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Northeast Asian Resource Security Strategies and International Resource Politics in Asia
Abstract
Soaring prices for minerals and energy are posing a major threat to the resource security of economies in Asia. As a result, many regional governments have launched new resource security strategies in the last few years. Most recent attention to resource security in Asia has focused on debating whether the Chinese government’s resource policies are mercantilist or liberal. This China-focused debate is too narrow to fully capture the nature of resource politics in Northeast Asia, since the governments of Japan and Korea have also recently launched their own resource security strategies. This paper considers regional-level trends in Asian resource politics by examining the causes, content and implications of the resource security strategies deployed by the consumer governments in Northeast Asia. It argues that growing resource security concerns, combined with a process of competitive policy emulation, have seen the Chinese, Japanese and Korean governments each adopt mercantilist resource security strategies over the last decade. Furthermore, the competitive nature of these mercantilist strategies is acting to intensify political and economic competition for resources between the Asian region’s three main economic powers.
... The belief is that if markets are open, economic forces will naturally encourage greater efficiency (Deutch et al., 2006). A liberal approach is characterized by agnosticism regarding the source of energy imports; eschewal of policies that seek to promote the interests of national over foreign firms; liberalization of domestic resource sectors and integration with international markets through open trade and investment policies; and foreign policy cooperation with other states to improve the functioning of international resource markets on a multilateral basis (Hancock and Vivoda, 2014;Wilson, 2014). ...
... First, Japan's statist approach has fuelled energy competition in the region as other energy importers utilize similar mercantilist strategies to secure access to energy. According to Wilson (2014), growing energy security concerns, combined with a process of competitive policy emulation, have seen the Chinese, Japanese, and Korean governments each adopt mercantilist energy strategies over the past decade. Moreover, the competitive nature of these mercantilist strategies is intensifying political and economic competition for energy between Asia's three main powers (Wilson, 2014). ...
... According to Wilson (2014), growing energy security concerns, combined with a process of competitive policy emulation, have seen the Chinese, Japanese, and Korean governments each adopt mercantilist energy strategies over the past decade. Moreover, the competitive nature of these mercantilist strategies is intensifying political and economic competition for energy between Asia's three main powers (Wilson, 2014). ...
Australia and Japan have much in common. Both countries are developed economies, located in the Asia-Pacific region, and are members of the International Energy Agency (IEA). Given these general similarities, one would anticipate that their governments adopt similar approaches to energy markets. However, this chapter demonstrates that there is much contrast in their respective approaches to energy markets. On one hand, in Australia, the government adopts a laissez-faire approach to energy markets, largely behaving as a facilitator of investment in upstream activities. The Australian hydrocarbon sector is dominated by international energy companies, which control both upstream and downstream sectors, and are responsible for supplying much of Australia’s energy. On the other hand, having first-hand experience from the 1970s oil crises, the Japanese government perceives energy resources as strategic commodities. Unlike in Australia, energy in Japan is securitized, where the government plays an active role in ensuring that Japan has access to uninterrupted supplies of affordable energy. Against this backdrop, this chapter explores contrasting approaches to hydrocarbon sector by the Australian and Japanese governments and highlights key similarities and differences between the two cases.
... The states of the Persian Gulf, endowed with rich energy resources, prefer the neo-mercantilist approach, state-led resource policy, and sovereign control over external supply networks [91,92]. ...
The energy market integration in the Middle East is assessed by comparing the acting institutions in the Levant and Persian Gulf sub-regions. Pami Aalto's regional institution's theoretical framework and the case-oriented comparative research method are adopted for this purpose. Changes in the Levant region coincided with the Arab League's establishment. This league did not develop due to inappropriate bi-lateral energy relationships and a lack of effort among the inter-state trade institutions. Regional institutions, lacking order creation, next to the Arab League members' sovereignty disturb gas transmission, transit, and environmental protection regulations. The Arab League has recognized Israel as an energy-producing member and has reduced the political conflicts' intensity to improve Arabic leadership in the Levant integration. The Persian Gulf states' unilateral trade negotiations, sanctions imposed by the US and EU on Iran's energy sector, and political disputes between Iran and some Arab states prevent coherent regional integration, liberalization, and the launch of joint energy projects. In bi-lateral energy diplomacy competition between the regional great energy powers, Iran and Saudi Arabia outside the region is evident. Though the environmental stewardship institution supports green energy, the profit-interest has priority in these regions. The outcome of this article reveals the existence of constraints imposed on energy market integration in these sub-regions.
... Among multiple aspects covered by this notion, it must here be emphasised that states fear inputs from industries becoming affected by imperfect contracting, collusion, geographic concentration, and conflict; they respond to these threats by having control and influence over suppliers, diversifying supply content and transit, generating inventories, providing security for the protection of assets (Lind & Press, 2018). This phenomenon is exacerbated by intensifying resource security concerns and competitive policy emulation, especially in North-East Asia (Wilson, 2014) with a special focus on China, but also the United States. Even though the Area, may it be in the Clarion-Clipperton Zone or elsewhere, is not resource yielding yet, virtually all the stakeholders display a mercantilist behaviour. ...
Advancing technologies and sustained pressures on resources have led humankind to push the resource frontiers every time further. A geographical place increasingly explored is becoming the stage of a new geopolitics: the deep-sea. The ore located on the floor of oceans is coveted as it has the potential to supply considerable amounts of critical minerals for a world which is everyday more ravenous of those. A major set of resource security strategies implemented by states can be defined as neo-mercantilist. At the same time, territory, understood as a political technology, holds appropriative features emanating from its measurement and calculation. Beyond the deliberate techniques to secure resources, there is thus the significant territorialising aspect of neo-mercantilism that is substantiated here. First, the construction of resource scarcity as a motivation is scrutinised. Thereafter, how neo-mercantilist practices have been utilised as a solution for securing resources is demonstrated. After presenting the concept, finally, how these relate to the territorialisation of deep-sea is explored. It results that territorialisation is the cause and the consequence of gaining resource security: it must be considered as being consubstantial to the act of securing resources. The findings show the tremendous consequences entailed by this new frontier involving a reshuffle of the global supply setting with subsequent (in)dependencies and competition.
... States intervene or participate in international energy markets to meet their energy and foreign policy objectives or advance broader strategic, geopolitical, economic, or ideational interests. Two ideal-type policy approaches are based on diametrically opposing views of the role of the state in energy markets: strategic and market-based (Vivoda and Manicom, 2011;Stoddard, 2013;Wilson, 2014;Sidortsov and Sovacool, 2015). In practice, there is always a degree of intervention even by the most market-oriented governments. ...
Global demand for liquefied natural gas (LNG) has doubled over the past decade. The long-term outlook for natural gas is strongest among the fossil fuels. Specifically, LNG is expected to play an increasing role in meeting global natural gas demand, as it provides a flexible link between geographically separated suppliers and customers. In the context of the growing role of LNG in the global energy system, this paper focuses on the world's five largest LNG exporters: Australia, Qatar, the United States of America (USA), Russia and Malaysia. In 2021, they accounted for three-quarters of the global supply. By focusing on exporters, the paper addresses the bias in energy policy literature, which is largely concerned with energy importers. The paper engages in a comparative analysis of LNG exports by five suppliers by considering the extent of their diversification. Focusing on the 2009-2021 period, the paper leverages eight variables to explain patterns of diversification of LNG exports among suppliers and over time. The paper finds that the geographical location and gas price differential across regional markets have the most explanatory power. This finding has significant policy implications for the behaviour of LNG exporting states, demonstrating high sensitivity to economic factors.
... Thus, in NEA, mercantilist approach to energy has so far hindered the formation of a viable institutional framework for common action. Lack of cooperation has rendered "regional resource markets less open, transparent and efficient," thereby "undermin [ing] the effectiveness of these markets in providing resource security for all consumer economies" [15]. ...
Over the past several decades, sustained economic growth has led to a surge in energy consumption in Northeast Asia, most notably, in China, Japan and South Korea. However, domestic supply has failed to meet the demand in energy, leading to two related outcomes: First, the widening gap between production and consumption has led to dependency on external sources of energy. Second, it has forced the governments to securitize their energy policy. Nevertheless, unlike other regions such as the European Union and the Association of Southeast Asian Nations, energy dependency in Northeast Asia has not encouraged closer intra-regional cooperation. Rather, in some instances, it has undermined cooperation and exacerbated unconstructive competition. Thus, in this study, our aim is to highlight the problematic relationship between energy securitization and regional energy cooperation in Northeast Asia, and provide an analysis on the rationale, mechanisms and challenges for energy-driven regional cooperation. We, in this respect, argue that, drawing on the existing regional compatibilities in renewable energy generation and consumption patterns, establishing a multi-modal integration and communication mechanism would promote greater integration and help bridge the gap between securitization and cooperation in energy in Northeast Asia.
... Casi a la par de su nacimiento, estas empresas empiezan su proceso de transnacionalización en la búsqueda de minerales y petróleo para hacer posible el crecimiento económico planificado, lo que en los años 2000 será potenciado por sus respectivos gobiernos gracias a la firma de acuerdos comerciales ad hoc (Wilson, 2014). Establecen una gobernanza jerárquica con las sucursales en los países de abundantes recursos mineros, y además relacional, cuando deben formar alianzas con empresas estatales, privadas locales o inclusive transnacionales ya existentes. ...
Este trabajo identifica a nivel industria-país las cadenas de valor en el mundo que hace uso intensivo de minerales, señala además qué empresas las lideran, y qué países han escalado su posición a mayor valor agregado. Las estimaciones se lograron mediante instrumentos propios del análisis insumo-producto complementado con algoritmos de la teoría de redes, teniendo como fuente de información las tablas de insumo-producto internacionales elaboradas por la OECD, con información de 33 sectores económicos de 63 países, para los años 1995 y 2011. La evidencia muestra casos de escalamiento hacia adelante del sector extractivo en Brunéi, Indonesia y Malasia hacia eslabones más sofisticados en las cadenas globales de valor (CGV).
... This link between national security and energy issues in Asia has been further conceptu alized by some analysts as the "the security dilemma" of Asian energy dynamics, which implies that increases in the security of one state decrease the security of others (Vivoda 2017, 275;Herz 1950), a zero-sum game, to use IR terminology. Marketos (2008), Sun et al. (2011), andWilson (2014) provide important insights in regard to great power politics and regional rivalries that influence energy issues. Several analysts have argued that the emphasis on energy's importance to defense and national security and great power poli tics can further aggravate existing tensions among regional countries, such as China, Japan, Australia, and Indonesia (Singh 2013;Sovacool 2011;Vivoda 2017;Wilson 2017). ...
This chapter provides a critical overview of extant literature on energy politics in the Asia-Pacific region and proposes a future research agenda for the field. It argues that traditional, security-centric analyses of energy issues in Asia have been complemented in recent years by a small but growing body of literature that addresses environmental and social aspects of energy. While these nascent fields require further development, scholars have yet to comprehensively address crucial contemporary developments in international energy relations, among them the peace-building potential of transnational energy projects, the cyber-security of energy infrastructure, and competition around deep-sea resources. Addressing these and other research gaps, the chapter formulates eleven broad focuses of the proposed future research agenda, including, among other topics, non-Western IR theories, Arctic resources, energy subsidies, and transnational infrastructure. These research areas will be placed in a rapidly evolving international system underpinned by a simultaneous increase in the securitization of energy and progress in regional cooperation, integration and trade.
... while the objectives of the multinational companies are purely commercial, Chinese goals are multifaceted. Many authors have emphasized the strong role of the state in driving the outward investment by Chinese energy and resource companies, describing the strategy as "strategic" or "(neo-)mercantilist" (Andrews-Speed, Liao, and dannreuther 2002;Lieberthal and herberg 2006;humphreys 2013;wilson 2014). A counter-argument has drawn attention to the capacity of the enterprises to formulate and implement their own investment strategies to fulfill business objectives, despite state-ownership (houser 2008; Andrews-Speed and dannreuther 2011). ...
Chinese energy and mineral companies have been investing overseas for more than twenty years, and the quantity and size of their projects have been growing steadily. Although Southeast Asia is not a preferred region for these investments, they remain significant on account of their relative value to the host country and because of the geostrategic importance of the region for China. Most of the companies making the investments or undertaking the projects are wholly or partly owned by the Chinese government at either central or local levels. As a result, the motivations for their investment activities reflect a mix of corporate and state objectives. Corporate objectives include securing energy or resource supply chains, increasing or diversifying their asset base, and enhancing their profits or market share. Government motivations range from direct support to companies for purposes of industrial strategy and resource security to indirect support through development assistance, diplomacy and regional strategic positioning. This chapter presents an overview of the scores of investments and major infrastructure projects undertaken by Chinese companies in Southeast Asia in oil and gas, coal, hydroelectricity and metalliferous mining, showing how the mix of motivations for these activities varies between industries and, to a lesser extent, between host countries. While the economic benefits of these investments to host countries are in most cases evident, there are some risks. The lack of transparency and low operating standards that characterize some projects can weaken the social license to operate, creating risks for both the Chinese companies and the host governments.
... Government interference is only needed in times of market failure (Vivoda and Manicom 2011). The market approach is characterised by agnosticism regarding the source of energy imports; eschewal of policies that seek to promote the interests of national over foreign firms; liberalisation of domestic resource sectors and integration with international markets through open trade and investment policies; and foreign policy cooperation with other states to improve the functioning of international markets on a multilateral basis (Hancock and Vivoda 2014;Wilson 2014). ...
... They create path-dependencies where numerous choices made create an institutional matrix resisting radical change, instead favouring incremental development (North 1990). Since the early 1990s, the informal institutional setting in Asia has been dominated by state sovereignty, a strong preference for policy autonomy, the persistence of bilateral patterns of energy diplomacy, and a lack of management among the region's great powers (Andrews-Speed 2014; Wilson 2014). Given that energy has been 'securitised' across the region (Phillips 2013), Asian LNG importers have practised neo-mercantilist protectionism of domestic markets, which have been dominated by state-owned or state-controlled companies (IEA 2013). ...
This chapter analyses change and continuity in the regional approach to LNG markets since 2010, focusing, in particular, on Japan, the world's largest LNG importer. The primary focus is on natural gas markets in the region as opposed to extraction, production and/or domestic regulation in producing states in the Asia-Pacific Region. This approach is driven by the fact that the regional gas market is in flux and the evolution of regional gas pricing will have a significant effect on the economics of natural gas production worldwide. Japan's approach to LNG markets is evaluated in the context of its interaction with other formal institutional actors and is couched within the broader regional institutional setting. Consequently, the chapter documents recent developments in Japan's LNG policy and summarises its activities in the LNG market since 2010.
... The market approach is characterised by agnosticism about the source of energy imports; eschewal of policies that seek to promote the interests of national over foreign firms; liberalisation of domestic resource sectors and integration with international markets through open trade and investment policies; and foreign policy cooperation with other states to improve the functioning of international markets on a multilateral basis (Hancock & Vivoda 2014;Wilson 2014). ...
... while the objectives of the multinational companies are purely commercial, Chinese goals are multifaceted. Many authors have emphasized the strong role of the state in driving the outward investment by Chinese energy and resource companies, describing the strategy as "strategic" or "(neo-)mercantilist" (Andrews-Speed, Liao, and dannreuther 2002;Lieberthal and herberg 2006;humphreys 2013;wilson 2014). A counter-argument has drawn attention to the capacity of the enterprises to formulate and implement their own investment strategies to fulfill business objectives, despite state-ownership (houser 2008; Andrews-Speed and dannreuther 2011). ...
The energy and mineral resource base of Southeast Asia is relatively modest by international standards. Nevertheless, Chinese energy and mining companies have been investing heavily in the region over recent years, in comparison with multinational companies and state-backed companies from other Asian countries. This paper applies a framework derived from the field of business studies to analyze why the scale of China’s engagement in Southeast Asia has become so great and how the motivations vary between the different energy and resource industries. The motivations for these activities reflect a mix of corporate and state objectives. Corporate objectives include securing energy or resource supply chains, increasing or diversifying their asset base, and enhancing their profits or market share. The motivations of the government range from straightforward support of the companies for the purpose of industrial strategy and security of resource supply, to development assistance and regional strategic positioning. The different motivations of the oil and gas, hydropower, and mining industries arise from the particular character of each market, both within China and globally. Southeast Asia has the twin advantages of geographic and apparent cultural proximity to China. Nevertheless, inexperience and a desire to catch up with their international peers have resulted in companies applying low social and environmental standards in some high profile projects. The subsequent disputes, together with the current low level of resource prices, may constrain the further growth of Chinese investment in the near future.
... 562– 66). The energy trade of China, Japan and South Korea has also acquired neo-mercantilist features since the mid-2000s as they attempt to secure privileged access to key energy resources especially in countries where national energy companies dominate, by supporting their own national companies by financial and regulatory means (Wilson, 2014, pp. 15–17). ...
This article introduces a methodological framework to study institutions in European and Asian energy markets with a comparative case study on the EU and east Asia. A distinction is made between informal and three types of formal institutions; and their transaction cost reducing, order creating and ecological/climatic functions. The operation of energy markets is explained through the structure of institutions, their types and functions. It is found that order-creating institutions guarantee enough stability, (mutual) trust and solidarity among EU Member States to support the competitive markets institution and supranational formal institutions as the underpinnings of trade in the internal energy market, which nevertheless retains some corporatist features. In the east Asian markets the nature of order-creating institutions sovereignty, energy diplomacy and great power management prevents the emergence of supranational formal institutions and a shared idea of trade. The prevailing structure has a large number of sub-regional organisations with overlapping tasks and few powers. In both markets the functions of institutions signify more than their number; transaction cost reducing institutions are dependent on order-creating institutions, while both of these functions are better realised on the regional level than ecological/climatic functions; ultimately informal institutions are most influential.
... The NEA-3 states have reinforced their energy diplomacies to better compete for resources since the mid-2000s. China has a newly launched, decidedly bilateral and state-centric energy diplomacy also involving pariah states, while Japan and South Korea have a longer tradition in this field (Wilson, 2014). ...
This article assesses the case made for energy market integration in East Asia by comparing the role of institutions in South East Asia and North East Asia. The types and functions of institutions and their overall structure are examined in light of global energy market trends. In South East Asia, the shift attempted by ASEAN towards more competitive markets is hampered by the remaining statist variants of the trade institution and bilateral energy diplomacy, which, as regards transaction cost functions, are sub-optimal. As for institutions with order-creating functions, the unresolved status of sovereignty within ASEAN hampers regulatory harmonisation; the great power management institution has since ASEAN׳s establishment reduced conflicts without providing decisive leadership conducive to integration. North East Asia׳s dependence on global energy markets overshadows the regional integration potential of the diverse liberalisation efforts and interconnection projects. Bilateral energy diplomacies, new trilateral institutions combined with ‘Track Two’ institutions and remaining great power competition co-exist. In both regions the institutional structure allows for step-wise, technical infrastructure integration. The environmental stewardship institution co-exists with statist energy security and development objectives while it supports cooperation on green energy. The overall structure of informal institutions constrains deeper energy market integration in several ways.
... Informal institutions include trade, sovereignty, energy diplomacy, great power management and environmental stewardship (Aalto, 2014). Since the early 1990s, informal institutional setting in Asia has been dominated by state sovereignty, a strong preference for policy autonomy, the persistence of bilateral patterns of energy diplomacy, and a lack of management among the region's great powers (Vivoda, 2010;Andrews-Speed, 2014;Wilson, 2014;Aalto, 2014). Given that energy has been "securitized" across the region (Phillips, 2013), Asian LNG importers have practiced neo-mercantilist protectionism of domestic markets, which have been dominated by state-owned or state-controlled companies (IEA (International Energy Agency), 2013). ...
Japan is among the leading countries pursuing deep sea mining (DSM) – both in “The Area” and in its domestic waters. One of the key drivers for this is the dearth of national mineral resources and the government`s desire to secure supplies of metals for its economy. While Japan has been undertaking research and development on the technological and environmental aspects of DSM, it has largely neglected the engagement of the community. This paper presents the results of a survey about DSM and the preferences of society in Japan for alternative sources of minerals. Key results are that for Japanese respondents: (i) understanding of DSM is still low, (ii) they tend to prefer development of DSM domestically rather than overseas, (iii) they prefer recycling or development of substitutes rather than DSM, (iv) people care about the impact on other industries which already use the ocean (fishing, tourism) but are split on whether minor impacts should prevent DSM occurring. This is a preliminary survey and the issue requires further examination with more detailed surveys and sophisticated techniques, importantly there is a need to supply participants with the most recent scientific understanding of DSM and its environmental impacts relative to other industries and other resource supply methods. In terms of marine policy, it is clear that there is a need to engage in significant stakeholder consultation to ensure a social license to operate, including concrete scenarios and plans for local benefit and mitigation of local impacts.
Research aim is to assess the prospects of using copper resources in the Far East to organize the regional base for the copper industry. Methodology. To assess the possibility or necessity of using the Far Eastern copper resources in the domestic industry, the state, production, needs and use of copper resources together with the existing projects of their development in the Far Eastern region are analyzed. Results and their analysis. In the Far East, projects are currently being implemented that require considerable use of a variety of non-ferrous metallurgy products. Metal products, materials and equipment required for the projects are imported or delivered from the western parts of Russia. Transportation significantly increases their cost. With the discovery and exploration of large copper deposits (Malmyzhskoye and Peschanka) and rich prospects of increasing the copper resource base in the far East, a number of ideas for copper industry creation and development in the region are proposed. Summary. The issue of copper industry creation in the Far East requires a multifaceted discussion, including the estimation of the general state and plans for the development of the copper industry in Russia and promising projects in the region. The region has sufficient reserves and resources of copper to create a complete technological chain of the regional copper industry, which involves the organization of copper production in the region. The potential of copper mineral resources in the region with an effective strategy for their use can contribute to the accelerated development of the Far East and become one of the factors of changing the geopolitical importance of Russia’s eastern part.
Due to its rapid economic growth and increasing demand for energy, China has engaged in numerous efforts to sustain its energy supplies and enhance its energy security. While existing literature argues that access to energy is oftentimes the driving force behind Beijing's foreign policy behavior, little work has been done to systemically examine the bilateral relationship between China and energy-producing countries. This paper explores how China's foreign policy making is influenced by its energy security concern, focusing on three foreign policy instruments—partnerships, foreign aid, and leadership visits. Using a large-N, quantitative approach, this paper analyzes the effect of oil production on these three foreign policy indicators. The results show that Beijing is more likely to form partnerships with oil-producing countries. Top Chinese leaders are also more likely to travel to countries that produce a higher level of oil. China's aid allocation to Africa is driven by oil abundance as well, although the findings on aid are only valid in the cross-national analysis.
Recent years have seen a renewed interest in energy amongst International Relations (IR) scholars. The existing IR literature is characterised by a debate between a realist-inspired ‘geopolitical’ approach that sees energy as a source of zero-sum conflict, and a liberal-influenced ‘global energy governance’ approach which emphasises interdependence and cooperative dynamics. However, by adopting a systemic perspective these IR approaches fail to account for the full range of political dynamics shaping inter-state energy relations. This article consolidates insights from the broader literature on energy politics to develop a new securitisation approach to international energy politics. It argues that energy securitisation – a process where governments frame energy as an existential threat to state interests – is variable and contingent. It occurs in states where energy issues are implicated in economic, regime and/or geopolitical security concerns, and leads governments to adopt nationalistic policy frameworks that result in international conflicts over energy. The utility of this securitisation approach is illustrated with a case study of the divergent energy behaviour of two major energy exporters (Russia and Australia). By accounting for domestic and international dynamics, and explaining rather than assuming the securitisation of energy, this securitisation approach offers more explanatory purchase than existing IR energy theories.
The rise of new economic powers has seen increasing attention focused on the international role of the BRICS countries. Importantly, a common feature uniting the BRICS is that they are all resource-rich, and many analysts (and some BRICS governments) have argued that natural resources are one of the key factors propelling the rise of the group. This article explores the BRICS’ emerging status as ‘resource powers’, examining how resource wealth underpins their economic development and foreign policy strategies, and thus contributes to their growing influence in international affairs. It is argued that through the use of nationalistic mining and energy policies, the BRICS governments have exploited natural resources for both domestic economic and international diplomatic objectives. However, there are several challenges and emerging risks facing the BRICS’ resource strategies, which mean that resource wealth is making a positive – though inherently limited – contribution to the growing international status of the group.
Surging world energy prices, increasing oil market volatility and a nascent ‘energy transition’ are posing major challenges for global energy governance. In response, there has been a proliferation in the number of multilateral bodies addressing energy issues in recent years, and a wide range of organisations now claim a role in facilitating intergovernmental energy cooperation. However, the practical achievements of these organisations have been very poor, with all suffering difficulties that have limited their ability to promote shared energy interests between states. This article examines the dynamics of multilateral energy organisations, arguing that the political economy features of energy – securitisation and attendant patterns of economic nationalism – explain why they have failed to develop more robust cooperative mechanisms. Ten global-level organisations are evaluated and found to suffer from membership, design or commitment issues that limit their effectiveness in global energy governance. These challenges are linked to the securitisation of energy, which has led governments to favour low-cost soft-law approaches over potentially more effective hard-law institutional designs. Moreover, the securitisation of energy poses limits for how far multilateral energy cooperation can proceed and means that contemporary efforts to strengthen these organisations are unlikely to succeed in coming years.
China has adopted a state-centered approach towards energy security to deepen political and commercial relationships with all energy producing nations and to aggressively invest in oil fields and pipelines around the world. Applying this approach to its relations with its Asia–Pacific neighbors has produced mixed results. While China's energy diplomacy has brought about opportunities for cooperation with some of its neighbors, notably some countries in Central Asia and continental Southeast Asia, it has become a source of conflict with some other neighbors, especially those with border disputes over maritime territories which may have rich natural resources. This paper examines China's state-led search for energy security and its implications for China's relations with Asia–Pacific countries.
China's debate over what ‘energy security’ is and how it can be achieved has evolved considerably over the past decade. raditionally, Chinese officials and analysts have been most worried about China's mounting oil imports, and they have expressed considerable wariness of international energy markets and institutions. This narrow and relatively nationalistic view of China's energy-security challenge has been challenged on several different fronts, however, particularly in the past five years. Prominent analysts now call for a more positive approach to international markets and institutions, and some argue that external dependence is a less important energy security challenge than the shortcomings of China's own energy system. China's broadening debate over energy security represents an opportunity for the outside world as it engages China on energy and climate change in the years ahead.
The EU’s higher profile in energy policy matters is arguably due to the increased importance of market liberalisation as a policy objective over the last twenty years. Given the EU’s own competences in the internal market and competition policy, the European Commission has accordingly been able to play a more active role in energy policy-making. Moreover it has been active in extending this approach to its energy relations with its neighbours as manifest in the Energy Charter Treaty, the European Energy Community Treaty and bilateral agreements with third countries. The European Commission has been keen to assert the centrality of market liberalisation to its future energy policy and energy diplomacy, notwithstanding the changes that have taken place in energy markets. Given that there appears to be an increased interest in ‘national champions’ amongst both energy exporting countries and at least some EU member states, how far can the EU sustain a strategy of market liberalisation? The article will place current policy dilemmas (and the EU’s role) in the context of a shifting energy policy agenda – essentially from a supply security ‘economic nationalism’ to market liberalism and back again. It then considers how EU policy is adapting to these circumstances and assesses the effectiveness of this response.
This book studies the main causes, consequences and nature of the Asia-Pacific's new free trade agreement (FTA) trend, and its implications for the global economy. It explores the FTA policies of the region's trade powers and offers conceptual and theoretical perspectives on the relationship between economic bilateralism and regionalism.
Energy security is a vital topic specially with foreign policies. With regards to Japan's own perspective, three points should be noted; security of supply, energy and the environment, and the importance in energy response of the International Energy Agency (IEA). An important task to consider is working closely with non-member emerging economies like China and India in enhancing their oil stockpiling system. The IEA can play an instrumental role in ensuring the steadfast implementation of climate change and energy efficiency efforts.
Following a historical commitment to multilateralism, in the last decade the trade policy initiatives of many states in the Asia-Pacific have turned to bilateralism through the negotiation of free trade agreements (FTAs). The corresponding proliferation of regional FTAs has thus far been understood to result from three broad motivations: a desire to advance trade liberalization beyond World Trade Organization (WTO) disciplines; mercantilistic efforts to secure preferential access to key export markets; and/or attempts to use FTAs to secure non-economic political gains. This paper argues that since the middle of the decade a new motive has emerged – the use of FTAs to improve resource security – particularly by import-dependent resource consumers in Northeast Asia. As yet unexamined in the literature, this paper seeks to document and explain this trend. It analyses the recent emergence of resource security concerns as a new FTA motive; the corresponding shifts in the FTA strategies and initiatives of Japan, Korea and China; and the dynamics of an emerging race for resource-related FTAs between the three governments. Based on this analysis, it demonstrates that resource-related FTAs could potentially improve consumers’ resource security through either the liberalization of trade, the extension of investment protections or broader diplomatic gains with the targeted supplier. However, owing to supplier reluctance to enter into binding policy commitments for resource industries, their track record shows success in only the diplomatic dimension, and the prospects for a strengthening of their effects are poor. As a result, it is argued that while resource concerns have become a key motive for FTA initiatives in the Asia-Pacific region, they have not substantively improved resource security for its import-dependent states and are unlikely to do so in the future.
China's engagement in South America and Africa's extractive sectors has increased significantly in the last decade. How comparable are the African and South American cases from a developmental perspective? This article explores resource curse theories, arguing that the ‘curses’ often associated to extraction are historically produced dynamic processes that need to be reevaluated in light of China's direct and indirect impacts on resource-endowed countries. It elaborates a framework to compare the developmental dynamics entailed by China's involvement in the South American and African extractive sectors, distinguishing between external, internal and intrinsic ‘curses’. The article holds that China's growth and investment have strengthened the position of resource-endowed countries in the international economy, revitalizing resource industries and improving terms of trade for commodities. Concurrently, the expansion of extractive activities has brought about increased environmental and economic sustainability challenges. Divergences between the African and South American cases are best observed at the national levels, where China's non-interventionist approach has different developmental implications depending on internal trends within investment host countries.
The East China Sea is one of the last unexplored high- potential resource areas located near large markets. But the development of oil and gas in much of the area has been pre- vented for decades by conflicting claims to boundaries and islets in the area by China, Taiwan, and Japan. Competition between China and Japan for gas resources in the East China Sea is intensifying and hampering improved relations. How- ever, conflict is not inevitable. A compromise—joint develop- ment—is motivated by the realization that a positive China- Japan relationship is simply too important to be destroyed by these disputes. Although both agree in principle on joint development, the two sides have different interpretations of what joint development means or implies, and what area should be jointly developed. The article spells out three basic agreements in principle that are necessary before details of any solution can be negotiated. The alternative to a solution is continued mutual suspicion, unstable relations, unmanaged and undeveloped resources, and an increasing frequency and intensity of incidents, fueling nationalist sentiments and resul- tant political conflict.
This report examines inaccuracies in some commonly held views of China's National Oil Companies (NOCs). Until now, there has been little analysis to test the widely held presumption that these companies act under the instructions and in close co-ordination with the Chinese government. Nor have critics been challenged on the validity of their concerns about investments made by these NOCs, and how they could be blocking supplies of oil for other importing countries.The IEA analysis, however, finds that contrary to these views, the NOCs actually operate with a high degree of independence from the Chinese government, and their investments have in fact largely boosted global supplies of oil and gas, which other importers rely on.
Although China and the United States do not rely on one another for energy supplies, the prospects for energy to become a cause for more serious clashes are high. Both countries should move beyond dialogue toward a true partnership that can confront the common challenges they face as importers.
China is widely viewed as exceptional in its free trade agreement (FTA) activity for two reasons. First, the existing literature on East Asian regionalism has treated China as a strategic unitary actor. Second, Chinese policy elites claim that China is exceptional for its ‘big country morality’ of seeking to provide agreements that benefit smaller countries. What drives China's trade policy in the ‘post-WTO’ era? More precisely, does China, as a state ruled by a Communist Party, have different factors affecting its FTA policy-making than do other states? Is China pursuing FTAs ‘with Chinese characteristics’: are the motivations behind China's FTAs different from those of other countries? The research presented in this paper finds that China's FTA policymaking process involves a lot of bargaining and is particularly affected by the relative weakening of liberalizing forces vis-à-vis protectionist ones after the WTO accession. Moreover, the effectiveness of economic diplomacy is affected by coordination problems between economic and political sections within the government. Although China has a few motivations that go beyond what drives other countries to FTAs, those expectations are either difficult to realize or not very useful even if realized.
Agricultural trade policy is a branch of Japanese trade policy where domestic political considerations have traditionally held sway. Recent trends, however, suggest that Japanese policy on Economic Partnership Agreements (EPAs), including the Free Trade Agreement (FTA) with Australia, is being directly influenced by the government's foreign policy goals. Despite Australia's standing as a major agricultural exporter that potentially threatens Japan's highly protected agricultural sector, the Koizumi and Abe administrations attached higher priority to several important foreign policy ambitions in agreeing to begin negotiations on an FTA with Australia. These goals were: exercising economic and trade leadership and influence in the Asia-Pacific region, enhancing political relations with long-standing trade partners, and ensuring energy and resource security. Sino-Japanese competition figured as a significant factor in shaping all these objectives.
With sharply falling prices for oil and other commodities over the second half of 2008, the geostrategic and industrial implications of resource nationalism are rapidly changing. In geostrategic terms, several regimes that have pursued resource nationalistic policies, sometimes described as use of the ‘energy weapon’, will have to revisit these policies. With the global economy slowing and commodity demand falling, a sustained period of weaker prices will shift the advantage back to international companies and away from host governments, as international companies can now afford to be more selective about the fiscal terms and regulatory conditions they are willing to accept from host governments. Evidence of this is already clear for producers of base metals and natural gas, and higher-cost oil producers are also beginning to feel the effects. The rapid shift of leverage from producer states to international companies will likely have destabilising effects in several key countries and regions.
This article looks at the opportunities and constraints for the G8 and G20 to act as steering committees in global energy governance. It starts from the premise that, intrinsically, informal consultation mechanisms among major powers have a large potential to act as coordinating bodies for global energy. After assessing the G8’s recent energy work, the article finds that the G8 has made notable strides on the energy front, particularly in areas of low controversy such as energy efficiency, but that its scope of action is limited by internal divisions, a lack of legitimacy, the absence of several key players and the lack of mechanisms for successful implementation of collective action. While some of these problems are addressed by the recent shift to the G20, the G20’s ability to act as a global energy governor remains limited. Nevertheless, by sketching the G20’s recent actions to phase out fossil fuel subsidies, we show that the G20 does have a large potential to make progress in addressing specific energy dossiers. The article concludes by making some concrete policy recommendations for G20 leaders to make full use of this forum’s potential.
Current public policy debates on energy security are characterized by a singular focus on questions regarding access to resources. This lopsided attention to the geopolitical dimension of energy security is based on the myopic and erroneous presumption that global energy politics is necessarily a zero-sum game in which one country's energy security is another's lack thereof. In fact, debates deflect attention from the real issues that policy-makers should consider in their attempts to foster effective global energy governance—the central role increasingly international energy markets play in balancing demand and supply—and, even more importantly, the significance of the ‘rules of the game’ that structure these markets. This article makes a first attempt to apply a broader analytical lens by pointing out and analyzing the important role rules play in determining outcomes in international oil and gas markets; by examining how current trends are affecting the existing ‘rules of the game’; and by highlighting consequences for public policy.
China’ economic boom has produced a surging appetite for fossil fuels, particularly oil. To foster and sustain its economic
development, China has taken a series of steps to quench its thirst for energy. The most striking measure is its high-profile
oil diplomacy, centering on the goal of gaining more secure national control of overseas oil and gas supplies. Why has China
chosen oil diplomacy over directly purchasing oil on the international market? And why does one prefer direct control of oil
and gas? This paper attempts to address China’s motivations from the perspectives of both the central government and the national
oil companies (NOCs). It is argued that China’s oil diplomacy has been driven not only by the government’s learning skill
and strategic concerns, but also by the NOCs’ strong commercial motives to expand business abroad and their management’s personal
incentive. Although both actors have common stakes in securing oil and gas from abroad, this by no means can guarantee that
the NOCs will obediently follow state orders.
Despite the mounting scholarly interest in processes of institutional change in international organizations, still very little
is known about how and when such evolutionary dynamics occur. This article hopes to contribute to this young, yet growing
body of literature by process-tracing the changes that have occurred in the institutional setup of the International Energy
Agency (IEA). Founded during the first oil crisis of 1973–74, the IEA has had to deal with major environmental changes over
its lifetime. In response, the agency has diversified away from its original raison d’être, namely managing an emergency oil sharing mechanism, to become a more proactive policy adviser guiding its member governments
toward sustainable energy economies. The article seeks to explain the observed patterns of change and inertia, using a theoretic
paradigm that builds on theories of “new institutionalism.” The paper argues that the agency’s institutional flexibility can
only be fully explained by taking into account a combination of factors: (1) the member states’ choices, in particular the
impulses of the G8-members of the IEA; (2) path dependency, especially the institutional link with the Organization for Economic
Cooperation and Development (OECD); and (3) agency by the secretariat and the executive bureau of the IEA.