9 - Enhancing Energy Security in Asia: The Role of Governments

Summary

The contemporary politics of energy have witnessed the foregrounding of governments as central actors in efforts to secure national and global energy security priorities. Governments are not only engaged in securing energy resources including the demand-supply dynamics, but are also expanding their efforts at developing alternative renewable sources including the enabling technologies. Dr R.K. Pachauri's presentation highlighted ways by which governments in Asia could enhance energy security in a holistic manner.

Energy Demand and Supply Challenges in the Future

The speaker noted that an analysis of current global energy demand and supply dynamics indicate some crucial trends. Rapidly growing economies of China and India have resulted in a significant increase in the global energy demand and this would have to be supported by OPEC that will play a crucial role and may even have to double their current oil production. This raises the issue of the ability of the Middle East region to raise its production levels in such short time, especially in light of discussions on peak oil production.

Dr Pachauri highlighted the current global nature of petroleum consumption currently pegged at nearly 80 million barrels per day (MBD), of which two-thirds (53 MBD) is used by the transport sector alone. He argued that any major plans to change future energy consumption would have to be predicated on substantial changes to the transport sector.

The Role of Governments

Dr Pachauri elaborated on the ways by which governments in Asia could enhance their energy security policies. These were discussed under three broad rubrics.

1. Preparation of a Level Playing Field: It was argued that governments have a crucial role in creating appropriate market mechanisms by following rational energy pricing, creating appropriate financial frameworks for energy investments, and by specifying clear legal and contractual terms for private sector participation. Further, governments must seek to diversify their energy supplies by reaching out to a wider geography, tapping new sources and by integrating markets and electricity grids on a regional basis. Importantly, they could reduce the risk of disruption by creating adequate strategic reserve capacity and by providing security to their supply lines.[…]