Overview of the Cooperation
and Major Schemes
2002. 10.
Bok-Jae Lee
Senior Research Fellow
CONTENTS
I. POLICY INTERESTS OF NORTHEAST ASIAN COUNTRIES
II. INTERESTS OF EACH COUNTRY IN COOPERATION
III. POSSIBILITIES FOR COOPERATION
IV. MAJOR ISSUES IN OIL
V. MAJOR ISSUES IN NATURAL GAS
VI. MAJOR ISSUES IN ELECTRICITY
VII. COOPERATION SCHEME
Ⅰ. Policy Interests of NEACs
1. China
• Supply Security of Imported Energy Resources
• Development of Clean Coal Technology
• Improvement of Energy Efficiency
• Transportation of Western Energy Resources to Eastern
Consuming Areas
2. Russia
• Management for Efficient Development of Energy Resources
• Coordination of Energy Policy between Federal Government and
Local governments
• R&D in Energy Efficiency and Environmental Protection
Ⅰ. Policy Interests of NEACs
3. Japan
• 3E: Energy, Environment, and Economy
• Implementation of Kyoto Protocol with Increasing Demand for Energy
• Supply Security of Energy
• Liberalization of Energy Industries: Electricity and Gas
4. North Korea
• Self Sufficiency
- maximum development of domestic energy resources: coal,
hydropower, renewable energy
• Introduction of Foreign Capital and Technology for Rehabilitation of
Energy Infrastructure
Ⅰ. Policy Interests of NEACs
5. Mongolia
• Liberalization and Privatization of Energy Industries
• Connecting Domestic Energy Supply Network to International Network
• Upgrade of Domestic Energy Standards to Global Level
6. South Korea
• Energy Supply Security
• Energy Demand Management
• Privatization and Deregulation of Energy Industries
• Connection of Domestic Supply Network to the Continental Network
II. Interests of Each Country
in Cooperation
• Russia – active in energy cooperation among Northeast Asian countries
based on plenty of domestic energy resources
• China – primarily interested in development of domestic energy resources
• Japan – approaching with a long-term perspective
• Mongolia–interested in the energy cooperation
• North Korea – interested in meeting domestic energy needs
• South Korea – active in energy cooperation in Northeast Asia
III. Possibilities for Cooperation
• Cooperation in pursuit of mutual benefits
- energy producing country- demand security
- energy consuming countries- supply security, diversification
• Similarity in policy interests among Northeast Asian countries
• Complementary in energy supply-demand structure of Northeast Asian
countries
• Geographical adjacency of Northeast Asian countries
• Recent favorable cooperation mood among Northeast Asian countries
IV. Major Issues in Oil
• Asian premium of Middle East crude oil prices
- low demand elasticity for the crude
- adequacy of marker crude
• Concerted response to energy supply disruption
- joint stockpiling program
- sharing SPR
• Cooperation in crude oil importation
- common utilization of excess stockpiling capacity
- common purchase and transportation of crude oil
- cooperation for security of ocean transportation route
V. Major Issues in Natural Gas
• Construction of pipeline network
- major consuming countries to play key roles
• Governmental setup of cooperation
- investment security
- unifying tax and pipeline tariff system
- pipeline operation rules
- supply security agreement
• Joint study program
- information exchange
- technological cooperation
- promotion of mutual understanding
VI. Major Issues in Electricity
• Role of each country
- Russia: a leading role based on plentiful energy resources
- Japan, South Korea: provider of technology and capital
- China, Japan, Koreas, Mongolia: Consumers
• Basic approach for construction of electric network
- local-regional-global
• Governmental organization
• Joint study program
- sharing study results among experts
- building mutual trust
VII. Cooperation Scheme
• Open regionalism
• Division of roles between government sector and private sector
- government to establish institutional arrangements
- private sector to carry out projects
• Bilateral and multilateral cooperation in parallel
- bilateral cooperation for small scale & short-run projects
- multilateral cooperation for large scale & long-run projects
• Cooperation organization
- government officials forum
- expert forum
- business forum
- umbrella organization: ‘Council for Northeast Asia Energy Cooperation’