Energy and Security Cooperation in Asia Challenges and Prospects
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!"#$%&'(")'*#+,$-.&' /001#$(.-0"'-"'23-(' /4(55#"%#3'(")'6$031#+.3' !)-.#)'7&' /4$-3.014#$'8#"' 259-"'/4#:' Energy and Security Cooperation in Asia Challenges and Prospects Christopher Len Alvin Chew Editors Institute for Security and Development Policy Västra Finnbodavägen 2, 13130 Stockholm-Nacka, Sweden www.isdp.eu Energy and Security Cooperation in Asia: Challenges and Prospects is a Monograph published by the Institute for Security and Development Policy. Monographs provide comprehensive analyses of key issues presented by leading experts. The Institute is based in Stockholm, Sweden, and cooperates closely with research centers worldwide. Through its Silk Road Studies Program, the Institute runs a joint Transatlantic Research and Policy Center with the Central Asia-Caucasus Institute of Johns Hopkins Universi- ty’s School of Advanced International Studies. The Institute is firmly established as a leading research and policy center, serving a large and diverse community of analysts, scholars, policy-watchers, business leaders, and journalists. It is at the forefront of re- search on issues of conflict, security, and development. Through its applied research, publications, research cooperation, public lectures, and seminars, it functions as a focal point for academic, policy, and public discussion. This publication is kindly made possible by support from the Swedish Ministry for For- eign Affairs. The opinions and conclusions expressed are those of the author/s and do not necessarily reflect the views of the Institute for Security and Development Policy or its sponsors. © Institute for Security and Development Policy, 2009 ISBN: 978-91-85937-59-2 Printed in Singapore Cover Photo Credit: Data courtesy of Marc Imhoff of NASA GSFC and Christopher El- vidge of NOAA NGDC. Image by Craig Mayhew and Robert Simmon, NASA GSFC. The image "Earth's City Lights" is sourced from NASA's Visible Earth website (http://visibleearth.nasa.gov/). Distributed in Europe by: Institute for Security and Development Policy Västra Finnbodavägen 2, 131 30 Stockholm-Nacka, Sweden Tel. +46-841056953; Fax. +46-86403370 Email: [email protected] Distributed in North America by: The Central Asia-Caucasus Institute Paul H. Nitze School of Advanced International Studies 1619 Massachusetts Ave. NW, Washington, D.C. 20036 Tel. +1-202-663-7723; Fax. +1-202-663-7785 E-mail: [email protected] Editorial correspondence should be addressed to Dr. Bert Edström: [email protected] Table of Contents Abbreviations .......................................................................................................................... 5 Preface ....................................................................................................................................... 9 Executive Summary .............................................................................................................. 15 Part I: Asian Energy and Security Profiles ........................................................... 19 1. Southeast Asia’s Energy and Security Challenge ......................................................... 21 Elspeth Thomson 2. Northeast Asia Energy Cooperation and the Role of China and Japan ..................... 41 Jaewoo Choo 3. Recent Developments in the Structuration of the Central Asian Hydrocarbon Energy Complex..................................................................................................................... 61 Robert M. Cutler 4. The Role of Energy in South Asian Security .................................................................. 83 C. Raja Mohan Part II: External Dimensions and Linkages ....................................................... 103 5. Perceptions and Strategies on Energy Security: The Case of China and Japan ...... 105 Janet Xuanli Liao 6. Australia’s Role in Feeding Asia’s Energy Demand ................................................... 121 Richard Leaver 7. Russia’s Energy Policy Towards Asia: Opportunities and Uncertainties ............... 143 Shoichi Itoh 8. The India-U.S. Nuclear Deal: Security Implications ................................................... 167 Rajesh M. Basrur 9. Energy Security Cooperation in Asia and the Role of the United States ................. 185 Gaye Christoffersen Part III: The Future of Energy and Security Cooperation in Asia ................. 211 10. A Mutilateral Approach to Energy Security: The Energy Charter and Asia ........ 213 Pascal Laffont 11. Nuclear Renaissance: Expectations, Realities and Security Implications .............. 221 Tatsujiro Suzuki 12. Energy and Climate Change: Towards Sustainable Development ........................ 239 Youngho Chang and Soo Jiesheng Tan 13. Assessing the Cebu Declaration on East Asian Security: Issues and Challenges in Regional Energy Cooperation ................................................................... 269 Renato Cruz De Castro 14. The Global Race for Oil and Gas: Signals from Asia ................................................ 289 Ingolf Kiesow 15. Is there a Solution? Obstacles to and Prospects for Multilateral Energy Cooperation in Asia ............................................................................................................. 317 Shoichi Itoh About the Editors ................................................................................................................ 341 Abbreviations ACCC Australian Competition and Consumer Commission ALP Australian Labor Party APAEC ASEAN Plan of Action for Energy Cooperation APEC Asia-Pacific Economic Cooperation APP Asia Pacific Partnership on Clean Development and Climate APT ASEAN Plus Three / ASEAN + 3 ARF ASEAN Regional Forum ASEAN Association of Southeast Asian Nations ASPOG Association for Studies of Peak Oil and Gas Production BJP Bharatiya Janata Party BTC Baku-Tbilisi-Ceyhan (Pipeline) CBM Confidence-Building Mechanism CCS Carbon Capture and Storage CDM Clean Development Mechanism CENTO Central Treaty Organization CNOOC China National Offshore Oil Corporation CNPC China National Petroleum Corporation COD Coalition of Democracies CPC Caspian Pipeline Consortium EAS East Asian Summit EC European Commission ECT Energy Charter Treaty EEC European Economic Community EEZ Exclusive Economic Zone EIA Energy Information Administration (USA) ENEOS Nippon Oil Corporation 6 Energy and Security Cooperation in Asia: Challenges and Prospects ESPO East-Siberian-Pacific Ocean (Pipelines) ESI Environmental Sustainability Index EU European Union EurAsEc Eurasian Economic Community FIRB Foreign Investment Review Board FTA Free Trade Agreements GATT General Agreement on Tariffs and Trade GCC Gulf Cooperation Council GHG Green House Gases GNEP Global Nuclear Energy Partnership GNPI Global Nuclear Power Infrastructure GS Genuine Savings HEU Highly Enriched Uranium HM Hizb-ul-Mujahideen HSM Hybrid Sustainability Model IAEA International Atomic Energy Agency IEA International Energy Agency IEF International Energy Forum INFCC International Nuclear Fuel Cycle Centre IPI Iran Pakistan India (Pipeline) JeM Jaish-e-Mohammed JODOC Japan Oil Development Corporation JOGMEC Japan Oil, Gas and Metals National Corporation JNOC Japan National Oil Corporation KCTS Kazakhstan-Caspian Transportation System KEDO Korean Peninsula Energy Development Organization KMG KazMunaiGaz KNOC Korea National Oil Company Abbreviations 7 KOGAS Korea Gas Corporation LeT Lashkar-e-Taiba LEU Low-Enriched Uranium LNG Liquefied Natural Gas LWR Light Water Reactor MEA Millennium Ecosystem Assessment METI Ministry of Economy, Trade and Industry of Japan MITI Ministry of International Trade and Industry of Japan MOX Mixed Oxide NATO North Atlantic Treaty Organization NDRC National Development and Reform Commission NEAT Network of East Asia Think-Tanks NPT Nuclear Non-Proliferation Treaty NSG Nuclear Suppliers Group OBP Odessa-Brody Pipeline OECD Organization for Economic Cooperation and Development ONGC Oil and Natural Gas Corporation OPEC Organization of the Petroleum Exporting Countries PECC Pacific Economic Cooperation Council PNOC- Philippine National Oil Company-Alternative Fuel Corpora- AFC tion PSA Product Sharing Agreement PSI Proliferation Security Initiative ReCAAPC Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships SAARC South Asian Association for Regional Cooperation SCO Shanghai Cooperation Organization SCP South Caucasus Pipeline 8 Energy and Security Cooperation in Asia: Challenges and Prospects SD Sustainable Development SEATO Southeast Asia Treaty Organization SLOC Sea Lanes of Communication SOCAR State Oil Company of Azerbaijan Republic SOMS Straits Of Malacca and Singapore SPR Strategic Petroleum Reserve SS Strong Sustainability TAGP Trans-ASEAN Gas Pipeline TAPI Trans-Afghanistan Pipeline TCGP Trans-Caspian Gas Pipeline TFP Total Factor Productivity UNFCC United Nations Framework Convention on Climate Change UNPA United National Progressive Alliance WCED World Commission on Environment and Development WMC Western Mining Corporation WMD Weapons of Mass Destruction WS Weak Sustainability WTO World Trade Organization WTI West Texas Intermediate WUM Weapons-Usable Material Preface Asia is one of the most dynamic regions in the world, experiencing record economic growth and contributing significantly to global economic devel- opment. However, this economic growth also translates into greater ener- gy demand and increases the need to secure stable supplies of energy re- sources. There are growing concerns on whether the quest for energy se- curity by