Wednesday, June 5, 2019

Fortress Japan? (fuel cells, Ghosn)

On the ousted Nissan executive Carlos Ghosn:

https://www.nytimes.com/2018/12/30/business/carlos-ghosn-nissan.html

The Establishment of Japan seemed to have rejected him the way a body might reject an organ implant.

But there might be a bigger story. Japan is trying to exploit methane found in ice on the sea floor around Japan.

http://www.bbc.com/future/story/20181119-why-flammable-ice-could-be-the-future-of-energy
Buried below the seabed around Japan, there are beds of methane, trapped in molecular cages of ice. In some places, the sediment covering these deposits of frozen water and methane has been eroded away, leaving whitish mounts of what looks like dirty ice rearing up out of the seafloor.

Take a chunk of this stuff up to the surface and it looks and feels much like ice, except for a give-away fizzing sensation in the palm of your hand, but put a match to it and it doesn’t just melt, it ignites. Large international research programmes and companies in Japan, among other countries, are racing to retrieve this strange, counter-intuitive substance – known as fiery ice – from beneath the seafloor to use its methane for fuel. If all goes to plan, they may even start extraction by the end of the next decade.

This methane from ice might be the source of hydrogen that Japan is trying to secure for its national fuel cell development initiative.

https://www.meti.go.jp/english/press/2019/0312_002.html

There are technical reasons that make fuel cells appealing to Japan.

https://www.greentechmedia.com/articles/read/in-hydrogen-japan-sees-the-next-lng#gs.gawc1s
With respect to renewables, Japan’s geography poses a challenge, as the country has just one time zone and an effectively islanded grid. Political relations may need to warm considerably before Japanese internet titan Softbank’s vision of an Asian super grid spanning Russia, China, Japan and South Korea can materialize. 

A still bigger challenge is that the grid in eastern Japan runs at 50 hertz, while the grid in western Japan runs at 60 Hz, making it difficult for the two halves of the country to trade power; transmission capacity between the grids is limited to 1.2 gigawatts. Where Europe and North America benefit from continent-scale grid integration, Japan is partitioned between two grids.

This stranger-than-fiction reality stems from Tokyo purchasing generators from Germany in 1895, and Osaka, Japan’s second-largest city, choosing generators from General Electric shortly thereafter. Long-running stalemates aren’t unusual in Japanese business. While the VHS vs. Betamax standards battle resolved itself relatively quickly, by 1895 domestic soy sauce manufacturers Yamasa and the forerunners of Kikkoman had already spent a quarter of a millennium in commercial competition.

Fuel cells are not an environmentally friendly technology, despite the propaganda.

https://cleantechnica.com/2019/01/02/the-hydrogen-fuel-cell-scam-from-george-w-bush-the-big-3-to-toyota-honda-japan/

Now back to the arrest of Carlos Ghosn for undeclared income. It has been speculated that the real issue was Ghosn's efforts to incorporate Nissan into Renault, which is partly owned by the French government.

https://cleantechnica.com/2018/11/21/carlos-ghosn-greed-stupidity-or-a-coup/
This raises the question of why this theatre of taking down a Japanese national hero was enacted — taking him into custody when he landed in Japan for a meeting with the Governor of Tokyo. For irregularities like these, you send a questionnaire to his lawyer or at most a subpoena — you don’t surprise him with a public arrest without any prior warning. The press being on site for this spectacle makes this a carefully staged event.

The Financial Times mentions another reason. For months, there have been talks about closer ties between the Alliance partners. I wrote about it half a year ago. While Nissan is very grateful to Renault and Ghosn for saving it nearly two decades ago, the company considers itself to now be the healthier, bigger, superior partner in the Alliance. Renault owns 43% of Nissan stock, giving it much control, while Nissan has just 15% non-voting stock in Renault, making Nissan essentially a very junior partner, which hurts the company leadership’s pride. A merger with Renault and Mitsubishi is likely felt as a French takeover.

But there might be another reason. Japan is unprepared for the shift to electric vehicles, a shift that might disrupt and destroy most of its automotive industry.

https://www.nytimes.com/2018/01/09/business/japan-electric-cars.html
FUJI, Japan — At a factory near the base of Mount Fuji, workers painstakingly assemble transmissions for some of the world’s top-selling cars. The expensive, complex components, and the workers’ jobs, could be obsolete in a couple of decades.

The threat: battery-powered electric vehicles.

Their designs do away with the belts and gears of a transmission, as well as thousands of other parts used in conventional cars. Established suppliers are nervous, especially in Japan, where automaking is a pillar of the economy — and where industrial giants have been previously left behind by technological change.

“If the world went all-E.V. today, it would kill my business,” said Terry Nakatsuka, chief executive of Jatco, the company that owns the transmission factory, using a shorthand term for electric vehicles.

Japanese prefer to stick with old technology and upgrade it continuously and incrementally (every Japanese household and business still owns and uses a fax machine), which is much less disruptive technologically and socially. This attachment to otherwise forgotten technology is also true in automotive engineering, despite the futuristic patina of fuel cells.
The Japanese government has made managing the shift to next-generation vehicles a priority, but critics say its approach lacks focus. It has bet big on hydrogen fuel cells, an alternative technology to plug-in rechargeable batteries that is struggling to win widespread support.

The fear is that once again, Japan will miss a big technological shift.

“What really puts Japan on the defensive is the idea that the tech revolution is coming to the car industry,” said James Kondo, a visiting professor at Hitotsubashi University in Tokyo who has worked with technology companies in the United States and Japan.

It has been pointed out that the billionaires Jeff Bezos and Elon Musk have a view of the future rooted in the popular science fiction of the 1970s. Fuel cell technology is likewise seen by non-Japanese as yesterday's antiquated vision of tomorrow.
Their focus has instead been on developing cars that extract energy from onboard hydrogen fuel cells. Enthusiasm for that technology has faded in other countries, in part because it would require huge and expensive new infrastructure for delivering hydrogen to drivers.

Japan is becoming an increasingly isolated hydrogen booster.

Toyota displayed a new fuel-cell prototype at the show alongside its plug-in model. And the government remains committed to pouring money into transformative “hydrogen society” projects, with plans to build 320 hydrogen stations for cars by 2025.

“The trend toward electric vehicles is growing, and sales are increasing, but we can’t suddenly jump to E.V.s,” Hiroshige Seko, Japan’s industry minister, said in September, defending the government’s commitment to hydrogen.

Not all of Japan’s carmakers have been avoiding electric vehicles. Nissan was an early advocate of battery-only cars, introducing its Leaf all-electric model in 2010.

At Nissan, Ghosn was a realist who championed electric vehicles and was openly skeptical about the prospect of fuel cell vehicles.

https://www.theglobeandmail.com/globe-drive/news/trans-canada-highway/fuel-cells-are-a-far-off-fantasy-says-nissans-ghosn/article15543471/
Crucially, electric vehicles can be exported to countries with recharging networks, whereas aside from parts of California, fuel cells have no such recharging stations. This would mean that Japanese automobile companies face the prospect of selling automobiles only in Japan if the national plan is to indeed shift to only fuel cell vehicles. Astonishingly, there seems to be no public outcry to a plan that would mean suicide to Japanese automotive exports -- one of the few remaining manufacturing sectors in Japan that still does export -- and the collapse of most of the industry. Importantly, this is a national plan drafted by the Japanese government (METI) with what seems to be the full approval of Japanese industry and labor. This might suggest that Ghosn was perceived not just as a threat to the independence of Nissan by its Japanese executives, but as a threat to Japanese national security by the Japanese state.

The choice would be seem to be between economic dynamism, with all of its attendant disruptions to the social fabric, and a harmonious if impoverished self-sufficiency.

https://en.wikipedia.org/wiki/Autarky
Autarky is the characteristic of self-sufficiency; the term usually applies to political states or to their economic systems. Autarky exists whenever an entity can survive or continue its activities without external assistance or international trade. If a self-sufficient economy also refuses all trade with the outside world then economists may term it a closed economy.

There is a famous precedent for this in Japanese history.

https://en.wikipedia.org/wiki/Sakoku
Sakoku (鎖国, "closed country") was the isolationist foreign policy of the Japanese Tokugawa shogunate (aka Bakufu)[1] under which relations and trade between Japan and other countries were severely limited, nearly all foreign nationals were barred from entering Japan and common Japanese people were kept from leaving the country for a period of over 220 years. The policy was enacted by the Tokugawa shogunate under Tokugawa Iemitsu through a number of edicts and policies from 1633 to 1639, and ended after 1853 when the American Black Ships commanded by Matthew Perry forced the opening of Japan to American (and, by extension, Western) trade through a series of unequal treaties.

It was preceded by a period of largely unrestricted trade and widespread piracy when Japanese mariners travelled Asia and official embassies and envoys visited both Asian states, New Spain (now Mexico), and Europe. This period was also noted for the large number of foreign traders and pirates who were resident in Japan and active in Japanese waters. 

Carlos Ghosn might be seen by the Japanese Establishment as a kind of pirate who endangers Japanese sovereignty.

Social cohesion comes at a price, and it can backfire. In order to prevent being colonized by the West in the 17th century, Japan isolated itself to such a degree that it fell behind economically and technologically -- a condition which actually made Japan vulnerable to the outside world and required a strenuous program of catching up with the outside world. In the 21st century, such a program of reaching economic parity with other great powers might not be possible for Japan, as it is already struggling despite possessing the advantages of advanced development.

In the USA, a pseudo-socialist left-wing calls for equality of condition and a pseudo-fascist right-wing demands restrictions on immigration and trade. These policies would promote social cohesion, as they do in Japan. However, these policies might have the same stultifying and counterproductive effects in the USA as they do in Japan (e.g., 30 years of economic stagnation with no end in sight, with the real possibility of serious economic contraction.)