EXECUTIVE SUMMARY

Pipelines and Fault lines: The Geopolitics of Energy Security in Asia

(21-23 October 2003)

The wars in Iraq and Afghanistan and recent developments in Central Asia and the Russian Far East have stimulated a great deal of attention on energy issues, including the various competing pipeline projects in a region where there also exist serious geopolitical and religious fault lines. On October 21-23, 2003, the Asia-Pacific Center for Security Studies (APCSS) held a conference on “PIPELINES & FAULT LINES: THE GEOPOLITICS OF ENERGY SECURITY IN ASIA” to examine the prospects for energy competition and cooperation in the Asia-Pacific region.

This conference brought together senior diplomats (e.g., former U.S. Ambassador to Afghanistan, Robert Finn), practitioners, energy specialists and leading scholars from 9 countries to analyze major trends in energy supply and demand, the energy strategies of great powers, and to examine the feasibility of the various pipeline projects in Northeast Asia, Central Asia, South Asia and the Caucasus.

Nearly all presentations drew attention to the various geopolitical and religious fault lines in Asia. These fault lines mean that various proposals for pipelines would remain pipe dreams unless and until multilateral cooperative measures are taken. A related concern expressed was that socio-political turmoil in the major oil-exporting countries could result in the disruption of global oil flows, thereby producing worldwide energy shortages and triggering a global economic slowdown. Key judgments and major conclusions are summarized below:

· The rapid growth of Asian economies will have a major impact on global oil supplies. The total demand for oil from Asia is projected to grow by 80% between 2001 and 2025, from 21.2 to 38.1 million barrels per day (mbd). Pipelines are an important potential aspect of energy security in Asia. However:

• Economics, technology, profit calculus factors appear more important than geopolitics in determining their outcome.
• Pipelines are unlikely to replace or even significantly reduce the reliance on sea-based transport of energy resources to Asian countries.
• While sea lanes of communication (SLOCs) will remain critical to Asian energy security, there is little evidence that (1) they will become chokepoints (countries can go around them); (2) countries exhibit signs of preparing to control them; and (3) interfering with SLOCs would be viewed worldwide as an act of war.
• Before determining competition and cooperation over pipelines, there is still considerable uncertainty over the availability and accessibility of energy resources to send through the pipelines.

• Government, corporate and NGO/public influences on pipeline development within and across countries remaining highly complex and negotiable.
• Generally speaking, U.S. role, policies and influence could shape/determine which pipeline projects come to fruition (for example, in the Russian Far East and Central Asia).
• If and when these pipelines are built, then their protection and safety may well become as important as the safety of SLOCs. The deliberate targeting of pipelines in Baluchistan, Chechnya, Colombia, and Algeria are cited in this context.

· Energy security in Asia may be characterized as “geopolitics lite”. That is, it is more energy politics rather than energy geo-politics. The former encompasses the use of diplomacy, deals (legal and illegal), profit motives, and considerations of efficiencies. The latter would encompass energy security concerns as a driver of security and foreign policy (as opposed to an element of it) and a shaper of military structures, deployments and modernizations.

• Energy security of Asia will continue to depend heavily on the Middle East—whether or not pipelines under consideration get constructed.
• The geopolitical implications of closer economic interdependence between the volatile Middle East and dynamic Asia could be unsettling. Asian economies’ growing thirst for oil implies that they will rely on others for continued access to energy—primarily, the U.S. and the Middle East states.
• Therefore, as these dependencies persist, even increase, U.S.-Asia cooperation regarding the Middle East will become more critical.
• There are few signs that any Asian country can unilaterally ensure secured access to energy resources through military means.

· Energy security is an issue of growing weight in key bilateral relationships in the Asia-Pacific (U.S.-Russia, U.S.-China, Russia-China, Russia-Japan, China-Japan, China-India, U.S.-India). As the dependence of booming Asian economies on external energy sources increases, the future of security cooperation in general and major powers relationships in particular may well be influenced by the degree of energy cooperation or the lack of it. In this context, China-Japan competition for Russian energy pipelines in Siberia evoked a great deal of discussion. The U.S., China, Japan and India are currently seen as pursuing “energy diversification” strategy to varying degrees of success.

· There was a consensus that energy security and national security today are inextricably linked. However, energy security also has implications for human security and regime security—not to mention environmental security. At times, the search for security in one area may be incompatible with another.

· Some constructive proposals for multilateral cooperation were also made by participants, most notably,

• Establishing Multilateral Petroleum Reserves to meet with crisis situations.
• Re-imagining Geopolitics: the need to think beyond “borders, orders and others” because pipelines are not only about oil and gas but are also part of the wider geopolitical context.
• Establishing an Asian Energy Security Complex that would transcend national rivalries.
• Pursuing transparent, reformist but culturally-sensitive policies that will not only ensure oil & gas flows but also facilitate broader economic cooperation and may eventually facilitate conflict resolution.