Energy Relations and Policymaking in Asia

2017-05-09, by KAPSARC, from King Abdullah Petroleum Studies and Research Center (KAPSARC), Saudi Arabia

Energy security is not a new topic for policymakers in Northeast Asia (NEA). The paradigm usually adopted by both researchers and policymakers has been to view energy security as an asymmetric risk. Energy suppliers worry about security of demand; energy consumers worry about security of supply and often about diversity of supply. Our premise is that it is time to replace this paradigm with a new one. Policymakers can, by adopting a broader view, use these energy relations to reinforce mutual interdependence between economies and reduce the risk asymmetries. These ideas were discussed in a series of workshops held in the GCC and NEA throughout 2015. The result was a collection of papers from 16 different collaborating research institutions on a range of perspectives, with four main themes: the consequences of trade and connectivity, domestic policies, energy security, and energy and the environment. These collected papers are published by Palgrave Macmillan in 2016, under the title Energy Relations and Policy Making in Asia.

Executive Summary:

Energy security is not a new topic for policymakers in NEA. The paradigm usually adopted by both researchers and policymakers has been to view energy security as an asymmetric risk. Energy suppliers worry about security of demand; energy consumers worry about security of supply and often about diversity of supply. Our premise is that it is time to replace this paradigm with a new one. Energy security need not be about asymmetric risks: policymakers can, by adopting a broader view, use these energy relations to reinforce mutual interdependence between economies and reduce the risk asymmetries.

The project summary discusses the following issues: the background of NEA; existing GCC-NEA relationships; shocks and vulnerability of energy trade (i.e, price shocks); energy security fears for countries such as East Asian ones;  NEA’s responding to the environment, such as adopting renewable energy and energy efficient technologies; and in the conclusion part, the author argues that understanding what are the real components of energy security can be aided by understanding that while political stability is certainly important to maintain energy flows and economic growth, economic stability is even more central.

It is emphasized in the conclusion part, that  understanding how the new environment provides opportunities for both sides to work together to share best practice and reduce the costs of energy for all sides can also help boost trust, aid understanding and, ultimately, lower the perception of asymmetric risks. Most important, policymakers can re-evaluate fears that bilateral relations among NEA-GCC are at risk through improved trust and communication. Energy will ow. Commerce will continue. But the opportunity to substantially improve relationships rests upon improved understanding, improved communication and enhanced trust. It is here that this project seeks to make its real contribution.

This project summary has been granted authorization to use and reproduce by the King Abdullah Petroleum Studies and Research Center (KAPSARC). For academic purposes only.

Copyright © 2016 King Abdullah Petroleum Studies and Research Center (KAPSARC). All rights reserved.

https://www.kapsarc.org/wp-content/uploads/2016/09/KS-1645-DP039A-Energy-Relations-and-Policy-Making-in-Asia_A-Brief-Summary-of-the-Book.pdf