“ Energy Challenge in Asia "
Yasuo TANABE
Director, International Affairs Division
Agency of Natural Resources & Energy
Ministry of Economy, Trade and Industry, JAPAN
At Session 1 of IEA-KEEI Joint Conference
on Northeast Asia Energy Cooperation
16-17 March, 2004, Seoul, Korea
METI
Ministry of Economy,
Trade and Industry
1
Contents
1. Energy Challenge in Asia
2. Energy Situation in Asia
3. Issues to be addressed
3-1. Oil Market
3-2. Energy Data
3-3. Oil Stockpile
3-4. Natural Gas
3-5. Coal
3-6. Energy Efficiency / Renewable
4. Russian Projects
5. Forum, Dialogue & Cooperation
6. Japan’s Energy Policy Review
2
1. Energy Challenge in Asia
Energy Demand/Supply Situation
- Rapid Growth of Energy Demand in Asia
- Increasing Dependence on Imported Energy (especially oil
from the Middle East countries)
Challenge: Energy Security
- “Energy Security” in the broader sense:
- Secure stable supply of energy at a reasonable cost in an
environmentally friendly manner
Enhancement of Asian Energy Security
3
2. Energy Situation in Asia
1. Major Focal Point of Growing Demand in the
International Energy Market
2. IEA Members (Japan and Korea) &
Non-members (China, ASEAN and so on)
3. Indigenous Natural Gas & Oil Resources
(China, Russia<East Siberia & Sakhalin>,
and ASEAN producing countries)
4
World Primary Energy Supply Outlook by Region
Growing Energy Demand in Asia Region
Middle East
Mtoe
15,267
Africa
16000
５％
13,167
14000
５％
４％
５％
11,132
12000
４％
３％
５％
9,179
10000
４％
３％
４％
8000
６％
１３％
China
14%
１２％
１０％
１１％
１１％
Transition
Economies
１１％
4000
４０％
４３％
４７％
５１％
Latin Am.
America
Asia
20%
１９％
１９％
17%
11%
6000
５％
OECD
2000
Excluding Japan & Korea
0
2000
2010
2020
2030
Source: ＩＥＡ/World Energy Outlook ２００２ 5
Natural Gas Reserves, Oil & Gas Projects in the Region
>Recent Projects
>Natural Gas Reserves
Gas
Producing
Countries
Proved
Reserves
（TCF）
Share
of total
（％）
PL Project from Russia
<East Siberia & Sakhalin>
WestWest-East Gas PL Project
Fujian LNG Terminal
Brunei
13.8
0.3
China
53.3
1.0
Indonesia
92.5
1.7
Malaysia
75.0
1.4
Australia
90.0
1.6
1680.0
30.5
Russia
（including Sakhalin）
Guandong LNG Terminal
Malaysia：
Tiga LNG
To Potential
Buyers
Indonesia：
Tangguh LNG
Source: BP Statistics 2003
Australia: NWS
6 LNG
3. Issues to be addressed
METI
Ministry of Economy,
Trade and Industry
7
3-1. Oil Market
-Collective Asian demand should have market
power vis-à-vis suppliers
>Establishing Oil Market in Asia
-Establishment of more open and transparent Asian
Oil Market will create better price mechanism and
supply-demand balance.
“Asian premium” is…
the situation that the price of oil which the Middle East exports to Asia is higher by $1 ∼
$1.5 than that to Europe and U.S.A.
Price（ $/B）
28
Gap
AL Formula price
To Asia
To Europe
To U.S .
26
24
22
of
price（ $/B）
2.0
1.8
Premium(Average)
1.6
0.94$/B
1.4
20
1.2
18
1.0
16
0.8
14
0.6
12
0.4
Premium
T o Asia - T o Europe
10
0.2
8
0.0
1
7
1991
1
7
1992
1
7
1993
1
7
1994
1
7
1995
1
7
1996
1
7
1997
1
7
1998
1
7
1999
1
7
2000
1
7
2001
8
3-2. Energy Data
-To make the energy market function appropriately
and to make a right energy policy
-Energy data / Statistics fundamental
-Harmonization, level up quality
(accuracy, timeliness, coverage)
-Capacity building
<Example: Joint Oil Data Initiative (JODI) >
9
3-3. Oil Stockpile
Japan & Korea
Keeping national oil stockpiling＝ IEA members
China
China
Decided to establish national oil stockpiling
ASEAN
Decided to revise ”ASEAN Petroleum Security Agreement” (1986)
Planning to enhance regional emergency preparedness capability
（2003）.
Considering the continuous increase of Energy demand in
Asia, as an Emergency Response Measure, Establishment of
Oil Stockpiling and regional cooperation in Asia is important.
10
3-4. Natural Gas
>Recent Features in LNG Trade
Diversification of LNG market
- Increase of LNG suppliers and consumers (China, etc)
- Increase of flexible contracts, spot transaction, swaps
between seasons, etc.
>Natural Gas Development
in Northeast Asia
Kovikta Gas PL
>World LNG Trade
Asia’s Total Share: 69%
Sakhalin Gas PL
South
Korea
16%
WestWest-East Gas PL
Taiwan
5%
North & South
America
5%
Europe
26%
LNG
LNG
LNG
LNG
LNG
Japan
48%
Source: BP Statistics 2003
11
3-5. Coal
Primary Energy Consumption in Asia
Comparison of CO2 Emission per Calorie
90.6
71.5
49.5
Coal
Oil
Source: METI
Natural
Gas
Natural Gas
Hydraulic
Nuclear
Oil
Coal
(g-CO2/MJ)
>Coal will remain as major energy source in Asia
till 2020.
>Emission of CO2 by consumption of Coal is
almost double of Natural Gas
Source: Institute of Energy Economics, Japan
“Clean Coal Technology (CCT)” will contribute to…
¾Reduction of Environmental Load.
¾Effective Usage for other fossil fuels using coal as relatively rich resource.
12
3-6. Energy Efficiency & Renewable
In Asia, each country shows different
index on how much efficient in energy
use.
Total Primary Energy Supply per GDP 2001
TOE/MUS$@1995
1.2
1
>Some countries have own technology
and experience in efficient energy
use.
>Possibility on cooperation to share
those technology and experience in
Asian countries.
0.8
0.6
0.4
0.2
0
China
Korea
Asia Total
Japan
Source: Energy Balance of OECD/Non-OECD Countries, IEA 2003
And also,
>Renewable energy (hydro, solar, wind, geothermal, combustion,
biomass, etc) to successfully deal with environment problems and
energy security,
>Further cooperation of renewable energy policy in Asian countries .
13
4. Russian Projects
4-1. Sakhalin Projects
Sakhalin-1
Sakhalin-2
Sakhalin-1
Sakhalin-2
Recoverable
Reserves
Grand
Project
Cost
Schedule
Oil: approx.2.3
Billion BBL
Oil: approx.1.1
Billion BBL
Gas: approx. 17TCF
Gas: approx. 17TCF
12 Billion USD
10 Billion USD
2005:
Commencement
of Oil Production
Max. 250,000B/D
1999:
Commencement of
Oil Production
Max. 180,000B/D
2008:
Commencement of
Natural Gas by
pipeline *planning
2007:
Commencement of
Natural Gas by
LNG *planning
Max. 9.6MMt/yr
Max. 6MMt/yr
Length: 1,3001,300-1,600km
Source: Report from related companies
14
4-2. East Siberia Oil Development and Pipeline Project
- Route:
- Length:
- Capacity:
- Estimated Construction Cost:
- Status:
From Angarsk to Nakhodka
3,885km
1MMB/D
approx. 6 billion USD
Under consideration by Russian Gov.
Source: Publication from Transneft
PL Project from Russia<East Siberia & Sakhalin>
Sakhalin
Angarsk
Nakhodka
15
5. Forum, Dialogue & Cooperation
METI
Ministry of Economy,
Trade and Industry
16
Bilateral Fora
between Japan & other Asia Region Countries
- Republic of Korea
On 19 March 2004: The 12th Korea-Japan Energy Policy Dialogue
will be held.
- People’s Republic of China
On 23 October 2003: The 7th China-Japan Energy Policy Dialogue.
- Australia
In May 2004: The 28th Australia-Japan High Level Group on Energy
and Minerals Consultations will be held.
- Russian Federation
Under Planning 3rd Russia-Japan Energy Policy Dialogue
17
Multilateral Energy Forum
►ASEAN + 3 (Japan, China, and Korea)
Energy Cooperation
- Priority areas
(from “HIRANUMA Initiative”, September 2002)
* Creation of an emergency network
* Initiative for the development of oil stockpiling
* Development of joint studies on the Asian oil market
* Initiative for the improvement of natural gas development
* Initiative for the improvement of energy efficiency and
renewable energy
- Natural Gas Forum, to be held in Shanghai in 29-30
March 2004
18
Multilateral Energy Forum
►
APEC Energy Cooperation
“Energy Security Initiative” (from 2000)
* Monthly oil data collection
* Energy information sharing, etc.
► IEF (The International Energy Forum)
- 8th Forum achievements (September, 2002)
* Confirmation of collaboration between oil-producing and oil
consuming countries toward stabilization of the oil market
* Support for Joint Oil Data Initiative (JODI)
(Priority: M-1 Data on production, stocks, and demand)
* Sharing awareness of the energy supply-demand situation in Asia
* Confirmation of the importance of natural gas
* Agreement to set up a permanent secretariat
- 9th Forum: Amsterdam, May 2004
19
6. Japan’s Energy Policy Review
Japan’s Energy Policy including long-term outlook is under review.
Related Points:
1.Asian Regional Approach
2. Natural Gas Shift
3. Oil Market in Asia
4. Energy / Environment Integrated Policy
20