The absence of a risk mitigation mechanism is another pressing issue concerning energy security in Northeast Asia. Oil security is central to energy security. Northeast Asia counts on the Middle East to meet 75 percent of its oil demands. In 2007, China and Japan imported 40 percent and 80 percent of their oil demands, respectively, from the Middle East. In addition, oil is shipped to Northeast Asian countries mainly by sea, a means of transportation that is prone to appalling security risks.

Experts say Northeast Asian countries should strive to shape a multilateral cooperative system that combines their strengths and integrates their resources. The only way out is for them to turn excessive competition into virtuous competition based on full cooperation.

Strategic focuses

Some Northeast Asian countries have tried different ways to initiate an oil cooperation mechanism. Japan suggested establishing an Asian energy agency, while the South Korean Government charged a special committee with promoting energy cooperation in Northeast Asia. China also actively participates in various initiatives in this regard. Russia, China, Japan, South Korea and Mongolia are working together on the development and sales of a gas field in Russia and the construction of a gas pipeline.

At the Northeast Asia Investment and Trade Expo, some experts called for attention to the following areas in an effort to establish an energy cooperation system in Northeast Asia.

- Northeast Asian common oil market. Although it consumes as much oil as Europe and the United States, Northeast Asia does not exert an influence on international oil prices in proportion to its oil consumption. In order to increase its say in international oil pricing and eradicate the Asian premium, countries in the region should establish a Northeast Asian common oil market and a Northeast Asian oil futures exchange.

In light of China's huge oil consumption and growth potential, Cui suggested turning one of the petroleum exchanges in Beijing, Dalian or Shanghai into the Northeast Asian petroleum exchange and making it a major international oil market on par with the New York Mercantile Exchange and the International Petroleum Exchange in London.

- Northeast Asian oil cooperation mechanism. Given Northeast Asian countries' marked differences in social systems, ideologies and levels of development, energy cooperation organizations like the International Energy Agency are not suitable for the region. To create a Northeast Asian energy agency, the countries could draw on the experience of the six-party talks designed to address the North Korean nuclear issue and the Shanghai Cooperation Organization. They may devise a stable cooperative mechanism featuring an energy working group, an energy ministers' meeting and a leaders' summit under the leadership of their central governments and work together to put in place joint oil reserve and purchase mechanisms.

Wang Hao, an expert on Northeast Asian energy cooperation at Jilin University, believes the Northeast Asian energy cooperation system should be demand-driven, with Russia playing a leading role and China, Japan and South Korea poised at its center. The countries should seek "co-opetition" and carry out regular consultation and coordination.

- Corporate energy cooperation. Northeast Asian countries should render support to cooperation between large oil companies to give full play to their respective advantages. For example, China is strong in exploration. South Korea has a slew of energy companies boasting capital and technology prowess in oil and gas processing. Japan's Mitsubishi Motors and Mitsui Chemicals are capable enough to invest in the energy sector. The countries should encourage their business communities to join hands to explore and develop Russia's oil and gas resources by establishing joint-venture or joint-stock companies or through mergers and acquisitions.

- Cooperation in the construction of oil and gas pipelines. Since the fierce competition between some Northeast Asian countries over the construction of pipelines has backfired, they should learn a lesson from the past and work closely together in this regard. They may jointly build a pipeline network for oil and gas transportation in Northeast Asia. They should resolve disputes over investment, handling capacity, routes, technology and conflicting interests through consultation.

Experts also pointed out that Northeast Asian countries should collaborate on environmental protection in the energy sector. Japan, which always gives priority to energy conservation and environmental protection, has accumulated significant experience in environmental restrictions, oil conservation and pollution treatment. Chinese officials are also calling for domestic energy-saving plans. Northeast Asian countries should establish a cooperative mechanism for environmental protection in the energy sector so that they can share experiences on a regional basis and lessen the environmental pressure facing the region.