It wasnoted that U.S. shale oil has taken advantage of production cost cuts to increase its supply potential
and could cap crude oil prices more effectively than expected earlier. It was interesting for me to see
the resilience of US shale oil will affect seriously the future of the current coordinated oil production
cut by the Organization of the Petroleum Exporting Countries and non-OPEC oil producing
countries. It was also pointed out that oil and gas development investment stagnant at low levels
could risk a supply crunch causing a possible oil price hike in the future. Future developments in theinternational oil market are attracting much attention. As for the LNG market, interesting arguments
2

IEEJ：May 2017○ｃIEEJ 2017
were made on the important implications of Qatar’s sudden announcement to lift a moratorium ongas development last month. Participants said that new LNG development in Qatar would greatlyaffect LNG projects in other countries due to Qatari LNG’s excellent price competitiveness. Qatar’spresence and strategic moves have become one of the most important points for analyzing the LNG
market in which continued oversupply until the early 2020s may see a sign of change at around thattime.

Contact: report@tky.ieej.or.jp
The back issues are available at the following URL
http://eneken.ieej.or.jp/en/special_bulletin.html

3