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It's MORNING EDITION from NPR News. I'm Steve Inskeep in New York.
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And I'm David Greene in Washington. Good morning. Let's look now at the shifting balance of power in East Asia. In a moment, we'll hear President Obama's view of a rising China. First we'll report on the implications of China's latest energy deal. China signed an agreement to buy Russian natural gas sent through a pipeline in Siberia. This deal has far-reaching implications as we hear from NPR's Jackie Northam.
JACKIE NORTHAM, BYLINE: The megadeal between Russia and China was a decade in the making. Many of the details, even the pipeline route, are predictably murky. And there's speculation those details are still being hammered out. But one thing is certain, Russia will receive $400 billion over the next three decades to help feed China's seemingly insatiable hunger for energy, says James Henderson with the Oxford Institute for Energy Studies in the U.K.
JAMES HENDERSON: I think the fact that it's actually happened marks a very fundamental shift. I mean, this is the world's largest gas exporter signing a deal with the world's fastest-growing gas market.
NORTHAM: Henderson said Russia's pivot to Asia was inevitable. Moscow needed to find new markets for its vast natural gas reserves. But Stephen Blank, a Russia specialist with the American Foreign Policy Counsel says the deal with China is largely political.
STEPHEN BLANK: Russia urgently needed an agreement for political reasons because of the sanctions and the crisis over Ukraine and because they wanted to show that they're still a great power that can, you know, play against the United States. And the fundamental driver of Russia's China policy is in many ways anti-Americanism, so hence the deal.
NORTHAM: The deal demonstrates how dynamic the energy market is right now, says Sarah Ladislaw, Director of the Energy and National Security Project at the Center for Strategic and International Studies. She says less than a decade ago, the U.S. was actually planning to buy natural gas from Russia. Ladislaw says the shale revolution here has changed all that. Now the U.S. is awash in its own natural gas and within a few years will start to export it. And Asia will also be a prime target for those American companies.
SARAH LADISLAW: The one thing that was really interesting for me is the number of ways in which energy is sort of being used as the symbol of geopolitical sentiment these days. It's amazing 'cause natural gas maybe is not the sexiest thing on earth, but it is certainly something that people are looking at as a symbol of people's intentions and symbols of some of the geopolitical turmoil that is going on.
NORTHAM: Part of that turmoil stems from the cost. Russia's deal with China could impact global prices and markets of natural gas in Asia. It's estimated China will pay Russia around $350 per thousand cubic meters. That's roughly the same amount it charges many European clients. But it's far less, almost half what other Asian nations are currently paying for natural gas, says Henderson with the Oxford Institute for Energy Studies.
HENDERSON: So that's creating a huge amount of turbulence, and it's creating uncertainty not just for suppliers, but also for consumers who want to negotiate, obviously, as low a price as they can get. And now they're being offered more choice.
NORTHAM: But that competition, those potentially falling prices could have an impact on multibillion dollar natural gas projects now under development in many corners of the world, says Ladislaw.
LADISLAW: The ones that will come online of the next several years, those are already invested in. It's any future develop that this causes countries and companies to sort of reevaluate what the commercial applications are. And so places like Mozambique or Tanzania where you have to build all of the domestic infrastructure, you've got to, you know, be able to get it all the way to sort of these consuming countries, quite similarly sort of additional projects coming out of Australia, those are going to be, you know, probably higher-cost projects.
NORTHAM: Gas is not expected to flow from Russia to China for at least four years. Even then, it will only provide about 10 percent of China's energy needs, meaning there's still lots more to go around for any potential supplier to the Asia market. Jackie Northam, NPR News, Washington.
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