Asia's booming oil demand seen problematic

Asia's booming oil demand seen problematic

TOKYO (Reuter): Asia's booming demand for oil could cause
major supply problems in the years to come, an influential
Japanese business group says.

The Keizai Doyukai (Japan Association of Corporate
Executives), which in May called for the establishment of an
Asian oil body to combat the problem and manage energy relations
with the Middle East, released a more detailed proposal yesterday
of medium- to long-term oil storage facilities to be shared by
APOED member countries, collaboration in oil refining and the
collection of regional energy statistics.

"The basic supply and demand situation in Asia is really quite
serious," said Ariyoshi Okumura, who conceived the plan.

"The Asia-Pacific region is consuming oil from outside the
region at a rate of 10 million barrels per day (bpd). If you are
a believer in linear extrapolation, we will need 20 million bpd
by 2010," he said.

"While I find that projection questionable, it is a certainty
that energy shortages in Asia will be a serious concern for our
governments in the years to come," said Okumura, chairman of
Keizai Doyukai's Committee on Middle East-Japan Relations.

The group's proposal calls for the formation of a Tokyo-based
oil body that would operate under the auspices of the Asian
Pacific Economic Cooperation (APEC).

Named the Asia-Pacific Organization for Energy Dialogue
(APOED), the organization would provide Asian countries a forum
with which to coordinate their energy needs.

"Many governments in Asia do not publish any kind of detailed
energy statistics," Okumura said.

"In order to cope with any emergency supply disruptions, the
Asia Pacific has to have significant stockpiles. Japan has a
substantial stockpile, but we don't know anything about China,
nor do we know and about the strategic reserves of Indonesia,
South Korea, Singapore and Malaysia," he said.

Okumura says the proposal is currently being considered by
APEC, adding: "APEC should be a very appropriate organization to
provide an umbrella for this initiative."

He also added that more contact was needed with oil-producing
countries.

"We have to broaden the base of human contact with the Middle
East and Central Asia. That's the only way for Japan to have
energy security, economic security," he added.

Okumura said he hoped to see the oil body set up within take
three years.

"Five years is too long, one too short, because so many
governments are involved," Okumura said.

The APOED proposal notes that Japan's target of reducing the
oil portion of its energy needs to 50 percent by 2010 has become
unrealistic because of delays in nuclear power development.