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South China Sea headbutting of nations is about energy security

“China’s territory,” its foreign minister asserts. Navigation of the waterways to the country’s south are key to other countries’ energy needs

PUBLISHED : Tuesday, 05 April, 2016, 4:56pm
UPDATED : Friday, 20 May, 2016, 1:59pm

“The South China Sea islands are China’s territory,” Foreign Minister Wang Yi told the ASEAN Regional Forum in August.

Other nations reject that assertion.

But territorial disputes in the South China Sea are also inextricably linked with wider issues of geopolitics and energy security.

China has every right to peaceably pursue what it considers its legitimate claims in the area. Still its challenge of the existing status quo is of considerable interest to others — even those without territorial claims in the South China Sea and who view their energy security and geopolitical interests aligned to continuing freedom of navigation in those sea-lanes.

Thus, even if the Obama Presidency had not already committed the United States to a foreign policy pivot towards Asia, US geo-strategic interests in Asia would anyway have forced Washington to take an interest in developments in the South China Sea.

Even though Beijing subscribes to the principle of freedom of navigation and overflight, any prospect that China might more easily exercise control over the sea-lanes of the South China Sea could be viewed as a potential threat to the energy security of key US allies Japan and South Korea while Taiwan too would also be vulnerable.

As the US Energy Information Authority (EIA) wrote, in 2013: “The South China Sea is one of the most important energy trade routes in the world” with “almost a third of global crude oil and over half of global liquefied natural gas (LNG)” passing through it each year.

In Japan’s case, given its own lack of natural energy resources and with the vast majority of its nuclear power plants offline since the March, 2011 earthquake and tsunami that resulted in very serious damage to and leakage from the reactors at the Fukushima plant, ensuring free navigation through the South China Sea is critical.

As the EIA pointed out in January, Japan is now the world’s largest LNG importer, second-largest coal importer and third-largest net importer of crude oil and oil products. And the vast bulk of those energy imports are sea-borne.

At the time of the Fukushima disaster Japan generated some 27 per cent of its energy from nuclear power and that has had to be replaced by even larger hydrocarbon imports, such as crude oil.

“Japan is primarily dependent on the Middle East for its crude oil imports,” the EIA said, noting that “roughly 84 per cent of Japanese crude oil imports originated from this region in 2014, up from 70 per cent in the mid-1980s.”

All those shipments pass through the South China Sea as they wend their way to Japan.

As for LNG, 84 per cent of Japan’s imports in 2013 came from eight sources, Australia, Brunei, Indonesia, Malaysia, Nigeria, Oman, Qatar and the United Arab Emirates.

All of that too has to pass through the South China Sea.

It is a similar story for South Korea which, as the EIA said in October, imports 97 per cent of its primary energy consumption with the Middle East accounting “for more than 84 per cent of South Korea’s 2014 crude oil imports, according to Korean customs statistics.”

That makes South Korea the world’s fifth largest importer of crude oil and condensate — but it is also the world’s second-largest importer of liquified natural gas.

In 2014, African, Middle East and South East Asian countries supplied 88 per cent of South Korea’s LNG imports, according to the 2015 BP Statistical Review of World Energy.

In Taiwan “total energy import dependence was about 98 per cent according to the Taiwanese government” the EIA said last September, with 83 per cent of crude oil imports sourced from the Persian Gulf.

As the world’s fifth-largest importer of LNG, Taiwan imported some 82 per cent of its needs in 2014 from three sources, Indonesia, Malaysia and Qatar.

Of course Taiwan itself has its own claims on the islands of the South China Sea, but irrespective of that, its own energy security, as well as that of Japan and South Korea, depends on freedom of navigation in the area’s sea-lanes.

The US military has recently expressed its own concerns over developments in the South China Sea.

“In my opinion China is clearly militarising the South China Sea,” Admiral Harry Harris, head of the US Pacific Command, told the US Senate Armed Services Committee on Feb 23 He added: “You’d have to believe in a flat earth to believe otherwise.”

The bottom line is that in the South China Sea, jurisdictional claims cannot be divorced from wider issues of energy security and geopolitics in Asia.

There’s more at stake in territorial disputes in the South China Sea than just islands, islets, rocks and reefs.

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