Sustainability 2013 report
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25 IN PEX C O RPO RA TIO N SU STA IN A BILITY REPO RT 2013 Adachi: The concept of saving is associated with the energy. The demand can be reduced by devising new technologies and ingenuity to gain certain utility. I believe it would be useful if we could incorpo rate this concept a little bit more into our thinking about energy in Japan, to find one possible way toward a sustainable society. Sugioka: In June 2013, we newly established Gas Supply & Infra structure Division, which is responsible for supervising all gas-related operations, from upstream to downstream. The mission of the Divi sion is related to what you are referring to. When we will transport to Japan the LNG developed by us, and contribute to multifunctional uses of energy through our gas supply infrastructure, we will consider ourselves blessed as an energy company. The concept of saving must be incorporated in order to contribute to a sustainable society Kikkawa: Of all renewable energies, geothermal power seems the most promising to me. Japan has the third largest geothermal poten tial in the world, and when it comes to finding geothermal resources with reliability, its necessary using methods with low environmental load and INPEX can make the most of the technologies it holds. Considering that you have already begun full-scale studies for com mercialization in Hokkaido and Akita Prefectures, while engaging in environmental protection, I feel that possibilities are immense. In addition, Indonesia, where INPEX is conducting the Abadi LNG Proj ect as the operator, is also a country rich with geothermal resources. By making a contribution through these technologies, you could bring diversification to this partner country. Sugioka: Since the Indonesian government and INPEX are both extremely focused on geothermal power, we are now consulting each other with a view to achieving something together. Yui: Gas consumption is currently increasing in Indonesia, and as a result, we are now requested to supply to the domestic market from our own production. I think we can create win-win relationships, not only through oil and gas projects, but also through projects conducted with considerations for local contributions. Geothermal energy is extremely important in this perspective. Kikkawa: Through the development of its projects, INPEX is able to earn trust from partner countries. Continuing this kind of operations is extremely important. Taking advantage of the strengths of our Group to focus on geothermal development Response to Global Management Issues Adachi: In June 2013, the Equator Principles1, under which private banks lend money in project finance, have been updated, their condi tions becoming very demanding. As an international standard, these principles have to be applied. For companies positioned as operators, like INPEX, they are a cause for cost increases. In view of this situa tion, what kind of considerations will you have for the regions where you operate, and how will you be accepted locally? In this respect, I believe that various elements are stacked on top of each other, including employment and human rights. I have heard that the Ichthys LNG Project began with the drafting of policies regarding the indigenous people, even though it meant an increase in cost. This could be a model case for Japanese companies. Sugioka: When we are working in the global arena, there are always major companies operating next to us. If we want to be accepted locally, we must do as they do. In our jargon, we call this the License to operate. In Australia, this led us to sponsor the construction of a vocational training school intended mainly for aboriginal people, some thing we did before making the final investment decision for the Ichthys LNG Project. This way of interacting with local communities is applauded because of the sens ib leness and flexibility we show, something unique to Japanese companies. Kikkawa: In the regions where you operate, your educational support for younger generations seems to match local needs very well. In other words, INPEX is a company that works for the well-being of people in its regions of activity. This is INPEXs approach to global issues, one step beyond what oil major companies do, and an important point in my view. INPEX's unique business style is a key to building trust relationships Kikkawa: It is essential to manage the issue of climate change with a broad perspective. Simply put, this is the domain of the Joint Crediting Mechanism (JCM)2, but I think companies that use fossil fuels must create a mechanism for further reductions of CO2 emissions in the world. Adachi: As for the issue of global warming, international rules seem to have been postponed, but a sudden change is possible. The Joint Crediting Mechanism can help prepare for it. However, it must begin with correct Important point is greenhouse gas countermeasures on a global scale 1 Equator Principles: International principles of action established for evaluating and managing the risks of socio-environmental impacts in project finance transactions, in order to avoid or mitigate environmental loads stemming from development