First will be Professor Kent Calder.

He's the admin the rush hour.

Professor and director of the rush hour
Center at Johns Hopkins University.

He's a former special advisor to the U.S.

ambassador in Japan former chair Japan
here at the Center for Strategic and

International Studies a professor for
over twenty years at Princeton University.

He did his Ph D. at Harvard.

He's the author of many books and not just
books articles that are very influential

and he's a leading expert on station
energy security and that's why he's here.

The second speaker will be a colleague
of mine Dr Adam Silver who should go

to require no introduction on my part.

So I'll make it very brief.

He's the co-director of the Center for
International Strategy technology and

policy assist up which is
putting on this conference.

He's been here at the non-school for
about how long now.

Adam twelve years thirteen something I'm
happy to say and I guess the pens and

how good he does with the speech today but

I was on the search committee that brought
him here has done nothing to disappoint.

He did his Ph D. at the University
of California Los Angeles.

He too is a leading expert on energy
security focused on primarily

on Russia and Eurasia wrote a very
well regarded book called oil

the diplomacy the finest
The car is a friend of mine.

He's on the Hill Professor John Duffield
of Georgia State University.

He and I spent ten days together
in Japan this past summer and

I'm grateful to have learned so

much from someone as knowledgeable as
Dr Duffield he did his Ph D. at Princeton.

He also is a leading authority on that.

Well as energy policy issues.

The author of a well regarded book
over a barrel the cost of U.S.

foreign oil dependence dependence and
we're happy to have him so

close by it at Georgia State he spends as
much time with here than at the one school

in Georgia Tech and he goes there I'm
sure with no further development.

Over the loss of culture that could
be followed by a system to be

followed by a sort of feel.

Thank you very much and I really this is
really been a wonderful conference with.

I think a really excellent group of
speakers and it's a pleasure to be here.

The issue of North East Asian energy
security and cooperation has been one and

some of you know that I've been
working on for many years.

My first work in this area was the spring
of one nine hundred ninety six.

A piece in Foreign Affairs
called Asians antitank and

then my book Pacific defense that was
dealt with energy that came out that fall.

So I've seen major changes
of course over the years.

They have been a lot of
them documented here.

My subject is the North East Asian
energy cooperation.

But right at the beginning.

I like to prefigure something I'm sure
that Adam will be building on later

which really is that the parameters
of energy in issues in Asia

are have began to sharply shift with
the very very rapid increases of demand

the Middle East relationship of course
has deepened very very rapidly.

In ninety three China was still
in an energy and oil export or

today is but was saying it imports over
five point six million barrels a day

and a good portion of that from the Middle
East and much of the rest from Africa.

Russia of course figures also importantly

in the mix in this very
rapidly rising energy demand.

So rather than thinking as we classically
have not just in energy but in.

Studies generally be about
a self-contained North East Asia or

East Asia thinking much
more broadly about Asia

as a continent and that relationships
with the Middle East and

the Central Asia and Russia as well
I think is increasingly sensible.

That's my focus my mandate.

Here is really to to perhaps
it generalize from the cases

that we've seen we've been talking
about China Japan and Korea.

I'd like to summarize some of
that perhaps to talk a bit about

Southeast Asia that we
haven't spoken about much and

to suggest the differences among
the major specific countries and then

things that we can say generally about
their energy problems as a basis for.

Talking more about North East Asian
energy cooperation.

Now to really conceptually get a sense for
where the cooperative possibilities are.

I think it's worth reviewing some of
the things that we have said generally

about the nature of the East Asian
energy challenges in general and

then the differences among
the key countries here basically

are the six elements that
I would say are our common

energy intensity economies very very
rapid increases in energy demand.

A demand doubling in six seven ten
years in China for example as we heard

limited domestic resource and down months
this varies by country as we will see but

conspicuously Korea and Japan and
Taiwan in particular having virtually

no domestic hydrocarbons as a consequence
of course heavy Middle East dependence.

There is important differences
between China and the one handed.

And Korea Japan Taiwan on the other but
this is fairly Kleiman

limited domestic equity stakes we've been
having an argument here about the pros and

cons of equity oil probably
speaking of course North East Asian

nations have been dominated
historically by the multinationals and

that is shifted particularly with
the changes in China in ninety eight and

the Japanese as Cho was saying Have
try to develop equity oil in it.

They've got it's been a mixed picture.

Another important thing which of course is
one of the reasons they have pushed equity

oil so much is the limited
geopolitical leverage broadly speaking

that the North nations of North East Asia
have in the international system.

So they have a particular type
of energy security problem.

Which has a family resemblance
in most of the key countries is

I think we all recognize but
that is significantly different from

the configuration of these
issues in the West now

I'd like to just go very briefly through
some of these details we know the high

economic growth rates in East Asia on
the right hand another important point

the countries have recovered quite
rapidly from political economic crises.

You can see how rapidly they recover.

For example from the two thousand and
eight financial crisis.

Because of this high growth.

High rates of increase in both oil
demand and then also because of the.

Lack of resources of course that
means spiralling energy deficit.

Particularly when prices are high.

At least has two thirds of the reserves
as we know Asia Pacific the proven

reserves are quite small on the left
you have the patron gas something

like three percent of
world reserves the right.

Gas with about nine percent.

So relatively small and in both areas and

particularly extreme in the case of Korea
and Japan of all of the countries in Asia.

I wrote a little book a few years ago
called Korea's energy insecurities and

it seems to me that Korea
probably has the most severe

energy security problems
of any major nation.

In the region.

And of course the fact that
the resources are in the Middle East and

Africa and
the demand is in Northeast Asia.

Produces what we well know
the importance of the sequence now.

There are some important variations
among the countries in question What I'm

basically doing is distinguished between
the capitalist North East Asia that

is Japan Korea and
Taiwan no to China policy here but.

Mainland China analytically substantively
really has somewhat different dynamics and

then Southeast Asia is
the third in Northeast Asia.

Of course particularly this almost
total lack of hydrocarbons and

a technology that allows for

technical technologically
driven solutions as Dr due.

Professor Lee and
others were pointing out earlier.

And also organizational
structures that upstream help

live in a slightly different way.

It was talking about the you
know market villas policies

of national oil companies but
I think one has to also note.

That the industrial groups of
both Korea and Japan have also

engaged in much broader cooperation
typically people like him.

Dale or ITOCHU or Mitsui they are more
commonly operated in the form of consortia

arrangements that are a little similar to
more similar to what he was recommending.

Now just to go through a few slides
here on the you can see that heavy X.

Journal dependency on
the part of Japan Korea and

Taiwan on the left China and the United
States interesting I included the US and

these in an interesting way in
terms of net dependency and

of course China's dependency in some
sense is perverse because it's so

heavily coal based
the the the three Japan Taiwan and

Korea are somewhat similar
to each other but.

A contrast thing to mainland China and
even to the United States now in

Middle East dependency is as Bill
mentioned China is a somewhat different

case you can see dependency around
the fifty percent level Japan and Korea

much much higher and of course the United
States here at just eighteen percent.

So it's a very very different
dynamic even though

we talk about dependence on Saudi oil and
things like that.

That said and

this is part of the reason that these
territorial issues of course are so

so fraught with tension and
Korea Japan and

Taiwan don't have domestic onshore
reserves that there are offshore

reserves I that the what I hear
from the Japanese side in any.

Caisson down in Korea to some
extent to it is that perhaps

if you take into account methane hydrates
and some other hydrocarbon forms

also that actually off shore there
could well be more subside much more

substantial reserves than
Cho was suggesting and

Japan Korea Taiwan don't
have the onshore reserves.

So offshore from a geopolitical
point of view does have some

significance to it in the South China Sea
as we know also some complex

issues that are tied up with territory and

oil and also geopolitics sea lanes.

Now China situation let me go given both

Collins brilliant presentation earlier
I don't want to spend too much time

you've seen a lot of this but
let me just summarize relatively speaking.

And certainly there
are the geographical issues.

There are resources in
the West in the north east and

the demand as it was pointing out in
the south on the coast south from

Shanghai toward going Joe that

there are distributional issues across
China that really are at the heart of some

of their dependencies on the broader world
if we net out and include coal and so on.

As I was showing earlier
dependence is not so high.

But it's heavily call based and
also certain parts

of the country like the southeast
coast find it difficult to and

not economically rational to
be supplied domestically.

So infrastructure.

Is right at the heart of so.

Of the key issues that China
has with regard to energy.

Together with Zealand
dependence as he pointed out.

Conversely the attractiveness of
pipelines and just to highlight

that issue again both above all and
also it shall mention pipelines.

Given that Asia is the one major
region of the world that doesn't have

a regional gas grid.

Those are a major issue
both in economic and

also geo political terms
looking to the future.

Maybe I should mention one other thing
I don't think it's been pointed out and

on the analysis of the Chinese political
economy which is westward development and

the changing locus of the economy
is as a whole beginning.

Well particularly under
President Hu Jintao the geographical

locus of demand for
energy in China is shifting from

the eastern coast the southeastern
coast toward the center and

toward the rather west which apart from
the factors that he was talking about

earlier gives an additional incentive for
pipelines and

other forms of access either from through
Myanmar or even further to the west.

Through some of the things
that John Carver and

others have been writing about through
Pakistan and and toward Iran and so on.

So the Chinese political economy is in
transition which has some important

implications for energy supply patterns
and particularly for pipelines.

OK well

this I showed earlier the contrast between
China on the one hand and the other north

east Asians on the other fifty
percent dependence on the Middle East.

Compared to the eighty's partly
because of the geopolitical.

Issues the vocal stressed

the infrastructural issues
that I've alluded to.

And then of course they vie or

mental questions as we know
China is now the largest C O two

matter in the world because of
the very heavy dependence on on coal.

And those problems are getting worse.

Now Southeast Asia just a word about that

first of all of course
internally within the region.

You have energy surplus and

energy deficit countries and
also among the forms of energy.

For example Malaysia as an energy
surplus exporter particularly on gas.

And obviously places like Singapore and

Thailand that are significant
energy importers So

the issue of it in for regional
trade is there in Southeast Asia and

then come back to that energy
efficiency is also of course of a major

question as it is in many places
Southeast Asia has some energy

options in alternate energy such as
geothermal that are somewhat unusual from

a regional point of view and because of
the regional imbalances between nations

that are very close to one another and
the absence of some of the geopolitical

problems that we were noting further north
say such as between China and Japan.

You've also got a more dynamic regional
gas grid system that's begun to evolve.

To put this in context of course these

nations are not consuming as rapidly nor

will they probably in future this economic
scale is not as large as India or China.

That said of course they are important
in the overall equation and

it seems to me one per.

All of them in the analysis of Asian
energy that we've often gotten is that we

say China China China is the China
we're the only nation in the region but

the synergies with China or
the conflicts with China or

the ways that growth elsewhere in
such large nations as India and

Indonesia intensify the problems that
have begun to emerge with China.

Those are important issues that
suggest a broader regional corruption.

And here's something I
always find interesting.

Even though gas grids have been
fraught with geo political problems

further north and
south east Asia they've been evolving

more significantly particularly
between among into an Asia Malaysia.

Sorrow a walk even out
into the South China Sea.

Geothermal the rate there is a ring
of fire in Southeast Asia as further

north and geothermal is the significant
in the Philippines the Philippines for

example is one of the largest jail
thermal producers in the world.

Now let me just begin to summarize here.

Briefly because my mandate was areas for

potential cooperation and
a lot of this summarizes

what I thought were very
important presentations by others.

I just listed here are some of
the key areas where Potenza Surely

we could get more significant cooperation.

I should stress that the issue of
incentives is out there I'd not sure

that we've seen the issue of incentives
sufficiently in the analysis so

far that first in terms of
possible areas energy efficiency

energy infrastructure
the pipelines of course.

Pre-eminently that have already
begun to evolve in Southeast Asia.

I'm sure with Adam's presentation
at least I would be interested in

the pipelines further west we've got two
hundred thousand barrels a day coming

from close to the Caspian Sea all the way
to Shanghai Now where are we going to see

these things moving in future things that
I know I remember in fact I even remember

at Shell is some knowledgeable
his saying about a decade

ago that he really couldn't see
the logic of the cross China pipeline.

But of course we now have it and
with it's becoming much more elaborate.

Those are major issues nuclear safety and

storage Korea for example has
such ambitious a nuclear plans.

We didn't really hear anything
about the storage issue but

in my understanding we there is an interim
storage but no specific plans yet

for for permanent storage or
what those options will be and

certainly as nuclear power becomes
more important storage and

of course safety will become
major issues for the future and

they do have a four operative
dimension potentially to them.

Nuclear reprocessing Here
is an issue that could

be fraught either with cooperation or
competition.

Japan is just opening this fall.

It's a question on nuclear
reprocessing complex I was up there.

Last spring and a couple

of our speakers reasonably and
rather pointedly pointed out that.

Korea hasn't been doing reprocessing but

Korea doesn't really have
the storage facilities to

cope with its emerging
nuclear waste problem so.

How is that going to relate
to the close feel cycle or

to nuclear reprocessing going forward
I think there are major issues that

are looming out there not only for
Korea and

Japan but perhaps for
other nations sea lanes security.

You've got all three of the Northeast
Asian nations heavily dependent

on the Middle East using
similar scene lanes but

we've recently had the three
countries involved in

an IT piracy operation so
they're active in the Arabian Sea.

Where are we headed on that
question cooperative upstream in

infrastructural development now
generally professedly was noting

the competitive aspects and
the Americans alas aspects and.

There's been a lot of that in the past.

In Sudan.

This may not be the right
kick case to take up but

in the Sudan and the Upper Nile.

That infamous Sudanese project India and

China are cooperating in the in that
they both have equity shares there.

There are several other cases many of
these projects have a lot of risk is that

child was pointing out what
about cooperative upstream and

infrastructural development.

Are there ways that as consortia
become more important that

the East Asian nations may
cooperate in this area.

And I terrorism hard security those

issues a lot of them have it handled
by either coalitions of the willing or

the US military or
the United Nations where are we headed

in that regard particularly on
issues within the region or

issues that are of special concern
to East Asian Nations and then them.

General question of regime creation
multilateral structures for dealing with.

Major energy problems.

Asia Adam for example to deal
with safety and storage issues.

Then I should make the point there have
been some cooperative steps taken already.

Dr Rio as many of you know
was where they park I

remember when I was in the U.S. embassy.

He was posted there as at the a perk
center was being founded and

a common common databases common
said to stickle understanding

that energy problems is an important first
step that actually already has been taken.

Beginning with a perk
flowing from the summit

APEC summit of a nine hundred
ninety five regional and

energy infrastructure I pointed out
Southeast Asians have already gone forward

with this in Northeast Asia we
have S O S boat China and Russia.

Cooperated in getting
the pipeline completed as far

as I guess toward the end of this year or
it should be complete

the Russians have been pressing
the competition between China and Japan.

Whether you can consider as to
the cooperative Venger or not I think it's

open to question but at least in
Southeast Asia regional infrastructure

is begun to evolve cooperated
are indeed at the two thousand and

seven say boo declaration had
a number of cooperative elements on

that of the gun to go forward and
the toy October two thousand and

eight that was hosted in Japan
by Prime Minister good on.

That was G eight.

But there are elements for
example the sector specific approach.

The energy efficiency
that were presented there

which are being broadened in
an Asian context as well.

Now.
In conclusion.

I think we all would agree there
are great benefits to the global

approach to energy issues to the extent
that we really could have ideas

in the abstract energy finance

telecommunications just a whole series of
these global issues that are emerging.

Unfortunately as of yet we don't really
have a fully comprehensive international

global map an ism the I.A.E.A. as you
know is a affiliated with the O.E.C.D.

which fortunately includes Korea and
Japan but it doesn't include China and

India partly because it's an O.E.C.D.
affiliate so

and yet there are important
commonalities within the region.

So there is a deepening rationale many
would say for regional cooperation.

I think we'll see in the APEC
summit going forward.

The Bassett or there is when it was
one of our students years ago for

the United States and my sense is
that certainly there will be major

proposals within a context for
the Yokohama summit relating to energy.

And also in the three there is
a rationale for regional cooperation.

The kind of complications
we saw between China and

Japan recently or Russia and Japan.

Perhaps adjusts the complexities and

pipelines go forward in Southeast Asia
they don't seem to do so

well in North East and yet in the end
if we look at the history there.

Periods and I would say particularly
in the wake of the oil shocks

coming out of the Asian financial crisis.

Maybe two thousand to
about two thousand and

well seven or or
eight Sable declaration and

twenty Arkell might be the high point in a
way they're actually have them significant

cooperation so
it's a rational sort of the pattern.

It's one that takes real effort and

leadership but broadly the to my mind

the nations of the region are becoming
more interdependent with each other and

even in spite of
the territorial conflicts and

driven by the very rapid economic
growth of China closer in their

coordination process is by far
than what they were a decade ago.

And so in the end.

Slowly we have important new patterns
of Asian energy cooperation emerging.

Thank you very much.

Thank you.