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Energy and mineral demand in the Asia-pacific region

Energy Demand

The strong link between economic growth and increasing demand for energy, both historical and current, is a trend which is expected to continue into the future with far-reaching national, regional and global environmental implications. An analysis of the structure of present energy demand for the Asia-Pacific region projected to the year 2000 has been undertaken by Fesharaki and Yamaguchi (1991). There are several important aspects of this demand in the year 2000 (Table 4.5). In particular, the share of oil in the energy mix will decrease from 47 per cent to as low as 37 per cent, depending on price; the major increase in energy share will be in utilization of gas; and coal use will remain fairly constant or decline slightly.

Although the data indicate that the energy-demand structure will change significantly by the turn of the century, it must be stressed that absolute energy demand will increase significantly (Figure 4.3). The rising percentage of gas in the energy mix merely means that gas demand will grow even faster than that for oil. Overall, this has several important implications for both economic development and the environment in the Asia-Pacific region, specifically the nations of South-East Asia.

First, the declining share of oil in the energy mix is largely attributable to reduced reserves and production in the region, much of which is a lowsulphur crude. Increasing reliance on imported oil in the region will be for high-sulphur crudes from the Middle East. Refining and processing of highersulphur stocks may well produce more harmful emissions, in particular sulphuric oxides (SOx). Similarly, such crudes will generate larger quantities of solid wastes.

TABLE 4.5 Asia-Pacific Energy-demand Structure, 1988 and 2000 (per cent)

Source 1988


1b 2c
Oil 47 42 37
Gas 10 16 17
Coal 31 26 29
Hydropower 6 7 7
Nuclear 6 9 10
Totala 100 100 100

Source: Fesharaki and Yamaguchi (1991).
a Excludes China.
b Low-price scenario of $23/barrel in the year 2000.
c High-price scenario of $35/barrel in the year 2000.

Secondly, the increased use of natural gas is perhaps a mixed blessing for the environment and the economy. Being in relatively abundant supply and at a reasonable price, natural-gas utilization can expand with marginal impact on economic growth, although large costs for conversion and new systems will be required. Similarly, processing emissions will be significantly lower in SOX and carbon dioxide (CO:), than comparable processing of oil. Natural gas releases approximately 14 kilograms of CO2 per billion joules while oil releases approximately 20 kilograms, and coal almost twice as much with 24 kilograms per billion joules.

Thirdly, although the percentage of coal in the energy mix is expected to decline slightly, it must be remembered that the absolute demand for coal will rise significantly. The result will be a continued increase in the amount required within the region. A study by Foell and Green ( 1990) shows projected emissions of sulphur dioxide (SO2) and nitrous oxides (NOX) (Table 4.6) for coal utilization in South-East Asian nations as between 8 and 10 per cent of the Asia-Pacific total. Although significant, such levels are small compared to those of China (as an example), where emission rates are approximately 60 per cent of the Asia-Pacific total.

Energy use to sustain the economic growth of the Asia-Pacific region is the highest in the world and is expected to continue well into the twenty-first century. A major environmental impact of expanded energy utilization will be the production of greenhouse gases with effects in terms of global warming, acid rain and the global hydrological cycle.

FIGURE 4.3 Increase in Oil Demand in the Asia-Pacific Region, 1987-1995

TABLE 4.6 SO2 and NOx Emissions from Coal Utilization in South-East Asia, 1986, 2000 and 2010 (million tonnes)




  1986a (Actual) 2000b (Projected) 2010b (Projected) 1986a (Actual) 2000b (Projected) 2010b (Projected)
Indonesia 0.780 1.850 3.184 0.712 1.701 2.359
Malaysia 0.298 0.441 0.753 0.296 0.582 0.741
Philippines 0.403 0.815 1.339 0.202 0.438 0.734
Singapore 0.061 0.107 0.151 0.166 0.252 0.338
Thailand 0.627 2.616 2.999 0.495 1.508 3.523
Total 2.169 5.829 8.426 1.871 4.481 7.875
Asia-Pacific total 28.155 52.904 76.167 14.216 28.677 44.249

Source: Modified from Foell and Green (1990).
a Actual figures.
b Projected on base-case scenario.

TABLE 4.7 Metal Consumption Forecasts for South-East Asian Countries. 1987 and 2000 (metric tons)







County/Region 1987 2000 1987 2000 1987 2000 1987 2000 1987 2000
Indonesia 68 181 33 101 56 - - 48 211  
Philippines 11 63 10 26 15 39 - - 23 46
Malaysia 27 120 19 47 23 98 - - 16 57
Thailand 54 165 26 71 24 87 0.5 2.1 49 108
Asia-Pacific 4 236 12 873 2 671 5 420 1 090 1 783 204 581 1 833 3 605
World 17 201 30 359 10426 14 504 5 623 7 796 847 1 246 6 862 10 387

Mineral Demand

As with energy, the demand for most metals in the region is growing rapidly, driven not only by increased use within individual nations but also because many nations of South-East Asia are major producers for the world market. It must be noted that in both cases, the environmental costs attendant on production and processing are large.

In the fast-developing nations of South-East Asia, demand for selected commodities will increase on an average of two to three times from 1987 to the year 2000. The demand by most countries for 'new' metals, such as aluminium, will be high because of their positions relative to the life cycle of metals and the stage of development of most South-East Asian nations, discussed earlier (Clark and Jeon, 1989) (see Table 4.3; Figure 4.2). Similarly, the demand for 'young' metals, such as nickel, will be low as most nations' development cycles for such commodities is just beginning (Table 4.7). To meet this increasing demand for metals in the region, over 80 new mineral developments and/or expansion of facilities have been planned, proposed or are presently under way, with a total capital investment in excess of $20 billion.

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