Saudi-Japan cooperation ‘could help solve world’s energy problems’

Nobuo Tanaka, president of Sasakawa Peace Foundation. (Illustration by Luis Grañena)
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Updated 12 January 2020

Saudi-Japan cooperation ‘could help solve world’s energy problems’

  • Nobuo Tanaka, chairman of the Sasakawa Peace Foundation speaks to Arab News about Saudi-Japan relations
  • Tanaka says Japan could be a mediator between GCC states and Iran, as well as the US

DUBAI: Cooperation between Saudi Arabia and Japan in energy could help solve some of the most intractable problems the world faces today, according to one of Japan’s leading business thinkers.

Nobuo Tanaka, chairman of the Sasakawa Peace Foundation and former director of the International Energy Agency (IEA), told Arab News that the two countries could help stabilize global energy markets, and also defuse the controversy over nuclear proliferation – two of the big issues facing the region and the world today.

“The demand and supply balance is a crucial issue for Japan, and Saudi Arabia supplies lots of our oil,” he said. “The world is well supplied, but there are geopolitical risks to delivery. There has been no reduction in Saudi Arabia’s ability to supply us, so there is no credibility issue there.”

Japan is the fourth-biggest importer of oil in the world, and the Kingdom is its main supplier, shipping around 40 percent of its total requirement.

Tanaka, who also served as head of trade at the Japanese economics ministry, was speaking ahead of the trip by Japanese Prime Minister Shinzo Abe to Saudi Arabia.

He added that Abe could be a mediator in the tense relationship between GCC states and Iran, as well as the US. “Abe has good levels of trust with American President Donald Trump, as well as with Saudi Arabia and Iran. He can encourage dialogue between the players, and that may lead the way for a better relationship in the region.”

One area where Japan can bring expertise to bear is in nuclear power.

The country has been looking at ways of developing safe nuclear power generation since the 2011 earthquake and tsunami that affected the Fukushima plant, causing deaths and economic damage.

Japan is considering employing new nuclear technology – the “integral fast reactor” developed in the US ­– as a safer option and a viable alternative to fossil fuels, Tanaka said.

Saudi Arabia was also planning to develop nuclear power generation capacity. “Japan, Saudi Arabia and others want peaceful nuclear technology to develop proliferation-free designs.”

He pointed out that the new technology could also offer a solution for Iran and North Korea – two of the current geopolitical trouble spots which are at odds with the rest of the world over their nuclear ambitions.

“Japan can help in this because we are a peaceful nuclear nation,” he added. “This is visionary. I think it is the only way to solve the nuclear issue in northeast Asia and the Middle East.

“Japan has been talking to the US about it for some time. The next step is to get it adopted by countries that want to use nuclear power, but not for military purposes.”

He said that the geopolitical situation in the Middle East was a cause for concern but saw some recent grounds for optimism.

“The retaliation by Iran has happened, but it seems to have been controlled. I hope it’s the end of the threat of direct military conflict, but certainly the risk remains of possible attacks.”

Amid speculation that Saudi Aramco might follow its record-breaking initial public offering (IPO) on Riyadh’s Tadawul stock exchange with a listing on an overseas market, Tanaka said the Japanese stock market would be a good place for such an IPO to take place.

“We would welcome Aramco in Tokyo. The Saudi-Japan strategic relationship is very important, and a Tokyo listing would take it to another level.”

Tanaka noted that there were important areas where Aramco and Japanese energy could cooperate, including in the use of hydrogen as a “clean” fuel that avoided the environmental problems associated with fossil fuels.

Big oil feels the heat on climate as industry leader promises: ‘We will be different’

Updated 22 January 2020

Big oil feels the heat on climate as industry leader promises: ‘We will be different’

  • Trump singles out ‘prophets of doom’ for attack
  • Greenpeace told the Davos gathering that the world’s largest banks, funds and insurance companies had invested $1.4 trillion in fossil fuel companies since the Paris climate deal

LONDON: Teenage environmental activist Greta Thunberg slammed inaction over climate change as the global oil industry found itself under intense scrutiny on the opening day of the World Economic Forum in Davos.

The teenage campaigner went head to head with US President Donald Trump, who dismissed climate “prophets of doom” in his speech.
She in turn shrugged off the US president’s pledge to join the economic forum’s initiative to plant 1 trillion trees to help capture carbon dioxide.
“Planting trees is good, of course, but it’s nowhere near enough,” Thunberg said. “It cannot replace mitigation. We need to start listening to the science and treat this crisis with the importance it deserves,” the 17-year-old said.
The 50th meeting of the World Economic Forum was dominated by the global threat posed by climate change and the carbon economy.
The environmental focus of Davos 2020 caps a year when carbon emissions from fossil fuels hit a record high, and the devastating effects of bushfires in Australia and other climate disasters dominated the news.
Oil company executives from the Gulf and elsewhere are in the spotlight at this year’s Davos meeting as they come under increased pressure to demonstrate how they are reducing their carbon footprint.
“We are not only fighting for our industry’s life but fighting for people to understand the things that we are doing,” said Vicki Hollub, CEO of Occidental, the US-based oil giant with extensive oil operations in the Gulf. “As an industry when we could be different — we will be different.”

‘Planting trees is good, but nowhere near enough,’ activist Greta Thunberg told Davos. (Shutterstock)

She said the company was getting close to being able to sequester significant volumes of CO2 in the US Permian Basin, the heartland of the American shale oil industry which is increasingly in competition with the conventional oil producers of the Arabian Gulf.
“The Permian Basin has the capacity to store 150 gigatons of CO2. That would be 28 years of emissions in the US. That’s the prize for us and that’s the opportunity. People say if you’re sequestering in an oil reservoir then you are producing more oil, but the reality is that it takes more CO2 to inject into a reservoir than the barrel of oil that it makes come out,” Hollub said.
The challenge Occidental and other oil companies face is to make investors understand what is happening in this area of carbon sequesteration, she added.
The investment community at Davos is also looking hard at the oil industry in the face of mounting investor concerns.
Greenpeace told the Davos gathering that the world’s largest banks, funds and insurance companies had invested $1.4 trillion in fossil fuel companies since the Paris climate deal. It accused some of these groups of failing to live up to the World Economic Forum goal of “improving the state of the world.”