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Southeast Asia’s resource supply and competition - fuelling insecurity?

Updated On: Aug 25, 2006

The concept of resource security has achieved greater resonance amongst many Southeast Asian nation’s foreign policies and development agendas.

At the regional level, progressive steps are also underway for resource security with ASEAN member states signing an MOU last month at the ASEAN Ministers of Energy Meeting (AMEM) in VientianeLaos to develop an ASEAN power grid. The AMEM also witnessed more urgent calls for cooperation in renewable energy use. At the fifth meeting of the SOME (Senior Officials Meeting on Energy) + 3 Energy Policy Governing Group in Singapore this February, improvements were also made in terms of oil stockpiling as well as cooperation in the areas of energy efficiency and conservation.

ASEAN member states appear determined not to be gripped by supply shortages and oil price hikes, and have adopted more sophisticated diversification strategies along the lines of alternative and renewable energy. Plans to adopt biofuels, nuclear energy and LNG (liquefied natural gas) are crowding the headlines.

Southeast Asia is also commanding a stronger market and strategic focus with China and India leading the way of investments. Competition amongst the key energy players in the region ensues. 

Malaysia for example, is facing strong competition from Australia over LNG deals with China. While Australia secured its largest single trade deal in exporting LNG to China for 25 years two months ago, Petronas may soon follow in its footsteps by supplying China for the same 25-year term.

New natural gas discoveries in Myanmar – increasing its profile as yielding one of the largest reserves in the region – have opened up more lucrative deals with its neighbours India, China, Malaysia, and Thailand, in spite of the tough stance against the junta during the 39th ASEAN Ministerial Meeting. Even the EU and US oil companies are operating in Myanmar’s gas fields in defiance of economic sanctions imposed on the state.

The political leverage gained through new-found economic prowess has led the regime to launch a military offensive to forcefully displace thousands of ethnic Karen from their homes. The refugees are now putting much strain on Thailand, destabilising the region’s political security.

Australia’s recent energy ambitions, even in the form of LNG exports, may not be so clean. An August 24 TODAY article has suggested that Australia’s vested interests in the political security of Timor Leste are actually oriented by the latter’s vast oil deposits valued at over US$30 billion. Citing Australian journalist, John Pilger’s allegation that a leaked Australian Defence Force document revealed that “Australia helped precipitate a rebellion led by Canberra-trained Major Alfredo Peinado” in order to exercise influence over “Timor Leste’s decision making” particularly those relating to its oil and gas. 

The article pointed to the fact that former Prime Minister of Timor Leste, Mr Alkatiri, was an anti-imperialist who stood up against the demands of Australia, and alluded to the fact that Australia intervened in Timor’s political crisis in “the nick of time” as “the Alkatiri government was preparing to sign a major oil exploration deal with Petro China which included building an oil refinery in Dili. That would have undermined Australian plans to build a refinery in Darwin to process all Timor Sea oil from both sides of the border”.

Resource security in the region also goes beyond oil and gas.  The region’s current alternative energy drive may be playing a major and contradictory role in prompting other environmental and human security issues.

The lucrative slash-and-burn clearing of land for oil palm plantations in Indonesia support in part, the large-scale plans of biofuel conversion. But such practices have also brought about the long-drawn transboundary haze pollution, disrupting economic and social activities of neighbouring states, and heightening political tension in the region. Recent headlines – harshly critical of Indonesia’s political will to curb the forest fires – published in ASEAN’s Haze Action Online would attest to this. 

Elsewhere, China’s energy thirst has extended across the Mekong River, such as via a new US$20 billion proposal to build a canal across Thailand's Kra Isthmus to transport petroleum from Thailand to southern China. Concrete plans may be underway in the near future for oil transports to increase all the way through the Mekong to bypass the Strait of Malacca. But should an oil spill come about as Washington CSIS researcher Chietigj Bajpaee insinuates in an August 22 Power and Interests News Report, the entire ecosystem as well as the economies of the Mekong River states would be imperilled. The devastating oil spill crisis currently encountered by the Philippines should provide a sombre reality check.

Sources:

Asean to sign power pact in July (Business Times (Malaysia), 16 May 2006)

China increases its energy stakes in SE Asia (The Business Times, 21 July 2006)

ASEAN calls for more renewable energy use (The Jakarta Post, 28 July 2006)

Singapore stands to gain as regional import hub for LNG (The Straits Times, 5 August 2006)

S'pore opts for LNG to diversify power sources (The Straits Times, 8 August 2006)

China, India duke it out over Myanmar’s natural gas riches (AFP, 14 August 2006)

Singapore Turns to Biodiesel to Fight Rising Fuel Costs (Reuters, 21 August 2006)

ADB funds northern power transmission upgrades (Than Hnien Daily, 22 August 2006)

Asia's Coming Water Wars (Power and Interests News Reports, 22 August 2006)

Oil lures West to troubled Myanmar (AP, 23 August 2006)

Irrawaddy: Karen refugees in Ratchburi pushed closer to Burma border (Burmanet News, 23 August 2006)

Australia ready to mark first LNG shipment to Beijing (Financial Times (England), 23 August 2006)

Timor Leste and the $47b question (TODAY, 24 August 2006)

Summary Record of the 2nd ASEAN+3 New and Renewable Energy (NRE) and Energy Efficiency and Conservation (EEC) Forum (ASEAN Centre for Energy,www.aseanenergy.org)

Summary Record of the 5th Meeting of the SOME + 3 Energy Policy Governing Group (ASEAN Centre for Energy, www.aseanenergy.org)

ASEAN Haze Action Online (http://www.haze-online.or.id/index.php)