Energy challenges test water-stressed Asia

Nikkie Asian Review, February 27, 2014

Asia is attracting more attention than ever before, in large part because of its re-emergence after a two-century decline. Amid the world’s ever-growing energy focus, Asia’s serious energy challenges have driven sharpening oil-and-gas competition there, spurring maritime tensions, territorial disputes, and resource and environmental stresses. There has been, however, insufficient discussion of such challenges in Asia.

In coming years, energy demand is likely to accelerate because the continent’s per capita energy consumption levels remain low by Western standards. The largest increase in global energy demand is in Asia. This demand is likely to only accelerate.

Over the next 20 years, Asia’s share of global energy consumption is projected to almost double, to about 54% for oil and 22% for natural gas. The densely populated subregions of Asia — East, Southeast and South — with their heavy dependence on oil and gas imports, will remain particularly vulnerable to sudden supply shortages or disruptions.

Asia’s growing energy consumption — much of it from fossil fuels, especially coal — militates against the gathering international push to combat global warming. Coal use, for example, has helped China lift hundreds of millions of people out of poverty, with the rising coal demand there not expected to plateau until at least 2025.

Yet the environmental and public-health costs of China’s coal use (it burns nearly as much coal as the rest of the world combined) are already high. Smog and soot periodically force citywide shutdowns, while the life expectancy of the people living in the northern parts of the country, according to a recent scientific study, has declined by more than five years on average.

Stress nexus

The energy-water-food nexus is at the core of Asia’s sustainable-development challenges. This stress nexus is behind the continent’s three interlinked crises: A resource crisis has spurred an environmental crisis, which in turn is contributing to regional climate change.

The reason for such stresses is that food production is reliant on water and energy, and energy and water are directly connected with each other. Energy is vital to extract, treat, distribute and supply water. Water is essential for energy extraction, processing and production. It takes, on average, up to 10 calories of fossil fuel energy to produce one calorie of food.

Groundwater extraction is particularly energy-intensive, and sinking water tables across much of Asia have significantly increased the energy needed to bring the same quantity of water to the surface. The expanding output of biofuels from irrigated crops has emerged as another important source of growing energy-related water consumption.

In an increasingly water-stressed Asia, the struggle for water is not only escalating political tensions and intensifying the impact on ecosystems, but it is also crimping rapid expansion of the region’s energy infrastructure. In many Asian countries, decisions about where to place new energy plants are increasingly constrained due to inadequate availability of local water.

Compounding the challenge is the fact that energy shortages in the heavily populated Asian subregions are usually the most severe in water-scarce areas. Yet, copious amounts of water are needed to generate electricity from coal, nuclear energy, natural gas, oil, biomass, concentrated solar energy and geothermal energy. In India, water stress is exacerbating an energy crisis, with its largest power generator, the National Thermal Power Corp., being forced to abandon plans for new coal-fired plants in water-scarce areas.

     One key reason why China has failed to develop its shale hydrocarbon industry is water paucity. To initially stimulate a shale well, millions of gallons of water must be shot into it to crack the shale rock and get crude oil, natural gas or natural-gaslike liquids flowing.

About 56,150 cu. feet (1,590 cu. meters) of water is used for every 1 million cu. feet of gas that comes from shale. Shale oil development is typically several times more water intensive than shale gas. China has impressive shale-hydrocarbon deposits, but these are largely located in areas where water resources are already scarce or under pressure.

Water constraints are increasingly shaping Asian decisions about energy facilities, cooling technologies and plant sites. For example, all new nuclear plants in Asia — the center of global nuclear power construction — are located along coastlines so that these water-guzzling facilities can draw more on seawater. Yet, seaside reactors face major risks from global-warming-induced natural disasters, as highlighted by Japan’s Fukushima disaster in 2011, which though tsunami-induced, showed the risks of sudden sea changes. Southeast Asia, with 3.3% of global landmass but more than 11% of the world’s coastline, is particularly vulnerable to water-related disasters.

Moreover, with Asia’s economic boom zones located along coastlines, finding suitable seaside sites for new nuclear plants is no longer easy. Coastal areas are often not only heavily populated but also constitute prime real estate. For example, India, despite having a 6,000km coastline, has seen its plans for a huge expansion of nuclear power through seaside plants run into stiff grass-roots objections.

Maritime disputes in play

Another concern in Asia is the growing linkage of territorial and maritime disputes with energy resources. Such linkage is hardly conducive to Asian peace and stability.

Access to resources has historically been a critical factor in war and peace. According to a recently published study, between one-quarter and one-half of interstate wars since the advent of the modern oil age in 1973 have been connected to oil geopolitics, including access concerns, producer politics, control and market structure.

Asia’s sharpening energy competition has contributed to aggravating territorial disputes in the South China and East China seas. The disputed Spratly and Senkaku islands occupy an area of barely 11 sq. km but are surrounded by rich hydrocarbon reserves.

China did not lay a formal claim to the Japanese-controlled Senkaku Islands until international studies in the late 1960s pointed to potentially vast hydrocarbon reserves beneath the seabed. Its newly declared air defense identification zone (ADIZ) covers territories that China claims but does not control, setting a dangerous precedent in international relations.

      Meanwhile, pipeline geopolitics have also intensified in Asia, even as Europe has sought to route additional Caspian Sea and Central Asian energy supplies to European markets at the cost of Asian markets.

China has managed to secure new hydrocarbon supplies through pipelines from Kazakhstan and Russia. But this option is not available to Asia’s other leading economies — Japan, India, and South Korea — which are not contiguous with suppliers in Central Asia, Iran or Russia. These countries will remain dependent on oil imports from an increasingly unstable Persian Gulf.

Furthermore, China’s fears that hostile naval forces could hold its economy hostage by interdicting its oil imports have prompted it to build a massive oil reserve, and to plan two strategic energy corridors in southern Asia. The corridors will provide a more direct transport route for oil and liquefied gas from Africa and the Persian Gulf, while minimizing exposure to sea lanes policed by the U.S. Navy.

One such corridor extends 800km from the Bay of Bengal across Myanmar to southern China. In addition to gas pipelines — the first was completed last year — it will include a high-speed railway and a highway from Myanmar’s west coast to China’s Yunnan Province, offering China’s remote interior provinces a link to the sea for the first time.

The other corridor — work on which has been delayed due to a separatist insurrection in Pakistan’s Baluchistan Province — will stretch from the Chinese-operated port at Gwadar, near Pakistan’s border with Iran, through the Karakoram mountains to the landlocked, energy-producing Xinjiang Uighur Autonomous Region of China. Notably, with Pakistan giving China control of its strategic Gwadar Port in early 2013, the path has been opened for the Chinese government to build a naval base there.

     Given the significant role that energy resources play in global strategic relations, Asia’s increasingly murky resource geopolitics threatens to exacerbate interstate tensions. Rising dependence on energy imports has already been used to rationalize an increased emphasis on maritime power, raising new concerns about sea lane safety and vulnerability to supply disruptions.

Asia is one of only two continents, along with Africa, where regional integration has yet to take hold, largely because political and cultural diversity — together with historical animosities — has hindered institution-building. Strained political relations among most of Asia’s subregions are also obstacles.

Strategic competition over energy resources will continue to shape Asia’s security dynamics. The associated risks can be moderated only if Asia’s leaders seek to break from the present insecurity by establishing norms and institutions aimed at building rules-based cooperation.

Energy and water shortages keep the poor chained to poverty. Asia needs an energy-technology revolution that can deliver cheap, reliable power to those mired in energy poverty and help clean up polluted waters, treat and recycle wastewater and make ocean water potable. Such a revolution is also critical for Asia to sustain its economic “miracle.”

Brahma Chellaney, a geostrategist and professor at the New Delhi-based Center for Policy Research, is the author, most recently, of “Water, Peace, and War” (Rowman & Littlefield, 2013).