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Energy Cooperation within Asia: Opportunities and Threats

Abolghasem Mahdavi Mazdeh

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Brief Content

Introduction

Global and Asian Demand and Supply of Energy

Geopolitics of Energy and Energy Security (World & Asia)

The Role of China, India and Iran

A Thorough Inference of Opportunities and Threats: A Hypothetical of

Model of Cooperation

Conclusions

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Energy as a strategic Good

Energy as a strategic Good

Energy Security Energy Security

IncreasingConsumption

IncreasingConsumption

Exhaustibility Exhaustibility

Producing CountriesProducing Countries

Consuming CountriesConsuming Countries

Energy Revenue in Public Budget

Energy Revenue in Public Budget

Role of Energy in theIndustrial Path

Role of Energy in theIndustrial Path

Introduction

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Global and Asian Demand and Supply of Energy

Source: EIA (2011)

Oil (Thousand Barrels Daily)

2005 2006 2007 2008 2009 2010

World Production 84603.24 84675.06 84591.88 85577.26 84419.02 86790.35

Asia Production 45781.73 45846.64 45701.27 47018.06 45910.47 47554.67

World Consumption 84086.68 85164.79 85760.64 85436.28 84683.31 87027.2

Asia Consumption 33947.49 34876.9 35366.69 36107.32 36874.37 38646.93

Table 1. World and Asia Production and Consumption of Oil

Asia’s Share of Oil Production and Consumption of the World are respectively %54 and %44 in 2010

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Source: EIA (2011)

Gas (Billion Cubic Feet)

2005 2006 2007 2008 2009 2010

World Production

99791.59 103423.3 105630.8 108049.7 104786.6 112089.9

Asia Production

51571.38 53926.75 55719.61 56235.26 54238.41 59860.91

World Consumption

101831.8 104063.1 107627 110914.9 107244.9 115453.9

Asia Consumption

47263.12 49222 51568.75 53429.44 52032.22 57250.4

Table 2. World and Asia Production and Consumption of Gas

Asia’s Share of Gas Production and Consumption of the World are respectively%53 and %49 in 2010

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Geopolitics of Energy and Energy Security (World & Asia)

Figure 1. World Marketed Energy Use by Fuel Type,1990 - 2035 (quadrillion Btu)

Source: International Energy Outlook (IEO 2010)

Fossil Fuels have a high share in the energy consuming basket of the World

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China& India

Iran

Strategic Ellipse of Energy

USA

Europe

Caspian Sea(%17 Oil & %46 gas

Reserves)

Persian Gulf(%55 Oil & %40 Gas

Reserves)

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Oil Natural Gas

Proved Reserves

(BB)

Production)TB per Day(

Proved Reserves

(TCF)

Production)BCF(

Persian Gulf 747.854 24795.87 2631.585 16039.23

Bahrain 0.12456 46.43458 3.25 432.6088

Iran 137.62 4251.58 1045.67 5161.287

Iraq 115 2408.465 111.94 46.01545

Kuwait 104 2450.37 63.5 414.3509

Oman 5.5 867.87601 30 957.0365

Qatar 25.41 1437.224 899.325 4121.261

Saudi Arabia 262.4 10521.0885 263.5 3095.713

United Arab Emirate 97.8 2812.8372 214.4 1810.953

Caspian Sea 235.814 17288.04 3170.67 30695

Azerbaijan 7 1040.91895 30 588.9129

Kazakhstan 30 1610.45847 85 306.7814

Russia 60 10124.06 1680 20915.44

Turkmenistan 0.6 202.37694 265 1599.77

Uzbekistan 0.594 105.49503 65 2122.82

Iran 137.62 4251.58 1045.67 5161.287

Table 3. Reserves and Production of Oil and Gas in Persian Gulf and Caspian Sea (2010)

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The Role of China, India and Iran

1) China

Coal (%70.45)

Nuclear Energy(%0.68)

Oil (% 17.62)Gas (%4.03)

Renewable Energy (%0.49)

Hydro Electricity (%6.7)

Figure 2. Energy Consumption in China, % of Total (2010)

Source: BP, Statistical Review of World energy (2011)

In China, Oil with %17.62 of total energy consumed is in the second place after coal

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Figure 3. The Trend of Consumption and Production of Oil in China, 2000-10

0

2000

4000

6000

8000

10000

2000

2001

2002

2003

3004

2005

2006

2007

2008

2009

2010

Tho

usan

d B

arre

ls p

er D

ay

year

Source: BP, Statistical Review of World Energy (2010)

Consumption

Production

In China, the rate of increase in consumption of oil is %90 but the rate of increase in production is %25 in 2000-2010

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2) India

Figure 4. Energy consumption in India, % of Total (2010)

Oil (% 29.66)

Gas (%10.62)Coal (%52.96)

Nuclear Energy(%0.99)

Hydro Electricity (%4.8)

Renewable Energy (%0.95)

Source: BP, Statistical Review of World Energy

In India, Oil with %29.66 of total energy consumed is in the second place after coal

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0

5001000

1500

2000

2500

30003500

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Production

Consumption

Tho

usan

d B

arre

ls p

er D

ay

year

Figure 5. The Trend of Consumption and Production of Oil in India 2000-10,

Source: BP, Statistical Review of World Energy (2010)

In India, the rate of increase in consumption of oil is %46.7 but the rate of increase in production is %13.7 in 2000-2010

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3- Iran

Importance of Iran

Geopolitical Situation

Energy Transit

Center of Strategic Ellipse of Energy

Easiest, Shortest & the Least Cost Way

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Proved Reserves

Share of Middle

East(%)

Share of Asia

(%)Production

Share of Middle

East(%)

Share of Asia

(%)

Oil137.62

)Billion Barrels( 18.2 15

4251)Thousand

Barrels( Per day

16.6 9

Gas1045.67

)Trillion Cubic Feet(

39 19.55161.2

)Billion Cubic Feet(

30 8.6

Table 4. Reserves and Production of Oil and Gas in Iran, Shares in the Middle East and Asia

Source: EIA

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Main Problems ofICI Cooperation

India’s Foreign policywith Respect to USA

Tension of India & Pakistan

Tension of Iran & USA

Competition betweenChina & India

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A Thorough Inference of Opportunities and Threats: A Hypothetical Model of Cooperation

1.Energy is a political commodity

2. Asia is itself a record growth continent

3.Energy security problems cannot be solved within Asia

4. Collective action is needed for stability & sustainability of development of the countries

5. There are historical differences, cultural diversities and different political practices in Asia

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Figure6. A Hypothetical Model of Energy Cooperation in Asia

Problem: Lack of Energy Cooperation in Asia (ECA)

Sustainability

Economic

Geographical

Political

Coordination

Environmental

Price

Eco. Goals

SLOC

Territorial

Exist. Inst.'s

New Inst.'s

Suppliers

Demanders

Cooperation

China & India

Iran

ICI ECA

Possible

Causes

Security

Stability

Corridors

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Conclusions

Fast growing rate of demand for energy in Asia necessitates a serious plan for energy.

Geopolitics of energy in the world demands a greater attention to the role of Iran on the supply side and China and India on the demand side.

A comprehensive Understanding of opportunities and threats in the area of energy implies to level up the degree of cooperation in Asia.

The potentials for Energy Cooperation in Asia (ECA) can be actualized primarily through a cooperation between Iran, China and India (ICI).

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