What Does Energy Security Mean?
I would like, first of all, to extend cordial welcome to all participants in this conference on "Global and Asian Market Dynamics: Implications for Northeast Asian Energy Security” organized by the East West Center and the Conference Connection Inc.
On behalf of the Korea Forum for Progress supporting this conference, I would like to pay special tribute to foreign participants, particularly to H.E. Dr. Edmund Daukoru, President, OPEC Conference and Secretary General and Minister of State for Petroleum Resources, Nigeria, and Mr. Abudulazis F. Alkhayyal, Senoir Vice President, Saudi Aramco, who have come all the way to Seoul to highlight this seminar.
The changing conditions in the global energy market, particularly in the Middle East is a matter of great interest for Korea, because Korea is the fifth largest oil importer and second largest LNG importer in the world. In Asia, the Korean oil and gas industry is also playing an important role in the regional oil market. This is why Korea’s energy community is particularly pleased to take part in this conference here in Seoul to discuss the matter of energy security in Northeast Asia.
Energy security is defined by many countries as moving away from the dependence on oil and moving away from the dependence on the Middle East. But energy security must these days be defined in broader terms than before. I will define energy security as the long-term ability to provide energy at a cost, which supports sustainable economic growth and improved quality of life for the citizens of a country.
Energy Security means cooperation between oil consumers and oil producers. The International Energy Agency (IEA) is already running workshops on consumer-producer dialogue. The establishment of the International Energy Forum (IEF) in Riyadh now helps to bridge the path between consumers and producers in a formal fashion.
Secondly, energy security means transparency. There is a need for establishment of a Futures market for oil and gas in the region. Currently the two major exchanges are in the United States and the United Kingdom with a small localized exchange in Japan. We do need a regional futures exchange in the East of Suez market. We are pleased that the initiators of the Dubai Mercantile Exchange are joining us at this conference.
Thirdly, energy security means joint investments. We need to reciprocate investment between oil producing and consuming countries. In Korea we have major investment by Saudi Arabia and Abu Dhabi and we would like more Korean investments in the producing countries.
Fourthly, energy security means security of supply must be matched by security of demand. While we all ask oil exporters to invest in producing more oil, we must be able to assure them that we can buy this oil and that our demand is secure.
Fifthly, energy security means cooperation for access to resources. While we all respect the free market, the government-owned companies in the region must have a forum to discuss how they can work together to access resources rather than be in conflict and in a race for such resources.
Finally, energy security means respecting the market forces but ensuring that market signals work. If the signals do not work, we need to ensure the problems are resolved
More than anything else, we need to emphasize energy efficiency. We need to make sure our energy resources are stretched for a longer time until we can find alternatives to the fossil fuels. Meanwhile, we need to spend money on research and development and educate our people to use energy more wisely. While we cannot control the supply, we can control the demand side to some extent.
The energy world has changed and we recognize that. To ensure a smooth transition to alternatives, we need to work together, consumers, producers and international oil companies. Such cooperation will enhance energy security and offers us all a win-win proposition.
I hope that this conference will serve as an instrumental vehicle through which energy industry leaders from consuming as well as producing nations interact with each other for an in-depth discussion of the Northeast Asian energy security.
We look forward to two days of exciting discussions and a lot of good talks leading to hopefully good results that we can use here in Korea. I wish you every success in your workshop activity and a pleasant stay in Seoul.