In addition to the terrible human toll and physical destruction resulting from the Miyagiken-Oki earthquake in Japan, the country also has to cope with damage to energy infrastructure, such as distribution networks.
One immediate impact is power shortages from the shut-down of the TEPCO Fukashima Daiichi nuclear power plant.This is a big plant, with 4696 MW capacity. It is also reasonably old, having come into operation in 1971. Even if the plant is ultimately brought back into production, this is likely to take many months. In 2007 another TEPCO plant, the 8212 MW Kashiwazaki Kariwa plant had to be shutdown due to earthquake damage and the plant only started to come back into operation in 2009. This generation was effectively replaced by gas-fired generation using LNG, with an impact on the global LNG market through higher spot prices and sales. The same may well happen again. Replacing a full year of Fukashima Daiichi generation with gas could require additional LNG imports of 4.5 million tonnes, a material addition to overall Japanese imports which were a record 70 million tonnes in 2010. Russia has already offered additional cargoes and Qatar and the Atlantic Basin would be other likely sources of spot cargoes.
Looking to the longer term, Japan has the third largest level of power generation capacity in the world, a quarter of which is generated by nuclear. Prior to the current disaster there was already concern about expanding nuclear and this is likely to increase. Around 30% of power is generated from gas and this may well increase, with implications for LNG.