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Dear
friends,
During
his
weekly
“Thaksin
Talks
with the
People”
radio
program,
the
Prime
Minister
reported
that
that
Russian
President
Putin
had
proposed
Thailand
as a
regional
energy
hub
where
Russia
would
store
its oil
and gas.
During
his
recent
radio
broadcast,
Thaksin
enthused
that
this
would
enable
Thailand
to buy
energy
at lower
prices.
He also
projected
that the
Petroleum
Authority
of
Thailand
(PTT)
would
gain
foreign
exchange
income,
learn
much,
advance
its own
development
program,
and
–
above
all –
make a
tidy
profit.
But I
say,
“Woah!
Hold
your
horses!”
These
ideas
may only
be
fanciful
opinions.
Implementing
this
policy
should
not just
happen.
In
previous
years,
the
Thaksin
government
announced
it would
make
Thailand
a
regional
energy
hub. The
important
project
was to
be set
up in
Sriracha.
Pipelines
between
Thailand’s
eastern
and
western
seaboards
(Strategic
Energy
Landbridge)
would
link
energy
producing
countries
in the
Middle
East
with
energy
importing
countries
in East
Asia.
Actually,
geography
makes
Thailand
highly
suitable
as a
regional
energy
trading
center
because
Thailand
is
located
between
oil
exporters
and oil
importers.
Also,
Thailand
has the
infrastructure
and
facilities
ready
for the
import/export
of
petroleum
products,
including
highly
efficient
petroleum
refineries.
Even
though
Singapore
is now
the
region’s
energy
trading
center
and it
has the
advantage
of being
located
along
East-West
shipping
routes,
its
primary
shipping
lane –
the
Strait
of
Malacca
–
is
overcrowded
and
plagued
by
piracy
and
terrorist
activities.
So, if
Thailand
could
build
pipe
lines
linking
its east
and west
coasts,
it would
have
opportunity
to
become a
regional
energy
trading
center
because
the
route
through
Thailand
would
then be
shorter
and
safer
than
Singapore’s.
Despite
the
attractiveness
of this
proposal,
it has
serious
problems
that
could
place
Thailand
in deep
trouble.
One
downfall
of this
strategy
is China’s
plans to
increase
its
energy
security
by
building
pipelines
through
Myanmar
and
Pakistan
to
China.
An even
bigger
drawback
is the
problem
of
getting
the gas
and
petroleum
from
Russia
to
Thailand.
Nothing
specific
has been
proposed
yet, but
Russia
would
likely
use
pipelines
to send
the
petroleum
and oil
to
Thailand.
However,
this
method
would be
infeasible.
Follow
my
argument.
Because
of its
abundant
petrol
and
natural
gas
supplies,
Russia
wants to
export
its
excess
energy
supplies.
Specifically,
Russia
wants to
become a
key
provider
in the
lucrative
European
Union
energy
market.
Other
Russian
targets
are East
Asian
countries,
such as
China,
because
of their
rapidly
growing
energy
appetites.
My
question
is this:
“What is
Russia’s
real
motivation
for
choosing
Thailand
as a
regional
energy
storehouse
when
there
are
other
huge
energy
importers
in the
region
– such
as
China,
Japan
and
South
Korea –
who also
have
strong
economic
growth.
”Why,”
I ask,
“does
Russia
not
build
pipelines
to those
countries?”
They
are,
after
all,
much
closer
to
Russia
than
Thailand.
Bringing
the
energy
supplies
all the
way to
Thailand
and then
taking
them all
the way
back to
East
Asia
would be
financially
infeasible.
Thus,
there
must be
another
motivation.
I
suspect
Russia
wants to
bring
petroleum
and gas
to
Thailand
to gain
a
greater
market
share in
Asian
countries
already
having
some of
their
own
energy
sources
– such
as
Indonesia,
Malaysia,
Brunei,
Myanmar
or even
Vietnam
–
before
they
start to
discover
more
energy
sources.
Bringing
Russian
energy
into
these
markets
now
would
give
Russia a
preliminary
advantage
in these
yet-to-be-developed
Asian
energy
markets.
The
assertion
that
Thailand
would
gain
cheaper
energy
prices
by
storing
Russian
petrol
and gas
is also
unreasonable.
It is a
long way
from
Russian
to
Thailand.
Building
pipelines
between
the two
countries
would
only
increase
the
price of
the
energy
because
of the
distances
involved.
The
price of
any oil
or gas
stored
in
Thailand
would
have to
include
the
capital
costs of
building
the
pipelines.
In fact,
demand
for
imported
energy
in the
Asian
region
is not
so high;
therefore,
this
project
does not
merit
investment
monies.
Moreover,
it is
cheaper
by far
for
Thailand
to
import
gas from
Myanmar
or
Brunei
than
from
Russia
due to
the
logistics
of
distance.
Further
study
must
evaluate
whether
it would
be
cheaper
to bring
energy
via
pipelines
from
Russia
or to
ship it
from the
Middle
East. In
most
likelihood,
Thailand
can find
cheaper
sources
of
energy
in
nearby
countries
than
from
Russia.
Also
ignored
has been
the fact
that PTT
(almost
half
owned by
private
interests)
monopolizes
Thailand’s
existing
pipelines,
precluding
any
sharing
with
foreign
interests.
Therefore,
the
promise
to
provide
Thais
with
cheap
sources
seems a
pipe
dream.
As it
now
stands,
the
proposal
to make
Thailand
a
regional
storehouse
for
Russian
oil and
gas is
not
feasible.
More
thought
and
study
must be
invested
before
this
proposal
is
considered
by the
people
of
Thailand.
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