The international oil and gas industry understands the need for diplomacy, a skill that is coming to dominate the matter of constructing and operating pipelines.
That is certainly the emphasis of a recent study published by the Seattle-based National Bureau of Asian Research entitled "Pipeline Politics in Asia: The Intersection of Demand, Energy Markets, and Supply Routes."
"The scramble for resources and transport has had uniquely important implications across East Asia and Eurasia while powerfully influencing regional energy market dynamics and geopolitical relationships," said Mikkal Herberg, one of five authors of the report.
"At the nexus of these dynamics is a growing competition to develop a number of major Asian and Eurasian oil and gas pipelines to move oil and gas across the region," Herberg said, citing three facts that drive the trend.
Three drivers
The first of these, according to Herberg, involves the fact that an increasing share of Asia's oil and liquefied natural gas supplies will have to transit the Indian Ocean, Malacca Strait, and the South China Sea.
Herberg cited figures from the International Energy Agency that indicate Asia's oil imports passing through the Malacca Strait could double over the next 2 decades to 22 million b/d from the current 11 million b/d.
"This has raised new concerns, particularly for China, over the growing risk of major maritime supply disruptions, as well as over US control of these vital sea lanes," Herberg said, noting that this concern is "driving China's efforts to diversify supply lines with new overland pipeline routes."
Asia's scramble for oil and gas has also been triggered by the break-up of the former Soviet Union, which Herberg said freed up "enormous new potential reserves of oil and gas in Central Asia" as well as "scaled up production" from Russia, especially fields in East Siberia.
Zero-sum competition
The rise of China and the country's booming oil and gas needs in particular represent the third main drive behind the region's scramble for supplies, touching off what Herberg called "a zero-sum competition over energy supplies and transit."
The essays in this report take up the broad geopolitics of cross-border pipeline development, the progress in development of new oil and gas pipelines from Russia's Eastern Siberia to China and Northeast Asia, and prospects for Central Asian oil and gas pipelines to East Asia.
Also included are essays on India's gas pipeline dilemmas and challenges, as well as the implications of new oil and gas pipelines being built by China across Myanmar into Southeast China.
This gives a heads up of what's in the pipeline, so to speak.
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