KUALA LUMPUR, Dec. 13 (AFP) — The strain of soaring oil prices is making Asian nations take a look at everything from windpower to coconuts to meet energy needs, but officials and analysts say there are no easy answers ahead.
Energy security has been a major topic at the Association of Southeast Asian Nations (ASEAN) summit this week, with the bloc’s political leaders calling for greater cooperation to slash dependence on imported oil.
Nuclear energy, geothermal, hydro-electric and windpower have increased their attractiveness with oil hitting record levels in August and remaining around 60 dollars per barrel.
Leaders from across the 10-nation group have been sounding out ways to develop alternative power, cut wastage and improve efficiency.
Malaysian Prime Minister Abdullah Ahmad Badawi said developed Asian countries like Japan and South Korea could share their experiences in the use of technology to improve energy efficiency.
"Developing countries certainly need a lot of capital investment and technology," Abdullah said.
Malaysia, the world’s biggest producer of palm oil, is pushing to develop bio-fuel from the plant, while the coconut-producing Philippines is offering to host a regional hub for ethanol fuel.
Indonesian President Susilo Bambang Yudhoyono floated the possibility of sharing capital to build refineries and to forge greater cooperation with oil-producing Middle East countries, delegates at the ASEAN gathering said.
But Dave Ernsberger, Asia oil director for energy information giant Platts, said ASEAN’s biggest challenge was how to deal with the destabilising effect of Indonesia’s plunge from being an oil exporter to a net importer.
"It has a fairly destabilising effect on energy security of the region ... ASEAN is still struggling with this," he told AFP.
Because of its small size and fragmented markets, ASEAN also "does not have the purchasing power of India or China and the political cohesiveness of Europe" to negotiate over its energy needs, Ernsberger said.
Proposals to stockpile oil are also fraught with difficulties, among them where to store supplies as well as provisions for access and conditions for a drawdown.
"ASEAN will continue to look after itself as best as it can, but they still need to deal with the effect of what happened in Indonesia," Ernsberger said.
Funding is also a problem, especially with plans to build refineries. In the meantime, ASEAN must compete for investments as oil exploration firms look for prospects in other parts of the world.
The high cost of alternative energy sources and tough environmental standards are also hampering efforts to diversify away from oil.
"The reality is that commercial acceptance of new technologies only occurs once these technologies achieve a cost of electricity of around five US cents per kilowatt-hour," Magued Eldaief, president and Asia executive for US-based GE Energy, said at a forum in September.
Ernseberger of Platts said that under current technologies, alternative energy sources cannot fully replace oil.
Most countries have only up to seven percent of their energy needs coming from renewable power sources.
Despite the difficulties, ASEAN countries are forging ahead.
"We need to pursue investments in energy infrastructures and seek wide collaboration in new and renewable energy and alternative fuels if we are to keep our economies humming and our lights on in the next three decades," Philippine President Gloria Arroyo said.
