This book chapter is excerpted from Energy Security Challenges for the 21st Century, edited by Gal Luft and Anne Korin (Praeger, 2009).
Energy security concerns are nothing new in Japan. The oil embargo during World War II and the 1970s oil shocks shaped much of Japan's recent history. The island of Japan is unique among industrialized nations in that it is virtually devoid of natural resources. Foreign suppliers must be found for all components of its energy portfolio except hydro and renewables: oil (47% of total energy supply), coal (21%), liquefied natural gas (13%), and nuclear (15%).
Long the technology leader in Asia, Japan finds itself preparing for a future in which its energy policy must weigh increased global energy demand, emerging resource nationalism, and stagnating upstream development. Japanese energy policy is built upon an understanding that resources are finite and that it has maxed out its domestic resources. This is the main factor behind Japan's relentless drive for efficiency and diversification.
By putting efficiency at the center of its policies, since 1973 Japan's energy intensity has improved by 37 percent, and its oil dependency has dropped by 30 points, making it one of the largest, most energy-efficient economies in the world.