Asian energy outlook to 2020: trends, patterns and imperatives of regional cooperation

With booming economic growth, Asia will play an increasingly important role in global economic and energy matters. The objective of this research lay in producing a quantified profile of the future configuration of energy supply and demand in the world as a whole and Asia in particular to 2020, by applying econometric means. Focusing on this region, the research mainly consisted of comprehensive investigation of its energy economics.

The authors start by providing insight on the following:

• a socioeconomic outlook for the Asian economy
• world energy demand Outlook
• energy supply-demand outlook in Asia
• outlook for CO2 emissions
• outlook for motorization
• crude oil and LNG supply and demand in Asia.

According to the author’s research, world primary energy consumption is projected to expand at an average annual growth rate of 2.1 % by 2020. About 70 % of the increase would be accounted for by non-OECD member economies, two thirds of which are from the Asian region. While the long term holds the prospect of a deepening dependence on the Middle East for the supply of oil in Asia, the region should have an ample supply capacity for natural gas and coal. The simultaneous attainment of energy security, market rationalisation, and environmental preservation in Asia demands the construction of the "best mix" of energy sources in each country, considering its situation as regards its amount of energy reserves, geographical conditions, and stage of economic development. Furthermore, formation of an analogous "best mix" in the region as a whole would require extensive utilisation of coal and nuclear power alongside natural gas while assuring the stability of the oil supply. The achievement of the "three Es" (economic development, energy security, and environmental preservation) should be approached through region-wide cooperation.

More particularly, the author makes the following recommendations so that the Asian countries being net consumers of energy to collaborate with each other in pursuit of the following four major tasks:

• a fuller exercise of bargaining power given their collective position as a massive regional consumer of oil, and strengthening of ties of dialogue and cooperation as equal partners with net oil producers
• construction of a shared reserve scheme for response to emergencies and effective use of the existing infrastructure to deal with short-term crises such as supply suspensions
• promotion of cooperative resource development and procurement inside and outside the region
• conditioning of international oil markets to give the supply and demand structure more flexibility.