Post on 17-Jan-2016
NS4054“Japan, Southeast Asia, and
Australia”Mikkal E. Herberg
Author
• Mikkal E. Herberg
• Research Director of NBR’s Energy Security Program, University of California
• Senior lecturer on international and Asian energy, UCSD
• Specialist on energy geopolitics and economics with a special focus on Asia
• 1981-2000 Strategic planning roles for ARCO
• Publications• China’s Search for Energy Security: Implications
for US Policy• Energy Security in the Asia-Pacific Region
and Policy of the New U.S. Administration
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Overview
• Key arguments
• Energy insecurity challenge for Japan, Southeast Asia, Australia
• Japan: a result of the Fukushima earthquake• Southeast Asia: disputes with China over conflicting maritime
territorial claims• Australia: become the world’s largest LNG exporter
• U.S. Implications
• Strengthen Asia’s energy security and cooperation
• A opportunity for a stronger and constructive US role in Asia
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Japan (1/8)
• Poor resource, high demand
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Japan (2/8)
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• Efforts
• Diversification of energy sources• Cause: the two 1970s oil shocks• Contents: Oil → natural gas, coal, and nuclear power• Results: energy security, economic efficiency, environmental
protection
0il75%
Coal17%
LNG4%
Others4%
0il Coal LNG Nuclear Others
Oil42%
Coal22%
LNG19%
Nuclear13%
Others4%
Oil Coal LNGNuclear Others
1973 2010
Japan (3/8)
• Radical Improvements in Energy Efficiency
• Strengthen its domestic energy foundation• Japan has reached the highest level in the world• Industrial energy efficiency: fuel-efficient vehicles, hybrid-vehicles
• Multilateral efforts to strengthen its energy security• A founding member of the International Energy Agency• Promote regional energy cooperation in Asia
• ASEAN
• The East Asia Summit
• The ASEAN+3
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Japan (4/8)
• Japan Energy Inc.
• The development of the Japan National Oil Company(JNOC) • The Ministry of Economy, Trade, and Industry subsidized the
company, the guidance of the government
• Despite huge subsidies and investments, the effect is low
• Koizumi dissolved the JNOC and created the Japan Oil, Gas, and Metals National Corporation (JOGMEC) in 2006
• But, rising oil and LNG prices, Beijing’s emergence in energy market• Tokyo returned to its emphasis on nationally controlled oil supplies• Target for oil imports by Japanese companies: 15% → 40% by 2030• Goal of raising overall self-sufficiency: 18% → 36% by 2030• Expand its financial support for Japanese companies
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Japan (5/8)
• Results
• Azadegan oil field
: abandonment
• Far East oil and gas
: dissatisfaction
• Diversification in LNG
: successful, but
Indonesia has diverted
the gas to domestic
use (50%↓)
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Japan (6/8)
• Fukushima and Its Fallout
• Results: shutdown of entire 54 nuclear power generation, the loss of 30% of normal electricity supplies, the decrease of 5% of electricity production in 2011
• Short-term Solutions: much higher imports of LNG• LNG imports: 79mmt(‘11) → 88mmt(‘12)
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Japan (7/8)
• Tokyo’s anxieties
• Rising LNG prices
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11
Japan (8/8)
• Tokyo anxieties
• Future nuclear power• Public: opposition to restore nuclear power• Government: energy costs without nuclear are too high
• In 2012, DPJ announced a plan that would phase out it by 2040
• But Abe announced plans to restart it gradually under new, tougher safety standards.
• Aug 11, 2015: Japan restarted first nuclear reactor• Long-term Solutions
• Expand its energy diplomacy and seek stronger access to LNG• US shale gas, participation in many LNG projects around Asia and U.S.
Southeast Asia (1/3)
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• Changing Energy Export Roles (Oil)»
• Until the 1990s, Oil supplier to Northeast Asia
• Since the 1990s, Southeast Asian domestic oil demand has increased
→ Oil importer emergence
• 75% of oil imports come from the Middle East
• Myanmar’s rising gas and oil production
Southeast Asia (2/3)
• Changing Energy Export Roles (LNG)
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• LNG supplier to Northeast Asia
• Increasing domestic demand
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Southeast Asia (3/3)
• South China Sea Challenges
• 2/3 of Asia’s oil supplies transit the critical sea-lanes of the South China Sea and the Strait of Malacca: Key energy sea-lanes
• In 2002, U.S. proposed a new Regional Maritime Security Initiative, but it was rejected
• Control of the energy sea-lanes is a key aspect of today’s conflict between U.S. and China in South China Sea
• Increasing conflict between China and neighboring states
• Oil and gas exploration in the South China Sea will be delayed
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Australia (1/2)
• The Opportunities and Challenges of Energy Plenty
• 2nd largest coal exporter, 5th largest LNG exporter, uranium
• Australia takes advantage of Asia’s booming energy demand
• Challenges: Indonesia’s rising coal exports, China’s low growth, declining refining capacity
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Australia (2/2)
• Australia LNG• LNG Boom
• Risks: increasing costs of engineering, labor, equipment
strong competition for Asian market(shale, Qatar, Russia, Africa)
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Conclusion
• Asia’s Energy Angst
• Energy becoming key factor in Asia’s geopolitical architecture
• Energy nationalism rising with prices, the difficulty of cooperation
• Zero-sum competition for control of supplies and transport routes
• Intensifying focus on transit security, control
• U.S. Implication
• Strengthen Asia’s energy security and cooperation• Strong US-Australian strategic and economic partnership• US engagement with Southeast Asia through ASEAN, East Asian Summit• Strengthen energy security cooperation in the Pacific islands
• A opportunity for a stronger and constructive US role in Asia