Energy producers, users must learn to cooperate

July 17, 2006

Countries that produce energy and those that consume it have to cooperate, the panelist in the session on Asia's energy crisis argued.

The panelists were: Karen Schneider, deputy executive director of the Australian Bureau of Agricultural and Resource Economics; Zhou Dadi, director general of the Energy Research Institute of China's National Development and Reform Commission; Evita Legowo, director of the Research and Development Center for Oil and Gas Technology of Indonesia's Department of Energy and Mineral Resources; and Katsuhiko Suetsugu, secretary-general of the Asia-Pacific Energy Forum. Suetsugu moderated the discussion.

Suetsugu: In what energy situation do you think each Asian country finds itself in?

Legowo: Indonesia has many energy resources, whether fossil or nonfossil. In Asia, Indonesia plays a role in supplying energy. Domestically, Indonesia has a problem in using energy, as we have very low energy per-capita. But we have high energy intensity.

Zhou: China's biggest problem is that it has a huge population. Per-capita daily energy consumption in our country, mostly from coal, remains considerably smaller than in Japan and other countries. Energy demand in our country is certain to grow rapidly.

Schneider: The developing economies of the Asia-Pacific region will be the focus of the growth, with analysts forecasting energy demand growth in the region of around 3% a year over the next quarter century. Much of this growth will continue to be met from fossil fuels. The development of new technologies will be critical to increasing the energy resource base.

Suetsugu: The energy problem has developed into a political issue. Resource-rich countries tend to limit investment and nationalize the resources. Instability in Iraq as well as Iran's nuclear ambition are risk factors. We need to find some solutions.

Schneider: High oil prices bring with them the seeds of solutions in a sense that they are likely to bring forward responses on the demand side in terms of energy conservation and additional energy supply. I think the story on oil prices is not completely a negative story for economies in the region.

Legowo: Energy security and self-sufficiency can be achieved through national and multinational efforts in energy-resources exploration, development, exploitation and transportation.

Zhou: The recent run-up in crude oil prices is already negatively affecting the Chinese economy. Prompting dialogues between oil users and suppliers is the only way to resolve the lack of investment by oil-producing countries.

(The Nikkei Weekly July 17 Issue)

Titles of speakers, names of companies, etc., were correct as of the time when the forum was held.