Economic "Fallout" from Japan earthquake, tsunami, and nuclear tragedies

[c1ue]

A thread to gather the economic impacts of Japan's recent tragedy.

As I've said before, the primary impact of this tragedy - beyond the immediate loss of life and infrastructure damage - is going to be economic.

FDA bans Japanese food imports

http://www.businessreviewusa.com/sec...ring-radiation

Japanese supplier of 20% of world's silicon substrates pleads for reliable electrical power - plants still shut down

http://www.eetasia.com/ART_880063857...,ARTICLE_ALERT

Russia bans Japanese imports

http://www.rttnews.com/Content/Marke...d=1582865&SM=1

Australia, Singapore, Hong Kong, Phillipines ban Japan food imports

http://e.nikkei.com/e/fr/tnks/Nni20110324D24JF856.htm

Anecdotally, Russian distributors are already refusing to buy anything Japanese that isn't already in a warehouse in Russia: diapers, cosmetics, etc etc.

Toyota may shut down US plants due to lack of parts

http://inthearena.blogs.cnn.com/2011...ants-may-shut/

[touchring]

Re: Economic "Fallout" from Japan earthquake, tsunami, and nuclear tragedies

The consensus on itulip seem to be that there will be no economic impact beyond Japan. ;)

[jneal3]

Re: Economic "Fallout" from Japan earthquake, tsunami, and nuclear tragedies

“We could potentially lose up to 5 million units and while much of it could be made up over time, it could not be made up in 2011,” said Michael Robinet, director of global production forecasting for IHS Automotive. “As we stand today 18% of global auto output is down.”

http://www.freep.com/article/2011032...text|FRONTPAGE

[cbr]

Re: Economic "Fallout" from Japan earthquake, tsunami, and nuclear tragedies

not to mention the fact that the Tokyo region is down about 30% in available power and there is no alternative. They are trying to make it up with lng, oil, etc., and bringing some reserves on line but the fact is one of the world's dynamo regions is unable to keep 24/7 power going which is required for some hi tech production.

this is a significant event.

[lektrode]

Re: Economic "Fallout" from Japan earthquake, tsunami, and nuclear tragedies

not to mention the fact that the Tokyo region is down about 30% in available power and there is no alternative. They are trying to make it up with lng, oil, etc., and bringing some reserves on line but the fact is one of the world's dynamo regions is unable to keep 24/7 power going which is required for some hi tech production.

this is a significant event.

uh huh... at the min: demand-push inflation - or....
worst case scenario?

1 - a krash until things get sorted out? (even if its a 'slow' crash, continuing on with the present-ongoing one we're in)

2 - china picks up the ball, runs, SCORES and the US ends up on the lesser-end of 'The Deal' (we lose even more of our job base, etc) while an(other) ally loses market share

wheres the iTulip Portfolio here?

[c1ue]

Re: Economic "Fallout" from Japan earthquake, tsunami, and nuclear tragedies

More scenarios on the economic impact of the tsunami: electricity shortfalls impacting Japan's economy:

http://finance.yahoo.com/news/Japans...&asset=&ccode=

TOKYO — The term “rolling blackouts” has become shorthand for noting one way Japan is trying to cope with its national calamity.

Shorthand should not be confused with short term. Utility experts and economists say it will take many months, possibly into next year, to get anywhere close to restoring full power.

The places most affected are not only in the earthquake-ravaged area but also in the economically crucial region closer to Tokyo, which is having to ration power because of the big chunk of the nation’s electrical generating capacity that was knocked out by the quake or washed away by the tsunami.

Besides the dangerously disabled Fukushima Daiichi nuclear power plant, three other nuclear plants, six coal-fired plants and 11 oil-fired power plants were initially shut down, according to PFC Energy, an international consulting firm.

By some measures, as much as 20 percent of the total generating capacity of the region’s dominant utility, the Tokyo Electric Power Company — or an estimated 11 percent of Japan’s total power — is out of service.

Until all the lost or suspended generating capacity is replaced, economists say, factories will operate at reduced levels, untold numbers of cars and other products will go unbuilt and legions of shoppers will cut back their buying — all taking a big toll on Japan’s economy.

The greater Tokyo region represents one-third of the nation’s economic output.
Masaaki Kanno, chief economist at JPMorgan Securities Japan, estimates that the country’s gross domestic product will shrink in the second quarter by about 3 percent on an annualized basis, with about half of that decline resulting from the power shortage.

A recovery will gradually begin to take hold in the third quarter, he said, as the need to rebuild the northeast portion of Japan’s main island, Honshu, acts as a major economic stimulus. But the power shortage will be a drag on economic growth for some time to come.

“We hadn’t initially expected the quake to impact the national economy to this degree,” Mr. Kanno said. But the lingering power shortages will be widespread, he said. Besides the direct effects on businesses, consumers “won’t go out as much and they’ll have to get home earlier,” he said, meaning they will not spend as much.

Tokyo Electric has been using rolling blackouts of up to three hours in designated zones to balance demand and supply. The cuts have at times been poorly communicated, further disrupting businesses already reeling from logistical problems and damage to factories in the north.

And Tokyo, more than most places in Japan, is highly dependent on electric trains and subways for commuting, so when there are blackouts, lots of people cannot get to work or easily organize their days.

“In the short term, it will be very difficult to make up the loss of power from the Daiichi plant,” Masakazu Toyoda, chairman of the Institute of Energy Economics, a research organization affiliated with the Ministry of Economy, Trade and Industry, said. “At the summer peak, the shortfall will be in the 10 percent to 20 percent range.”

Tokyo Electric now has an operating capacity of 37 gigawatts and expects to be back up to about 54 gigawatts by summer, according to PFC Energy. (Each gigawatt is sufficient to power about 250,000 Japanese households.)

But Tokyo Electric’s peak summer demand is usually 60 gigawatts, according to PFC, meaning at least a 10 percent shortfall. Some economists say privately that the shortfall could turn out to be more than twice that large.

Tokyo Electric is trying to make up the lost generating capacity by restarting shuttered plants, repairing the damaged ones, tapping hydropower reserves and temporarily operating gas turbines. But summer blackouts are inevitable, with plans for many areas to go without electricity for an hour or two at the hottest part of the day.

In theory, the Tokyo area could import electricity from the south. But a historical rivalry between Tokyo and the city of Osaka led the two areas to develop grids using different frequencies — Osaka’s is 60 cycles and Tokyo’s is 50 cycles — so sharing is inefficient.

There are transfer stations, but they have limited capacity. And the hand-off is comparable to two railroads that use different gauge tracks and have to unload cargo from one train and reload it onto another at the place the tracks meet.

“The simplest way to solve the problem is through conservation,” Mr. Toyoda said, “so the question of how to encourage that with the least impact is on the government’s agenda.”

Ultimately, the need to conserve energy could force Japanese companies — already among the most efficient in the world — to emerge even leaner and more competitive. But that is little consolation now.

Mr. Toyoda said policy makers would aim most conservation measures at consumers, rather than businesses, because households’ share of electricity consumption has been rising for decades.

“In 1973, the ratio of electricity used by industry was 50 percent,” he said. “Now it’s just over 30 percent.”

The energy crisis has even led officials to consider the unthinkable: Instituting daylight saving time, something they have previously declined to adopt because it might cause confusion.

Industry, meantime, has recognized the importance of a coordinated response.

Members of the Japan Automobile Manufacturers’ Association, including Toyota, Nissan and Honda, are considering apportioning full days of power cuts among themselves, according to the Nikkei newspaper, as they seek to avoid power cuts that wreak havoc on manufacturing equipment.

Hirokazu Furukawa, an association spokesman, confirmed that the automakers were studying possible cooperation, but he said that the complicated matter would require more study and that no deal had been reached.

In 2005, the Environment Ministry introduced an experiment, called Cool Biz Japan, to save energy by cutting the cost of operating air-conditioning systems in Tokyo, where the summer heat and humidity rival that of Washington. As part of the plan, thermostats in government buildings were raised to about 82 degrees Fahrenheit.

Setting an example, the prime minister at the time, Junichiro Koizumi, adopted an open-collar look that helped to make him something of a fashion leader.

But Kazuharu Aizawa, a spokesman for the environment ministry, noted that more than 62 percent of Japanese had adopted the Cool Biz air-conditioning goal, so the room for additional energy savings this summer through turning up the thermostat would be limited.

“Many people are going to have to turn off the air-con altogether,” he said.

In the 3 years I lived in Japan, I saw very little use of air conditioning by the Japanese people I knew.

If indeed only 30% of overall electricity use is industrial, it is highly unlikely conservation efforts will make up the shortfall unless I happened to see the few dozen families who don't use ae-ya-con.

Electricity in Japan is also damned expensive - even 10 years ago, my electricity bill was such that I regularly spent $500/month. The equivalent today is probably at least double even before the tsunami, and likely the cost will increase even more with backup/standby/overflow gas turbine contributions.

[c1ue]

Re: Economic "Fallout" from Japan earthquake, tsunami, and nuclear tragedies

More data on how tsunami - including Fukushima #1 but also numerous other power plants - will affect the Japanese economy via electricity shortages.

Short summary? It is almost tolerable now, but will get much, much worse.

Note also how many natural gas, coal, and oil fired electricity generation plants that were also taken out by the combination of earthquake and tsunami.

[LorenS]

Re: Economic "Fallout" from Japan earthquake, tsunami, and nuclear tragedies

In theory, the Tokyo area could import electricity from the south. But a historical rivalry between Tokyo and the city of Osaka led the two areas to develop grids using different frequencies — Osaka’s is 60 cycles and Tokyo’s is 50 cycles — so sharing is inefficient.

I'm not so sure I buy this statement. Inter grid ties can be DC (and are), even for areas with the same frequency. The DC tie helps to make up for conversion losses because DC lines can carry more current for a given power loss and the DC tie eliminates phase issues that can cause problems when trying to tie two grids together. http://en.wikipedia.org/wiki/HVDC

I think the biggest problem is that a lot of capacity went off line and won't be easily replaced. Sharing with other grids only helps if they have extra capacity (or have different load demand timing). I can't imagine that Osaka is uncorrelated with Tokyo on load demand schedules.

We've grown quite dependent on electricity. Even when I "work with my hands" I typically use power tools. My propane torch is about the only non electric power tool I have. Pneumatic tools may give you a bit of extra time during black outs, but not much. I don't know about anyone else, but my manual tools (aside from hammers, socket wrench and an axe) get very little use. Even my screwdrivers have largely given way to a cordless drill.

It won't help Tokyo much, but in the rural areas PV will likely provide the quickest way to add electrical power generating capacity. Even wind turbines are pretty slow to deploy.

[don]

Re: Economic "Fallout" from Japan earthquake, tsunami, and nuclear tragedies

not to mention the fact that the Tokyo region is down about 30% in available power and there is no alternative. They are trying to make it up with lng, oil, etc., and bringing some reserves on line but the fact is one of the world's dynamo regions is unable to keep 24/7 power going which is required for some hi tech production.

this is a significant event.

The Black Swan spreads its wings (affording as well a peek into the future)

[c1ue]

Re: Economic "Fallout" from Japan earthquake, tsunami, and nuclear tragedies

It won't help Tokyo much, but in the rural areas PV will likely provide the quickest way to add electrical power generating capacity. Even wind turbines are pretty slow to deploy.

Actually, no.

If you look at the US energy usage pie - residential usage is a tiny fraction:



Residential use of energy in the US - primarily electricity - under 20% of overall energy usage.

I would expect in Japan the residential use is even smaller, with much more of the electrical use being used for transportation and industrial usage.

PV panels won't run trains 19 hours a day. Installing them means you'll have lights and hot water, but nothing in the stores.

[flintlock]

Re: Economic "Fallout" from Japan earthquake, tsunami, and nuclear tragedies

A cheap portable solar panel would come in handy for those needing to charge battery powered items like cell phones, radios, tools, etc. Ive considered buying one for that doomsday scenario myself.