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Scoop, New Zealand
March 23 2005
Marshall Auerback: The Militarisation Of Oil
Wednesday, 23 March 2005, 12:54 pm
Opinion: Marshall Auerback
International Perspective: The Militarisation Of Oil
by Marshall Auerback
From: http://www.prudentbear.com/internationalperspective.aspOil
prices spiked to record levels last week, propelled by a rally in
petrol prices and a cold snap in the northern hemisphere, against the
backdrop of a tight balance between supply and demand. Yes, that's
right, basic "supply/demand," not "political turbulence in the Middle
East."
If anything, this simplistic relationship between Middle Eastern
political tension and rising/falling crude prices has broken down
over the past few weeks. As the FT's Philip Stephens noted, "The
Middle East is becoming a different place. The world's sole
superpower is unwilling any longer to accept the status quo. That of
itself is a powerful agent for change. Images beamed by Arab
satellite television, first of the Palestinian and Iraqi elections
and now of the public clamour for Syria's withdrawal from Lebanon,
are shaking the authoritarian preconceptions of the old order. Behind
the scenes, the world-weary cynicism about the prospects of an
Israeli-Palestinian peace deal is giving way, if not to optimism,
then at least to glimmers of hope."
It is very telling that the price spike came during a most propitious
backdrop: a popular uprising in Beirut, the growing isolation of
Syria and small stirrings of change in Egypt and Saudi Arabia.
Analysts said hawkish comments from the Organization of Petroleum
Exporting Countries have contributed to the rally. Ali Naimi, the
Saudi oil minister, last week forecast that oil prices would stay
between $40 and $50 a barrel for the rest of this year. The acting
OPEC secretary general, Adnan Shihab-Eldin, also added fuel to the
fire (so to speak) when he said oil prices could rise to $80 in the
next two years in the event of a major oil supply disruption, similar
to the war in Iraq. (It is also worth noting that crude's strength is
no longer simply a weak dollar phenomenon: as market analyst James
Turk has noted, oil is now becoming more expensive in terms of both
euros and dollars, reflecting the growing breadth of this particular
bull market.)
But talk, unlike oil, is cheap. OPEC could no more "talk up" the
market than it could talk it down last year. Obscured against the
perennial geopolitical conflict that tends to characterise the oil
producing regions of the world, or the endless theorising about
whether the oil cartel is "cheating" on its quotas, is the fact that
exploration success in global oil has been in decline for decades and
that the world has been living off of the major fields discovered
literally decades ago. Recent exploration has gone in large part
toward exploiting more effectively these major fields, but such
exploration has not been characterised by huge new discoveries.
Announced increases in "reserves" merely reflect changes in reporting
requirements as mandated by the SEC, rather than major finds of new
sources of oil. Likewise, most advances in technology simply enhance
extraction, but have done little to augment existing supply. As a
consequence, the rate of depletion of these fields has increased,
implying looming supply problems ahead. Add to this the fact that the
vast majority of new projects will produce less refinable heavy oil
and it is clear that major supply shortfalls loom, cold weather or
hot weather.
We have arrived at the summit of "Hubbert's Peak," the oil geologist
who in 1956 correctly prophesized that U.S. petroleum production
would peak in the early 1970s, then irreversibly decline. In 1974 he
likewise predicted that world oil fields would achieve their maximum
output in 2000; a figure later revised by some of his acolytes, such
as Henry Groppe, Colin J. Campbell, and Matt Simmons, to anywhere
between 2006-2010.
If high oil prices are here to stay, it clearly has epochal
implications for the global economy. Indeed, even if the recent rise
puts paid to the notion that Middle Eastern political risk premiums
in and of themselves bear tangential relationship to underlying
movements in the oil market, the very lack of new supply will almost
invariably lead to an increasing militarization of global energy
policy, although perhaps not in the Middle East-centric manner in
which this has been occasionally manifested in the past.
For Iraq is hardly the only country where American troops are risking
their lives on a daily basis to protect the flow of petroleum. In
Colombia, Saudi Arabia, and the Republic of Georgia, U.S. personnel
are also spending their days and nights protecting pipelines and
refineries, or supervising the local forces assigned to this mission.
American sailors are now on oil-protection patrol in the Persian
Gulf, the Arabian Sea, the South China Sea, and along other sea
routes that deliver oil to the United States and its allies. In fact,
as Michael Klare has noted (Blood and Oil: The Dangers and
Consequences of America's Growing Dependency on Imported Petroleum),
the American military is increasingly being converted into a global
oil-protection service:
"Ever since the Soviet Union broke apart in 1992, American oil
companies and government officials have sought to gain access to the
huge oil and natural gas reserves of the Caspian Sea basin --
especially in Azerbaijan, Iran, Kazakhstan, and Turkmenistan. Some
experts believe that as many as 200 billion barrels of untapped oil
lie ready to be discovered in the Caspian area, about seven times the
amount left in the United States. But the Caspian itself is
landlocked and so the only way to transport its oil to market in the
West is by pipelines crossing the Caucasus region -- the area
encompassing Armenia, Azerbaijan, Georgia, and the war-torn Russian
republics of Chechnya, Dagestan, Ingushetia, and North Ossetia.
"American firms are now building a major pipeline through this
volatile area. Stretching a perilous 1,000 miles from Baku in
Azerbaijan through Tbilisi in Georgia to Ceyhan in Turkey, it is
eventually slated to carry one million barrels of oil a day to the
West; but will face the constant threat of sabotage by Islamic
militants and ethnic separatists along its entire length. The United
States has already assumed significant responsibility for its
protection, providing millions of dollars in arms and equipment to
the Georgian military and deploying military specialists in Tbilisi
to train and advise the Georgian troops assigned to protect this
vital conduit. This American presence is only likely to expand in
2005 or 2006 when the pipeline begins to transport oil and fighting
in the area intensifies.
"Or take embattled Colombia, where U.S. forces are increasingly
assuming responsibility for the protection of that country's
vulnerable oil pipelines. These vital conduits carry crude petroleum
from fields in the interior, where a guerrilla war boils, to ports on
the Caribbean coast from which it can be shipped to buyers in the
United States and elsewhere. For years, left-wing guerrillas have
sabotaged the pipelines -- portraying them as concrete expressions of
foreign exploitation and elitist rule in Bogota, the capital -- to
deprive the Colombian government of desperately needed income.
Seeking to prop up the government and enhance its capacity to fight
the guerrillas, Washington is already spending hundreds of millions
of dollars to enhance oil-infrastructure security, beginning with the
Cano-Limon pipeline, the sole conduit connecting Occidental
Petroleum's prolific fields in Arauca province with the Caribbean
coast. As part of this effort, U.S. Army Special Forces personnel
from Fort Bragg, North Carolina are now helping to train, equip, and
guide a new contingent of Colombian forces whose sole mission will be
to guard the pipeline and fight the guerrillas along its 480-mile
route."
Other countries are responding in kind, notably China. More expensive
oil will undercut China's energy-intensive boom. The country is
already experiencing sporadic power shortages against a backdrop of
growing car ownership and air travel across the country. Energy is
becoming vital to strategically important and growing industries such
as agriculture, construction, and steel and cement manufacturing.
Consequently, pressure is already mounting on Beijing to access
energy resources on the world stage. As a result, energy security has
become an area of vital importance to China's stability and security.
China is stepping up efforts to secure sea lanes and transport routes
that are vital for oil shipments and diversifying beyond the volatile
Middle East to find energy resources in other regions such as Africa,
the Caspian, Russia, the Americas and the East and South China Sea
region.
To be sure, China's drive for energy security has nowhere come close
to reaching the militarization of America's current energy policy. To
the extent that it has engaged in competition, this has so far been
limited to the economic sphere through state-owned oil and gas
companies such as China Petroleum Chemical Corporation (Sinopec),
China National Petroleum Corporation (C.N.P.C.), its subsidiary
PetroChina and China National Offshore Oil Corporation (C.N.O.O.C.),
all of which are actively seeking to accumulate overseas subsidiaries
or offshore exploration rights. Sinopec, for example, has won the
right to explore for natural gas in Saudi Arabia's al-Khali Basin and
Saudi Arabia has agreed to build a refinery for natural gas in Fujian
in exchange for Chinese investment in Saudi Arabia's bauxite and
phosphate industry.
Chinese acquisitions are also extending closer to Washington's
traditional sphere of influence in the Americas. China and Canada
signed a joint statement on energy cooperation, which included
accessing Canada's oil sands and uranium resources following Prime
Minister Paul Martin's recent trip to the country. Moreover, while
attending last November's annual Asia-Pacific Economic Cooperation
(A.P.E.C.) summit in Chile, Chinese President Hu Jintao announced an
energy deal with Brazil worth $10B supplementing a $1.3B deal between
Sinopec and Petrobras for a 2000 km natural gas pipeline. China is
also acquiring oil assets in Ecuador as well as investing in offshore
petroleum projects in Argentina. During Venezuelan President Hugo
Chavez's visit to Beijing in December and Chinese Vice President Zeng
Qinghong's visit to Venezuela in January 2005, China also committed
to develop Venezuela's energy infrastructure by investing $350M in 15
oil fields and $60M in a gas project in Venezuela.
However, as oil prices rise and China imports an increasing amount of
its energy needs, the competition is beginning to spill over into the
political and military spheres. The burgeoning energy trade with
Saudi Arabia, for example, already complements a growing relationship
in the military sphere as seen with China selling Saudi Arabia
Silkworm missiles during the Iran-Iraq War in the 1980s,
There are also indications that Beijing's relations with Tokyo are
taking on a more militaristic hue, particularly in relation to the
issue of Taiwan. Although Taiwan has largely been viewed within the
context of the so-called "One China" policy, analyzing the conflict
through this narrow prism has obscured other important,
energy-related facets underlying Beijing's hawkishness on the issue
(and the corresponding response by both Tokyo and Washington). A
territorial dispute between China and Japan in the East China Sea,
which both sides claim as their Exclusive Economic Zone (E.E.Z.), is
being further fueled by reports of vast supplies of oil and gas in
the region. The disputed territory includes the Diaoyu or Senkaku
islands and the Chunxiao gas field northeast of Taiwan, which
according to a 1999 Japanese survey holds 200 billion cubic meters of
gas. Japan regards the median line as its border while China claims
jurisdiction over the entire continental shelf. In 2003, China began
drilling in the area after the Japanese rejected a Chinese proposal
to develop the field jointly. Although the Chunxiao gas field is on
the Chinese side of the median line, Japan claims that China may be
siphoning energy resources on the Japanese side.
The rising military tensions between the two countries manifested
itself most recently in the form of a confrontation following the
incursion of a Chinese nuclear-powered submarine into Japanese waters
off the Okinawa islands on November 10, 2004. The intrusion was
followed by a two-day chase across the East China Sea. Although China
subsequently apologized, it was not an isolated occurrence: this was
soon followed by the intrusion of a Chinese research vessel into
Japanese waters near the island of Okinotori, which was believed to
have been surveying the seabed for oil and gas drilling purposes.
This was, according to a Power and Interest News Report by author
Chietigj Bajpaee, the 34th such maritime research exercise by Chinese
vessels within Japan's E.E.Z. in 2004, up from eight in 2003, with
China not giving prior notification in 21 of the 34 cases.
Tokyo has responded in kind: Japan's most recent Strategic Defense
Review named both North Korea and China as causes for security
concern as it instigated an overhaul of defense priorities. The
review is particularly notable for the inclusion of China as a
country that needs "carefully watching" in the wake of the November
2004 submarine incident.
Adding to these tensions is Japan's shift from its post-war pacifist
and defensive posture towards a more active military role in the
region, as seen with the current deployment of its Self Defense
Forces to Iraq. Last December, Prime Minister Koizumi extended by a
year the deployment of 550 ground troops in Iraq, the biggest and
most controversial dispatch since the Second World War. His
government has also continued to push for a revision to the
57-year-old pacifist constitution that would enable more effective
participation in such missions as a way of strengthening the
U.S.-Japan alliance.
The Bush Administration has not remained a disinterested party in
this rising dispute. After a temporary post Sept. 11-cessation of
references to China as a "strategic competitor", the US has more
recently again begun to express disquiet about the thrust of China's
military policy, particularly in response to the proposed lifting of
the European Union's arms embargo on China. A recent joint statement
by the US and Japan last month named Taiwan as an issue of joint
security concern for the first time. In response, China has noted
that the US spends more on its defense than the next 18 countries
combined, but this has not stopped Beijing from pushing to acquire a
national fleet of Very Large Crude Carriers, or V.L.C.C.s, that could
be employed in the case of supply disruptions brought on by a
terrorist attack, the Malacca Straits (through which about 80 per
cent of China's oil imports flow) or a U.S.-led blockade during a
conflict over Taiwan.
Growing US-Chinese tensions (fuelled in large part by this ongoing
competition for global energy resources) also help to explain China's
less than enthusiastic support of US aims to discourage North Korea
from developing its nuclear weapons program further. Indeed, in
regard to the latter, the Chinese foreign minister, Li Zhaoxing, has
recently expressed doubt about the quality of American intelligence
on North Korea's nuclear program and said the United States would
have to talk to North Korea one-on-one to resolve the standoff.
Washington has repeatedly sounded the alarm about North Korea's
nuclear efforts and has pressed China, North Korea's only significant
ally, to be more active in seeking seek a solution. If the US insists
on playing the "Taiwan card," Beijing seems equally happy to play the
"North Korea card."
Oil, and the corresponding drive for energy security, therefore, is
becoming an increasingly common, yet disruptive, thread driving
policy in Washington, Beijing and Tokyo. The competition over energy
resources is now becoming an additional area of contention over and
above existing trade disputes between Washington and Beijing. China's
growing presence on the international energy stage could ultimately
bring it into confrontation with the world's largest energy consumer,
the United States, where a growing number of American soldiers and
sailors are being committed to the protection of overseas oil fields,
pipeline, refineries, and tanker routes. Given the parlous state of
America's national finances, it is clear why Tokyo, with its huge
repository of savings, is being brought in effectively to help
underwrite this policy (although why the Japanese have gone along so
compliantly, other than a longstanding historic rivalry with China,
is less clear). With these 3 global behemoths engaged in an
increasingly fraught competition over an increasingly scarce
resource, it is clear that the global economy will pay a higher price
for oil, not only in dollar terms, but also in blood for every
additional gallon of oil which we seek to consume. The great game has
truly begun.
http://www.scoop.co.nz/stories/HL0503/S00230.htm
March 23 2005
Marshall Auerback: The Militarisation Of Oil
Wednesday, 23 March 2005, 12:54 pm
Opinion: Marshall Auerback
International Perspective: The Militarisation Of Oil
by Marshall Auerback
From: http://www.prudentbear.com/internationalperspective.aspOil
prices spiked to record levels last week, propelled by a rally in
petrol prices and a cold snap in the northern hemisphere, against the
backdrop of a tight balance between supply and demand. Yes, that's
right, basic "supply/demand," not "political turbulence in the Middle
East."
If anything, this simplistic relationship between Middle Eastern
political tension and rising/falling crude prices has broken down
over the past few weeks. As the FT's Philip Stephens noted, "The
Middle East is becoming a different place. The world's sole
superpower is unwilling any longer to accept the status quo. That of
itself is a powerful agent for change. Images beamed by Arab
satellite television, first of the Palestinian and Iraqi elections
and now of the public clamour for Syria's withdrawal from Lebanon,
are shaking the authoritarian preconceptions of the old order. Behind
the scenes, the world-weary cynicism about the prospects of an
Israeli-Palestinian peace deal is giving way, if not to optimism,
then at least to glimmers of hope."
It is very telling that the price spike came during a most propitious
backdrop: a popular uprising in Beirut, the growing isolation of
Syria and small stirrings of change in Egypt and Saudi Arabia.
Analysts said hawkish comments from the Organization of Petroleum
Exporting Countries have contributed to the rally. Ali Naimi, the
Saudi oil minister, last week forecast that oil prices would stay
between $40 and $50 a barrel for the rest of this year. The acting
OPEC secretary general, Adnan Shihab-Eldin, also added fuel to the
fire (so to speak) when he said oil prices could rise to $80 in the
next two years in the event of a major oil supply disruption, similar
to the war in Iraq. (It is also worth noting that crude's strength is
no longer simply a weak dollar phenomenon: as market analyst James
Turk has noted, oil is now becoming more expensive in terms of both
euros and dollars, reflecting the growing breadth of this particular
bull market.)
But talk, unlike oil, is cheap. OPEC could no more "talk up" the
market than it could talk it down last year. Obscured against the
perennial geopolitical conflict that tends to characterise the oil
producing regions of the world, or the endless theorising about
whether the oil cartel is "cheating" on its quotas, is the fact that
exploration success in global oil has been in decline for decades and
that the world has been living off of the major fields discovered
literally decades ago. Recent exploration has gone in large part
toward exploiting more effectively these major fields, but such
exploration has not been characterised by huge new discoveries.
Announced increases in "reserves" merely reflect changes in reporting
requirements as mandated by the SEC, rather than major finds of new
sources of oil. Likewise, most advances in technology simply enhance
extraction, but have done little to augment existing supply. As a
consequence, the rate of depletion of these fields has increased,
implying looming supply problems ahead. Add to this the fact that the
vast majority of new projects will produce less refinable heavy oil
and it is clear that major supply shortfalls loom, cold weather or
hot weather.
We have arrived at the summit of "Hubbert's Peak," the oil geologist
who in 1956 correctly prophesized that U.S. petroleum production
would peak in the early 1970s, then irreversibly decline. In 1974 he
likewise predicted that world oil fields would achieve their maximum
output in 2000; a figure later revised by some of his acolytes, such
as Henry Groppe, Colin J. Campbell, and Matt Simmons, to anywhere
between 2006-2010.
If high oil prices are here to stay, it clearly has epochal
implications for the global economy. Indeed, even if the recent rise
puts paid to the notion that Middle Eastern political risk premiums
in and of themselves bear tangential relationship to underlying
movements in the oil market, the very lack of new supply will almost
invariably lead to an increasing militarization of global energy
policy, although perhaps not in the Middle East-centric manner in
which this has been occasionally manifested in the past.
For Iraq is hardly the only country where American troops are risking
their lives on a daily basis to protect the flow of petroleum. In
Colombia, Saudi Arabia, and the Republic of Georgia, U.S. personnel
are also spending their days and nights protecting pipelines and
refineries, or supervising the local forces assigned to this mission.
American sailors are now on oil-protection patrol in the Persian
Gulf, the Arabian Sea, the South China Sea, and along other sea
routes that deliver oil to the United States and its allies. In fact,
as Michael Klare has noted (Blood and Oil: The Dangers and
Consequences of America's Growing Dependency on Imported Petroleum),
the American military is increasingly being converted into a global
oil-protection service:
"Ever since the Soviet Union broke apart in 1992, American oil
companies and government officials have sought to gain access to the
huge oil and natural gas reserves of the Caspian Sea basin --
especially in Azerbaijan, Iran, Kazakhstan, and Turkmenistan. Some
experts believe that as many as 200 billion barrels of untapped oil
lie ready to be discovered in the Caspian area, about seven times the
amount left in the United States. But the Caspian itself is
landlocked and so the only way to transport its oil to market in the
West is by pipelines crossing the Caucasus region -- the area
encompassing Armenia, Azerbaijan, Georgia, and the war-torn Russian
republics of Chechnya, Dagestan, Ingushetia, and North Ossetia.
"American firms are now building a major pipeline through this
volatile area. Stretching a perilous 1,000 miles from Baku in
Azerbaijan through Tbilisi in Georgia to Ceyhan in Turkey, it is
eventually slated to carry one million barrels of oil a day to the
West; but will face the constant threat of sabotage by Islamic
militants and ethnic separatists along its entire length. The United
States has already assumed significant responsibility for its
protection, providing millions of dollars in arms and equipment to
the Georgian military and deploying military specialists in Tbilisi
to train and advise the Georgian troops assigned to protect this
vital conduit. This American presence is only likely to expand in
2005 or 2006 when the pipeline begins to transport oil and fighting
in the area intensifies.
"Or take embattled Colombia, where U.S. forces are increasingly
assuming responsibility for the protection of that country's
vulnerable oil pipelines. These vital conduits carry crude petroleum
from fields in the interior, where a guerrilla war boils, to ports on
the Caribbean coast from which it can be shipped to buyers in the
United States and elsewhere. For years, left-wing guerrillas have
sabotaged the pipelines -- portraying them as concrete expressions of
foreign exploitation and elitist rule in Bogota, the capital -- to
deprive the Colombian government of desperately needed income.
Seeking to prop up the government and enhance its capacity to fight
the guerrillas, Washington is already spending hundreds of millions
of dollars to enhance oil-infrastructure security, beginning with the
Cano-Limon pipeline, the sole conduit connecting Occidental
Petroleum's prolific fields in Arauca province with the Caribbean
coast. As part of this effort, U.S. Army Special Forces personnel
from Fort Bragg, North Carolina are now helping to train, equip, and
guide a new contingent of Colombian forces whose sole mission will be
to guard the pipeline and fight the guerrillas along its 480-mile
route."
Other countries are responding in kind, notably China. More expensive
oil will undercut China's energy-intensive boom. The country is
already experiencing sporadic power shortages against a backdrop of
growing car ownership and air travel across the country. Energy is
becoming vital to strategically important and growing industries such
as agriculture, construction, and steel and cement manufacturing.
Consequently, pressure is already mounting on Beijing to access
energy resources on the world stage. As a result, energy security has
become an area of vital importance to China's stability and security.
China is stepping up efforts to secure sea lanes and transport routes
that are vital for oil shipments and diversifying beyond the volatile
Middle East to find energy resources in other regions such as Africa,
the Caspian, Russia, the Americas and the East and South China Sea
region.
To be sure, China's drive for energy security has nowhere come close
to reaching the militarization of America's current energy policy. To
the extent that it has engaged in competition, this has so far been
limited to the economic sphere through state-owned oil and gas
companies such as China Petroleum Chemical Corporation (Sinopec),
China National Petroleum Corporation (C.N.P.C.), its subsidiary
PetroChina and China National Offshore Oil Corporation (C.N.O.O.C.),
all of which are actively seeking to accumulate overseas subsidiaries
or offshore exploration rights. Sinopec, for example, has won the
right to explore for natural gas in Saudi Arabia's al-Khali Basin and
Saudi Arabia has agreed to build a refinery for natural gas in Fujian
in exchange for Chinese investment in Saudi Arabia's bauxite and
phosphate industry.
Chinese acquisitions are also extending closer to Washington's
traditional sphere of influence in the Americas. China and Canada
signed a joint statement on energy cooperation, which included
accessing Canada's oil sands and uranium resources following Prime
Minister Paul Martin's recent trip to the country. Moreover, while
attending last November's annual Asia-Pacific Economic Cooperation
(A.P.E.C.) summit in Chile, Chinese President Hu Jintao announced an
energy deal with Brazil worth $10B supplementing a $1.3B deal between
Sinopec and Petrobras for a 2000 km natural gas pipeline. China is
also acquiring oil assets in Ecuador as well as investing in offshore
petroleum projects in Argentina. During Venezuelan President Hugo
Chavez's visit to Beijing in December and Chinese Vice President Zeng
Qinghong's visit to Venezuela in January 2005, China also committed
to develop Venezuela's energy infrastructure by investing $350M in 15
oil fields and $60M in a gas project in Venezuela.
However, as oil prices rise and China imports an increasing amount of
its energy needs, the competition is beginning to spill over into the
political and military spheres. The burgeoning energy trade with
Saudi Arabia, for example, already complements a growing relationship
in the military sphere as seen with China selling Saudi Arabia
Silkworm missiles during the Iran-Iraq War in the 1980s,
There are also indications that Beijing's relations with Tokyo are
taking on a more militaristic hue, particularly in relation to the
issue of Taiwan. Although Taiwan has largely been viewed within the
context of the so-called "One China" policy, analyzing the conflict
through this narrow prism has obscured other important,
energy-related facets underlying Beijing's hawkishness on the issue
(and the corresponding response by both Tokyo and Washington). A
territorial dispute between China and Japan in the East China Sea,
which both sides claim as their Exclusive Economic Zone (E.E.Z.), is
being further fueled by reports of vast supplies of oil and gas in
the region. The disputed territory includes the Diaoyu or Senkaku
islands and the Chunxiao gas field northeast of Taiwan, which
according to a 1999 Japanese survey holds 200 billion cubic meters of
gas. Japan regards the median line as its border while China claims
jurisdiction over the entire continental shelf. In 2003, China began
drilling in the area after the Japanese rejected a Chinese proposal
to develop the field jointly. Although the Chunxiao gas field is on
the Chinese side of the median line, Japan claims that China may be
siphoning energy resources on the Japanese side.
The rising military tensions between the two countries manifested
itself most recently in the form of a confrontation following the
incursion of a Chinese nuclear-powered submarine into Japanese waters
off the Okinawa islands on November 10, 2004. The intrusion was
followed by a two-day chase across the East China Sea. Although China
subsequently apologized, it was not an isolated occurrence: this was
soon followed by the intrusion of a Chinese research vessel into
Japanese waters near the island of Okinotori, which was believed to
have been surveying the seabed for oil and gas drilling purposes.
This was, according to a Power and Interest News Report by author
Chietigj Bajpaee, the 34th such maritime research exercise by Chinese
vessels within Japan's E.E.Z. in 2004, up from eight in 2003, with
China not giving prior notification in 21 of the 34 cases.
Tokyo has responded in kind: Japan's most recent Strategic Defense
Review named both North Korea and China as causes for security
concern as it instigated an overhaul of defense priorities. The
review is particularly notable for the inclusion of China as a
country that needs "carefully watching" in the wake of the November
2004 submarine incident.
Adding to these tensions is Japan's shift from its post-war pacifist
and defensive posture towards a more active military role in the
region, as seen with the current deployment of its Self Defense
Forces to Iraq. Last December, Prime Minister Koizumi extended by a
year the deployment of 550 ground troops in Iraq, the biggest and
most controversial dispatch since the Second World War. His
government has also continued to push for a revision to the
57-year-old pacifist constitution that would enable more effective
participation in such missions as a way of strengthening the
U.S.-Japan alliance.
The Bush Administration has not remained a disinterested party in
this rising dispute. After a temporary post Sept. 11-cessation of
references to China as a "strategic competitor", the US has more
recently again begun to express disquiet about the thrust of China's
military policy, particularly in response to the proposed lifting of
the European Union's arms embargo on China. A recent joint statement
by the US and Japan last month named Taiwan as an issue of joint
security concern for the first time. In response, China has noted
that the US spends more on its defense than the next 18 countries
combined, but this has not stopped Beijing from pushing to acquire a
national fleet of Very Large Crude Carriers, or V.L.C.C.s, that could
be employed in the case of supply disruptions brought on by a
terrorist attack, the Malacca Straits (through which about 80 per
cent of China's oil imports flow) or a U.S.-led blockade during a
conflict over Taiwan.
Growing US-Chinese tensions (fuelled in large part by this ongoing
competition for global energy resources) also help to explain China's
less than enthusiastic support of US aims to discourage North Korea
from developing its nuclear weapons program further. Indeed, in
regard to the latter, the Chinese foreign minister, Li Zhaoxing, has
recently expressed doubt about the quality of American intelligence
on North Korea's nuclear program and said the United States would
have to talk to North Korea one-on-one to resolve the standoff.
Washington has repeatedly sounded the alarm about North Korea's
nuclear efforts and has pressed China, North Korea's only significant
ally, to be more active in seeking seek a solution. If the US insists
on playing the "Taiwan card," Beijing seems equally happy to play the
"North Korea card."
Oil, and the corresponding drive for energy security, therefore, is
becoming an increasingly common, yet disruptive, thread driving
policy in Washington, Beijing and Tokyo. The competition over energy
resources is now becoming an additional area of contention over and
above existing trade disputes between Washington and Beijing. China's
growing presence on the international energy stage could ultimately
bring it into confrontation with the world's largest energy consumer,
the United States, where a growing number of American soldiers and
sailors are being committed to the protection of overseas oil fields,
pipeline, refineries, and tanker routes. Given the parlous state of
America's national finances, it is clear why Tokyo, with its huge
repository of savings, is being brought in effectively to help
underwrite this policy (although why the Japanese have gone along so
compliantly, other than a longstanding historic rivalry with China,
is less clear). With these 3 global behemoths engaged in an
increasingly fraught competition over an increasingly scarce
resource, it is clear that the global economy will pay a higher price
for oil, not only in dollar terms, but also in blood for every
additional gallon of oil which we seek to consume. The great game has
truly begun.
http://www.scoop.co.nz/stories/HL0503/S00230.htm