I think I might actually be able to answer your question here.
Gasoline in Japan costs ~$7 a gallon. They have to buy it from the same
places we do, and since they are an 'ally' they get schtupped about the same
as we do.
I guess they are more adventurous, and would rather have their fuel dollars
going to an ally than a pootential enemy (that is just my guess).
Plus, I would imagine they are trying to reduce their dependance on
unrenewable fuel and run more and more things on something that will be
around a long, long time after the rotted dinosaurs have been burnt up and
are encircling the Earth in the Ozone Layer.

In other words; they're smarter than we are. They are DOING something about
the dependance on Foreign Oil rather than crying about it.

I am willing to bet the switch to Ethanol will be painful at first, but as
people (here) learn that there is money to be made from making Everclear
that more and more places will be learning to make Corn Squeezin's, and
eventually the price will be less than Fossil Fuels, as the supplies of one
increases and the supply of the other decreases.

This could have a 'rubber band' effect, though. The Japanese are pretty big
consumers of Oil. If they switch most of that demand to Ethanol, then there
will be a glut of Oil on the market. If the Chinese (currently the number
one *BUYER* of crude oil) follows suit, there will be a MAJOR glut of oil on
the market! That means, gasoline will become cheaper and cheaper, so that we
here in the US of A will continue to burn it, rather than seeing what's
happening as a Wake Up Call and following the lead of the Japanese.
By the time Oil prices rise agan, Japan will be getting most of the output
of Ethanol, and we'll be Up The Creek energy wise, scrambling to make up
lost time; in the long run, it will cost us MORE doing it LATER then it will
the Japanese doing it NOW.

Very interesting question you asked! I'm glad I read it. Otherwise I might
not have known about 60% of the plant's output going to Japan until much
later.

Now, if only I could do something with this knowledge that would benefit us
here...    :)

 OK, start over:  Why would Japan be buying ethanol to be transported
from the Midwest U.S. instead of just buying oil / gasoline / fuel from
somewhere closer?"

they dont have enough room on that island to grow their own corn.  same
reason my cousin drives a truck load of hay out to long beach harbor on his
kenworth every couple weeks.

 Near the midwest town where I live they are opening a new ethanol
plant (produced from corn).
 It said in the article that 60% of the ethanol produced will be
shipped to Japan and other foreign countries.
 What is the likely reason for that?