Territorial disputes can hamper Asia-Pacific economic progress
Updated: 2012-10-10 06:04
By Ho Chi Ping(HK Edition)
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According to the US Energy Information Administration (EIA), the East China Sea has an abundant natural resource reserve and, if fully explored, can provide China, Japan, and South Korea with sufficient energy to support their economies.
EIA estimates that the East China Sea has between 70 to 160 billion barrels of oil reserve, 100 million barrels of which have already been discovered. Chinese sources estimate that the potential natural gas reserve can reach 7 trillion cubic meters.
Man-made political clashes, however, hamper the progress of natural resource development. When the "big three" powers in East Asia engage in dangerous territorial disputes and show unwillingness to compromise on the sovereignty they separately claim over the islands, the region is left to a stark energy future.
In recent years, with the rapid rise of China as the "world's factory", East Asia's hunger for energy has become more pressing. China, once an energy exporter, has become a global energy importer at a speed unprecedented in modern history. The overall gap between supply and demand in East Asia's energy market has widened significantly. Currently, one-third of the energy needs of the three East Asian states have to be met by imports.
The de-nuclearization movement among green groups, particularly after the March 11 tsunami that severely affected East Japan, has succeeded in decreasing the use of nuclear energy, once an important and reliable source of electricity in the region. Operations of nuclear power plants were halted in many large nuclear-powered states like Germany and Japan. Emerging nuclear states such as China have become more cautious about pursuing their nuclear development programs.
Because many green or renewable energy technologies are still in their nascent stages of development, however, it is unrealistic to foresee in the near future a wide deployment of next generation energy sources in cost-effective ways. But if more efficient and cost-effective exploration of unconventional energy sources, especially offshore oil and gas, can be conducted, the gap between the energy supply and demand in Asia can still be narrowed.
The US experience provides a good example. In 2011, the US government released a "Blueprint for a Secure Energy Future", which indicated that it would not prefer one energy source over another, but instead would seek energy security by relying on various options. Renewable energy can and should be developed simultaneously with fossil fuels.
This balanced approach has already worked. According to EIA, due to the rapid growth in US shale gas production, dry natural gas production in the US rose 18 percent between 2005 and 2010. The US has surpassed Russia as the world's largest dry gas producer. Increasing domestic supply led imports to decline to their lowest level since 1992. EIA predicts that the US will become a net exporter of gas by 2021.
US President Barack Obama has announced that new areas of Alaska and the Gulf of Mexico will be opened for offshore drilling. Prompted by the rapid development of unconventional energy sources and a strong determination to develop its offshore energy industries, the US, where people usually consume four times more energy than the world average and where 60 percent of oil is imported, is unequivocally moving toward a self-reliant energy future.
East Asian states like China have the vision to develop unconventional energy sources, but regional politics make it extremely difficult for them to make progress in energy security. The disputes over the Diaoyu Islands between China and Japan and the Dokdo Islands between Japan and South Korea threaten the already fragile trust among the three Asian powers. Such lack of trust will inevitably hamper the region's progress in natural resource development and, therefore, work against the future economy of the region. Although an all-out war between East Asian states appears highly unlikely so far, the territorial disputes harm the economic interests of all three states, which really should have been jointly exploring and developing the region's natural resources to create benefits for all sides.
The author is former secretary for home affairs of the HKSAR government.
(HK Edition 10/10/2012 page3)