Coal is back and nuclear is next: The Iran war is rewiring Asia’s energy future |
Coal is back and nuclear is next: The Iran war is rewiring Asia’s energy future
The effective closure from the Iran war of the Strait of Hormuz—the critical chokepoint for roughly 20% of the world’s oil and liquefied natural gas—is in its fifth week with no clear signs of resolving. For Asia, which buys more than 80% of the crude and LNG that flows through the narrow waterway, the consequences have been swift: severe fuel shortages, export bans, and government budgets stretched to the breaking point.
The crisis is forcing Asia to look both backward and forward simultaneously. In the short term, governments are returning to coal—the dirtiest of fossil fuels—to keep the lights on. In the long term, the supply shock may accelerate nuclear restarts and electric vehicle adoption faster than years of climate policy ever managed.
The fuel crisis has pushed Asian countries to turn to increasingly severe measures to maintain their stockpiles.
South Korea urged households to take shorter showers, charge devices during off-peak hours and shift usage of high-energy appliances like washing machines to weekends. Samsung, meanwhile, barred employees from driving their car to work if the last digit of their license plate matches the last digit of the current date.
Southeast Asian governments are rolling out similar restrictions. Thailand introduced a four-day workweek for civil servants, and ordered higher office air-conditioning temperatures to curb demand. Vietnam’s airlines are suspending some domestic routes as the country braces for jet fuel shortages.
The situation is most critical in the Philippines, where President Ferdinand Marcos Jr. on March 24 declared a national energy emergency, citing an “imminent danger” to the nation’s supplies of fuel. Transit workers went on strike on Friday to protest rising fuel prices.
The crisis also is straining government finances. Malaysia’s monthly fuel-subsidy bill, for example, has surged from 700 million Malaysian ringgit ($174 million) to more than 3.2 billion ringgit ($797 million), and could reach 24 billion ringgit ($6 billion) if oil remains above $110 per barrel. Kuala Lumpur cut the quota of subsidized fuel by a third before the weekend in a bid to slice costs.
Asian governments are temporarily pivoting to coal as the Iran war chokes off natural gas supplies, undermining years of effort to curb the continent’s dependence on........