Abstract
Asia is likely to experience a huge upsurge in energy use, as the bulk of thisincrease met through imports. China is already the world's second largest consumer of energy.Japan is by far the leading importer of energy in the region. Japan, South Korea, and Taiwan aremajor importers of liquefied natural gas. For Japan and South Korea, a reliance on LNG andnuclear power was a tool in maintaining energy security after the two oil shocks of the 1970s. Today, however, these two economies and also China consider importing natural gas from Sakhalinand Eastern Siberia to expand their supply choices, reduce costs of fuels, and control harmfulemissions. This creates an opportunity to build large capacity cross-border infrastructure thatpromises significant benefits to industries and individual consumers. However, diversification offuel mix is a slow process, and expensive natural gas projects require an integrated approach thatcoordinates a pipeline construction with the gas field and distribution grid development. In thisrespect, the economies of Northeast Asia are yet to develop capacity to receive and consume largevolumes of pipeline gas. Moreover, competition from nuclear power, coal and LNG is strong. Also, private sector alone is unlikely to succeed in promoting pipeline gas because of the high costsinvolved, domestic and international constraints. Government support is needed for thesemega-projects to succeed. Natural gas resource development in Northeast Asia requires that theenergy security, competition promotion and environmental protection are considered collectivelyand in coordinated manner, not just predominantly national or bilateral issues.
