Experts Mull Framework for North Pacific Regional Cooperation on Energy Security

HONOLULU (Dec. 18) -- Between them, the nations that surround the North Pacific – China, Japan, Korea, Russia, Canada and the U.S. – include the world's largest energy consumers and importers, as well as two of its largest producers. While each of these countries has its own interests and agendas, all share the common desire for energy stability and security, from both the supply and demand perspectives.

The search for a regional framework to cooperate multilaterally on these issues led energy experts from each of the North Pacific nations to meet at the East-West Center in Hawaii this week to discuss each other's national energy security issues and strategies, and to outline the possible areas of mutual benefit from creating a mechanism for regional cooperation on energy issues.

Between sessions at the International Conference on Energy Security in the North Pacific, which was jointly organized by the East-West Center and the Korea Energy Economics Institute, several of the speakers shared their nations' perspectives on North Pacific energy cooperation.

"The countries of the North Pacific region account for more than 50 percent of global energy consumption," said David Pumphrey, Deputy Director of the Energy and National Security Program at the Center for Strategic and International Studies in Washington, D.C. "So I think that cooperation in the North Pacific could become the core of a global approach to issues like moving toward lower-carbon energy systems."

Ji Chul Ryu, Executive Director of the international energy research center at the Korea Economic Energy Institute, said that the North Pacific nations "are all world champions in different aspects of the energy picture. The U.S. is the world champion in consumption and technology. Russia is the number one supplier of natural gas, and number two in oil, behind the Middle East. China is the champion of coal consumption; Japan is the champion of energy conservation; Canada is the champion uranium supplier for nuclear power; and Korea is the champion at constructing power plants."

"If different people are trying to become champion in the same area, then they should compete," he said. "But in a case like this where we are all champions in different areas, we should cooperate."

Pierre Alvarez, a Senior Fellow at the Canada West Foundation, said that his nation is in the "enviable position" of being an energy exporter that has no supply worries and "can sell whatever we produce." But as the world transitions to a lower-carbon energy scenario, he said, "Canada stands to benefit from other countries' tremendous emerging environmental technologies in areas like carbon capture and cleaner use of coal that we are just too small to develop on our own."

For Russia, the region's other big energy exporter, a regional cooperative framework would bring benefits in areas like market stability and joint development of resources, said Nina Poussenkova, Scholar-in-Residence at the Carnegie Moscow Center. "Our energy concerns are different from others in the North Pacific," she said. "Up to now, we have been focused on Europe, but we need to develop new energy export markets in order to make the best use of our resources."

In addition, Poussenkova said, Russia would benefit from partnering with other nations to develop energy resources in the country's vast far east, where acute economic and social disparities are a threat to national security, and resource extraction is geologically very challenging. "Even when oil prices were high, developing these resources would have been difficult for Russia, and now with falling prices it's even worse," she said. "We need the technical advantages that other countries have in production, marketing and the environment."

In China, the world's fastest-growing energy consumer, the biggest issue is the country's heavy dependence on foreign oil, said Shixian Gao, Director of the Centre for Energy Economics and Strategy at the Energy Research Institute of China's National Development and Reform Commission. "When international oil prices change a lot –whether they go very high or very low – it's not good for China's economic development," he said. "A cooperation framework would create a more stable situation on both the supply and demand sides."

By sharing natural resources, efficient technology and marketing systems, Gao said, "we can join together to keep the energy market stable."

In Japan, where energy efficiency is highly developed and demand is declining, the situation is different yet again, said Prof. Reiji Takeishi of Tokyo International University. From a public policy perspective, he said, Japan is likely to take a "wait and see" approach to a regional energy-security framework. More likely, Takeishi said, is that individual companies that use a lot of energy, like steel manufacturers, "will decide for themselves how they want to participate" in any regional energy arrangement.

All the experts agreed that there would be many challenges to overcome in creating a North Pacific regional energy framework, not the least of which is that there has until now been no active communication on such a concept.

"That's why we're having this meeting," said East-West Center Senior Fellow Yoon Hyung Kim, a co-chair of the conference. "It's a first step toward promoting a more mature discussion on a cooperative approach to energy in the North Pacific."

"This is really the first time we're hearing a lot of this information," agreed Russia's Poussenkova. "And because we are all independent experts, not negotiators, we've been able to speak very frankly about what our own countries have done right on energy policy, and what they've done wrong. It's the first time I've really seen this kind of arrangement, and I think it can be very beneficial."

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