ENERGY SECURITY IN ASIA

INNOVATION, DIVERSIFICATION, COOPERATION VITAL TO ENERGY SECURITY

Daniel Yergin

Asahi Shimbun, August 12, 2012

Chinese and Indian economic growth is leading to a surging demand for energy. Which energy sources can meet this demand? Since the nuclear accident in Japan, each country has adopted a different approach to nuclear energy. More time is needed before renewable energies become widely used. As in past crises, the key lies in technological innovation. It is time for developed and developing nations to work together to find solutions.

Since around 2004, the globalization of energy demand has fundamentally changed the international environment. In the old days, the drivers of energy demand were the United States, Western Europe and Japan, but the drivers these days are the emerging markets. China and India now have a decisive impact on energy markets and on the global economy as a whole. At the same time, energy security is now a very important issue, not just for developed nations but for these newly emerging economies too. This was symbolized by Chinese Premier Wen Jiabao's warning to Iran that it should refrain from "extreme acts" such as disrupting the Strait of Hormuz.

On the eve of World War I, when he was converting the British Navy from coal to oil, Winston Churchill made the famous statement that "safety in oil lies in variety and variety alone." The words are as relevant in 2012 as they were a century ago. Churchill was talking about the need to diversify sources of oil, but the key to energy security has to be the diversification of all energy sources.

One immediate issue nowadays is the world's unprecedented dependence on electricity. We wouldn't have the Internet, iPhones or home computers without it. With regards to the fuel mix for electricity generation, on a global basis a triumvirate of coal, nuclear and natural gas will remain dominant for at least another two decades.

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