East Asia/Pacific Natural Gas Trade

International Natural Gas Trade Project, Center for Energy Policy Research, Energy Lab, MIT


This paper will examine how a set of past policies and practices has produced a pattern of LNG use in Japan which has likely reached the maximum possible volume under those conditions. It appears as though this effect was unintended, and now even may be seen as unfortunate. However, changing these conditions is difficult, and the likelihood of success uncertain.
The policies and practices described are those of Japan because it is the giant of liquefied natural has (LNG) utilization. Japanese experience has created much of the world’s perception about LNG, and both producing and consuming countries’ expectations have been shaped by that experience. In this paper, we describe key elements of the Japanese experience, and show that it was perhaps more random or accidental than deliberate, with consequences that may be self-limiting to greatly increased natural gas use in that country.