Outline and Achievement of the Second Seminar on Energy Security in Asia

12 March 2001

The second Seminar on Energy Security in Asia was held on Tuesday 6 March. Last year, the expansion in the use of natural gas in Northeast Asia was discussed. This year, with the participation of Dr. Daniel Yergin, Chairman of the Cambridge Energy Research Associates (CERA), Mr. Robert Priddle, Executive Director of the International Energy Agency and other energy experts, discussion was held on Asia's energy security problems in the 21st century from various perspectives with a focus on oil. Approximately 200 people interested in energy issues from around 30 countries and three international organizations took part, including energy experts invited as speakers and guests, Japanese government officials, diplomatic corps, Japanese corporations and research institutions.

1. Outline

(1) In the opening address, Mr. Seishiro Eto, Senior Vice-Minister for Foreign Affairs, addressed the issues of Asian energy demand forecasts, the role of oil, liberalization of energy markets, and environmental protection. He then proposed promotion of 3C's, that is cooperation, coordination and cohesion among Asian countries based on the diversity of Asia for energy security in Asia. Following this, Dr. Taro Nakayama, former Minister for Foreign Affairs, gave a congratulatory address to the seminar, pointing out the importance of the "Asian Energy Community."

(2) In the first session, entitled, "Energy Security Challenges in Asia," Dr. Dennis Eklof, Senior Director and Research Director for Asia Pacific Energy Service at Cambridge Energy Research Associates, spoke on a variety of issues related to energy security in the 21st century. Vladimir Bohun, Director for Infrastructure, Energy and Financial Sectors Department (East) at the Asian Development Bank, spoke about issues on sustainable development and energy utilization in Asia. Dr. Ibrahim Muhanna, Advisor to the Minister of Petroleum and Mineral Resources, Saudi Arabia, discussed the prospect of strengthening relations between the Middle East and Asia in oil trade and other aspects.

(3) In the second session, "Future Direction of the Asian Energy Market," Dr. Fereidoon Perry Sioshansi, President of Menlo Energy Economics, examined the impact of information technology (IT) on the energy market. Mr. Tadayoshi Nakazawa, Chairman of The Tokyo Commodity Exchange, talked on the plan to start trading crude oil futures. Mr. Gatot Wiroyudo, Senior Vice President Director, Exploration and Production of PERTAMINIA, Indonesia, raised issues concerning future development of upstream technology. Professor Zhou Fengqi, Senior Advisor at the Energy Research Institute, State Development Planning Commission, China, spoke about the oil demand and supply outlook and energy supply policy of China.

(4) At the luncheon session hosted by Ms. Kaori Maruya, Parliamentary Secretary for Foreign Affairs, Dr. Daniel Yergin, Pulitzer Prize winner for "The Prize: The Epic Quest for Oil, Money & Power," and Chairman of Cambridge Energy Research Associates, touched on the impacts of IT and globalization on the energy issues of the 21st century. In conclusion, he stressed the importance of diversifying energy sources, quoting a speech before the First World War by then First Lord of the British Admiralty Winston Churchill, who promoted a conversion of battleship fuel from coal to oil: "On no one quality, on no one process, on no one country, on no one route and on no one field must we be dependent."

(5) In the third session, "Energy Risk Management in Asia," Mr. Yoo Chang-Moo, Director General of the Energy Industry and Resources Policy Office at the Ministry of Commerce, Industry and Energy, Republic of Korea, spoke about South Korea's oil stockpiling policy, and MR. Virapgol Jirapraditkul, Director at the Energy Policy and Planning Division in the Natural Energy Policy Office, Thailand, discussed energy policies of Thailand. Mr. Shigeru Sudo and Ms. Akiko Higashi, researchers from the Mitsubishi Research Institute Inc., analyzed the impacts of disruptions of oil supply on the Asian economy, using a general equilibrium model of microeconomics. Dr. Jung Yonghun, Vice-President of the Asia Pacific Energy Research Centre, discussed energy security issues to be addressed in the APEC region.

(6) In the fourth session, "Future Direction of Asian Regional Cooperation", Mr. Robert Priddle, Executive Director of the International Energy Agency (IEA), pointed out that the IEA, which is a global organization, could contribute to the Asian region from various perspectives, such as sharing with Asia IEA's shared goals. Mr. Kazuo Matsunaga, Director-General of the Natural Resources and Fuel Department at the Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry, proposed the following cooperatiev measures to ensure energy security in Asia: (1) diversification of energy sources by expanded utilization of the natural gas and coal abundant in Asia, (2) improvement of energy efficiency, (3) development oil stockpiling in the region on the one hand, and (4) maintaining and strengthening Asia's good relations with the Middle East in light of oil dependency on the other.

2. Achievements

Asia is a mixture of countries with differing energy circumstances. Major achievements of the seminar are the reaffirmation of the importance of promoting Asia's intra-regional cooperation as well as inter-regional cooperation with the Middle East oil producing nations and other energy producing countries, securing stable energy supplies for sustainable economic development in Asia, and discussion on concrete measures for the above cooperation. The recognition that the fundamental issue in planning for future energy security in Asia is to consider how to build a cooperative structure in order to secure volume of supplies of the energy required as well as to stabilize prices amidst rapid changes in the energy environment, including market liberalization, environmental issues and technological innovation, was widely shared among the seminar participants. Based on the above achievements of this seminar, the Ministry of Foreign Affairs intends to engage itself with energy diplomacy, in cooperation with the Ministry of Economy, Trade and Industry and other related ministries and agencies.