Energy Security: Will It Drive or Divide Asian Integration?

Despite abundant natural resources, Asia remains a net energy importer. With the price of oil rising amid increasing scarcity and concerns mounting about carbon emissions and global warming, it is clear that nations in the region must adopt measures to achieve greater energy security. Questions over how to secure new sources, build strategic reserves and develop alternative sources such as nuclear power, however, ensure that no nation can consider energy security without doing so in concert with its neighbours.

The issues surrounding energy security pit Asian nations against each other, said Rajat M. Nag, Managing Director-General, Asian Development Bank, Manila. But ultimately, Asian nations will realize that they stand to benefit more from cooperation than from competition, he said. "Therefore I think energy security in the long run will actually deepen and hasten Asian integration," he said. Already, China and India have signed agreements to cooperate in their search for new energy sources.

That said, there is growing evidence of resource nationalism among energy producing nations, noted Hilmi Panigoro, Chief Executive Officer, Medco Energi Internasional Tbk, Indonesia. Venezuela and Bolivia are two recent examples. Russia offers another. But, even in Indonesia, some politicians are arguing that the country should stop exporting its natural gas when there is a shortage of gas at home. Globally, more and more oil and gas reserves are falling under the control of national oil companies.

Asian nations need to work to reduce their dependence on fossil fuels by promoting renewable energy, said Idris Jusoh, Chief Minister of Terengganu, Malaysia. Malaysian palm oil is one alternative, he said, and solar power is a "gift from God." Nag seconded Jusoh’s sentiments, but cautioned that renewable energies cannot yet offer a significant alternative to fossil fuels. "Yes, we should work on R&D on renewables but energy security, as we’re talking about now, we have to focus on the difficult issue of fossil fuels."

Tokio Kanoh, Chief Director, Committee on Economy and Industry, House of Councillors, Japan, stressed the need to use technology to make existing industry cleaner and reduce carbon emissions. For the sake of both energy security and the environment, Asia must develop more energy conservation technologies, he said. A participant noted that boosting energy efficiency and conservation was a much faster way of increasing energy security than finding new energy sources and could help offset the risk of a supply shock.

Boosting energy efficiency requires changes all the way down the power consumption chain, from the way utilities burn coal to the light bulbs consumers use to light their homes. Carbon trading provides a means to finance these changes in developing Asia, said Nic Frances, Chairman and Chief Executive Officer, Coolnrg International, Australia, and to pay for innovative projects to improve living standards and lower the cost of power to the poor.

Ultimately, though, Asia’s energy security may depend on its willingness to develop nuclear power as an alternative source, said Kanoh. Though it remains controversial, many communities have embraced nuclear power and even nuclear waste as a necessary alternative, he said. And breeder reactors that produce more fuel as they consume it offer the ultimate renewable. But other panellists said nuclear was far too controversial outside of Japan to gain popular support. Indonesia, for example, is considering nuclear power, said Panigoro, but faces widespread opposition. Indonesians are not the only Asians wary about nuclear. "There is so little buy-in politically and such strong resistance from civil society," said Nag, "that nuclear power as a means of enhancing security is decades away."

Nuclear power also raises real security concerns, said Ralph A. Cossa, President, Pacific Forum CSIS, USA, particularly about proliferation of nuclear weapons. Along with Indonesia and Vietnam, Myanmar is trying to start a nuclear power programme, he said. And, while all three are bound by an ASEAN agreement for a nuclear-free zone, the agreement has many loopholes, he said. "We could very easily in 5 to 10 years from now be dealing with Myanmar or some other country the way we’re dealing with Iran or North Korea now," said Cossa. "It’s a serious concern."