Energy for Asia

Asian nations convene to talk energy


Energy was on everyone’s mind at the Third Foreign Ministers’ Meeting of the Asian Cooperation Dialogue (ACD), held in China’s eastern coastal city of Qingdao, Shandong Province, on June 21-22. Hashing out a common strategy for securing energy for all ACD member countries was the top priority.

AN ASIA THAT TALKS: Chinese Premier Wen Jiabao stresses the importance of energy cooperation in Asia at this year’s ACD meeting

In a keynote speech at the seminar on cooperation and development in Asia, held prior to the foreign ministers’ meeting, Thai Foreign Minister Surakiart Sathirathai pointed out, “We cannot afford to shy away from the hard decisions on managing our energy resources. We need to accept reality that we no longer live in an era of cheap oil prices. We need to look long term and develop our resources.”

Due to the rising awareness of cooperation, the organizers said that this year’s seminar provided a timely occasion to build upon the recommendations on energy security posed at previous meetings, which Bahrain and the Philippines hosted, respectively.

World crude oil prices have been surging since last year and currently stand near $40 per barrel. Developing countries in Asia are worried that rising oil prices may negatively affect regional economic growth. Asia is an important player in the global energy market as it is home to some major energy producers and consumers.

Sustained and stable energy supply is fundamental to Asian economies and way of life there. This constitutes a common objective regarding their national energy strategies. This year’s ACD meeting provided much needed political impetus in this regard.

Cooperation in the field of energy is the first step to meeting the demand for energy in ACD countries.

“Enhanced energy cooperation is necessary to safeguard Asian energy security and promote economic development in all countries,” Chinese Premier Wen Jiabao told the opening ceremony of the ACD Foreign Ministers’ Meeting.

DIGGING FOR COMMON INTERESTS: Chinese Foreign Minister Li Zhaoxing (right) and his Thai counterpart, Dr. Surakiart Sathirathai, share ideas on energy security at the third ACD Foreign Ministers’ Meeting in China on June 22

Wen added that China was open to energy dialogue and cooperation with other countries in Asia and the world at large on the basis of equality and mutual benefit.

According to Kassymzhomart Tokaev, Minister of Foreign Affairs of Kazakhstan, the planned oil pipeline project between Kazakhstan and China will make the latter a major trading partner of his country. He expects trade volume between the two countries to reach $10 billion within three years.

Seeking fuel alternatives, ACD members hope to reduce dependency on oil and other natural resources, minimize instability in the oil market and better conserve and manage fossil fuels. The prevailing thought in Asia has come to be that supplemental sources of power will secure an energy supply without further depleting limited resources or irreparably devastating the environment. Cooperation in developing more efficient, renewable and alternative fuels as well as improving the energy infrastructure were also discussed.

China, Japan and the Republic of Korea have shown interest in cooperation with Southeast Asia to develop automobiles and engines that burn bio-fuel, produced from tropical plants such as the cassava and oil palms, which is suitable to grow in the latter’s region.

While Pakistani Foreign Minister Khurshid Mahmood Kasuri said his country emphasizes cooperation in developing renewable energy resources such as solar, biogas and hydropower but that apparently does not rule out buying conventional fuels from former Soviet republics, as many are doing. “We are actively pursuing other initiatives such as gas pipelines from Central Asia,” said Kasuri, adding that available energy resources should be utilized efficiently and “fairly” so as to leave some for coming generations.

Building strategic oil reserves is one option in building a country’s boldness in its energy strategy. Many Asian countries are devising oil reserve plans. China, for example, the world’s fifth largest oil producer, has reserves that would last only a week. That country is now working on 70-75-day strategic reserves distributed in four locations, said an energy expert attending the seminar that preferred not to be identified. Regional strategic oil reserves have a psychological effect on stabilizing oil prices, providing a well that could be tapped into when other oil producers cut output, said the expert. But he added major oil producing ACD members, like Indonesia, might not be comfortable with the idea.

Differences are unavoidable in such a huge and diverse region. Despite this, ACD nations agree on the principle of cooperation in energy security. The Qingdao Initiative, the outcome of the first ACD event in China, can be seen as an initial step forward. The document proposes the establishment of a regular energy forum to discuss and cooperate in energy issues, while encouraging greater emphasis on renewable energy.

About the ACD

The Asian Cooperation Dialogue (ACD) was first initiated by Thai Prime Minister Thaksin Shinawatra in early 2001 and founded in June 2002, serving as a confidence-building process for Asian nations. Characterized by positive thinking, the ACD is generally open, broad-based and inclusive.

After admitting three new members at this year’s Foreign Ministers’ Meeting in China, the ACD now consists of 25 member states stretching from the Persian Gulf to the Pacific: Bahrain, Bangladesh, Brunei, Cambodia, China, India, Indonesia, Japan, Kazakhstan, the Republic of Korea, Kuwait, Laos, Malaysia, Myanmar, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand, Vietnam, the United Arab Emirates, Mongolia and Iran.

So far, 16 ACD members have volunteered to take the lead in launching 18 regional cooperation projects, including an agricultural cooperation project (China), an environmental project (Japan), the establishment of an ACD biotechnology consortium (India), small and medium-sized enterprise cooperation (Singapore) and tourism (Thailand).

Some countries have proposed documents on launching regional cooperation in specific fields, while holding symposiums or forums.

As a leader in the ACD agricultural and energy cooperation, China held the ACD Workshop for Agricultural Ministers in May 2004, during which a joint initiative of intensifying agricultural cooperation among ACD members was

China also worked for the issuance of a document on energy cooperation, the Qingdao Initiative, at the third foreign ministers’ meeting.

The ACD’s first and second foreign ministers’ meetings were both held in Thailand, in Cha-am in June 2002 and Chiang Mai in June 2003, respectively. The next ACD foreign ministers’ meeting will be hosted by Pakistan in 2005.

Energy Cooperation Agreed Upon In the Qingdao Initiative

1. Enhancing exchanges of information on energy among ACD countries to promote openness and transparency of members’ energy situations.

2. Encouraging cooperation on energy exploration and exploitation, including participation of the private sector, as well as actively exploring the potential for new energy reserves in Asia through consultation among interested parties.

3.Strengthening cooperation on energy conservation, efficiency, renewability with particular emphasis on increasing the use of cleaner bio-energy to achieve balance in energy consumption and environmental protection in Asian countries.

4. Promoting scientific, technological and commercial cooperation for the development and production of energy from renewable resources including through wind, biogas and solar processes.

5. Enhancing cooperation in rural electrification and exploring the feasibility of creating a regional power grid, which could be helpful for supplementing regional power needs.

6. Encouraging countries to exchange and share views on the international energy market, with a view of facilitating fair energy pricing for both consumers and producers in Asia.

7. Promoting a favorable environment to attract investors to play a more significant role in the energy sector of ACD member countries.

8. Strengthening coordination and cooperation, within capacities and national interests, in the construction of oil and gas pipelines and other means of energy transport, storage facilities as well as hydro power stations; and promoting the possibility of establishing a regional network to facilitate the efficient transport/transmission of energy.

9. Taking into account the United Nations Convention on the Law of the Sea, ensuring safe transportation along vital energy shipping routes through dialogue and cooperation, while taking also into full consideration the territorial integrity and the security concerns of all parties concerned.

10. Strengthening cooperation in human resources development and promoting technology sharing through training and exchange of the best practices, with a view of building energy capacity.

11. Exploring the possibility of establishing a forum on energy cooperation in Asia. The forum should be open and not exclusive to ACD members. The ACD Working Group on Energy would determine the mandate and the scope of responsibilities of the forum.