Gas boom to reshape US role in Asia

By Shaun Tandon November 8, 2013 11:03 AM

Men work on a natural gas valve at a hydraulic fracturing site on June 19, 2012 in South Montrose, Pennsylvania (AFP Photo/Spencer Platt)

Washington (AFP) - A boom in gas production will reshape the US role in Asia and could fuel new tensions with a growing, energy-hungry China, a new report says.

US foreign policy has historically been based largely on demand for outside energy, with Washington closely allying itself with oil-rich Arab monarchies.
But a major increase in gas production -- in part through the controversial practice of "fracking" deep underground -- has given the United States the prospect not just of energy independence but of playing a Middle Eastern-style strategic role as an exporter, according to industry forecasts.
A report by the Seattle-based National Bureau of Asian Research predicted soaring demand from the continent -- led by China -- for imported gas.
Despite rapid growth, Asia relies on natural gas for just 11 percent of its energy use, far lower than the 30 percent global average, the study said.
Four Western nations -- the United States, Canada, Australia and Norway -- could control 40 percent of the world's natural gas supply by 2020, said Nikos Tsafos, an expert at consultancy PFC Energy who contributed to the report.
"If you're sitting here in Washington, DC, that could seem like a good thing. If you're sitting in Beijing, you may not think so," he said at the launch of the report in the US capital.
Tsafos expected that China's suspicions of US intentions would grow, pointing to the backlash in Beijing when US lawmakers' concerns about national security led China to drop a bid to acquire former US oil giant Unocal in 2005.
If its worries about the United States mount, China may increasingly look to neighboring Russia for energy or farther afield to countries such as Sudan, Venezuela or Iran, the report said.
Amy Myers Jaffe of the University of California-Davis said that China -- traditionally focused on Taiwan and other nearby interests -- may calculate that it needs to develop its military to secure far-flung oil and gas installations.
"The United States will be able to use its energy abundance as a means to promote its global vision," she wrote, saying that Washington may pursue a "more assertive" foreign policy.
"But it must also consider how its changed energy situation will influence China's military calculus," she wrote.
Mikkal Herberg of the University of California-San Diego noted that the rise in US energy security comes as the war-weary country cuts its military budget.
Asian nations, however, still rely on oil and liquefied natural gas from the Middle East.
A reduction of the US role in the region "would have important implications for Asia, since much of its imported oil and LNG comes from the Middle East and is secured by US power in the region and protection of sea lanes from the Middle East to Asia," he wrote.
US President Barack Obama has already declared a "pivot" strategy of putting a greater focus on Asia, which he has said is key to the US future.
China has been seeking in the medium-term to reduce its overwhelming dependence on coal, one of the dirtiest forms of energy which is linked to the country's notoriously poor air quality as well as climate change.
China has been pursuing renewable energy such as solar, but gas has grown more attractive as prices drop.
Japan, Asia's second largest economy and a US ally, has also been on the prowl for foreign energy after the Fukushima disaster in 2011 led it to shut down nuclear reactors.