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UX – Indian Demand High

Chinese and Indian demand is growing, insufficient infrastructure blocks domestic production


Ebinger 12

Senior fellow and Director of the Energy Security Initiative at Brookings, Charles, “Liquid Markets: Assessing the Case for US Exports of Liquefied Natural Gas,” 5-2-12, http://www.brookings.edu/~/media/events/2012/5/02%20lng%20exports/20120502_lng_exports



While Japan has traditionally been the focal point for natural gas consumption in Asia, the economic rise of China and India has begun to have an in- creasing impact on forecasts for the Asian gas mar- ket. Although energy and electricity supply in both countries has been dominated by coal, both coun- tries have expressed interest in expanding the role of natural gas. The International Energy Agency predicts that gas demand in China and India may grow as fast as 7.7 percent and 6.5 percent, respec- tively, per year to 2035.63 Over the past five years, both countries have become significant importers of natural gas, mostly—exclusively, in the case of India—in the form of LNG. Both China and In- dia have made significant investments in LNG regasification infrastructure with six LNG import terminals currently under construction in China and two in India (with an existing terminal also undergoing expansion), and more expected in the near future. In addition to the LNG imports, China imports gas from Turkmenistan via a pipeline that traverses Uzbekistan and Kazakhstan, is in the pro- cess of developing a pipeline interconnection with Myanmar, and has long been engaged in discus- sions with Russia over a potential pipeline inter- connection. India, which does not currently share a pipeline with any other country, is looking to de- velop various international pipeline projects, from Turkmenistan, Myanmar, Oman, and Iran. How the demand for gas in these countries con- tinues to grow will depend on a number of fac- tors, including the pace of economic growth, the policies for substitute fuels—primarily coal, nuclear power, and oil—and the speed and scale at which unconventional gas can be developed. With electricity demand increasing at rapid rates in countries across South and East Asia, there is also a very real possibility that LNG consump- tion will not be sufficient and that substantial coal demand will persist. However, while coal and oil will continue to make up a large part of the energy mix, natural gas demand is projected to increase steadily, prompting the need for more investment in imports and in supporting domestic produc- tion, particularly of unconventional gas. The EIA’s recent global estimate for shale gas reserves sug- gests that India and China have roughly 63 tcf and 1,275 tcf of shale gas reserves, respectively.64 The coal-bed methane (CBM) gas reserves of each country are estimated to be equally vast: one as- sessment of China’s CBM reserves is 1,306 tcf and estimates of India’s CBM reserves range from 71 to 162 tcf.65 For both countries, these estimates for unconventional gas have stimulated national interest in unconventional gas production. How- ever, development of these resources is likely to be a mid-to-long term proposition. The regula- tory and policy environment in both countries will need to be amended to accommodate shale gas and CBM production and to address issues related to hydraulic fracturing, such as water consumption, treatment, and disposal. The ex- tent to which natural gas prices are deregulated will also have a bearing on how quickly domestic unconventional gas will be produced as produc- tion companies will require economic incentives to begin and sustain production. Unconventional gas production will also require technical capac- ity and physical infrastructure, both of which are currently in short supply in both China and India. The former concern is partially being ad- dressed through Chinese and Indian investments in North American shale plays. The latter concern will require significant attention, particularly as the pipeline networks in both China and India are inadequately developed and as the investment climate for foreign operators remains uncertain.66

India LNG demand to increase by 55% in 2 years


Vaijayanthi 2014

(http://www.platts.com/latest-news/natural-gas/mumbai/indias-natural-gas-demand-to-double-to-51697-26778967, 29Apr2014, M.C.Vaijayanthi, “India's natural gas demand to double to 516.97 mil cu m/day by 2021-22: report”)
. India's natural gas demand to double to 516.97 mil cu m/day by 2021-22: report¶ Mumbai (Platts)--29Apr2014/615 am EDT/1015 GMT India's natural gas demand is forecast to more than double to 516.97 million cubic meters/day in fiscal 2021-22, according to a report commissioned by an oil ministry regulatory body.¶ Demand in fiscal 2016-17 is forecast at 378.06 million cu m/day, up 55% from estimated demand of 242.66 million cu m/day in fiscal 2012-13 (April-March), the report said.¶ Vision 2030: Natural Gas Infrastructure in India by downstream regulator Petroleum and Natural Gas Regulatory Board was prepared a year ago and made public in recent days.¶ It forecasts natural gas demand in India to grow at an average of 6.8%/year from 242.66 million cu m/day in fiscal 2012-13 to 746 million cuj m/day in fiscal 2029-30 due to increases in demand for power generation, fertilizer production and city gas distribution.¶ Article continues below...¶ Request a free trial of: International Gas Report International Gas Report¶ International Gas Report ¶ International Gas Report is a biweekly report that intelligently analyzes what is happening in the natural gas industry, improving your vision and sharpening your competitive edge. Through its unrivalled network of global correspondents, it covers the whole gas chain, from the well-head to the burner tip, in Asia, Europe, the Middle East, Africa and the Americas, including gas transport, regulation and the ever-present problems posed by shifting geopolitical concerns.¶ Request a trial to International Gas Report Request More Information¶ "Gas-based power generation is expected to contribute the highest, in the range of 36% to 47%, to this demand in the projected period," the report said.¶ "The share of the fertilizer sector in overall gas consumption in the country is expected to go down from 25% in 2012-13 to 15% in 2029-30 owing to higher growth in other sectors," it added.¶ The report forecast 7.2% annual growth in gas supplies reaching 400 million cu m/day by fiscal 2021-22 and 474 million cu m/day in fiscal 2029-30.¶ Supply from domestic sources was projected to rise from 101.11 million cu m/day in fiscal 2012-13 to 156.7 million cu m/day in fiscal 2016-17 and 230 million cu m/day in fiscal 2029-30.¶ LNG imports were projected to rise sharply from 44.6 million cu m/day in 2012-13 to 143 million cu m/day in fiscal 2016-17 and 214 million cu m/day in fiscal 2029-30.¶ In a separate report by Ernst&Young released last Friday, analysts projected India's gas shortage to peak in the current fiscal year.¶ "Over the next few years, the shortfall in natural gas production in the country is expected to continue, with supply trailing demand. The shortage of gas is likely to reach its peak in fiscal 2014-15, with around 37% of demand being unmet," Ernst&Young said.E&Y said incremental supply was expected to be met through LNG imports as domestic supply will fail to keep pace with the anticipated rise in demand, limiting its demand-supply projection for up to fiscal 2016-17.¶ LNG import potential is expected to increase to 150 million cu m/day by fiscal 2016-17, contributing around 42% of total supply, E&Y said.¶ CRITICAL OF GAS POLICY¶ The supply projections in the PNGRB report factor in a forecast 30 million cu m/day of gas that is expected to be received via the TAPI pipeline from fiscal 2021-22 onwards.¶ The PNGRB report was critical of the current government policy that determines priority in gas allocations and the volumes supplied.¶ The Gas Utilization Policy "creates artificial demand and discourages new suppliers and hence needs to be progressively removed," the PNGRB report said.¶ "A free market without compromising the long-term objectives of the nation would be a more prudent approach," it added.¶ The PNGRB report also touched on the controversial issue of gas pricing, saying the government had to make investment in the upstream and mid-stream gas sectors attractive to meet growing demand.¶ "Key to this would be sending the right price signals, which could be achieved by reforms in the power and fertilizer sectors to increase their affordability," the PNGRB report said.¶ In its report, E&Y said India's new gas pricing policy was expected to increase domestic production by encouraging upstream investment and overall it "augurs well" for the natural gas market.¶ India's cabinet approved a new gas pricing formula to come into effect from April 1 that would have almost doubled the prevailing $4.20/MMBtu gas price, but the oil ministry acted on the advice of the Election Commission to put the hike on hold due to ongoing elections that are due to end mid-May.¶ "This [new pricing] will improve India's energy security and increase availability of gas for its key gas-consuming industries... [and] is expected to increase certainty and transparency in the pricing of natural gas in India," E&Y said.¶ "So far, the gas market has been adversely affected by the government's current gas-pricing policy, and investment in the upstream sector declined to $1.8 billion in fiscal 2011-12 from $6.3 billion in fiscal 2008-09," it added.¶ The E&Y report, quoting Morgan Stanley, said gas prices of more than $8/MMBtu could result in incremental production of almost 95 million cu m/day over 20 years and would help to reduce India's LNG import costs by around $16 billion.¶ PNGRB said India's natural gas transmission network would increase from the current 13,000 km with a capacity of 337 million cu m/day to 28,000 km with a capacity of 721 million cu m/day over the next 5-6 years, connecting all major demand and supply centers in the country.

India wants US natural gas


NGI 8-24-12

(Natural Gas Intelligence, “Japan, India Said to Urge U.S. to Allow LNG Exports,” 8-24-12, http://intelligencepress.com/subscribers/daily/news/d20120824i.html?printable=yesandhighlight=export, accessed 9-18-12) PM


Two potential beneficiaries of relatively cheap North American natural gas supplies, Japan and India, reportedly both have been urging the Obama administration to open LNG exports as soon as possible, according to the project manager for one of the export terminal proposals. Jordan Cove's Bob Braddock told NGI that he was aware that both Japan and India are pressing for a decision from the U.S. federal government that would allow LNG exports to their respective non-Free Trade Agreement (FTA) nations.
Earlier this year Japanese media reported that the country was appealing to the United States for LNG (see NGI, Feb. 27). China Investment Corp. (CIC) and the Government of Singapore Investment Corp. (GIC) have invested a combined $1 billion in Cheniere Energy Partners LP's Sabine Pass LNG export project in Louisiana, according to published reports last week.

Link – LNG k2 solve Indian Demand

India wants US LNG now


The Economic Times 2012

(http://articles.economictimes.indiatimes.com/2012-06-20/news/32336137_1_lng-imports-lng-supply-deal-lng-export, “GAIL wants US to relax norms for more LNG imports”, Jun 20, 2012,)

NEW DELHI: Close on the heels of sewing nation's first gas import deal from the US, state-owned GAIL India wants Washington to relax rules so that it can buy more liquid gas (LNG) to meet growing energy needs of the country.Gas-surplus US at present allows exports of small amounts of natural gas. It has so far allowed only Cheniere Energy to export liquefied natural gas (LNG) from Sabine Pass LNG terminal to countries that have not signed free-trade agreements with the US such as India.¶ GAIL recently signed an agreement to import 3.5 million tons of LNG from Sabine Pass, a subsidiary of Cheniere Energy.¶ But given the growing gap between demand and supply, GAIL Chairman B C Tripathi wants to tap all of the seven LNG export terminals planned in the US and has written to Oil Ministry and Ministry of External Affairs seeking diplomatic intervention to push Washington to allow other terminals to sell gas to India. The seven planned LNG terminals only to nations that have signed free-trade agreements (FTAs) with the US.¶ "This implies that GAIL as a representative company of India, cannot conclude any contractual arrangement with these seven LNG export terminal companies till the time non-FTA approval is given to them," he wrote. "This is coming in way of GAIL's efforts to finalise liquid shale gas export from the US to India whereas time is very ripe now to strike LNG deals at competitive prices".¶ Tripathi said GAIL's September 2011 acquisition of 20 per cent stake in Eagle Shale Assets in Texas of Carrizo Oil and Gas, has "provided it with an opportunity to understand the North American gas market".¶ This led to GAIL sewing up the LNG supply deal with Sbaine Pass at a price linked to US Henry Hub gas price as against the practice of tying it up with oil.¶ He said LNG imports from the US was largely dependent on approvals from the Department of Energy, Federal Energy Regulation Commission and clearances from various departments of the US pertaining to land, water, air etc.¶ While FERC's approval was related to construction and conformance to the regulations, approval of DOE pertains to export of LNG to countries which signed FTA with US and/or nations which have not signed FTA with the US but are not covered under any sanctions for trade relations.¶ As on date, only Sabine Pass has received approval for export to both FTA/non-FTA countries whereas seven export terminals have received only FTA approvals.¶ "We are given to understand that approval from DOE of the US is largely a policy decision with active involvement of the US government. It is, therefore, essential that Government of India immediately takes up with the counterparts in the US and impresses upon them for treating India as a special nation by keeping us outside the purview of FTA/non-FTA framework," he wrote.¶ Development of shale gas -- natural gas formed from being trapped within shale formations -- in the US has turned the as market there from shortage to glut. The US Energy Information Administration estimates that China holds the world's largest shale gas reserves, with 1,275 trillion cubic feet, followed by the United States at 862 trillion cubic feet.¶ Tripathi said the relaxation would allow India and in particular GAIL to approach all the LNG exporting companies in US to bring large volume of liquid shale gas to India.¶ With supply outstripping demand for gas in US, chances are quite high to conclude LNG deals at competitive price, he said. "It is, therefore, in the larger interest of India's energy security that this matter is taken up urgently... so that US government extends special status to India for import of liquid shale gas to India."¶ Under a deal Cheniere Energy signed last year, GAIL will import 3.5 million tonnes of liquid gas per year starting in 2017.¶ Other US players, including the San Diego-based utility Sempra Energy and Dominion Resources Inc, are also pressing for permits to ship gas across the Pacific. India's current demand of 254.2 million standard cubic meters per day (mmscmd) of natural gas far overshoots supply of 166 mmscmd.¶ The demand-supply gap is likely to widen further, potentially hurting output at power, petrochemical plants and refineries.¶ The government estimates show the nation's gas demand is set to rise 40 per cent by March 2015 to 356.16 mmscmd.¶ A price linked to Henry Hub, a key benchmark location for pricing throughout the US, is likely to be cheaper than oil-index rates that LNG exporters like Qatar charge from India.¶ Prices at Henry Hub fell 9 per cent to about $ 4 per million British thermal units in 2011, the second-lowest annual average price since 2002.¶ LNG imports into India are priced as much as $ 15-17 per mmBtu.

I/L – Indian Energy Demand Leads to Conflict

Demand for gas will force India to cooperate with Vietnam on gas exploration


Daiss, Energy Tribune, 9-5-12

(Tim, “The Sino Indian Vietnamese Triangle: Old Grudges, Hydrocarbons, And Geopolitical Gamesmanship Part One ,” 9-5-12, http://www.energytribune.com/articles.cfm/11624/The-Sino-Indian-Vietnamese-Triangle~-~-Old-Grudges-Hydrocarbons~-~--And-Geopolitical-Gamesmanship-Part-One, accessed 9-11-12) PM


Nevertheless, all is not well for the country’s natural gas future. Vietnam’s Natural Gas Master Plan projects that gas consumption in the country will increase from 290 Bcf in 2010 to over 460 Bcf by 2015. Meanwhile, PetroVietnam forecasts that there will be a gas supply gap of 1.3 Bcf/d by 2025 as demand outstrips supply. Much of that increased gas demand comes from power generation. The country’s electricity demand has accelerated as its economy continues to grow. For the past 15 years, Vietnam’s GDP has increased by an average of 7% annually. In line with that economic growth, electricity demand has climbed by 15% per year since the mid-1990s, according to a 2010 World Bank report. As a result, Vietnam has been aggressive in efforts to attract investment and issue exploration contracts for its offshore acreage in the South China Sea.¶ South China Sea’s varying reserve figures¶ Oil reserve estimates for the South China Sea vary. One Chinese estimate places potential oil resources as high as 213 bbl. A 1993/1994 US Geological Survey (USGS) report estimated the sum total of discovered reserves and undiscovered resources in the offshore basins of the South China Sea at 28 bbl.¶ Natural gas, according to the USGS, is more abundant in the area than oil. The USGS estimates that about 60%-70% of the area’s hydrocarbon resources are natural gas and has placed the sum total of discovered reserves and undiscovered resources in the offshore basins of the South China Sea at 266 Tcf.¶ Part of Vietnam’s drive for oil and gas includes a wild card – India (which is actively exploring for oil and gas in waters off Vietnam’s coast, placing India squarely in the middle of the Vietnamese-Chinese standoff). Not as if Vietnamese-Chinese tensions weren’t strained already but Sino-Indian relations alone are complex enough to keep geopolitical pundits and college professors occupied for years. At stake is national pride, hydrocarbons and control of much of the South China Sea¶ - See more at:

That leads to Indo-Vietnamese energy cooperation over the Paracel Islands


Daiss, East Asian energy correspondent for Energy Tribune, 9-12-12

(Tim, “The Sino Indian Vietnamese Triangle: Old Grudges, Hydrocarbons, And Geopolitical Gamesmanship Part Two ,” 9-12-12, http://www.energytribune.com/articles.cfm/11658/The-Sino-Indian-Vietnamese-Triangle~-~-Old-Grudges-Hydrocarbons~-~-And-Geopolitical-Gamesmanship-Part-Two, accessed 9-17-12) PM


Along with Vietnam, India also has strained relations with China albeit even more complicated. The world’s two most populous countries also share a common border of¶ 3,380 kilometers (2,100 miles) – an area that has seen plenty of conflict and bloodshed. The two have had three major military clashes along this common border since 1962 and India still accuses China of crossing into disputed areas, with a recent incident occurring in July when the Chinese army allegedly stopped work on an Indian government irrigation project in the Leh district of Ladakh, a disputed area on the Sino-Indian border.¶ Consequently both nations have steadily built up military forces and infrastructure along the border. Additionally, India is disgruntled at its growing trade imbalance with China. Added to the mix is the fact that India successfully launched an ICBM in April, which has a striking range of mainland China, ruffling Beijing’s feathers even more. India for her part protests China’s growing alliance with its archrival, Pakistan.¶ Vietnam induces India to stay put¶ However if India resents China’s overtures to Pakistan, China despises even more India’s meddling in its backwaters in the Paracels. This started playing out in 2006 when Vietnam, eager for more hydrocarbons, offered up bidding in the area to foreign exploration and production companies. That year Vietnam assigned oil block Numbers 127 and 128 to Indian oil and gas major ONGC (Oil and Natural Gas Corporation Limited). Despite objections from the Chinese government, ONGC began production tests in September 2009. Last May, however, Indian media reported that ONGC would likely withdraw from block 128 after gas and oil did not show up in an exploratory well. They have already withdrawn from block 127. ONGC officials informed Vietnam of its plans to terminate operations based on commercial considerations. While this no-doubt pleased China, Vietnam upped the ante and induced India to stay. “They [PetroVietnam] told us to put two more years in the blocks and gave us additional data to improve the prospectivity in the block,” said a spokesman for ONGC’s overseas division OVL. “The decision is good for us as there is no additional responsibility. The two year period has started so we will continue in the block.”¶ Just a few weeks earlier Vietnam’s National Assembly approved a maritime law claiming sovereignty and jurisdiction over the Paracel and Spratly Islands.¶ But Beijing is not one to be out done. On June 28, Chinese oil major CNOOC announced plans to offer nine oil and gas blocks to international oil firms in waters within Vietnam’s claimed 200-nautical mile EEZ.¶ Heated words between the two countries were exchanged again. On July 23 China’s Xinhua news agency reported that China would establish a military garrison for a new city in the Paracels. The new city, Sansha, was approved as 1,100 Chinese residents elected a legislature to oversee the area. The next day about 150 Vietnamese marched through Hanoi in protest over China’s action.¶ And on August 27, China raised the stakes even higher. Bloomberg reported that CNOOC put up 26 blocks in this year’s second round of auctions. A site known as 65/12 was included, within 50 kilometers (31 miles) of the Paracel Islands, near a block put up for bid last year that prompted a protest from Vietnam.¶ Dr. Nicholas Thomas, associate professor at the Department of Asian and International Studies at City College in Hong Kong, described these developments as “multi-scenario,” some or all of which are in operation at any given time. He told Energy Tribune that first India needs to help ensure its future access to offshore oil reserves so at one level it is an unsurprising development. “The fact that India is moving into an area long considered China’s is a simple evolution of a rising state with large energy needs,” he said. He also added that India is trying to develop its position with respect to China’s rise.¶ Dr. Zha Daojiong, a professor at the School of International Studies, at Peking University in Beijing, told the Energy Tribune: “Because ONGC is a state-owned company, its answer to the Vietnamese call for biddings in the South China Sea of course is a reflection of Indian government policy preferences.”¶ “Viewed from China, ONGC’s decision to continue [in oil block 128] is obviously to sound a non-compliance with Chinese demands,” he said.¶ “Politically-diplomatically, ONGC can afford to continue on since it is not known to have entered into the offshore oil/gas sector within China proper. For the same reason, China does not have much recourse other than continuing to object and protest Indian behavior,” Zha said.¶ He added that the real test at the end of the day will be determined by the company’s actual performance in the specific blocks.¶ Dr. Harsh V. Pant with the Defence Studies Department at King’s College London has a different take. “There may not be many hydrocarbons there but Vietnam by its recent concessions is more committed to get India to stay,” he told Energy Tribune by phone. He added that since Vietnam gave India more concessions to stay in block 128, Hanoi and New Delhi view the development in “strategic terms.”¶ “India wants to project itself as a regional balancer and many regional states including Vietnam see a need for such a balance of China’s rise,” he said.¶ Dr. Keun-Wook Paik, a Senior Research Fellow of the Oxford Institute for Energy Studies, develops this theme even further. “There is a kind of invisible competition between China and India. The general verdict against China’s and India’s overseas gas expansion is that China was performing much better than India,” he told Energy Tribune.¶ He credited the success of China’s NOCs [National Oil Companies] to the government mandate given to them as larger and stronger than those of India. He added that Chinese entities have deeper pockets as well.¶ Paik also said that until recently there was no excuse for India to intervene in the South China Sea’s territorial disputes between China and ASEAN countries.¶ “The legitimate excuse however, will be provided once India is engaged in Vietnam’s offshore oil and gas exploration and development and a substantial oil and gas discovery is made,” he said¶

Impact – Indian Energy Conflict Bad

That causes multiple scenarios for conflict that escalates – the Paracels are key


Cronin, CNAS Asian security director, 9-4-12

(Patrick, “Averting Conflict in the South China Sea,” 9-4-12 http://www.chinausfocus.com/peace-security/averting-conflict-in-the-south-china-sea/, accessed 9-18-12) PM



China’s growing tensions with the Philippines, as well as with Vietnam, have been pitted against a more deeply engaged United States committed to rebalancing its influence to Southeast Asia in general and the South China Sea in particular.¶ Just as China may not want its claims to be ignored, China’s smaller neighbors are equally adamant about their claims. The Philippines, which is attempting to build a minimal naval capability to patrol its waters, is no threat to China. At worst, politicians in Manila can be accused of raising the profile of disputed claims to such a high level, that it appeared overly confrontational to Chinese leaders, who in turn decided that a stern response was necessary. While the United States stands for a peaceful resolution of these complex disputes, there is little doubt that Washington would assist Manila in a crisis.¶ Vietnam also wants a fair deal with respect to its claims, including its exclusive economic zone (EEZ). It does not want China selling oil-exploration rights in disputed waters within Vietnam’s EEZ. Nor does Vietnam want to accept Chinese claims to the Paracel Islands, which China occupied during Vietnam’s fragile, post-unification period in the 1970s. Once again, while the United States wants these disputes to be settled diplomatically, coercive measures would compel all actors in the region to recalibrate their security requirements. Regional polarization and a naval arms race could well be catalyzed.

Link – LNG k2 Alliance

LNG key to US-Japan Alliance


Kobayashi 14 (“Enhancing Japan’s Energy Resilience: The Role for the U.S.-Japan Alliance” Yoshikazu Kobayashi, April 25, 2014, http://cogitasia.com/enhancing-japans-energy-resilience-the-role-for-the-u-s-japan-alliance/, CG)

Three years after the 3-11 earthquake in Japan, the new Basic Energy Plan (BEP) was approved by the cabinet this spring. The new BEP, a product of lengthy and heated discussions among policy planners, academics, and business leaders, calls nuclear energy “an important base-load power supply source” for the future of Japan’s energy supply, and provides fundamental policy direction for other energy sources such as coal, oil, natural gas, electricity, and renewable energy. Utilizing the new BEP as the framework, specific policies for each energy source will be developed and implemented.¶ In light of these developments, it is important to review Japan’s policy challenges from the viewpoint of resilience enhancement. Because supply disruption risk cannot be reduced to zero, strengthening prompt recovery capabilities should have more significance in Japan’s energy policies. This post identifies potential areas of bilateral energy cooperation between Japan and the United States.¶ The U.S.-Japan alliance plays a crucial role in enhancing Japan’s energy resilience. First of all, liquefied natural gas (LNG) exports from the United States will further solidify our bilateral relationship because it has significant effects on the diversification of Japan’s supply sources and energy price references. If all of the proposed LNG export projects to Japan (Freeport, Cove Point, and Cameron) are realized, it will result in an export volume of 17 million tons of LNG. This volume exceeds the exports from Qatar to Japan in 2013 and ranks second only to Australia in terms of total 2013 Japanese LNG imports. This level of exports will certainly have a material impact on Japan’s diversification efforts as well as balance Asia’s LNG market.¶ Even if some of these projects do not start as scheduled, U.S. LNG exports to Japan will have symbolic meaning for the alliance. There is no doubt that there is an economic motivation to export LNG to capture the rents caused by the natural price difference in the U.S. and Asian markets. As a study commissioned by the U.S. Department of Energy reveals, LNG exports will bring net benefits to the U.S. economy. Export of energy, however, is always politically sensitive because energy is a critical resource for all economies. The manufacturing and petrochemical industries have repeatedly have argued against the U.S. government’s export efforts. Concerns about potential price spikes in the natural gas market remain, as occurred when the United States was hit by unusually cold weather in February 2014. American willingness to export LNG to non-FTA countries like Japan–despite all of these concerns and opposition within the United States–is interpreted as a sign that the U.S. intends to assist in the restoration of the post-earthquake Japanese economy. Increased trade of a vital commodity such as LNG will naturally draw more U.S. attention to preserving a free and safe maritime order in the Asia Pacific basin. This will accelerate the U.S. rebalance policy and will have a favorable effect on the U.S.-Japan alliance.¶ Another equally important area for bilateral cooperation is nuclear energy. Japan and the United States have been developing cooperative partnerships in the civil utilization of nuclear energy since the 1950s, and have deepened their cooperation since the current Japan-U.S. Nuclear Power Cooperation Agreement went into effect in 1988. The earthquake in 2011 provided additional momentum for bilateral nuclear energy cooperation. President Barack Obama and former Prime Minister Yoshihiko Noda made an agreement to establish the U.S.-Japan Bilateral Commission on Civil Nuclear Cooperation in April 2012. The commission intends to “facilitate discussions on future nuclear energy cooperation; and advance shared interests in nuclear safety and security, nonproliferation, counterterrorism, decommissioning and decontamination, emergency preparedness and response, and research and development.” Under this commission, the two countries held a working group meeting in February 2014 to discuss the advancement and adoption of Probabilistic Risk Assessment methodology for nuclear power plant operations. The next step is, in accordance with the agreement of the bilateral commission, to expand the scope of cooperation to areas such as nuclear security and emergency response.¶ Nuclear energy, despite the severe accident at Fukushima, has gained importance due to growing energy demand in the developing world, the increasing need to reduce global greenhouse gas emissions, and chronic geopolitical uncertainties in major oil- and gas-producing regions. Sharing its experience of long-term peaceful use of nuclear energy and lessons from the Fukushima Daiichi accident with all existing and future nuclear energy users is Japan’s responsibility to global society. As leading civil nuclear energy countries, the United States and Japan have to tighten their collaborative relations to ensure safe and peaceful expansion of nuclear energy in the world.¶ In light of the increasing importance of energy for the two countries, establishing a Bilateral Strategic Energy Dialogue is worth considering. The energy market and business activities are primarily undertaken by private companies both in Japan and the United States, and government intervention should be minimal. Yet regulatory issues such as LNG exports, long-term crude oil exports, and nuclear security and safety issues cannot be discussed and promoted without serious commitment from both governments. Regular meetings at the minister-level will accelerate the development of bilateral cooperation, solidify the U.S.-Japan alliance, and play a key role in enhancing Japan’s energy resilience.¶ Mr. Yoshikazu Kobayashi is a senior economist at the Institute of Energy Economics, Japan and a visiting scholar with the Japan Chair at the Center for Strategic and International Studies. Mr. Kobayashi’s essay is part of CSIS’s Strategic Japan Working Paper Series featuring Japanese scholars addressing pressing issues in Japanese foreign policy.

I/L – Alliance k2 Pivot

US-Japan alliance key to asia pivot


Dian 12 (“JAPAN AND THE US PIVOT TO THE ASIA PACIFIC”, MATTEO DIAN, January 2013, http://www.academia.edu/2473499/Japan_and_the_US_Pivot_to_the_Asia_Pacific#, CG)

At the same time, and perhaps more importantly, the Obama administration is trying to ¶ turn its main Asian allies, and primarily Japan, into active security providers in the region, ¶ inducing them to expand their roles and to increase their military capabilities. ¶ ¶ THE PIVOT AND THE US-JAPAN ALLIANCE¶ The American pivot toward the Asia Pacific, as well as the increasing A2AD capabilities ¶ of the PLA, has accelerated the development of the US-Japan alliance that has been ¶ evolving since the end of the Cold War, and particularly after 1997. The pivot reinforces ¶ trends initiated after the end of the Cold War aimed at renewing and deepening the ¶ alliance and encouraging a more active Japanese security strategy in East Asia. ¶ During the Cold War, the US-Japan alliance was based on America’s provision ¶ of deterrence and security, in return for which Japan behaved as ‘America’s ¶ Unsinkable Aircraft carrier’, supplying bases and remaining committed to the West. ¶ ¶ ¶ 5¶ This logic of security for fidelity was embodied by Article 5 of the Mutual Security Treaty ¶ signed in 1960, which obliged Washington to defend Japan in case of attack, while Tokyo ¶ had no such obligation in case of a direct attack against the United States. This allowed ¶ Japan to develop a Pacifist security strategy and to keep to a minimum its involvement in ¶ the proxy wars that destabilised East Asia throughout the Cold War.¶ Since the end of the Cold War, the shifting security environment has stimulated two ¶ distinct moments of redefinition and enhancement of the alliance, in 1997 and 2005. ¶ On both occasions, amendments to the Mutual Security Treaty highlighted a progressive ¶ increase in the importance of article 6 of the Mutual Security Treaty that emphasises ¶ collaboration between the US and Japan in the promotion of peace and stability ¶ in the region. ¶ The first post-Cold War amendment to the regime established by the Mutual Security ¶ Treaty took place with the ‘Review of the Defense Guidelines on US-Japan relations ¶ and regional security’ released in November 1997.10 That agreement established an ¶ improved structure and policy guidelines for US-Japan roles and missions in order to ¶ reach a higher degree of cooperation and coordination, both in normal circumstances ¶ and in the case of emergency. Previous agreements foresaw joint military activities and ¶ common planning only the case of a major international crisis or a direct attack against ¶ assets on Japanese soil. The new peacetime cooperation therefore represented a major ¶ change to the mechanics of the alliance. In addition, the revised guidelines provided ¶ a normative framework for cooperation regarding issues not previously covered by ¶ existing agreements, such as international humanitarian relief activities, emergency relief ¶ operations, and cooperation in UN peacekeeping activities. The 1997 revision therefore ¶ represented an important step in Japan’s quest for a more equal security partnership with ¶ the US. Nevertheless, Japan did not totally commit itself to its expanded role, which was ¶ still marked largely by non-combative, rear area functions. Above all, Japan’s desire to ¶ hedge against entrapment and to avoid excessive entanglements was clear.11 In 1997, ¶ the Japanese firmly maintained their position on the principle of the non-exercise of ¶ collective self-defence and reasserted their commitment to the exclusive use of military ¶ means for self-defence, setting out fundamental limits to their security policy

Link – LNG Solves Asia Pivot & Demand

LNG exports solve Asia Pivot and Asian energy dependence


Ebinger 12

Senior fellow and Director of the Energy Security Initiative at Brookings, Charles, “Liquid Markets: Assessing the Case for US Exports of Liquefied Natural Gas,” 5-2-12, http://www.brookings.edu/~/media/events/2012/5/02%20lng%20exports/20120502_lng_exports



Increased LNG exports will provide similar assis- tance to strategic U.S. allies in the Pacific Basin. By adding supply volumes to the global LNG market, the U.S. will help Japan, Korea, India, and other im- port-dependent countries in South and East Asia to meet their energy needs. The desire on the part of Pacific Basin countries for the U.S. to become a gas supplier to the region has been underlined by the efforts of the Japanese government, which has attempted to secure a free-trade agreement waiver from the United States to allow exports. As with oil price-linked Russian gas contracts in Europe, U.S. LNG exports linked to a floating Henry Hub benchmark, have the potential to weaken the market power of incumbent LNG providers to Asia, increasing the negotiating power of con- sumers and decreasing the price. As U.S. foreign policy undergoes a “pivot to Asia,” the ability of the U.S. to provide a degree of increased energy security and pricing relief to LNG importers in the region will be an important economic and strategic asset. Beyond the basin-specific considerations of U.S. LNG exports, they would provide a source of pre- dictable natural gas supply that is relatively free from unexpected production or shipping disrup- tion. With Qatar representing roughly one-third of the global LNG market, a blockade or military intervention in the Strait of Hormuz or a direct attack on Qatar’s liquefaction facilities by Iran would inflict chaos on world energy markets. While the United States government will be un- able to physically divert LNG cargoes to specific markets or strategic allies that are most affected (gas allocation will be made by the market play- ers), additional volumes of LNG on the world market will benefit all consumers.

Exports are key to Asia Pivot – otherwise energy demand will drive the US back to the Middle East


Palti-Guzman, global energy analyst at Eurasia Review, 9-13-12

(Leslie, “Should the U.S. Export Natural Gas?” 9-13-12, http://online.wsj.com/article/SB10000872396390444226904577561300198957854.html, accessed 10-1-12) PM


The U.S. is awash in natural gas—a historic surplus that has driven domestic prices to lows not seen in decades. But amid this sea change, a surprising debate has arisen: Are gas exports bad for the U.S. economy? Shipping natural gas outside North America can't occur without a green light from the U.S. Department of Energy, which isn't expected to weigh in on the issue until after the November elections.¶ In the meantime, the debate has split into two camps. Supporters see little negative impact and, on the contrary, benefits for U.S. political influence abroad. The other side argues, among other things, that natural-gas exports are likely to give rise to an international cartel similar to OPEC which would compete with U.S. exports and put further pressure on the U.S. economy.¶ The Wall Street Journal recently sat down with two opponents in the export debate: Leslie Palti-Guzman, an analyst with the global energy and natural-resources consulting group Eurasia Group; and Anne Korin, an adviser to the U.S. Energy Security Council and co-director of the Institute for the Analysis of Global Security, an energy-security think tank. MS. PALTI-GUZMAN: There is no question that LNG exports could have numerous economic benefits. It could increase GDP, create jobs, and reverse account deficits as well as reduce international energy prices.¶ There are also numerous energy-security benefits associated with LNG exports. The U.S. gas bonanza is giving Washington a key geostrategic opportunity to reposition itself in Asia-Pacific, and slowly away from the Middle East, and to help key allies.¶ MS. KORIN: I don't support government action to restrict exports of LNG. That said, exporting gas may not be the most economic use of that commodity. Once gas is exported., local excess supply falls and the domestic price of gas begins to rise.¶ Suppose an American company signs a long-term contract to sell LNG to Japan at $15 per million British thermal units. At that moment, the difference between U.S. and Japanese gas prices will begin to shrink rapidly, with U.S. natural-gas prices rising and Japanese prices falling.¶ Price Predictions¶ WSJ: So, Ms. Palti-Guzman, you don't think that exporting gas will increase prices for U.S. consumers or manufacturers?¶ MS. PALTI-GUZMAN: Beyond 2015, Henry Hub [U.S. benchmark] prices could experience a lot of volatility and rise to $5 to $6 per million BTUs and above. But current gas prices are down to levels that are unsustainable for producers.¶ Enlarge Image¶ Anne Korin: 'Once gas is exported from the U.S., local excess supply falls and the domestic price of gas begins to rise.' AIGS¶ MS. KORIN: I think it would be imprudent to make price predictions for such a volatile market. Seven years ago we were in a natural-gas crisis and nobody could have predicted prices below $2 per million BTUs. It's the same situation today, possibly with the reverse trajectory.¶ WSJ: Is there an amount we could export without hobbling U.S. manufacturers?¶ MS. PALTI-GUZMAN: The amount of LNG exports allowed will depend on the priority of the next administration—whether it is to reduce the trade imbalance or create jobs, for instance. The most likely scenario is that two or three projects—six billion cubic feet a day—will export U.S. shale-gas-based LNG by 2020. This is not enough to put an end to the economic advantage of U.S. manufacturers.¶ MS. KORIN: Before rushing to export our gas bonanza, investors ought to compare the economics of exporting natural gas "as is" with those of selling higher-value products made from that gas.¶ For example, natural gas can be easily converted into the liquid fuel methanol, which can be used in flexible-fuel vehicles [cars and trucks that can use other fuels in addition to gasoline]. At today's natural-gas prices, methanol costs about 35 cents a gallon to produce. When adjusted for markups, taxes and energy content, it's significantly less costly than gasoline. Such fuel switching would have a profound impact on our trade deficit, and would be a boon for the natural-gas industry and for the economy.¶ Global Strategic Effects¶ WSJ: Ms. Palti-Guzman, you said that exporting gas could be a boon to U.S. foreign policy. How so?¶ Enlarge Image¶ Bloomberg News¶ MS. PALTI-GUZMAN: The U.S. has never been closer to energy independence since President Nixon launched in 1975 the concept of energy security through self-sufficiency. Washington has a unique opportunity to become a net exporter of gas and oil products. The U.S. could become by decade's end the world's third-largest LNG exporter, after Qatar and Australia.¶ The U.S. gas bonanza is giving Washington a key geostrategic opportunity to reposition itself in Asia and the Pacific, to slowly back away from the Middle East and help key allies. The U.S. may have a future role to play for governance over natural-gas flow in Asia, especially if it becomes a key LNG exporter.¶ MS. KORIN: But as LNG plays a larger part in international natural-gas trading and the commodity becomes fungible, the other gas giants—Russia, Iran, Qatar, Saudi Arabia and the United Arab Emirates—will have every incentive to concretize their discussions on forming an OPEC-like natural-gas cartel. They'll be able to restrict supply to the market and counterbalance the U.S.¶ That will drive the newly global natural-gas price—and thus prices in the U.S.—higher than it would have gone otherwise. That will certainly benefit those who own and sell the gas, but through higher electricity and chemical prices, it would overall be a drain on the economy.

Energy diplomacy key to Asia pivot


Campbell & Andrews 13 (Kurt Campbell, Chairman and Chief Executive of The Asia Group and former US Assistant Secretary of State for East Asian and Pacific Affairs, and Brian Andrews, Engagement Manager at The Asia Group who previously served at the White House, State Department, and Defense Department on Asia policy, “Explaining the US ‘Pivot’ to Asia”, Chatham House, January 2013, p. 5-6, http://www.chathamhouse.org/sites/files/chathamhouse/public/Research/Americas/0813pp_pivottoasia.pdf)
Recognizing the Asia-Pacific region as increasingly the driver of global economic growth, the third element of the approach has been elevating the importance of economic statecraft as a core element of US foreign policy in order to fuel the economic recovery. American companies continue to represent the gold standard in trade and investment. Sophisticated developed economies like Japan and Singapore as well as developing economies like Myanmar and Indonesia all seek improved economic ties with the United States. At the same time, there is a growing desire in Asia to invest in the United States, under the framework of a transparent and predictable legal and investment system, as the latter’s economy picks up steam. While the private sector must drive this process, the US government has taken steps to create a political and international regulatory environment to facilitate closer commercial ties across the Pacific and promote shared economic growth. During its host year in 2011, the United States refocused APEC on its core mission of facilitating Asia-Pacific economic integration. The US-Korea Free Trade Agreement passed the Senate with large bipartisan support, eliminating tariffs on 95 per cent of US consumer and industrial exports within five years. The Trans-Pacific Partnership (TPP) will bring together economies from across the Pacific – developed and developing alike – into a single trading community. For the countries of South-east Asia that are not yet ready to join TPP negotiations, the United States has launched with the Association. Energy diplomacy will play an increasingly large role in economic policy on both sides of the Pacific. Global energy dynamics are changing dramatically — in terms of the geography of supply and demand, as well as the world’s energy mix. Alternative energy options, unconventional gas, surging energy demand and growing dangers from climate change are reshaping the geopolitical energy space. As America moves from greater energy self-sufficiency to increasing exports, energy diplomacy will play a greater role in its energy policy. In November 2012, President Obama, joined by Brunei and Indonesia, launched the US-Asia Pacific Comprehensive Partnership for a Sustainable Energy, underwritten by $6 billion in financing from the Export-Import Bank and the Overseas Private Investment Corporation, to create a framework for consolidating and expanding energy and environmental cooperation to ensure affordable, secure and cleaner energy supplies for the region.

I/L – Pivot Solves Asia Conflict

Only strength in the pivot can deter enemies and assure allies to prevent conflict


Trang 13 - research fellow at the Diplomatic Academy of Vietnam

(Le Thuy, “The (continued) need for American Pivot to Asia,” http://southchinaseastudies.org/en/publications/vietnamese-publications/863-the-continued-need-for-american-qpivot-to-asiaq)



One of the oft-cited indications that the US “pivot” might be going astray in contributing to Asian stability, to many critics, is the emboldened stance many regional countries seem to be taking towards China. To these critics, American efforts to enhance alliances and partnerships in Asia were feeding many US allies and friends’ adventurism and seeding rivalry, to the detriment of regional security and stability.[7] Yet as Georgetown University’s Victor Cha has argued, America’s alliances in Asia have been maintained as much an instrument to control US allies and avoid saber-rattling with potential adversaries as they are a deterrent to those adversaries. At the beginning of the Cold War, Washington’s decision to establish bilateral alliances with South Korea and Japan instead of incorporating the latter two into a larger multilateral network where American voice would presumably hold less sway was a deliberate choice to counter Soviet influence and at the same time avoid unintended clashes with Soviet forces on the Asian front.[8]¶ ¶ That kind of restraining effect offered by alliances remains in place today. Early into Obama’s first term in office, it was demonstrated as the contours of things on the Korean peninsula turned for the worse in 2010. After Pyongyang evaded responsibility for the Cheonan incident, in which North Korea was accused of sinking a South Korean submarine and causing the deaths of 46 South Koreans, and Beijing refused to press its quasi-ally on that issue, Washington took an active role in keeping the situations in check by demonstrating support for South Korea while at the same time encouraging Seoul to exercise restraint.[9] Indeed, even China has grasped the values of US alliances with Japan in discouraging Tokyo’s backsliding into its past militarist adventurism. Given growing unease with China’s rise in various Asian capitals today, American presence is all the more critical to provide both the assurance and deterrence all regional countries need.¶ ¶ Many would point to the string of confrontations in East Asia that happened to concur with US return to the region and seem not convinced that the American “rebalance” is indeed beneficial to regional stability. It should be noted, however, that tensions in the East and South China Sea had smoldered before the Obama administration announced the “pivot” – even before the administration took office. What is truly disturbing for regional peace and stability is the correlation between signs of US withdrawal from Asia and China’s moves to advance its interests to many regional countries’ chagrin. In 1974, when American troops were beginning to leave Vietnam after the signing of the Paris Accord, China took advantage of Vietnam’s situation to capture the Paracels from South Vietnamese forces. In the early 1990s, Manila’s decision to discontinue to host American military base in the Philippines hastened further American disengagement from the region, and the Filipinos paid quite a dear price for their decision as China, emboldened by US troops’ departure from Philippine shores, leveled up its assertiveness at the Mischief Reef.[10]Apparently the Clinton administration’s demonstration of US resolve and commitment to Taiwan’s security in 1996 forced Beijing to review its strategy and adopt a more nuanced “charm offensive” towards its neighbors. Yet a decade of relative calmness in the South China Sea began to fade away as the Bush administration appeared to be indulged in the war on terrorism.[11] In formulating and executing the “pivot”, the Obama administration was responding to regional events rather than precipitating those events; in fact, Washington was answering US allies and friends’ concerns about China’s power trajectory and perceivable US distractedness in ways that help assuage those concerns rather than precipitate them and allow unnecessary conflicts to transpire.

US weakness leads to allied aggression – still draws in the US


Trang 13 - research fellow at the Diplomatic Academy of Vietnam

(Le Thuy, “The (continued) need for American Pivot to Asia,” http://southchinaseastudies.org/en/publications/vietnamese-publications/863-the-continued-need-for-american-qpivot-to-asiaq)

Another reason many believe the “pivot” is not in America’s security interests comes in the form of “entrapment risks”. Analysts such as Kenneth G. Lieberthal of the Brookings Institution and Justin Logan of the Cato Institute increasingly see Asia as a “cost center” for the United States in which heightened American commitment is likely to encourage many Asian states’ increased reliance on the US to provide for their security and/or raise the possibility of America being drawn into unnecessary conflicts with China to protect those countries’ interests.[22] To compound the problem of “free-riding”, many have contended that by touting the “Asia rebalance”, the Obama administration was creating promises it would not be able to fulfill, given current budget constraints.[23] US security commitments in Asia, so the argument goes, have allowed US allies and partners in the region to keep a limited defense budget while behaving more provocatively than they would be if they were not certain about American posture.[24]¶ ¶ Yet it is mind-boggling to think that absent US security commitment, those ally and partner countries would both pump up their defense spending and behave more accommodating towards China. More likely is that without America playing the role of a balancer, increased military investment would bolster those countries’ ability and willingness to take China head-on, which would be far more detrimental to everyone’s interests. As has been widely noted, however, the Japanese have slowly but surely begun to upgrade their defense capability while working closely with the US.[25] Paradoxically, while critics of “cheap riding” have argued that the projected two-percent increase in Japanese military expenditure is minimal and inadequate,[26] others are worrying about a possible resurgence of Japanese militarism,[27] which suggests that the Japanese investment in their military buildup might be at the right level.

Successful pivot is key to solve Asian conflict


Friedberg, Princeton IA professor, 9-4-11

(Aaron L., “China’s Challenge at Sea,” http://www.nytimes.com/2011/09/05/opinion/chinas-challenge-at-sea.html?_r=1, accessed 9-30-11, CMM)


If the United States and its Asian friends look to their own defenses and coordinate their efforts, there is no reason they cannot maintain a favorable balance of power, even as China’s strength grows. But if they fail to respond to China’s buildup, there is a danger that Beijing could miscalculate, throw its weight around and increase the risk of confrontation and even armed conflict. Indeed, China’s recent behavior in disputes over resources and maritime boundaries with Japan and the smaller states that ring the South China Sea suggest that this already may be starting to happen.¶ This is a problem that cannot simply be smoothed away by dialogue. China’s military policies are not the product of a misunderstanding; they are part of a deliberate strategy that other nations must now find ways to meet. Strength deters aggression; weakness tempts it. Beijing will denounce such moves as provocative, but it is China’s actions that currently threaten to upset the stability of Asia.¶ Many of China’s neighbors are more willing than they were in the past to ignore Beijing’s complaints, increase their own defense spending and work more closely with one another and the United States.¶ They are unlikely, however, to do those things unless they are convinced that America remains committed. Washington does not have to shoulder the entire burden of preserving the Asian power balance, but it must lead.

Impact – Asia War Bad

The impact is fast and escalates


Boyes 1-30 - Berlin correspondent for British newspaper The Times, covering Germany and northern Europe

(Roger, “Chinese ambitions a test of Obama's pivot towards Asia,” http://www.theaustralian.com.au/news/world/chinese-ambitions-a-test-of-obamas-pivot-towards-asia/story-fnb64oi6-1226813342972#)



IF the Third World War breaks out this year, it could well go something like this: a Chinese trawler is stormed by the Japanese Coast Guard as it approaches disputed islands in the East China Sea. The fishermen are arrested, shots are fired. Beijing sets an ultimatum, Tokyo invokes the US-Japanese security accord. The commander of the Chinese navy, Wu Shengli, has already made clear he is not going to sit on his hands if there is a flare-up: "If Japan fires the first shot, it will not be given the chance to fire a second."¶ The Japanese army, meanwhile, has been carrying out military exercises in preparation for what it fears might be a Chinese grab of the forlorn rocks, known as the Senkaku islands by the Japanese who administer them. Both countries have been studying the Falklands campaign. One Chinese participant at Davos let slip that its navy could in "a surgical operation" plant the red flag of China on the uninhabited and strategically worthless land.¶ While we in Europe fret about Ukraine, about Iran and the gathering tragedies of the Middle East, a cold war is turning hot in Asia. This crisis-in-the-making has the potential to turn our world upside down. How do we contain Chinese power? Can a strong China co-exist with a strong Japan? Faced with the choice of facing down China or abandoning its defence pledges to Japan, which way would the US jump?¶ As tensions rise, commentators reach for the example of World War I, which is being over-analysed to mark its centenary. There are indeed parallels. China, like Germany, is an emerging, impatient state with a swollen arms budget. The US, like Britain 100 years ago, is a hegemonic power in apparent decline. Japan, like France in 1914, is dependent for its security on that declining power. Rival nationalisms, now as then, can spark warAny future conflict would play out differently from the Great War; the alliance system has changed and so has the inter-dependence of the world economy. For sure, though, war in Asia would not stay in Asia.¶ The US, China and Japan are the top-three global economies and a head-on clash would crash the markets.¶ Europeans might not end up in the trenches this time but they would be on the dole queue. No wonder Japanese Prime Minister Shinzo Abe was given such an attentive hearing at Davos when he compared Sino-Japanese competition with the Anglo-German struggle at the beginning of the 20th century.¶ In fact, China is almost certainly not on the war path.¶ Rather, it has sniffed out what it believes to be the decay of US power abroad and wants to test President Barack Obama's supposed "pivot" to Asia. Does the new focus on Asia make the US a friend or foe of China?

Asian conflict escalates; miscalc is unique


Campbell 8 - Assistant Secretary of State for East Asian and Pacific Affairs, Dr. Campbell served in several capacities in government, including as Deputy Assistant Secretary of Defense for Asia and the Pacific, Director on theNational Security Council Staff, previously the Chief Executive Officer and co-founder of the Center for a New American Security (CNAS), served as Director of the Aspen Strategy Group and the Chairman of the Editorial Board of the Washington Quarterly, and was the founder and Principal of StratAsia, a strategic advisory company focused on Asia, rior to co-founding CNAS, he served as Senior Vice President, Director of the International Security Program, and the Henry A. Kissinger Chair in National Security Policy at the Center for Strategic and International Studies, doctorate in International Relation Theory from Oxford, former associate professor of public policy and international relations at the John F. Kennedy School of Government and Assistant Director of the Center for Science and International Affairs at Harvard University, member of Council on Foreign Relations and International Institute for Strategic Studies

(Kurt M, “The Power of Balance: America in Asia” June 2008, http://www.cnas.org/files/documents/publications/CampbellPatelSingh_iAsia_June08.pdf)



Asian investment is also at record levels. Asian countries lead the world with unprecedented infrastructure projects. With over $3 trillion in foreign currency reserves, Asian nations and businesses are starting to shape global economic activity. Indian firms are purchasing industrial giants such as Arcelor Steel, as well as iconic brands of its once-colonial ruler, such as Jaguar and Range Rover. China’s Lenovo bought IBM’s personal computer¶ We call the transformations across the Asia-Pacific the emergence of “iAsia” to reflect the adoption by countries across Asia of fundamentally new strategic approaches to their neighbors and the world. Asian nations are pursuing their interests with real power in a period of both tremendous potential and great uncertainty. iAsia is: Integrating: iAsia includes increasing economic interdependence and a flowering of multinational forums to deal with trade, cultural exchange, and, to some degree, security. Innovating: iAsia boasts the world’s most successful manufacturing and technology sectors and could start taking the lead in everything from finance to nanotech to green tech. Investing: Asian nations are developing infrastructure and human capital at unprecedented rates. But the continent remains plagued by: Insecurity: Great-power rivalry is alive in Asia. Massive military investments along with historic suspicions and contemporary territorial and other conflicts make war in Asia plausible. Instability: From environmental degradation to violent extremism to trafficking in drugs, people, and weapons, Asian nations have much to worry about. Inequality: Within nations and between them, inequality in Asia is more stark than anywhere else in the world. Impoverished minorities in countries like India and China, and the gap in governance and capacity within countries, whether as backward as Burma or as advanced as Singapore, present unique challenges. A traditional approach to Asia will not suffice if the United States is to both protect American interests and help iAsia realize its potential and avoid pitfalls. business and the Chinese government, along with other Asian financial players, injected billions in capital to help steady U.S. investment banks such as Merrill Lynch as the American subprime mortgage collapse unfolded. Chinese investment funds regional industrialization, which in turn creates new markets for global products. Asia now accounts for over 40 percent of global consumption of steel 4 and China is consuming almost half of world’s available concrete. 5 Natural resources from soy to copper to oil are being used by China and India at astonishing rates, driving up commodity prices and setting off alarm bells in Washington and other Western capitals. Yet Asia is not a theater at peace. On average, between 15 and 50 people die every day from causes tied to conflict, and suspicions rooted in rivalry and nationalism run deep. The continent harbors every traditional and non-traditional challenge of our age: it is a cauldron of religious and ethnic tension; a source of terror and extremism; an accelerating driver of the insatiable global appetite for energy; the place where the most people will suffer the adverse effects of global climate change; the primary source of nuclear proliferation; and the most likely theater on Earth for a major conventional confrontation and even a nuclear conflict. Coexisting with the optimism of iAsia are the ingredients for internal strife, non-traditional threats like terrorism, and traditional interstate conflict, which are all magnified by the risk of miscalculation or poor decision-making.

Link – Plan solves oil linking

US exports solve oil linking price structures


Ebinger 12

Senior fellow and Director of the Energy Security Initiative at Brookings, Charles, “Liquid Markets: Assessing the Case for US Exports of Liquefied Natural Gas,” 5-2-12, http://www.brookings.edu/~/media/events/2012/5/02%20lng%20exports/20120502_lng_exports

Additional volumes of U.S. LNG will be beneficial to the global gas market. While U.S. export vol- umes are unlikely to transform the existing frag- mented structure of existing LNG trade, it will help to erode the basis of oil-linked contracts that have characterized it for decades, and to move the market toward global price convergence. In the short-term, the emergence of the United States as an exporter comes at a time of tightening global supply, meaning U.S. exports will provide much needed liquidity to natural gas consumers around the world, potentially improving the energy costs for consumers in LNG-dependent countries like Japan and India. While the economic benefits of this are clear, the progression towards a more global LNG market has substantial geopolitical implications as well. Although the U.S. govern- ment cannot directly influence the destination of each LNG cargo exported from the United States, U.S. foreign policy interests are served through a better-supplied global LNG market and through assistance to import-dependent strategic allies in Europe who will gain strategic leverage from the increased competition to Russian gas.

Link –LNG k2 US Econ

LNG exports are key to the econonmy – terminal construction, increased production, trade revenues, and price stabilization


Ebinger 12

Senior fellow and Director of the Energy Security Initiative at Brookings, Charles, “Liquid Markets: Assessing the Case for US Exports of Liquefied Natural Gas,” 5-2-12, http://www.brookings.edu/~/media/events/2012/5/02%20lng%20exports/20120502_lng_exports



The potential benefits of U.S. LNG exports relate to trade, macroeconomics, and geopolitics. Ex- ports of natural gas would bring foreign exchange revenues to the United States and have a positive effect on U.S. balance of payments, although in the context of overall U.S. trade, the impact of LNG revenues are likely to be small. The construction, operation, and maintenance of LNG export facili- ties and related infrastructure will also likely lead to some, limited, job creation. Exports may also serve as a stimulus to continue and even increase production of natural gas, which may result in an additional supply of employment. With some do- mestic production—mainly dry gas with little liq- uid content—being suspended due to gas prices being too low for continued economic extraction, exports may serve as an important source of in- cremental demand to support necessary volumes to stabilize gas prices. To the extent that gas for export is produced at zero or negative cost in as- sociation with unconventional oil, such gas can be seen as a consequence, rather than a detriment to increased U.S. energy security.



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