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US Energy Policy and China

January 6, 2012

Historically, China has primarily been a continental nation, looking to the North, South and West for security threats. For energy, it has huge supplies of coal and the potential for large supplies of shale gas. What it lacks is oil.

Now, it is looking Eastward, toward the ocean – specifically the Pacific Ocean and the sea lanes from the Indian Ocean.

This shift has been caused by China’s growing dependence on oil and China’s role as a major maritime trading power.

How the United States pursues its energy needs will determine whether the United States and China will compete for the same oil resources.

China is in the process of developing a large, modern navy, including ballistic missile and attack submarines, frigates and the supporting ships necessary for a modern navy.

Currently, half these vessels are older and not suitable for 21st century combat. The Peoples Liberation Army Navy (PLAN) has adopted sea skimming anti-ship missiles, such as the maneuverable Yakhont, that travels at 2.5 Mach with a range of 160 miles. Missile ships, using catamaran hulls that provide a stable platform for cruise missiles, are also part of the PLAN’s arsenal.

It’s been said that if Argentina had had another half dozen Exocet missiles, it would have won the Falkland Islands war against the U.K.

China, using sea based and land based maneuverable missiles, is developing , and may already have, the ability to implement an anti-access (A2) and area-denial (AD) strategy in the South China Sea, that could prove deadly to the U.S. Navy if it had to operate in the South China Sea should hostilities ever occur.

While the PLAN is getting newer, better and bigger, the U.S. Navy is getting smaller.

Currently, the PLAN’s primary focus is to protect the South China and East China Seas; and the existing PLAN is a credible defensive force.

 

South China Sea and Key Straits

South China Sea and Key Straits

As it looks East, it sees a line of islands stretching from Japan, South, past Taiwan and the Philippines, and then to Brunei and Indonesia. It views this “first row of islands” as an obstacle to reaching the Pacific Ocean, and – more importantly, to maintaining access through the Malacca, Sunda and Lombok straits.

More than five times as many ships pass through the Malacca Strait as pass through the Panama Canal. The Lombok Strait is important since very large crude carriers (VLCCs) traverse it because the Malacca Strait is too shallow.

Over 15 million barrels of oil per day traverse through the South China Sea destined for China, and the other bordering nations. For comparison, the United States uses 20 million barrels of oil per day.

China has claimed virtually the entire South China Sea as belonging to it. (See the dotted line on the map.) The South China Sea stretches from Taiwan, past the Philippines and as far south as Malaysia.

China believes there are large oil and natural gas resources under the seabed.

Many islands within the South China Sea are claimed by several nations, including China, the Philippines, Vietnam, Malaysia and Brunei. These disputes have the potential for conflict, though China’s navy is too strong for any of the other countries to challenge China – without the support of the United States.

China views the presence of the U.S. Navy in the South China Sea as a threat.

China’s growth is expected to result in its importing much larger quantities of oil, so the straits and the South China Sea will grow in strategic importance to China. China is increasing its oil imports from the Mideast and Africa. It has also invested in Canadian oil companies, and would sorely like to import oil from Canada. It’s also exploring for oil in the South China Sea.

The United States energy policy can increase the potential for conflict between the United States and China – or, minimize the threat of conflict.

By developing oil resources in Alaska, the [U.S.] outer continental shelves, and on federal land, and by partnering with Canada to develop Canada’s oil sands, the United States can avoid having to compete with China for Mideast and other oil resources.

While it may not be possible to avoid conflict over the islands and navigation rights in the South China Sea, it is possible to be certain we don’t go head to head with China, competing for oil.

For additional information on China’s Navy and maritime interests, see The Great Wall at Sea, published by the USNI.

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