Japan and Europe should rework their energy strategy to move away from Russia

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Private energy companies are moving further and further away from Russia.

Among the development projects in the Russian Far East region of Sakhalin, involving the government and Japanese companies, Exxon Mobil Corp. of the United States decided to withdraw from Sakhalin-1, the main operations of which relate to crude oil, and the British company
Shell PLC has decided to withdraw from Sakhalin-2, whose main activities concern liquefied natural gas.

These are important sites for Japan, accounting for around 1% of Japan’s crude oil imports and 7% of its LNG imports. If Russia continues its aggression, the government as well as the commercial and other companies that have invested in the projects will have to consider pulling out.

There is an urgent need for advanced nations to join forces to establish a flexible LNG supply system in response to fluctuations in demand in each country, and then multiply alternative suppliers, such as Australia and the Middle East.

The rush to decarbonise, primarily in Europe, initially led to an overvaluation of renewables, which dampened investment in crude oil and natural gas development and caused prices to spike. During the transition period towards decarbonization, it is important to continue investing in gas fields.

The role of nuclear energy, which can provide a stable supply of electricity, will also become important. It is essential that the government fully implement safety measures and fully support the restart of nuclear reactors.

Editorial

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