Plenary session No.3
Energy and regional security
Saturday 8 December 2007, 11.25 am
SPEAKERS
M.K. Narayanan
National Security Adviser, India
Sheikh Mohammed Al Abdallah Al Sabah
Director for Government Delivery, Kuwait
Yuriko Koike
Former Minister of Defence, Japan
IISS Director-General John Chipman opened the plenary by stating that the rising powers of Asia now had greater demands for energy and were taking a larger role in discussions about security in the Middle East, while also directly assisting in building regional stability.
M.K. Narayanan, National Security Adviser to the Prime Minister of India, said India faced unprecedented demand for energy to fuel its economic growth. It had 17% of the world’s population, but 0.8% of the world’s known oil and natural-gas reserves, though it had substantial coal reserves. Consequently, India imported approximately 70% of its oil, much of it from the Middle East. India’s dependence on oil imports was projected to rise to nearly 90% by the year 2020. It was the world’s second-fastest-growing energy market, and was poised to become the world’s third-largest net importer of oil after the US and China. To ensure energy security for over 1 billion people was a daunting challenge. Nuclear energy had become a priority and was expected to generate 40,000 megawatts by 2030.
India believed that external partnerships played a vital role in bridging its energy deficiencies. In this respect, the synergy between India and the Gulf was obvious; India was amongst the Gulf’s closest neighbours, had a modernising economy, and had emerged as a significant trading partner, with total trade of over US$25bn. Nearly 5 million Indian citizens lived in the Gulf. The importance of the Gulf in India’s strategic calculus had steadily grown over time. For India, peace and security in this region was vital. If India could do something to add to the sense of security in the region, it would.
Narayanan said India believed a common approach to problems such as extremism, fundamentalism and terrorism would go a long way towards strengthening regional security. The Gulf, like South Asia, must remain prepared for a new wave of terrorism. It was not just al-Qaeda, but the al-Qaeda mindset – a mentality reflected in a large number of terrorist outfits across the globe – that needed to be dealt with. This had resulted in a new paradigm of terror, whether it was in planning, funding, arms acquisition or training methods. According to India’s intelligence reports, new schools that specialised in training an international brigade of terrorists were being established on the Pakistan–Afghanistan border. Recruits from 14–15 countries had been identified among the trainees. These were highly specialised schools. Targets included high-profile political and other personalities, vital infrastructure and installations including large ocean liners, oil pipelines, oil dumps and electricity pylons, as well as the usual military and political targets. The sea was becoming a favoured route for carrying out attacks.
Given India’s experience in dealing with terrorism, there was no scope for complacency. The Gulf nations, with major oil resources, were highly vulnerable to such threats. The dispersed nature of terrorist networks, and the diversified nature of terrorist targets, including economic and religious targets, made terrorism extremely dangerous. The related activity of piracy on the high seas was becoming an increasing menace, especially in the Indian Ocean. With some 90% of world oil supplies passing through the Strait of Hormuz or the Bab-el-Mandeb, ensuring the security of these waters was of vital importance, not only to countries in the immediate neighbourhood such as India, but also countries in the extended neighbourhood such as Japan and perhaps China.
Sheikh Mohammed Al Abdallah Al Sabah, Director for Government Delivery, Kuwait, asserted that maintaining regional security required the protection of energy sources and supplies in the region from sabotage or subversive attempts. Therefore it was necessary continuously to try to neutralise tensions and conflict spots in the region. This had led leaders at the 28th GCC Summit to reaffirm the importance of preserving Iraq’s unity and ensuring its full sovereignty, and the necessity that some countries did not destabilise its security and stability by interfering in its internal affairs. The Summit also stressed the importance of transparent dialogue and respect for UN resolutions along with the need for full cooperation between the International Atomic Energy Agency and Iran to resolve the nuclear issue.
The Annapolis conference was expected to be a positive step towards reactivating the Middle East peace process, urging both parties into serious negotiations to guarantee all Palestinians’ rights and meet their ambition to create an independent state. However, Israel had since imposed further restrictions on Palestinians in the Gaza Strip. This had upset Kuwait’s hopes of seeing the conference become a serious and frank step towards resolving the conflict.
Energy security, from Kuwait’s point of view as an oil-producing state, was based on the necessity to provide oil and oil derivatives for consumer countries at adequate prices, thereby contributing to international economic growth. The region held 70% of international oil reserves and 40% of gas reserves. It produced more than a third of the total daily oil produced, and had become the nerves and the arteries of international economies, especially emerging economies. For this reason, Kuwait considered the security and the stability of the region crucial for international development.
The Gulf states continued to develop and renovate their oil infrastructure in order to respond to growing demand. Kuwait planned by 2020 to increase oil production and refining capacity to 4m barrels per day. Consuming states meanwhile should diversify their gas and oil energy sources so as not to count on one source alone.
Yuriko Koike, former Minister of Defense, Japan, noted the sharp rise in the price of oil over the past year. In Japan this had affected many prices from petrol to taxi fares. The price spike hit developing countries hard, especially those with scant natural resources. One reason for the rise was the rapid increase in global oil demand led by China and India. This would have a grave negative impact on the global environment. Global warming had become one of the highest-priority issues in the world, and had been discussed at the recent OPEC Summit. Establishing a new framework beyond the Kyoto Protocol was an urgent task.
Japan had been active in working with other countries, and had proposed the new process under way to develop a post-Kyoto Protocol. It would chair the G8 summit meeting next year in Hokkaido, where global environment and climate change would be a main agenda item. Japan would spare no effort in establishing a new framework for the solution of climate-change issues.
Development of renewable energy, as well as enhanced energy efficiency, held the key to addressing rapid demand growth and climate change. Japan had state-of-the-art technology in energy conservation and renewable energy. Efforts to resolve climate-change issues, and create sustainable energy demand would stabilise the world economy, bringing benefits to Middle Eastern countries.
A long-term stable supply of oil from the Middle East was critical. As Japan imported 90% of its oil from the Middle East, stability of the region was vital. Therefore, Japan would devote its utmost efforts to support this goal. Japan was stepping up the creation of a multi-layered relationship with Middle Eastern countries, so as to meet the needs of both sides and to deepen interdependency.
Securing the safety of energy-related infrastructure, especially sea lines of communication, was essential in achieving a stable supply of energy. The law that had enabled Japan’s Maritime Self-Defense Force to refuel an international naval task force in the Indian Ocean and Arabian Gulf, to support the international fight against terrorism, had expired. However, Koike hoped that refuelling could resume as soon as possible.
Questions and answers
Lord Hurd, former UK Foreign Secretary, asked Narayanan if, in view of the large Indian Muslim population, al-Qaeda was active, and, if so, what steps the government had taken to counter this? Sir Hilary Synnott, Consulting Senior Fellow, IISS, asked about the security implications of climate change, given that China and India’s economic growth would involve massive use of energy and water. What was the prospect for regional cooperation over issues such as the use of water from the Himalayan basin? Dr Geoffrey Kemp, Director of Regional Strategic Programs, the Nixon Center, United States, requested a status report on the proposed Iran–Pakistan–India gas pipeline, and on the US–India nuclear dialogue. Also, was India interested in purchasing the US aircraft carrier Kitty Hawk?
Narayanan responded that India had been greatly concerned at the possibility of infiltration of the al-Qaeda mentality and mindset into its very large Muslim population, which at over 150m is the second largest in the world. India also had the second-largest Shia population in the world, at 27–28m. But, he said, no Indian Muslim had been involved in al-Qaeda terrorist activity, and none of the major terrorist incidents that had taken place in India had involved Indian Muslims. Almost all of them had been carried out by foreign terrorists. Nevertheless, India was concerned about people – who could be professionals rather than from poor backgrounds – going abroad and becoming radicalised.
The issue of climate change was close to the heart of Manmohan Singh, the Prime Minister. Though India had 17% of the world’s population, it accounted for less than 3% of greenhouse-gas emissions. But with many people below the poverty line, India could not take on commitments that would limit economic development. It was concerned that Himalayan glaciers were melting at an alarming rate. If richer parts of the world assisted poorer nations in adaptation and mitigation, and provided funding for this purpose, a great deal could be done. Water was becoming a scarce resource for India, which had agreements with Bangladesh and Nepal; but politics sometimes played a role. India was in a dialogue with China on harnessing (from India’s side) the Brahmaputra and its large water systems. The proposed Iran–Pakistan–India pipeline was still at a preliminary stage: there were problems concerning transit fees, pricing and transportation costs. The US–India nuclear deal had run into political problems internally, but was good for India, the US and the world. Civil nuclear cooperation would take India out of energy bondage. On aircraft carriers, India currently had enough problems with the Admiral Gorshkov, purchased from Russia. It had not even looked at the Kitty Hawk.
Daniel Fung, Chairman, Des Voeux Chambers, Hong Kong, asked Koike about Sino-Japanese rapprochement over joint development of the gas fields in the East China Sea, given the thaw in bilateral relations following Premier Wen Jiabao’s visit and the thaw in military-to-military relations. Koike responded that the environment and energy efficiency were fruitful areas for discussion between Japan and China, and the relevant technologies would be welcome in both countries, offering ‘win–win’ cooperation to both.
Ellen Laipson, President and Chief Executive Officer, the Henry L. Stimson Center, United States, asked Sheikh Sabah whether at the society level within GCC countries there was any discussion of changes in consumption patterns, and responsibility at the individual level to deal with climate change. Sheikh Sabah responded that the Middle East contributed less than 2% of total carbon-dioxide emissions. However, there were changes in consumption patterns, for example in the use of paper bags as opposed to plastic bags, and the use of catalytic converters. There was no doubt that global warming was starting to take hold in decision-makers’ minds as well as with the population, although this was not as pronounced as in the West.
