1. The Geopolitics of Energy and the Malacca Straits Mikkal E. Herberg The National Bureau of Asia Research The Woodrow Wilson Center for International Scholars Washington, D.C. November 14, 2006

2. Asia’s Energy Angst Energy becoming key factor in Asia’s geopolitical architecture Energy nationalism rising with prices, perception of long-term looming scarcity Zero-sum competition for control of supplies and transport routes Intensifying focus on transit security, control Mainly oil but increasingly natural gas (LNG) long-term

4. What are the Energy Stakes? About more than Malacca Straits Can bypass Straits: but shortage of shipping capacity Larger context is the South, East Asian sea lanes Energy volumes through Straits: – Oil: 11 MMBD 2002 rising to 22 MMBD 2030 Rising one-half to two-thirds of Asia’s total oil consumption – LNG: 29 BCM 2002 rising to 114 BCM 2030 Another 114 BCM SE Asia through South China Sea

8. The Malacca Straits Key Countries with Energy Interests United States – Interest in uninterrupted flow of oil, LNG Indonesia, Malaysia – Littoral states, sovereignty, sensitive to U.S. role Japan: 90% of oil supplies, 40% of LNG – Powerful navy, very limited role China: 30% of oil supplies, headed for 60% Singapore: strong navy, littoral state, closer U.S. relations India: “looking east”, rivalry with China

9. China’s Growing Focus on Sea Lanes Fear US dominance sea lanes, also terrorism and piracy Lack of “Blue Water” navy power projection Must “free ride” on US, SE Asia naval powers Response: – “String of Pearls”: near-term port access strategy, submarines – Blue Water navy development long-term – Alternative routes: Myanmar oil pipeline – Want to build Chinese tanker fleet – only 10% now – Growing interest in patrolling Straits Malacca; reducing US control

10. Conclusions As oil and LNG prices rise, energy geopolitics focus on sea lanes and Malacca Straits will intensify U.S. dominance of sea lanes to continue Terrorism, piracy main near-term concerns Rise of China and possible asymetrical strategies to address energy shipping vulnerability are wild cards very long-term U.S., India, Japan all wary of China factor