The Geopolitics of EnergyThe Geopolitics of Energy

Asia’s Energy AngstAsia’s Energy AngstEnergy becoming key factor in Asia’s

geopolitical architectureEnergy nationalism rising with prices,

perception of long-term looming scarcityZero-sum competition for control of supplies

and transport routes Intensifying focus on transit security, controlMainly oil but increasingly natural gas (LNG)

long-term

South China Sea (Malacca Straits)South China Sea (Malacca Straits)Key Countries with Energy InterestsKey Countries with Energy Interests

United States– Interest in uninterrupted flow of oil, LNG

Indonesia, Malaysia– sovereignty, sensitive to U.S. role

Japan: 90% of oil supplies, 40% of LNG– Powerful navy, very limited role

China: 30% of oil supplies, headed for 60% Singapore: strong navy, littoral state, closer U.S.

relations India: “looking east”, rivalry with China

China’s Growing Focus on Sea China’s Growing Focus on Sea LanesLanes

Fear US dominance sea lanes, also terrorism and piracy Lack of “Blue Water” navy power projection Must “free ride” on US, SE Asia naval powers Response:

– “String of Pearls”: near-term port access strategy, submarines– Blue Water navy development long-term– Alternative routes: Myanmar oil pipeline– Want to build Chinese tanker fleet – only 10% now– Growing interest in patrolling Straits Malacca; reducing US

control

ConclusionsConclusions

As oil and LNG prices rise, energy geopolitics focus on sea lanes and Malacca Straits will intensify

U.S. dominance of sea lanes to continue Terrorism, piracy main near-term concerns Rise of China and possible asymetrical strategies

to address energy shipping vulnerability are wild cards very long-term

U.S., India, Japan all wary of China factor