I am a businessman, involved in the petroleum industry. However, I feel that this is not enough for me, and I am painfully aware that I need to be conscious of my role as a citizen and inhabitant of our planet. In this context, I am very happy to have this opportunity to meet people from the younger generation, who will be shouldering the burdens of the 21st century, and to be given this opportunity to speak to you.

The title of my talk today is "Our Project to Protect Tropical Rainforests," and perhaps this might seem an exaggerated description of what we are doing. But, I can assure you that the awareness and intentions on which our project is based are extremely broad-ranging. At the same time, our philosophy is to approach what we are doing in a steady, stable, step-by-step manner.

Three years ago, I met Dr. Fukui Kenichi, Nobel Prize Laureate and professor of physics at Kyoto University. He said something I thought was really wonderful, that is, that the 21st century should be a time to restore the planet. That is, during the 20th century, we enjoyed various forms of prosperity, but we also had the tragedies of war and poverty resulting from human population growth, making the 20th a century that combined both light and darkness. With this, and with the way our lives have been based on abundant consumption, abundant production and abundant waste, which means using up plenty of resources, including petroleum, I think I am not alone nowadays in seeming to hear a message from the people to be born in the 21st and 22nd century that says, "You people of the 20th century, how wasteful you are! Leave us an Earth where we can live!"

This alone should induce us to look back on the cold facts of the 20th century, and think of how we can ameliorate what we can consider as the negative inheritance from that time. I believe that this is an exceedingly important issue for the whole world, as we start off the 21st century, and I'd like to take this awareness as the underlying basis of my remarks to you today.

So, looking back on the 20th century, its first half made it a century of war. Human beings have a tendency to fight. In this context, I am sure you know people who speak of their own opinions as if they are conclusive. That is, they speak as if their subjective opinion is an objective assessment. This sort of thing results in trivial clashes. If you want to invite constructive dialogue with others, all you have to do is qualify your remarks, in a small voice, saying something like "At least, that's what I think," at the end of your sentence, presenting the subjective as the subjective and allowing broader opinions. I think it is important to discuss things in this manner.

In "Essays in Idleness" (Yoshida Kenko, 1283-1355) we read that not being able to speak out makes the stomach swell. When we talk without restraint about our dissatisfactions and opinions, by looking for ways to reconcile them, we can function as one of the members of an organization, which entails methods for self-restraint even while we continue to insist on our own opinions. I think it is very important to effectively utilize individuality.

Even as value systems proliferate, we need to make progress on environmental issues. If we are to take steps on the environmental front in a world context where there are rich countries and countries that are not rich, then I think the process of identifying problems, devising means to solve them and implementing those means is extremely important.

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We Need to Cure the Disease, Not Just the Symptoms

I wonder what everyone here thinks about present-day capitalism, centered as it is on the market principle. Everything is available in today's market, which weeds out the weak, and although I would not go so far as to call it American globalism, governments lack policy to help out the weak players, and so an extremely confused type of globalization is occurring around the world today.

Behind this are factors hidden within the competitive market economy, such as the problem of population growth and the resulting spread of poverty, which has kept up without a break during the fifty prosperous years of the latter half of the 20th century. Thus, as noted by Dr. Fukui Kenichi, "Prosperity has been secured, but too much of a gap has appeared between industrialized and underdeveloped countries. Wealth has caused injustice."

As I'm sure you all know, Japanese society today is experiencing various problems, such as low birthrates and an aging population, an ongoing economic slump from ten lost years, disgraceful conduct by corporations and politicians, low prices for real estate, stock and other financial capital, an unstable financial sector, and problems related to the systematic instabilities of banks and other financial institutions. Various systems and mechanisms set up during postwar Japan are fundamentally inapplicable to present-day Japan. That is, treating the symptoms will not do. We need to transcend this approach and address the basic issues. We are now facing an age when every citizen of every country needs to think about changing the concepts being advocated by their national governments, changing what is accepted as common knowledge, and changing their value systems.

In this context, as Dr. Fukui has said that we need to slough off the ideas we have held up until now about the greatest and most important theme for the whole of mankind in the 21st century - the issue of the environment. We need to change our concepts, change our value systems, and attend to this issue.

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Corporate Leadership in Assistance Programs Needed to Encourage More ODA Outlay

I think you might know what the Cosmo Oil Company logo looks like - a square enclosing four concentric rings of color. We can take the outer ring of green to mean the earth, and the next of sky blue to mean the universe. The next ring of red we can take to indicate energy, and the core circle of pure white indicates our company. I think this logo matches very well with the concept of environment. In viewing our video just now, I think you may have felt that "The government should be doing this kind of thing, shouldn't it?" However, the government has a lot of problems with it systems, with promises it has made, and so on. When we in the corporate sector do what we can in this field, this helps put government assistance systems and assistance policies into motion. As the circle widens, more effort is put into the programs, and I think that is very meaningful.

Two of the people involved in our assistance project, Hiroshi Kiriyama and Satoshi Kawada, happen to be here with me today - I think you saw them in the video. Mr. Kawada graduated from Waseda University 13 years ago, before coming to work with us. I think everyone here knows about Japan's system of assistance to underdeveloped countries, that is, ODA (Official Development Assistance). Within that system there are grants programs and grant-type assistance, as well as technical assistance and loan programs. Unlike banks that offer loans at high rates of interest for short periods of time, this system offers deferred repayment regimes that stretch over as long a time period as possible, with easy terms. One part of the ODA system's technical assistance is the Japan Overseas Cooperation Volunteers (JOCV), which sends young volunteers abroad. One day Mr. Kawada came to say, "I want to join JOCA, so I would like to quit my job." Unfortunately, at that time our company did not have any policies to deal with this kind of situation. So, a system was put together at my discretion, and he joined JOCA on a leave of absence from the company. This did not mean a loss to the company. If we had lost him completely, that would have been a loss, and meanwhile the government contributed to his salary during his leave, from its ODA budget. He spent one year in the Solomon Islands, as you have seen in the video, where, although he came down with malaria, he had the wonderful experience of being able to contribute to building a village there.

So, the starting point was the Solomon Islands, and another relevant factor is that I have been interested in environmental issues for quite a long time, and in the midst of this, the issue of global warming came to the fore. Particularly at risk are low-lying countries like the Netherlands, as well as island nations in the South Pacific, such as Republic of Kiribati, the Republic of Nauru and Tuvalu, located to the northeast of the Solomon Islands. These islands are extremely small, and the sea level is rising apace with the progress of global warming, threatening to erase these countries from the map. It has been proposed that their people emigrate to Australia or New Zealand, but no decisions have been made, so they are facing a difficult situation. This is the kind of thing Mr. Kawada saw first hand. And, as you saw in the video, I also happened to be acquainted with the head of the South Pacific regional department of the Ministry of Foreign Affairs, and had several opportunities to speak with him. So, at just about the time when we were considering whether there wasn't something we could do in a steady way, within the limits of our resources, in view of the extreme importance of issues relating to both tropical rainforests and global warming, we decided to focus on these small islands of the South Pacific, which are suffering terrible damage. Thus, one of the activities Cosmo Oil is engaged in as a way of making a contribution to environmental protection is a tropical forest conservation project in Papua New Guinea and the Solomon Islands. We feel we can make a significant contribution to protecting the planet by addressing these issues.

The video we saw a while ago spoke of time and labor expended, but this does not refer to the kind of high-priced labor we have here in Japan. The on-site labor was rendered as service, and the time was counted as a sum total of agreed time spent on the site, and though it appears that we are doing something showy, constructing the rice polishing shed shown in the video cost only 5 million yen (USD 42,372 @ USD = ¥118), meaning that we are starting off with just a very small amount of assistance. Corporations never put resources to use in a showy way or ignore the dictates of company profits. Rather, the important thing is to encourage the government to supply more assistance by carrying out this kind of small-scale, detailed project.

Japan is presently implementing about 1.2 trillion yen (about USD 10 billion) worth of Official Development Assistance (ODA). Japan itself was formerly a backward, under-developed country. After World War II, the United States granted assistance amounting to approximately 2 percent of the US economy to Germany and the rest of Europe under what was called the Marshall Plan. With respect to Japan, it adopted the Government Appropriations for Relief in the Occupied Area Fund (GARIOA) and the Economic Rehabilitation in Occupied Area Fund (EROA). Although these funds were mainly for military appropriations, they formed the cornerstone of Japan's present prosperity. In this context, the amount of 1.2 trillion yen of ODA comes out to 0.2 percent of Japan's private sector economy, that is, a percentage not even one tenth of what the United States provided to Europe in the past under the Marshall Plan.

Just to briefly touch on ODA, Japan is number-one in the world, providing more assistance than the United States does. However, with respect to outright grants, Japan falls behind France and other northern European countries. If we look at why the figure for Japan's ODA is so large, this is because Japan is making a lot of interest-bearing loans to China and other countries. These loans have long deferment periods, low interest rates, and exceedingly long repayment schedules. These factors comprise what is called a "Grant Element (GE)." (Editor's note: This term is used to express the leniency of the terms of assistance. Loans made on a commercial basis are said to have a GE of zero percent, and the GE ratio rises as the terms of the loan become more lenient.) Loans made by ordinary banks may have a GE ratio of 25 percent, and as various factors are calculated in, if the GE ratio exceeds 60%, this is regarded as an ODA outlay. Inclusion of these kinds of loans into the calculations yields the high figures for Japanese ODA. As China grows into an economic powerhouse, I am led to wonder why we have to lend them money, but that's the way things are, and this has only so much bearing on our activities. Through our small assistance program, we can cause ODA money to be forthcoming, so in a sense we are borrowing help from the government. I feel that this kind of thing is very important.

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Reducing Carbon Dioxide Emissions Through Individual Awareness

Turning to the issue of global warming, I think everyone here is familiar at least with the title of the Kyoto Protocol. The whole world (that is, signatory nations), including Japan, plan to reduce carbon dioxide emissions to a level that is 5.2 percent less than the level of emissions in 1990. This was, in any event, promised. Japan will make a reduction of 6 percent, the US 7 percent, Europe 8 percent. Russia will break even, Australia will be allowed an 8 percent increase, and Canada will make a 5 percent reduction. In the case of Europe, the calculation is not by country, but collectively as the European Union. If, as in the case of Portugal, an increase of 27 percent is allowed, then countries with a lot of self-confidence, such as Germany, which says they can achieve a 21.5 percent reduction, or England, which is confident that it will be able to do away with a lot of coal and achieve a 12.5 percent reduction, then you can come up with a figure of an 8 percent reduction for Europe as a whole.

However, the trouble with choosing 1990 as the base year is that, by that time, Japan had already achieved considerable reductions in energy use, while Europe started a crash program of energy saving after that. Thus, in the process of establishing comparable figures for the developed countries, there was a problem in that Europe had an advantage. However, as I mentioned earlier, because the whole European area had in the past suffered from the effects of acid rain, awareness of environmental issues throughout the region was raised, so the Europeans could achieve a strong sense of unity with respect to this issue. In Japan, a Cabinet decision was reached to take measures for at least a 6 percent reduction.

How is Japan going to make this 6 percent? Let's say that the carbon dioxide issues of the mainstream industrial sector finally reach plus/minus zero compared to 1990 levels. And, a 3.7 percent decrease can be worked out through afforestation, etc. And, through developed countries lending a helping hand to underdeveloped countries using emission credits and the Clean Development Mechanism (CDM), the suppression of carbon dioxide emissions in underdeveloped countries can be credited back to the regulation account of developed countries. Through this CDM issue, or by the purchase of emission credits from those with large capacities by those who lack capacity, further percentages can be provided through a kind of market-style dealing in emission credits. We also have to think about the non-mainstream sector in Japan - at present Japan is emitting nearly 3 hundred million tons of carbon dioxide, and half of this is from the industrial sector. The other half comes from households, transportation, building management and so on, and unfortunately emissions from these sectors have increased by 10 percent compared to 1990 levels. Overall, the increase has been over 6 percent. So, in order to achieve a 6 percent decrease, Japan must achieve a decrease of 12 percent in order to keep the promise they made under this international treaty. That is a tall order. If it came to something like, "Everyone must decrease the distance they travel by car, and only one car per family," or other restrictions on people's everyday lives, this would cause big problems. However, I think that just raising each citizen's awareness can to a certain extent contribute to Japan being able to achieve its quotas relative to environmental issues.

It will be difficult if not impossible to regulate global warming. However, as each of us is part of a large population, the carbon dioxide emissions coming from our daily life activities do cause global warming. At the same time, global warming is also causing changes in the climate, changes in the rainy season. And this is further resulting in changes in the habitats and habits of wildlife, as well as rising sea levels. The damage on a planetary scale being caused by these problems is more menacing than had been predicted, and I think that we need to accept the cold facts about this issue. That is why Japan must keep the one promise it has made, but also, with respect to underdeveloped nations, it must consider how it can truly lend a helping hand and not just work with them to balance its figures. On this account, how can we encourage the national government to use Japan's resources to back up our efforts abroad through ODA? I think that an important issue for us to address in future is how to use that power to develop a bigger movement.

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Japan Dependent on the Mid-East for Petroleum - Lifeblood of the Economy

Now, at the beginning of my talk I mentioned that I am an oilman. In this connection, I'd like you to take a look at this. These are rock strata. I expect that the image most of you have about petroleum is that it exists in the form something like water or seawater in a rock stratum underground, but this is not at all the case. In actuality, petroleum is found in this kind of rock formation. In the Jurassic Era, and in the Cretaceous Era about 50 to 100 million years ago, the remains of plants and animals washed down the rivers and accumulated in estuaries, inlets, along shorelines, in marshes, etc. And through a variety of processes involving the earth's heat and pressure, bacteria, and so on, it became hydrocarbons, eventually turning into petroleum.

Petroleum that formed in estuaries and so on quite naturally did not remain there, but because it is fluid, it continued to move around, propelled by the forces of the earth's heat and pressure, and it eventually settled into spaces from which it was impossible for it to move further. These spaces are what we now call petroleum reservoirs. Looking at the planet as a whole, we can say that the largest series of petroleum reservoirs exists in a line extending from the Caucasus through the Caspian Sea to the Mid-East, and on through India and Indonesia to Australia. The second greatest line of reservoirs extends laterally through Alaska and North America and then on down through Mexico and Venezuela to Argentina and other parts of South America. In addition, there are reservoirs extending from the Ukraine into Siberia. These three are known as the three major series of reservoirs, and because it is difficult to find petroleum reservoirs anywhere but along these lines, most of them have already been secured by the major oil companies, or in the case of the oilfields of the Mid-East, by the countries of that region.

For every 100 meters you dig down into the earth, the temperature rises by 4 degrees Centigrade. Petroleum is found at temperatures ranging from 60 to 120 degrees Centigrade, and if you divide that by 4, you can see that petroleum lies hidden at depths or 1,500 to 3,000 meters, or even deeper, at 3,500 - 4,000 meters below the surface. Finding these hidden reservoirs of petroleum or determining the geological structures at this depth involves less risk at present than it used to, due to advances in mining technology, but we can never really be sure that the oil is there unless we dig down and find out. Once we find a likely petroleum reservoir or geological structure, we can determine what state the oil is in and how it can be recovered only by drilling down to it. That is the way it goes, so there are still problems of time, money and risk involved in the development of oil fields.

At present, we in Japan depend on the Mid-East for 99 percent of our petroleum. In ancient Japanese records, the word "moyuru-mizu," or "burning water," can be found, and in the Edo Era, because of its smell, petroleum was called "nyoi haeru mizu," or "smell-emitting water," and the word "kuso-zu," or "shit-water," was also in use, but later on the word "sekyu," "petroleum" (literally "rock oil") came to be current. This shows that petroleum was known in ancient Japan, though only in small amounts. However, most of the petroleum that eventually became the staff of our daily lives and the lifeblood of our economy comes from the Middle East.

Up until the present time, about 2 trillion barrels of petroleum have been discovered, and humans have already used up about 1 trillion barrels. About 1 trillion barrels are said to remain. Petroleum reservoirs will naturally spew out only about 10 to 15 percent of their oil. The rate of recovery rises when water or gas is pumped in to force the oil out. Even so, only about 30 to 40 percent can be recovered. With present advances in technology, and depending on circumstances, in some cases nearly 50 percent can be recovered. In any event, about half remains sleeping in the earth, and I think there must be a room for improvement in terms of more effective use of resources.

At the present time, it is said that petroleum reserves will last for about 40 years, natural gas for about 60 years, coal for over 200 years, and uranium for over 70 years. As for petroleum, if there are increases in the rate of recovery, or as a result of changes in consumption, for example if the amount of gasoline consumed is cut in half by doubling the efficiency of automobile engines, the lifetime of petroleum reserves may not necessarily match present estimates. However, I do think that we need to be fundamentally aware that petroleum reserves are limited.

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From an Industry Fated to be Negative to an Environmentally Advanced One

When fossil fuels are used, carbon dioxide is inevitably emitted. Our company is making its utmost efforts to provide consumers with petroleum products that are highly convenient and at the same time as benign as possible to the natural environment. However, the petroleum industry is without a doubt fated to emit carbon dioxide, and in view of global warming - the most important issue for the planet - unfortunately it must be a negative industry. This is why we believe that we should try to ameliorate the negative parts of the industry, even by a little bit. The number of green consumers are increasing, and so the industry demands green management. Whether a company is enthusiastically taking on environmental issues or not is starting to become an important criterion for consumers when they purchase goods or services. I have no doubt that this will become increasingly true. That is why we have decided to consider the factor of environment in all our company's activities - management, advertising, technology development and social contributions.

Our company has developed a credit card that we call the "Cosmo the Card Eco". In order to create a fund for supporting a variety of activities that contribute to environmental protection, members of this program make a contribution, and the company also makes a contribution based on the amount of the member's purchases. The fund supports various kinds of environmental activities, with the purpose of involving the company together with the customers in efforts to deal with environmental issues.

Also, when petroleum is extracted from oil fields, a large amount of the gas found together with the oil is also emitted, and up until now this gas has normally been disposed of by burning it off. From last year [2000], we have stopped burning off this gas, and are instead pumping it back into the petroleum reservoir. This results in a higher percentage of recovery of the petroleum, thus killing two birds with one stone, but an extremely large capital investment is required, and the technology is far from simple, so this process is not being carried out at most oil fields in the world. Our project is one of the pioneer projects in the world, and is rated highly by many, including the government of the United Arab Emirates, where it is located.

We would like to control to the utmost limits possible the negative aspect of carbon dioxide emissions from fossil fuel consumption. Let us re-examine everything that goes on in the industry, and take measures in consideration of environmental impacts. For example, couldn't we include presentations of environmental problems in our advertising, or sponsor concerts and outdoor activities for children that take environmental issues as their themes? Even if the methods are not new, if we can constantly, steadily and surely include an awareness and understanding of the environment in all our ongoing activities and re-examine our whole business, I think that we can carry out environmental activities that come naturally and do not waste resources.

Inside the company, I am saying that we should aim to become a company that puts environment first. But, if we want to use the analogy of a marathon race, we are just making our first moves off the starting line, and are running not even at the front, but in the middle of the pack. However, towards the end of the race, I hope we can pull away from the pack and run out front. Because we are aiming to be an environment-first company, we have thrown the environmental ball, and the concepts of imagination, change, and a novel way of thinking not hung up on the past, that is, the ball of environment and innovation, to the people working in our company, and those who cannot catch it and play with it are being warned that they will no longer be welcome to work there.

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