Thursday, June 10, 2004

Energy = ASEAN + China + Japan + Korea

The imported-energy-dependent Asian countries are the major sufferers of the growing oil prices in the international market. Already the Asian countries are paying an energy-premium price for their imported energy. The soaring economic growth or the growing imported energy dependence cannot be blamed for this extra amount. And it is very evident that any hike in the energy price will be a setback to the developing Asian economy.

The 22nd AMEM+3 (ASEAN Ministers on Energy Meeting + China, Japan and Republic of Korea), which was held in Manila on June 9, has discussed these core issues and reached an understanding to work toward an effective solution for the energy security issues in the future. Energy has become the most valuable commodity in the international arena and it is high time that Asian countries work together toward attaining the energy security of the region. ASEAN (Association of Southeast Asian Nations) is a net importer of oil and 60% of its primary energy consumption is based on imports. The case is same with the People's Republic of China, Japan, the Republic of Korea and even India; only the percentage of dependency differs. Most important, the Asian countries must strengthen their relationship with the Persian Gulf countries and adopt a proactive energy policy by diversifying their energy resources.

The 22nd meeting of AMEM has proposed to concentrate on cooperation in energy security, natural-gas development, oil-market studies, oil stockpiling and renewable energy. According to SOME (Senior Officials' Meeting on Energy), "The AMEM+3 can work together for stable and secure energy markets in ASEAN+3 region and can develop the energy security communication system to enhance the regional capacity for timely emergency response by sharing information including oil data under the Joint Oil Data Initiative (JODI) for interested countries."

Other than the common energy goals, the 22nd AMEM+3 has notable relevance in bringing these countries together to solve the long-standing issues pertaining to the energy security of the region. The South China Sea is rich in oil and gas deposits and thus the ownership of the island chains in the region has been disputed by the countries nearby. Moreover this region is strategically important, as it is one of the busiest sea lanes of transport, transit and communication.

The 22nd AMEM+3 would be able to look at this issue and could bring an amicable solution for the long-pending issue of ownership. It would help to formulate a joint energy-exploitation plan in the South China Sea and would be a dependable energy source for the concerned countries. Simultaneously AMEM+3 would help to have greater cooperation among the partner countries.

The Russian energy pipeline that has been proposed to be constructed to the port of Nakhodka could possibly satisfy the energy appetite of the neighboring countries. Greater cooperation among China, Japan and the Koreas would help to build an energy network within Northeast Asia and this would provide a dependable consumer circle for Russia. The plan to bring in the Central Asian energy resources across China to the Asian market seems to be more practical at this stage. The investment for the pipeline construction can come from a joint front of ASEAN and the other Northeast Asian countries. The swift realization of the pipeline would be a great relief for the energy security of the region.

The larger the group, the stronger the bargaining leverage. India, being an inevitable partner for Asia's energy quest, must join hands with the AMEM+3 in the realization of energy security of the region. India currently ranks sixth in world energy demand and the dependence on imported energy has been growing. According to the Energy Information Administration, oil consumption in India is expected to grow rapidly, to 3.2 million barrels a day by 2010, from 2.0 million in 2002.

Though there are attempts to reduce India's dependence on Persian Gulf oil considerably, it (the Persian Gulf) will remain the major source of energy import for the foreseeable future. Most important, India's energy policy should include an approach of collective bargaining toward securing its energy supply from the Middle East and in its energy exploitation plans in non-Middle East energy reserves. In the Indian president's address on June 7 to the joint session of parliament, APJ Abdul Kalam stressed, "The government will put in place policies to enhance the country's energy security with special emphasis on petroleum and natural gas." This would bring forth a comprehensive national energy security that would mainly include developing domestic as well as overseas energy resources. Closer participation from India with its other Asian counterparts would help ensure energy security, and allow access to an adequate and affordable energy supply for economic development.


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