Japan's Dependence on Imports for Oil and Natural Gas (2006)

Source: The Ministry of Economy, Trade and Industry (METI) statistics, Ministry of Finance (MOF) trade statistics and METI statistics

Japan's dependence on oil imports is 99.6% (as of FY2006, according to METI statistics). Following the two oil shocks in the past, a shift to nuclear power and natural gas as alternative energy sources to oil has been pursued as the national policy. As a result, Japan's energy dependence on oil declined from 77% in 1973. Even today, however, the significance of oil as primary energy remains unchanged, with some 50% of energy still generated by oil. Since 90% of Japan's total crude oil imports come from oil-producing countries in the Middle East, especially Saudi Arabia and the United Arab Emirates (UAE), the diversification of import sources is an important factor for securing stable access to energy resources, in addition to strengthening relations with these Middle Eastern countries.

Japan is also dependent on 96.4% of domestic natural gas consumption for imports, with its domestic production only a small fraction higher than that of oil. It was only a few decades ago that natural gas became familiar to the Japanese people. Unlike oil, which is in a liquid form at normal temperature, it used to be difficult to transport natural gas in any way other than through a pipeline. It was thus impractical to transport it to Japan which is an island country. This changed in the 1960s when a new technology that turns natural gas into liquid form by cooling it to 162 degrees Celsius below freezing point was developed. Since then, natural gas has been imported as liquefied natural gas (LNG). Currently, LNG is supplied to Japan from Australia, Malaysia, Brunei, Qatar, and Indonesia, among others. In addition to residential heating and cooking, natural gas is used as fuel for generating one-fourth of Japan's electricity, constituting an important energy source next to oil and nuclear power. Since natural gas produces less carbon dioxide (CO2), one of the greenhouse gases causing to global warming, compared to oil, its demand has been increasing globally as a cleaner energy source.

Copper and Zinc Supply Sources to Japan

Source: ICSG (Left), ILZSG (Right)

Mineral resources, including iron ore, copper, aluminum and nickel, are as indispensable for our lives as energy resources such as oil and natural gas. These resources are used in various scenes of our lives by being transformed into metal components of manufactured products. Like oil and natural gas, they also come mostly from overseas. It is thus essential to secure the long-term and stable supply of these resources. In the case of copper, Japan used to have major mines such as the Ashio and Besshi Copper Mines, but they were all closed long ago, and all the copper concentrates used by Japan are imported today, with half coming from Chile.

In this way, Japan is dependent on imports from foreign countries of natural resources that are indispensable for living with some exceptions, it is particularly dependent on imports from developing countries where country risk is involved. An important mission of JBIC is to help secure access to long-term and stable supplies of resources from these countries.