Scholars, policymakers and business leaders from Japan and the United States recently gathered at Stanford to analyze energy innovation and build new bilateral endeavors.

“With rapid economic growth in emerging countries, world energy consumption has been and will be increasing, everyone has been wondering if there are enough energy resources for this growth," said Hideichi Okada, a former vice minister for International Affairs at Japan's Ministry of Economy, Trade and Industry.

Panelists weigh in on the changing energy picture in the U.S. and Japan.

Okada said Japan and the U.S. share concerns about world geopolitical change in energy supply and demand, and nuclear policy. Okada is at Stanford as the Sasakawa Peace Fellow at the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) this year.

Okada's remarks came during the the New Channels Dialogue, a two-day conference organized by the Japan Program at Shorenstein APARC and the Sasakawa Peace Foundation. It is the first of three annual conferences aimed to stimulate debate on 21st century problems faced by both nations. 

“In the aftermath of the disaster at Fukushima, Japan has reinvigorated its search for cutting-edge technologies and alternative sources of energy,” said Yuji Takagi, president of the Sasakawa Peace Foundation. In parallel, the U.S. has increased its production of shale gas as a viable alternative of natural gas.

Confluence of national interest and demand, and shared historical connections between the U.S. and Japan, suggest an ideal environment for further partnerships between the two countries.

“We have entered an especially important period in bilateral relations between the Asia-Pacific [and the U.S.] – it is undergoing such rapid change and technology is transforming. In this context, I believe the U.S.-Japan relationship will only become more important,” Takagi said.

Experts and Stanford scholars discuss electricity systems in California and Japan.

Okada cited the joint U.S.-Japan wind power project in Hawaii as an example of recent cooperation. Last December, Maui became the site of a multi-year renewable energy project between the American and Japanese governments.

Other panelists offered different perspectives on energy opportunities from across sectors, included among them were Julia Nesheiwat, the State Department’s Deputy Assistant Secretary at the Bureau of Energy Resources; Hirofumi Takinami, a member of the Japan’s House of Councilors and former visiting fellow at Shorenstein APARC; Thomas Starrs, SunPower vice president; Nobuo Tanaka, former IEA Executive Director; and Frank Wolak, Stanford economics professor and director of the Program on Energy and Sustainable Development.

Topics discussed included:

• Energy constraints experienced by Japan since the Fukushima nuclear disaster, and challenges facing Japan’s electricity industry liberalization.
• Regional implications of China’s rise as a major energy consumer and producer.
• Geopolitical and trade balance effects on the United States and Japan resulting from the shale gas revolution transforming the U.S. into a major energy producer.
• Broad impacts to the energy industry caused by geopolitics and financial instability.
• Lessons learned from California’s experience with electricity industry liberalization.
• Multilateral partnerships for energy technology and innovation.

The second day of the conference was a closed session in which candid, in-depth discussions were held. Participants also went on a site visit to Bloom Energy led by principal cofounder and chief executive officer K.R. Sridhar.

The New Channels Dialogue highlighted energy imperatives and created a network of exchange anticipated to continue beyond the conference. A report that encompasses major points and policy recommendations will be published in the forthcoming months. 

We write to invite you to an international conference on “Regional Carbon Policies” that PESD is hosting at Stanford University on Thursday, December 5^th. With efforts to expand international carbon markets beyond Europe’s trading scheme seemingly stalled, various countries and subnational jurisdictions have taken unilateral action on climate policy. Switzerland, the Canadian provinces of Québec and British Columbia, California, the member states of the Regional Greenhouse Gas Initiative (RGGI) in the northeastern United States, and New Zealand have all moved forward on carbon markets or taxes. Asian countries including Japan, India, South Korea, and China are also in the process of implementing carbon policies.
 
Linking regional efforts to create a single larger carbon market has the potential to increase the impact and reduce the cost of climate mitigation. With this in mind, our conference brings together academics, government policymakers, and market participants to share the best available academic and practical knowledge about how to make regional carbon policies work. We specifically seek to: 1) identify common implementation challenges facing regional climate policies around the world, 2) formulate a “best practice” market design that can serve as a starting point for a country or region contemplating a GHG emissions allowance market, and 3) identify the policy pathways most likely to foster rapid and successful integration of regional carbon efforts. An additional goal of the meeting is to identify key market rules and integration protocols that can be tested as part of a new research project at Stanford that uses structured “games” to simulate cap and trade markets.

We hope you will join us for this unique event.

Click here for the conference agenda and to register
                                                                                       
Frank A. Wolak                                       Mark C. Thurber
Director, PESD                                          Associate Director, PESD
wolak@stanford.edu                              mthurber@stanford.edu

Frank Wolak was a panelist at a one-day symposium in Tokyo put on by the Center for International Public Policy Studies entitled “Can Japan have a new economic paradigm after the catastrophic quake and tsunami on 11th March?”.

Wolak described how active demand-side participation by consumers through the use of dynamic pricing could help manage Japan’s current energy shortfall and benefit Japanese industry by stimulating the demand for the advanced metering and other electronic equipment necessary to implement dynamic pricing. Wolak summarized the results of several PESD research projects demonstrating significant price-responsiveness at both the residential and industrial level to retail prices that vary with real-time system conditions.

The major topic at the symposium was how Japan would meet its current and future electricity supply needs and what role nuclear power should play. There was general agreement among the panelists that nuclear power should remain part of Japan’s energy mix for both economic and energy security reasons, along with more stringent nuclear safety regulations. Other participants included Junichiro Koizumi (former Prime Minister of Japan) and Chief Executive Officers from a number of major Japanese corporations including Toshiba, Nippon Steel, Toyota, Panasonic, and Canon.

Platts Coal Trader International
Vol. 11, Issue 67, Pages 5-6

Australia faces serious challenges over the next 20 years in maintaining its hard-won place as a leading coal exporting country and capturing new market share, according to a research paper published by Stanford University's Program on Energy and Sustainable Development April 5.

Following earlier papers on China, Indonesia and South Africa's coal industries, the latest PESD paper, entitled Australia's Black Coal Industry: Past Achievements and Future Challenges, has been written by coal industry expert Bart Lucarelli.

The paper sketches the development of Australia's export coal industry, from its shaky start in the aftermath of the Second World War amid a glut of cheap oil, to the "phenomenal success story" of today.  The renaissance of Australia's coal industry was assisted by the discovery of vast deposits of high-quality coking coal and thermal coal in Queensland's Bowen Basin and the

Hunter Valley of New South Wales respectively, along with new mining technologies and the economic expansions of Japan, South Korea and Taiwan, Lucarelli said.

During the Australian coal industry's competitive phase - 1987 to 2003 - export coal prices were relatively stable, but the growth rate of Australia's coal industry slowed as Indonesia became a significant coal exporter.  Since 2003, Australia's coal industry has been in a "volatile price phase," as export coking and thermal coal prices have soared to record highs with the entry of China and latterly India into the international seaborne market, while weather events have affected supplies from coal exporting countries.

Looking to the next 20 years, Lucarelli forecasts serious challenges to the preeminence of Australia's export coal industry in the shape of infrastructure constraints, regulatory risks and under-investment in railways and ports by government-owned companies.  "The most pressing and immediate technical challenge to the black coal industry of Australia is the shortage of rail and port infrastructure to support its further growth," said Lucarelli in the research paper.

‘Chronic infrastructure shortages' Governments in Queensland and New South Wales have proposed projects for expanding their rail and port networks to support a significant increase in Australian coal exports, which are forecast to grow to 540 million mt by 2020 from 240 million mt in 2010.  "Part of the reason that chronic infrastructure shortages are likely to persist has to do with the type of technology being implemented - large rail and fixed land port systems," Lucarelli explained.  Large port and rail projects are required for economies of scale, but involve long lead times, high upfront costs and complex regulatory clearances. 

"A second reason for the chronic shortage of infrastructure has been the reliance on state-owned entities to make the necessary investments in the rail and port systems," Lucarelli said. Government-owned rail and port companies tend to be less nimble and entrepreneurial in their decision-making than the private sector, though some port and rail companies have been privatized recently - most notably Queenslandbased rail company QR National and the port of Brisbane.  Regulatory uncertainty stemming from the Australian government's stop-start policy on curbing carbon emissions and its proposed Mineral Resource Rent Tax on coal-mining profits are additional factors clouding the expansion of Australia's coal industry.  "Potential coal mining projects most at risk due to regulatory uncertainty are the massive new steam coal projects planned for the Galilee, Gunnedah and Surat basins," Lucarelli said.  Illustrating the potential for expansion within Australia's coal industry, Lucarelli said that if only two of the advancedstage projects in the Surat Basin in Queensland started production on schedule, they could add 110 million mt/year of thermal coal exports by 2015.  This is almost as much thermal coal as Australia exported for the whole of 2008, at 115 million mt.