ASEAN-India-Australia: Towards Closer Engagement in a New Asia

6. Energy Security: An ASEAN Perspective

6 EnErgy SEcurity An ASEAn Perspective Elspeth Thomson The projected demand for energy in ASEAN over the next two decades is expected to be among the highest in the world. Many of the ten member nations are just beginning their economic take-offs after decades of strife. Essential for sustained development to occur, of course, are adequate and reliable energy supplies. The region is not without energy resources. However, it is facing two major energy security worries: inadequate oil for transport fuels and inadequate electric power. The local oil resources needed to fuel the transport sector are far from sufficient. Not only must the region steadily increase its imports of oil, but it must do so against the background of rapidly changing oil prices. At the time of writing, high oil prices were threatening the survival of the region’s poorest through increased food, power, and transport costs. Governments were scrambling to attempt to eliminate oil subsidies on the one hand, and provide monetary assistance in other ways to cushion the effects of high oil prices, on the other. Most analysts predict that oil prices will rise much higher yet before feasible alternatives appear, be they biofuels, electric vehicles, etc. If this is the case, there will surely be heightened domestic insecurity within ASEAN. Public demonstrations could easily swell into efforts to overthrow governments. As for electric power, there are large numbers of people in ASEAN who have none at all, or only minimal and unreliable supplies. The governments 95 96 Elspeth Thomson seem faced with the impossible dilemma of either building more fossil-fuelled plants that contribute to global warming, or building nuclear plants with their attendant relatively high costs, long lead times, and lack of expertise for building and operating, as well as the worries over disposal of wastes, building on land prone to natural disasters, and potential diversion to military or illicit uses. ASEAN’s two energy worries have implications for India and Australia. India shares the same worries as ASEAN. Their rates of modernization, and concomitantly, demand for and ways in which energy is consumed, will likely share some similarities over the coming years. Fortunately, India and ASEAN are beginning to cooperate instead of compete in the area of energy. Australia stands to gain from ASEAN’s need to build more power plants of whatever type. Indonesia, Vietnam, Thailand, and Malaysia have all announced plans to build nuclear power plants and other countries in the region may soon follow suit and need to import uranium from Australia. At the same time, other parts of the region may opt to build more thermal plants and need Australian coal. As Australia has plenty of both resources, there will be no competition between ASEAN and India for coal or uranium, at least in the near future. OvErviEw Of ASEAn’S EnErgy rESOurcES And EcOnOmic StructurES The ASEAN ten vary greatly in terms of land size and resource endowment, as well as economic development. They also differ in terms of their population size, economic structure, and concomitantly, their energy consumption. Table 6.1 gives an overview of their economic structures and total energy consumption.1 All of these economies are still very much evolving. Their current structures are the result of their geography, history, political and legal systems, cultures, etc. Total energy consumption is a function of a host of factors. Among these, the rate of economic and population growth are key, as is the structure of the economy. Industry generally consumes more than services, and within industry, heavy industry consumes far more than light industry. In developing economies, the agricultural sector usually consumes the least amount of energy. Of the ten ASEAN countries, industry accounts for at least one-third of total value added in all but four: Cambodia, Laos, Myanmar, and the Philippines. Agriculture still accounts for about half of total value added in Laos and Myanmar. The service sector is smallest, at about 26 per cent of total value added in Laos. Over the coming decades, it is expected that the Table 6.1 ASEAN Energy and Economic Structure Overview Total Primary Energy Consumption 2006 (quadrillion BTU) Population 2007 estimates (million) Population Growth 1997–2007 (%) Per Capita Energy Consumption 2006 (million BTU) Per Capita Energy Consumption Growth 1997–2006 (%) Agricultural Sector, % Total Value Added 2006 Industrial Sector, % Total Value Added 2006 Service Sector, % Total Value Added 2006 Per Capita GDP, Purchasing Power Parity (USD) 2007...