Oil will bear brunt if Japan's nukes restart

It seems likely a small number of Japan’s nuclear power plants will begin to be brought back online in H2 2014. When Japan’s cabinet approved the 78-page National Energy Plan (NEP) on 11 April, nuclear was designated as an important base-load power source for the resource-poor nation. Although exact numbers and timing have yet to be decided, the first two nuclear plants to be brought back will most likely be the reactors in Kyushu, with three reactors in Kansai region likely to follow soon after.

 It has been assumed Japan’s LNG imports will diminish dramatically once the nuclear plants are restarted, and that the decline will be proportional to the rise in nuclear generation. However, this is an oversimplification, because Japanese nuclear power was replaced in part by additional oil burn at the nation’s power stations. This led to a spike in oil consumption in the aftermath of the March 2011 Fukushima nuclear incident that was proportionally bigger than the rise in LNG consumption.