Natural Gas in Asia
History and Prospects
This working paper by Mikkal Herberg (The National Bureau of Asian Research; University of California, San Diego) was commissioned for the 2011 Pacific Energy Summit on “Innovation Generation: Powering a Prosperous Asia.”
This paper examines the challenges of increased use of natural gas by Asian nations and what steps may be taken to develop alternatives to coal and oil.
Over the past two decades, use of natural gas in Asia has increased threefold, ensuring that the Asia-Pacific will continue to be a hub of the global gas trade for the foreseeable future. Despite increased growth, however, natural gas is still an underutilized resource and is far outpaced in Asia by the consumption of coal and oil. Increased consumption of natural gas in place of oil and coal would have the dual effect of providing Asian energy security and mitigating climate change. Yet emerging economies are faced with some key challenges. Plentiful and inexpensive domestic reserves in countries such as China and India drive continued coal consumption. Furthermore, political, geographic, and economic constraints have made further investment in gas and development of liquefied natural gas (LNG) pipelines difficult.
- Despite vastly increased consumption of gas as well as growth in production on the continent, the use of coal and oil far outpace natural gas, leaving room for increased investment in gas as an energy source.
- Overcoming competition from cheap energy sources such as coal and oil requires government policies that encourage investment in natural gas and pipeline construction.
- Increased Asian use of natural gas not only reinforces a decades-long upward trend in consumption, but also has several noticeable benefits, including increased energy security and reduced carbon emissions.
- The development and maturity of the Asian gas market will be incremental and halting while construction of gas pipelines and transportation infrastructure is delayed by lingering geopolitical disputes.
Mikkal Herberg is a Senior Lecturer at the Graduate School of International Relations and Pacific Studies, University of California–San Diego, and Research Director on Asian energy security at the National Bureau of Asian Research.