Japan should consider alternative energy as oil price marks threshold $100
(From The Japan Times Jan. 7 issue)

原油100ドル時代に代替エネルギー開発を

It did not take long for oil prices to reach $100 a barrel in 2008. Rising demand, geopolitical instability and a falling dollar have all contributed to the soaring price of crude. None of these factors is likely to diminish: High prices are here to stay.

After flirting with the $100 mark in the late half of 2007, oil prices crossed that threshold Jan. 2 in New York. Crude prices have climbed steadily for six years and are now five times the 2002 level, when they were just $20 a barrel. Last year alone, oil prices surged 60 percent. Adjusted for inflation, prices today are at or near those of the early 1980s, when markets were rattled by the Iranian revolution and the outbreak of the Iran-Iraq war.

Geopolitics is equally messy today. Iraq and Nigeria, major exporters, are restive, and traders are unsettled by developments in Pakistan and Iran. Rising tensions in the Middle East generally have also added to upward pressure on prices. Concern about the U.S. economy and the falling value of the dollar, have prompted investors to look for hedges. This too pushes up the price of oil.

The biggest factor is the demand for oil created by the rise of China and India, dynamism in Southeast Asia and economic growth in the United States, all of which have shifted the demand curve. Moreover, prospects for finding more oil are limited. Estimated deposits appear to be nearing a plateau and there is limited equipment and manpower available to search for new fields. Record profits are being returned to shareholders rather than invested in new infrastructure.

Japan's dependence on imported energy means that rising prices can hit the economy hard. A strengthening yen helps dilute some of the impact. The use of nuclear energy provides some insulation as does this country's energy-efficient technologies and production processes. But confidence in the nuclear industry has been damaged by scandals and technology failures; efficiency is not a cure-all. Japan, like the rest of the world, must prepare for a new international energy market.

原油相場がついに1バレルあたり100ドルをつけた。需要の増加、地政学的不安定、ドル相場の下落などが相場を押し上げた。今後も原油高は続きそうだ。

原油価格は6年間上昇を続け、今や02年の5倍に達している。昨年だけでも60 % も急騰した。

地政学的問題も背景にあるが、原油高の最大の要因は、中国、インドの需要増、東南アジアの発展、米国経済の好調などだ。輸入原油に依存する日本経済は、原油高で深刻な影響を受けそうだ。円高、原子力の利用、省エネ技術も影響を軽減するだろう。

しかし、原子力産業は不祥事、技術的問題で信用を落としている。効率ですべてが解決できるわけではない。他国と同様、日本はエネルギー市場の新展開に備えなければならない。