To find out how much energy security has mattered in the Pacific's recent history, ask the Japanese. At the museum of the Yasukuni Shrine in Tokyo, which honours the country's war dead, sometimes controversially, an exhibit suggests, with a jarring note of self-justification, that a 1941 American naval blockade against Japanese oil imports triggered the Pacific war.
Seventy years later, a tsunami that swooshed in from the Pacific and knocked out the Fukushima Daiichi nuclear-power station led to the closure of Japan's 54 nuclear reactors. Parts of the country, which is a greedy consumer of electricity, were left practically powerless. Huge tankers full of natural gas, heading for terminals dotted along Japan's Pacific coastline, eventually got the country up and running again, and in 2012 Japan consumed 37 per cent of the world's liquefied natural gas.
The past few years have seen some upheavals in the balance of energy security around the Pacific. America, which used to be the world's largest net oil importer, ceded that spot to China in 2013. Thanks to shale oil and gas, this year it is set to become the world's biggest producer of oil and liquid natural gas. It already is the No 1 producer of dry natural gas.
That highlights the prospect of huge trans-Pacific complementarities. China is reducing the dominance of dirty coal in its energy mix, Japan and South Korea are denuclearising and fast-developing countries such as Indonesia are changing from LNG exporters to importers. To date, however, there is next to no trans-Pacific trade in oil, gas or coal in either direction: In 2011, according to the Singapore-based Pacific Economic Co-operation Council, it added up to only 1.4 per cent of global trade in those products.
According to statistics from BP, North America gets most of its crude-oil imports from Canada or via its east coast from Latin America, the Middle East and western Africa. Asia receives the vast majority of its imports from the Middle East via the South China Sea. The Pacific is a big blank, but that may be about to change, with potentially big implications for the economic interdependence and geopolitics of the Pacific region.
The epicenter of the change is North America, whose huge gas discoveries are about to turn it into a global L.N.G. power. In Canada Asian-owned companies plan to build the first export terminals on the coast of British Columbia in the next few years to ship LNG across the Pacific. In the United States the government recently approved the construction of four terminals to liquefy gas and ship it west via the Panama Canal.
One of those, Dominion Energy's Cove Point, near Washington, was built as an LNG import terminal in the 1970s and had been mothballed for much of the following three decades. Not long after it resumed receiving LNG imports in 2003, American natural-gas prices plummeted in response to the shale revolution, putting the terminal out of business again.
In 2011, therefore, Dominion switched to marketing Cove Point to foreign LNG customers as a potential export facility. On September 29 the Federal Regulatory Energy Commission finally approved construction of an export terminal.
Those LNG exports will benefit from a US$5.3 billion expansion of the Panama Canal. Due to be completed in 2016, after several delays, this will make the canal big enough to accommodate nine-tenths of the world's LNG fleet, potentially cutting at least 11 days off shipping times between the Gulf of Mexico and East Asia.
The implications of this new trade could be substantial on both sides of the Pacific. According to Jane Nakano of the Washington-based Centre for Strategic and International Studies, as of last year Japan had contracted to buy about a fifth of its LNG imports from America once it gets the necessary permissions.
Currently dry gas costs US$4 to US$5 per million British thermal units in America. Even allowing for another US$6 or so to liquefy the gas and transport it to Asia, and far less from Canada's west coast, the price still would be much lower than the US$15 to US$18 per MMBTU that LNG currently fetches in Japan. Cheaper energy would make Japan's economy more competitive, and America would see a much-needed improvement in its trade balance.
For American exporters that scenario involves risks. Australia, one of the world's two biggest LNG exporters, will be ramping up its output during the next five years, with much of the increase destined for Asia. China, another big potential buyer, appears to be avoiding American LNG. This year it signed a US$400 billion deal to import natural gas from Russia for the next three decades.
The energy markets of China and North America are warily intertwining in other ways, however, mainly through Chinese investment in oil. North America has received a flood of investment from Chinese oil companies since the global financial crisis. In 2012 CNOOC, one of China's state-owned energy behemoths, bought Canada's Nexen for US$15 billion, seven years after its bid for America's Unocal was scuppered by opposition in Washington.
The welcome is not always open-armed, of course. After the Canadian deal Prime Minister Stephen Harper put a financial limit on further acquisitions: "Canadians have not spent years reducing the ownership of sectors of the economy by our own governments," he said, "only to see them bought and controlled by foreign governments instead."
Mexico, which in 2013 changed its constitution to allow foreign investment in its oil industry for the first time in 75 years, would welcome Chinese investment in its energy sector with open arms, according to Ildefonso Guajardo, Mexico's economy minister. Tellingly, in the past two years President Enrique Pena Nieto has had four meetings with his Chinese counterpart, President Xi Jinping, the same number he has had with President Barack Obama.
The benefits of this new North American energy glut go far beyond the oil industry. For a start, it is making North American manufacturing more competitive. The combination of cheaper energy and rising Chinese wages could make Mexico a more attractive factory floor.
It is also sending two powerful geopolitical signals, however: one to America's close allies, such as Japan and South Korea, that the friendship now can also help underpin their energy security, and the other to the wider Asian region, that North America has bounced back from the global financial crisis. In time such symbols of economic revival could resonate strongly on the other side of the Pacific.
Eduardo Pedrosa, the Singapore-based secretary-general of PECC, called it a tectonic shift in American competitiveness.
"I don't think anyone over here realises how massive this shale revolution is for the US economy," Pedrosa said.
@2014 The Economist Newspaper Ltd. Distributed by the New York Times Syndicate