Tokyo Electric considers buying U.S. shale gas to cut fuel costs
(Reuters; June 1) - Tokyo Electric Power Co., the owner of the Fukushima nuclear plant, is considering buying North American shale gas starting in 2016 as it looks to lower its fuel costs, Japanese business daily the Nikkei reported. Tepco reckons it can buy U.S. shale gas at half the price of LNG it now uses, allowing it to save money on electrical generation, the newspaper said.
The utility is using more LNG as fossil fuels fill the void left by nuclear capacity taken offline after the March 2011 earthquake and tsunami. Tepco is expected to present its ideas to a Ministry of Economy, Trade and Industry panel, which screens power-rate increase proposals, the Nikkei said.
The utility has asked the ministry to approve a proposed household rate hike to take effect in July, despite opposition from consumers, the business daily reported. The utility's fuel costs have increased significantly since losing its nuclear power output. Its LNG purchases are linked to oil prices, a costly connection with oil in the $100-a-barrel range.