ADB report warns on Asian energy

April 9, 2013 at 2:03 PM
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MANILA, April 9 (UPI) -- Asia is on a dangerously unsustainable energy path, warns a new report from the Asian Development Bank.

Without fundamental changes to the way it consumes energy, the region's oil consumption will double by 2035, natural gas will triple and coal consumption will rise by 81 percent, the report warns.

"Asia must both contain rising demand and explore cleaner energy options, which will require creativity and resolve, with policymakers having to grapple with politically difficult issues like fuel subsidies and regional energy market integration," said ADB Chief Economist Changyong Rhee in a statement.

Although Asia has just 9 percent of proven global oil reserves, the region is on course to nearly triple oil imports by 2035, making it more vulnerable to external supply shocks, the report warns.

While 33 percent of developing Asia's oil imports came from the Middle East in 1990, by 2010 that figure had risen to 48 percent. "As this accelerating trend will likely continue, Asia's high and growing dependence on a single region poses a risk to adequate and reliable energy supply," the report states.

ADB points to Japan as a "compelling" example of managing its energy demand. While Japan is the third largest economy in the world, it has the lowest level of energy intensity.

Sparked by the oil shocks of the 1970s and enduring the collapse of oil prices in the 1980s and 1990s, Japan achieved an energy intensity in 2010 that was 25 percent lower than in 1980.

"The broader lesson that developing Asia can draw from the Japanese experience is that managing energy demand more efficiently can make a big difference to the energy pathway, and there is every reason for others to try to emulate Japan's success. The lesson for Asian governments is that they must take the lead in changing the mindset and culture of their citizens so that they use energy more efficiently and thus do their part to promote Asia's energy security," the report states.

Because Asian countries cannot meet all their power requirements individually, ADB says they must step up cross-border interconnection of power and gas grids to improve efficiency, cut costs and benefit from surplus power.

"With increased cooperation, a pan-Asia energy market is achievable by 2030," the report said.

Still, ADB says, nearly half of the world's people without electricity live in Asia, and 1.8 billion people in the region continue to rely on wood and other traditional fuels as a primary energy source.

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