Asean energy security in turbulent times
Future security in Southeast Asia will increasingly be determined by the energy and economic systems of the region, as much as by its military security. The strategic stability of Southeast Asia will depend on securing its key maritime choke points, ensuring the energy security of the region, securing its supply chains, and coping with great power rivalry while managing climate change and energy transition risks. All of these issues are now at center stage for both the Association of Southeast Asian Nations (Asean) and external powers outside the region.
The security of the maritime energy transit through Southeast Asia, particularly through the Strait of Malacca, one of the busiest shipping lanes in the world and a major route for the oil and liquefied natural gas flows to East Asia, is another aspect of the energy security of the region that has been increasing in importance. As the Strait of Malacca is currently a major chokepoint in global energy security, any form of disruption, whether from a pirate attack, an accident, or a deliberate act of sabotage, would have a global impact and would bring extreme pressure on the economies of Southeast Asia. Although there are alternative routes such as the Sunda and Lombok Straits, these routes are less efficient and lack the necessary infrastructure to handle a massive diversion of traffic. Therefore, there are major structural risks involved in the current system of energy transit through the region. Addressing these risks would require greater cooperation among littoral states, enhanced maritime domain awareness, and the development of port and energy infrastructure to allow for redundant systems.
With industry and urbanization driving up energy demand in Asean countries, most are increasingly relying on the import of fossil fuels to meet their energy requirements. The region is thus vulnerable to the impact of fluctuations in the price of these fuels and also exposed to the risk of geopolitical crises that could impact the supply of these fuels. This report believes that for Asean countries to develop their energy resources in a balanced manner, there is a need for regional frameworks such as the Asean Power Grid and the Trans Asean Gas Pipeline that would enable countries to share resources in order to increase efficiency.
Moreover, as great power rivalry becomes more pronounced, competition for influence in Southeast Asia is also becoming more pronounced. As the United States’ foreign policy, particularly under the Trump administration, has become more inward-looking and less engaged with Asian affairs in Asia and the Pacific, China has been seeking to expand its influence through the Belt and Road Initiative. However, the Indo-Pacific strategy of countries such as Japan, India, and Australia is also attempting to offer an alternative to the Belt and Road Initiative in terms of large-scale infrastructure development, trade, and investment. Thus, Asean member states risk being coerced economically if they are perceived to be taking a side between the two great powers. As such, Asean member states are seeking to maintain their strategic autonomy in the face of competition between two great powers, and are seeking to benefit from both countries. The way in which they attempt to do this is through hedging, or diversifying their relations with, and seeking investment from, several countries, as well as strengthening regional trade arrangements and strengthening regional institutions.
The challenge of climate change can exacerbate structural risks that Southeast Asia already confronts in its energy systems and infrastructure. As sea levels continue to rise and climate-related disruptions increase, several refineries, ports, and power plants along the coasts of Asean countries may face destruction. The energy transition to cleaner energy also carries financial risks and will create challenges, particularly for developing countries, in growing their economies while ensuring sustainability. Uneven development in addressing and financing these risks may exacerbate current disparities between countries and create new imbalances between earlier movers and late developers. If left unaddressed, these disparities could lead to decline for some countries.
Asean countries must develop and implement strategies for adaptation and mitigation to address the effects of climate change in the region’s energy systems and infrastructure. In addition, financing mechanisms and policies to achieve the transition should be coordinated and harmonized regionally to create a fair and resilient transition for all countries in the region.
Ultimately, Southeast Asia’s future will be shaped by the ability of Asean countries and external actors to construct secure energy systems and resilient economies. In order to ensure a collective future in a rapidly changing and increasingly divided world, Asean must work together to strengthen its cooperation and to create long-term resilience in energy and economic systems.
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Simon Hutagalung is a retired Indonesian foreign ministry official. The opinions expressed in this article are his own.
