Japan, the world’s second-largest economy, may have found a way to reduce its almost total dependence on other countries for the oil that drives the industries on which the country’s wealth is built.
Betting that Japan can extract and commercially exploit methane hydrate, the hoped-for alternative to oil, investors last week drove up the price of Japan Drilling, a company established in 1968 but only this month raising money by selling shares to the public.
Japan Drilling won the attention of market players because it is involved in the niche field of researching and developing methane hydrate.
The mineral is abundant in the seabeds surrounding Japan and may, over and above revitalizing the country’s economy, reshape Tokyo’s diplomatic and military relationships with the outside world, including the United States.
Japan has few mineral resources to speak of. It imports 99.7% of its crude oil, importing 87% of its oil from the Middle East. That makes the country heavily reliant on a secure sea lane stretching from the Middle East to Northeast Asia. Maintenance of good diplomatic relations with energy suppliers and with its military backer, the United States, is also essential.
Methane hydrate is a frozen methane gas found in a high-pressure, low-temperature environment, such as seabeds and beneath frozen ground. It is often called burning ice. Methane itself is a component of natural gas.
There are growing expectations that methane hydrate will come to serve as a valuable energy resource. The US, China, Canada and South Korea are among other countries seeking to develop commercially viable extraction technology.
In Japan, the government is backing efforts to complete research and development by 2018 and launch commercial production after that.
The volume of methane hydrate in seafloor sediments around Japan alone is estimated to be enough to provide energy equivalent to 90 years of the nation’s natural gas usage today.
Source: Asia Times