Fueling Sustained Growth: Strengthening Energy Markets for Economic Development
Working Paper by Han Phoumin
This working paper was commissioned for the 2014 Pacific Energy Forum, held in Seattle on April 23-24, 2014.
The event brought together energy experts and leaders from across the Asia-Pacific region to examine the prospects of expanding trans-Pacific energy trade and to address the dual challenge of ensuring Asia’s energy and environmental security.
This working paper examines the importance of energy market integration for capturing the advantages of energy cooperation between Asia and North America.
The ASEAN and East Asia region relies significantly on imports of fossil fuel from the Middle East to power its economy. This dependence makes the region vulnerable to disruptions in the supply of oil and gas—for example, as a result of political instability. In some major energy consumers within Asia, demand for fossil fuels is growing at a faster pace than domestic production; thus, their import dependence, particularly on oil and natural gas, is becoming larger, rendering energy security concerns greater. In order to maintain energy security and fuel sustained growth in the ASEAN and East Asia region, the leaders of the East Asia Summit (EAS) agreed to promote energy efficiency, greater reliance on renewable energy, and clean use of coal, among other measures. In this regard, energy cooperation in terms of technology transfers and developing management and regulatory frameworks for integrating energy markets in the ASEAN and East Asia region with the rest of the world, and especially with the United State and Canada, will play a crucial role in connecting Asia to North America.
Energy market integration between the ASEAN and East Asia region and North America will be even more important in the future given the recent development of unconventional resources, which has led to the prospect of abundant energy supplies.
The development of green and low-carbon-emitting technologies will be central to sustaining future growth. Thus, energy market integration in both soft and hard infrastructures is necessary to allow markets to interact.
The ASEAN and East Asia region and North America need to view energy market integration as a win-win framework for fueling sustained growth.