A year after the tsunami, Japan is trying to get the country back on track. But there’s a long road ahead. How is Japan going to reshape its energy future?
On March 11, the world paused to reflect the one-year anniversary of Japan’s tragic tsunami.
Over 15,800 lives were lost from this single event. It’s estimated over 3,000 people are still missing.
I don’t know about you, but disasters like this remind me to really appreciate the life I have. There are some incredible survival stories that still send chills up and down my neck every time I read them.
Of course, Japan is working hard to figure out a way to get the country back on track. But there’s a long road ahead.
One of the biggest challenges… How is Japan going to reshape its energy future?
Over the past year, the tsunami forced Japan to depend much more on fossil fuels…
Barclays Capital says, “Neither the Japanese government nor environmentalist groups are happy about relying more heavily on fossil fuels.”
It’s pretty much guaranteed Japan’s dependency on fossil fuels will continue to surge for several years.
In January, Japan’s trade deficit hit a record high of $7 billion.
Meanwhile, all but two of its nuclear reactors are shutdown and renewable energy only accounts for 2% of its electricity output.
Before the tsunami, Japan was the world’s third-largest producer of nuclear power. It provided 30% of the nation’s entire energy needs. Today, there’s plenty of debate about whether or not the country will ax its nuclear energy program altogether.
If this happens, fossil fuel imports would likely stay at record highs for years to come.
This is simply the new reality Japan must deal with. It’s going to be a tough challenge for the country for a long time.
But for companies like Total S.A. (NYSE: TOT), Japan’s new energy landscape provides unique opportunities to profit…
Total S.A. is already a major oil and gas company.
Based out of France, the company has a market cap of $126 billion, and owns and operates major energy projects all over the world.
In Indonesia, it’s the country’s leading producer of natural gas.
According to The Jakarta Globe, Total produces 30% of Indonesia’s gas production and has 14 trillion cubic feet of reserves.
Much of this comes in the form of LNG, which Indonesia is the second-largest exporter in the world of. And Japan is currently Indonesia’s biggest LNG customer.
Rigzone.com reports Japanese “LNG imports are expected to remain the largest incremental gainer in 2012.”
In other words, as Japan continues to ramp up its demand of fossil fuels, especially LNG, Total will be one of the first companies to benefit from the extra spending.
Good Investing,
Mike Kapsch
Article by Investment U