-
Pipeline Politics in Asia: Energy Nationalism and Energy Markets
- National Bureau of Asian Research
- Chapter
- Additional Information
1 the national bureau of asian research nbr special report #23 | september 2010 Pipeline Politics in Asia: Energy Nationalism and Energy Markets Mikkal E. Herberg mikkal e. herberg is a Senior Lecturer in the Graduate School of International RelationsandPacificStudies at theUniversityofCalifornia–San Diego,andResearch Director on Asian energy security at The National Bureau of Asian Research. He can be reached at . [3.238.79.169] Project MUSE (2024-03-28 13:36 GMT) 3 pipeline politics in asia u herberg A sia has become “ground zero” in global energy markets as demand has accelerated to fuel urbanization and transportation, power, petrochemical, and industrial growth. The shift in the locus of global energy demand from mature industrial countries to developing Asia is transforming the landscape of global energy markets and geopolitics. The trends are stunning. For example, the International Energy Agency (IEA) forecasts that in the two decades leading up to 2030, China and India combined are likely to account for more than 50% of total world energy demand growth, 60% of world oil demand growth, 20% of natural gas demand growth, and 85% of world coal demand growth. Asia’s boom in oil and natural gas demand has increasingly provoked a scramble among regional powers to secure access to and control over future oil and gas supplies, as well as intense competition over control of oil and gas transportation links and transit infrastructure. In concert with their national oil companies (NOC), national gas companies, the NOCs of key producer countries, and their state financial institutions, China, Japan, South Korea, and India are scouring the globe to gain control over new supplies and to forge new transit routes. At the same time, the United States has become deeply engaged in promoting or discouraging new oil and gas pipelines around the Eurasian region, in some cases seeking to isolate pariah states such as Iran and Myanmar while promoting new supplies from friendlier states. The scramble for resources and transport has had uniquely important implications across East Asia and Eurasia while powerfully influencing regional energy market dynamics and geopolitical relationships. At the nexus of these dynamics is a growing competition to develop a number of major Asian and Eurasian oil and gas pipelines to move oil and gas across the region. Three factors drive this trend. First, an increasing share of Asia’s oil and liquefied natural gas (LNG) supplies will have to transit the Indian Ocean, Malacca Strait, and the South China Sea to bring petroleum from the Middle East and Africa. The IEA forecasts that Asia’s oil imports passing through the Malacca Strait could double over the next two decades from today’s 11 million barrels per day (mmbd) to 22 mmbd. This has raised new concerns, particularly for China, over the growing risk of major maritime supply disruptions, as well as over U.S. control of these vital sea lanes. This is driving China’s efforts to diversify supply lines with new overland pipeline routes less vulnerable to disruption. Second, the breakup of the former Soviet Union in the early 1990s freed up enormous new potential reserves of oil and gas in Central Asia, most importantly in Kazakhstan, Turkmenistan, and Azerbaijan. It also opened the potential for scaled up Russian oil and gas production and exports from Eastern Siberia. Third, the rise of China and the country’s booming oil and gas needs, combined with its growing projection of economic and diplomatic power regionally and globally, have touched off an increasingly competitive political atmosphere in East Asia in which a zero-sum competition over energy supplies and transit has become a key element in regional rivalries and strategic competition. All these factors have converged to produce a highly competitive backdrop for regional pipeline development and control. In an effort to explore the geopolitical and energy market implications of these developments, The National Bureau of Asian Research (NBR), in cooperation with the Asia Program of the Woodrow Wilson Center for International Scholars, organized a major conference on May 4, 2010, in Washington, D.C., that brought together a select group of analysts and policy experts. The conference, entitled “Pipeline Politics in Asia: The Intersection of Demand, Energy Markets, and Supply Routes,” was supported by generous contributions from ExxonMobil, Chevron, ConocoPhillips, and the Japan Oil, Gas and Metals National Corporation. 4 nbr special report u september 2010 Five essays were commissioned for the conference to provide a basis for in-depth analysis and discussions. The essays focused on the broad geopolitics...