IEEJ：May 2019○ｃIEEJ 2019
Special Bulletin
A Japanese Perspective on the International Energy Landscape (429)

May 23, 2019

Key Issues at 4th IEEJ/APERC International Energy Symposium
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanOn May 17, the Institute of Energy Economics, Japan (IEEJ), and the Asia Pacific Energy
Research Center (APERC) held the fourth IEEJ/APERC International Energy Symposium at theGrand Prince Hotel Takanawa in Tokyo. They have sponsored the flagship annual symposium since
the first one that took place in 2016 to mark the 50th anniversary of the IEEJ and the 20thanniversary of APERC. Globally famous experts participated as panelists in the symposium titled“Energy Transition: More Challenges, More Opportunities,” making presentations and panel
discussions in three sessions. In the following, I would like to introduce the panelists’ arguments thatwere the most impressive for me.
In Session 1 titled “How can we maintain good energy governance under uncertain
geopolitical developments?”, discussions on the international energy situation were made from theviewpoints of geopolitics and energy governance challenges to protect international energy orderstability, based on U.S., Middle Eastern and Russian perspectives.
Ms. Sarah Ladislaw of the U.S. Center for Strategic and International Studies pointed outthat U.S. energy policies and strategies had assumed energy shortages in the past but now assume
energy abundance thanks to the shale revolution, leading to what President Donald Trump terms the“energy dominance” concept. This means that the Trump administration has growingly taken
advantage of energy abundance for maximizing U.S. national interests and emphasized energyabundance in foreign policy and diplomatic strategies. Mr. Fareed Mohamedi of SIA-Energy
International noted that Saudi Arabia, the biggest cornerstone for international oil market stability, isbeing greatly transformed under its new leadership. He indicated that it would be important that
Saudi Arabia is seen as pursuing higher oil prices to respond to new domestic and external situations
as the oil sector plays pertinently important roles even amid structural reform. Dr. Tatiana Mitrova ofRussia’s Skolkovo School of Management argued that global energy governance is in a crisis as
disarray deepens in international political, economic and geopolitical situations. She noted that thepresent situation is very severe for Russia that is required to develop various international anddomestic strategies including its cooperation and partnership with Japan.
The geopolitical viewpoint is indispensable for analyzing today’s international energysituation. The most important players for global energy geopolitics are the United States, Russia, theMiddle East and China. Each panelist for Session 1 discussed how to develop relations with China,
giving me an opportunity to recognize China’s great presence anew.
In Session 2 titled “What will an appropriate energy mix for the Energy Transition be?”,participants made discussions from three angles – overall energy supply and demand outlooks,
natural gas’s roles and nuclear energy’s roles.
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Ms. Laura Cozzi of the International Energy Agency provided an overall picture of global
energy security and climate change challenges based on the IEA’s World Energy Outlook 2018. She
argued that various energy options have their respective roles to play as energy demand growthcenters on Asia among regions and on electricity among energy sources, noting that innovativetechnologies are important. Prof. Jonathan Stern of the Oxford Institute for Energy Studies pointed
out that while natural gas, the cleanest fossil fuel, is highly expected to play a greater role in theglobal energy mix, there are great challenges and uncertainties. One challenge is that while gas itself
is required to be decarbonized in a world where powerful decarbonization is promoted, as typicallyseen in Europe, it is important for gas to be selected as a price-competitive or affordable energy
source in Asia expected to boost energy demand. Mr. William Magwood of the OECD Nuclear
Energy Agency emphasized that all clean energy sources are required to promote low-carbonization
or decarbonization under the Paris Agreement and that nuclear energy is important among them. He
pointed out that policy-side and industry sector initiatives are important for realizing higher safety ina cost-efficient manner and that while innovative technologies grow important, interests in and hopeson small modular reactors are particularly high.
Unless there is a perfect energy source, the key requirement for an energy mix is to use allavailable options in a well-balanced manner while trying to overcome weaknesses or problems
unique to each energy source. Given that energy resource endowment, economic and industrial
development, market structure and other conditions differ from country to country, we must takenote of the fact that the best energy mix differs among countries.
In Session 3 titled “What policies, corporate strategies and changes in awareness areneeded to combat climate change?”, what challenges governments and enterprises face in attaining
the goal of limiting the average temperature rise to well below 2℃ and how their present initiatives
should be assessed were discussed, based on presentations by three panelists.
Mr. Wim Thomas of Shell International BV introduced Shell’s Sky Scenario, arguing that
there are key steps toward decarbonization to attain the 2℃ goal, including thorough energy
efficiency improvement, electrification, transition to new energy systems, carbon pricing, and carbon
capture and storage and others. He also pointed out that decarbonization, though being technologicallypossible, would be a very great challenge for the whole of society. Dr. Kenneth Medlock of Rice
University’s Baker Institute described U.S. low-carbonization/decarbonization initiatives and relevantmarket realities, noting that gas’s growing share of the energy mix amid shale revolution progress has
played a key role in these initiatives in U.S. He also argued that while there are policy initiatives forfurther low-carbonization including research and development, and tax incentives at the federal leveland bottom-up policies taking advantage of local features at the local government level, theirachievements remain uncertain. Prof. Dadi Zhou of the Energy Research Institute of the China
National Development and Reform Commission emphasized that China, the world’s largest
greenhouse gas emitter, has steadily promoted low-carbonization initiatives in compliance with theParis Agreement. He demonstrated China’s proactive approach on cutting GHG emissions by citing
various relevant initiatives.
Climate change is a challenge for humankind to protect global interests. The world mustpursue global interests while coordinating conflicts between national interests and introducing
innovative technologies from the long-term viewpoint. Based on energy security and geopolitical2

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challenges discussed in the previous sessions, adequate energy mixes will have to be developed topromote climate change countermeasures.
Contact: report@tky.ieej.or.jp
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