May 4, 2007; Volume 03, Number 16

of the

Japan Considered Podcast

[Listen to the audio file by clicking here]

Clink Links Below for Today's Topics

Introduction
The “Oops” Corner
Gregg Rubinstein Comments on the Latest “2+2” Consultations
Japan’s Recent Energy Diplomacy
Recent Energy Diplomacy Disappointments
The Abe Cabinet Energy Diplomacy Initiative
Uranium Diplomacy in Kazakhstan
Concluding Comments

Good Morning. From Beautiful Spring Valley. In the Midlands of South Carolina. It’s Friday again. May 4th, 2007. And you are listening to Volume 03, Number 16, of the Japan Considered Podcast.

Introduction

Did I just say “May 4th”? Hardly seems possible! The beginning of May already. “Golden Week” again in Japan. Time surely flies! Just one more final exam and Commencement. And the spring 2007 semester here will be history. Our Commencement this year is on Saturday, the 12th. Now, that’s a real treat. Seeing all of those smiling faces. Students, parents, and so on. Makes the whole thing almost worthwhile.

But down to business here! I’m Robert Angel, creator and maintainer of the Japan Considered Project. And creator and host of this Podcast. You can subscribe to the program free of charge via iTunes, or any other podcast aggregator. As well as download the audio files and/or program transcripts from the Japan Considered Project Website at www.JapanConsidered.com. The archives include sound files from the beginning of the program. Back in November, 2005. And the sound files, plus a text transcript of each program, from the beginning of January 2006. A lot of pages with information about key topics of longer-term interest on Japan’s domestic politics and conduct of international relations.

Thanks for tuning in. I think we’ll have a program today that you’ll find worth your time. First, an interview with Gregg Rubinstein. He’ll explain to us the significance of the “2+2” consultations recently concluded in Washington, D.C. He’s been involved with these discussions for a long time. As usual, valuable commentary. Then we’ll move on to consider Japan’s recent energy diplomacy. Including Prime Minister Shinzo Abe’s whirlwind tour of the Middle East. And nuclear energy-related visits to Kazakhstan by Japan’s METI Minister and a group of industry executives.

If time permits, we’ll conclude today with a brief look at recent domestic political developments. The ruling coalition and opposition parties are gearing up for the July Upper House elections. Both of them have problems we need to talk about. Lots of movement. Lots of public statements. More than a little public posturing. The sort that sometimes provides insights into what’s actually going on behind the PR smokescreens that all concerned parties maintain. Ah, what a great time to be a student of Japan’s domestic and international politics!

The “Oops” Corner

It’s been a few weeks since we’ve had to schedule an “oops corner” segment on the program. But earlier this week, a sharp-eared regular listener wrote to note that I had described Iccho Ito as the second mayor of Nagasaki to be assassinated. When, in fact, Ito’s predecessor, Hitoshi Motoshima, was indeed attacked in 1990, and severely wounded. But fortunately, he survived. And in retirement has continued his campaign against nuclear weapons and war. Apologies for the error. And thanks to our attentive listener for his correction.

Gregg Rubinstein Comments on the Latest “2+2” Consultations

Next, let’s consult Gregg Rubinstein about the latest round of “2+2” consultations. I spoke with him earlier today at his Washington, D.C. office via the Skype Phone.

RCA: Good Morning Gregg Rubinstein. Thanks for joining us today on the Japan Considered Podcast. This is your second appearance, isn’t it?

GR: Or third.

RCA: Or third. Indeed! I’ve got an extensive interview with you just waiting to be processed for the Japan Considered Project interviews page.

GR: Yes. I’m looking forward to seeing what comes out of that.

RCA: It’s excellent material. But I thought today I’d ask you about a subject that doesn’t seem to be getting much coverage in the English language press. But is in the Japanese press. And that’s these recent “2+2” consultations. What’s that all about?

GR: A little background here. 2+2 is a convenient shorthand for a group that’s called the Security Consultative Committee, or SCC. This is the top layer in the US-Japan security consultation framework. It’s cabinet level, involving the Secretaries of State and Defense, and their counterparts in the Japanese government, the Foreign and Defense Ministers. Thus the term “2+2.”

This group covers the whole range of security relations. Not just defense, but related political and diplomatic issues. It used to meet fairly regularly earlier in the postwar period. And then lapsed for a number of years, through much of the eighties and nineties. It was, however, revived at the beginning of this decade, more or less as a way to measure progress in the transformation of the U.S.-Japan security relationship that’s been occurring over the last six years or so.

RCA: Prime Minister Shinzo Abe was just in Washington talking with President Bush, and then we have these 2+2 meetings. What sorts of things would be covered under the 2+2 that they couldn’t have talked about while Abe was here?

GR: Well, the timing of those meetings was a little curious. Really, the 2+2 ought to have occurred earlier this year, before the Abe visit, as a way of previewing some of the issues Abe would have talked about with Bush on the security relationship. The 2+2 did not occur earlier this year for a number of reasons. Partially, scheduling of the principals involved. The fact that Gates had just come into the job recently. He and Rice both were distracted with other issues. Also there was a little friction over some security issues, involving Kyuma. Which I think you talked about in earlier podcasts.

All of this got settled to the point everyone said, let the talks go ahead. There was a perceived need to have another 2+2 session to mark progress on a number of security agenda issues. So that’s why it worked the way it did.

RCA: What do you think were the most important outcomes of this 2+2 consultation?

GR: What you have to understand about this 2+2 is that it is the latest in a series of 2+2 consultations over the past two years. They’ve first set up, then agreed to, and are now implementing an agenda of major security relationship issues.

There’s the usual global and regional politics stuff. That always gets reviewed. And we always affirm that we are interested in defusing the North Korea nuclear issue. That we’re committed to fight terrorism. That we have to deal constructively with China. Go through a list of that.

As far as the bilateral issues, there are three big ones right now. One is realignment of US forces in Japan. Which includes moving of some US personnel out of Japan. Relocating others. In some cases, more joint tenancy of US and Japanese forces on the same base. It’s a pretty ambitious program. Particularly where Okinawa is concerned. And, of course, politically quite sensitive. That’s an on-going issue.

Number two, what is called the roles, missions, and capabilities dialogue. When I was working with Jim Auer on security relations in the early eighties, we had the first roles and missions dialogue with Japan. This was an effort, to get off of the “How much is Japan spending on defense this year?” And get discussions on a more constructive track of “Alright. Well, what should we be doing, and what should Japan be doing to deal with the common issues we face?” What was then the Soviet threat. So, the various roles for each country’s forces, and what they would need to do, were lined up.

Well, twenty years later, obviously the situation has changed a great deal. There’s been substantial evolution, both in the security environment, and in the political situation of both countries. So it was time for another look at roles and missions. Now, properly called roles, missions, and capabilities. Because once you decide what you need to do, then you have to know what you have to do it with.

Those dialogues are going on right now. For a while they were held up a bit because everybody’s attention was focused on base realignment issues. Particularly in Okinawa. Now, that dialogue is moving ahead at a fairly steady pace. So, the 2+2 talked about progress that had been made there.

And finally there was missile defense. Acquisition of missile defense capabilities. And US-Japan interaction in missile defense operations. I think that during this 2+2 there was no new ground broken. What it really did was ratify and confirm progress that’s been made over the agenda set out in three previous meetings, since early 2005.

RCA: I hear, or read, on the Japanese side, and sometimes hear – and even from some folks in Washington – there’s a growing rift between Japan and the United States. That we’re drifting apart. Is that in your experience true?

GR: I read these things too. You’ll recall the friction over the Yasukuni issue while Koizumi was still in office. And various great and good people here wringing their hands over that, etc. And there are frictions on other specific problems. But, basically Bob, no. I don’t know what these people are talking about. And I wonder if they do, either.

Sure, there are a lot of issues. And some of them are significant problems. Japan is involved in a paradigm-shifting transformation in the way it approaches the world in foreign and defense policy. All of the things that you’ve been reviewing in recent broadcasts are very much there. We’re certainly in a transformation in the way the U.S. and Japan do defense business. We are engaging each other in both scope and depth to a degree we never have before. Obviously, when you do this, you’re going to step on a lot of vested interests, and disturb a lot of frozen mindsets. There’s going to be friction, resistance, and hand-wringing. So, that there are problems does not surprise me. It certainly would surprise me if there weren’t.

If I were to summing it up in one phrase, a lot of what we’re going through on the security front I would describe as ‘growing pains.’ Growing pains, as we know, can be very painful. But the objective still is growth and evolution. It’s not like the U.S. and Japan are moving in conflicting directions.

RCA: Those are useful comments, and I appreciate your time today.

So there you have it. Thanks again to Gregg for his time and insights. He’s a cautious, responsible, and experienced observer of this important aspect of Japan’s relationship with the United States. An increasingly important aspect, it appears.

Japan’s Recent Energy Diplomacy

 “Four small islands, poor in natural resources” may be a misleading, if often repeated, description of Japan. But it does reflect the importance of energy imports for the Japanese economy. Japan’s economic health requires a dependable supply of imported energy. At reasonable, and relatively stable, prices. And, public confidence in continuation of that dependable, reasonably priced, supply. Everyone recognizes it.

So, Japan’s attentive public expects its national government to formulate and implement policies appropriate to meet those expectations. No insignificant task! The Abe Administration since its inception last year has recognized that expectation. And has invested heavily in a bold, Kantei-led program of “energy diplomacy” to meet the need.

Japan since the first “Oil Shock” in the 1970s has been doing what it can to increase energy efficiency throughout its economy. Those efforts, plus the decline in population, has slowed the Rate of increase in Japan’s demand for energy resources. But it’s still growing. And still as important.

The same can’t be said for much of the rest of the world, however. Population growth and rapid, energy-consuming, industrialization in countries such as China and India have intensified competition for energy resources throughout the world.

Not just for petroleum and natural gas. But also for uranium. As nuclear power generation programs expand worldwide. Partly in response to growing concern over fossil fuel consumption’s contribution to Global Warming.

Most listeners to this program will be all too familiar with the increase in petroleum prices of late. But uranium’s price rise has been even more dramatic. Two years ago, uranium sold for around $20 a pound on the world market. At the end of April this year it was at $113 a pound, and expected to rise. No wonder Japan is reluctant to rely exclusively on market forces to assure its energy supplies.

Recent Energy Diplomacy Disappointments

Japan’s energy diplomacy has experienced a number of widely publicized disappointments in recent years. Disappointments that have increased pressure on the Abe Administration to “do something” to assure the security of Japan’s energy supplies.

Last September, for example, Russia revoked its environmental approval for a major joint oil and gas project on Sakhalin. That’s a $22 billion project in which Japanese companies held a 45 percent share. With Shell holding the controlling 55 percent. Since then, Russia’s governmental Gazprom has purchased just over 50 percent of the shares in the project. Buying out Shell, and reducing Japan’s stake considerably. This move is hoped to alleviate Moscow’s concerns for the environment. And improve chances for the project’s survival. Sakhalin-2 is directed toward exploitation of reserves estimated at 1 billion barrels of crude oil and 500 billion cubic meters of natural gas. A nice source of energy that’s quite close to Japan.

Around the same time last year, Japan’s energy diplomacy suffered another disappointing setback. This time in Iran. After months of negotiation, Japan’s INPEX Holdings was forced to reduce its 75% share in the development of the Azadegan oil field to only 10 percent. Though far away, the Azadegan field has been estimated to have reserves of as much as 26 billion barrels of crude oil. One of the largest in the world.

Japan’s pull-back was attributed to long-standing U.S. concern over Iran’s nuclear development plans. And disagreement between INPEX Holdings and Iran over Iranian measures to remove landmines from the site. Clearly, Japan’s longer-term plan to cope with international energy supplies needed a re-think. Increasing Japanese ownership of oil exploitation projects from the current 15 percent to around 40 percent in the next two decades wouldn’t be enough.

A third high-profile disappointment for Japan in the imported energy supply area involves Mainland China. The on-going dispute between Tokyo and Beijing over exploitation of natural gas reserves in the East China Sea. We’ve covered this issue extensively on this program. It has implications well beyond energy policy for Japan’s overall diplomacy.

Overlapping exclusive economic zones in the area makes this a ticklish issue to handle under the best of conditions. But discovery of significant natural gas deposits has intensified its sensitivity. Japan and China have agreed to the principle of joint production. But fairly credible reports of Chinese independent development operations in the disputed area have raised questions in Japan about Beijing’s true intentions. And have made it appear less likely Japan ever will benefit from those gas deposits. If, in fact, they prove to be as extensive as now thought.

The Abe Cabinet Energy Diplomacy Initiative

Against this background of disappointing news, and growing public concern over long-term energy supplies, the Abe Administration has undertaken a number of high-profile diplomatic efforts to assure Japan won’t be left out in the cold – so to speak.

Last week we mentioned that Prime Minister Abe left Washington after a visit of only two days. To tour five countries in the Middle East. They were Saudi Arabia, Kuwait, Qatar, the United Arab Emirates, and Egypt. Four of these five are major suppliers of around three-quarters of Japan’s imported oil. Egypt, of course, is important for other reasons. Abe arrived in Saudi Arabia last Saturday to begin the tour.

Japanese official spokesmen went to great pains to assure the governments of the Middle Eastern oil-producing countries that Japan now is interested in developing “multi-layered” relationships with them. Relationships, that is, beyond the purchase of crude oil.

To make the point, Abe was accompanied by a delegation of around 180 senior Japanese business leaders. Led by Nippon Keidanren Chairman, Fujio Mitarai. Talk about a protocol officer’s nightmare! Not only business leaders involved in the oil business. But in a wide array of industries. Japan hopes to interest the Middle East’s oil producers in transfer of the technology necessary to allow those countries to diversify their economies away from total dependence on oil revenues.

The message was the same in all countries Abe visited. Japan needs a reliable supply of petroleum. To achieve this, Japan is willing too cooperate with the oil-producing countries’ efforts to diversify their economies. With meaningful technological, educational, and cultural exchanges. In addition, wh ile in Saudi Arabia, Abe offered Saudi Arabia use of part of Japan’s strategic oil storage facilities in Okinawa. A depot, in other words, the Saudis could use to supply oil to their other Asian Countries. In return, Saudi Arabia would agree to give Japan preferential treatment on oil supplies in the event of an emergency situation. An innovative proposal. Though I’ve yet to hear if the arrangement has been finalized.

Uranium Diplomacy in Kazakhstan

And petroleum diplomacy isn’t all of it. Members of the Abe Cabinet have been busy assuring Japan’s growing nuclear energy industry of a reliable supply of uranium to fuel their reactors. And assuring Japan’s attentive public that they’re doing it! Japan is the world’s second-largest producer of nuclear power. Right after France. Also, their long-term energy plans include significant further expansion of nuclear energy’s role in their economy. Annual imports of uranium now total around 9,500 tons a year. That’s expected to increase significantly. For this aspect of the “energy diplomacy” initiative, Japan has focused on Kazakhstan, the world’s second largest producer of uranium ore.

At present, this former Soviet satellite supplies only about 1 percent of Japan’s total uranium imports. METI hopes to increase that, through cooperative agreements and investment, to as much as 30 percent in the future. Maybe more.

To this end, METI Minister Akira Amari visited Kazakhstan earlier this week. He, like Prime Minister Abe in the Middle East, was accompanied by a large delegation of Japan’s business leaders. In Kazakhstan, Amari and the Kazakh prime minister announced that the two countries now consider each other “strategic partners.” That Japan intends to increase significantly its imports of uranium from Kazakhstan. And that Japan will provide Kazakhstan with the technology and technological support needed to improve security there and to further process the uranium ore they mine.

To make the point, representatives of 29 of the companies accompanying Amari on his visit signed agreements with their Kazakh counterparts. These included both uranium supply agreements, and technology transfer agreements.

As with Prime Minister’s Middle East visit, Amari’s “energy diplomacy” visit to Kazakhstan – and before that, to Uzbekistan – has been given broad and prominent coverage in Japan’s print and electronic media. With government spokesmen readily available to make statements and answer journalists’ questions. Obviously, the result of a governmental full-court PR press.

No telling how Australia will respond to all this. Earlier this year they signed agreements with Mainland China to supply uranium for China’s growing nuclear development program. And appear to have reached agreement with Labor-dominated state governments to allow more mining in areas where mining had been prohibited. Japan now buys just over 20 percent of Australia’s uranium production. It looks as if Japan is diversifying its supply sources.

Concluding Comments

Well, we’re out of time again. Both collective security and other domestic political developments will have to wait until next week. Thanks again for listening. And continue to send your comments and suggestions – And, your corrections – to me at RobertCAngel@gmail.com. I read and appreciate them all. Let’s go out today with a clip from North Carolina’s Wind Riders. This the next-to-last cut on their latest CD, “Another Night.” I’ll put a link in the transcript to their website, where you can buy the album. Enjoy.

[bluegrass]

Goodbye All. Until next week.