December 2011, Vol. 238 No. 12

Features

Issues Facing U.S. Shale Gas Exports To Japan

This article explores the feasibility of exporting shale gas – in the form of LNG – from the U.S. to Japan and Korea considering the break-even gas prices and the liquefaction and transportation costs versus prevailing spot and long-term contract prices of LNG in Japan. Potential risks also are discussed. Japan has limited energy resources and its energy self-sufficiency, even after inclusion of nuclear power, barely amounts to 16%. This is the main reason why Japan is heavily dependent on imported energy to maintain its economic growth. Following the oil shocks of the ’70s and ’80s, Japan gradually veered away from initial oil dependence of almost 80% to