ENERGY SECURITY AND STRATEGIC CULTURE

The perspective of Japan

SÉCURITÉ ÉNERGÉTIQUE ET CULTURE STRATÉGIQUE AU JAPON

A Thesis Submitted

to the Division of Graduate Studies of the Royal Military College of Canada

by

Chad Kohalyk

In Partial Fulfillment of the Requirements for the Degree of

Master of Arts

April 2008

©This thesis may be used within the Department of National

Defence but copyright for open publication remains the property of the author.
SÉCURITÉ ÉNERGÉTIQUE ET CULTURE STRATÉGIQUE AU JAPON

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To my wife, for all your support.

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 ACKNOWLEDGEMENTS

My supervisor, Dr. Kérim Ousman, deserves special thanks for graciously agreeing

to supervise me in my time of need.

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 ABSTRACT

Energy Security and Strategic Culture: The perspective of Japan

Kohalyk, Chad
Master of Arts
Royal Military College of Canada
April 2008
Supervisor: Dr. Kérim Ousman

This thesis analyses the unlikelihood of the militarization of Japanese energy policy as predicted

by neorealism. Using a constructivist approach this thesis argues that Japanese strategic culture

since the Second World War impedes any tendency towards using military force to secure energy

resources. Cultural norms of anti-militarism and economism ensure that energy security remains

solely an issue of economic policy. Rather than militarization, the Japanese domestic debate over

energy security hinges on government intervention in the marketplace. After the energy crises of

the 1970s the Japanese government used its diplomatic and economic power to intervene in the

market. As energy prices fell during the 1990s government intervention relaxed. In light of recent

price increases the Japanese government is once again taking an interventionist approach. The

thesis concludes with a call for future research that considers the perspectives of other Asian

countries, particularly China.

Key words: Japanese energy policy, security policy, energy security, alternative security,
constructivism, strategic culture

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 ABSTRACT

Sécurité énergétique et culture stratégique au Japon

Kohalyk, Chad
Maîtrise ès arts
Collège militaire royal du Canada
Avril 2008
Directeur : Professeur Kérim Ousman

Cette thèse analyse l'invraisemblance d'une militarisation de la politique énergétique du Japon,

militarisation qui ne peut manquer de se produire selon la pensée néo-réaliste. Il est soutenu,

dans une optique constructiviste, que la culture stratégique existant au Japon depuis la Deuxième

Guerre mondiale est contraire à tout recours à la force armée pour garantir l'approvisionnement

en énergie. Les principes culturels de l'anti-militarisme et de l'économisme sont tels que la

question de la sécurité énergétique ne peut être envisagée autrement que dans le cadre de la

politique économique. Au Japon, l'intervention du gouvernement sur le marché, et non pas la

militarisation, est au cœur du débat. Après la crise de l'énergie des années 1970, le gouvernement

du Japon a utilisé ses moyens diplomatiques et fait jouer son pouvoir économique sur le marché.

Lorsque les prix de l'énergie se sont affaiblis durant les années 1990, le gouvernement a réduit

ses interventions. Vu la flambée récente des prix, le gouvernement du Japon a de nouveau

recours à l'intervention. Enfin, l'auteur recommande une recherche plus poussée tenant compte

du point de vue d'autres pays d'Asie, notamment de la Chine.

Motsclés: Politique énergétique du Japon; politique en matière de sécurité, sécurité énergétique,

autres moyens de sécurité, constructivisme, culture stratégique

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 Table of Contents
Introduction 1

Chapter 1: Debate and Framework 5

Debate 6
Theoretical framework 12
Conclusion 21

Chapter 2: The strategic culture of Japan 22

Roots of antimilitarism and economism 23
Norms: Antimilitarism and Economism 28
The new security environment 31
The tenacity of strategic culture 37
Conclusion 45

Chapter 3: The state of Japanese energy security 47

From patch to pump 48
Threat analysis 52
The relationship with China 56
Southeast Asia 63
Conclusion 66

Chapter 4: A comprehensive energy security policy 67

The First Oil Shock 69
The Second Oil Shock 74
New energy security strategies 78

Conclusion 86

List of References 91

Appendix 98

Curriculum Vitae 100

List of Figures
Figure 1. Energy and insecurity from Calder (1996:5). 8
Figure 2. Shipping lanes to Japan from the Middle East.
Adapted from Graham (2006:32). 49
 1

Introduction

As oil prices climb, the debate over the link between energy and security flares up, particu-

larly for a resource-starved nation such as Japan. The vulnerability of Japan’s high dependency

on foreign energy sources is an old theme, dredged up whenever there is a spike in oil prices, a

war in the Middle East, or tension in the China Seas. The discussion inevitably turns to the issue

of war, and the question of whether energy resources might provide the impetus for a clash be-

tween the powers of East Asia. In the 1930s it was energy security that led Japan to sail its navy

south to take the oil fields of Indochina, Malaya and the Dutch East Indies under the doctrine

“Protect the North, Advance South” (hokushu nanshin). Today, as Japan moves towards a more

“normal” foreign policy, will it once again bring its military might to bear in defense of energy

resources so vital to its economy? In this thesis I argue that Japan’s strategic culture prevents a

role for the military in energy security policy.

In the recent literature on Japanese security (eg. Hughes 2004a:110; Pyle 2007:304, Sam-

uels 2007:190) energy security is cited as a concern alongside the traditional regional security

issues of North Korea, the Taiwan Straits and the rising military and economic power of China.

Neorealism is often the theoretical framework used to analyse Japanese national security policy.
 2

For neorealism security issues—including energy security—are commonly regarded from a mili-

tary perspective. However this is not the case for Japan. In this thesis I reject neorealism by tak-

ing a constructivist approach to the question of whether there will be a military conflict over en-

ergy resources in East Asia. Cultural and historical elements shape how the Japanese view the

problem of energy security, and influence policy for dealing with it. To paraphrase the construc-

tivist Alexander Wendt: energy security is what states make of it.

This thesis asserts that Japan’s military strategic culture prevents it from militarizing its

energy policy. To demonstrate this I explore the historical roots of the cultural norms of antimili-

tarism and economism, which rose to prominence after the Second World War. I argue that these

norms have been retained despite changes to Japanese military policy in the post-Cold War era.

Countering neorealist claims that Japan must rearm itself commensurate to its economic power, I

show how Japan avoids rearmament by using its “pacifist” constitution for leverage—notwith-

standing pressure from America. Anti-militarist cultural norms limit military power to very nar-

row aspects of national security policy. Beliefs on the limitation of military power suggest that

Japanese defense and energy security policy will not likely converge in the near future. Energy

does not fall under the jurisdiction of the Japanese military or Ministry of Defense. Energy secu-

rity policy falls under the sole control of the Ministry of Economy, Trade and Industry (METI).

Japanese economism, defined as the priority accorded to economic power over military

power, is the basis of Japan’s post-war economic recovery. Another element of this economism is

cooperation between government and industry to manage the marketplace. Government interven-

tion to secure political and economic relationships with energy supplier countries is an important

aspect of Japan’s energy security policy. Government after government the Japanese have dem-
 3

onstrated that they are not willing to defer their energy security entirely to the whims of the mar-

ket.

I argue that these two elements of Japanese strategic culture override any neorealist im-

perative toward the militarization of energy security policy. I find that state intervention is an

important aspect of Japanese energy security policy, and the level of intervention fluctuates with

the competitiveness of the international oil market. Finally, I conclude that for Japan, peaceful

engagement with China is a priority for Japanese energy security.

The thesis is presented in the following manner: Chapter 1 outlines the debate over Japa-

nese energy security, characterized by the neorealist and market security positions presented in

the literature.1 Additionally, I introduce the framework for my constructivist approach to deter-

mine the Japanese perspective on energy security. Chapter 2 delves into Japanese strategic cul-

ture and the historical context that gave rise to the cultural norms of antimilitarism and econo-

mism. Primary material for this chapter includes a number of official documents, such as the

Constitution of Japan and the National Defense Program Guidelines, which illustrate the struc-

tural constraints on Japanese military policy-making. Chapter 3 then turns to the current state of

Japan’s energy supply chain and specific security concerns. I pay special attention to sea lane

security, considered to be the likely area for militarization. Chapter 4 details the Japanese ap-

proach to energy security since the 1970s, showing how economism prevails over neorealist im-

peratives for militarization. Primary documents for this chapter include the New National Energy

1 The commoditization of energy resources and market security is the main argument against the neorealist perspec-
tive in the literature. Although this argument will be addressed subsequently, the potential power of the marketplace
to mitigate regional insecurity is not the concern of this thesis. Rather, I am concerned with how the Japanese them-
selves perceive and approach energy security. Similarly, the Peak Oil hypothesis is not featured in my analysis. Peak
Oil holds that a maximum rate of global petroleum production exists, and once reached will result in a global energy
crisis. It is a major criticism of the market security perspective. However this thesis is concerned with the influence
of strategic culture on energy security policy-making, not on the larger debate over the economics of energy security.
For more on the market security and peak oil debate see Manning (2000).
 4

Strategy released in 2006, which employs a number of non-military strategies such as conserva-

tion, diversification, stockpiling and international cooperation through development and educa-

tion. Finally, in the Conclusion, future research paths are considered. I conclude that from the

Japanese perspective conflict over energy resources or a militarization of energy security policy

is unlikely in the near future. This conclusion has important implications for not only neorealist

theory, but also for the debate on resource warfare.2

2Exploring the implications for resource warfare is beyond the scope of this thesis. There is an expansive literature
on resource warfare. See Thomas Homer-Dixon’s The Upside of Down (2006) and Michael T. Klare’s Resource
Wars: The New Landscape of Global Conflict (2002) for a detailed introduction.
 5

Chapter 1: Debate and Framework

Introduction

In the Japanese security literature, energy security is often cited as a vital national security

concern (see Hughes 2004a:110; Pyle 2007:304, Samuels 2007:190). However, there has been

relatively little research done specifically on Japan’s approach to energy security. The most influ-

ential work in the field has been Kent Calder’s book Pacific Defense: Arms, Energy, and Amer-

ica's Future in Asia (1996) in which Calder (1996a:200) concludes that within Asia: “The deadly

triangle of growth, energy shortage, and armament, in the context of fluid post-Cold War geostra-

tegic alignments, threatens to destabilize Asia and indeed the whole Pacific. Energy shortage, the

deadly but little-known link in this equation, provokes … new naval rivalries …” Manning

(2000:vii) criticized Calder’s work thusly: “... it became received wisdom … that the specter of

competition for dwindling oil and gas resources was a likely source of future conflicts.” Man-

ning’s book, The Asian Energy Factor (2000), is a refutation of Calder. Despite Manning’s

counter-arguments Calder is still cited in the latest publications on Japanese security (see Hughes
 6

2004a:110; Pyle 2007:304). Generally, the academic debate has been dominated by the opposing

views of geopolitics and market security.

The link between energy and security has been made within Japan as well. Toichi (2003:6)

warns: “Now, more than ever, energy problems and security problems are indivisible from one

another.” The current Japanese Minister of Defense Ishiba Shigeru argued in his 2005 book

Kokubou (“National Defense”) that oil was the first reason for the Japan Self Defense Forces de-

ployment to Iraq (Ishiba 2005: 43-45).

In this chapter, I will give an overview of the international and domestic debates over the

role of energy security in Japan’s national security policy. The dominant theoretical approach to

Japanese security has been neorealist, however this has proved problematic. I illustrate neoreal-

ism’s weaknesses and propose a constructivist framework to approach the problem of energy se-

curity policy in Japan. I argue that cultural and historical elements shape how the Japanese them-

selves view the problem, and guide policy for dealing with it.

Debate
Until the mid-1990s Asian security specialists were focused on the issues of a rising China,

territorial disputes, military modernization and the crises in the Taiwan Strait and Korean Penin-

sula. As Asia’s economies boomed, the issue of real and projected energy needs of the region

moved beyond the realm of industry analysts, seeping into the general security debate. Views

range from pessimistic geostrategists such as Kent E. Calder to optimistic free-marketeers like

Robert A. Manning. Calder (1996a:137) warns that energy “could be a catalyst for conflict.”

Manning (2000a: 203) on the other hand sees energy security not as a source of conflict but as an

“integrative force, creating a larger sense of shared interests and a stake in cooperation.” For
 7

Manning oil is a global commodity, and “mere geopolitical access” will not guarantee the best

price. Thus, Manning (2000b:82) advises that: “Foreign investment, long-term futures contracts,

and the build-up of strategic petroleum reserves are more efficient ways to safeguard supply than

territorial aggrandisement.” Among Asian security specialists, this debate remains unresolved.

The claims of the geostrategists are based on a neorealist perspective of international rela-

tions in East Asia. In addition to the sharp increase in oil prices since the 1990s and exploding

demand for energy in countries such as India and China, a number of strategic developments in

the region are considered as cause for concern. For geostrategists, the economic and military rise

of China, the Taiwan Strait crisis of 1995, Chinese territorial claims in the South China Sea and

the dispute with Japan over gas fields in the East China Sea are signs of impending conflict.

Likewise, Japan has also seen a “normalization” of its defense policy. This has manifested as an

expansion of the Self Defense Forces role abroad, resulting in a number of overseas deployments

including two missions to Iraq without sanction from the United Nations. From the perspective

of safeguarding energy resources, Graham (2006:235) argues that there is an undercurrent of us-

ing concerns for sea lane security to “justify controversial aspects of defense policy.” As we will

see in the coming pages, to some analysts, Japan and China seem to be on a collision course. 3

Within Japan there are also two competing visions of energy security which Evans (2006)

labels energy “internationalists” and energy “autonomists.” Generally internationalists advocate

market security while autonomists view energy as a “strategic” resource, and campaign for inter-

3 Although Korea too has seen a massive increase in energy demand since the 1990s, and also has embarked on a
path of military modernization, it is unlikely to come into direct conflict with Japan despite territorial issues related
to Dokdo. Taiwan too has increasing energy demand and military transformation, but it is on good terms with Japan.
All three of these countries—Japan, Korea and Taiwan—are locked in a tight defense relationship with America,
which further dampens any possible outbreak of conflict between the three. Similarly, India is not a strategic adver-
sary for Japan, despite its large contribution to the increase in Asian energy demand. In congruence with the litera-
ture, and for the purposes of this paper, China will be considered the most likely opponent of Japan in any contest
over energy resources, and thus will retain most of my attention.
 8

ventionist policies. Contingent on world events, the balance of favour has shifted back and forth

between internationalists and autonomists. The oil shocks of the 1970s swung the pendulum in

the favour of the autonomists. As efficiency gained priority over security in the 1990s, the inter-

nationalists once again gained favour. The recent surge in oil prices has caused doubt in the

power of market principles, resulting in calls for Japanese policymakers to recognize energy as a

strategic good rather than a commodity. Liberal Democratic Party Energy Strategy Committee

chairman Omi Koji stated: “We can no longer rely on the market to secure energy. We should put

much more emphasis on energy as our nation’s strategy” (cited in Evans 2006:8). Others such as

Toichi Tsutomu, Managing Director of The Institute of Energy Economics, argue for diversifying

Japan’s energy mix, investing in technology and infrastructure as well as increasing international

cooperation through the creation of an Asian International Energy Association (Toichi 2003,

2006).

The most prominent consideration of energy as a source of conflict is Kent E. Calder’s in-

fluential book Pacific Defense: Arms, Energy, and America's Future in Asia (1996).4 Calder

makes the link between energy and security by asserting that energy shortage leads to resource

competition exacerbating arms races and facilitating instability. Calder considers the Sino-

Japanese relationship the crux of an emerging power game and lays out his argument as follows:

Energy shortages will, as noted above, most likely make both China and Japan
increasingly anxious about secure access to Middle Eastern oil in coming dec-
ades … Such energy security concerns will doubtless also prompt a rising
anxiety about the sea-lanes over which ever more vital energy imports must
travel. In the short run, this could produce Sino-Japanese tensions over the
South China Sea … In the longer run, it could possibly provoke a naval arms
race between the two giants, beginning with helicopter and smaller aircraft car-

4 Reprinted as Asia's Deadly Triangle: How Arms, Energy, and Growth Threaten to Destabilize Asia-Pacific in 1998.
 9

riers and leading ultimately to competitive blue water navies for both. (Calder
1996a:137)

He illustrates the relationship between the different variables as in Figure 1 (op. cit.:5):

ECONOMIC ENERGY GEOSTRATEGIC

GROWTH SHORTAGE INSECURITY

ARMS
from Calder (1996:5) BUILDUP

Figure 1. Energy and insecurity from Calder (1996:5).

Calder feeds his model with China’s exploding energy demand. China’s increasing share

of total oil imports to Asia has eroded Japan’s traditional market dominance. As there is a finite

amount of oil, China’s gain is Japan’s loss, which threatens Japan’s economic survival. This

zero-sum view on energy has struck a chord with Asian security analysts who continue to refer to

Calder’s work to this day. However this view is an oversimplification. For one, it does not ac-

count for the increase in total imports to the region. China’s share of imported supplies may be

increasing relative to other states in the region, however the total amount of supplies imported is

growing as well. Between 1992 and 2004 China’s share of Northeast Asian5 oil imports increased

from just 4% to 25%. Japan’s share dropped from 66% to 41%. However, during the same period

imports to the region increased from 6.33m b/d to 9.78m b/d (IEA 2005). While China’s demand

has boomed, Japan has been able to keep its demand under control. China’s gain is not necessar-

ily Japan’s loss. Similarly, changing US marketshare during the the 1960s and 1970s did not

5 Including China, Japan, the Koreas and Taiwan.

 10

generate conflict: between 1960 and 1977 US oil imports grew from 1.8m b/d to 8.8m b/d while

oil demand in Europe and Asia rose from 4.5m b/d to 19m b/d (Manning 2000a:191).

There is a market dynamic and it is on this basis that Robert A. Manning, Director of the

Council of Foreign Relations Study Group on Asian Energy Security in the 21st Century, criti-

cizes Calder’s view. Manning’s criticisms stem from research done in a study group which he

turned into the book The Asian Energy Factor: Myths and Dilemmas of Energy, Security and the

Pacific Future (2000). Manning (2000a:80) described Calder’s argument as the “scarcity” view

of energy security where “imports equals shortages equals resource competition equals territorial

conflict.” He dismissed the “myth” of scarcity as outmoded, and claims that the power of mar-

kets mitigates interstate conflict over energy resource.

Since the 1980s oil prices are no longer unilaterally administered by supplier countries.

The international oil market transformed in the 1980s as the supply glut caused producer coun-

tries to worry about their access to markets. Oil prices are now set through the complex interac-

tion between the spot market and futures transactions in a global exchange, turning oil into a

commodity market. At the end of the 1990s Manning (2000a:75) argued: “… oil products have

become fully commodified, mainly sold on a free market, floating price basis. International crude

markets have become increasingly global and transparent, similar to the now familiar world fi-

nancial markets.” Manning takes the opposite position of Calder with a more optimistic perspec-

tive: “Rather than being a source of conflict, energy has the capacity to become an integrative

force, creating a larger sense of shared interests and stake in cooperation.” (op. cit. : 205)

However, the oil market is not completely free, with resources able to flow from any sup-

plier to any consumer without restriction. Significant political and technological challenges re-
 11

main. The Organization of the Petroleum Exporting Countries, an oil cartel able to influence oil

prices by manipulating supply, currently accounts for 40% of world production (World Economic

Forum 2006:13). Manning’s argument is weakened as energy markets transform.

Market forces can still play a role in contributing to energy security. As a non-renewable

resource, oil is by definition a finite commodity but the absolute quantity of petroleum in the

world is unknown and estimates are changing constantly with changes in technology and prices.

Improved technologies such as drilling, seismic, reservoir modeling, etc. have allowed the identi-

fication and extraction of more oil than in the past (World Economic Forum 2006:14-5). High oil

prices encourage new investments in exploration and recovery; oil exploration firms strike out to

discover new reserves, and oil that was previously too costly to develop becomes economically

recoverable. China’s investment in countries normally avoided by Western companies—such as

Sudan, Chad and Kazakhstan—benefits the energy security of other states as well as China’s.

Every barrel of oil developed in these countries is one that China does not have to buy on the

global market. Often, for logistical reasons, China sells this oil on the global market, contributing

to the total supply available (Foreign Policy November/December 2007). For consumers, high

oil prices become the incentive for conservation or substitution. This in turn depresses demand,

loosening a tight market.

What this means is that there are alternatives to conflict in solving energy shortage issues

in East Asia, and China and Japan are taking these routes. Specific examples will be explored

further in Chapter Four. In this thesis I try to determine how the Japanese themselves perceive

energy security. I argue that for the Japanese, energy security is an economic rather than a mili-
 12

tary issue. Japan’s strategic culture effectively invalidates the option to militarize energy security

policy.

Theoretical framework
Neorealism purports that foreign policy choices are limited by international structure. The

founder of neorealism, Kenneth Waltz, argued that a theory of international relations must be

systemic, rather than reductionist in nature (Waltz 1979). His theory of how the international sys-

tem works rests on four assumptions: 1) the international system is anarchic in that there is no

effective authority to guarantee compliance to agreements, 2) the most important actors in world

politics are states, 3) their behaviour is rational, and 4) they seek security and act in relation to

the capabilities of others (James 1994:183). Survival of the state is dependent on preventing the

rise of one state or coalition of states from being able to subordinate others. States therefore must

be sensitive to the changing capabilities of other states as a matter of survival, and must strive to

counterbalance changes in relative power by either expanding their own capabilities or forming

coalitions.

“Capabilities” are not limited to military power but may also include economic power. Ne-

orealism predicts that at some point Japan will want to be a great power—yearning for a return to

a “normal” foreign policy by casting off its pacifist constitution and rearming to a level commen-

surate with its economic power. In 1970 Herman Kahn (cited in Heginbotham and Samuels

1998:178) was amazed by the Japanese economic miracle and argued, if growth continued, the

“Japanese will almost inevitably feel that Japan has the right and duty to achieve full superpower

status and that this means possessing a substantial nuclear establishment.” Growth did continue,

at an amazing rate, but Japan eschewed great power status in the traditional sense. David C.
 13

Kang (2003:65) notes that the logic of “offensive realism” would conclude that Japan should

have rearmed long ago, during the height of its economic power in the 1980s. Yet full rearma-

ment—commensurate with Japanese economic capability—has yet to be realized. This has

proved problematic for neorealist theory.

Within the same perspective John Mearsheimer (2001:35) cautioned: “Only a misguided

state would pass up an opportunity to be the hegemon in the system because it thought it already

had sufficient power to survive.” Robyn Lim (2003:166) advises that it “would be especially

dangerous … for Japan to think that it could use its economic power to ensure its strategic secu-

rity.” For Lim, Chinese behaviour towards Taiwan proves the “fallacy” of economic interdepend-

ence. Furthermore, Japan’s wealth could actually make it a target (ibid.).

Under the neorealist paradigm states act rationally. Many neorealists have concluded that it

is only a matter of time until Japan adheres to the precepts of structural realism. Writing about

Japan, the eminent neorealist Kenneth Waltz (1993:66) stated that “[f]or a country to choose not

to become a great power is a structural anomaly. … Sooner or later, usually sooner, the interna-

tional status of countries has risen in step with their material resources. Countries with great-

power economies have become great powers, whether or not reluctantly.” As the economy ex-

panded overseas and Japan gained global interests some saw the inevitability of a “more active

foreign policy” able to secure those interests. One economist (Ezrati 1997:101) argued that “no

nation, including Japan, can afford to locate its production facilities abroad and not develop the

capability to at least threaten to project power to protect those sources of wealth.”

Imported energy resources are one of those sources of wealth. Writing about Japan’s “re-

luctant” realism Michael Green (2003:9, 158) argues that “Japan, in spite of—indeed because
 14

of—its economic travails, is set to be a larger actor in international relations” and notes that “en-

ergy and geostrategy are closely linked.” Open sea lanes are vital to Japan’s existence. George

Friedman, in his book The Coming War With Japan (1991), predicts a clash between American

naval power and Japan’s need to control the sea lanes, vital for the import of important raw mate-

rials. A war between Japan and America seems unlikely at this point, but Kent Calder (1996b:62)

warns that a “naval arms race among China, Japan, and possibly South Korea sparked by the

changing oil equation is the greatest long-term security danger the region faces.” Calder

(1996a:220-1) further stresses the urgent need to understand “how economic growth or changing

energy demand generates new patterns of military competition.”

The economic growth and changing energy needs of China have fueled fears of conflict

and competition between Asian powers in the Pacific. China and Japan import oil from the same

Middle East sources and ship it through the same sea lanes. Lim (2003:141) notes that “China’s

growing strategic pressure is beginning to cause Japan to become more anxious about its secu-

rity.” Edward Lincoln (2007:78) doubts the Chinese can dominate overseas oil supply to the ex-

tant of denying Japan access to the oil it needs. The market is simply too broad. Although Lin-

coln (op. cit.:82) does see contentions over territoriality in the East China Sea and sea lane pro-

tection as a conceivable if “unnecessary conflict.” For neorealists this boils down to the fact that

Japan and China have never been great powers at the same time (Lim 2001:1): the simultaneous

existence of two great powers in one region competing over the same resources is bound to lead

to a clash.

However, as described above, Japan has continued to confound proponents of neorealism.

This highlights a weakness in the application of neorealism to Japan, specifically with regards to
 15

independent action. Neorealism treats states as “the equal of all others” (Waltz 1979:88). In the

international system, states are discrete units equal in terms of rights, even if they are unequal in

terms of power. Waltz holds (1979:96) that: “To say that a state is sovereign means that it decides

for itself how it will cope with its internal and external problems.” Independent action is to be

made by sovereign states. However it is difficult to consider Japan independent in neorealist

terms. Though considered a sovereign state, its domestic policy is constrained by an imposed

constitution and its foreign policy is highly influenced by the US-Japan Security Treaty. Japan’s

relationship with America severely limits Japan’s ability to take independent action on military

policy, including the militarization of energy security.

Of course this does not mean that Japan’s foreign and domestic policies are completely

dominated by America. After the first oil crisis in 1973 Japan broke from American foreign pol-

icy by engaging in “resource diplomacy” with the Organization of Arab Petroleum Exporting

Countries (OAPEC). Observers of Japanese foreign policy consistently write about Japanese ca-

pabilities to hedge against American dominance (see Samuels 2007, Hughes 2004b). However it

must be noted that increases to Japanese military capability resulting from American pressure is

not representative of Japanese power, but of American power. The deployment of Ground Self

Defense Force units to Samawah in southern Iraq, as well as the the Air Self Defense Forces that

supplied them, are not an expression of Japanese desire for expeditionary forces, but the result of

political pressure in terms of the US-Japan alliance. In terms of the neorealist definitions of sov-

ereignty outlined above, Japan does not act with complete independence, which is problematic

for a theory based on the concept of states as sovereign actors in the international system.
 16

Furthermore, examining the foreign policy of a single state from the top-down perspective

of neorealism results in a tendency to treat each state as a monolithic unit. States do react to

stimuli from external structures, but do so through the lens of internal cultural and political struc-

tures. By ignoring activity within the state, an extremely important layer of analytical nuance is

overlooked. Historical enmity between Japan and its neighbouring countries in addition to do-

mestic fears of remilitarization prevent Japan from acting as neorealists have predicted. Domes-

tic structures and cultural norms have influence over the policy outcomes of the state, and thus

should not be ignored. To analyse Japanese energy security policy close examination of Japanese

social norms and institutions is required. This necessitates a constructivist approach.

Whereas neorealism focuses solely on the external constraints of the international system,

constructivism considers the interaction between both the external and internal constraints on

political action. Peter Katzenstein (1996:22) points out that “[i]nternational and domestic envi-

ronments shape state identities.” Constructivism focuses on the ideas, norms, and historical and

cultural factors that contribute to the national interest. Constructivism rejects the materialist per-

spective of neorealism which views political behavior as determined simply by the power struc-

ture of the international system alone.

As Houghton (2007:27) notes “constructivism is a diverse collection of approaches.”

Though there are differences between the major proponents of constructivism such as Wendt and

Katzenstein, there are some core assumptions common to all that I will summarize below.

The first assumption is the differentiation of “brute” and “social” facts. Brute facts are

those given by nature, and remain true regardless of ideational beliefs. Houghton (2007:28) gives

the example of a golfer being hit by lightning. Whether or not the golfer believes in electricity, he
 17

will be electrocuted. Brute facts are contrasted with social facts, which are dependent on human

social beliefs. Money is the classic example of a social fact. Alexander Wendt (1992) applied this

concept to international relations theory with the phrase “anarchy is what states make of it.” In

other words the concept of anarchy in international relations is a social construct, and thus does

not have an immutable definition applicable to all states. This further applies to the social fact of

security, which is an intersubjective understanding developed by the security debate in a com-

munity (Buzan et. al 1998).

A second proposition of constructivism is agency, as in those that are responsible for the

construction of social facts. Constructivists maintain that agents are as important as structure as it

is they that created the structure, and are simultaneously constrained by it. In principle, construc-

tivists try not to emphasize either agency or structure over the other.

In Japan the national security debate is dominated by four groups of agents: neoautono-

mists, pacifists, Middle Power Internationalists, and Normal Nation-alists. Neoautonomists are

proponents of an independent state, with a revised constitution and an equal relationship with

America. Pacifists promote “unarmed neutrality” with the goal of Japan to become the Switzer-

land of Asia. Middle Power Internationalists have no desire for Japan to be a great power and

emphasize economic prosperity. Normal Nation-alists on the other hand endorse a more pro-

active international role for Japan, but still advocate a defensive military posture and a close rela-

tionship with America. These four agency groups interact with each another within the domestic

domestic national security structures, specifically: the “pacifist” constitution, the restrictive secu-

rity policy frameworks emphasizing civilian control and the US-Japan security relationship.

Agency and structure is explored further in Chapter Two.

 18

The third assumption of constructivism is resultant of the first two. Institutions are socially

constructed by human agents. Observers of social institutions too are human and thus are not ex-

ternal to the reality being observed or described. Observers and their theories can contribute to

the social construct. This assumption is analogous to the scientific concept of the “observer ef-

fect” where the act of observing alters the phenomenon being observed.

This of course means that “ideas matter”—the fourth proposition of constructivism. The

most important ideas are those “intersubjective” beliefs that are shared by a particular culture,

sometimes known as “common sense.” These cultural beliefs attach different social meanings to

events and forces. Like ideas, “identity matters.” Identity is what gives meaning to social factors

that neorealists would consider objective. For example, to most Japanese, America’s possession

of nuclear weapons has a fundamentally different meaning than North Korea’s possession of nu-

clear weapons. Culture and identity are “important causal factors that help define the interests

and constitute the actors that shape national security policies and global insecurities” (Katzen-

stein 1996:537).

For constructivists such as Alexander Wendt (1992) and Katzenstein (1996) the interna-

tional system does not exist outside of the human experience: it is a human invention, shaped by

social interaction. Furthermore identities, ideas and social norms are developed through an inter-

subjective understanding—a body of “common sense” knowledge influencing and influenced by

the actions of a community. Social norms influence the views of political actors, shaping their

interests and rationality. Thus in order to study international relations of a state it is important to

study the ideas and beliefs of its people, for it is these ideational elements that inform the actions

of the state. The historical memory of 1930s militarism influenced how Japan organized its De-
 19

fense Agency, the organization responsible for overseeing the Self-Defense Forces. The idea of

“civilian control” was paramount for Japan’s first post-war Prime Minister Yoshida Shigeru, who

placed the Defense Agency inside the Prime Minister’s Office staffed by officials without mili-

tary experience. Furthermore Yoshida barred “men with a past” (iwaku tsuki, i.e. former military

officers) from posts within the agency (Samuels 2007:52). This has in turn affected national se-

curity policy for the next 50 years. These norms that influence security policy are part of Japan’s

strategic culture.

As Lantis (2005) points out, there remains significant room for clarification in defining

strategic culture. Johnston’s definition is most promising (ibid). He defines strategic culture as

“shared assumptions and decision rules that impose a degree of order on individual and group

conceptions of their relationship to their social organization or political environment.” This is

analogous to norms in constructivism. In constructivist terms norms are the intersubjective be-

liefs that define agents, structures and the possibilities of action. For the purposes of this thesis,

strategic culture is defined as a subset of norms dealing with security of the state or community.

In Chapter Two I will focus on two norms of Japan’s strategic culture: antimilitarism and econo-

mism.

Constructivism rose to prominence in the late 1980s and early 1990s as the Cold War

ended and the bipolar system dominated by America and the Soviet Union dissolved. Neorealist

theory predicted a realignment of powers balancing against America, which was not evidenced in

the international system. Constructivists criticized neorealism as overly spare and materialist and

turned to ideational factors for an explanation (Jackson and Sørensen, 2003: 162-4).
 20

Neorealism views power and national interest as the drivers of international politics. Power

is often considered simply as military capability, but also includes other elements such as size of

population, natural resources and economic strength. National interest is often defined in terms

of power. In describing international politics neorealists focus on the distribution of power and

competition of interests within the international structure. Constructivists on the other hand focus

on the individual goals, threats, fears, cultures and identities that make up the “social reality” of

international politics.

The constructivist “claim is not that ideas are more important than power and interest”

(Wendt 1999:135) but that ideas define the meaning of power. In this respect, constructivism is

an empirical approach to the study of international relations in that it focuses on specific cultural

norms and social structures. For example, in post-war Japan the structure of the state and cultural

norms resulted in a flexibility on issues of economic security on one hand and a rigidity on issues

of military security on the other (Katzenstein and Okawara 1993:84). This observation cannot be

said of every state within the international system.

The main argument advanced by this thesis is that the cultural norms of Japan’s strategic

culture prohibit the use of military force to ensure energy security. I support this position by us-

ing both primary and secondary sources.

My conception of Japanese strategic culture draws upon the secondary literature, building

on existing constructivist (eg. Thomas U. Berger and Peter Katzenstein) and historical (eg. Rich-

ard Samuels and Christopher Hughes) analyses of security policymaking in Japan.

 21

For further corroboration I also refer to relevant primary sources such as the New National

Security Strategy released by the Ministry of Economy, Trade and Industry in 2006 and the Na-

tional Defense Program Guidelines released by the Ministry of Defense in 2005.

Official records can pose a problem for constructivist analyses in that often details of dis-

senting views or actors, and alternative policy choices are not recorded. Secondary literature can

describe the context, ideas and prevailing viewpoints that inform the policy. Through this combi-

nation of primary and secondary sources I identify the ideas influencing the domestic debate over

energy security. I contend that these ideas rule out militarization of energy security policy as a

viable political option for Japan.

Conclusion
Constructivism cannot single-handedly produce predictions of political outcomes but it can

inform the analyst as to the rationality of actors and their tendencies. In this thesis a constructiv-

ist approach will give insight into how the Japanese define security and how they have built their

policy making mechanisms. This thesis argues that Japanese strategic culture tends to prevent a

role for the military in energy security policy. Despite neorealist contentions about Japanese

geostrategic imperatives, domestic structures of policy-making ensure a separation of military

and energy security policy. Furthermore, these tendencies of Japanese foreign policy lead me to

believe it is highly unlikely that Japan will militarize its energy security policy in the near future.

My conclusions are based upon the examination of Japanese strategic culture, the focus of the

next chapter.
 22

Chapter 2: The strategic culture of Japan

Introduction

Duffield (in Lantis, 2005) observes that “[t]he overall effect of national security culture is

to predispose societies, in general, and political elites, in particular, toward certain actions and

policies over others. Some options will simply not be imagined…some are more likely to be re-

jected as inappropriate or ineffective than others.” Cultural norms, structures and agents influ-

ence security perceptions and policy choices. For example, the strategic culture of Japan has so

far prevented the conceptual link between energy and military power made by neorealists.

This chapter will focus on two norms of Japan’s strategic culture—antimilitarism and

economism. The national security policy-making structures and political actors are described in

detail as Japanese strategic culture is evidenced in these agents and structures. I describe how

these agents and structures developed since the 1950s, and illustrate how they endured into the

post-Cold War era. I argue that despite post-Cold War changes in military capability, the strategic

culture acquired during the 1950s and 1960s still persists. A solid understanding of Japan’s secu-
 23

rity norms, agency and structure is vital to understanding the Japanese approach to specific secu-

rity concerns such as energy.

Roots of antimilitarism and economism

The end of the Pacific War in 1945 left Japan in ruins. After losing its entire empire, nearly

three million lives, and being the first victim of nuclear attack, Japan found itself occupied by

foreign troops for the first time in history.

Following the emperor’s delivery of the the Imperial Rescript on Surrender on 15 August

1945, Japan went through an extraordinary political and economic transformation under the oc-

cupation of American forces from 1945 to 1952. Determined to expunge Japan of militarism and

nationalist doctrine, the Occupation forces conducted war crimes trials between 1946 and 1948

(Pyle 2007:219-221). The International Military Tribunal for the Far East convened in the former

Imperial Japanese Army HQ building and tried Class A, B and C war criminals for conspiracy to

start war, war crimes, and crimes against humanity respectively. General Douglas MacArthur,

commander of the occupation, also drew up a new constitution to replace the Prussian-style

Meiji Constitution. The new constitution was in many respects a very liberal document. It re-

moved the emperor from politics, protected civil liberties, and gave women the right to vote.

Most importantly the new constitution contained a “Peace Clause” renouncing war and banning

the right to maintain armed forces.

Article 9 is the ultimate symbol of Japan’s post-war antimilitarism, an object of repentance.

Its official English translation reads as follows:

ARTICLE 9. Aspiring sincerely to an international peace based on justice and

order, the Japanese people forever renounce war as a sovereign right of the na-
tion and the threat or use of force as means of settling international disputes.
 24

In order to accomplish the aim of the preceding paragraph, land, sea, and air
forces, as well as other war potential, will never be maintained. The right of
belligerency of the state will not be recognized.

Earlier drafts of Article 9 intended not only to prohibit offensive capability, but even to

prevent the maintenance of a military establishment and the use of force in self-defense (Hughes

2004b:32). However, parliamentary amendments led to the insertion of the phrase “in order to

accomplish the aim of the preceding paragraph.” This phrase is key for the toleration of the Self

Defense Forces. As long as it was not used for the purpose of “settling international disputes”

military force could be maintained for other functions. Article 9 has been both an important ob-

stacle and a key tool for the conduct of Japan’s foreign and defense policy.

As the Cold War spread to Asia the vulnerability of Japan caused concern in George Ken-

nan, who visited the country in February 1948, shortly after penning his “Long Telegram.” The

Occupation took Kennan’s concerns into account, reversing course from the utopian ideals of the

early years of occupation. The goal now was not reform but recovery, to prepare Japan for inde-

pendence and strengthen it against communist influence (Pyle 2007:221-2). Focus shifted to

economic rehabilitation. Japan was to become a “trading nation.”

The Chinese revolution of 1949 and the outbreak of the Korean War in 1950 changed

American perceptions of Japanese security and the balance of power in Asia. In 1950 the US

24th Infantry Division was pulled out of Japan to the front in Korea. Not wanting to leave Japan

exposed, MacArthur ordered the creation of a 75,000-strong National Police Reserve to maintain

order and repel any possible invasion. The National Safety Agency was formed in 1952 to over-

see the National Police Reserve. This new agency answered directly to the Prime Minister,
 25

Yoshida Shigeru. In 1954, the National Safety Agency became the Japan Defense Agency (JDA),

and the National Police Reserve became the Japan Self-Defense Forces (JSDF).

The restoration of military power was not an issue taken lightly by the politicians of post-

war Japan. Fresh were the memories of national destruction, reaped by the militarism of the

1930s. Now, America’s vision for Japan had changed from a peaceful protectorate to a bulwark

against the forces of communism. In fact, American planners had already been conspiring with

former imperial officers with plans to develop a 350,000 man army, 4.6 million ton navy and

7,000 plane air force. Japan’s first Prime Minister Yoshida Shigeru blocked this plan using the

new “American-imposed” pacifist constitution as his weapon, a tactic used repeatedly by Japa-

nese politicians since its inception (Samuels 2007:40). Pacifism was an idea accepted by both

progressives and conservatives, but for different reasons. Socialists advocated a pacifist neutral-

ity for ideological reasons while the Liberal Democratic Party found pacifism a convenient

shield protecting from American requests for more participation in the Cold War.

Yoshida worked hard to ensure civilian control over the new military. He placed two levels

of civilian bureaucracy above the uniformed officers. The first is the Cabinet Legislation Bureau

(CLB), an advisory organ within the prime minister’s secretariat responsible for all legal issues

regarding the constitutionality of the SDF and interpretations of Article 9. The CLB is populated

by two dozen senior bureaucrats seconded from the other ministries. Significantly no official

from the Japan Defense Agency (or the later Ministry of Defense) has ever held a position in the

CLB (Samuels 2007:50).

The second level of bureaucracy is the Japan Defense Agency (JDA), directly responsible

for controlling the military. Although the director general of the JDA would be a member of
 26

cabinet, the agency was part of the prime minister’s office. This meant that the director general

did not have the power to convene Cabinet meetings, could not introduce legislation, and had

very little control over the defense budget.

Yoshida wanted even more civilian control over the military so he ordered JDA internal

bureaus to be directed only by officials with no military experience. Former imperial military

officers and retired SDF officers were not eligible for these posts. Furthermore, these officials

were seconded from other ministries, ensuring that they had no defense policy background.

Many positions were routinely “reserved” (shiteiseki) for officials from specific ministries: the

Ministry of Finance controlled the JDA Budget Office, the Ministry of Foreign Affairs took the

Policy Office, and the Equipment Bureau was headed by a secondee from the Ministry of Inter-

national Trade and Industry. The JDA was not an agency in which to make one’s career. In fact it

took until 1988 until the JDA’s first career official achieved the post of administrative vice-

minister (op. cit.:52-3).

The military effectively had two civilian buffers between it and the parliament. A 1952 Na-

tional Safety Agency directive prohibited general staff officers from having any contact with

members of parliament. Until reforms made in 1997 there was no way for a uniformed officer to

appeal decisions made by the JDA director general. JDA civilian bureaucrats could even veto

unanimous decisions made by the Joint Staff.

Yoshida maneuvered brilliantly in response to US pressure for rearmament and calls for

Japan to play a larger role in the Cold War. His policies, commonly referred to as the “Yoshida

Doctrine,” were based on three fundamental tenets: 1) the primary goal of the nation is economic

rehabilitation, 2) Japan should be lightly armed for self-defense, not participating in collective
 27

defense or deployments abroad, 3) basing rights for the US military would guarantee long-term

security (Pyle 2007: 242). The Yoshida Doctrine reigned until the end of the Cold War and paved

the way for the Ikeda Plan, Prime Minister Ikeda Hayato’s goal of doubling the nation’s income

in ten years. During the 1960s the practice of keeping defense spending under one percent of

GNP became the norm, although it was not to become explicit policy until the 1976 National De-

fense Program Outline.

Only twice during the Cold War was the Yoshida Doctrine interrupted. The first was under

Kishi Nobusuke, serving 1957-1960, who was a former cabinet member for Tojo and an alleged

Class A war criminal. Kishi was against foreign troops on Japanese soil and tried to renegotiate

Japan‘s security relationship with America. He wanted a say in the stationing of US forces in Ja-

pan, a commitment from the US to defend Japan in case of attack, and a fixed term for the treaty.

The ratification of the security treaty in 1960 saw mass public demonstrations. Hundreds of

thousands of protesters gathered in front of the Diet Building. Six million workers went on strike

(op. cit.:237-8). On account of the public furor Kishi was forced to resign. Public opinion,

memories of the disastrous results of 1930s militarism still fresh in the public consciousness, had

seized on the tenet of pacifism espoused in the 1947 constitution. Japan then went back to its

“trading state” strategy under its next prime minister Ikeda Hayato.

Defense issues were put to rest for the next couple of decades until the second break from

the Yoshida Doctrine under the premiership of Nakasone Yasuhiro, from 1982 to 1987. Nakasone

attained the office of prime minister due to political deadlock within the LDP. Nakasone em-

barked on a mission to overturn the Yoshida Doctrine by championing a neoconservative agenda,

somewhat reminiscent of his contemporaries US President Ronald Reagan and UK Prime Minis-
 28

ter Margaret Thatcher. Small government, deregulation and more direct confrontation with the

Soviet Union were the order of the day. Nakasone yearned for a “constitution independently

drawn up by the Japanese people,” a new alliance with the US as equals, and an end to the self-

imposed limitations on Japanese military power. Nakasone had espoused the concept of

“autonomous defense” since his days as director-general of the Japan Defense Agency in 1971

(Samuels 2007:35). In 1985 Nakasone became the first Japanese prime minister to visit the con-

troversial Yasukuni Shrine on the day commemorating the end of the second world war, August

15th. The reaction in China and Korea was so negative Nakasone did not return to Yasukuni the

following year. Nakasone boldly aligned Japan with the West in the struggle against communism,

stating at the G7 conference in Williamsburg, Virginia that “security is indivisible.”

A defense build-up was imperative to achieve his goal. He attempted to do away with the 1

percent of GNP stipulation on defense spending. However he was foiled by the Ministry of Fi-

nance and was only able to achieve a level of 1.004 percent of GNP in 1986 (Pyle 2007:273).

Despite extraordinary effort, Nakasone’s objectives were largely blocked by both the opposition

and the entrenched bureaucracy. It would take more than a neoconservative prime minister to

overturn Japan’s commitment to the Yoshida Doctrine.

Norms: Antimilitarism and Economism

Antimilitarism in Japan is characterised by doubt in military measures as a means of en-

hancing national security and general distrust of the military establishment. This is exemplified

by restrictions on military capability enshrined in the “peace” constitution and the fixation on

“civilian control” of the military. Antimilitarism is rooted in the memories of the militarism of

the 1930s, and the absolute destruction it wrought on the country. “Japan’s defeat in World War
 29

II discredited military measures as a means of enhancing national security” (Heginbotham and

Samuels 1998:173). Antimilitarism has led to a highly strictured military capability.

Economism is defined in the context of this thesis as the prioritization of economic power

over military power, with a further implication of cooperation between government and industry.

The close relationship between the Ministry of Economy, Trade and Industry (formerly the Min-

istry of International Trade and Industry) and private Japanese industry is an important factor in

the development of Japanese domestic and foreign policy. Like antimilitarism, economism was

also instilled during the immediate post-war period, as Japan’s antimilitarism facilitated the pri-

oritization of economic power over military power. Pyle summarizes:

In the post-war era, the Japanese realist pursuit of maximizing power was now
concentrated on economic competition. The instruments of power were no
longer armed forces, military bases, vast armaments, and territorial control, but
instead productive efficiency, market control, trade surplus, strong currency,
foreign exchange reserves, advanced technology, foreign direct investment, and
foreign aid. The trading state had replaced the armed state. (Pyle 2007:256)

Structural realists argue that when forced to make a choice, states will seek to achieve

political-military goals first (Heginbotham and Samuels 1998:193). Throughout the Cold War,

under the Yoshida Doctrine, Japan consistently prioritized the economic goal of rehabilitation

over re-armament. Realist scholars have been forced to come up with new terms to explain these

choices giving rise to such concepts as “mercantile realism” (Heginbotham and Samuels 1998),

“realism through institutionalism” (Cooney 2002) and “reluctant realism” (Green 2003). The

common thread through these arguments is that for Japan power was defined in economic terms.

Often security issues in Japan are discussed in terms of macro-economic management. For

energy autonomists treating oil as a “strategic commodity” does not mean that military power

should be brought to bear. On the contrary, autonomists encourage using economic and diplo-
 30

matic power through government intervention in the energy markets in order to secure access to

energy resources (Evans 2006:6-9). Economic security, and the “obsessions about economic vul-

nerability” as termed by Kawashima (2005:18-21), has led to policies reducing dependency on

raw materials (such as oil) and the enhancement of indigenous technology (i.e. technological

autonomy). Katzenstein and Okawara (1993:99) point out that the “obsession” over economic

vulnerability has not “permeated the military security debate.”

International problems are more readily defined in economic rather than military terms.

Katzenstein and Okawara summarize the policy implications as follows:

On questions of economic security, prevailing norms facilitate flexibility, for

example in Japan’s energy and technology policies, while on military issues,
such as the deployment of the SDF overseas, they encourage policy rigidity.
(op. cit.:5)

In the Japanese concept of security there is a clear separation of the economic and military

dimensions. “This separation rests on the premise that the use or threat of military force to ensure

Japan’s economic security is not a viable political option.“ (Katzenstein 1993:92). An example is

the difference between the Japanese and American reactions to the 1973 Oil Crisis.

America used the threat of its military power (ie. the Carter Doctrine6 ) to defend its energy

interests in the Middle East. The Japanese, on the other hand, depended on diplomatic initiatives

and an adaptable private sector willing to provide technological innovativeness in response to

international energy market prices. This choice helped the Japanese economy weather the oil cri-

ses. Despite inflation, deficits and consumer panic the GNP growth rate was negative only for

6 President Carter acknowledged the “overwhelming dependence of the Western democracies on oil supplies from
the Middle East” and laid out his doctrine in his 1980 State of the Union Address: “Let our position be absolutely
clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the
vital interests of the United States of America, and such an assault will be repelled by any means necessary, includ-
ing military force.” (see Yergin 1993:701-2)
 31

1974 (Shaoul 2005:413). Overall the Japanese economy continued to grow and even achieved

gains in productivity (Katzenstein 1993:107).

The two norms of economism and antimilitarism have influenced the structure of Japan’s

military apparatus and defense policymaking processes, as well as the outlook of the political

actors and the general public. These cultural norms are deeply rooted in Japan’s historical experi-

ence, specifically of utter military defeat and economic destruction in the second world war.

During the Cold War, Japan spent minimal national effort on military power, concentrating

on its “economic miracle” while the world’s two superpowers contended for dominance. Then,

suddenly, the fall of the Soviet Union transformed the international security environment. With

this change it was once again time for Japan to adapt.

The new security environment

The post-Cold War saw the end of the bipolar security environment and ushered in a new

era of economic globalization. This challenged both of the traditional norms of antimilitarism

and economism, but adjustment was less complicated for the latter. After initial confusion Japa-

nese policymakers eventually began to liberalize the Japanese economy. The developmental

capitalism that helped Japan recover from the destruction of the war had allowed it to catch up to

the West. Now that Japan was an advanced economy it had to move to a more liberalized, global

competitive economy. The economy was still the basis of Japanese power, and remained a prior-

ity.

Military policy 7, being the more rigid of the two, has proven more difficult to adjust and

has attracted much more attention. Since the end of the Cold War the JSDF has undergone a

7I use the term “military” rather than “security” or “defense” to distinguish policy relating directly to the Self-
Defense Forces.
 32

number of changes: new (sometimes controversial) equipment, closer relations with the US, par-

ticipation in peace-keeping missions abroad and the upgrading of the Japan Defense Agency to

the Ministry of Defense. To some analysts it seemed Japan might finally be ready to build a mili-

tary force commensurate with its economic stature, evidence that Japan may be discarding its

anti-militarist norm.

Japan’s post-Cold War transformation has been motivated by two external factors: 1) new

expectations for participation in the international community; and 2) new threats in East Asia.

Three post-Cold War events were crucial in the emergence of these factors: the first Gulf War,

the North Korea nuclear crisis, and the Taiwan Straits confrontation between China and America.

The Gulf War was the first international crisis in the post-Cold War period. After the UN

passed Resolution 660 condemning the invasion and demanding the withdrawal of Iraqi troops,

America began to put together a military coalition to drive Saddam Hussein back.

Japan was the world’s second largest economic power and highly dependent on the Middle

East for its energy resources. Pressure began to mount on Japan to participate in the American

coalition, however Japan’s reaction was slow. During the Cold War Japan did not have a say in

the international security environment, and was content to let America and the Soviet Union

drive the debate while it concentrated on economic reconstruction. Now Japan was being asked

to participate in an international military action. Japanese policymakers debated endlessly, and

the US, losing patience, approved a resolution to begin withdrawing troops from Japan (Pyle

2007:291). This spurred an immediate reaction from Japan which did the only politically expedi-

ent thing it could: send money. Japan pledged $13 billion dollars to support the coalition
 33

(Inoguchi 1991:258-9). However international criticism derided the contribution as merely

“chequebook diplomacy.”

Long-time politician Ozawa Ichiro took advantage of the international reaction to argue

that it was time Japan became a “normal nation” (futsuu no kuni). Although popularized by

Ozawa in the early 1990s the “normal nation” concept has roots as far back as immediate post-

war Japan. Yoshida Shigeru told his aid Miyazawa Kiichi: “The day [for rearmament] will come

naturally when our livelihood recovers. It may sound devious (zurui), but let the Americans han-

dle [our security] until then” (op. cit.:230). Later, in 1963 Yoshida wrote in his book Sekai to

Nippon (Japan and the World):

In my recent travels, I have met with leaders of other countries who have re-
covered from war and are contributing to world peace and prosperity. I feel Ja-
pan should be contributing too. For an independent Japan, which is among the
first rank of countries in economics, technology, and learning, to continue to be
dependent on another country is a deformity (katawa) of the state. … For Ja-
pan, a member of the United Nations and expecting benefits, to avoid support
of its peacekeeping mechanisms is selfish behavior. This is unacceptable in in-
ternational society. (as cited in Pyle 2007:239)

In his popular book Blueprint for a New Japan: The Rethinking of a Nation (1994) Ozawa

compares Japan to Venice noting that “it did not survive 1,000 years simply because of superior

business practices. It was a fully functioning republic: Venetians engaged in political and security

efforts. … Unlike Venice, [Carthage] paid mercenaries to defend it. Its belief that wealth alone

could sustain a nation ultimately caused its demise.” (as cited in Calder 1996:97). Neorealists see

this call for “normalization” as a drive for increased military power. However this is not the case.

Ozawa is a globalist, and argues for Japan to integrate its military deployment policies into the

political frameworks of multilateral institutions such as the UN.

 34

Ozawa argues that greater attention should be paid to the preamble of the Constitution,

rather than focusing exclusively on Article 9. The preamble is as follows:

We, the Japanese people, desire peace for all time and are deeply conscious of
the high ideals controlling human relationships, and we have determined to
preserve our security and existence, trusting in the justice and faith of the
peace-loving peoples of the world. We desire to occupy an honoured place in
an international society striving for the preservation of peace, and the banish-
ment of tyranny and slavery, oppression and intolerance for all time for the
earth. We recognize that all peoples of the world have the right to live in peace,
free from fear and want.

Ozawa’s argument is that the preamble means Japan should be contributing to “collective

security” as defined in the UN Charter. With a revised Article 9, Japan could better deploy troops

in UN-sanctioned operations to contribute to international security and stability operations, rather

than having to resort to special legislation for each deployment. Ozawa has also argued that Ja-

pan should be able to join NATO-led operations in Afghanistan.

The international reaction to Japan’s non-participation in the Gulf War coalition signaled

that states in the new world order had to take responsibility for contributing to international

peace. To this end the Diet passed the International Peace Cooperation Law in June of 1992,

which faced fierce opposition in the lower house. The Social Democratic Party and United Social

Democratic Party tried to disrupt the vote and even submitted resignation letters in an attempt to

force an election. The bill finally passed, ending the ban on sending troops abroad. However

troops were to be deployed only for logistical or humanitarian support and strict conditions were

placed on Japanese peacekeepers (Kawashima 2005:36):

1. all parties in the conflict must have agreed to a cease-fire

2. all parties in the conflict must have accepted Japan’s participation in peace-keeping

operations
 35

3. the PKO forces must maintain strict impartiality in performing their duties

4. the JSDF must withdraw immediately upon any breakdown of the above conditions

5. the use of weapons is permitted only in the extremely limited case of self-defense

In 1992 Japan contributed nearly 700 personnel to the UN peacekeeping force in Cambo-

dia, the first time Japanese troops had been deployed abroad since 1945. Since then Japan has

contributed to a number of UN peacekeeping missions, sending troops to Mozambique (1993),

Zaire (1994), the Golan Heights (1996) and East Timor (2002). Japanese troops were further de-

ployed for disaster relief. In 2005 the SDF offered relief assistance to victims of the tsunami in

southeast Asian. The SDF were deployed to the southeastern United States to provide assistance

after Hurricane Katrina.

By the mid-1990s policymakers came to the conclusion that in order for Japan to contribute

proactively to international peace, Japan should seek a permanent seat on the UN Security Coun-

cil (UNSC). Japan was already responsible for 20% of the UN’s regular budget. Some opposed

this conclusion on constitutional grounds, arguing that Japan had renounced the use of force ex-

cept in self-defense and a seat on the UNSC would mean Japan would have the power to author-

ize war (Kawashima 2005:139). Security council reform has yet to happen; however, the UN

plays an important role in Japan’s “normalization,” particularly as a counterbalance to the secu-

rity relationship with America as discussed in the next section.

The new responsibilities for international security and emergency response precipitated a

change in the structure of Japan’s defense apparatus. On 14 January 2007 the Japan Defense

Agency was upgraded to the Ministry of Defense. The defense portfolio was moved from a sub-

ordinate position in the prime minister’s office, to a position equal to the other ten ministries of
 36

the cabinet. The newly created Minister of Defense now has greater control over the national

defense budget as well as the ability to convene Cabinet meetings and push new legislation. The

justification for the upgrade was the need to better manage the JSDF’S new international peace

support role as well as to facilitate more rapid emergency response to situations at home and

abroad.

While Japan debated its role in the international security environment, the regional security

environment became a dangerous place triggered by the North Korean nuclear crisis of 1994-95,

followed by the Taiwan Straits crisis of 1995-96. The reality of being the victim of a ballistic

missile attack struck Japan during the Taiwan Straits crisis when China test-fired ballistic mis-

siles that landed within 60 kilometers of Japanese Exclusive Economic Zone around Okinawa.

However, the most transformative event was the Taepodong Shock: in 1998 North Korea tested a

ballistic missile by firing it over Japan. The Soviet Union had ballistic missiles (eg. SS-20s) but

had never fired them towards Japan. North Korea has fired ballistic missiles toward Japan three

times: in 1993, 1998 and 2006 (Nagahisa 2007:9).

North Korea was now a military threat. The media and many politicians expressed frustration

over the fact that Japan depended entirely on US satellite imagery to know what was going on in

its own backyard. This motivated the government to begin development of its own spy satellite

to monitor developments in the areas surrounding the Sea of Japan. Since 1998 Japan has de-

ployed indigenously produced satellites, used to monitor North Korea’s missile bases.

The new sense of threat from North Korea also helped to push through new guidelines for

working with the US military. This allowed the JSDF more leeway in being active in the “vicin-

ity” of Japan, a vague term that China and other Asian countries have taken as evidence of resur-
 37

gent militarism. Japan began to participate in the Proliferation Security Initiative (PSI), a US-led

initiative to interdict ships transporting banned weapons and weapons technology. Japan also be-

gan closer work with America on ballistic missile defense systems, a move that has sparked re-

sentment from China.

The changes that have taken place (new expeditionary capability, BMD, upgrade of JDA to

MOD) have caused consternation in some of Japan’s neighbours and doubt in analysts that Japan

remains dedicated to the Yoshida Doctrine-era norms of antimilitarism and economism. Pyle

(2007:297) argues that Japan is “slowly moving away from the Yoshida Doctrine, however it still

[has] no new strategy to replace it.” However Pyle ignores the fact that Japan’s adjustment to the

new security environment has been conducted by political leaders brought up during the heyday

of the Yoshida Doctrine, and working within the political structures developed by Yoshida him-

self. From a constructivist perspective, even though the outside world was changing, domestic

norms, agency and structure ensured the continuity of Japanese strategic culture. I turn my atten-

tion next to the specific agents and structure that provided the context for Japan’s adjustment to

the post-Cold War security environment.

The tenacity of strategic culture

Japanese domestic politics is conducted by four discernible groups: neoautonomists, paci-

fists, Middle Power Internationalists, and Normal Nation-alists. These groups have been identi-

fied by many prominent Japan observers such as Samuels (2007), Hughes (2004b, 2005), Berger

(1998), Kawashima (2003) and Calder (1996). It must be noted that these groups do not correlate

to specific political parties, nor are they formalized political factions. These groups represent the
 38

agency of Japan’s strategic culture. After briefly profiling each group I will turn to the policy-

making structures they must work within.

The outlier groups are pacifists and neoautonomists. The pacifists (“progessives” to Calder

1996:94) are represented by myriad NGOs, Socialist Party and Communist Party members. They

promoted “unarmed neutrality” during the Cold War and did not (and in the case of the Commu-

nist Party still do not) recognize the legitimacy of the Self Defense Forces. The pacifists are also

opposed to the placement of US forces on Japanese soil—not out of any nationalist sentiment,

but out of anti-militarist principle and the desire to be removed from great power politics. Their

goal is for Japan to become the Switzerland of Asia.

Neoautonomists, best represented by the ultra-nationalist governor of Tokyo Prefecture

Ishihara Shinataro, seek autonomy through strength. Sometimes called “Gaullists” (Hughes

2004b:51; Kawashima 2003:48, Calder 1996:98), this group would like to see Japan as a fully

independent state, active on the world scene. Termination of the security treaty with the US and a

revision of Article 9 (and possibly the entire “American-imposed” constitution) are the goals of

the neoautonomists. The neoautomists are also very antagonistic towards China.

Pacifists and neoautonomists have consistently been outliers in the debate over Japan’s for-

eign and defense policy. The balance of power in the discourse has revolved around the “conser-

vative mainstream” groups: Middle Power Internationalists and Normal Nation-alists.

Middle Power Internationalists are primarily concerned with prosperity. “Traders” (Calder

1996:94-5) look to the success of Yoshida and Ikeda whose postwar economic policies saw Japan

reborn from the ashes of defeat. Generally opposing the use of force, Traders are content with a

minor role in international society insisting that Japan be a “civilian power.” This group’s main
 39

priority is access to markets and its weapons are diplomacy and multilateralism. Often labeled

neomercantilist, this group can be exemplified by politicians such as Miyazawa Kiichi. Middle

Power Internationalists are amenable to a better relationship with China, a new source of future

prosperity, and prefer to somewhat distance Japan from the United States.

The group known as Normal Nation-alists (or as “normalizers” by Hughes 2004b:49-56) is

the most complex containing proponents of globalism, realism and neoconservatism. All factions

want Japan to take on more responsibility in the world and would like to see a stronger—though

still defense-oriented—posture for Japan. However, each faction has its own reasons. As popular-

izer of the concept of a “normal” nation, Ozawa Ichiro exemplifies this group in general, and

more specifically the globalist faction. Ozawa has argued for a more proactive, UN-centric secu-

rity policy. He accepts the security umbrella of the US but considers the UN as the only actor

who may use force legitimately. Ozawa urges Japan to observe its commitment to international

peace, even arguing that a portion of the SDF to be formed as a “UN reserve unit” (Samuels

2007:124). Realist politicians such as defense minister Ishiba Shigeru have argued for closer ties

with the US. Coordinated force planning, training, bilateral command relationships and co-

basing are important for realists who desire a more equal security relationship with the US. In

2005 foreign minister Aso Taro declared that the United States comes first, Asia second (op.

cit.:126).

For realists, China is a clear threat to Japan. Realists resent China’s rapid defense build-up

and anti-Japanese rhetoric. China’s patriotic education campaign and stance on history grate on

the revisionists, who share much of the security outlook with realists but focus on cultural and

historical issues, particularly with regards to Japan’s wartime history. The Normal Nation-alists
 40

have become the mainstream political force since the end of the Cold War, particularly the Revi-

sionists, which has recently resulted in some departures from antimilitarism (eg. GSDF/ASDF

deployment to Iraq, refueling mission to Indian Ocean). However their policies must contend

with internal factionalism, increasingly powerful political opposition and public opinion which

still harbours deep anti-militaristic attitudes.

Japan’s transition to the post-Cold War security environment has been predicated on the

interplay between these four groups and the security policy structures developed during the Cold

War. Defense policy-making structures remain rooted in Japan’s post-war experience, and are

influenced by anti-militarist sentiment. Japanese national defense policy is based on the constitu-

tion (particularly Article 9, described earlier) and the Basic Policy on National Defense, a docu-

ment approved by the Cabinet in 1957. The Basic Policy aims to defend Japan’s independence

and international peace though the following four actions:

1. Support the activities of the United Nations and promote international cooperation

thereby making a commitment to world peace.

2. Stabilize the livelihood of the people and establish the foundations for national security.

3. Build up rational defense capabilities by steps within the limit necessary for self-

defense in accordance with national strength and situation.

4. Defend the nation based on the security arrangements with the U.S. until the United

Nations will be able to fulfill its function in stopping such aggression effectively in the

future.

In addition to the Basic Policy a number of other policies and principles also influence any

new defense policy. These include the policy of not becoming a “military power”; ensuring civil-
 41

ian control of the military; maintaining an exclusively defense oriented policy; and adherence to

the Three Non-Nuclear Principles (never to possess, manufacture nor permit the importation of

nuclear weapons) introduced to the Diet in 1967 by Prime Minister Sato Eisaku (Defense of Ja-

pan 2007:381).

Defense capabilities and future military build-up are conducted under the requirements of

the National Defense Program Guideline (NDPG)—formerly the National Defense Policy Out-

line (NDPO) first established in 1976. Contingent on the international security environment, the

Ministry of Defense has updated the NDPG twice: in 1995 and 2004. The original NDPO of

1976 was formulated as a hedge against military abandonment by the US (Hughes 2004b:27).

The NDPO stabilized SDF expansion and focused it on qualitative improvement. The end of the

Cold War precipitated the revision of the NDPO in 1995, which saw a cut in the quantity of mili-

tary capabilities, while improving quality. This document was the first time Japan explicitly iden-

tified North Korea as a potential threat to Japan. The September 11th attacks and the resulting

international environment triggered the 2004 revision, which was the first national security

document to openly identify China as a potential threat (Samuels 2007:69). Every five years the

Ministry of Defense puts together a proposal outlining major projects and procurement plans

called the Mid-Term Defense Program (MTDP). This document is written in accordance to the

limitations of the NDPG, and in line with the general national defense policies. The MTDP

budget is then submitted to the Ministry of Finance for negotiation.

Since the end of the Cold War Japanese strategic culture has been going through a trans-

formation described in a plethora of recently published books including: Japan's Re-Emergence

as a 'Normal' Military Power (2004); Japan Rising: The Resurgence of Japanese Power and
 42

Purpose (2007); and Securing Japan: Tokyo’s Grand Strategy and the Future of East Asia

(2007). Whether or not this change is a radical departure from Cold War norms is the core con-

cern of analysts. Hughes and Samuels agree that the changes to Japanese defense policy are in-

cremental, evolutionary rather than revolutionary. Samuels (2007:209) argues that Japan’s strat-

egy is “more than a robust version of the Yoshida Doctrine and less than its wholesale replace-

ment” and agrees with Mike Mochizuki’s argument that a new strategy is simply a “recalibration

of policy within an existing strategy.” Rather than a stark increase in military power, Japan’s

military transformation has seen a change of roles. This is consistent with the policy of not be-

coming a “military power.”

The 2004 NDPG adopted the recommendations of the Araki Commission which proposed a

strategy with two goals: 1) “prevent a direct threat from reaching Japan and, in the event that it

does reach Japan, to minimize the damage” and 2) “to reduce the chances of threats arising in

various parts of the world … [by] improving the international security environment” (Council on

Security and Defense Capabilities 2004:5).

The first goal is the traditional self-defense capability, identical to the principles enshrined

in the Self-Defense Forces Law of 1954. However the JSDF has moved away from the tradi-

tional mission of repelling a Soviet land invasion. New threats have been identified including

ballistic missile attacks. For this new capabilities were required including reconnaissance satel-

lites and ballistic missile defense. The JSDF had drawn down its heavy fighting capabilities

meant for a Soviet invasion and began developing a “multi-functional, flexible and effective”

defense capability. Closer integration with American counterparts was also deemed important in

case of a regional contingency. This had already been set down in the revised guidelines for US-
 43

Japan security cooperation in 1999 (see Morgan 2000). Japan is willing to work closer with the

US on issues relating to self-defense in the immediate area surrounding Japan, but a fear of en-

tanglement persists. Ever since Yoshida’s time Japan has used a hedging strategy in its relation-

ship with America. On the one hand it desires a close relationship to guarantee its security, on the

other Japan seeks institutional limitations to protect against military entanglement.

In terms of regional security, Hughes points out Japan has emphasized cooperation with the

US under US-Japan Security Article 5 (the immediate defense of Japan) rather than Article 6

(maintenance of international peace in the East Asian region). For instance, Japan has prohibited

itself from defending its American ally abroad (Hughes 2005:107). Hughes continues:

The constitutional and legal firewalls that Tokyo has enacted predicating JSDF
dispatch to support U.S.-led coalitions in Afghanistan and Iraq on UN resolu-
tions possibly limit the range of support that Tokyo is prepared to offer Wash-
ington. Moreover, Japan has restricted the expansion of JSDF activities region-
ally and globally to non-combat missions, and left intact its constitutional pro-
hibition on the exercise of collective self-defense. (op. cit.:114)

The JSDF has turned into a smaller, lighter force with expeditionary capabilities, justified

by Japan’s new role in international peacekeeping, the second goal of the Araki Commission (op.

cit.:119-122; see Appendix 1 for comparison). The maintenance of expeditionary forces is a

completely new development for Japanese security policy. Japan had previously engaged the in-

ternational security environment primarily though economic assistance.

However this is not a violation of Japan’s anti-militarist norms. As described earlier Japan

has justified peacekeeping based on the constitution and basic defense policies, and has instituted

strict limitations on the role JSDF plays in theater. Although it has taken some time, the public

has become satisfied that peacekeeping operations do not equal militarism. Besides, the new
 44

peace-keeping capability is dwarfed by economic assistance, still the primary tool of foreign pol-

icy.

The UN and possibly NATO are important factors for the foreign deployment of the JSDF.

For pacifist, globalist and Middle Power politicians international institutions are the only source

for legitimating the use of force. Keeping international institutions central to foreign deployment

can also be viewed in terms of Japan’s hedging strategy against America. By linking deployment

with international institutions, Japan can avoid becoming entangled in American military adven-

tures. This gives Japan more room to maneuver in its foreign policy.

The US-Japan security relationship constrains Japan’s military policy. Japan is dependent

on the American security guarantee, and cannot independently formulate military policy. Japan

must balance bilateral alliance cooperation with its fears of entanglement. Changes are carefully

considered within the context of the relationship with America. Hughes (op. cit.:134) thinks “…

the odds are stacked against Japan retaining sufficient room to hedge against or significantly in-

fluence U.S. security behavior…” because “Japan’s modernization of its security policy, military

doctrines, and JSDF capabilities will only serve to reinforce the range of possibilities for bilateral

alliance cooperation.“

Japan’s post-Cold War strategic culture is still being formulated. The fundamental security

threats to Japan have changed. The relationship with America is, as always, in flux. China’s inte-

gration with the international economy and the development of relations with Japan remains to

be seen. Domestic consensus between the various political groups and the public has to be

reached for Japan to settle on a national strategy reminiscent of the Yoshida Doctrine. In the
 45

meantime Japan will continue to adjust to the new environment incrementally, based on the

norms of antimilitarism and economism established during the Cold War.

Conclusion
The strategic culture of Japan was forged in the aftermath of a destructive and humiliating

defeat in the Pacific War. Japan was dominated by an occupational American force who influ-

enced the formation of Japan’s constitution and defense capability. While some commentators

might consider Japan’s strategic culture as pacifist, dominated by the “pacifist constitution,” I

believe this is an exaggeration.

Pacifism is represented by a small portion of Japanese political culture. However this does

not make the wider populace pro-military. Rather, the value instilled in the Japanese during the

Cold War was antimilitarism. As demonstrated above, Japan has not moved to increase its mili-

tary power, it has adjusted the capabilities of its military based on new threats and responsibili-

ties, always adhering to the norm of antimilitarism. The interaction between the agents and struc-

tures of policymaking provide for the rigidity of Japan’s military policy described by Katzenstein

and Okawara, resulting in evolution rather than abandonment of strategic culture. Such rigidity

helps to focus military policy on immediate security issues. Homeland defense from the threat of

North Korea and potentially China, the relationship with the US and new responsibilities for

supporting international peace efforts are the issues that dominate Japanese military policy. The

restraints on military power encourage the use of other tools to solve foreign policy problems.

The value of economism has coalesced into the concept of “comprehensive security”

which holds that economic security is at least as important as military security. The concept fur-

ther maintains that security is multi-faceted and must make use of diplomatic, economic and
 46

military instruments as part of a larger approach (Samuels 2007:56-7). As we will see in the next

chapter, energy issues are confronted with the “flexible” policies of economism. When domestic

energy analysts advocate treating oil as a “strategic commodity” it does not mean they want mili-

tary power to be brought to bear. This is a conclusion only made by neorealist scholars focussed

exclusively on military power. Rather, domestic analysts encourage using economic and diplo-

matic power through government intervention in the energy markets in order to secure access to

energy resources (Evans 2006:6-9).

 47

Chapter 3: The state of Japanese energy security

Introduction

“Energy security” is an umbrella term capturing the perspectives of consumers, producers,

developers, power companies and policymakers. Energy security covers a wide range of con-

cerns including pricing, supply diversity, access, political risk, infrastructure security and energy

as a weapon (World Economic Forum 2006: 9). Thus energy security strategies may encompass a

broad range of activities, for example: diversification of supply countries and energy supply mix

(i.e. increasing the proportion of nuclear, wind or solar power etc. of total energy needs); increas-

ing efficiency and conservation of petroleum resources; stockpiling to mitigate shortages; and

investing in development. How Japan deploys these strategies will be discussed further in Chap-

ter Four. In this chapter I will focus on aspects of energy security with a potential role for the

Japanese military. First I will outline Japan’s energy supply chain, highlighting the security con-

cerns raised by various analysts. I give special consideration to sea lane defense, considered the

most likely area of militarization. Lastly I consider energy and territorial issues between Japan

and China.
 48

From patch to pump

Japan is a resource deficient island nation, forced to import many raw materials to maintain

its economy. Japan’s steel industry is completely dependent on imported iron ore. All of Japan’s

wool and raw cotton are imported and key foodstuffs such as soy beans (93.5%), wheat (87.5%)

and salt (87.1%) come from overseas. Most of Japan’s energy resources must be imported:

99.4% of coal, 99.6% of crude oil and 95.8% natural gas (Japanese Shipowners‘ Association

2006:1).

Of all imported energy resources oil is singled out as a security concern for two reasons:

dependence and distribution. Half of Japan’s primary energy requirements are provided for by

oil, 90% of which comes from the politically volatile Middle East (ANRE 2006).

Since the 1970s Japan’s primary energy mix has somewhat diversified. Oil accounted for

77% of energy supply in 1973, but has since dropped to about 50%. The rest of Japan’s energy

mix consists of coal (20%), natural gas (14%), nuclear energy (9%), hydro (4%) and “new en-

ergy” (2%). Nuclear, hydro and the “new energy” of solar, wind and geothermal power are all

generated domestically and autonomously. Though Japan is dependent on foreign coal imports,

coal is fairly evenly distributed around the world and easy to access. Japan imports its coal

mostly from Australia (56.5%), China (15.5%) and Indonesia (14.7%). Likewise, natural gas can

be found in many parts of the world. Japan imports its natural gas from Indonesia (26.9%), Ma-

laysia (28.8%), Australia (14.8), Qatar (11.6%), Brunei (11.0%) and the UAE (8.8%). Oil depos-

its on the other hand are concentrated in the Middle East. 90% of Japan’s oil imports come from

the Middle East (Saudi Arabia 26%, UAE 25%, Iran 15%, Qatar 9%, Kuwait 9%, Oman 2%, Iraq

2%, Yemen <1%). This high level of dependence is due to Japan’s oil refining infrastructure,
 49

which is designed for the low-sulphur, sweet crude of the Middle East. Southeast Asia and Africa

account for the last 10% of Japan’s imports (ANRE 2006). The security implications of Japan’s

dependence on oil and its concentration in the politically volatile Middle East is key to the

geostrategic view of energy autonomists.

The energy supply route from the oil fields of the Middle East to the Japanese consumer is

long and arduous. Petroleum is extracted from oil reservoirs by upstream exploration and pro-

duction firms. Japan’s two major firms are INPEX and JAPEX, operating all over the world in

countries such as Australia, Azerbaijan, Brazil, Canada, China, Indonesia, Japan, Libya, Ka-

zakhstan, the Philippines and Timor Leste. INPEX was the result of a government-engineered

merger between Inpex Corporation and Teikoku Oil in 2005—respectively Japan's first and third

largest developers. The Japanese government owns nearly 30% in Inpex Holdings. Japan Petro-

leum Exploration Co (JAPEX) too is partially owned by the government, which holds 49.9% of

shares (Asia Times, 3 April 2007).

After extraction the petroleum is then shipped to Japan in very large crude carriers (VLCC,

classified as weighing 160,000 to 300,000 deadweight tons, DWT), a voyage that takes approxi-

mately 20 days. Oil tankers enroute to Japan from the Middle East pass through one of three

straits in Southeast Asia. The Malacca Straits being the most commonly used. Japan accounts for

largest share of traffic through the Malacca Straits. Approximately 30 oil tankers pass both ways

through the straits per day. VLCCs exceeding 230,000DWT and ultra large crude carriers

(ULCC) are routed through the Lombok-Makassar Straits, the main deep-water alternative to the

Malacca Straits, adding an extra three days to the journey. Recently the trend has been to con-

struct double-hulled VLCCs under 230,000 DWT to comply with draft restrictions on vessels
 50

passing through the Malacca Straits. The Sunda Strait, which lies between the Malacca and

Lombok-Makassar straits is the second-most direct route for shipping passing between the Indian

Ocean and the South China Sea. It is only two days beyond the Malacca Straits but shallowness,

strong currents and the position of offshore oil installations in the Java Sea prevent the strait

from being used by anything but smaller and more maneuverable vessels (Graham 2006: 26-28).

As will be detailed later, piracy and terrorism have been raised as concerns with regards to the

straits of Southeast Asia.

Figure 2. Shipping lanes to Japan from the Middle East. Adapted from Graham 2006:32.
 51

Once through the straits tankers must then traverse the South China Sea on their way to Japan.

These routes are also controversial due to Chinese territorial claims which overlap with other na-

tions in the region, as discussed later in the chapter.

Natural gas comes to Japan via a slightly different process. In Europe and the US gas can

be transported via pipeline. However transporting gas to Japan can only be done by ship. First

the gas must be cooled to -16 degrees Celsius in the field. This reduces the volume of the gas by

600:1 and turns the gas to a liquid. The gas is then loaded onto massive insulated tankers and

transported to Japan. Upon arrival it is reconverted into natural gas, ready for consumption in

households or at power stations. This processing procedure is expensive, and supply disruption

risks do exist. For example, due to the separatist conflict in the Indonesian territory of Aceh,

shipments from LNG plants in Indonesia were interrupted (Jain 2007:31).

Once tankers make it to Japanese waters they unload their cargo at one of the 31 refineries

located in various parts of the country. The refineries–owned by such companies as Nippon Oil,

Showa Shell Sekiyu, Idemitsu Kosan and Cosmo Oil—process the petroleum into different

products such as kerosene, gasoline, naphtha and fuel oil. Fuel is ordered from the refineries by

trading companies and commercial fuel distributors. Distributors will make deliveries to local

gas stations and other retailers. Vehicles account for more than a third of domestic demand for oil

products, the highest of any application (Agency for Natural Resources and Energy 2006: 22).

Another destination for fuel is factories or mills for electrical power generation. The chemical

industry uses a fifth of Japan’s refined oil products (naphtha) as raw material for chemical proc-

esses (ibid.).
 52

Japan also has an expansive transnational shipping industry. Japan’s ports are busy with the

comings and goings of bulk carriers, container ships, car carriers and supertankers. Over 40,000

vessels arrive per year at Nagoya Port alone. Ships bring all sorts of cargo including coal, coke,

timber, dried corn, bananas and crude oil. Furthermore Japan exports aluminum coils, farm

equipment, scrap, finished metal products, new and used cars. Often these vessels require fuel to

continue their journey. Many aspects of Japan’s economy depend on imported energy resources,

which flows via an extended chain fraught with risks.

Threat analysis
The energy supply chain can be split into three sectors: upstream (exploration and produc-

tion), midstream (transport) and downstream (refining). For Japan only certain aspects of the

chain have the potential for militarization or conflict. The least important sector for our purposes

is the downstream, which entails the refining, selling and distribution of petroleum products.

Domestic distribution and consumption/demand are not readily militarized, except possibly in

wartime. Japanese energy security policy does include strategies to discourage consumption and

diversify energy use away from oil, suppressing demand. These are expressly non-military and

will be described in detail in Chapter Four. In a physical security sense the potential for terrorist

attacks against refineries does exist. However the security burden for refineries and storage fa-

cilities is shared by the Japan Coast Guard (JCG), port authority security and the individual com-

panies themselves. Thus the downstream sector cannot be used for justification of military ex-

pansion and furthermore does not influence the prospects for conflict with the other nations of

East Asia.
 53

The upstream sector is of greater concern and historically the largest threat to Japan‘s en-

ergy security has been disruption of supply due to politics or war in producer countries. Exam-

ples include the 1973 Arab oil embargo and the Iran-Iraq Tanker War of the 1980s. The militari-

zation of the upstream portion of the energy supply chain would be exceedingly difficult for Ja-

pan, requiring the positioning of expeditionary forces in supply countries.

Yet in today’s international political atmosphere, not to mention the limitations imposed by

Japan’s own pacifist constitution, the unilateral deployment of Japanese expeditionary forces is

highly unlikely for the following reasons. Foreign deployment of Japanese forces is normally

only permitted under the International Peace Cooperation Law, enacted in 1992. Under the aus-

pices of the UN, Japan has deployed ground forces to the following countries: Angola, Cambo-

dia, El Salvador, East Timor/Timor Leste and the Golan Heights. Of those countries only Angola

has been an oil supplier to Japan, albeit intermittently and only accounting for less than 1% of

imports. Emergency deployments of Japanese Self Defense Forces are rare. Japan has deployed

to Indonesia—a substantial supply source for energy—but only on a short-term, humanitarian

mission after the tsunami of December 2004. Obviously this cannot be interpreted as a militari-

zation of energy security.

The deployment of the Japanese Iraq Reconstruction and Support Group in 2004 represents

a special case. Ishiba Shigeru, recently appointed Minister of Defense, argued in his 2005 book

Kokubou (“National Defense”) that oil was the first reason for the JSDF deployment to Iraq

(Ishiba 2005: 43-45). This argument was made after Ishiba left his post as the head of the Japa-

nese Defense Agency in 2003 and before his Ministry of Defense appointment in the fall of

2007. However Iraq accounts for only 2% of Japanese oil imports. The mission should be seen
 54

within the context of the US-Japan security relationship. Rather than an attempt to secure energy

resources in the Middle East, the Iraq mission was a decision made in the complex back-and-

forth game of domination between Japan and America. Though the Middle East is Japan’s pri-

mary source of Japanese oil imports, it is a highly militarized space already dominated by

American power. Japan would find it difficult to physically secure equity oil in this space. The

Iraq deployment could hardly be called a militarization of energy security policy. It is an acqui-

escence of dominance in the security relationship between Japan and America, an issue that will

be further explored in the next chapter.

One final security concern within the upstream sector involves the defense of export termi-

nals. Export terminals are acknowledged as potential targets for disruptive attacks (Akimoto

2006:62; Toichi 2006b:8). A specific example is the 2004 bombing of a crude oil terminal in

Basra, Iraq (Akimoto 2006:57). However, as terminals are located in the sovereign territory of

another country Japan has no right or means to use its military power. Regardless, Japan has at-

tempted to mitigate the issue of attacks on export terminals by investing in terminal security and

infrastructure.

In summary, militarization of the upstream sector does not seem a viable option for Japan.

Rather, securing upstream supply must be achieved by economic or politico-diplomatic means—

a topic broached further in this thesis.

This leaves the midstream sector: transportation. This sector is where geostrategists such as

Lim, Calder and Graham focus their attention. Transportation threats include piracy and/or ter-

rorism on the high seas, and denial of access to shipping lanes due to conflict or territorial
 55

claims. Open sea lanes, ensuring the flow of imported resources and exported goods is vital for

the well-being of the island nation of Japan.

Securing sea lines of communication (SLOC) against disruption is often seen as a justifica-

tion for the increase of Maritime Self Defense Force capabilities. One of Kawashima Yutaka‘s

hypothetical “worst-case scenarios“ for the 21st century involves Japanese SLOC security off the

coast of a Pakistan ruled by a confrontational Islamist leader. The scenario takes place in a time

where the US-Japan security treaty has come to an end:

The voyage becomes dangerous when vessels approach the coast of Southeast
Asia, where piracy against relatively small vessels is quite common. Japan‘s
tacit assumption is that in the event of hostile or disruptive actions by coastal
states in the Indian Ocean, the U.S. Seventh Fleet will intervene. ... in the ab-
sence of U.S. naval protection, Japan would have to agonize over whether to
expand its own naval capability to ensure the safety of vessels sailing to and
from Japan (Kawashima 2005:147-148).

For Kawashima the expansion of Japanese naval capability depends on the absence of the

US-Japan security treaty. Even so he remains “doubtful that the government could overcome the

constitutional and political restraints“ to see this through (ibid.). Graham (2006:236) argues that

sea lane protection is a “defensive task” and thus facilitates rearmament under the constitution

with less controversy than the Ground Self Defense Forces.

Proposals for expanded sea lane security measures often focus on specific geographical

flashpoints: the Malacca Straits, the South China Sea and Strait of Taiwan, and the East China

Sea. The security of the Strait of Hormuz is also of great concern as most of Japan’s oil imports

come from Persian Gulf countries. As noted previously, this region is heavily overlaid by Ameri-

can military presence. Nevertheless, as far back as 1980, Americans have pressured Japan to con-

tribute to US-led patrols in the Gulf, using the prospect of a threat to Japanese shipping in the
 56

Strait of Hormuz. Japan resisted this argument and eventually bolstered Japanese military pres-

ence at home to free up elements of the 7th fleet for patrol in the Gulf (Graham 2006: 147-8).

This is a common tactic for Japanese military hedging in the context of the US-Japan security

relationship.

The latter two flashpoints—the Strait of Taiwan and the East China Sea—hinge on Japan’s

relationship with China, vital for Japan’s energy security future, pessimistic or otherwise. It is to

this relationship that we focus our attention next.

The relationship with China

China is often cited as the most immediate threat to Japan’s energy security. China’s grow-

ing demand for oil has led to direct competition with Japan in the energy market (eg. over Rus-

sian pipelines). Sino-Japanese territorial claims in the East China Sea, and the oil and gas depos-

its found there, have agitated foreign relations between the two countries. Furthermore, Chinese

designs on Taiwan and the South China Sea threaten important shipping routes to Japan. These

issues play an important role throughout the history of the Sino-Japanese energy relationship.

The energy relationship between China and Japan has been defined by periods of both co-

operation and competition (see Liao 2006). China began oil exports to Japan in 1973. Exports

increased as Japan desperately tried to diversify its oil supply after the first oil shock in October

1973. This was despite the high content of sulphur in Chinese crude, which meant higher refin-

ing costs for Japan. Cooperation also meant joint oil exploration. Between 1976 and 1992 the

Export-Import Bank of Japan—predecessor of the Japan Bank for International Cooperation

(JBIC)—authorized three official loans totaling ¥169 trillion to China for the development of oil

and coal resources (Liao 2006:7-8). Yet, on average, oil imports from China only accounted for 5
 57

or 6 percent of total imports. Furthermore, imports began to drop off in 1993 as China became a

net importer of crude. China and Japan became competitors for foreign energy resources.

This competition has exacerbated the fears of Japanese energy autonomists. Japan, China,

South Korea and Taiwan accounted for 36 percent of world growth in primary energy demand

between 1983 and 1993. The turning point for energy pessimists was 1993, when China, the fifth

largest oil producer, became a net importer of oil. Oil consumption in China has expanded as rap-

idly as its booming economy, increasing an average of 7.7% each year between 1992 and 2004

(BP 2007). Still, as of 2006 oil accounts for just 19.3% of primary energy supply. In spite of in-

creased domestic production, oil imports have increased more than 1000% between 1992 and

2004. In 2004, China accounted for 25% of oil imports to Pacific northeast Asia, compared to

just 4% in 1992. Japan has traditionally dominated this market, but has seen its share drop from

66% in 1992 to 41% in 2004. In 2003, Chinese oil demand reached parity with Japan. By 2004

China’s demand exceeded Japan’s by 400,000 barrels per day. While Japan’s crude oil demand is

expected to remain flat or even slightly decline over the next 15 years, International Energy

Agency projections expect China’s demand to be nearly double Japan’s by 2020 (Evans

2006:10).

As described earlier, neorealists such as Calder see the relative gains of China in the oil

market as a threat. However energy is simply another variable in a complex web of issues in East

Asia including overlapping territorial claims, military expansion and re-alignment, and general

mistrust and suspicion between China and Japan.

The competition for energy resources has developed against a background climate of po-

litical distrust. Questions of historical responsibility over Japanese atrocities committed during
 58

the Second World War have sparked a number of anti-Japanese riots in China. Japanese concerns

over China as a military threat began as concern over China’s qualitative build-up of its forces

after the Gulf War. Chinese resumption of nuclear testing in 1995 was of particular concern, pre-

cipitating the suspension of Japanese grant aid to China between the years of 1995 and 1997

(Hughes 2004b:45). The incursion of Chinese “research” ships near the Senkaku Islands—dis-

cussed in detail later—was also considered as evidence of aggression by Japan.

Japan is suspicious of Chinese territorial claims in the south China Sea, fearing the rise of

an expansionist China. Disputes between China and ASEAN countries over energy resources in

the South China Sea have been exacerbated by Chinese naval clashes with Vietnam (1988, 1994)

and the Philippines (1995, 1996). Because of these overlapping territorial claims, Michael T.

Klare (2002:136) sees the South China Sea as “the area most likely to witness large-scale war-

fare.”

Chinese disputes in the South China seas are beyond the military influence of Japan. The

Maritime Self-Defense Force patrols sealanes only out to 1000 nautical miles. However an ex-

tended conflict in the South China Sea would impact Japanese oil imports. “Japan’s energy life-

line runs through the South China Sea. Tokyo is nervous.” warned Calder (1996b:63) in the mid-

1990s. Fears of an expansionist China and its impact on Japanese sea lanes still hold today. As

recently as 2005, Admiral Koichi Furusho, the former chief of staff of Japan’s Maritime Self De-

fense Forces, has argued that the currently stable sea lanes “would collapse as soon as Taiwan

unifies with China. The sea lanes would turn all red.” (International Herald Tribune 11 Septem-

ber 2005).
 59

Above all the Taiwan Straits crisis (1995-1996) has had the largest impact on tensions be-

tween China and Japan. During the crisis China test-fired ballistic missiles that landed within 60

kilometers of Japanese Exclusive Economic Zone around Okinawa. In reaction to China’s face-

off with America over Taiwan, Japan re-dedicated itself to the United States–Japan Security Alli-

ance in 1996. Under the new agreement, a confrontation between China and America over Tai-

wan would oblige rear-area support from the Japanese Self-Defense Forces. This political act

made Japan and China rivals.

Territoriality is an overarching issue in the South China Sea and Taiwan Strait, one that any

potential dispute over energy must be measured against. This is also true of the East China Sea,

where overlapping territorial claims have caused disputes over offshore gas deposits, a direct

competition between China and Japan.

The Senkaku (Ch. Diaoyu) Islands are a group of five small volcanic islands and three

“rocks” (islands too small for human habitation) east of Okinawa and northwest of Republic of

China on Taiwan. Although administered by Japan the islands are claimed by both People’s Re-

public of China and Taiwan. Chinese claims to the Senkaku date back to the Ming dynasty

(1368–1644). Japan formally incorporated the islands in 1895 during the First Sino-Japanese

War. The islands came under the control of America after the second world war. America gave

the islands to Japan in 1972 when it returned control of Okinawa despite protestations from both

the People‘s Republic of China and the Republic of China on Taiwan.

Conflicting claims over the islands were dormant until 1968 when the United Nations sug-

gested that oil deposits may be nearby. This sparked the mobilization of a number of nationalist

civilian groups who over the years landed on the islands, planted flags and and even built light-
 60

houses. Ownership over the islands can contribute to the overall size of sovereign claims to re-

sources under the sea, not to mention jurisdiction over sea lines of communication (Samuels

2007: 144).

Japan and China’s dispute over gas deposits in the East China Sea revolve around the de-

marcation of each countries’ respective Exclusive Economic Zone (EEZ). Under the United Na-

tions Convention on the Law of the Sea (UNCLOS) an exclusive economic zone is an area be-

yond and adjacent to the territorial sea where the coastal state has “sovereign rights for the pur-

pose of exploring and exploiting, conserving and managing the natural resources.” (Liao

2006:18) Both Japan and China have been signatories to the UNCLOS since 1996. According to

the UNCLOS Articles 56 and 57, coastal states have a right to claim up to 200 nautical miles as

an EEZ. Problematically, the East China Sea is only 360 nautical miles across at its widest point.

The UNCLOS stipulates in cases of contested zones interested parties should begin development

negotiations and come to an agreement both sides can accept.

In 1982 Japan proposed a maritime border at the halfway point between Japan and China.

China insisted on the principle of “natural prolongation” of the continental shelf, which would

place the border along the Ryukyu Island chain. Neither side has been willing to give in. When

there is a disagreement over the demarcation of an EEZ the UNCLOS stipulates that concerned

parties should avoid action that could undermine eventual agreement. Disregarding this stipula-

tion in 2003 China began development on the Chunxiao gas field only 5 nautical miles west of

the Japanese-proposed median line. China National Offshore Oil Corporation (CNOOC) and

Sinopec, both state owned exploration and development companies, began pumping natural gas

out of the field on 28 January 2006 (Wall Street Journal, April 6, 2006: A13).
 61

Japan is concerned that the undersea gas field may extend to its side of the median line it

proposed in 1982, thus claiming the right to a share of the resources found to straddle the inter-

mediate line. Japan has requested drilling data from China but has yet to receive any. China has

dismissed Japanese claims to the gas deposits, arguing that due to the continental shelf China’s

EEZ demarcation line extends far beyond the Japan-proposed median line, thus there is no dan-

ger of the gas field extending to Japanese territory.

In June 2004 China suggested that that the two countries jointly explore the area. Japan

refused the offer and once again requested drilling data. On 7 July 2004 Japan sent research ves-

sels of its own to investigate possible gas deposits on its side of the proposed EEZ demarcation

line. The Chinese Vice Foreign Minister criticized the move as an “act that infringed upon

China’s interests and sovereignty.” (Asia Times, 27 July 2004). The tension created an unhealthy

atmosphere for foreign investors. Both Shell and Unocal had stakes in Chunxiao, but withdrew in

late 2004 for “commercial reasons.” Unconfirmed reports claim that the oil majors were told to

withdraw by Washington on behalf of Japan (Liao 2006: 21).

Chinese protesters have clashed with the Japan Coast Guard, and others have been arrested

by Japanese police for landing on the Senkaku Islands. Most worrisome is the use of military re-

sources in and around the EEZ. People’s Liberation Army Navy (PLAN) vessels have been spot-

ted within the boundaries of the Japanese-claimed EEZ on a number of occasions, conducting

surveys or on exercise. Japan often complains about sorties by Chinese jets in the airspace above

the EEZ. Japan’s Air Defense Identification Zone extends west of the gas field. Japan Air Self

Defense Forces are often scrambled in response to Chinese air activity in area. In 2004 a Han-

class submarine entered the EEZ and stayed submerged for two hours. Japan demanded and re-
 62

ceived an apology from Chinese authorities for the incident. In a thinly veiled threat in 2005 Ja-

pan and America had a training exercise in San Diego to defend “remote islands” captured by

unnamed enemy forces. A continuation of this exercise was held on Iwo Jima in 2006 (Samuels

2007: 103, 143; Reuters 5 February 2007). The former Taiwanese director of naval intelligence

Admiral Lang Ning-li said “It is like the 1930s again, when the Central Pacific became a vital

concern to both the United States and Japan, whose navy was expanding. That means there could

be conflict between China and Japan, which both see these seas as vital, and can’t share this

space.” (International Herald Tribune 11 September 2005).

However the mobilization of military assets cannot be interpreted solely through the lens of

energy security. The waters around the Chunxiao gas field are strategic for reasons other than as

a potential energy source. US aircraft carriers and other naval vessels stationed in Japan use these

sealanes when they disembark for Taiwan. Rather than a show of power in the dispute over gas

fields, Chinese incursions into these waters could be part of military readiness exercises with an

eye toward Taiwan.

Japan sees the demarcation of the maritime border as a precondition to any agreement.

China on the other hand sees the definition of a border as a source of dispute, and wishes to put

the border issue off as long as possible. The United Nations says a decision on global offshore

territorial claims will be made by May 2009. Negotiations between the two countries are ongo-

ing. Japanese officials have repeatedly claimed to seek a political solution to the dispute. Twelve

rounds of talks over gas exploitation in the East China Sea have been held to date, with virtually

no progress being made.

 63

Southeast Asia
Beyond the China Seas lies the Indonesian archipelago, and the Malacca Strait. At only 2.8

kilometers wide at its narrowest point the Malacca Strait has been designated by the US Energy

Information Administration as one of the worlds six oil chokepoints, along with Hormuz, Pan-

ama, Suez, Bab-el-Mandeb and the Bosporus. The Strait of Malacca is one of the most important

shipping lanes in the world with an estimated 15 million barrels of oil per day flow in 2006.

The main concern in the Malacca Strait is piracy. Maritime terrorism too has been raised as

a security concern in Southeast Asia. The International Maritime Bureau warned of the possibil-

ity of a terrorist group targeting shipping in a 2001 report. The ASEAN Regional Forum, a multi-

lateral security organ, warned about “the potential for terrorist attacks on a vulnerable sea ship-

ping [to] threaten the growth of the Asia-Pacific region and disrupt the stability of global com-

merce.” (Graham 2006:54) No maritime terrorism has occurred in the Malacca Strait yet, but pi-

racy has been a growing problem.

In response to the rising number of attacks Indonesia, Malaysia and Singapore imple-

mented Operation MALSINDO on 20 July 2004 in a coordinated effort to secure the Malacca

Straits against piracy and maritime terrorism. Singapore has called for more international coop-

eration in securing the waterway but Indonesia and Malaysia remain opposed to a foreign pres-

ence in the Strait. The Indonesians and Malays have refused offers from the US Navy to partici-

pate in a Regional Maritime Security Initiative on nationalist grounds (Tow 2007:169-170).

 64

Piracy has been raised as a concern in Japan.8 There has been much back and forth over the

importance of the Malacca Strait to Japan, and what Japan can do about it. However Senior offi-

cials have repeatedly affirmed that “the primary mission of Japan’s [MSDF] is to secure the

safety of maritime traffic to a distance of 1,000 nautical miles” (see Graham 2006:182-5).

Japanese naval analyst and retired MSDF Rear Admiral Akimoto Kazumine proposed the

concept of a multilateral Ocean Peacekeeping (OPK) force. The current Minister of Defense

Ishiba Shigeru even floated this idea in a speech in Singapore (Hughes 2005:130-1). This has

been met with skepticism by several Southeast Asian states, particularly Indonesia. The Japanese

Coast Guard (JCG) has had much more luck. Since 2001 the JCG has conducted bilateral exer-

cises with Singapore, the Philippines, Thailand, Malaysia, Indonesia and Brunei (Hughes

2005:130). The JCG is a much less controversial vehicle for cooperation than the MSDF. Gra-

ham (2006:201) points out that the deployment to the Gulf has established a naval presence

along the length of Japan’s energy supply routes and the regular passage of MSDF ships through

the Malacca Straits on their way to the Indian Ocean represents “a low level de facto maritime

cooperation” (op. cit. 199) with the Straits states. However this is hardly the sign of an expan-

sionist military power.

There is not much of a role or a need for the Japanese military beyond home waters. Gra-

ham (op. cit.:238) concludes that short of a major regional conflict, “fears that Japan would be

denied navigational access to Southeast Asia, or that resource shipments bound for China would

physically crowd Japan out of the Straits of Malacca appear somewhat overblown.”

8 One particular sensational incident was the hijacking of the Alondra Rainbow, a Panamanian-flagged bulk carrier
transporting aluminum ingots to Miike, Japan. The ship was hijacked in the Malacca Straits in 1999. The Japanese
captain and chief engineer, along with 15 other crew-members were cast off in life rafts without food or water. Luck-
ily they were rescued by a passing ship a week later (for a detailed account see Langewiesche, 2004).
 65

In the event of an incident affecting the sea lanes there are a number of possibilities for

rerouting oil shipments. Japan’s 166 day strategic stockpile of emergency oil supplies would be

enough to mitigate a fairly long period of disruption due to an accident or terrorist incident.

In the event of a blockage of the Malacca Strait due to an accident, terrorist attack or denial

of access due to regional conflict, a number of alternative routes are available for goods and en-

ergy resources on their way to Japan. The closest alternative to Malacca would be the Sunda

Strait. A rerouting through Sunda would add only two days and an estimated 8.5 percent to the

cost of a one way voyage, however shallowness would be problematic. The Sunda is a wide

strait, but in places is limited to an 18m draft. Thus only smaller ships with a displacement of

less than 100,000 DWT may safely use this route (op. cit.:27).

The Lombok-Makassar Straits is the best alternative to Malacca Straits and is fact the sec-

ond most used for Japanese trade. The Lombok is three days voyage past Malacca and would add

13.5 percent to shipping costs (op. cit.:28). It is wide enough and deep enough to accommodate

any ship. MSDF Rear Admiral Akimoto Kazumine (retired) estimated that a closure of the

Malacca Straits would cost $88 million, a mere 0.3 percent of the total oil import bill in 1997

(ibid.). This would be similar to the costs incurred if the South or East China Sea became inac-

cessible to Japanese tankers who would have to re-route through the Lombok Makassar Straits

and around the Philippines.

A much more disastrous scenario, if unlikely, would be the closure of the entire Indonesian

archipelago. It would take an extra two weeks to navigate south around Australia—double the

distance of the normal route through the Malacca Strait—and could potentially cost Japan an ex-

tra $1.5 billion dollars annually for oil imports (op. cit.:31). Such a scenario, if it were ever to be
 66

realized, would likely entail much more sweeping emergency measures as it would be a conflict

with global repercussions.

As demonstrated earlier in this chapter Japan is completely dependent on oil imports, and

by extension open sealanes are in the national interest. It should be pointed out that other East

Asian countries such as Taiwan, Korea and even China are similarly dependent on open sealanes

for their own imports and exports. Open sealanes are in the interest of all Asian Pacific countries.

Conclusion
Although the midstream transportation sector of the energy supply chain offers the greatest

potential for militarization, Japan has shown little desire to extend JSDF interests beyond home

waters. Issues of territoriality with regards to the Senkaku Islands, and providing support for

American forces in the event of Chinese action on Taiwan are the primary concerns of the Japa-

nese military in East Asia.

Alarmists are overly concerned with transportation security issues. The primary threat to

Japan’s energy security is potential political disruption by supplier countries. Furthermore, it is in

Japan’s interest to curb domestic demand for oil, as well as help other countries in Asia curb their

own demand. These are issues best left to diplomacy rather than force, a viewpoint shared by the

Japanese government as illustrated in Chapter Four.

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Chapter 4: A comprehensive energy security policy

Introduction

A definite pattern can be discerned when analyzing the formulation of Japanese energy pol-

icy within the context of the evolving international oil market. When the market is functioning

smoothly economic efficiency takes precedence over energy security. In times of international

crisis state intervention attempts to shape the market to the advantage of the Japanese economy.

This pattern has continued since the economism of the Yoshida era, when government and indus-

try worked together to rebuild Japan after the second world war.

Over the years Japan has attained high levels of energy efficiency. While oil demand has

remained relatively flat since the 1970s—5.3m b/d in 1973 and 5.2m b/d in 2003—the size of

Japan’s economy has doubled (BP 2007). Simultaneously Japan has decreased its overall de-

pendence on oil from 77 percent to 50 percent. It moved away from oil for electricity generation.

Since the 1970s nuclear energy has been turned to for electricity production. Nuclear energy ac-

counts for 30 percent of Japan’s electricity needs, 15 percent of total energy needs. In 1973 oil

was used for 75 percent of electricity generation, since then it has dropped to 5 percent. Further-
 68

more Japan pioneered the liquefied natural gas (LNG) industry. LNG is used for electricity gen-

eration and now accounts for 15 percent of Japan’s total energy profile. Japan is, by a wide mar-

gin, the world’s largest buyer of LNG (Herberg 2004:354-5). Japan has achieved one of the low-

est levels of energy intensity of any OECD country.

Like many nations, the most important event to shape Japanese thinking about energy se-

curity was the Yom Kippur War and the resultant Arab Oil embargo of 1973—the first Oil Shock.

This event sparked a realization in Japan that its “national survival is inextricably linked with

stability elsewhere” initiating a change in foreign policy in general, and towards the Middle East

in particular (Calabrese 2002:84). This change laid the groundwork for future participation in

peace-keeping operations and the concept of “comprehensive security” as described in the last

chapter. In terms of energy security the Japanese government instituted new policies of conserva-

tion and diversification that helped it weather other international crises such as the second Oil

Shock of 1979-80 and the Gulf War of 1990-1. Such policies have served Japan fairly well, thus

it is no surprise that a similar approach has been taken in the New National Energy Strategy re-

leased by Ministry of Economy, Trade and Industry in 2006. As oil prices skyrocket due to insta-

bility in the Middle East, precipitated by the terrorist attacks of September 11th, energy security

has once again attained national concern.

In this chapter, I explore Japan’s historical reaction to the oil shocks of the 1970s. I high-

light the prominence of the strategic cultural norm of economism—the prioritization of economic

power over military power, and the cooperation between state and industry—in energy security

strategies resulting from the shocks. Energy security strategies since then have hinged on the

degree of government intervention in the energy market through diplomatic and economic
 69

means. This has been the model for Japan’s present-day energy security policy, which I describe

in the later part of the chapter. Understanding these fundamental strategies is the key to gauging

the Japanese perspective towards energy competition and resource conflict.

The First Oil Shock

The Oil Shock of 1973 was facilitated by a change in the structure of the international oil

market. Until the 1960s the international oil market was dominated by the “majors” otherwise

known as multinational oil companies or MNOCs.9 Through their exclusive technical capabilities

to bring refined fuels to market, the majors were able to negotiate long-term concessions with the

national governments of oil producing companies. The majors market power gave them the ad-

vantage in setting the international oil price. During the late 1950s the rise of the “independents,”

new public and private oil firms, undermined the grip of the majors. As more companies moved

into the oil market producer countries were able to engage in more competitive negotiations re-

sulting in better terms. The MNOC share of non-US upstream oil operations subsequently

dropped from 92 percent in 1965 to 76 percent in 1976 (L. Hughes 2005:31).

As international demand for oil increased in the 1960s oil producers gained more market

power. In 1971 America became a net-importer of crude oil. Additionally, the Japanese “eco-

nomic miracle” needed more oil to fuel its rise. In the early 1950s coal accounted for more than

half of Japan’s energy profile and oil for only 7 percent—less than firewood (Yergin 1993:545).

Twenty years made a massive difference. By 1973 Japan’s energy profile was 77 percent de-

pendent on oil, 89 percent of which was imported from the Middle East.

9The “Seven Sisters” of the oil industry are Exxon (formerly Esso and Standard of New Jersey), Royal Dutch Shell,
British Petroleum (formerly Burma Oil and Anglo-Iranian), Gulf Oil, Texaco, Mobil (Standard Oil of New York or
“Socony”) and Chevron (Standard Oil of California or “Socal”). For a history of the formation of the majors, and the
oil industry in general see Daniel Yergin’s The Prize: The Epic Quest for Oil, Money & Power (1993).
 70

The increase in demand put more market power in the hands of the Organization of the Pe-

troleum Exporting Countries (OPEC). Founded in 1960, OPEC’s membership—originally Iran,

Iraq, Kuwait, Saudi Arabia, and Venezuela—doubled by 1975 to include Qatar, Indonesia, Libya,

the United Arab Emirates, Algeria, and Nigeria. OPEC acted as a unified bargaining unit intent

on gaining a larger share of revenues from Western oil companies. The 1971 Tripoli Agreement

was a turning point in the international oil market. World oil prices were no longer to be set uni-

laterally by the majors, but were to be negotiated between the MNOCs and OPEC.

The newfound market power of oil producing states was wielded politically for the first

time in 1973 when the Organization of Arab Petroleum Exporting Countries (OAPEC), consist-

ing of the Arab members of OPEC plus Egypt and Syria, protested the Yom Kippur War, and the

support Israel had from Western governments. OAPEC members met in Kuwait and decided to

unilaterally increase the price of oil by 70 percent in order to pressure the West to abandon Israel.

OPEC used this opportunity to leverage its control over production to gain power over the inter-

national oil pricing structure.

Japan, whose Middle Eastern policies were overly nuanced, was branded as an “un-

friendly” nation and began to experience the worst disruption of oil supply since the second

world war. The foreign ministry estimated a nearly 40 percent shortfall for the months of No-

vember and December, offset by only 52 days worth of private stockpiles and 27 days supply en

route to Japan (Yoshitsu 1984:2). The majors were able to minimize damage by evenly spreading

the costs of cutbacks between America (18 percent), Western Europe (16 percent) and Japan (17

percent). The majors rerouted non-Arab oil to embargoed countries, while the producer countries

increased exports to countries not subject to the embargo (Yergin 1993:624).

 71

For resource-poor Japan, maintaining the “economic miracle” in order to catch up to the

West was a priority. Until 1973 Japan had depended on the majors as the “conduit for Middle

Eastern crude oil … the governments of the Gulf area were irrelevant” (Yoshitsu 1984:1). The oil

shock changed this as Japan scrambled to send officials to various Gulf states to plead the case of

Japan. This was the first break with American foreign policy during the Cold War, and an exam-

ple of how antimilitarism and economism dominate Japanese foreign policymaking (Katzenstein

1993:106-7).

Some business interests have advocated severing ties with Israel, which Foreign Minister

Ohira Masayoshi and his subordinates dismissed as “people with oil on the brain.” (Yoshitsu

1984:3). The foreign ministry was concerned about private firms engaging in panic buying from

countries such as Libya, and how that would cause inflation at home (op. cit.: 2-3). The Japanese

government began a round of “resource diplomacy” directly engaging a number of Gulf countri-

es—including Iran—in direct diplomatic talks. The Japanese offered development assistance,

including loans and technical assistance (Hook et al. 2005:106-7).

The American reaction on the other hand called for autonomous energy capability—“Pro-

ject Independence”—and led to the Rapid Deployment Force (RDF), an independent military

contingency force that would repel any attempt on Middle Eastern oil interests. America sought

to protect its oil interests with military power and pressured its alliance partners to oppose the

OAPEC. The American strategy later became known as the Carter Doctrine. In 1979 Carter con-

sidered Soviet troops in Afghanistan “a grave threat to the free movement of Middle East oil”

and proclaimed in a speech:

Let our position be absolutely clear: An attempt by any outside force to gain
control of the Persian Gulf region will be regarded as an assault on the vital
 72

interests of the United States of America, and such an assault will be repelled
by any means necessary, including military force. (Yergin 1992:702)

For Japan energy security was an economic issue to be dealt with by diplomatic and eco-

nomic policies, rather than resorting to military power. Japan adopted a policy of moving away

from resource-intensive industries and shifting the Japanese economy towards up and coming

high technology industries. MITI had recognized the dependency on foreign oil as a weakness

early on and in 1971 released a study advocating the need to move from “energy-intensive” in-

dustry to “knowledge-intensive” industry. Vice-minister of MITI Amaya Naohiro (cited in Yergin

1993:655) said: “Instead of using the resources in the ground, we would use the resources in our

head.” This reduced dependence on oil while simultaneously encouraging new energy-saving

technologies. In 1974 Japan passed three power generation laws: 1) the Law for the Neighboring

Area Preparation for Power Generating facilities; 2) the Electric Power Development Promotion

Law; and 3) the Electric Power Development Promotion Special Accounting Law. Under these

laws subsidies were awarded to municipalities that agreed to host nuclear power stations. The

subsidies were to be funded by a new tax on electricity.

The oil crisis sparked another change in the international oil market as consumer countries

sought alternatives to OPEC. Prior to 1973 international oil market power had shifted from the

majors to the members of OPEC, which accounted for 60 percent of world production. Consumer

countries encouraged private and newly formed public companies to set off across the world in

an attempt to develop new non-OPEC crude oil sources. The effort was successful as OPEC saw

its share of world production drop from 63 percent in 1972 to a mere 37 percent in 1989 (L.

Hughes 2005:34). Lack of cohesion within OPEC and the deregulation of the domestic oil indus-

try in America expedited the weakening of OPEC’s market power.

 73

In order to ensure energy security, Japan tried to gain control of its energy supply chain by

investing in equity oil supplies. In 1978 the Government of Japan reformed the Japan Petroleum

Development Corporation (JPDC) into the Japan National Oil Company (JNOC) which was

mandated to provide financial support to private firms engaged in upstream exploration and de-

velopment activities—a clear example of energy autonomism. The objective was to have 30 per-

cent of crude imports come from Japanese owned and operated oilfields (Liao 2006: 5-6).

A further international reaction to the oil crisis was the creation of the International Energy

Agency (IEA) in 1974. The IEA was mandated to manage the development of strategic reserves

and coordinate the international response to any disruption of supply. IEA member countries are

required to establish at least 90-day stockpiles of oil imports. During an emergency international

stockpiles may be released to a single member or amongst the community as a whole under the

direction of the IEA.

In Japan stockpiling is a joint endeavour between private oil companies and the govern-

ment. Under the 1976 Petroleum Stockpiling Law oil companies were obliged to maintain 70

days worth of refined products. The national reserve was launched in 1978 under JNOC man-

agement and slowly grew to be slightly larger than the private stockpile as of 1995. Currently

Japan maintains a combined stockpile of 166 days worth of emergency supplies (Agency for

Natural Resources and Energy 2006:22).

Stockpiling, attempts to control consumption and the diversification of resources helped to

mitigate the damage of the next oil shock in 1979.

 74

The Second Oil Shock

The second oil crisis of the 1970s came at the end of the decade with the Islamic Revolu-

tion in Iran. Labour strikes in the months before the revolution saw Iranian oil production drop,

falling even below Iranian energy needs in December 1978. Exports were then halted until the

following March (L.Hughes 2005:37-8). This however did not result in an absolute shortage of

oil on the international market. The crisis was exacerbated by the price-setting mechanism of oil,

which could not react quick enough. As the national oil companies of the producer countries

were not vertically integrated, the MNOCs were responsible for a large share of refining and dis-

tribution. As Iranian supply dried up the MNOCs cut back sales to third party firms which had to

turn to spot market to makeup for shortfalls in supply. The spot market was fast-paced trading

between refiners and other trading entities in smaller quantities of crude. The new demand on oil

trading on the spot market raised prices. Oil on the spot market was fetching prices double the

official selling price (OSP) set by the producer countries. This caused producers to raise their

prices to match the spot market, a trend that led to the eventual abandonment of the OSP during

the 1980s. The second oil shock was a failure of the dual-pricing system rather than a politically

orchestrated event like the first oil strike.

After the first oil shock Japan had invested heavily in Iran in an attempt to diversify away

from Arab countries. Japan was dependent on Iran for nearly 20 percent of its oil imports when

the second oil shock struck. Panic reigned in Japan as the government ordered the bright lights of

the Ginza shopping district dimmed to save energy (Yergin 1993:688). During the second oil

shock Japan had only about seven days worth of national reserves under the new stockpiling re-

gime that was initiated in 1978. Private firms held around 80 days worth. The Japanese economy
 75

weathered the shock as trading companies entered the spot market to make up for supply short-

ages. Complete reliance on the market was considered insufficient, however, and the Japanese

government stepped in to regain supply from Iran under a 1980 agreement with the new regime.

This oil accounted for 12 percent of total imports, which became a sore point with America in

light of the Tehran Hostage Crisis (Shaoul 2005:426-7).

The second oil crisis served to underline the transition to nuclear energy, liquified natural

gas and industrial reforms pursued since the first oil crisis. Some energy conservation efforts did

not catch on. Prime Minister Ohira Masayoshi promoted a “low energy look” (shoene rukku) of-

fice fashion that minimized the need for air conditioners as a strategy for lowering electricity

demand. This served as inspiration for Prime Minister Koizumi’s successful “Cool Biz” cam-

paign in 2005.

After the oil shocks of the 1970s energy security became the most important issue in the

1980 Report on Japan’s National Comprehensive Security (Jain 2007:32). One result of the new

emphasis on energy security was the increase of power and influence of the ministries and de-

partments that control policy, specifically the Ministry of International Trade and Industry (now

Ministry of Economy, Trade, and Industry), the Ministry of Foreign Affairs, the Agency for

Natural Resources and Energy, the Science and Technology Agency, the Ministry of Transport

and others. Sometimes these agencies can work at cross-purposes depending on the issues (ie.

gas versus nuclear versus coal) leading to competition and bureaucratic infighting, not to men-

tion relations with private sector lobbyists, trade associations, politicians and trading houses

(Manning 2000:150).
 76

The bureaucracy is strong and independent and fiercely protective of its portfolio. METI is

the ministry in charge of energy security, with the Agency for Natural Resources and Energy the

lead actor in developing energy policy. Inter-ministerial communication is limited due to the

“vertically divided administration” system (tatewari gyousei). Tanaka Akihiko (2000:9) com-

ments: “When the jurisdictional demarcation is clear, no one, not even the prime minister, finds it

easy to interfere into the ‘internal affairs’ of the ministry in charge.” This type of administration

system applies throughout the bureaucracy, including those areas that deal with defense policy.

During the 1980s and 1990s the structure of the international oil market had transformed.

Consumer countries diversified both their supply lines and energy sources. International demand

was low so producer countries were forced to lower prices resulting in the “Arab Oil Shock”

(Shaoul 2005:420). By 1988 OPEC had abandoned the “official selling price” system and oil’s

transition to a market commodity was complete.

The collapse of the price of oil led to a reduction of state intervention on behalf of con-

sumer governments. In fact the Japanese government intervened on behalf of domestic refiners

with a protectionist moratorium on refined petroleum imports. As the price of international petro-

leum products continued to drop throughout the 1990s import controls were removed, spurring a

round of mergers and acquisitions in the domestic refining sector (L.Hughes 2005:52-4). The

autonomist policies of the late 1970s gave way to the liberalization policies of the international-

ists as the government abandoned efforts to control upstream production (Calabrese 2002:86).

JNOC was a disaster. After racking up ¥2 trillion in debt JNOC was disbanded in 2001, a victim

of Prime Minister Junichiro Koizumi’s economic restructuring of the country. JNOC had many

of its assets sold off and the rest of the organization was merged with another public entity: the
 77

Metal Mining Agency of Japan. The result was a new independent administrative institution

named Japan Oil, Gas and Metals National Corporation (JOGMEC). JOGMEC is currently re-

sponsible for managing stockpiles and can engage in financing of upstream exploration and pro-

duction ventures, though under tighter operating restrictions than JNOC (Evans 2006:21).

Energy security fears were stoked only twice during the late 1980s and early 1990s. The

Iran-Iraq War had contributed to the inflation of oil prices during the second oil shock, but did

not threaten energy supplies in the greater Middle East. However in the mid-1980s the war took a

new turn as each country attacked oil tankers and shipping terminals of the other. The Nisshin

Maru, a Japanese oil tanker, was attacked at a terminal near the Strait of Hormuz by Iranian gun-

boats. The tanker was not damaged and was able to exit the gulf under its own power. The

Tanker War prompted America and the Soviet Union to step in to protect international shipping

in the Gulf in 1987. The outbreak of the Gulf War in 1991 caused worry over oil supplies how-

ever this proved to be a relatively short crisis and supply disruptions to Japan were mitigated by

the IEA. The Gulf War proved to have a much more important effect on Japanese defense policy

rather than energy policy.

Overall during the 1990s the view of energy internationalists gained ground. Open markets

and international cooperation were promoted rather than government intervention in energy mar-

kets. However a new crisis was on the horizon. The Chinese economy was gaining speed and

since 1993 had become a net oil importer. China was importing most of its oil from the Middle

East as well, which was about to go through another round of instability after the terror attacks of

September 11, 2001 causing oil prices once again to skyrocket.

 78

New energy security strategies

During the 1970s the ideas of energy autonomism gained favour in Japan as government

intervention was seen as the way to energy security. The shift to energy internationalism hap-

pened during the 1990s as the international oil market transformed and efficiency outweighed

security. Since the terror attacks of September 11th—and the resulting instability in the Middle

East—security has once again become a central concern, and Japan’s new energy policies reflect

this shift.

In 2002 the first comprehensive national law targeting the energy sector was enacted, the

Basic Law on Energy. Environmentalism and security of supply became the focus of state policy.

Economic structural reforms such as the liberalization of energy markets, deregulation and other

measures are subordinated to the first two policies. It is on this basis that the law justifies state

intervention in the domestic and international energy markets (L.Hughes 2008:62-3).

In 2006 the Ministry of Economy, Trade and Industry introduced the New National Energy

Strategy. The basic premise of the document is that high oil prices will continue for the medium-

and long-term based on tight supply and demand in the international market. For the first time

natural gas is considered together with oil as an insecure energy resource. To ensure energy secu-

rity the document outlines a number of strategies including the continued promotion of diversifi-

cation and conservation. However the document takes an unexpected turn by endorsing the in-

crease of Japanese control over upstream resources—surprising considering the failures of

JNOC, which was dissolved and merged into JOGMEC.

The reason for this is METI’s perception that the international oil market has changed since

the turn of the millennium. Increased state control over energy resources (“resource national-
 79

ism”), restrictions on foreign investment, lack of large-scale distribution infrastructure (eg. pipe-

lines), declining non-OPEC sources and increased dependence on the Middle East for supplies

are all cited as obstacles to energy security. Furthermore increasing world energy demand, pri-

marily increases in Chinese and Indian consumption, are seen as an additional stressor to world

markets. Using IEA projections from 2004, the document projects demand to increase 63 percent

between 2002 and 2030. The rising consumption of the major Asian countries erodes Japanese

market share, and any advantage Japan had in terms of buying power (METI 2006:2).

Despite neorealist predictions, international cooperation is highlighted in the new strategy.

The strategy states that it is increasingly important to contribute to international frameworks ad-

dressing climate change and nuclear proliferation. The strategy sets a number of numerical tar-

gets to attain by 2030. Since the 1970s dependence on oil has dropped from nearly 80 percent to

approximately 50 percent. The new strategy targets 40 percent as the next goal. Japan will be

able to achieve this by decreasing energy intensity by 30 percent, reducing dependence on oil in

transport sector to 80 percent by introducing alternative fuels, and increase the share of nuclear

power to 30-40 percent of the entire energy profile. The document also endorses a full review of

the stockpiling system and a feasibility study for the preparation of an emergency response sys-

tem for natural gas.

Diversification and conservation of domestic demand has historically been Japan’s strategy

for reducing vulnerability to import disruption. A second strategy is the diversification and con-

servation of international demand. After China became a net importer of oil, the prospect of

competing with China for energy resources prompted Japan to direct more ODA into domestic

exploration and energy efficiency projects (Pyle 2007:327). Chinese oil demand reached parity
 80

with Japan in 2003. China is a major concern for Japanese policymakers and there is an ongoing

debate whether or not China’s rise is threatening or benign (Evans 2006:10). Engagement is a

priority. This engagement is in stark contrast to the zero-sum competition predicted by neoreal-

ism. The Japanese strategic cultural norm of economism prioritizes economic power over mili-

tary power. Economic engagement through aid is characteristic of the Japanese approach to in-

ternational problem-solving. Rather than a military confrontation, the Japanese seek political and

economic solutions through engaging the Chinese. Moreover, engagement is not limited to bilat-

eral relationships.

Japan has endeavoured to develop regional energy security strategies through APEC and

ASEAN (Herberg 2004:354). Toichi Tsutomu (2003:3) has called for the creation of an Asian

International Energy Association. Japan put forth the Hiranuma Initiative at the International En-

ergy Forum in Osaka in 2003, which was signed by energy ministers from Japan, China, Korea

and ASEAN. The policy statement encouraged cooperation in the development of natural gas

resources in Asia, promoted information exchange in time of emergency and cooperation be-

tween Asian nations in price negotiations with Middle East suppliers.

The New National Energy Strategy released by the Ministry of Economy, Trade and Indus-

try in 2006 aims to promote such cooperation with other Asian countries. Technology transfer

initiatives to introduce alternative energies—such as wind and solar—to reduce consumption,

and cooperation to build nuclear power regulatory frameworks are two goals.

Developing coordinated stockpiling regimes in Asian countries is also a priority in order to

prevent oil price spikes. For example during the run-up to the 2003 Iraq war, China and India
 81

engaged in “panic buying” for fear of a supply disruption, destabilizing international oil markets

(Herberg 2004:371).

The last strategy is increasing the amount of oil on the market, and ensuring Japanese ac-

cess to those supplies by investing in upstream exploration and production projects. The New

National Energy Strategy has set the goal to increase equity oil from 15 percent to 40 percent

(METI 2006:14). The key tool for this strategy is government intervention—i.e. energy autono-

mism—specifically resource diplomacy and the subsidizing of investment in overseas supplies

through JOGMEC.

Japan began to consider closer ties with Saudi Arabia in the late 1990s when Prime Minis-

ter Hashimoto proposed the idea of a “comprehensive partnership” during his visit to Riyadh in

November 1997. The idea was taken up by successive leaders and has resulted in Japanese in-

vestment projects in Saudi Arabia, the first in two decades (Calabrese 2002:89-90).

Furthermore, another strategy is to commercially engage Middle Eastern supply countries

in the domestic downstream industry. This incentivizes supply countries to maintain oil distribu-

tion in Japan, an economic defense against supply disruption. Saudi Aramco has purchased a 15

percent stake in Showa Shell Sekiyu, Royal Dutch Shell’s Japanese affiliate. Furthermore, while

prime minister Abe Shinzo visited Saudi Arabia in May of 2007 he announced a deal giving

Saudi Arabia oil-storage facilities in Okinawa in return for preferential access in the case of an

emergency. JBIC also announced a $1 billion loan to Abu Dhabi for long-term oil contracts (The

Economist May 3 2007).

Japanese attempts at diversification of supply have had mixed results. JNOC was a failure

and JOGMEC has not had much more luck. The Japan Bank for International Cooperation
 82

(JBIC) invested $580 million in the Baku-Tbilisi-Ceyhan pipeline and INPEX was able to cap-

ture a small stake in the Kashagan oil field of Kazakhstan (Evans 2006:17). Other modest equity

oil supplies have been acquired by JAPEX and INPEX in Indonesia and the United Arab Emir-

ates. However Japan’s attempts to diversify have been frustrated by energy nationalism, espe-

cially by Russia and Iran.

Analysts such as Tsutomu Toichi (2006a:4; 2006b:11) thought Russia could act as Japan’s

energy saviour. Moscow and Tokyo have become more amenable to solving the Chishima/Kuril

Islands dispute. The four southernmost islands have been a point of discontent between Japan

and Russia since the Soviet Union seized them after the second world war. During the 1990s

Japanese corporations began to invest in oil and gas development on Sakhalin Island in the north

Pacific. The Japanese owned Sakhalin Oil and Gas Development Co (SODECO) has a 30 percent

working interest in the Sakhalin-I project, located in the northeast of Sakhalin Island. The

Sakhalin-II project is an offshore project that was slated to supply Japan with large amounts of

LNG. Royal Dutch Shell was the lead investor with a 55 percent share, backed by Japanese firms

Mitsui and Mitsubishi which together owned 45 percent of the project. In December of 2006

Russian firm Gazprom (50 percent owned by the Russian government) took a 50 percent plus

one share stake after the Russian government withdrew an environmental permit (International

Herald Tribune September 20, 2006). Ownership of the project has been redistributed among

Shell (27.5%), Mitsui (12.5%) and Mitsubishi (10%). Terashima Jitsuo (2007:99), a strategic

analyst at Mitsui, recommended that Japan “rethink” (nerinaosu) its energy strategy and diplo-

macy with Russia.

 83

It has not all been a disaster for Japan. In 2003 Japan and China became embroiled in a

diplomatic row over a Russian-built export pipeline for Siberian oil. The pipeline was originally

to terminate in Daqing, China. Japan offered a $7 billion financing package to re-route the pipe-

line to the Pacific Ocean at Nakhodka—and on to the entire Asian market including Japan, Ko-

rea, Taiwan and China. The first stage of the pipeline originating from Taishet is due to be com-

plete in 2008. The first stage terminates at Skovorodino, near the Chinese border. A pipeline to-

wards China will be branched off at this point, but the main line will continue onto Nakhodka

and is scheduled to be completed by 2015. China will have access to Siberian oil long before Ja-

pan, but the Siberian pipeline will help to alleviate dependency on the Middle East (Evans

2006:16).

Meanwhile, Japan has been losing equity oil in the Middle East, specifically in Saudi Ara-

bia and Iran. Arabian Oil, a Japanese company, lost its concession rights in Saudi Arabia in 2000.

The Saudi concession was the largest supplier of Japanese owned oil, and one of Japan’s oldest

overseas oil development projects (op. cit.:14). Since then Arabian Oil has also lost its conces-

sion rights with Kuwait.

The loss of the Saudi oil made the 1999 investment into the Iranian Azadegan field in Iran

that much more significant. A $2 billion development deal was inked in early 2004 between a

Japanese government-backed consortium lead by INPEX to develop the major Azadegan oil field

(Shaoul 2005: 411). This deal faced problems from the beginning in light of the international ten-

sion over Tehran’s nuclear program, and pressure from America to halt all investment into Iran.

Since the 1973 oil shock Japan has maintained investments in Iranian oil fields to the detriment
 84

of its relations with America. During the Tehran Hostage Crisis Japan renegotiated supply con-

tracts with the revolutionary regime.

Japanese investors balked. Officially INPEX maintained that landmines left over from the

Iran-Iraq war had yet to be cleared from the development site, but it is believed that pressure

from the American government on the Japanese government caused INPEX to drag its feet (Asia

Times April 3 2007). Finally, in 2006 the Iranians ordered INPEX to begin development by Sep-

tember or lose the concession. INPEX was forced to sharply cut its stake in the Azadegan oilfield

from 75 percent to just 10 percent.

Despite these setbacks METI is forging ahead with new interventionist policies. The New

National Strategy emphasizes the need to foster Japanese oil majors that can increase equity sup-

plies to 40 percent of total imports by 2030. Japan has no oil firms that can compete with interna-

tional majors—its biggest firm does not even rank in the top twenty largest companies. Action

has been taken on this already as the government engineered a merger between INPEX (36 per-

cent owned by METI) and Teikoku Oil (originally established by the government), the nation’s

largest and third largest oil developers respectively. The result of the merger was INPEX Hold-

ings, of which the Japanese government holds 30 percent of shares.

Japanese energy policy has maintained a predictable cycle since the 1970s. State interven-

tion increases with price rises and doubts in the stability of the international oil market. When oil

markets settle down and economic efficiency becomes the concern, state intervention is relaxed.

However, in either cycle, cooperation with the international community—especially other Asian

consumers—is regarded as an important strategy for securing Japan’s energy. Political and eco-
 85

nomic engagement with both suppliers and other consumers is the path Japan has embarked on to

solve its energy security issues, despite neorealist contentions.

 86

Conclusion

In this thesis I have considered the effects of Japanese strategic culture on energy security

policy. Traditionally the debate has been dominated by neorealists and proponents of market se-

curity. Neorealism predicts that the international structure is forcing Japan and China to collide

over energy resources. Market security holds that participation in international oil markets miti-

gates military conflict over energy resources. I have considered this problem from a different an-

gle by taking a constructivist approach. In investigating Japanese military and energy policy I

found that Japanese strategic culture tends to counter neorealist imperatives for gaining and in-

creasing military power. Japan’s anti-militarist norm has prevailed even as Japan has adjusted to

the post-Cold War security environment. However, that same strategic culture, specifically the

norm of economism, means that the Japanese state will often intervene in international energy

markets. The Japanese are not inclined to fully expose their economy to the whims of the free

marketplace. Furthermore, I have found that Japanese energy policy reacts to changes in the

structure of the international energy market. State intervention increases when the market be-

comes less competitive.

 87

These findings suggest that energy security is solidly the domain of national economic pol-

icy for Japan. Thus, Japan will pursue cooperative and interventionist (but not nationalist) poli-

cies to ensure energy security. It is difficult to judge how severe a situation would have to be for

Japan to turn to military power in defense of energy resources.

Lantis (2005) argues that strategic “cultural dilemmas” can propel foreign policy decisions

beyond the traditional bounds of strategic culture. A strategic cultural dilemma could be an ex-

ternal shock which challenges existing beliefs and requires a resocialization process to develop a

new cultural consensus. For example, Japan’s utter defeat and occupation by a foreign power in

1945, which lead to a rejection of the militarized state and a new cultural norm of antimilitarism.

Another type of dilemma is strategic cultural dissonance, which arises when two or more tenets

of strategic culture come into conflict. For example, Japan’s commitment to the UN but simulta-

neous rejection of “collective security.” The degree of dissonance required to raise doubts about

core beliefs is a topic worthy of further inquiry. Nevertheless, Japan would have to overcome its

cultural resistance to military power for energy security to be moved from economic to military

policy.

Abandonment by America may spur such a change. However, one must consider Japan’s

robust energy stockpiles, it’s large economy able to absorb any short-term disruption, as well as

the re-routing options available for imports. The use of force in defense of energy resources

could only be imagined in a scenario involving an extended military conflict over a wide swath

of geographic area. Such a scenario would require emergency policies far beyond the scope of

normal energy security planning.

 88

Calder claims energy to be the “the deadly but little-known link” threatening to destabilize

East Asia. However, the security issues that dominate security planning for Japan are the situa-

tion on the Korean peninsula, the uncertain rise of China and the maintenance of the US-Japan

security alliance. From the Japanese perspective, although energy security is a serious concern, it

is not considered a source of insecurity justifying the use of military force. For Japan, energy se-

curity is contingent on international cooperation, particularly the engagement of China. This is in

opposition to the predictions of neorealism.

This thesis has examined the Japanese perspective exclusively. Future research should con-

sider the perspectives of other Asian countries, particularly China. The Chinese perspective is

very important to Japan. As Jain (2007:39) points out: “The major dilemma before Japan is how

to deal with its energy-hungry Asian competitor with whom the possibility of co-operation is

rather limited.”

The Japan Science and Technology Agency (JSTA) sponsored a scenario study in 2004 that

explored the implications of a “nationalistic China” and an “open China” (Evans 2006:12-3). In

the nationalistic scenario China sought to assert itself as regional hegemon, building up its mili-

tary power and tending to use force as a tool to address security issues. The scenario also as-

sumed that China would pursue autonomist science and technology policies, and therefore a

similar energy security policy. Under these assumptions the Japanese scenario-builders con-

cluded that the Chinese government would centrally administer domestic energy prices and pur-

sue aggressive upstream investments in equity oil. Domestic consumption would increase with

expanded electricity and vehicle usage, however efficiency would remain poor due to price con-

trols which incentivize demand. A nationalistic China would have a negative impact on Japanese
 89

energy security as “its nationalistic view [of] energy resources at home and abroad undermine

the function of the international energy market.”

The “open China” scenario on the other hand reverses the domestic factors presupposing a

growing shift towards a market economy and a continued opening to the international commu-

nity. Under this set of conditions military power is de-emphasized and economic and trade ties

would steer China towards cooperating with regional partners to solve energy problems in a mul-

tilateral fashion. Open China would still pose a risk to Japan’s lead in science and technology

and energy market power as it became more competitive, however the international energy mar-

ket would not be endangered.

These scenarios illustrate how Japan views the rise of China—in any form—as problematic

for Japanese energy security. Independent research into Chinese perspectives on energy security

would build on the research presented in this thesis and inform policy-making in the region.

The classical realist Thomas Hobbes wrote: “if any two men desire the same thing, which

neverthelesse they cannot both enjoy, they become enemies; and in the way to their End, en-

deavour to destroy, or subdue one an other.”10 Yet Hobbes was writing for a different time. Mod-

ern technology and markets can be leveraged by governments for developing numerous policy

options to ensure that nations not “endeavour to destroy, or subdue one an other.” This is the path

Japan has followed since the first Oil Shock of 1973. Despite changing its role in terms of inter-

national and regional security, Japan seems committed to pursuing an energy security policy

based on economism.

10Hobbes, Thomas, Richard E. Flathman, and David Johnston. 1997. Leviathan: Authoritative Text, Backgrounds,
Interpretations. 1st ed, Norton critical edition. New York ; London: W. W. Norton & Company: 69.
 90

In terms of energy security and national security policy in general, the most important issue

for Japan is how to engage with China. For third parties with interests in the Asia-Pacific it is key

to have a clear understanding of each country’s perspective when analyzing the regional security

environment. The competition between China and Japan has overwhelming economic and terri-

torial dimensions which energy policy can get lost in. Priority should be placed on these issues in

order to maintain peace in East Asia.

 91

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Japanese Language Sources

[NOTE: Below are Japanese sources used when English-language translations could not be
found. – Author.]

防衛省「平成19年版日本の防衛：防衛白書」
[Ministry of Defense. (2007). Defense of Japan 2007 (Annual White Paper).]

経済産業省「新・国家エネルギー戦略」2006年5月
[Ministry of Economy, Trade and Industry. (2006). New National Energy Strategy]

経済産業省「新・国家エネルギー戦略の」2006年5月
[Ministry of Economy, Trade and Industry. “Essence of the New National Energy Strategy” May
2006.]

坂本 茂樹「マレーシア: マラッカ海峡を 回する原油パイプライン計画の実現性を検証

する」石油・天然ガス調査グループ2006年9月1日
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Malacca Strait.” Oil and Natural Gas Research Group, JOGMEC.]

寺島 実郎「新・エネルギー摩擦：日本の危機」文藝春秋85、2007年4月
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十市 勉 「海洋政策とエネルギー問題」電気新聞に2006年9月1日
[Toichi, Tsutomu. “Energy security and Ocean policy” The Denki Shinbun, Sept 1st 2006.]
 98

Appendix
From Ministry of Defense. (2007). Defense of Japan 2007 (Annual White Paper).

1976 NDPO 1996 NDPO 2004 NDPG

Personnel 180000 160000 155000
Regular 145000 148000
Reserve 15000 7000
Major Units
Regionally deployed 12 divisions 8 divisions 8 divisions
2 combined brigades 6 combined brigades 6 combined brigades
Mobile operations 1 armoured division 1 armoured division 1 armoured division
G 1 artillery brigade
S 1 airborne brigade 1 airborne brigade Central Readiness
D 1 training brigade Group
F 1 helicopter brigade 1 helicopter
SAM units 8 anti-aircraft artillery 8 anti-aircraft artillery 8 anti-aircraft artillery
groups groups groups

Main equipment
Battle tanks approx. 1200 approx. 900 approx. 600

Artillery approx. 1000 approx. 900 approx. 600

Major Units
Destroyers (mobile opera- 4 flotillas 4 flotillas 4 flotillas
tions)
Destroyers (regional dis- 10 divisions 7 divisions 5 divisions
trict)
M Submarines 6 divisions 6 divisions 4 divisions
S
D Minesweepers 2 flotillas 1 flotillas 1 flotillas
F Land-based patrol aircraft 16 squadrons 13 squadrons 9 squadrons
Main equipment
Destroyers approx. 60 approx. 50 47
Submarines 16 16 16
Combat Aircraft approx. 220 approx. 170 approx. 150
Major Units
Aircraft control and warn- 28 warning groups 8 warning groups 8 warning groups
ing units 20 warning squadrons 20 warning squadrons
1 squadron 1 squadron 1 early warning group
Fighter Aircraft Units 12 squadrons
Interceptors 10 squadrons 9 squadrons
A Support fighters 3 squadrons 3 squadrons
S
D Air reconnaissance 1 squadron 1 squadron 1 squadron
F Air transport 3 squadrons 3 squadrons 3 squadrons
Air-to-air refueling - - 1 squadron
SAM units 6 groups 6 groups 6 groups
 99

1976 NDPO 1996 NDPO 2004 NDPG

Main equipment
Combat Aircraft approx. 430 approx. 400 approx. 350
Fighter craft approx. 350 approx. 300 approx. 260
Aegis-equipped Destroyers - - 4 vessels
B Aircraft control and warn- - - 7 warning groups
M ing units
D 4 warning squadrons
SAM units - - 3 groups
 100

Curriculum Vitae
 101

Chad Kohalyk was born in Golden, British Columbia in 1978. After traveling
throughout Japan he enrolled at the University of British Columbia to study
linguistics and Japanese history. Upon completing his degree he returned to
Japan where he worked as a translator and public relations consultant. Over the
next few years Chad travelled extensively throughout Asia from China to Iran
to Cambodia.

In 2005 he returned to Canada once more to further his education at the Royal
Military College of Canada. There he studied regional analysis methodology.
In 2007 he took a break to work in the oil shipping business in Japan. There he
saw Japan’s energy supply chain firsthand.

Chad’s other research interests include international shipping, communications

technology, social network theory and future war.