Petroleum Petroleum Industry Which Runs a Stable Business Industry Law Was Abolished
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Petroleum Association of Japan September 2015 Petroleum Industry in Japan Petroleum Association of Japan Keidanren Bldg., 3-2,1-chome, Ohtemachi, Chiyoda-ku, Tokyo 100-0004 Public Relations Tel. 81-3-5218-2305 Fax. 81-3-5218-2321 http://www.paj.gr.jp/ CONTENTS 1. Preface.......................................................................................................................2 2. Profile of Petroleum Association of Japan .............................................................3 3. Oil Supply and Demand in Japan ...........................................................................7 4. Energy Policy in Japan ..........................................................................................13 5. Oil Stockpiling and New Emergency Response Measures ................................21 6. Petroleum Resource Development in Japan .......................................................25 7. Regulatory Reform and Petroleum Industry ........................................................27 8. Petroleum Product Distribution and Marketing ..................................................32 9. Toward a Fundamental Reexamination of Petroleum-related Taxes .................36 10. Improvement and Reinforcement of Corporate Structure .................................40 11. Thorough Safety Measures ...................................................................................42 12. Preparation for Major Oil Spill Incidents .............................................................44 13. Environmental Measures in the Oil Refining Sector ..........................................46 14. Quality Improvement in Automotive Fuels ..........................................................49 15. The Global Warming Issue and Oil .......................................................................52 16. Utilization of Biomass Fuel ...................................................................................58 17. Efficient Use of Oil .................................................................................................61 18. Efforts toward Developing New Energies ............................................................65 u Stable Oil Supply to Final Consumers including Times of Disaster ..................67 Appendix: ......................................................................................................................69 N Location of Refineries and Crude Distillation Capacity in Japan N Overview of the Japanese Petroleum Industry N Main Product Specifications in Japan N Web Address of PAJ’s Oil Statistics Website 1 1 Preface Prices of crude oil (Dubai) in 2014, which had been Concerning Sophisticated Methods of Energy Supply around 105 US dollars per barrel (US$/Bbl) for the Structures. In addition, a new criterion was indicated first six months, jumped temporarily to the level of in July 2014, so that oil companies are requested to 110 US$/Bbl in June due to growing tension in the further reexamine their production capacity. On the Middle East. Reflecting the economic slowdown in other hand, the downturn in oil demand has trig- Europe and China, supply surplus due to increased gered a decrease in the number of SS, especially in production of shale oil in the United States, etc., the rural areas, and “the issue of SS in depopulated prices continuously declined since then. After OPEC areas” has become obvious. Therefore, the petro- decided to maintain its crude oil production level at leum industry has been addressing this issue with its Meeting of the Conference at the end of Novem- the central and local governments in an integrated ber, crude oil prices became lower rapidly and bot- manner. tomed out at the level of some 50 US$/Bbl, which Each oil company is aiming at becoming “an inte- was less than half the price during the second half grated energy company” to execute its responsibili- of 2014. ty for stable oil supply as an energy supplier with As a result, Japan’s average crude oil price (CIF) in reinforcement of its business structure by incorpo- 2014 was about 105 US$/Bbl, down about 5 US$ rating such sectors as not only oil but also non-oil versus 2013. On a yen basis, however, the CIF was where demand expansion is expected. A sequence about 69 yen per liter (¥/L), about 2 ¥/L higher on of these efforts by the petroleum industry as a average than the previous year, due to the yen whole will contribute to strengthening industrial weakening by about 8 yen. competitiveness and building a strong and flexible Regarding domestic petroleum product demand nation (national resilience) that are the nation’s for 2014, major fuels such as gasoline showed a priority issues. structural declining demand trend due to fuel effi- This brochure has been created to provide con- ciency improvement, etc., and demand for heavy sumers as well as stakeholders with a better under- fuel oils for thermal power generation also declined standing of the current situation and the future due to the fuel shift from oil to natural gas, coal, etc. efforts of the petroleum industry in Japan. We hope As a result, total fuel oil demand dropped below this brochure will help to give you a sound under- that of the previous year. standing of oil and the petroleum industry in Japan. In the wake of the Great East Japan Earthquake which occurred four years ago, people´s awareness of the significance of oil as well as its advantages as an independent and distributed energy source has been renewed. The petroleum industry has been advancing its reinforced disaster response capabili- ties for its supply chain, all the way from refineries to service stations (SS). In Japan’s new Basic Energy Plan (the Fourth Plan), decided at the cabinet meet- ing in April 2014, oil is positioned as “an important energy source to be continuously utilized” and eval- uated as “a last resort of energy supply at the time of disaster.” Under the year-by-year trend of declining fuel oil demand, each oil company reduced its crude oil pro- cessing capacity by March 2014 based on the Law 2 2 Profile of Petroleum Association of Japan Petroleum Association of Japan (PAJ), incorporat- industry (systems to ensure the industry’s ener- ed in November 1955, is composed of 13 oil refiners gy security, reinforce its competitiveness, and and primary oil distributors (Motouri) in Japan. reform the energy system, etc.) PAJ deals with all matters concerning the refining b Advocacy toward the deliberation of energy mix and marketing of petroleum products. The main and global warming countermeasures (incorpo- activities are: ration of PAJ opinions on the positioning of oil 1. Publishing information on important issues for in the primary energy supply into the govern- the petroleum industry ment’s policy development) 2. Advocating the industry’s opinions and submit- c Improvement of a system to ensure stable oil ting proposals to the government, business asso- supply in emergencies and enhancement of ciations, the media and the general public measures for building a robust structure and the 3. Researching and coordinating activities related to security systems in oil refineries important petroleum issues and providing infor- d Promotion of consumers’ understanding on the mation on such issues convenience of oil, taking consumer choice into 4. Undertaking governmental subsidy programs consideration (PR and dissemination activities, such as the “Major Oil Spill Response Program”, etc.). including international conferences 5. Enhancing communication and understanding among member companies 2. Projects and Main Activities in FY2015 1. Addressing issues concerning the energy policy 1. Basic Policy for Fiscal Year (FY) 2015 in the future Business Activities (1) Advocate deliberations on the new energy policy. Both in the new Basic Energy Plan (April 2014) and (2) Manage biomass fuel issues. the Interim Report on Petroleum and Natural Gas (3) Tackle the global warming issue. Subcommittee (July 2014), oil is positioned as an important energy source to be continuously utilized 2. Reducing tax burdens in various petroleum-relat- in the future too. Those reports also indicated the ed taxes and ensuring fairness in taxation among policy to maintain and strengthen the petroleum energy sources industry’s international competitiveness as well as to maintain and reinforce its oil supply chain. 3. Strengthening both the domestic and interna- In addition, the examination of global warming tional competitiveness of the petroleum refining countermeasures for the COP 21 session in Decem- industry in Japan ber 2015 and the consideration of the optimum (1) Take actions toward international issues relat- energy mix prior to this session have become the ed to the refining industry and make efforts to important issues for the Japanese government and reinforce competitiveness. the industry circle. (2) Identify issues by analyzing the corporate To that end PAJ addresses the following major management and financial condition of the issues for FY2015 with views to secure a sustainable petroleum industry, and take measures to and stable oil supply into the future and to strength- deal with those. en the petroleum industry’s global competitiveness: a Realization of concrete measures for the policy 4. Promoting various uses of petroleum products direction that are requested of the petroleum (1) Promote activities to encourage broad use of 3 Profile ofDomestic Petroleum Oil Supply Association & Demand of Japan Trend PAJ’s High Energy Efficiency Oil Utilization (4) Support business of