This article explores the relationship between diversification and energy security risks. It uses portfolio theory to conceptualise energy security as an insurance mechanism against disruptions to energy import markets. It provides quantitative measures of systematic and specific risks associated with Japanese energy imports during the period 1970—99. It suggests that Japan's policy of diversification of energy import sources has reduced specific risks, although fundamental changes in the political and economic structure of international energy and, in particular, oil markets have also significantly reduced systematic risks. The article concludes that, despite their limitations, portfolio measures provide a much more theoretically and methodologically robust indicator of energy import security than traditional measures of dependence.

The siting of unwanted projects always involves conflict between developers and community interests. Yet the notion of community has been undertheorised in the siting literature. The concept of community is explored and related to the siting of risky projects. An analysis of seven siting cases from around the world suggests that the environmental spillover effects from projects often transcend local administrative boundaries and that the relevant unit of analysis will often be much broader than a local community defined administratively. Understanding the origins and management of siting conflicts requires a broader definition of community, one that incorporates not only administrative communities at different levels of government, but also one that encapsulates different social, environmental and even virtual communities. Politics will determine which community boundaries matter in any given siting dispute. IntroductionControversy over the placement of unwanted projects has become a feature of all nations. It is not difficult to find cases of siting disputes in democratic polities, but such conflicts are also increasingly observed in non-democratic states. Such conflicts are not only over the location of projects often regarded as highly risky, such as nuclear-related and toxic waste facilities, but are also over a range of other projects generally regarded as less risky including prisons, airports, medical facilities, industrial facilities and even renewable energy projects which are encouraged to facilitate the reduction of greenhouse gas emissions. It is hardly surprising that private and public developers are confronted with serious challenges in developing a variety of projects even though they may generate significant net benefits to society and may be in the national interest.

This article investigates Japanese approaches to managing oil import security in the period 1970Á2005 by developing a framework that integrates portfolio and inducement approaches to managing import security. It argues that Japan is an insuring state and, in the context of continuing asymmetric dependence, seeks to ensure its security not only through portfolio strategies that aim to reduce systemic and specific risks, but also through political and economic inducements that reinforce those portfolio strategies. Empirical evidence suggests that these strategies have enhanced Japan's insurance cover against oil unanticipated supply disruptions and has enhanced its relative security over the period. The Japanese case suggests the importance of exploring portfolio strategies and structures as power in addition to other forms of non-military power, such as economic aid and diplomacy, in understanding international economic security.

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