The Energy Outlook in the Pacific Basin Region

The outlook for suppliers of energy to the expanding economies of the Pacific Basin region is essentially positive, but particularly for exporters of high quality steam coal. This paper argues that economic growth in the Pacific Basin region has exceeded world economic growth for some years and that this will continue to be the case for the next decade at least. It looks briefly at the link between economic growth and energy demand and at the relationship between energy demand and the demand for electricity. Changing preferences in fuel mix for electrical generation in the region are noted and tentative forecasts made about variations in this mix. The pros and cons of various forms of fuel used to generate electricity are considered from the point of view of the consumer. Having concluded that steaming coal in particular is likely to become even more important as a generator of base load electricity, the paper looks at the opportunities this presents for exporters such as Australia, and touches on some factors that could prevent development of those opportunities. This paper will concentrate on electrical energy. For the purposes of this paper, the Pacific Basin refers essentially to Australia, New Zealand and the Asian countries bordering the Western Pacific. As a supplier, Siberia is not included because, although it has great potential, it is thought that problems of climate, infrastructure and political restructuring will delay the realisation of that potential until the next century. Although it deals with the Pacific Basin region, where many countries are industrialising rapidly from a predominantly agricultural base, it looks at the experience of mature industrial DECD economies where their experiences seem relevant.