Energy industry in Ibaraki Prefecture, Japan, October 7, 2007 (Ryan McCune)

Japan on Thursday vowed to take “concrete” steps toward reducing its dependence on Iranian oil as the United States allied their Asian ally to put pressure on Tehran which they suspect is developing a nuclear weapons capacity.

Japan’s pledge is an encouraging sign for American foreign policy after China rebuffed sanctions aimed at starving the Iranian regime of the oil sales that provide 85 percent of its government revenue. Along with India, China and Japan account for more than 40 percent of Iran’s oil exports.

The European Union, another major buyer, has already committed to banning imports of Iranian oil. An embargo is expected to come into effect late in January.

The United States have lobbied Japanese and South Korean officials for months to reduce their Iranian oil buys. For each nation, Iranian crude makes up roughly 10 percent of their petroleum imports.

Japan’s finance minister cautioned that his nation wouldn’t be able to stop buying Iranian oil overnight. After a devastating tsunami and earthquake last year, Japan is struggling to build its economy. It is heavily dependent on foreign energy buys, especially as its nuclear industry is under pressure after the accident at the Fukushima power plant in March.

The United States have already banned Iranian oil imports. President Barack Obama imposed sanctions on its central bank and financial institutions that do business with it before the New Year’s. Japan hopes to secure a waiver for its banks from these punitive measures by supporting a Western oil embargo.

Iran insists that its uranium enrichment program serves no military purposes and staged naval exercises in the Persian Gulf earlier this year to try to stave off further international pressure. It has threatened to shut the narrow Strait of Hormuz through which passes 40 percent of the world’s seaborn oil transports every day.

Even if the United States don’t buy Iran’s oil, they are heavily dependent on exports from the other side of the Persian Gulf where Saudi Arabia’s oil industry is concentrated. A disruption in oil shipments could cause prices and insurance costs to rise but also hurt Iran’s economy as it may no longer be able to export to oil buyers in Asia while the US Navy tried to break an Iranian blockade of the Strait.

Prime Minister Yoshihiko Noda of Japan

Barely two months in office, Japan’s prime minister Yoshihiko Noda faces a split in his ruling party over a push to liberalize trade relations with other Pacific nations.

The premier has demanded consensus on Japan’s entry to the Trans Pacific Partnership before its prospective members are due to convene in Hawaii next month but his Democratic Party is divided.

The Trans Pacific Partnership began in 2006 as a free trade agreement between Brunei, Chile, New Zealand and Singapore. Australia, Malaysia, Peru, the United States and Vietnam are on track to join the organization which seeks to eliminate all tariffs on Pacific trade by 2015. Canada, the Philippines, South Korea and Taiwan have also expressed an interest in joining.

During next month’s Asia-Pacific Economic Cooperation meeting in Honolulu, present and future members of the TPP are expected to decide on expansion as well as the broad outlines for a trade agreement.

Japan’s agricultural lobby is opposed to joining the partnership. Former agriculture minister Masahiko Yamada leads the resistance against freer trade within the Democratic Party. He is an ally of party strongman Ichirō Ozawa who is currently under investigation on corruption charges. Noda’s ascendance to the premiership in September was a setback for Ozawa who had endorsed his opponent.

Noda has tried to unify the ruling party by bringing Ozawa allies into his cabinet but the debate over whether or not to join the Trans Pacific Partnership is fracturing his very government. The defense minister, Yasuo Ichikawa, a former agricultural ministry bureaucrat, is one of the voices cautioning against a multilateral liberalization of trade relations. Opponents of TPP membership fear that Japanese farmers would struggle to compete against other East Asian and South American producers.

The underlying predicament, writes Jeffrey W. Hornung at The Diplomat, is that both of Japan’s major political parties rely heavily on rural support. Bodies that represent farmers’ interests have gained an “inordinate amount of influence” of the political process, he writes.

The Democratic Party has advocated direct income subsidies for small farmers for more than a decade while the liberal democrats, traditionally in power, enacted structural economic reforms in the 1990s that disadvantaged the rural economy. Rural voters switched parties in 2009′s election and propelled the Democrats to power for the first time in their existence.

Japanese businesses, by contrast, argue that freer trade could be a boon to the country’s sluggish economy which is still recovering from March’s devastating earthquake and tsunami. They fear that Japan is lacking behind other Asian powerhouses, Korea in particular.

South Korea, which recently enacted a free trade agreement with the United States that could boost its exports by several tens of billions of dollars per year, conducts more than a third of its trade with countries it has trade deals with. The Japanese figure is just 18 percent.

Japan’s population, moreover, is shrinking. By midcentury, it is expected to have lost thirty-two million people, a huge drop for an industrial nation that will have to rely increasingly on exports.

Prime Minister Yoshihiko Noda of Japan, then finance minister, in Kyoto, November 5, 2010 (AP)

As Japan changed prime minister this week for the sixth time in as many years, it’s tempting to dismiss the leadership reshuffle as virtually insignificant. Yoshihiko Noda, however, may finally herald the change that his Democratic Party promised to bring to Tokyo when it swept to power two years ago.

In what is interpreted as a sign of the new prime minister’s conservatism, Noda picked a relative lightweight to head his finance department—a key position in his cabinet as Japan copes with a debt twice the size of its $5 trillion economy and an expensive recovery in its northeast which was devastated by an earthquake and tsunami in March.

Without a potential challenger in the finance ministry, Noda can be expected to call the shots himself on economy policy where he believes a balance between fiscal consolidation and pro-growth reform is essential. “We can lose no time in reforming public finances,” he told a news conference after being formally appointed on Friday. “But I’m not putting fiscal reform on top of everything else.”

Noda could push for an increase in the nation’s sale tax which has among the lowest rates in the industrialized world. His predecessor failed to act on a promise to consider it. Naoto Kan, who was also finance minister before he headed the government, did enact tax relief for Japanese business last year in an attempt to boost economic growth.

At 40 percent, Japan’s corporate tax rate was the highest among major economies.

Noda replaced Kan who was generally unpopular and had been discredited by the nuclear power plant accident in Fukushima this spring. He inherits not only a divided parliament but warring factions in his Democratic Party as well.

Noda’s election was a setback for the powerful party chief Ichirō Ozawa who challenged Kan in August of last year after maneuvering him into the finance ministry in the first place. The first Democratic finance minister insisted on fiscal restraint to reduce Japan’s colossal debt. Kan was supposed to be more “flexible” in facilitating the sort of pork barrel spending and nepotism which propelled Ozawa to power.

The man who is often called Japan’s “shadow shogun” because of his enormous sway in Democratic Party politics was instrumental in its 2009 election victory which ended decades of Liberal Democratic Party rule. His tactics have since come under scrutiny however and his prestige has dwindled as evidenced by Noda’s win. Ozawa backed his opponent.

The party elder’s first chosen prime minister, Yukio Hatoyama, left office after less than nine months in power amid disappointment over his indecisiveness and incompetence.

Signaling a departure from Liberal Democratic policy, Hatoyama had demanded that the United States move a military base off the island of Okinawa as a demonstration of Japan’s security independence. The Americans, however, stayed put. Hatoyama, who, for all his rhetoric, recognized that Japan was extremely dependent on American protection, resigned in disgrace.

The Okinawa base debacle distracted attention from the real failure of Hatoyama’s cabinet—its unimaginative fiscal policy which offered no change at all from Liberal Democratic orthodoxy.

Before they came to power in 2009, the Democrats vowed to represent “self reliant individuals” and reduce the burdensome scope of Japan’s welfare state in favor of a market driven approach.

Once in government and confronted with a global economic contraction, the party blamed the free market policies of the past for job losses and a widening income gap. It suddenly championed more of the very Keynesian, demand side stimulus which had been implemented by the Liberal Democrats for close to two decades. A record, $1 trillion dollar budget was enacted, full of measures that were designed to soften the impact which the recession had on working Japanese.

The spending spree hugely increased Japan’s indebtedness while recovering from March’s natural disaster will probably require more borrowing on the short term.

It’s too soon to tell whether Noda has the political capital and the will to truly rein in the Japanese state but he says he wants to.

While finance minister, Noda championed a 10 percent spending cut across all departments of Japan’s government and aimed to cap the issuance of new sovereign bonds at half a trillion dollars. The need for fiscal restraint is clearly present as tax income now covers less than half of Japan’s annual budget.

In terms of foreign policy, the new prime minister signals a return to normalcy. He promised to restore the alliance with the United States as the “very foundation” of Japan’s international relations while Chinese editorials have chastised him for identifying rising nationalism and naval power across the East China Sea as potentially hazardous to regional stability.

As Democrats and Republicans said to be near a compromise that would avert the risk of default, British and Japanese officials on Sunday warned that failure to reach a deal could have global repercussions. “If they get this one wrong and there’s a default—we don’t expect that, we think that they will sort this out—but if that were to happen, it has consequences for every family and every business in this country and all across the world,” said the chief secretary to the British Treasury.

In Tokyo, sources familiar with Japan’s international and monetary affairs said that they were increasingly concerned that markets might be too hopeful about prospects for a lasting solution to America’s debt crisis. “Nobody thought Washington would let Lehman collapse,” one Japanese official told the Reuters press agency. “But look what happened.”

The United Kingdom and Japan, which hold $333 and $907 billion in Treasury bonds respectively, are among the United States’ largest creditors. China, which owns well over $1 trillion in American debt, has also expressed alarm.

On Saturday, China’s official People’s Daily newspaper, the mouthpiece of the Communist Party, castigated Congress’ handling of the crisis as “irresponsible” and “immoral.” It opined that Washington was to blame for a “farce,” claiming that “not a single representative has considered the world and even US national interests are being banished from the mind.

An editorial for the Xinhua news agency similarly blamed politicians of both parties for “kidnapping” the rest of the world.

Given the United States’ status as the world’s largest economy and the issuer of the dominant international reserve currency, such political brinkmanship in Washington is dangerously irresponsible, for it risks, among other consequences, strangling the still fragile economic recovery of not only the United States but also the world as a whole.

For all the jitters in international financial markets, the bulk of American debt is held domestically. Almost half, some $6 trillion, is owed either to the Federal Reserve or government accounts like Social Security and public retirement funds. An additional $3.2 trillion is owed to American investors. $4.4 out of a total debt of $14.3 trillion is held abroad. As a share of the American economy, the country’s debt to the world is relatively small, which is why it has been able to borrow at low interest rates.

The devastating tsunami that hit Japan earlier this month severely damaged a nuclear power plant along its northeastern coastline. Engineers have worked for several weeks trying to contain the damage but the facility is highly unlikely to ever become operational again.

Japan is the world’s third largest nuclear power. More than fifty nuclear plants provide over a third of the country’s energy needs.

The United States have the most nuclear power plants in the world but no new facilities have been built for more than twenty years. At least one influential senator has called for a moratorium on the construction of new plants. The administration, which seeks to decrease America’s dependence on foreign oil, doesn’t have particular nuclear ambitions anyway.

France, with nearly sixty plants, is almost entirely energy independent thanks to nuclear power. Nuclear accounts for almost 80 percent of France’s energy production while the country exports some 20 percent of its total production to neighboring European countries.

In Finland, four nuclear reactors are in operation while a fifth is being built. Last year, the country’s parliament approved the construction of two more. Neighboring Sweden has three operational nuclear power plants with ten reactors which produce nearly half of the country’s electricity. The rest is largely provided by hydroelectric power plants while fossils and other renewables account for less than 10 percent of total production.

China and India, which expect energy needs to skyrocket in years ahead, have made no attempt to stall the construction of new nuclear energy plants. Prime Minister Manmohan Singh announced a safety review of India’s six nuclear plants but five more continue to be built which should boost the country’s nuclear energy production by more than 50 percent.

China, the world’s largest energy consumer, has the most ambitious plans for nuclear expansion. The country currently operates thirteen reactors. An additional twenty-five are under construction while fifty more are planned.

Most of China’s energy, less than 70 percent, now comes from coal with hydroelectricity accounting for some 20 percent.

While the attention is hyped, it is understandable. Nuclear power accidents are potentially catastrophic and deserve reporting on. The rhetoric however has been totally overblown.

The European Union’s energy commissioner has characterized the incident as “apocalypse” and comparisons with Chernobyl are being thrown around like candy to longtime opponents of nuclear energy.

Japan has fifty-three nuclear power plants which provide more than a third of the country’s energy needs. The plants in the disaster area all shut down automatically when the earthquake hit Friday. The Fukushima facilities were the only ones that were seriously damaged.

The waves of the tsunami were too high for the protective seawalls built around the Fukushima plant which is located on the coast. The disaster probably destroyed the facility’s diesel backup power systems. While the actual reactor was unaffected, because of a lack of power, the plant’s pumps failed.

Normally, when a reactor is shut down, it can take more than a week for “decay heat” from traces of radioactive isotopes to cool down. The core’s fuel rods must be continually bathed in cooling water during that time to prevent overheating. This is what went wrong at Fukushima.

Because the pumps failed, the coolant water in the reactors overheated and began to evaporate. Engineers had to release pressure by venting radioactive steam which contained an otherwise harmless level of radiation.

The explosions that occurred at the Fukishima plants were hydrogen explosions. While damaging the plant’s infrastructure, these bore no immediate health risks.

If engineers at the plant do not manage to cool down the reactors, their water levels will drop and expose the fuel rods, leading to a meltdown. This would cause the rods to melt to the bottom of the steel and concrete containment vessels surrounding the reactors but still pose no immediate threat to the general population. The containment structures are powerful enough to withstand even the extreme temperatures of a full meltdown.

It is possible that one or several of the containment vessels of the Fukushima facility were damaged during the quake. A spokesperson has said that one spike in radiation levels was “probably” caused by damage to the container. If that is true, people in the vicinity of the plant could be exposed to harmful levels of radiation.

The government therefore ordered the evacuation of residents within a twenty kilometer radius from the Fukushima power plants. Tens of thousands of people had already left the area.

If a meltdown happens, the decay heat from the reactor must still be absorbed. Japanese engineers have reportedly used sea water to flood an entire containment structure. This causes irreversible damage to the reactor but should prevent further steam releases and with it, releases of radiation.

The incident at the Fukushima facility is utterly incomparable with the Chernobyl disaster.

The Ukrainian plant was very different from the Japanese in that it had no containment structure and used graphite instead of water to moderate the nuclear reaction. It was the graphite that caught fire in 1986 and because of the lack of a container, radiation was immediately released into the atmosphere.

The radiation released in Japan so far has not been excessive and is highly unlikely to have hurt anybody.

As a precaution, authorities have distributed iodine tablets which help minimize the damage incurred by breathing radioactive iodine which is a component of nuclear fallout.

Technically, this hasn’t been necessary. If people are to be exposed to unsafe levels of radiation as a result of the radioactive steam that was released from the Fukushima plants, it will be because they drank contaminated water or milk. This is a health hazard authorities should, and will, be looking out for.

(UPDATE) After this article was published it was reported that the pool containing spent nuclear fuel in at least one of the Fukushima reactors was without water, causing unusually high radiation levels. Japanese officials denied this.

The pools may be a greater danger than the reactors because they are not contained. The roofs of two of the plants at Fukushima were lost in hydrogen explosions moreover, exposing the spent fuel pools directly to the atmosphere.

Two explosions occurred at a nuclear facility in Fukushima Prefecture over the weekend. At least one of its reactors may have experienced a partial meltdown after its coolant pumps failed. In the aftermath of the quake, engineers attempted to cool down the reactor using sea water.

Nearly two hundred thousand people in the vicinity of the plant were being evacuated out of precaution. Eighteen people were believed to have suffered radiation poisoning.

While the emergency in Japan almost immediately triggered another discussion about the pros and cons of nuclear energy, it may be worth remembering that Japan has fifty-three nuclear power plants. After the United States and France, it has the most nuclear plants in the world which provide more than a third of Japan’s energy needs.

Because Japan has so very few natural resources, it is highly dependent on the import of fossil fuels. Nuclear energy has been a strategic priority for Japan since the 1970s in an attempt to reduce the nation’s dependence on foreign oil and natural gas.

While Japan has had accidents with nuclear power in the past, it has some of the world’s most skilled engineers and scientists in the field and quite possibly the most modern nuclear energy industry in the world. It has also learned to live with earthquakes and among the world’s most rigorous of building codes which probably saved countless of lives in the most recent disaster.

Since the 1950s there have only been two major accidents with nuclear power—the partial core meltdown of a reactor of the Three Mile Island station near Harrisburg, Pennsylvania in 1979 and the Chernobyl incident of 1986. Both events led to more stringent safety requirements for existing and new plants. The situation in Fukushima will probably produce additional insights and lessons for future nuclear power plant construction.

While accidents with nuclear power are potentially catastrophic, other energy sources are much more fatal.

Nearly nine hundred people died in coal mining since 1980 in the United States alone. Even wind turbines have caused more deaths than the nuclear power industry. The very opponents of nuclear energy often allege that entire wars are fought over oil. No country has ever invaded another to seize its nuclear power plants.

Nuclear power is much safer and much cleaner than traditional sources of electricity. It is reliable and efficient unlike wind and solar. A nation as France is almost entirely energy independent because of it.

The opposition to nuclear power is not based on science. It is not based on facts. The people who fear nuclear power do not understand how it works and cannot comprehend that man is able to master its technology. But he is—and he should.

Entire towns along Japan’s northeastern coast were swept away by the tsunami. Thousands of people were still missing as relief efforts were underway. Auto plants, electronics factories and energy plants were closed. Millions of homes and businesses were left without electricity.

Several of the nation’s airports, including Tokyo’s Narita, and all sea ports suspended operations while partial rail service resumed on Sunday. At least one bullet train carrying hundreds of passengers in Miyagi Prefecture had been derailed while four went missing in the coastal areas.

Prime Minister Naoto Kan said that the country hadn’t faced a larger crisis since the end of World War II. After months of political gridlock, Japan’s two main political parties came together to enact an emergency budget, probably including a temporary tax hike to fund reconstruction.

In the short run, Japanese companies are expected to divert resources back home for recovery, strengthening the yen and undermining the competitiveness of Japanese exports. While immediate growth is likely to stall as a result of the massive damage incurred on infrastructure and housing, their rebuilding will effectively amount to a massive stimulus, said Ian Bremmer of the Eurasia Group on the Fox Business Network this week.

Analysts have attempted to draw lessons from the 1995 Kobe earthquake. That disaster caused some ¥10 trillion, or $120 billion in today’s exchange rates, in damage. At the time, it equaled 2.5 percent of Japan’s GDP but it devastated a major port and a larger chunk of Japan’s industrial output than Friday’s catastrophe.

Kobe, moreover, was built on sand. “They didn’t know there was a fault line under it,” said Bremmer. “While this was a many, many, many times greater magnitude earthquake, the likely impact on the actual infrastructure is considerably lower.”

Japan is one of the most heavily indebted nations in the world. The long term effects of repeated short term government interventions in the private sector during the “lost decade” of the 1990s have resulted in a huge public debt that exceeds GDP twofold.

Trapped in low growth and a corrosive downward spiral of deflation, the economy has contracted significantly in recent years despite being one of the world’s largest. The bulk of Japanese debt is held domestically however. The global implications of its recession and recent devastation will likely be limited therefore.

Japan accounted for $5.4 trillion, or almost 9 percent, of the world’s GDP last year. Its economy contracted mildly at the time but was expected to expand by 1.5 percent this year.

Japan is a country that has learned to live with earthquakes. Because of rigorous building codes, many towers were able to withstand the quake while levies and concrete walls prevented even more regions from being flooded.

Earthquakes shake Japan every year and tsunamis, while less frequent, are a common occurence in East Asia. Yet, supposedly, the latest catastrophe was a stark reminder of the dangers of global warming.

That, at least, is what the President of the European Economic and Social Committee would have us believe. Not only Japan was struck by the earthquake; “some islands affected by climate change have been hit,” according to Staffan Nilsson.

Has not the time come to demonstrate on solidarity—not least solidarity in combating and adapting to climate change and global warming? Mother Nature has again given us a sign that that is what we need to do.

After all, there were no earthquakes before industry? Natural disaster never struck before humanity began polluting the skies? They did, of course, and while our climate is changing, the devastation in Japan and across the Pacific is not a reminder of it at all.

When global warming alarmists jump on any calamity to make their point, it discredits environmentalism altogether and reveals plainly that to them, it is more about ideology than science.

Japan wasn’t struck by disaster because it pollutes too much. Rather the reason so many Japanese were able to survive the worst earthquake in their recorded history was the incredible advances in science and technology that could only have happened on a free market.

The 8.9 magnitude temblor, which was centered near the regional capital city of Sendai, was the heaviest to struck the island nation in recorded history. The earth continued to twitch with aftershocks on Saturday, punctuated by a pair of strong earthquakes in the early morning, including one with a magnitude of 7.1 and another with a magnitude of 6.8.

Thousands of residents were evacuated from an area around a nuclear plant north of Tokyo after fears of a radiation leak but officials said problems with the reactor’s cooling system were not at a critical level. An atomic power emergency was declared to enable authorities to implement crisis measures however and an explosion at the facility was reported on Saturday.

Underscoring grave concerns about the plant, the United States Air Force, which has three bases in Japan, delivered coolant on Friday, according to Secretary of State Hillary Clinton.

The Japanese Government’s chief spokesman said that the metal container around the reactor was not damaged in the explosion and that radiation levels in the area had actually decreased after the blast.

Other nuclear plants and oil refineries were shut down while one refinery in Chiba Prefecture was shown ablaze on Japanese television. The intense fire in the waterfront area east of Tokyo could not be reached by firefighters because of the heat.

An irrigation dam was reported broken in Fukushima Prefecture, north of the capital. All that was left of many structures in the city of Minamisōma were their foundations. Only concrete and steel buildings appeared to have withstood the wash.

Auto plants and electronics factories closed while millions of homes and businesses were without electricity. Several airports, including Tokyo’s Narita, and all sea ports suspended operations while rail services halted. At least one bullet train carrying hundreds of passengers in the Miyagi region had been derailed while four were missing in the coastal areas.

Japanese politicians pushed for an emergency budget to fund relief efforts after Prime Minister Naoto Kan asked them to “save the country.” Kan surveyed the disaster area by helicopter for several hours on Saturday.

Eight thousands troops were dispatched to aid in the recovery and the government asked the United States military for assistance. Some 38,000 American soldiers are stationed in Japan along with an equal number of family members and civilian personnel.

President Barack Obama told the Japanese prime minister that his country would assist in any way. Five US Navy ships were en route for Japan; two were already docked in the harbor of Yokosuka. Neither of the American ships was damaged, said the Pentagon. The USS Ronald Reagan carrier strike group, at sea in the western Pacific and on its way to Korea at the time of the quake, was underway for Japan to assist in relief efforts.

Japan is one of the most heavily indebted nations in the world. The long term effects of repeated short term government interventions in the private sector during the “lost decade” of the 1990s have resulted in a huge public debt that exceeds GDP twofold.

Trapped in low growth and a corrosive downward spiral of deflation, the economy has contracted significantly despite being one of the world’s largest. Last year, Japan experienced mild negative growth.

As a result of its high standards of living, the country is also coping with a large aging population and mounting financial pressure on its public pension system.

Japan’s financial sector and infrastructure are well developed but remain subject to political interference. Last year, to prevent the soaring currency from impeding a fragile recovery, the government began to pursue an active monetary policy to protect the competitiveness of Japanese exports.

This post was updated with corrections and new information.