the Real Cost of Energy for Japan

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DATsunONE

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Oct 12, 2014
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Japan is expected to spend, roughly, $ 0.19 trillion ($ 0.19 cho; or, ¥ 20.13 cho), for energy (oil, coal, and natural gas) imports, next year. China, on the other hand, is expected to spend, roughly, $ 0.22 trillion ($ 0.22 cho; or, ¥ 23.71 cho), for energy (oil, coal, and natural gas) imports, next year. At first glance, the two countries appear to be spending about the same for the production of goods and services; that, they are competitive, economically speaking.

China, however, if it stopped importing all energy, today, would still be able to maintain 91% of it’s current production level. This is because most of China’s production is based on coal, which constitutes 69% of China’s overall energy consumption, and is self produced, by far (97%). It is also because much of China’s production is based on oil, which constitutes 18% of China’s overall energy consumption, and is also self produced (41%). That 41% figure is misleading, though. China could choose to increase it’s internal production of oil, if it wanted to. If China ramped up it’s production of oil, internally, it would still be able to maintain 99% of it’s current production level. It might take China a year to do that but, that year would go by quickly.

On the other hand, if Japan stopping importing all energy, today, it’s production of goods and services would come to a screeching halt (1%). This is because almost all of the energy that Japan consumes must be imported.

Japan faces the same dilemma, when it comes to the extraction and transportation of raw materials it needs for the production of goods.

With these facts in mind, it is hard to imagine how Japan will be able to compete, economically, with China. For hypothetical example, were China to enter the auto making industry, in a big way, and dramatically undercut Japan’s automobile prices, and Japan attempt to come close to those prices, China would profit, tremendously, whereas Japan would take a big loss. In that event, Japan would have to get out of the auto making business, all together. All of the other heavy industries, in Japan, would fall the same way; like dominos.

Fuel cells couldn’t possibly save Japan from this fate. Some (the energy brokers) offer compact fusion as the solution to Japan’s dilemma. They insist that, since Japan can’t do anything about it, and practical compact fusion may be here in 10 years, that Japan should keep buying their other energy products (oil, natural gas, and coal), in the interim.

I beg to disagree. Ten years may be too late, even if compact fusion were practical by then. A compact fusion reactor is still a steam engine and still just as expensive to build and maintain as a fission reactor, if not more. Though, not much radioactive waste, comparatively, is produced; cumulatively, it would still be a lot to dispose of. Japan does not have enough land available for such disposal. The worst problem, by far, with compact fusion reactors are their compactness. You’d have to, literally, maintain large armies/air forces around them to keep people from simply walking away with them. Even that won’t secure them. Talk about attractive nuisance! Every thief in the world will be trying to figure out how to steal one.

Most profound is that compact fusion couldn’t possibly solve Japan’s dilemma. It would only perpetuate it. Compact fusion reactor fuel is just another expensive energy source that China will be able to produce, for itself, and that Japan will have to buy from elsewhere. In addition, energy produced from compact fusion reactors couldn’t possibly reduce the cost of extracting raw materials and the cost of transporting those raw materials below that or even close to that which China would spend for the same. Most of China’s extraction and transport of raw materials is by means of coal (69%) energy, which they employ locally.

What may be just fine and dandy for an American auto maker could very well be the death knell for a Japanese auto maker!
 
Japan is planning on restarting nuclear reactors to combat the problem.
http://blogs.wsj.com/japanrealtime/2014/10/21/obuchi-resignation-wont-likely-affect-reactor-restarts/" onclick="window.open(this.href);return false;
https://en.wikipedia.org/wiki/Nuclear_power_in_Japan" onclick="window.open(this.href);return false;
 
During it's hayday (hieght), nuclear power contributed only 13% to Japan's overall consumption of energy. There are many reasons why Japan limited it's relative consumption of nuclear power produced energy to 13%. They will be discussed, at a later time.

To understand the nature of economic competition between China and Japan, it is necessary to look at other things; other than just relative (internal) energy consumption of Japan alone. William Deming taught that it is necessary to have a System of Profound Knowledge; the first part being, an appreciation of a system. To appreciate a system, it is necessary to understanding the overall processes involving suppliers, producers, and customers of goods and services. In this comparative analysis, China's relative energy costs, compared with Japan's, of producing goods and services is of paramount importance.

Unlike Japan, China has all the raw materials, including fissionable (or fussionable) fuel quality material, in country. China does not need to go elsewhere to purchase those materials but, Japan does. Yet, China doesn't utilize those materials to rely, heavily, upon nuclear power energy production; and, for good reason. Instead, China relies heavily upon coal (69% so) for the brunt of it's energy consumption; which, it produces (mines) almost entirely (99%) in country. In other words, China uses the cheapest means (relatively speaking) of producing it's goods and services whilst Japan uses the most expensive means of doing so. Japan cannot compete, economically, with China if Japan continues this course.

The solution to Japan's dillema is so not nuclear (fission) power. And, if nuclear (fission) power is not the solution, neither is nuclear (fussion) power.

Japan needs to go back to the basics of business. Remember the lessons of Peter Drucker; in particular, decentralization and simplification. Don't take action, without thinking it through. Nuclear power (fission or fusion) is concentration of energy production and extremely complex to institute, manage, maintain, and replenish. Nuclear power is a knee jerk reaction that Japan has not thoroughly thought through. Watt for watt, taking nuclear power alone, China can produce goods and services for so much less than Japan can, on any given day. Nuclear power is clearly not the answer to the question of how to compete, economically, with China.

Japan might benefit from an outside view. Like William Deming said; “A system cannot understand itself. The transformation requires a view from outside.”

Dan
 
For Japan, in this analysis of the relative costs of energy production/consumption between China and Japan, Japan must also calculate it's costs of extraction and transport of the raw the materials that it must import to produce the goods it manufactures, especially for export.

Japan must transport almost all of the raw materials it requires for the manufacture of the goods it exports from overseas; i.e., by ship. In contrast, China does not have to ship almost any of it's raw materials, it utilizes for the manufacture of it's exports, from overseas. Japan does not ship any raw materials with nuclear powered ships. Nor, even with the advent of compact fusion, will Japan ever ship raw materials with nuclear powered ships.

Comparing the relative energy consumption (between China and Japan) of the extraction of raw materials is a much more difficult analysis to make. That analysis will be made later, too.

Dan
 
China is smart and proactive in their deployment of coal to energize their economy, for instance, natural gas is banned from being used to generate electricity as its considered too valuable to be used for that purpose. Others may be inclined to use natural gas to make electricity as natural gas power stations are are lower capital cost than coal power stations, but long term, coal is cheaper.

Similarly about 90% of China uses solar hot water, that saves on using precious coal/gas, as sunlight is free, and glass is cheap. It also indicates that solar PV was considered to be a stage for deployment after full deployment of solar hot water.
 
Where can I buy one of these compact fusion reactors? ;)

That said, if they did materialize, Japan could certainly make its own fusion fuel for, e.g. a D+T process. They can make D from seawater (that they have no shortage of) and breed the T from fusion neutrons, right?

I haven't examined it, but I would also suppose that they could develop some more conventional renewable energy tech like on/offshore wind and solar, no?
 
Japan generated 30% of its energy needs from nuclear and had planned to increase that to 40%.
http://www.world-nuclear.org/info/Country-Profiles/Countries-G-N/Japan/" onclick="window.open(this.href);return false;
 
Japan ships almost all of the raw materials it requires for the manufacture of goods for export from other countries. To do so, it pays other countries for the oil to run those ships and for those raw materials. China, on the other hand, not only transports almost all of the internally acquired raw materials it requires for the manufacture of goods for export, internally; but, does so by means which it acquires and manufactures internally, as well.

Japan has considerably cut the costs of purchasing the raw materials it requires, from abroad, by vertical integration; i.e., purchasing it’s own mines and farms in other countries. However, Japan is not, and will not be, installing any nuclear power plants on those properties. Moreover, heavy equipment (big iron) doesn’t run on electricity, anyway. Hence, to operate those mines and farms, Japan has to pay a premium (purchase at retail) for it’s energy from those countries. China, on the other hand, neither has to purchase it’s mines and farms nor has to pay a premium for the energy it requires to operate them.

For these reasons, and the one’s previously outlined, China produces goods for export at far lower cost to manufacture and to ship to market than does Japan.

Dan
 
China’s consumption of energy is primarily (69%) fueled by coal, almost entirely of which it mines in country. Not only is China self sufficient but, it has 48 years of proven reserves enough to sustain it’s current and projected levels of growth. Those more familiar with China’s unproven reserves, however, claim that China actually has well over a 100 years of coal reserves to sustain itself.

Even though China is now the number one producer of carbon dioxide, responsible for a full quarter of the world's CO2 output, as a result of burning coal and other fossil fuels, it has no intention of giving up it’s strangle hold on Japan’s throat; economically and figuratively speaking that is. No appeal for mercy is going to get China to take it’s hands off Japan’s throat. No one is going to convince China that global warming can be averted by total abstinence, either. That’s a lot like a doctor telling a man, who’s body is riddled with cancer caused by years of smoking, that his cancer will be cured if he quits smoking. Quitting smoking isn’t going to cure advanced cancer, in time to avert death. Nor will total abstinence from the use of coal (even if executed today) avert global warming, in time to save the planet. Much more has to be done but, that is yet another subject to be broached, at a later time. As the United States has made very clear by it’s inaction, as of recent, it isn’t going to step in (by force of arms) to save Japan from China, either. Japan has nothing the United States wants, any longer. Cheap goods come from China, now. And; the United States, itself, has no intention of totally abstaining from it’s own rampant emissions of CO2, anytime soon, either. If China does totally abstain from it’s reliance on coal, it will only do so after it has strangled Japan; and, not a moment sooner.

Only Japan can save itself from China’s strangle hold on it’s neck. And; only by truly competing, economically, against China can Japan do that.

If Japan doesn’t even see or understand the problem, the energy dilemma that it is in, there is no way that it could possibly solve it. China’s primary reliance on coal, of which it produces almost entirely in country, and can continue to do so for more than a 100 years, from which it produces almost all of it’s goods and services, allows China to produce goods, for export, at far lower cost than Japan can.

Is nuclear power (fission or fusion) the answer? Complete mathematical analysis and evaluation, comparing the two country’s energy usage and relative cost thereof, taking into account all the applicable variables, should resolve this question. If Japan actually does the math, correctly, it will see (with total clarity) that nuclear power is obviously not the solution to their energy problem.

Of course, Japan could ignore their energy problem and just stick their head in the sand, so they won’t have to witness their demise, when it comes. That isn’t going to change the outcome, though. Some say that, Japan will suffer less if it did that (just bury it’s head in the sand) because Japan can do nothing to save itself from China, anyway. I beg to disagree.

Dan
 
DATsunONE said:
Japan ships almost all of the raw materials it requires for the manufacture of goods for export from other countries. To do so, it pays other countries for the oil to run those ships and for those raw materials. China, on the other hand, not only transports almost all of the internally acquired raw materials it requires for the manufacture of goods for export, internally; but, does so by means which it acquires and manufactures internally, as well.

Japan has considerably cut the costs of purchasing the raw materials it requires, from abroad, by vertical integration; i.e., purchasing it’s own mines and farms in other countries. However, Japan is not, and will not be, installing any nuclear power plants on those properties. Moreover, heavy equipment (big iron) doesn’t run on electricity, anyway. Hence, to operate those mines and farms, Japan has to pay a premium (purchase at retail) for it’s energy from those countries. China, on the other hand, neither has to purchase it’s mines and farms nor has to pay a premium for the energy it requires to operate them.

For these reasons, and the one’s previously outlined, China produces goods for export at far lower cost to manufacture and to ship to market than does Japan.

Dan

Wow. Always good to see some transportation electrification skeptics here on the MNL forum. :lol:

A somewhat different analysis says that all countries that are developing tend to do so along a characteristic S-shaped curve (GDP per capita versus year). When these curves are stretched and squashed on a logarithmic plot, they can all be seen to be highly similar, Japan, Korea, US, Vietnam, China, just starting at different times and having different timescales. This analysis says that China growth will slow down as it approaches Japan/US GDP per capita levels, as did Japan and as Korea is doing.

Cost of production curves in a country follow a related 'development curve' related to labor costs.

Generally speaking, more developed countries have cheaper shipping costs due to better infrastructure.

Where's your analysis come from?
 
DATsunONE said:
China’s consumption of energy is primarily (69%) fueled by coal, almost entirely of which it mines in country. Not only is China self sufficient but, it has 48 years of proven reserves enough to sustain it’s current and projected levels of growth. Those more familiar with China’s unproven reserves, however, claim that China actually has well over a 100 years of coal reserves to sustain itself.

If Japan doesn’t even see or understand the problem, the energy dilemma that it is in, there is no way that it could possibly solve it. China’s primary reliance on coal, of which it produces almost entirely in country, and can continue to do so for more than a 100 years, from which it produces almost all of it’s goods and services, allows China to produce goods, for export, at far lower cost than Japan can.

Dan

Please provide some reasonable sources that China can support current consumption levels for 100 years....let alone levels consistent with future growth.

Why are they importing enough coal from Australia to float the entire Oz economy?
 
In 1985, the Central Committee of the People’s Republic of China (PRC) sent out many of it’s top officials and greatest minds to the United States to study business from all the major universities there. The current President of the PRC, Xi Jinping, was among that delegation; and, consequently, has personal knowledge of this. That was the year before the PRC decided to go all in on business.

Many of those business professors, who were consulted, suggested, back then and in subsequent lectures, that the PRC not repeat the mistakes of the United States and Japan by spending it’s gains to build up it’s infrastructure, unnecessarily so, as it gained wealth but, instead, reserve the brunt of their gains to buy up failing competing businesses, as those businesses failed. In other words, the PRC was made completely aware of the “S” Curve, in 1985, and specifically warned and taught how to avoid that pitfall by not building up an expensive infrastructure, no matter how rich they became.

To this date, the PRC has not departed from that strategic business plan, nor any of the other business lessons, taught to them by those many U.S. professors of business, back in 1985 and in subsequent years. Nor, is the PRC expected to depart from that strategic business plan under Xi Jinping’s leadership or any of his immediate successors leadership, either. That strategic business plan has a proven 29 year track record of nothing but success story after success story for the PRC.

The mythical “S” Curve for the PRC is nothing but that; wishful thinking. The PRC has no intention of abstaining from the use of coal as it’s primary source of energy; not now and not as long as utilizing coal to produce energy continues to give them the extreme competitive business advantage over all other competitors that it has. Japan would be deluding itself into an early grave to believe otherwise.

The PRC’s plan is to buy up all of Japan’s major corporations, as each one fails, clandestinely of course, and then shut down all of Japan’s extravagant infrastructure, and revamp that infrastructure with their own economy one, so it can then focus all of it’s attention on taking down the United States. This is just another aspect of the PRC’s overall strategic business plan, as it was taught to them by the United States. Japan’s choice is simple; do it now (become competitive) or have it done for you later! A wishing, and a hoping, and a praying, or lavishing in the luxury of self worth and self delusion, or taking bad advice from U.S. Oil Companies, ain’t going to get it done for you.

By the way; if you actually believe that the vast majority of the Chinese people are so displeased with the economic progress the Central Committee of the PRC is responsible for leading them into for the past 29 years, that they no longer wish to be lead by those people or the strategic business plan which got them there, you are so so sadly mistaken.

Dan
 
Electricity is that primrose path the Oil Companies sent Japan down to insure that Japan keeps buying oil from them. Japan fell for the electricity con job; hook, line, and sinker. Oddly enough, Japan still hasn’t woken up from it’s drunken electric binge (stupor), yet.

With so much data to draw from, it isn’t even necessary to go over the engineering equations and calculations thereupon to prove to Japan just how they’ve been succored (conned, played), and continue to be succored, by the Oil Companies.

There are no (ocean going) shipping companies that ship with electric ships. There are no mining companies that mine with electric heavy moving equipment. There are no land development companies that build buildings with electric heavy earth moving equipment. There are no farming companies that farm with electric harvesters and other farming moving heavy equipment. There are no trucking companies that haul with electric tractors. Hybrids don’t count! There are no airline companies that fly with electric jets. And; there are no railroad companies that use more than a token amount of electric engines to drive their trains. Very few trains are driven by electric engines.

The data is conclusive. It is not possible to compete against China, economically, by employing electric drive engines. It’s not that electric drive hasn’t been around long enough. We’ve had electric motors and batteries for well over a hundred years, now. It’s not for lack of trying. It’s just not possible to carry enough electricity to provide the necessary power to weight ratio to compete against fossil fuel.

The Oil Companies are attempting to perpetuate the electricity con job by claiming that future advances in electric drive, electric production, and electric storage capacity, technologies will (magically) change the results from running that equation; render electric drive more economically feasible than fossil fuel drive. That’s a bunch of hooey. Not a single such proposal pencils; nor, ever could.

Take, for example, the PV artificial islands con job. Japan can’t even afford to defend it’s close in natural small islands and (magically) the Oil Companies expect it to be able to afford defending offshore artificial ones. That’s the end of that calculation. We don’t even have to go over the comparative cost analysis of sticking really fragile pieces of glass, enclosed in really expensive cases of high maintenance glass, way up in the extremely erosive salty air, on platforms subject to constant 20 to 40 foot waves, what to speak of tsunami generated waves, so far away from their point of use as to make the transport of the electricity produced therefrom exponentially costly; do we? And; where are those raw materials going to come from? And; how are those raw materials going to be extracted and transported?

Dan
 
What is the relevance of this thread? It appears to be a consideration of problems that may occur if certain things may happen, solved or not by fantasy solutions.

Seems to be framing of a discussion of a possible solution for a possible problem that probably won't exist.
 
What happens if there is a massive revoluntion in China, or even just Hong Kong? How long will the people there put up with low wages, human rights violations and out of control pollution? China doesn`t do that all on gas/coal. They do a lot of it on the low paying back breaking of their population. They aren't going to put up with it forever.

If you want to predict the future you can`t just look at the numbers and stats.
 
minispeed said:
How long will the people there put up with low wages, human rights violations and out of control pollution?
They don't put up with it now, already. Things are changing very quickly there. China is already 'off shore-ing' some tasks to countries with cheaper labour overheads. The world can't off-shore forever because the very act of doing so drives up incomes, and thus expectations, of that country the work is sent to.

China is, obviously, a very authoritarian state and sees security through stability. With such a view, they will crack down on anyone risking destabilisation because for them it is a matter of state security. It is not unique these days, and it never has been, to see Governments ride rough-shod over human rights when they believe national security is at stake. I don't see China as any different, except that they have a different view to us that challenging stability is a national security risk rather than part of a vibrant society.

I'm no apologist for China but I think they have upped their game so much recently that I would find it difficult to conclude China's human rights violations are necessarily so much worse than some other Western countries. The bigger thing they appear to struggle with are issues of local corruption between business interests and local authorities. What country would you say is a towering beacon of integrity in that regard? The US?
 
This thread is not meant to present or offer solutions.

The objective of this thread is to point out a very real, existing, servere problem, that requires immediate attention, to Nissan. The other Japanese automakers would benefit from reading this material, as well. Part of the problem, identified here, is both the inability to recognize it's existence and it's immediacy.

It is one thing to be able to see a problem and yet another thing, altogether, to be able to solve it. The obligation to solve a problem does not fall upon the person who identifys it.

Solutions to a problem neither occur overnight nor are sought before their necessity is established.

This thread is to debate whether the problem identified herein does, in fact, exist. There is no going forward (looking at potential solutions) until the fact of it's existence is validated, in accordance with the Japanese way of doing business; by rigorous exhausting analyses and by consensus.

In this analysis, no input (no matter how far fetched, though it may, at first, appear) is rejected, out of hand. This is a strategic business comparative analysis. If any input is rejected it will be done so academically and after thorough analyses. We might bruise a few egos or have our own ego stomped on, along the way, but the identified problem warrants continuing on, undaunted.

If you can't handle the heat, leave the thread!

Dan
 
DATsunONE said:
This thread is not meant to present or offer solutions.

The objective of this thread is to point out a very real, existing, servere problem, that requires immediate attention, to Nissan. The other Japanese automakers would benefit from reading this material, as well.


I think Nissan and the other Japanese automakers should support a revolution in China then. Maybe they should develop a light BEV that can be air dropped with weapons attached in mass quantities to support and encourage a Chinese revolution. However I have identified another problem, lets debate if it exists or not. Most people in China hate the Japanese, so that may mean if the Japanese auto makers support and supply a revolution in China that the people may then not support it. We then probably need some third party to get involved to offer support so it looks like it's coming from someone else..... The Japanese auto makers should start reading up on "Iran-Contra". There's also an American Dad episode they should research.
 
The Peoples Republic of China (PRC), and almost all of it’s mainland inhabitants, view the inhabitants of Hong Kong, not as kinsmen, but as escapees from the people’s revolution; contaminated by 155 years of British (capitalist) rule. If the current Central Committee of the PRC thought as Maoist did, they would have purged them all, by now. Today, the PRC seeks their rehabilitation, instead.

There is only two lessons of importance for Japan to take from how the PRC has been treating the inhabitants of Hong Kong, since it’s “liberation from it’s capitalist oppressors”. Once the PRC has bought out all of the major Japanese corporations, after each one fails, which they are certain to do if they do not learn to compete against the PRC, they will not purge the Japanese people. Nor, will the PRC allow the Japanese people to rule themselves, ever again, either.

If Japan has no intention to compete against the PRC, economically, as indicated by it’s current business behavior, the Japanese people would do best to learn Chinese; sooner than later. Chinese will become the first and mandatory language of Japan, when the PRC takes over.

Dan
 
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