Natural Gas and the Fall Out of Nuclear
Japan's nuclear crisis (as it surely appears to be at this stage) will certainly have consequences for the global energy markets, both in the near term and in the future planning of energy sources.
Nuclear power represents generates more than a quarter of the Japan’s total electricity output. Forced shutdowns of nuclear facilities as well as earthquake impacted oil, gas and coal-fired power stations will strain the country’s remaining generating resources.
Already the world’s largest buyer of LNG, Japanese requirements for liquefied natural gas will certainly increase. Shell has already announced that it will be diverting cargoes of the fuel from Europe.
Though there has been slack in the market, increased demand will undoubtedly lead to higher prices for liquefied natural gas in the future, particularly in Europe.
In the longer term, the events in Japan are leading to a rethink of the role of nuclear power.
German Chancellor Angela Merkel has said that all seven of the country’s nuclear power plants, which began operation before 1980, would be suspended from operation for three months pending a safety review. Britain and other European nations face decisions in whether to replace, extend the lifespan or shut down aging nuclear plants.
As far as options, many point to solar power and renewables as a solution. Certainly they may be viewed as being safer, but they cannot replace the output of nuclear energy. In 2008, nuclear plants generated 13.5% of the world's electricity, while solar power accounted for 0.06%.
Natural gas appears to be the logical successor to nuclear power as the safe, reliable and readily available source of energy.
New and growing supplies from Russia, Qatar, Australia, Central Asia and North African nations (amongst others) will provide for plentiful future supply. The development of unconventional shale gas resources in the US has already set that nation on the course of being an exporter. Though questions remain on the environmental front, shale gas will also play a role in the European energy mix.