Japanese earthquake, tsunamis and nuclear power disaster may change global markets

Last Friday's deadly earthquake in Japan, followed by tsunamis, has caused a nuclear power disaster in the country. In addition to the devastation caused by the natural disasters, multiple explosions and deteriorating safety at the Fukushima Daiichi nuclear power plant operated by Tokyo Electric Power Co. (TEPCO) has gained international attention.

For comprehensive coverage of the Japanese nuclear power disaster and efforts under way to resolve it, visit PennEnergy’s Japan Earthquake and Nuclear Emergency 2011  special section.

While TEPCO works to install a new power distribution line to the affected nuclear plant, a few "heroes" are working to cool the reactors with seawater. Radiation threats have mounted, and many are being treated for over-exposure. Thousands have been evacuated from nearby cities and towns, and the US has now started evacuating embassy officials and their families from Japan for their safety.

Many across the nation are without power, and myriad companies are trying to boost natural gas production to be able to supply LNG to Japan for power generation.

All the while, countries worldwide, including China, India, Germany, Sweden and South Korea, are stopping nuclear power construction projects and reevaluating nuclear power plants for safety, risk factors and emergency preparedness.

Some analysts are predicting a "death knell" for the nuclear power industry, and although premature, the industry will likely undergo a lengthy transformation in the wake of this disaster, similar to the deepwater oil and gas drilling industry after the Macondo accident.

Should power generation shift away from nuclear, an opportunity arises for coal, natural gas, oil and renewable power generation. Some market analysts foresee an increased price of natural gas due to increased demand caused by this crisis, and OPEC has begun discussions to perhaps increase oil supply.

Additionally, oil refiners and petrochemical companies across Japan are working feverishly to produce enough to fuel emergency efforts and aid workers.

Although the effect is sure to be felt, it is currently unclear to what extent the earthquake in Japan will ultimately affect markets across the globe.

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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.