Southeast Asia energy security is long-term concern, House panel told

Southeast Asia’s long-term oil and gas security remains uncertain despite current global supply abundance and low prices, the National Bureau of Asian Research’s Energy Security Program director told a US House Foreign Affairs subcommittee.

Energy and national security are synonymous and will remain a key strategic worry for the region’s governments, especially China, Japan, South Korea, and India, which are all key powers, Mikkal E. Herberg said during a Sept. 8 hearing of the Asia and the Pacific Subcommittee.

“The governments in Asia remain deeply concerned about heavy dependence on supplies from the Middle East,” Herberg said in his written statement. “This dependence is rising as low-cost production rises in the Persian Gulf while at the same time production is declining from many other parts of the world, including sharp recent declines in US unconventional production.

“Asia, especially China, will need to play a greater role in supporting political stability in the Middle East and security of the sea lanes from the Persian Gulf to Asia,” he said. “Collaboration between the US and China on security of the Indo-Pacific sea-lanes will be essential to energy security for Asia. This is a key strategic challenge for the US and the rest of oil import-dependent Asia.”

China recently became the world’s largest oil and gas investor as its national oil companies sought overseas supplies, Herberg said. This further accentuates its growing importance in global energy security diplomacy, he noted.

“It is expanding its diplomatic and strategic footprint across the world’s key energy exporting regions with important implications for US strategic and foreign policy influence, especially in the Middle East,” Herberg said. “The US will need to find ways to work with China to collaborate on our common interests in providing security and strengthening political stability in these key energy exporting regions, including the Middle East, Africa, Central Asia, and Latin America.”

Regional cooperation needed

Regional cooperation is paramount as diverse cultures and national boundaries affect much of Southeast Asia’s energy infrastructure, but many countries’ governments prefer to go-it-alone for now, the subcommittee’s chairman observed in his opening statement. “Energy options are limited throughout much of Asia, and the fact remains that regional cooperation will be necessary to overcome the energy shortage conundrum,” Rep. Matt Salmon (D-Ariz.) said.

Salmon said the US began shale gas exports by sea this year and is projected to become the world’s third-largest LNG supplier within 5 years.

“Asian buyers already have contracted to purchase more than half the US supply of LNG, and will continue to affect global energy policy on a massive scale,” Salmon said. “The Asia-Pacific needs American leadership to assist with the security concerns of our partners and allies, to maintain the rule of law and freedom of navigation crucial to energy security, and to provide critical energy supplies and access to new energy technologies.”

Herberg noted that LNG supplies will be important to Asia’s ability to make a more rapid shift from coal toward much less carbon intensive gas during the long transition to renewable energy supplies.

“US LNG exports are a key factor in today’s much lower LNG prices, along with growing supplies from Australia and elsewhere,” Herberg said. “US LNG exports are also extremely important to Asia’s ability to diversify its LNG imports away from potentially unstable suppliers and to maintain affordable prices. This is especially important to Japan and South Korea, key US allies in the region and the two largest LNG importers in the world.”

Contact Nick Snow at nicks@pennwell.com.

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