IEEJ: March 2013 All Right Reserved
Special Bulletin
A Japanese Perspective on the International Energy Landscape (123)

March 18, 2013

Growing Importance of ASEAN+3 Energy Cooperation
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, Japan
I had an opportunity to attend ASEAN+3 fora on energy cooperation in South Korea’s
Incheon from March 11 through 13. At the fora, policy planners and other officials from theAssociation of Southeast Asian Nations and three East Asian countries -- Japan, China and South
Korea -- discussed various topics ranging from overall energy supply-demand to oil and natural gas
markets and nuclear energy.
ASEAN+3 energy cooperation emerged from an agreement among ASEAN+3 energy
ministers at the eighth International Energy Forum (dialogue between energy producing andconsuming countries) in Osaka in September 2002. Based on the agreement, the regional energy
cooperation forum was launched in 2003. Since the first meeting, in which I participated, I havebeen interested and involved in the region’s energy cooperation. But my participation in theASEAN+3 energy cooperation meeting was the first time in two years. The previous meeting inwhich I participated took place in Brunei on March 11, 2011, when the devastating earthquake andtsunami hit northeastern Japan. I remember that shocking video footage of the tsunami came on
television amid the meeting. After the Brunei meeting, I failed to take part in ASEAN+3 gatherings
for two years. In this sense, I found some impressive points anew concerning the regional energy
cooperation at the Incheon meeting.
First, I felt that the region’s energy cooperation has been steadily stable and maturing. Myfeeling was that as a decade has passed since the launch of the regional energy forum, the range oftopics for exchange of views has expanded to cover various energy issues, with the participating
countries’ relationships deepening enough to have steady and cool discussions at their regularmeetings. The stabilization and maturity of discussions on regional cooperation represent
achievements through the accumulation of discussions over the past decade. In this sense, thestabilization and maturity will contribute much to the further promotion of regional energy
cooperation. If the participating countries are complacent in the present situation, however, thematurity could make it difficult to maintain and raise the momentum. These countries should makefurther efforts to maintain and enhance the momentum of the energy cooperation forum.
Second, new challenges regarding regional energy cooperation have surfaced amidchanges in various environments for the ASEAN+3 energy fora. In the past decade, China’s
significance for the world and for Asia has increased dramatically. How to proceed with regionalenergy cooperation in the face of rising China is very significant at the ASEAN+3 fora. Particularly
important is the fact that China has had geopolitical tensions with other countries in the region. TheNortheast Asian geopolitical environment has grown severer over the past few years. Because ofsuch development, however, the promotion of cooperation in tackling common energy challenges isimportant. In this sense, I felt that discussions on energy cooperation at the Incheon meeting were1

IEEJ: March 2013 All Right Reservedcool, positive and desirable between Japan, China and South Korea, and between ASEAN and thethree East Asian countries.
Third, discussions have deepened as the significance of ASEAN as a region has grown
further. As noted above, China’s presence has clearly increased. As China has grown more important,however, ASEAN has attracted more attention as the next growth center. ASEAN includingIndonesia, Malaysia and Vietnam has been seen as an energy resources exporter. Due to rapid
economic and energy demand growth over the past years, however, the region has grown as anenergy resources importer, as symbolized by Indonesia that has become a net oil importer. As
ASEAN’s significance increases amid great situational changes, discussions on energy cooperationinvolving ASEAN have grown more important. For example, the International Energy Agency has
grown more interested in ASEAN and reportedly plans to provide an analysis focusing on ASEAN inthis year’s World Energy Outlook. In this sense, the energy cooperation fora between ASEAN andthe three East Asian countries can be viewed as very significant.
Fourth, I personally felt that nuclear energy and natural gas are great matters of concern
among individual topics for the promotion of energy cooperation. As far as nuclear energy isconcerned, the ASEAN+3 region represents one of the regions featuring the most dynamic changes
in the world. In addition to China that is proceeding with a large-scale nuclear energy development
program, Vietnam has steadily gone ahead with a plan to become a new nuclear power generation
country. Many other ASEAN countries are about to become net fossil energy importers and areseeking to introduce nuclear energy over a medium to long time. On the other hand, the region
includes Japan and South Korea as countries having advanced nuclear technologies. In Japan,
however, the government has been reviewing its nuclear energy policy since the March 2011
Fukushima Daiichi Nuclear Power Plant accident. A very important challenge for future nuclear
energy development plans in the region is to enhance and achieve safety, security and safeguards. To
resolve the challenge, the region must share lessons from the Fukushima accident. In this sense,countries in the region are commonly and highly interested in their cooperation involving nuclear
energy.
Natural gas has also been growing more important as a matter of concern. Expectations on
the clean, abundant natural gas resources have greatly increased in the region where energy demandhas been rising with the supply/demand structure requiring upgrading. A concern is how the U.S.
shale gas revolution will influence the ASEAN+3 region. Regional interests have grown in theproblem of the huge Asian premium on prices of liquefied natural gas that has become a great issue
over the past years. Discussions on the issue were very active at the Incheon meeting. The presenceof far higher natural gas prices than in other regions became a major topic at the meeting as theASEAN+3 region’s common problem. In a sense, participants in the meeting discussed the Asianpremium problem from the viewpoint of what is required for the further sound development of theregion’s gas/LNG market. The Asian premium became the hottest and most timely topic at thediscussions on regional energy cooperation. The region’s gas market problems, including thedevelopment of Asian gas/LNG hubs subjected to a recent IEA report, have attracted global attention.
Amid such situation, I am very interested in how the region will proceed with discussions onregional energy cooperation.
In this way, the ASEAN+3 region has occupied a very important position in the entire
global energy market, with its importance expected to increase. How countries in this region will2

IEEJ: March 2013 All Right Reserved
cooperate in tackling energy problems and overcome energy cooperation problems will be one of theimportant factors influencing the global energy situation and will be very significant not only forthese countries but also for the entire world.

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