The Geopolitics of Energy and the Malacca Straits

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
Asias Energy Angst

• Energy becoming key factor in Asias 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

3
(No Transcript)
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 Asias total oil
  consumption
• LNG 29 BCM 2002 rising to 114 BCM 2030
• Another 114 BCM SE Asia through South China Sea

5
(No Transcript)
6
(No Transcript)
7
(No Transcript)
8
The Malacca StraitsKey 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
Chinas 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