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East Asia tackles energy
security
By Richard Giragosian
Nearly three years into the global "war on
terrorism", there is still an incomplete recognition of
the strategic importance of energy security. The current
focus on energy security remains lacking and limited,
with a rather outdated reliance on the more traditional
perspective of concentrating on the risks posed by
instability and insecurity in the Middle Eastern
oil-producing region. The Middle Eastern theater
mandates such focus for three reasons: its role as the
major source and gateway for global energy, the
instability rooted in the very nature of its regimes,
and as the original source of the new wave of Islamist
terrorism.
Yet as the repercussions of the
attacks of September 11, 2001, continue to alter the
global geopolitical landscape on several levels,
comprehensive energy security is the integral edifice
absent from the newly evolving architecture of
international security. This absence is most evident in
the vulnerabilities of key components of the global
energy network, including troubling deficiencies in the
transport of liquefied natural gas (LNG) and the exposed
weakness of pipelines.
The evolution of
strategic energy security
Recognition of energy
as a global security concern first garnered strategic
attention in the 1970s, with the Organization of
Petroleum Exporting Countries (OPEC) oil embargo of 1973
and the overthrow of a key regional Western ally in
Iran. From the start, the initial stage of energy
security was linked to the volatile Middle East and was
elevated as the defining issue in relations with the
region. The evolution of this geopolitical marriage of
the Middle East to Western energy consumers resulted in
a cumulative disregard for the fundamental signs of
discord mounting in the region that eventually erupted
in the backlash of Islamist terror and rigid
anti-Americanism.
But with a shortsighted
preference of regime stability to ensure the steady flow
of oil, longer-term security was sacrificed. It is this
painful lesson that defines the very nature of the
region as a challenge to security and stability today.
Thus the warning signs emanating from within the region
were always there but generally neglected, leading to
the current threats rooted in decades of dictatorship, a
deficit of democracy, and looming demographic disaster.
Another lesson learned from the first stage of
energy security was the danger of ignoring the domestic
political, economic and social dimensions of energy
security. This set of dynamic internal factors has
contributed to the emergence of the Middle East as a
breeding ground for global insecurity and has combined
with the external dependence on Middle Eastern oil to
endanger new "regions at risk".
A region at
risk: Asia-Pacific
The dramatic geopolitical
shifts stemming from the end of the Cold War and the
global "war on terrorism" in the wake of September 11
have resulted in an abrupt restructuring of the
traditionally bipolar system of global governance that
has served as the norm for the 20th century. Of all the
regions subject to the repercussions of this new
geopolitical landscape, the Asia-Pacific region has
emerged as one of the key arenas. A convergence of new
factors, ranging from the threats posed by al-Qaeda to
the sweeping engagement of the US military throughout
the region, has endowed the region with a significantly
enhanced strategic importance.
The implications
for the Asia-Pacific region from within this new prism
of global geopolitics and a greater reliance on military
security have also been deepened by several underlying
characteristics. Specifically, the Asia-Pacific has seen
a pattern of increasing insecurity in recent years that
has exposed the absence of any regional institution
capable of forging common and cooperative security. This
pattern of mounting threats has been marked by three
escalating crises: the Taiwan Strait crisis in 1996, the
Asian financial crisis of 1997-99, and the recent North
Korean nuclear crisis. There is also a danger of a
fourth crisis, involving Chinese frustration with the
intricacies of Taiwan's political ambitions.
This absence of a governing regional structure
has only exacerbated the region's vulnerability within a
new post-Cold War/post-September 11 threat matrix.
Although there has been some attempt to address this
regional insecurity through existing regional
organizations such as the Association of Southeast Asian
Nations (ASEAN), the regional states still lack the
political will, military capability and experience to
enforce security adequately in any significant
multilateral approach. And as the only substantive
security architecture in the region is limited to the
web of bilateral security treaties centered on the
United States, there is a serious need for a new
security regionalism. Such an effort can link
Asia-Pacific economic cooperation to a regional security
process and also build on the regional powers of
Australia, Japan and South Korea, each of which has been
recently "deputized" by the United States. Therefore,
energy security may offer the most effective avenue
toward this "securitized regionalism", especially given
the genuine level of cooperation and shared interests in
seeking adequate and secure supplies of energy.
Such a need for regionalized security is also
reflected in the less visible security challenges facing
the Asia-Pacific region. These security problems are
concentrated in the core of the region, in the very
foundations of the still incomplete state- and
nation-building process, and stem from the fragility and
weakness of these states. Coupled with the economic,
social and environmental issues in the region, the
complexity of these threats requires a multilateral, yet
regionally based approach.
The economics of
energy security
In terms of pure economics, the
outlook for energy security in the Asia-Pacific looks
particularly troubling, with rising levels of oil
consumption and an even stronger rise in demand. Some
experts, such as Ji Guoxing of the Shanghai Institute of
International Strategy Studies, contend that the
Asia-Pacific region's dependence on Middle Eastern oil
may exceed 90% by 2010. While oilfields in Russian
Siberia and Central Asia do offer some short-term energy
relief, the lack of existing infrastructure to
facilitate the transport of this oil poses costly
political and economic challenges of their own.
Aside from the dependence on imports from the
Middle East, there is also a danger of tension stemming
from such an oil shortage within the Asia-Pacific region
itself. The growing demand for energy may strain
relations between such important regional actors as
China and Japan, for example, which may then engender a
set of new destabilizing regional or international
conflicts. But an even more immediate problem is the
effect of oil-market volatility on the region, with the
sharp rise in oil prices putting particular pressure on
the currencies of some crude-importing emerging-market
countries and the dangers of soaring current account
deficits and weaker economic growth. This also threatens
to impact the record of growth that has served as the
driving force for Asian stability and development since
the end of World War II. And while Asia is seen as the
most affected region, the surge in oil prices, an
increase of 48% over the past two years, also threatens
other struggling oil importers.
The dangers
of soaring oil prices
The danger of an "oil
shock" is an important but underestimated element of
energy security. In a July Financial Times article, two
analysts confirmed this "link between oil prices and
financial markets" by noting it "has profound
implications for both energy security and economics".
The market volatility further reveals the structural
weakness of all commodity-based economies, not just
oil-producing states. In terms of economic theory, the
fundamental danger of an over-reliance on one commodity
for economic growth and development has been fairly well
established, articulated as the so-called "Dutch
disease".
There is a further link between price
rises for oil and other commodities. A broad
commodity-wide pattern was revealed in the oil shocks of
1973-74 and 1979-82, as the prices for gold and soybeans
doubled and wheat reached an all-time high. This pattern
also reveals the deeper vulnerabilities of developing
countries to this economic aspect of energy security. It
also merits more attention given the grave implications
for social unrest and political instability in key
energy-dependent states that may result from a sustained
global surge in oil prices.
Several key Asian
economies are the most at risk from persistently high
crude prices, with the major net importing countries of
China, India, Singapore and South Korea, as well as
Taiwan, being the most vulnerable. The danger for these
economies lies in the impact on the current account and
growth, and domestic purchasing power. This has already
been demonstrated in regional currency markets, as the
Singapore dollar hit near three-month lows against the
US dollar and the Thai baht reached a one-year low in
late July. The North Asian currencies such as the South
Korean won and New Taiwan dollar are also seen at risk.
Regional energy security in the
Asia-Pacific Energy security in the Asia-Pacific
remains a complex and multifaceted challenge, with four
main strategic issues mandating coordinated
action:
1. Measures are needed to reduce Asian
dependence on fossil fuel or to secure an adequate
alternative supply to meet rising demand.
2. The need
to address the environmental impact of the region's
energy structure, as seen by the environmental
repercussions from the heavy coal use in Chinese
industries, for example.
3. The necessity for
ensuring nuclear security in the face of regional
ambitions to expand nuclear power.
4. Specific
policies to improve the vulnerable regional energy
infrastructure and transportation networks, as well as
safeguarding vital sea-lanes and "chokepoints".
As demonstrated by the set of four strategic
priorities areas listed above, regional energy security
in the Asia-Pacific requires a multilateral approach.
There is a potential for regional cooperation, stemming
from the convergence of national interests in the face
of recent transnational threats. Much of these shared
interests and threats have only been revealed in the
aftermath of September 11 and the ensuing global "war on
terrorism".
To date, the regional approach to
Asia-Pacific energy security has been focused on
petroleum security, conservation and the search for
alternative fuels. Specific examples of regional
cooperation are largely through ASEAN, and include a
Petroleum Security Agreement, requiring ASEAN member
states to provide crude oil and/or petroleum products
for countries in short supply.
Studies for a
Trans-ASEAN Gas Transmission System and an ASEAN Power
Grid have also been initiated aimed at ensuring a
reliable supply of energy to the region, with some
notable progress to date related to cooperation in
natural gas use and energy management.
Regional
energy security was formalized as a priority issue at an
Asia-Pacific Economic Cooperation (APEC) Energy Security
Initiative Workshop on "Elements of Energy Security
Policy in the Context of Petroleum" held in Bangkok in
September 2001. Dr Piyasavasti Amranand, the secretary
general of Thailand's National Energy Policy Office
(NEPO), reported to the APEC workshop that the current
imbalance among reserves, production, and consumption of
oil within the region has elevated oil security as a
major concern for APEC officials.
Piyasavasti
stated that the total reserves in the APEC region are
far less than regional demand, exacerbating the regional
dependence on oil imports, especially from the Middle
East, therefore, made energy security a key element in
establishing economic development policies.
Thailand has long been sharing information with
the Asia-Pacific Energy Research Center (APERC) and
other research centers, such as the ASEAN Center for
Energy (ACE), and has also implemented other measures
that have substantially enhanced the energy security of
the country. Strategic oil stockpiling by the Thai
private sector is one of the measures, but there is an
inadequate government role in developing a state-owned
stockpile.
The 2001 APEC workshop also
recognized the security of tanker traffic as a main
concern. In an address to the workshop, APERC president
Tatsuo Masuda explained that the combination of
vulnerable transport from the Middle East and West
Africa with the fact that tankers are getting smaller,
while the number of tankers crossing the Indian Ocean to
Asia triples or quadruples, necessitates a reduction of
the risks posed by tanker traffic. Masuda specifically
pointed to the need for pipeline infrastructure projects
connecting Russia, China, Korea and Japan, as a way by
which to reduce this risk.
Limits to
cooperation Despite a degree of potential for
regional cooperation, energy security remains hindered
by the divides between the states of the Asia-Pacific.
The sheer scale of diversity and scope of diverging
national interests have significantly impeded even these
early efforts at coordination. The absence of a
recognized common goal is profound, making the pledges
for joint strategic reserves and regionwide gas
pipelines unfulfilled promises.
According to
energy analyst Tomoko Hosoe of Facts Inc and the
East-West Center, "Although the ASEAN grouping is a
dynamic, populous region, its total economy and oil
consumption are more on the scale of Korea's than that
of Japan or China," as seen by the fact that "Japan's
current oil stockholdings are large enough to supply all
of ASEAN's net oil imports for more than two years".
Hosoe further recognizes that "ASEAN can be important in
enhancing Japanese energy security, but on the oil
front, ASEAN can do very little in terms of supply to
East Asia in general or Japan in particular".
The importance of strategic petroleum
reserves
The role of strategic petroleum reserves
in energy security has long been recognized as a crucial
component to protect against unexpected shortages or
disruptions of energy supplies. But adequate stockpiles
have been difficult and costly to create and maintain,
as the most vulnerable import-dependent economies are
most often the least able to handle the prohibitive
cost. The United States, as the world's largest oil
importer, established a Strategic Petroleum Reserve
(SPR) in 1975 to help prevent a repetition of the
economic dislocation caused by the 1973 Arab oil
embargo. The US strategic reserve comprises five
underground storage facilities, hollowed out from
naturally occurring salt domes, in Texas and Louisiana.
Oil stored at one of the sites, Weeks Island, was
transferred after problems with the structural integrity
of the cavern were discovered in the mid-1990s.
As an important element in US energy security,
the mere existence of a large, operational reserve of
crude oil was seen as an effective way to deter future
oil cutoffs and to discourage the use of oil as tool for
geopolitical leverage. In the event of an interruption,
introduction of oil from the reserve on to the market
was expected to help calm market-driven crises, mitigate
sharp price spikes, and reduce the economic effects of
the shocks that had accompanied the 1973 disruption. It
was further held that the reserve would buy precious
time for any crisis to sort itself out or for diplomacy
to seek some resolution before a potentially severe oil
shortage escalated the crisis beyond the parameters of
state diplomacy.
The International Energy
Agency
With energy security as a core mission of
the International Energy Agency, there has been a
significant effort to foster a communal approach to the
issue, with oil stockpiling as a central element. The
IEA seeks to cooperate and complement the work of
regional organizations such as APEC and ASEAN, and
promotes the shared goals of energy security, high
economic efficiency, and a cleaner environment.
In terms of stockpiling, the IEA's Agreement on
an International Energy Program (IEP) requires
participating countries to maintain emergency oil
reserves equivalent to at least 90 days of net oil
imports, 7-10% restraint on national oil demand, and to
participate in a crisis-allocation system through an
Emergency Sharing System. Stocks of IEA net importers
have decreased substantially from a peak of 160 days
during the mid-1980s to 116 days by July 2001. The
decrease in oil stocks was mainly due to industry
restructuring, which moved to a "just in time"
stockpiling. This decrease in IEA stocks is also
expected to continue over the coming decade due to
increasing oil imports and a lack of automatic stock
adjustments within the IEA economies.
Generally,
the IEA holds that stock drawdowns are one of the most
concrete and effective emergency response measures. IEA
stocks are seen to be adequate to handle a medium-scale
disruption of short-to-medium-term duration and larger
disruptions of up to 12mbpd (million barrels per day)
are also believed to be within IEA control, although
only for a limited duration. Industry stocks are seen as
less reliable than public stocks, as they are partly
needed for operating purposes and are subject to much
weaker governmental control.
The ASEAN
position on stockpiling
The ASEAN Petroleum
Security Agreement (APSA), reached in Manila in 1986,
formulated an important strategic approach to containing
sudden shortfalls in oil supplies. The agreement
specifically established an ASEAN Emergency Petroleum
Sharing Scheme for petroleum products in times of both
shortage and oversupply. In cases of shortage, which the
agreement defines as "a critical shortage or when at
least one Member Country is in distress", the
oil-exporting members of ASEAN would move to aid the
affected member state or states. The assistance would be
triggered by crises involving cases where the total
supply is less than 80% of the normal domestic
consumption requirements. Such emergency oil supplies
would be limited for domestic consumption in the
distressed countries, however.
In times of
broader crises, where more than one ASEAN member state
is affected, the agreement calls for the distribution to
be initially allocated in proportion to their respective
normal domestic consumption and exports for the 12-month
period prior to the crisis. Since its inception n 1986,
APSA has never been actually executed, although it was
once nearly implemented during the Gulf War crisis in
the early 1990s.
Although such formal ASEAN
assistance through shared resources is important in
times of regional crises, there has been a recent move
recognizing the importance of establishing strategic
stocks of oil as a reserve against sudden cuts or
shortfalls in oil supplies. According to IEA executive
director Robert Priddle, "despite the fact that for many
ASEAN nations the cost of maintaining such oil
inventories appears prohibitive, such an effective
insurance against major economic risks is worth a
considerable price".
The imperative for such
stockpiling has been bolstered in recent years by the
threat to world supply and transport in the wake of
September 11 and unease over the implications for
instability in the Middle East as a result of the war in
Iraq and its postwar uncertainty. Other developments,
such as an overall trend of decreasing oil stocks among
IEA members for the past 15 years and a steady decline
in OPEC spare capacity, have also served to reinforce
the importance of such strategic reserves.
Some
recent cost benefit analyses of expanding emergency oil
stocks have found that, for smaller Asian oil-importing
economies, a stockpile covering around 30 days of net
imports is optimal. These studies have also recommended
a joint stockpiling scheme sharing a common large-scale
facility for the APEC region.
Within ASEAN+3
(the Southeast Asian grouping plus China, Japan and
South Korea), both Japan and South Korea maintain
government-owned emergency petroleum reserve stocks as a
strategic protection against short-term disruption in
oil supply. As members of the IEA, both Japan and Korea
are required by the organization's agreement to hold
stocks equivalent to at least 90 days of net imports.
Both the Japanese and Korean reserves are also
reportedly well above that requirement.
The
Japanese approach
Japan's vulnerability to
disruptions in oil supplies was most profoundly exposed
during the global oil crisis of 1973. That first oil
crisis affected Japan greatly, both psychologically and
economically, and resulted in a sharp reduction in
Japanese gross domestic product (GDP) growth, from 5.1%
to -0.5%. The crisis was also seen as an embarrassment
to the government, with some critics pointing to its
failure to foresee or contain the crisis. The shock gave
a new impetus to the need for addressing the country's
energy security.
By 1975, the Japanese
government enacted a stockpiling law, with private
requirements creating a 90-day stockpile (government
stockpiling was not initiated until 1978, with a
30-million-kiloliter target, later reaching 50 million
kiloliters by February 1998). A second oil crisis in
1978 renewed concerns over Japan's vulnerability, with a
volatility in oil prices demonstrated by a price rise
from US$13.7 per barrel to $34 a barrel by 1980.
During the relatively smaller energy crisis
stemming from the Gulf War of 1991, there were no
serious supply shortages, although prices did increase
sharply. Through this crisis, real GDP growth declined
from 5.6% in 1990 to 3.1% in 1991. In 1990, the
government announced that private-sector stockpiling
would be utilized, increases in stockpiling were
postponed, and the private sector was allowed to reduce
stockpiling by four days in January 1991 to allow a
release of supply. After the Gulf War, 10 sites for a
government stockpile were constructed in August 1996.
The current private Japanese stockpile operates
according to a 70-day requirement and utilizes existing
tanks and facilities in private companies. This private
stockpiling system counts oil reserves in
transportation, operation and distribution, and counts
both crude oil and petroleum products. In contrast,
national stockpiling, initiated in 1978-79, uses only
storage tanks and counts only crude oil. The Japanese
approach to stockpiling, with its priority on a private
structure, recognizes a number of advantages and
disadvantages to the system.
The Japanese
position sees three main advantages to private
stockpiling: less time and cost to meet target level;
swift, flexible and effective release; and a tendency to
reduce panic in the market (stockpiling as a "first aid"
kit). There are also three disadvantages identified
under the Japanese system: an insufficient amount, and
if stock falls below 45 days, it becomes difficult to
release; a significant barrier for newcomers,
encouraging a need for government subsidy; and less
transparency in the market, thereby making it difficult
to see or measure the effects of the release.
Overall, the Japanese conclusion is that
stockpiling is primarily a government concern, linked to
national security, but sees private stockpiling as
necessary to obtain swiftness, flexibility, and
economizing. Private companies are expected to supply
and release stock swiftly and flexibly, and provide
accurate and timely information, especially during
emergencies. For its part, the Japanese government is
expected to recognize and appreciate the function of
private stockpiling and provide sufficient political
support to the private sector.
According to
information provided by Kazuyoshi Takayama of the Nippon
Mitsubishi Oil Corp, the Japanese stockpiling system can
only be reduced or released ("drawn down") by the
government in times of a crisis involving an abrupt
disruption in supply, although there is some
consideration underway of an implementation of a draw
down in cases of severe price fluctuation.
Takayama also pointed to the importance of
Russia's (East Siberia) vast resource potential to
supply Japan and other East Asian economies. One of the
most important appeals of this option is the price
competitiveness of Russian energy to the Asian market,
making it an important source for import
diversification.
Japan's four-part
strategy
In addition, Japan has also adopted a
number of related measures to buffer the effects of oil
disruptions and price volatility. The Japanese approach
consists of four parts:
1. Diversification of
energy, with a special focus on the alternative
sources of nuclear energy and LNG, now accounting for
about 13% and 12% respectively, and coal, once Japan's
dominant energy source until the shift to oil in 1970s.
2. Sourcing diversification, to offset
its high dependence on Middle Eastern oil, seeks to
promote other sources of crude oil, from China,
Indonesia and Mexico. Imports from these countries
declined after the late 1980s because of economic
constraints, mainly after the Japanese liberalization
and deregulation of the oil industry. Japan also invests
in producing crude oil overseas, as the share of
Japanese-developed crude oil overseas is about 15% of
total oil imports. Overall energy imports from the
Middle East have been reduced to about 40%.
3. Energy conservation involving multiple
measures: to reduce demand, improve self-sufficiency,
reduce emissions, and reduce energy costs. Japan also
pursues energy conservation through an improvement of
energy efficiency in appliances (micro-energy
conservation) and by shifting to less energy-intensive
industries (macro-energy conservation). As a result of
these policies and financial support, Japan's energy
efficiency has improved by almost 30%.
4.
Emergency preparedness. driven by experience of oil
crises, Japan has established a mandatory private oil
stock (currently 70 days); a government (national)
stockpile of 50 million kiloliters; and a combined
private and national stockpile of 160 days.
The South Korean stockpile
As the
world's fourth largest oil importer, there is an acute
South Korean appreciation of the need for sufficient oil
reserves. The Korean stockpiling system consists of a
combination of government (Korea National Oil Corp) and
private reserve, with the KNOC storage capacity expected
to reach 164 million barrels by 2006. As of June 2001,
the KNOC capacity was 132 million barrels (65 days),
comprising some 60 million barrels in the government
stockpile and 72 million barrels held by the private
stockpile. The South Korean government considers the
drawing down of the stockpile as authorized in the event
of a short-term disruption or to stabilize supply and
demand.
There is also a degree of flexibility,
with mechanisms allowing for a limited release of a
portion of the KNOC stockpile and a temporary lease and
redelivery mechanism or "time exchange", which is
strictly limited for increasing the stock level. South
Korea sees this joint stockpiling between KNOC and
private oil producers as a strategic alliance for
securing stable supply and demand. KNOC also provides
the use of its unused facilities to private oil
companies.
The Thai reserve
Thailand
is also developing measures to prepare for emergency
disruptions in supply. Although Thailand's dependency on
energy imports has been substantially reduced in recent
years, from 98% in 1980 to 63% in 2000, the Thai fuel
import dependency is projected to increase to 70% over
the coming decade (for 2000-2010). Thailand's dependency
on oil imports has also followed a similar trajectory,
decreasing to 55.1% in 2000 from a 1980 level of 93.6%.
The Thai approach to energy security is multifaceted and
includes measures to promote the development of
indigenous energy resources, diversify energy supplies
and utilize renewable energy, as well as pursuing
greater overall efficiency.
Thailand's current
total storage capacity for crude oil is roughly 28
million barrels, and for petroleum products, excluding
LPG, about 39 million barrels. The total existing
storage capacity, therefore, stands at roughly 67
million barrels, representing about 110 days of
consumption (at 2000 levels). Although this is well
above the normal working requirements of 40-45 days,
Thai officials have reported that actual stocks are
lower than the storage capacity. Thailand's six
refineries account for nearly all crude-oil storage. For
petroleum products, however, oil traders and
distributors hold a significant portion of this storage
capacity, with 22.2 million barrels compared with 16.8
million barrels held by the refineries.
Currently, Thailand has a limited stockpile,
mandated by its Fuel Act of 1978, required to be
maintained by the Thai private sector. For crude oil,
refineries are required to stock 3% of annual throughput
(equivalent to about 11 days), and marketers and
importers to stock 3-6% of different petroleum products
based on sales, to this mandatory stockpile. Leading
experts estimate that for the Thai economy, the ideal
stockpile would be of about 27 million barrels by 2010.
Last October, Thai Energy Minister Prommin
Lertsuridej signed a memorandum of understanding with
Philippine Energy Minister Vincent Perez to conduct a
joint feasibility study on petroleum reserves and
investment. The Thai Energy Ministry reported that the
two countries have pledged to share their existing
petroleum facilities under the cooperative agreement in
order to strengthen their respective petroleum reserves
as well as to create business opportunities.
This is particularly important for the
Philippines because of a current shortage in local oil
supply. This shortage, due to the government's
implementation of a Clean Air Act, has prompted higher
imports of refined oil to the country through Subic Bay,
where Thai subsidiaries in the Philippines have been
granted concessionaires for the oil depots.
The Philippines
Under the leadership
of President Gloria Macapagal-Arroyo, the Philippines
has undertaken an economic transformation, deregulating
its energy sector and offering new incentives for
foreign investment. Although the Philippines was able to
increase its crude-oil production from 1,000 barrels per
day (bpd) in 2001 to an average of 23,512bpd in 2002,
the rise in production volume is still modest in
relation to the country's needs. The Philippines
consumed 342,000bpd on average in 2002, resulting in net
oil imports of 318,488bpd.
This dependence on
imported oil is compounded by a projected annual
increase in oil consumption of 5% over the next several
years as economic growth increases demand in most
sectors. Oil demand for power generation, however, is
expected to decline sharply as many aging oil-fired
electric power plants are shut down or converted to burn
natural gas. And with more than 90% of the Philippines'
oil imports coming from the Middle East, the issue of an
oil stockpile is a grave concern. The Philippines has
been without any stockpile whatsoever since required
contributions ended in 1998.
Indonesia also
maintains oil stocks, but these reserves stem from the
country's role as an archipelago, ensuring adequate
supplies to its islands rather than from a strategic
imperative. Thus the Indonesian stocks are not generally
thought to be large enough for effective protection in
times of crisis.
Conclusion
The
imperative for energy security in vulnerable strategic
regions as the Asia-Pacific is paramount for global
stability and development. The priority of this
challenge for the Asia-Pacific region is also no
accident, as it is the world's fastest-growing energy
consumer, with projected demand to surpass other regions
steadily for some time. But it remains to be seen
whether this troubled region will be able to forge a
collective and cooperative approach in the wake of the
daunting challenges and demands posed by the global "war
on terrorism" and an increasingly destabilizing unipolar
world.
Richard Giragosian is a
research associate with the Institute for the Analysis
of Global Security. This article was originally
published in Energy Security by IAGS and
is used by permission.
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