Asia under pressure to curb oil usage

BANGKOK, Wednesday (AFP) - As oil prices edge ever higher, Asian governments are under pressure to reduce consumption and explore alternatives, but for many citizens, car ownership remains a holy grail and calls for change are being ignored.

The price of oil flirted with the 70 dollar per barrel level last week, highlighting the ballooning cost of fuel subsidies which many regional nations are working to reduce despite popular opposition.

Concerned about their rising oil import bills, governments are calling on the public to change their energy habits, with strategies large and small including wearing thinner clothing and adjusting air-conditioning thermostats.

They are also looking anew at alternatives, like the nuclear power industry which argues it is the answer for a region thirsting for electricity, and environmental groups who say the key is conservation teamed with massive investment in renewable sources such as wind power.

But there is little evidence to show that rising oil prices - which last week hit a record 68 US dollars a barrel before easing to 66.13 dollars Friday - are impacting on Asians' behaviour, and car ownership is a case in point.

According to Automotive Resources Asia, vehicle sales for June rose in China, Malaysia, the Philippines, Taiwan and Thailand, only declining in India, Indonesia and Japan.

"There's been some little shifting of segments, particularly in China, and a little bit say in the Philippines, but I'm not sure that's due to the changing in the price of oil," says its Bangkok-based research director John Bonnell.

"What we see in most of the region, in Southeast Asia, China, India - sales are still strong."

And while energy-conscious small vehicles are increasingly popular in the west, Asians are still in the throes of their love affair with gas-guzzling sport utility vehicles (SUVs) despite rising prices at the pump.

Energy is becoming an increasingly political issue across the region as governments weigh the need to protect their economies against the political risks of cutting subsidies.

In China energy conservation is becoming a party leadership priority with power consumption forecast to reach 3.1 trillion kilowatt hours by 2010, up from 1.9 trillion in 2003, and power shortages commonplace countrywide.

Communist party leaders have urged citizens to conserve electricity by turning air-conditioners in government buildings to no lower than 26 degrees Celsius (79 degrees Fahrenheit), and wearing thinner clothing rather than Western suits.

In Indonesia investors have welcomed President Susilo Bambang Yudhoyono's decision to scrap fuel subsidies that had cost around 6.4 billion dollars despite mass demonstrations across the archipelago.

Governments in Pakistan, Nepal and India have also faced protests and unrest after cutting oil and gas subsidies.

The search for alternative energy sources has seen regional nations explore biofuels like bananas, coconut trees and alcohol, as well as wind farms and solar power.

Some countries, such as Japan and South Korea, have launched major drives to move away from traditional power sources, but the percentage of energy produced remains small - apart from the controversial nuclear option.

In Japan 52 percent of the energy supply came from mostly imported oil in 2005, down from 90 percent before the first oil shock of 1979.And while Japan is the world's largest producer of solar energy - making 48.5 percent of the global total - it is nuclear energy and natural gas that have replaced oil's share, not "alternative" or "renewable" sources.

South Korea, which imports 97 percent of its fossil fuel energy from abroad, has focused on the development of alternative sources but the latest figures show that it accounts for just 1.03 percent of total energy consumption.

In eco-conscious New Zealand the government has published a study showing wind energy could supply around 35 percent of the country's future electricity demand.

But in most Asian homes, turning on a switch or moving from A to B still mostly means tapping into traditional fossil fuels.