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Home Archive December 2011 Issue

December 2011 Issue

From the Editor: Asian Energy Security in Review

By 2030, the Asia Pacific region will account for two-thirds of the world’s energy demand growth.  This issue of the Journal of Energy Security does not examine the limitless factoids bolstering this emerging reality but looks more closely at the security implications of getting energy resources and power to Asian markets.  These issues are examined not only from the perspective of Asia itself as a region, but perhaps most importantly the impact that these developments are already having among and between Asian neighbors and on the maritime thoroughfares that in many cases connect them to one another.  The world is certainly not lacking in complexity; as Asia goes further afield to source the resources it burns at home to power its economies and to provide for its citizens such developments bring uncommon neighbors in touch with one another.  China’s forays into Venezuela and Iran are two cases in point where Chinese interests directly clash with US policy and our own national security interests.   In short, the resource nationalism that drives many of these countries’ policies brings them in closer proximate conflict with one another increases the risk of energy-related instabilities.  How we deal with these resource-driven instabilities and how we prepare to protect and militate against them will come to define our collective world in the decades to come if not sooner.

As the ASEAN Summit which concluded in November demonstrated, resource competition sometimes makes strange bedfellows.  Who would have imagined, nearly forty years after the end of the Vietnam War, that the US and Vietnam, along with Japan and India would be pulling together to offset China’s policies regarding resource extraction in the South China Sea?   Who would have imagined forty years ago that by 2025 India’s population would eclipse that of China’s as mighty Asia surges ahead with economic growth and expansion?  Who would have imagined a Japan, bloodied by its spring earthquake and accompanying tsunami that would be forced to seemingly turn away from nuclear power generation and in doing so make itself less not more energy secure?  This list of seeming improbabilities debunks the adage that the more things change the more they stay the same. 

Asian energy security is not exclusively a China issue but the region’s security is almost always either directly or indirectly impacted by this nation.  China and the Shanghai Cooperation Organization is a clear case in point.  In an effort to thwart growing Islamic radicalism, China is joined in the ranks to counter this collectively perceived threat by other SCO members.  In doing so, it is expanding its energy interests in very real ways across Central Asia while making friends with wary Central Asian states.  And as China expands its own domestic nuclear power industry, Artem V. Goncharuk- our most welcome Russian JES contributor-asks rhetorically whether global nuclear technology providers are not short-selling themselves by creating a new commercial Chinese nuclear rival in the future?

We round out this issue with an examination of Saudi oil policy and are asked to consider whether we are in the midst of a fundamental paradigm shift in the Saudi provision of this most ubiquitous transportation fuel.  Has Saudi Arabia abdicated it position as the world’s biggest oil producer, global oil price-setter, and the world’s most important swing-producer out of a conscious decision to ‘get while the going is good’ where higher oil prices translate into increasing its national revenue stream for a burgeoning population?  Or are global oil markets hitting their heads against a glass ceiling defined by the Saudis’ geologic and technological inability to produce more?  The consequences of this latter development, if true, are chilling for oil dependent US and European economies mired in unemployment and slow-growth scenarios for the foreseeable future.  Can we imagine a world, forty years from now, when China’s Communist Party has been thrown out of office due to an inability to fuel its oil-based transportation infrastructure?  Can we imagine a world, forty years from now, with a fundamentally different Middle East grasping at its last straws of oil?  For much of the world, including Asia, it appears we are being swallowed alive by forces beyond our control.  But the onus of responsibility rests with ourselves as it is our time and our burden to carry: to consider the improbable, to envision the implausible, and to prepare for the unlikely in charting a more secure energy future.  

editor@iags.org

 

The Shanghai Cooperation Organization: Assessing China

China is using its membership in the Shanghai Cooperation Organization (SCO) to advance its energy interests across the whole of Central Asia.  Armed with money, shared borders, and a shared aversion to US influence in the region,  a central part of China's emerging energy strategy is Central Asian capture at least where resources are concerned.  Interestingly, first time JES contributor David Lamoureux writes that through SCO expansion a new Eurasian Energy Community could emerge stretching from the Russian Federation across the Middle East to South Asia.     

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Fueling China's Maritime Modernization: The Need to Guarantee Energy Security

Discussion between US President Obama and China's Premier Wen Jiabao on the final day of the Bali Summit over rising tensions in the South China Sea is only the most recent indication of China's emerging maritime power-posture.  Defined as a 'core interest' by the Chinese not only this sea but the other islands and waterways that characterize the region-and the resources that lie beneath them-is a collective source of irritation between China, the US, and China's neighbors.  Dissecting the drivers behind China's military modernization and what it means to China, its economy and global security is the subject of military analyst Henry Philippen's essay. 

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Chinese Nuclear Expansion: Are We Growing a New Rival?

Artem V. Goncharuk, the first Russian contributor to the JES, takes an objective crack at analyzing the global implications of nuclear technology transfer to the PRC.  In an effort to gain market share in the world’s largest expanding market for nuclear power, Goncharuk asks the question whether global technology providers, through their lenient terms of sale, are not creating a new nuclear rival in China that has no compunction in re-selling these same technologies, with modifications, to the highest bidder. 

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Integrating Energy Concerns into India's National Security Strategy

Integrating Energy Concerns into India's National Security Strategy

As in many countries, India's national energy security policy has not kept pace with its domestic economic growth and rapidly increasing population.  Both of these trends put tremendous pressure on the nation's resources and drive ever increasing imports from abroad.  While the Indian navy voices a strategic policy that links energy and national security,  the armed forces on the whole are reluctant to get involved in a strategic issue outside of their traditional areas of responsibility.  

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Japan’s Energy Security Predicament in the Aftermath of the Fukushima Disaster

Japan’s Energy Security Predicament in the Aftermath of the Fukushima Disaster

The Fukushima disaster is a potential game-changer in how and from what resources Japan will produce energy in the future.  However, based on historic precedent in Japan's power industry this change may be slow in coming.  Institutional barriers, culture, and a close relationship between Japan's regulatory authority and the country's power companies may slow if not prevent the country from transitioning to other fuels over the short term.  In the meantime, the country's bill for imported fuels, oil and LNG, is skyrocketing.  Room for increased energy efficiency is marginal as Japan is the least energy intensive country in the world.  Without nuclear power, the country faces some very difficult decisions in charting its future energy course. 

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North American LNG & Asian Energy Security

North American LNG & Asian Energy Security

With Asia's unremitting demand for energy, particularly natural gas, the region is preparing for a gas future.  LNG import terminals are being developed. Malaysia and Indonesia are the world's second and third largest exporters of this commodity respectively but simply cannot supply all of the region's present and future projected demand.  With the North American gas market already significantly altered with the introduction of shale gas, this is one potential future source of LNG to the Asian market.  It remains unclear however how this relationship will develop if at all.

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Closing the Gap Between Energy and National Security

For many, putting the words ‘military’ and ‘energy’ in the same sentence is an anathema.  Yet the US Department of Defense and its Operational Energy Strategy is charting a course to make the armed forces more effective with ‘more fight with less fuel.’ NATO as an alliance should consider a similar path.  Reducing the Alliance’s fuel vulnerabilities by transitioning to alternative fuels not only reduces the strategic vulnerability associated with dependence on oil in military operations and transport but in an age of fiscal austerity it simply makes sense.  At the same time, government itself must do its part and avoid shooting itself in the foot by entering into energy relationships that reduce a nation’s own energy diversity.  Closing the gap between energy and national security may not be easy but it can be done.

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A Strategic Shift in Saudi Oil Policy?

A Strategic Shift in Saudi Oil Policy?

For decades, Saudi Arabia played OPEC’s gate-keeper opening and closing its oil tap to keep oil 'reasonably' priced.  There were reasons for this: the threat from Iraq, the need to placate the United States as its biggest customer, and its ability to provide a  reasonable standard of living for a moderately sized population.  Today, Saddam Hussein is history, China has displaced the United States and the population of Saudi Arabia has nearly tripled since 1980.  Contributors Steve Yetiv and Lowell Feld postulate that we are in the midst of a paradigm shift in global oil with a transformation of the Saudis from oil ‘doves’ to ‘hawks.’ 

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