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Conclusion for the Course

So far we have examined recent global economic and security changes in the wake of US shale gas revolution. Particular attention was given to energy industry, energy market, and energy security in Asia, including Russia, China, Japan, and Korea.

We learned that shale gas and tight oil has radically shifted global energy markets and redrawn the global energy map.

Energy can also be a source of political leverage or vulnerability for countries, particularly for major powers. Energy has again become one of the most strategic and influential determinants of global security and geopolitics.

Major power configurations are critically shifting due to energy changes. Shale substantially enhanced US global economic competitiveness and US foreign policy leverage globally. China is likely to play a larger geopolitical role in the Middle East, Central Asia, and Africa.

Russia’s regional portfolio was dominated by post-Soviet Eurasia and Europe. Russia’s pivot to the Asia-Pacific will have a critical strategic impact.

As oil prices decreased in 2015, natural gas, especially LNG, which is considered to be a promising energy source for the near future, is having difficulty in expanding its presence because a unified global market and price have not yet formed. For this reason, Asia’s dependency on nuclear power is still high and transitioning to new and renewable energy is relatively slow. Due to international pressure to reduce greenhouse gas emissions and poor commercialization of new and renewable energy, for Asian countries other than Japan, nuclear power is becoming the only alternative.

It is expected that nuclear power generation will continuously grow, especially in China, Korea and India. ASEAN countries are also expected to develop nuclear energy into their main energy source for energy security and in response to climate change.

We must closely observe how the potential reduction of shale oil and gas production due to worsened profitability of the US shale industry will affect potential US exports to Northeast Asia. The possibility of creating regional cooperation and co-prosperity through developing a gas trade hub in Northeast Asia is much in need. What’s more, the discussion regarding construction of a large-scale storage facility for commercial natural gas in Asia, thus making Singapore, China, Japan, and Korea regional hubs for natural gas trade, is needed.

Finally, the issues of energy security and climate change are not yet properly addressed at the global level. The current global energy architecture lags behind the changes in the energy market. Efforts should be made to improve the fairness and efficiency of the LNG market, and now is the perfect time to address the structural governance problems that are holding the market back.

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This article is from the free online course:

Global Resource Politics: the Past, Present and Future of Oil, Gas and Shale

Hanyang University