Few issues present as many potential opportunities within US-Asia relations, while at the same time challenges and complexities, as energy. The exponential growth of Asian economies has led to unprecedented demands for energy resources. Though Asian countries are large consumers of fossil fuels, they are also increasingly leading in the deployment of nuclear, solar, and other energy technologies with a reduced carbon footprint. Meanwhile, the revolution in shale oil and gas production made the United States the world’s largest producer of oil and gas in June 2015, opening the door for the first US crude oil exports in 40 years—with Asia seen as the leading potential export market. At the same time, intense debate within the United States on the economic merits, environmental impacts, and safety of transporting fossil fuels—much of it at the local level—is significantly reshaping the context in which US-Asia relations on energy are evolving.
Washington State sits on the front lines of these issues. Washington is reliant on hydropower for most of its electricity generation, and leads US states in renewable electricity generation. At the same time, its petroleum refineries in Whatcom and Skagit Counties are a critical part of the US west coast energy infrastructure, and petroleum, coal, oil and gas accounted for approximately 1 percent of Washington exports to Asia in 2015. However, as US oil and coal producers increasingly look to Asian markets for export opportunities, Washington offers the nearest gateway to Asia for oil from North Dakota’s Bakken Formation and coal from the Powder River Basin in Montana and Wyoming.
As many as six new port facilities in Washington for exporting oil and coal to Asia have been proposed in recent years. These have generated intense and often divisive discussions within Washington communities on the economic benefits and job creation opportunities on the one hand, and environmental and safety impacts on the other. Although the recent decision by the Army Corps of Engineers to halt the permitting process for the proposed Pacific Gateway Terminal at Cherry Point has narrowed these proposals down to one at the moment, these debates will continue as long as demand in Asia and global market prices make exporting US oil and coal a potentially profitable investment.
Washington is also a hotbed of activity on clean and renewable energy technology development, which is generating new research, development, and commercialization activities with Asian partners. For example, Boeing is conducting joint research on aviation biofuels with partners in Australia, Japan, and China. Terra Power, a Bellevue-based startup supported by Microsoft co-founder Bill Gates, is developing technologies for small, modular nuclear energy devices that can provide power to communities at significantly lower costs and safety concerns than traditional large reactors. The company finalized a contract with China National Nuclear Corporation in September 2015 to build a prototype and a commercial version of the reactor. UniEnergy Technologies in Mukilteo, a startup supported by Chinese and Japanese investment, is building turn-key megawatt-scale energy storage solutions for commercial, microgrid and utility applications. And the Pacific Northwest National Laboratory in Richland has two decades of experience conducting research with Chinese partners, including in sequestration of fossil fuels emissions, building energy efficiency, and climate change research. These kinds of increasing R&D and investment partnerships, coupled with a strong commitment by Washington state and community leaders to advancing clean and renewable energy technologies, make the state well-placed for engagement with Asian regions and communities grappling with similar issues.
Sean Connell is a guest contributor to Asia Matters for America. He is employed by the Economic Development Alliance of Skagit County (Washington), and is a former Visiting Fellow at the East-West Center in Washington. This is an ongoing, multi-part series on the impacts and interrelationships between Washington State and the Asia-Pacific region. The views expressed are those of the author, and do not necessarily reflect the positions of any organization with which the author is affiliated. Part I of this series can be found here.