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| Fig. 1: Hydrocarbon Production vs Consumption in East Asia, [2-4] (Image Source: B. Janey) |
Major East Asian economies such as South Korea, China, and Japan exhibit similar energy trends. High energy consumption and a critical dependence on imported hydrocarbons. With limited domestic reserves of hydrocarbons such as oil and natural gas relative to their consumption, these countries rely heavily on global trade to sustain their economic growth and energy demands. This dependency poses a major economic risk in the event of global trade disruption and simultaneously raises national security concerns for the respective countries as energy scarcity could destabilize the region leading to war. This article serves to demonstrate the severity of East Asian reliance on imported hydrocarbons, with a focus on South Korea, China, and Japan.
All three countries are some of the largest importers of hydrocarbons globally. Further, they exhibit similar trends for non-hydrocarbon fuels and consume roughly all the nuclear and renewable energy they produce. [1-4]
China: China consumed roughly 1.58 × 1020 J in 2021. [1] Chinese electrical energy predominantly relies on coal due to its large coal reserves. Since 2016 Chinese coal production has increased rapidly. [5] Hydrocarbons are necessary to meet its other energy needs, chiefly fuel for vehicles. Hydrocarbons contribute approximately 28% of China's annual energy budget with roughly 64% of these hydrocarbons imported. More specifically, 44% of China's natural gas and 72% of its petroleum is imported. In 2022, natural gas contributed merely 9% of the country's electricity generation capacity. Electricity from petroleum was negligible. [1,2] Comparing the petroleum consumption of China to its transportation consumption, roughly 44% of petroleum in China is consumed for transportation. [2,6]
South Korea: South Korea consumed roughly 1.26 × 1019 J in 2021. Hydrocarbons contributed to approximately 58% of its total energy consumption of which 98% was imported. Natural gas is predominantly used to generate electricity accounting for 31% of total electricity generating capacity. [1,4] In 2022, the transportation sector used 1.67 × 1018 J. [7] As such, roughly 30% of consumed petroleum is used for transportation.
Japan: Japan consumed roughly 1.77 × 1019 J in 2021 with hydrocarbons contributing 61% of its annual energy needs. Due to the Fukushima disaster, nuclear energy production sharply declined, forcing Japan to rely more on imported natural gas. Similar to Korea, Japan predominantly uses natural gas for electricity generation and oil for transportation. 28% of Japan's electricity is generated using natural gas. Roughly 1.15 × 1017 J of electricity is generated through oil which only accounts for 2% of oil consumption. Based on the refined petroleum products consumption as reported by the U.S. EIA, almost half of its oil consumption goes towards transportation, predominantly comprised of motor gasoline, distillate fuel oils (which includes diesel fuels), and jet fuels. Roughly 99% of the hydrocarbons consumed by Japan are imported. [1,3]
As shown in Fig. 1, South Korea and Japan have negligible hydrocarbon resources. Additionally, China's hydrocarbon deficit, while less severe than its counterparts, is still significant. [2-4] All hydrocarbon consumption is greatly influenced by each country's transportation needs. Overall, China's predominant hydrocarbon needs are the result of its transportation sector and other industries that utilize petroleum derivatives. South Korea and Japan rely on natural gas to help contribute to its electrical sector, with a considerable amount of their remaining hydrocarbon use from vehicles. The slight decrease in oil consumption for transportation in South Korea can likely be attributed to its population density which dissuades traveling larger distances compared to Japan with considerably larger land mass.
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| Fig. 2: Disputed Maritime Boundaries, [11] (Courtesy of the DOE) |
The scarcity of hydrocarbon resources in East Asia contrasts with the large energy demand of the countries there. Most hydrocarbon reserves fall within the South China Sea and are located in uncontested shallow water basins within the waters of Malaysia, Brunei, and Vietnam. [8,9] Thus, these resources are unavailable for China to capitalize on. Further, even if China were to control the entire oil reserves of the South China Sea, its production would merely increase by about 8.5%. [10] Additional hydrocarbon reserves are predicted to exist within the East China Sea. More than 35% of global petroleum is shipped through the East China Sea, of which 85% is imported into China, South Korea, and Japan. [11] A predicament arises in that resources and crucial energy trade routes lie in heavily disputed marine territories between China, South Korea, Japan, and, predominantly in the South China Sea. [8,9,11] Each country has a strategic advantage in claiming said territories. One result has been China's nine-dash line. Fig 2 displays disputed maritime territories in the East China Sea. [11]
While China produces and contains much more hydrocarbons than South Korea and Japan, it is still bound by the same energy concerns in the region due to its sizable hydrocarbon imports. Seeing as transportation constitutes a considerable amount of hydrocarbon demand, it makes sense that these countries would be interested in electrifying their transportation industries. Hydrocarbons do aid Japan and South Korea in electrical generation, so diversifying their energy sources is essential to decreasing hydrocarbon reliance. South Korea has increased investments in nuclear and renewable energy such as wind energy. [12,13] Japan is exploring hydrogen as an alternative energy source. Additionally, Japan is looking to restart idle nuclear plants as a strategy to reduce hydrocarbon dependency. [14] China is greatly interested in electric vehicles and thus still needs to expand its domestic electric generation capabilities. China is rapidly expanding its renewable energy network, particularly solar and wind, and increasing investments in natural gas production based on energy production trends. [1] Further, China continues to advance into deep water areas of the South China Sea in an attempt to discover and amass more hydrocarbon resources. [9]
The heavy reliance on imported hydrocarbons leave East Asia's major economies exposed to energy security risks much greater than those of the United States. Despite immense investment into energy diversification, the region's dependency on hydrocarbons does not seem likely to diminish in the near term as transportation consumption appears steady. Addressing these vulnerabilities is of utmost importance to the respective economic powers in East Asia. Escalating geopolitical tensions, especially around heavily disputed territorial claims, can create a precarious situation in the region. Substantial diplomacy and co-development are necessary to resolve the energy vulnerabilities of the region. Due to the energy demands of the respective countries, if these countries are unable to compromise, and global trade were to be disrupted, there would be a high potential for conflict.
© Benjamin Janey. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] "BP Statistical Review of World Energy 2022," British Petroleum, June 2022.
[2] "China Country Analysis Brief," U.S. Energy Information Administration, September 2023.
[3] "Country Analysis Brief: Japan," U.S. Energy Information Administration, June 2023.
[4] "Country Analysis Brief: South Korea," U.S. Energy Information Administration, April 2023.
[5] J. Lii, "China's Role in Global Coal and Trade Policy," Physics 240, Stanford University, Fall 2024.
[6] C. Lyu, X. Ou, and X. Zhang, "China Automotive Energy Consumption and Greenhouse Gas Emissions Outlook to 2050," Mitig. Adapt. Strateg. Glob. Change 20, 627 (2015).
[7] "Korea Energy Demand Outlook First Half, 2022," Korea Energy Economics Institute, 2022.
[8] "Assessment of Undiscovered Conventional Oil and Gas Resources of Southeast Asia, 2020," U. S. Geological Survey, Fact Sheet 2020-3046, November 2020.
[9] "Regional Analysis Brief: South China Sea," U.S. Energy Information Administration, March 2024.
[10] K. Friedman, "South China Sea Oil Estimates," Physics 240, Stanford University, Fall 2023.
[11] "Regional Analysis Brief: East China Sea," U.S. Energy Information Administration, June 2024.
[12] J. Kang, "Wind Energy Development in South Korea," Physics 240, Stanford University, Fall 2024.
[13] A. Ee, "Nuclear Energy in South Korea," Physics 240, Stanford University, Fall 2023.
[14] R. Eto, "Economic and Energy Outlook of Japan for FY2021," Institute of Energy Economics, Japan, IEEJ Energy J. 16, No. 1, 1 (2021).