Volume 11 : Abstract 3

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Japan's Energy Policy in Asia: Cooperation, Competition, Territorial Disputes

by Reinhard Drifte
(Chair of Japanese Politics, University of Newcastle, UK)

Introduction

Japan is the fourth largest consumer of primary energy in the world despite its economy and banking sector being in deep trouble and its energy consumption in decline as a result. Japan's sectorial energy pattern and the geographic provenance of its fossil energy will therefore continue to exert a considerable influence on world energy markets, and in particular on the increasingly tighter Asian regional energy situation. Asia imports around 60 % of its oil from the Middle East, and by 2010 it will be the world's largest consumer of primary energy. China became a net oil importer in 1993 and imports now 30 % of the oil it consumes, two thirds of which comes from the Middle East. Other countries, such as Malaysia and Indonesia, are also expected to become net importers within ten years or so. Thus Asia is fast becoming a net importing region for oil.

China's need for more energy and its inefficient use of environmentally harmful energy sources negatively affects its neighbours, including Japan. Since the 1990s, China has e.g. expanded the use of its abundant reserves of low-quality brown coal. Various aspects of supply sources and transport of Japan's imported fossil energy influence more and more the regional security situation not only because of the continuing dependence on the Middle East by most Asian energy importers but also because of territorial disputes around current and potential future gas and oil resources and their transport routes. The terrorist attacks of 11 September this year have highlighted the vulnerability of the industrialised world and its dependence on socially and economically underdeveloped and volatile regions and countries. In our context, the attacks have drawn attention to the volatility of all those Muslim countries, ranging from the Middle East, Central Asia, South Asia and Southeast Asia which are important either for the production and/or the supply routes of fossil energy to Japan.

This paper addresses the question of how Japan is responding to these challenges at national and regional level. Special attention is given to the role of China which bears a great influence on Japan's energy security not only because of its growing energy needs but also because of territorial conflicts. It concludes that while Japan's economic size will guarantee that it will continue to be one of the top primary energy consumers in Asia, its commercial and political inflexibility will increasingly marginalize Japan as a player in the regional energy competition.

Reinhard Drifte
Chair of Japanese Politics
University of Newcastle
UK
(added 21 April 2002)

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