Energy

China’s Territorial Aggression Is Driven By Its Hunger For Oil

Mr. Murphy is a former Department of Energy official under President George W. Bush. He is Managing Partner at SourceRock Partners and Executive Vice President of Marmik Oil Company.

Similar to the Russian exploitation of Crimean energy resources and infrastructure, China is abusing the sovereignty of its neighbors in the South China Sea with a boldness that is less publicized, but equally chilling to that of Putin’s hegemonic activity.  The recent Asia trip by President Obama was touted to deal – at least in part – with increased Chinese encroachment in international waters and air zones.  Rightfully so, and one can’t help but be discouraged that we provided support in a Presidential speech and caveated that we can only “hit singles… and doubles.”

When the Chinese Defense Minister says, “no compromise, no concessions,” to the U.S. Defense Secretary regarding international territorial concerns, we no longer have the luxury of dissembling the word of world leaders.  We are now confronted with the harsh reality that they are willing to support their words with action. Now is the time to hit home runs.

The U.S. must strongly inform our foreign policy and diplomacy efforts in Southeast Asia with the awareness that China’s motives are not only martial in nature but also a desperate attempt to hold a totalitarian control over all energy resources in the region.

First was their indirect attempt to control ownership of resources by investing in infrastructure directed to the Chinese market.   At the turn of the century, East African nations were just beginning to discover the vast energy resource potential under their waters.  China quickly moved to make significant investments in infrastructure along the African coast.  Over time the Chinese investments came with more and more caveats: Chinese labor being used almost exclusively, government-to-government negotiations for price controls and contracts bound by Chinese national oil companies.

By 2009, China had been throwing investment dollars closer to home to build pipelines directly to its onshore borders.  An estimated $2.5billion pipeline across Burma into China’s Yunnan province heralded the first time China sought a way to bring oil from tankers across the Indian Ocean into its borders some way other than the establishing shipping lanes through the South China Sea. Coupled with several overland pipelines from the oil-rich Caspian, China had crafted at exorbitant cost almost a full replacement of its existing import capacity from its eastern seaports.  The implication is that China has long planned for the contingency of a loss of oil imports if someone were to close the Malacca Straits against it.

Countries under Western sanctions that are finding themselves more and more resource-rich, like Burma, are prime targets for Chinese generosity in direct investment capital.  Over time, sanctions against these countries may become moot given Chinese willingness to provide economic support in exchange for access to energy resources.

Disturbingly, the converse is becoming  more prevalent.  Countries that are engaging in capitalist activities with private sector companies to develop their energy resources have been systematically targeted by Chinese aggression within their own borders for years.

In the summer of 2011, Chinese boats damaged seismic vessels conducting exploration efforts in an offshore Vietnamese block licensed in a partnership with PetroVietnam and a private Canadian oil company more than 650 miles from the Chinese mainland.  Since 1967, the United Nations Convention of Law of the Sea (UNCLOS) has declared territorial waters of a nation can extend only as far as 200 nautical miles within an Economic Exclusivity Zone.

In December 2012, Chinese ships again attacked seismic vessels with industrial cable-cutting equipment in another Vietnamese offshore block close to the Spratly Islands.  This was a month after an ASEAN meeting that attempted to negotiate with China on territorial disputes.

China quickly responded by claiming Chinese sovereignty over not just the hotly contested Spratly Islands, but the entirety of the South China Sea.  In a fit of pique, Beijing even produced a centuries-old map that claimed the entirety of the South China Sea as Chinese territory.

These actions necessitate a re-examination of U.S foreign policy imperatives that acknowledge and react to the production and transportation of energy resources.  A central tenet of modern energy policy must be the protection and support of the right of nations to maintain the integrity of their borders to produce their resources responsibly.

If we don’t want the worst-case scenario of a “War for Oil” played out in the Pacific Rim, we must be adamant in our defense of not just the inherent sovereignty of nations in the South China Sea, but also their maritime borders and their right to produce their own energy resources without the militant oversight of China.

Here’s the link to the original article. 

Image is via Shutterstock from MarketWatch.