1. Asia’s Access to Energy: Challenges in the IOR
Cdr (Dr.) Kapil Narula
National Maritime Foundation

2. Scope and Flow ‘Access’ + Challenges + IOR Drivers
Growing Energy Demand
Shifting Patterns of Energy Flows
Challenges: Barriers, Energy Sources
Maritime Choke Points and Impact of Disruptions
Conclusion

3. 4A’s of Energy Security Availability Affordability Acceptability
Accessibility
Geopolitical
Geographical
Technological
Economic/Financial
Human resource

4. Growing Energy Demand
Source: BP Energy Outlook (2015)

5. Changing Patterns of Energy Flows
Source: BP Energy Outlook (2015)

6. Energy Import Dependence
Energy Trade
Top five oil importing countries and their oil trade (2014)
Crude imports
Product Imports
Crude exports
Product exports
(thousand barrels/day)
U.S.
7338
1883
339
3760
China
6209
1331 8
539
India
3809
415 1
1281
Japan
3383
950 -
278
South Korea
2590 *
Top five coal exporting and importing countries (2013)
Exporters
Million tons
Importers
Energy Import Dependence
Indonesia
426
China
320
13%
Australia
336
Japan
196
94%
Russia
114
India
178
31% US 99
Korea
127
83%
Columbia 74
Chinese Taipei 68 -
Data Source: IEA Key World Energy Stats (2014)

7. Challenges Barriers Oil/Natural Gas Coal Nuclear Renewables
Geopolitical
NOC vs IOC
(81%, 11% E, 8% F) X
Fuel
Technology
Transcontinental grid
Geographical
Mapping
Exploration
Offshore
Land
Scale
Technological
Shale
Enhanced Recovery
Extraction efficiency
Productivity
HWR
Power density
Intermittency
Storage
Financial
Investment
Relative cost
Infrastructure
Capital cost
Market barriers
Capital Subsidies
Transportation
Choke points
Pipe vs ships
Stranded fields
Re/Gasification
Port capacity
Domestic tpt
Electricity corridors
Capacity
Human resource

8. Volume affected (mbbd)
Maritime Choke Points
Data Source:
EIA (2013);
Graphics:
The Fuse
Choke point
Share of
oil trade
Disruptions (%)
Volume affected (mbbd)
Pipelines
(mbbd)
(%)
20 %
50 %
100 %
Hormuz 30
3.4
8.5 17 5
Malacca 27
3.0
7.6
15.2 -
Bab el-Madeb
6.7
0.76
1.9
3.8
2.5
Data Source: The Economic Implications of Disruptions to Maritime Oil Chokepoints, CNA (2011)

9. Bypassing Choke Points

10. Impact of Disruption Spike in oil price (volatility)
Physical shortages in short term
Economic impacts
Duration (days) that would cause GDP to drop by 1% in the 1st Q after disruption
(w/o mitigation efforts)
Strait of Hormuz
Strait of Malacca
20% D
50% D
100% D
20%
50%
Singapore 28 11 6 39 15 8
Indonesia
120 48 23
160 64 32
ROK
143 57
192 76 38
India
347
139 67
China -
229
114
171 84
Japan
239
119
177 87
Data Source: The Economic Implications of Disruptions to Maritime Oil Chokepoints, CNA (2011)

11. Conclusion Accessibility Challenges in IOR Impact
Short term (not a concern)
Long term (needs continued attention)
Challenges in IOR
Threats: Persistent
High Uncertainty
Impact
Disruptions: Unlikely
Short term: Price volatility
Long term: Can be mitigated

12. Discussions