Integration in Asia noticeably reduces energy cost.
February 12 , 2008

The APA Secretary-General, Dr. Hadi Nejad Hosseinian said: “Through integration of the West Asia and the East Asia, the cost of energy would noticeably be reduced.” In an interview with IRNA on Tuesday, February 12, the APA Secretary-General underlined that in the context of current global rivalry in the field of energy, he estimates that Asia stands to gain a clear competitive edge in final energy cost if east and west Asia work together in an integrated fashion. Huge saving in investment for peak-hour use of energy in each country, considerable reduction in the cost of investment and their risks are among major economic incentives of an Asian integrated energy market scheme.

Nejad Hosseinian pointed out that security of energy supply and demand at a price agreeable to both producers and consumers has the highest priority for major world economies.

He said that major energy producers and big consumers with the highest growth rate are respectively in West and East Asia. Expanding cooperation between these two regions will lead to greater integration in the Asian continent, which will bring more benefits to all of its countries.

APA Secretary-General argued that major world economies adopt one of the three approaches to ensuring their energy needs: bilateral cooperation between the supplier and the consumer, regional cooperation, and resorting to use or threat of use of force to control energy resources. Japan, China and India, as the major Asian economies, seek to guarantee the supply of their energy need by entering into bilateral agreements with energy supplier countries, an approach which is more risky in comparison with the others.

In response to the question about the definition of Integrated Energy Market, Nejad Hosseinian said: integrated energy market applies to a region where all energy-related issues including production, transportation, distribution and sale are regulated in a way which balances the interests of both the suppliers and the consumers. The larger and the more integrated this region, the greater the common interests and benefits of the members would be. We can draw on the experience of the European energy market to expedite creation of the integrated energy market in Asia.

In response to a question about the options of producers to sell their products to the highest bidder irrespective of integration, the APA Secretary-General stressed that no producing country is expected to concede their national income.