Management Issues in the Energy Industry in Australia and Japan between 1990 and 2011

Abstract

Developing alternative sources of energy to fossil fuels has become critical with the possible exhaustion and adverse environmental impacts of such fossil fuels. This report considers the energy management challenges in Japan and Australia, to highlight the potential of nuclear energy as such an alternative energy source. Due to the scarcity of mineral resources in Japan, nuclear energy presents the opportunity for the country to alleviate its dependence on oil and coal imports. Due to this demand, countries such as Australia that have high mineral resources, have the opportunity to diversify their exports, alleviating the adverse environmental impacts, associated with the current focus on mining and production of fossil fuels.  Japan and Australia could benefit from these factors by initiating cooperation on such areas as the transfer of nuclear plant-technology in exchange for lower Uranium prices.

INTRODUCTION

Background

Establishing effective energy-management policies has become a core concern globally with increasing concerns of the sustainability and environmental impacts of fossil fuels. Fossil fuels such as coal, oil and natural gas are important sources of energy for industrial, agricultural and domestic use across the globe. Statistics of energy consumption, provided by the International Energy Agency (IEA) indicate that there has been an increasing consumption of fossil fuels over the last four decades (2010, p. 28). Since such fossil fuels are non-renewable (Bodansky 2004, pp. 7-8), continued reliance on such sources pose a challenge to global energy security. Further adverse environmental impacts of fossil fuels have increased the search for more environmentally friendlier energy sources.

An alternative that is gaining increasing popularity out of its potential to satisfy the increase in energy demand is nuclear energy. This is for instance highlighted by increases in prices and production of Uranium – the mineral used in nuclear energy generation – in the recent years (World Nuclear Association – WNA 2010; 2011; see appendix, figure 1, for price trends). The increased demand of Uranium thus provides opportunities for countries endowed with rich Uranium deposits (e.g. Australia) to market it to those dependent on fossil fuels (e.g. Japan).

Thesis Statement

Increased energy demand challenges the sustainability of continued reliance on non-renewable energy sources such as coal, petroleum and natural gas (Tanaka 2009). Further, such sources of energy are associated with heighted degradation of the environment out of the emissions they release. Accordingly, alternative sources of energy that would meet the energy demand of a rising population and increased industrialization has become a necessity of the modern world.  This report assesses the challenges arising in energy management  thus elucidate ways through which the industry can respond appropriately. Specifically, from a premise of the need to reduce GHG emissions from the energy sector (Tanaka 2009), the paper evaluates the potential of nuclear energy to substitute fossil fuels through a case study of Japan (market for nuclear energy) and Australia (supplier of nuclear energy).

Scope and Organization of the Study

This paper limits its analysis of energy management challenges to Japan and Australia. Japan’s choice was based on its high dependence on imports of fossil fuels to meet the energy requirements of a rising population (Toichi 2002). The choice of Australia was advised by its high deposits of Uranium that makes it a potential supplier, while having the potential to reduce the country’s reliance on coal as its core energy-related export (Jessup & Mercer 2001). The paper is organized into four parts including an introduction, a section evaluating energy management issues in the two countries and a third section that compares nuclear energy to fossil fuels. The last part offers a summary of key points discussed leading to recommendations that would help the energy industry to respond appropriately to the management issues identified.

Proceed to the second part here.

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