JAPAN'S ENERGY SECURITY PLAN GETS OFF TO

UNCLAS SECTION 01 OF 04 TOKYO 000924 SIPDIS SIPDIS PLEASE PASS TO EAP/J WENDELL ALBRIGHT AND LORI SHOEMAKER. PLEASE PASS TO USTR MICHAEL BEEMAN. E.O. 12958: N/A TAGS: ECON ENRG JA SUBJECT: JAPAN'S ENERGY SECURITY PLAN GETS OFF TO LACKLUSTER START ¶1. (SBU) SUMMARY. The committee to design Japan's new national energy strategy and revise Japan's 2003 Energy Basic Plan held its first meeting February 8. The government plans to complete the new national energy strategy in late May, and revise its Energy Basic Plan in mid-October with public comment planned for the summer. Private sector committee members criticized the government's initial discussion points, noting they lacked dynamism and a sense of priorities. END SUMMARY. ¶2. (SBU) The new energy subcommittee (sogo bukai or coordination subcommittee),set up under the METI Minister's Advisory Committee for Natural Resources and Energy, held its inaugural meeting on February 8. Masahiro Kuroda, president of the Economic and Social Research Institute (ESRI) in the Cabinet Office, chairs the working group, whose members include 13 other energy experts and scholars. The committee's goal is to draft a new national energy strategy with an interim report expected in late March followed by a final report by the end of May. The committee then plans to combine this framework with those of other energy committees to create a revision of the Energy Basic Plan, which was adopted by the government in 2003. That draft will then be shepherded into public comment this summer with a final revision ready for adoption by the Cabinet in mid-October. ¶3. (SBU) Tsuneyoshi Tatsuoka, director of the General Policy Division of METI's Agency for Natural Resources (ANRE) and representative from the committee's secretariat, explained the list of issues for discussion by the subcommittee. Also present among the ten government participants was Nobuyori Kodaira, director general of ANRE. ¶4. (SBU) Most of the private sector members highlighted the fact that the discussion list was too general. The main criticism was that the draft tried too hard to please too many people resulting in a uninspiring outline that lacked "forcefulness," a sense of risk management, and a sense of crisis. Many members also questioned which items were to be included in the new national energy strategy and which were to be addressed in the Energy Basic Plan, and stressed the need to prioritize. ¶5. (SBU) Mitsuo Kohno, chairman of the Naigai Information Study Group (Naigai Joho Kenkyukai),commented on how Japan had failed for decades to hold a comprehensive discussion on energy and underscored the urgent need for an energy strategy based on security (anzen hosho). He joked that without one, ANRE would lose its raison d'etre. Kohno also noted the importance of making recommendations as soon as possible. Prime Minister Koizumi has demonstrated an apparent lack of interest in energy issues, but the next administration might be more engaged. ¶6. (SBU) The next subcommittee meeting is scheduled for March 22 at which time the draft of the new national energy strategy will be presented for discussion. ¶7. (SBU) Comment: The list of issues for discussion outlined at the committee meeting (see para. 10 below) is comprehensive despite committee member complaints that it lacked forcefulness. The challenge will be to explore thoroughly the viability of the outlined issues and then to implement the new policies; the true test of the plan will be its execution. It is still too early in the process to determine the effort's success or failure but the outspoken criticisms suggest the possibility of a thoroughly vetted end product. In addition, the call for increasing the use of nuclear energy and reducing reliance on oil through new technologies mirrors efforts in the US and offers opportunities for the two countries to combine efforts. End comment. ¶8. (SBU) The following list contains the private sector subcommittee members and their affiliations: Tadashi OKAMURA, Director and Chairman of the Board, Toshiba Corporation; Chairman of the Petroleum Committee (Sekiyu Bunkakai),Advisory Committee for Natural Resources and Energy. Takeo KIKKAWA, Professor, Institute of Social Science, University of Tokyo. TOKYO 00000924 002 OF 004 Noriko KIMOTO, Journalist and critic. Mitsuo KOHNO, Chairman, Naigai Information Society (Naigai Joho Kenkyukai). Hajime SASAKI, Chairman, Global Environment & Energy Committee of the Japan Association of Corporate Executives (Keizai Doyukai); chairman of the Board, NEC Corporation Masahiro SHIBATA, Vice Chairman, Nippon Keidanren; chairman, NGK Insulators, Ltd. Akihiko TANAKA, Director (Shocho),Institute of Oriental Culture, University of Tokyo. Jitsuro TERASHIMA, Chairman, Japan Research Institute. Yasuhiko TORII, Advisor (Gakuji Komon),Keio University; Chairman, Electricity Industry Committee (Denki Jigyo Bunkakai),Advisory Committee for Natural Resources and Energy Masahisa NAITOH, Chairman and CEO, Institute of Energy Economics, Japan. Masaru HASHIMOTO, Governor, Ibaraki Prefecture. Kenji YAMAJI, Professor, Graduate School of Engineering, University of Tokyo. Yoko WAKE, Professor, Faculty of Business and Commerce, Keio University. ¶9. (SBU) The following list contains the government subcommittee members and their positions: Nobuyori KODAIRA, Director General, ANRE. Tetsuhiro HOSONO, Director General, Natural Resources and Energy Policy, ANRE. Ichiro TAKAHARA, Director General, Energy Conservation and Renewable Energy Department, ANRE. Kenji KONDO, Director General, Natural Resources and Fuel Department, ANRE. Kenyu ADACHI, Director General, Electricity and Gas Industry Department, ANRE. Satoshi IWATA, Deputy Director General (Shingikan) in charge of Energy Supply and Demand, ANRE. Tsuneyoshi TATSUOKA, Director, General Policy Division, Director-General's Secretariat, ANRE. Naoto TAKAHASHI, Planning and Research Officer (Kikaku Chosa kan),General Policy Division, Director General's Secretariat, ANRE. SIPDIS Hidehiko NISHIYAMA, Director, Policy Coordination and Planning Division, Nuclear and Industrial Safety Agency (NISA). ¶10. (SBU) The following is a provisional translation of the discussion points presented at the February 8 meeting: ¶A. Basic understanding of the current state of affairs (1) Changes in the international supply/demand structure (2) Diversification of the risk factors surrounding the energy market (3) Reconstruction of energy strategy taking place in other countries ¶B. How discussions ought to be concerning the overall future energy policy (1) Necessity to reconstruct energy policy as national strategy TOKYO 00000924 003 OF 004 a) Increase in risk factors to be considered b) Reconstruction of policy by setting energy security as base point c) Private sector and government acting together (2) Basic ways of thinking for the future energy policy a) 5 Principles b) Basic strategy -Promotion of energy conservation -Promotion of conversion to energy other than oil -Promotion of nuclear power and nuclear fuel cycle -Securing stable supply of oil and natural gas resources -Promotion of actively offering energy cooperation to Asian countries -Development of advanced energy technology and the strategic use of the outcome (result/ product) -New means to secure necessary investment ¶C. How the discussions concerning each individual measure ought to be (1) Promotion of energy conservation a) Basic policy b) Concrete actions 1) Current state and problems in the industrial sector 2) Current state and problems in the public welfare (minsei) and transportation sector 3) Establishment of a framework for the strategic development and spreading of energy conservation technology (2) Reducing dependence on oil a) Basic policy b) Concrete actions 1) Diversification of fuel in the transportation sector 2) Promotion of the introduction of new energy 3) Promotion of the use of clean fossil fuel (3) Securing stable supply of oil and natural gas a) Basic policy b) Concrete actions 1) Strategic resource diplomacy 2) Joint efforts by the government and the private sector for securing and strengthening Japanese rights and interests (keneki) 3) Actions taken by companies for strengthening the procurement power of oil and gas 4) Enrichment and strengthening of the oil stockpiling system, etc. (4) Promotion of nuclear energy a) Basic policy b) Concrete actions 1) Promotion of nuclear power generation 2) Action for the early establishment and increasing the independence (jishusei) of nuclear fuel cycle 3) Promotion of research and development for putting fast breeder reactor (kosoku zoshokuro) cycle technology into practical use 4) Promotion of nuclear safety from scientific and rational standpoints (5) Asia Energy Cooperation TOKYO 00000924 004 OF 004 a) Basic policy b) Concrete actions 1) Promotion of energy conservation cooperation 2) Promotion of the clean usage of fossil fuel 3) Promotion of the introduction and spread of oil stockpiling system, etc. (6) Formation of "strong" energy companies and energy technology strategy a) Basic policy b) Concrete actions 1) Promotion of the formation of "strong" companies 2) Drawing up and spreading energy technology strategy (7) Policy means/steps a) Set numerical policy targets and evaluate the degree of accomplishment (achievement) b) Deal comprehensively by way of effectively combining budgetary, tax and other relevant systems c) Efficiently and effectively implement public hearings, public relations and educational activities SCHIEFFER