Rising energy prices may hit APEC

Rising energy prices may hit APEC

Mynardo Macaraig, Agence France-Presse, Manila

Rising energy prices may arrest growth in Pacific Rim
economies particularly among countries dependent on fuel imports,
energy experts at an Asia-Pacific Economic Cooperation (APEC)
forum warned on Thursday.

An APEC forum study on energy and security issues warned that
"rising energy prices may cause growth in APEC economies to stall
due to high oil import dependency and an inflexible energy supply
structure."

Energy demand within APEC will grow faster than in the rest of
the world, exerting long-term pressure on energy prices, it said.

Jung Yonghun, vice president of the Asia Pacific Energy
Research Center (APERC), an APEC advisory group, said "economies
that depend on foreign resources for energy supplies are the most
vulnerable."

He cited Japan and South Korea, which import all their energy
needs as examples. China and the United States, oil producers,
were less vulnerable while oil-exporters like Indonesia might
actually profit.

The APERC study, released at an APEC ministerial meeting on
energy in the Philippine capital, cited "strong energy demand
growth in Asia and North America, geopolitical instability in key
energy exporting economies and constraints on infrastructure to
deliver energy sources to the markets."

APERC warned that imports would eventually account for 55
percent of the region's oil supply, up from the current level of
36 percent.

Speaking at the opening of the APEC conference, Philippine
Energy Secretary Vicente Perez said economic and population
growth in the region would further increase demand for energy,
easily exceeding local production.

"The fact that demand grows faster than supply in the long run
will be a major policy concern for us," Perez said.

He cited APEC studies showing that the region's gross domestic
product (GDP) would increase by 105 percent from 1999 to 2020
with the population rising by 19 percent to three billion in the
same period.

This means that APEC's final energy consumption would reach
5.948 million tones of oil equivalent (MTOE) by 2020, a 58
percent increase from the 1999 figure, outstripping indigenous
energy production, even from oil-rich countries within APEC.

The experts said that APEC members would need US$3.4 to $4.4
trillion in new infrastructure investment in energy until 2020 to
meet this growing demand.

A statement from the energy ministers issued after Thursday's
discussions, said APEC was developing "response mechanisms," for
short-term disruptions to energy supplies including boosting
energy investment, expanding energy choices and increasing
efficiency.

"Oil supplies can be seriously interrupted by factors such as
geopolitical instability, natural disasters, piracy on key sea
lanes, terrorism and the intrinsic infrastructure and production
features of oil supply systems," the ministers said.

Perez said the discussions did not dwell on securing power
facilities and sealanes from terrorists and other threats.

APEC comprises Australia, Brunei, Canada, Chile, China, Hong
Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New
Zealand, Papua New Guinea, Peru, the Philippines, Russia,
Singapore, Taiwan, Thailand, the United States and Vietnam.