Mikkal E Herberg Author Mikkal E Herberg Research Director of NBRs 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 ID: 751219
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NS4054
“Japan, Southeast Asia, and Australia”
Mikkal
E.
HerbergSlide2
AuthorMikkal E. HerbergResearch 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 ARCOPublicationsChina’s Search for Energy Security: Implications for US PolicyEnergy Security in the Asia-Pacific Region and Policy of the New U.S. Administration
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OverviewKey argumentsEnergy insecurity challenge for Japan, Southeast Asia, AustraliaJapan: a result of the Fukushima earthquake
Southeast Asia:
disputes with China over conflicting maritime territorial claims
Australia: become the world’s largest LNG exporterU.S. ImplicationsStrengthen Asia’s energy security and cooperationA 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 shocksContents: Oil → natural gas, coal, and nuclear powerResults: energy security, economic efficiency, environmental protection
1973
2010Slide6
Japan (3/8)Radical Improvements in Energy EfficiencyStrengthen its domestic energy foundationJapan 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 AgencyPromote regional energy cooperation in AsiaASEANThe East Asia SummitThe 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 2006But, rising oil and LNG prices, Beijing’s emergence in energy marketTokyo returned to its emphasis on nationally controlled oil suppliesTarget for oil imports by Japanese companies: 15% → 40% by 2030Goal of raising overall self-sufficiency: 18%
→ 36% by 2030Expand its financial support for Japanese companies
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Japan (5/8)
Results
Azadegan
oil field : abandonmentFar East oil and gas : dissatisfactionDiversification 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 anxietiesRising LNG prices
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Japan (8/8)Tokyo anxietiesFuture nuclear powerPublic: 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 reactorLong-term SolutionsExpand its energy diplomacy and seek stronger access to LNGUS shale gas, participation in many LNG projects around Asia and U.S.
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Southeast Asia (1/3)
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Changing Energy Export Roles (Oil)
Until the 1990s, Oil supplier to Northeast AsiaSince 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 productionSlide13
Southeast Asia (2/3)Changing Energy Export Roles (LNG)
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LNG supplier to Northeast Asia
Increasing domestic demandSlide14
Southeast Asia (3/3)South China Sea Challenges2/3 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 statesOil and gas exploration in the South China Sea will be delayed14Slide15
Australia (1/2)The Opportunities and Challenges of Energy Plenty2nd 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 LNGLNG Boom
Risks
: increasing costs of engineering, labor
, equipment
strong competition for Asian market(shale, Qatar, Russia, Africa) 16Slide17
ConclusionAsia’s Energy AngstEnergy becoming key factor in Asia’s geopolitical architectureEnergy 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. ImplicationStrengthen Asia’s energy security and cooperationStrong US-Australian strategic and economic partnershipUS engagement with Southeast Asia through ASEAN, East Asian SummitStrengthen energy security cooperation in the Pacific islandsA opportunity for a stronger and constructive US role in Asia
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