Asian maritime boundary disputes driven by oil, gas demand

A subcommittee of the US Senate Foreign Relations Committee has been told that growing demand for oil and gas is one of the main drivers of increasing “friction and tension” over maritime boundaries in waters of East and Southeast Asia.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, July 17 -- A subcommittee of the US Senate Foreign Relations Committee has been told that growing demand for oil and gas is one of the main drivers of increasing “friction and tension” over maritime boundaries in waters of East and Southeast Asia.

“In recent years, we have observed an increase in friction and tension over these disputes,” said US Deputy Assistant Secretary of Defense Robert Scher, referring to what he called a series of “persistent territorial disputes” over maritime territories in Southeast Asia and the South China Sea.

While Scher said the sources of the rising friction are varied, he told members of the Subcommittee on East Asian and Pacific Affairs that “increased demand for oil and natural gas naturally increases the perceived stakes among claimants in securing resource rights.”

Scher also said that China, while intent on securing its own interests in the region, “actively opposes any activity by other claimants to assert their own sovereignty claims” and that “China has increased and will continue to increase its force posture in the South China Sea.”

Peter Dutton, associate professor at the US Naval War College, said China was more likely to use its position of strength as the means to achieve its goals, either now or in the future.

“If it is not in a strong enough position today to gain acceptance of its sovereignty over the islands [of the South China Sea], rather than negotiate a partial result China will likely wait until such future time as its position is suitably strengthened to finalize all of its claims,” Dutton said.

Still, he held out hope that “with active US involvement it may be possible to bring together all parties to at least open multilateral discussions to manage friction and prevent escalation of competing sovereignty claims, EEZ and continental shelf claims, security claims, and access rights.”

China-Vietnam tension
Meanwhile, US Deputy Assistant Secretary of State Scot Marciel said Washington remains concerned “about tension between China and Vietnam, as both countries seek to tap potential oil and gas deposits that lie beneath the South China Sea.”

Marciel noted that starting in the summer of 2007, China told a number of US and foreign oil and gas firms to stop exploration work with Vietnamese partners in the South China Sea or face unspecified consequences in their business dealings with China.

“We object to any effort to intimidate US companies,” Marciel said, reminder his audience of a visit to Vietnam in September 2008 by former Deputy Secretary of State John Negroponte.

According to Marciel, Negroponte “asserted the rights of US companies operating in the South China Sea, and stated that we believe that disputed claims should be dealt with peacefully and without resort to any type of coercion.”

China-Japan disputes
Dan Blumenthal, resident fellow of the American Enterprise Institute, said that of all the regional territorial disputes, “the Sino-Japanese quarrel in the East China Sea is the most vexing, and perhaps most dangerous.”

Blumenthal said the dispute is grounded in great power competition, historical animosity, the desire to exploit potential energy resources beneath the sea, and concerns over the ultimate disposition of Taiwan.

“This combination of issues is particularly volatile,” said Blumenthal, who noted that both countries claim sovereignty over the Senkaku/Diaoyu islands, and both include the islands in their EEZ/continental shelf claims.

Referring to energy security, Blumenthal noted that both countries make claims to the Chunxiao gas field, which China claims is 5 km away from the Japanese median line in the East China Sea.

“Currently, the Chinese energy company CNOOC is the operator of the field, and energy experts estimate that the Chunxiao could have as much as 250 tcf of natural gas and between 70-160 billion bbl of oil,” he said.

“Since both Japan and China are committed to diversifying their sources of their energy supplies, the natural gas and oil in the East China Sea is of utmost importance to both,” Blumenthal said.

He noted that an additional concern for China is the maritime distance between its ports and its main oil suppliers in the Persian Gulf and that Beijing is increasingly uncomfortable about relying on US goodwill to patrol those waters.

“Both national pride and suspicion of the United States drive China to seek alternative sources and routes of supply, preferably closer to the mainland in areas where China can project military power,” Blumenthal said.

“The Chunxiao field is thus an important piece of Chinese energy security strategy,” he said.

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