Asia warned vs energy dependence

DEVELOPING ASIA should shift its dependence to alternative fuels to sustain its growth path in the next two decades, a senior Asian Development Bank (ADB) official said yesterday.

“If developing Asia is to continue to grow at around 6% and lift millions more out of poverty it needs a massively increased energy supply,” Minsoo Lee, senior economist at the ADB said during the discussions on the lending agency’s updated Asian Development Outlook 2013 at the AIM Conference Center in Makati.

However, Mr. Lee said, while Asia’s energy demand will continue to increase in the next two decades, its energy supply is not enough, even by 2035.

He said that the energy security in developing Asia rests on three pillars: adequacy and reliability of critical energy supply, environmental sustainability, and affordable access.

In terms of adequacy and reliability, he mentioned that Asia’s energy self-sufficiency rate -- a country’s dependence on renewable resources of energy, will be deteriorating due to increasing dependence on fossil fuels, which are non-renewable.

Only three economies in Asia will be self-sufficient by 2035 namely, Kazakhstan, Azerbaijan, and Brunei Darussalam. The Philippines’ self-sufficiency rate is projected at less than 20% by 2035, Mr. Lee said.

“In the Philippines, the indigenous reserves of coal and natural gas will likely be depleted by 2035, and the renewable resources usage share will dramatically decrease to 20%, from the current of about 40%,” Mr. Lee said.

“Therefore, the government should think of ways to boost the country’s energy self-sufficiency rate in two decades,” he added.

Mr. Lee mentioned that without radical changes to Asia’s current energy mix by 2035, coal use will increase by 81%, oil consumption will double, [and ] natural gas use will more than triple.

Developing Asia accounted to 79% of the total population dependent on traditional fuels globally.

Developing Asia’s fossil fuels proven reserves of coal was recorded at 26% of the global figure in 2011, conventional gas reserves was at 16%, while technically recoverable oil and natural gas liquids were accounted to 15%.

Mr. Lee said the region’s oil imports will triple to $30 million barrels a day by 2035 from $11 million barrels a day in 2011.

“In 2010, Asia’s oil imports from the Middle East has risen to 48%. As this trend, will likely to continue, Asia’s growing dependence on a single region poses a great risk for adequate reliable energy supply,” he said.

In terms of environmental sustainability, Mr. Lee said the consumption of fossil fuels is likely to spell environmental disaster.

Furthermore, in terms of affordable access to electricity, Mr. Lee said, “Asia is home to most of the world’s energy poor.”

Developing Asia accounted to 50% of the population without access electricity in 2011. “Affordable energy is key to inclusive growth,” Mr. Lee said.

Mr. Lee said that to allow affordable access of electricity to the poor, the government should “replace general subsidies with targeted subsidies.”

Fossil fuel subsidies accounts to 0.7% of the Philippine gross domestic product (GDP) in 2011, he said.

He also said governments should introduce tax on greenhouse gas emissions to reduce energy consumption and develop new clean technologies.

He added that energy experts should harness renewable energy supplies such as solar, wind, hydropower and biofuels. Developing Asia’s contribution to the global GDP would increase by 2035, its energy use relative to the rest of the world would also grow.

Developing Asia accounts to 28% of the global GDP in 2010, which is projected to almost double to 44% in 2035.

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