ASIA

1. ASIA INDIA Regional Energy Security Strategy

2. Basic Facts and Policy Implications • The South Asian countries are very much inefficient in energy use. • South Asian region has 23per cent of the world population with only 2.1per cent of the world GDP and Gross National Income of South Asian countries excepting Maldives was estimated as US$ 524, which was only 10per cent of world average income of US$ 5,240 in 2003. • Economies of South Asian countries are showing remarkable GDP growth during the recovery from global meltdown. • It is estimated that the energy demand will grow with the economic growth almost at equal rate. • China and India alone are consuming almost quarter of the oil production of the world, although the population of these two countries is more than one-third of the world. • All the countries of South Asia are very much concerned about the energy situation because of miss-match between the demand and supply situation. • More than 50per cent of the people of South Asia do not have access to commercial energy, particularly, electricity which is regarded as the harbinger of modern economic development. • Issue of energy security in different countries of South Asia is being looked at from the country perspective. • Integrated energy planning approach needs to be institutionalised in all countries of South Asia to ensure energy security of each country. • South Asian countries must go for cleaner energy for meeting their future energy demand and ensuring long term energy security. • In the event of sky rocketing increase in crude oil price, South Asian countries should take appropriate measures to reduce the demand for liquid fuel. • South Asian countries have abundant potential for harnessing renewable energy and all of them must go for harnessing future energy demand from renewable sources. • If the issue of energy security can be considered from inter and intra-regional perspective, then solution to the problem of future energy security becomes much easier to accelerate the pace of economic development to change the fate of teeming millions of South Asia

3. China: Challenges VS opportunity Basic Facts: • China, the world’s largest energy consumer, has a tendency to make a splash when it enters global energy markets. • In oil markets, crude prices rose along with China’s import volumes in the early 2000s, after the country became a net importer of oil in 1993. • In coal markets, its shift to being a net importer of thermal coal in 2009 pushed prices to their current record highs. • According analysts , the country may soon have the same effect on natural gas. • The government plans to promote natural gas consumption because it is cleaner-­burning than oil or coal. • Under Beijing’s blueprint, gas use will more than double during the next five years to reach 260bn cu m, making China the world’s third­largest gas market after Russia and the US. 1. One trend: Soon No 1 2. Two Challenges: • 1) Heavy reliance on coal • 2) High dependence on oil 3. Three Strategies • 1) decarbonization • 2) Diversify oil supply • 3) Secure oil transportation

4. Soon will be No 1 Second largest energy consumer soon pass the US; double 1,742 Mtoe in 2005 to 3,819 Mtoe by 2030;

5. Challenge 1: heavy reliance on coal 69%, Traditional pollution: 16/20, 5.8%; Climate change: No 1 CO2 emitter Energy efficiency: cut 20% energy intensity Decarbonize: Nuclear 8GW-70GW Hydro 170 GW to 300GW; Wind 15GW to 120 GW; Solar No 1

7. Challenge 2: oil import quadruple from 3.5mb/d to 13.1mb/d by 2030Dependence rate 52% to 80% 70m-350m auto, solution public transportation and electric car

8. Diversification : 60% from Middle East, Africa: Wen $100 billion, Russia & Kazakhstan CIC investing, Latin America, Investment help increase production • China Crude Oil Import by Source (Thousand Barrels per day, 2008 total 3568 )

9. Secure Oil shipping:1) Sea route: Malacca Hu’s visit, two destroyers Samolia, Aircraft carrier, 2) international pipelines Kazakhstan China Burma China

10. India – Rising tiger? Energy demand in India will be about 4.36per cent and demand for electricity will grow by about 8per cent per annum till 2020. • 5th largest consumer of energy in the world (375.8 mtoe) -> 3rd by 2030 (812 mtoe) • 2.9 mbd petroleum -> 6 mbd (2030), 152 GW -> 800 GW (2030) • Middle East – 67% of India’s oil purchases • Population of 1.1 Bn, ~700 Mn in poverty • High energy prices are hugely politically sensitive • Climate change strategy inextricably linked with energy strategy

11. India – Rising tiger?

12. Key issues • Tense neighborhood • State-owned actors – NOCs, SOEs • Competing for equity oil stakes abroad • Climate change • 4th largest coal reserves in the world – concentrated in the most backward regions of India • Power sector challenges

13. Primary energy sources

14. Recommended strategy • Diversifying supply • Improved demand-side management • Increased focus on nuclear, renewable & natural gas • Restructuring the energy sector • Securing technology transfer & fuel supply abroad • Equitable sharing of benefits • Military – internal security & stability, deterrent to aggression from neighbors • Navy – securing supply routes

15. Pakistan Geo- Strategic Importance Current Situation – likely to Worsen Challenges

16. Geo-Strategic Importance of Pakistan In Pakistan, fuel based primary energy demand will increase at a rate of 3.72per cent and demand for electricity will grow by 8per cent per annum till 2020.

18. Possible Future Scenarios- 3 possiblities • Exogenous Developments

19. Pipelines

20. Strategies • Social, environmental and human development implications • Institutional fragmentation • Privatization • Energy efficiency • Gas pipelines • Implementation

21. The MaldivesIn Maldives, fuel based primary energy demand will increase at rate of 5.84per cent and demand for electricity will grow at a rate of 11.3per cent • Small Island Nation • 1190 islands, 200 inhabited, 90 resorts • Tourism drives 28% of GDP • Average altitude of 1.5m, highest point 2.3m • Energy Supply • No proven oil, natural gas, or coal reserves • 100% imported diesel fuel and biomass

22. The Maldives • Vulnerabilities • Climate Change • The 2004 Tsunami • Evacuation

23. The Maldives • International Climate Policy • Pledge to produce 100% clean energy in ten years • Underwater Cabinet Meeting • Climate Vulnerability Forum • Energy Strategy • Efficiency • Wind • Solar • Biomass/ Waste

24. Asia: common challenges • Major consuming nations China will become No 1 soon after 2010 India currently No 5, will become No 3 by 2030 • Heavy dependence on oil imports China’s and India’s net oil imports are expected to grow three times more than current USA and Japan imports -> Major impact on world oil supply and prices • Dependence on fossil fuels Most energy currently generated from fossil fuels, particularly coal

25. International Climate Change Negotiations • China • US, India relations • Per capita equity • India • Leading developing nations • Nuclear technology transfer • Maldives • Demanding cuts by developed countries • Pakistan • Coal technology transfer (CCS, etc)

26. Cooperation and competition: Competition • China and India - competing for equity oil stakes around the world, driving prices up • Competition in Myanmar, Nepal, Bhutan Cooperation • Pakistan + India / China - Pipelines • Security - Terrorism, secure oil routes

27. Outlook for the region • Security / military tensions need to be resolved first before any real cooperation • Energy interdependence can help foster warmer ties • Technology transfer can help reduce emissions • Iran / Afghanistan situation has huge implications for energy supply to Pakistan, India & China

28. Asia: common challenges • Major consuming nations - China will soon become No 1 in 2010, India currently No 5, will become No 3 by 2030; • Heavy dependence on oil imports: China’s and India’s net oil imports are expected to grow three times more than what the USA and Japan now import. -> Major impact on world oil supply and prices. • Dependence on fossil fuels: Most energy currently generated from fossil fuels, particularly coal

29. Climate change • China & India are big players in global climate change policy • Aligned strategy • Demanding cuts by developed countries • Asking for technology transfer (CCS, etc) • Smaller countries vulnerable to sea level rise – Bangladesh, Maldives, etc

30. Cooperation and competition: Competition • China and India - competing for equity oil stakes around the world, driving prices up • Competition in Myanmar, Nepal, Bhutan Cooperation • Pakistan + India / China - Pipelines • Security - Terrorism, secure oil routes

31. Outlook for the region • Security / military tensions need to be resolved first before any real cooperation • Energy interdependence can help foster warmer ties • Technology transfer can help reduce emissions • Iran / Afghanistan situation has huge implications for energy supply to Pakistan, India & China