Japan could ask people to reduce their natural gas consumption

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Japan could ask households and businesses to reduce their consumption of natural gas, fearing that increased global competition for the precious fuel could disrupt the stable supply.

Cyclists pass Tokyo Gas Co. storage tanks at the company's Hiranuma plant in Yokohama, Japan, Wednesday, April 20, 2022. Japanese imports jumped 31 percent in March from a year ago year to reach a record value, driven by crude oil, coal and natural gas, and this will result in higher electricity bills in the country which is heavily dependent on others for its energy resources. Photographer: Toru Hanai/Bloomberg
Cyclists pass Tokyo Gas Co. storage tanks at the company’s Hiranuma plant in Yokohama, Japan, Wednesday, April 20, 2022. Japanese imports jumped 31 percent in March from a year ago year to reach a record value, driven by crude oil, coal and natural gas, and this will result in higher electricity bills in the country which is heavily dependent on others for its energy resources. Photographer: Toru Hanai/Bloomberg Photo by Toru Hanai /Bloomberg

(Bloomberg) – Japan could ask households and businesses to reduce their consumption of natural gas, fearing that increased global competition for the precious fuel could disrupt stable supply.

A panel within Japan’s Commerce Ministry has called for talks to create a framework that would allow the government to ask households and businesses to conserve gas when supplies are tight, according to documents released Monday. As long-term liquefied natural gas contracts help the country ensure a stable supply, competition over fuel is increasing and « conservation measures will be required » in the event of energy supply disruptions, the document said.

The government will first ask households and businesses to limit gas use to the best of their abilities, and if that’s not enough to avoid supply shortages, it will follow with specific conservation targets, the documents say. . Local Nikkei media reported the plan earlier.

The discussion comes after recent moves by Russia to transfer the rights to the Sakhalin-2 natural gas project to a new company, which could threaten foreign owners, including Japanese companies. The Japanese government is already asking its citizens to play their part in energy conservation, as the electricity supply is expected to be tight this summer and winter.

Japan should have enough power this week, with rainy weather expected to lower temperatures in several parts of the country. The power reserve ratio, which measures the reserve capacity of generators, was expected to be the lowest for the Tokyo area on Wednesday at 7.1%, according to the Ministry of Commerce, still above the 3% needed for a network steady. Japan’s spot electricity price the next day stood at 31.22 yen per kilowatt-hour on Monday, according to the Japan Electric Power Exchange, down 3.8% from the previous week.

(Updates story throughout with details from government records.)

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