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About Commodity Insights
22 Jul 2021 | 05:00 UTC — Insight Blog
Featuring Herman Wang and Takeo Kumagai
On July 23, after a lavish show, the parade of athletes, and a bevy of speeches, the Tokyo Games' opening ceremony will climax with the lighting of the Olympic cauldron.
And so will begin propane's fortnight in the spotlight. Symbolizing the spirit of the competition, the cauldron continues to burn for the duration of the Olympics—a tradition that began with the 1928 games in Amsterdam—and then is also lit for the Paralympic Games that follow.
The fuel used to sustain the flame is typically natural gas or LPG. The Tokyo Olympics and Paralympics will use propane, spokeswoman Yumiko Takeshita told S&P Global Platts.
The fuel is being provided by Japanese LPG supplier ENEOS GLOBE Corp., but Takeshita declined to say how much propane had been procured, nor the cost.
Bruce Swiecicki, a senior technical advisor with the US National Propane Gas Association, said a cauldron of Olympic size can be expected to consume roughly 11 gallons (41.6 liters) of propane per hour, which comes out to about 4,200 gallons (16,000 liters) over the 16 days it will be lit for the summer games. However, he added the caveat that cauldron designs vary greatly and the specs of the one built for Tokyo are not publicly known.
In a first for the Olympics, these games will also use hydrogen generated from solar power to supplement some of the propane burned in both the flame relay torches and the cauldron, Takeshita said, though she again did not disclose any quantities or cost.
Use of the alternative fuel "is one of a variety of initiatives that we hope will serve as a springboard to increase the demand for hydrogen energy and help create a full-fledged, hydrogen-based economy," Takeshita said.
Previous Olympics have also sought to tackle at least some of the environmental concerns over the emissions footprint of the cauldron and torch relay.
In 2012, the London Games had what it billed as the world's first "low-carbon cauldron" that was significantly more modest than previous versions, composed of 204 "petals" lit by natural gas to represent each participating nation. The flames could be turned down at the conclusion of each day's competitions to reduce gas consumption by 85%.
The 2016 Rio de Janiero Games also commissioned a smaller cauldron to cut the amount of natural gas burned and highlight its theme of global warming, housing the flame in a striking reflective sculpture to represent the sun.
More recently, the 2020 Winter Youth Olympic Games in Lausanne, Switzerland, used Swiss wood pellets in its cauldron.
Powering the Olympics is about far more than just the flame, and Japanese energy giant ENEOS will be supplying oil products, gas, hydrogen and electricity for the entire Tokyo Games.
A total of about 78 million kWh of electricity will be provided to the 53 Olympic facilities, of which 24 million kWh will come from 100% renewable sources, ENEOS said.
That includes hydrogen for about 500 fuel cell vehicles (FCVs) used at the games, some of which is being produced at a research center in Fukushima, the site of the 2011 nuclear disaster. The center is the world's largest hydrogen production facility, using about 20 MW of solar power.
ENEOS is allocating seven of its hydrogen stations in Tokyo and adjacent prefectures for the games to service the FCVs. This includes an ENEOS hydrogen station at Shiomi, Koto ward in Tokyo, which is a sales outlet for hydrogen produced at the Fukushima research center.
Japanese energy company ENEOS will provide hydrogen fuel produced in Fukushima for the Tokyo Games at this Shiomi service station. Photo courtesy of ENEOS.
The company will also fill up the tanks of about 2,200 vehicles and 1,500 buses with conventional fuels, along with 45 power generators, as well as supply gas to several facilities.
With energy markets having strongly rebounded in 2021 from the market crash of 2020, ENOES' costs of underwriting the energy supplies will be significantly higher, unless it had the foresight to stockpile some volumes a year ago, when the games were originally scheduled to take place before COVID-19 forced their postponement.
For instance, refrigerated CFR North Asia propane prices hovered around $350/mt in summer 2020, about half of the $650-$700/mt they have averaged so far this summer, according to Platts assessments.
LNG prices, meanwhile, have been extremely volatile, with Platts JKM trading at around $2.15/MMBtu at the start of last summer, then spiking to $32.50/MMBtu in mid-January amid a cold snap in Asia, before plummeting to $5.57/MMBtu at the beginning of March and then rising steadily to about $14/MMBtu in recent days.
All the fuel and infrastructure will support the thousands of athletes, coaches, staff and volunteers at the games—though no spectators, given Tokyo's COVID-19 state of emergency.
Shining above them all will be the Olympic cauldron, starring propane—with an assist from hydrogen.