In April, Japan’s nuclear power plant export policy faced a new crisis. Itochu, a major Japanese company, decided to withdraw from a nuclear power plant project in Turkey due to the rising costs of nuclear plant safety measures.
After the 2011 earthquake and the subsequent Fukushima nuclear plant disaster, most nuclear plants in Japan have not been re-started. As a result, the only market for Japan’s nuclear industry is overseas. But if a major company like Itochu cannot find sufficient economic benefit in foreign markets, it is questionable whether Japan’s nuclear industry remains viable.
A shrinking nuclear industry will affect Japan’s foreign and security policy since it removes the three major benefits that Japan’s nuclear plants have historically delivered.
First, nuclear power has given Japan a steady energy source with which it could develop its economy. Nearly all of Japan’s oil energy is generated from imported oil, and this is true historically as well: in 1973, more than 75 per cent of Japan’s energy consumption was generated from oil. After the 1973 and 1979 oil price shocks, Japan substantially buttressed its energy supply by increasing oil stockpiles, diversifying sources of fossil fuel resources and finding new energy resources such as renewable energy and methane. Increasing the share of electric power generated by nuclear plants was an important element of these changes. Just before the 2011 earthquake, nearly 30 per cent of electric power in Japan was generated by nuclear plants. That number dropped to nearly 0 per cent after the earthquake.
Second, Japan’s nuclear industry has saved Japan the cost of protecting its primary maritime trade routes. More than 80 per cent of Japan’s imported oil comes from the Middle East. This number has not changed after the 2011 earthquakes. It is worth bearing in mind that one of the main reasons Japan decided to attack Pearl Harbor was a shortage of oil caused by economic sanctions against Japan. Indeed, during World War II, the United States blockaded Japan by attacking Japan’s primary trade routes. If there is no other energy source (like nuclear plants), Japan would need a huge maritime force to safeguard its primary trade routes in order to guarantee its energy supply.
Third, despite the Japanese government’s official line, many countries in the world believe that Japan has the capability to develop nuclear weapons given its nuclear industry. Indeed, Japan’s nuclear potential has proven a very important factor in Japan–US relations. During China’s nuclear tests in 1964, both Japan and India requested that the United States extend its nuclear umbrella deterrence policy to cover them. While Japan’s case was heard, India pleaded in vain. As a result, Japan could afford to cease its joint nuclear development negotiation with West Germany, whereas India was compelled to continue its own nuclear development plans. The United States viewed Japan’s possession of nuclear weapons as more of a concern than India’s. The possibility of Japan’s developing nuclear weapons has thus given Japan an implicit nuclear deterrence and has strengthened its relations with the United States.
This possibility may also promote cooperation from China on the issue of North Korea’s nuclear program. North Korea’s nuclear weapons would likely not target Beijing, but if North Korea possessed nuclear weapons, then there would be a heightened possibility that South Korea, Taiwan or Japan would develop nuclear weapons. This means that Japan’s capacity (or lack thereof) to develop nuclear weapons is an important factor in China’s cooperation with the United States to eliminate North Korea’s nuclear program.
The shrinking Japanese nuclear industry is important not only for Japan but also for the security of the United States, China and other countries. So how do we deal with it? Even if Japan re-opens the domestic market, it will not be easy for the industry to expand further. Japan needs to find new markets in foreign countries.
Japan–US–India–Australia civil nuclear cooperation presents one option. India needs many more nuclear plants, but they lack the technology to build them. The United States is seeking to enter the nuclear market in India, but US nuclear corporations need to import Japan’s parts to build nuclear plants. Australia has uranium resources and already ships uranium to India. All four of these countries have an interest in developing India’s nuclear power sector. This cooperation has the possibility to be an important part of a ‘free and open Indo-Pacific’.