Japan has virtually no domestic oil or natural gas reserves and is the second-largest net importer of crude oil and largest net importer of liquefied natural gas in the world. Including nuclear power, Japan is still only 16 percent energy self-sufficient. Japanese companies have actively pursued upstream oil and natural gas projects overseas in light of the country’s lack of domestic hydrocarbon resources. Japan remains one of the major exporters of energy-sector capital equipment and Japanese companies provide engineering, construction, and project management services for energy projects around the world. Japan has a strong energy research and development program that is supported by the government. The Japanese government actively pursues energy efficiency measures in an attempt to increase the country’s energy security and reduce carbon dioxide emissions.

Oil is the most consumed energy resource in Japan, although its share of total energy consumption has declined by about 30 percent since the 1970s. Coal continues to account for a significant share of total energy consumption, although natural gas and nuclear power are increasingly important sources, particularly as Japan pursues environmental policies. Japan is the third largest consumer of nuclear power in the world, after the United States and France. Hydroelectric power and renewable energy account for a relatively small percentage of total energy consumption in the country. Total energy consumption from 2003 to 2030 is forecast to grow by 0.3 percent per year on average, relatively small as compared to China’s forecast growth rate of 4.2 percent per year on average, according to EIA data.