Cleantech Market Intelligence
Around Lonely Islands, An Energy War Brews
For an international flashpoint, the Senkaku Islands in the East China Sea just southwest of Okinawa, are unprepossessing. A group of small, uninhabited stony islands, they cover only 7 square kilometers total. These isolated pinnacles “are apparently ready for disintegration by the first disturbing cause, either gales of wind or earthquake,” observed a British ship captain in 1845.
The Senkakus, though, are still there, and they’ve become the focus of an increasingly alarming row between China and Japan. Traditionally a part of Okinawa, Japan’s southernmost prefecture, they’ve been claimed in recent decades by China, which terms them the Diaoyu Islands. This dispute heated up at the end of 2012 after a Chinese marine surveillance aircraft, ostensibly civilian, flew through Japanese airspace over the Senkakus. Japan scrambled eight F-15 fighter jets in response. “Despite our warnings … it is extremely regrettable that an intrusion into our airspace has been committed in this way,” Japan’s top government spokesman, Osamu Fujimura, told reporters, according to the Global Post.
A Chinese foreign ministry spokesman responded in kind: “The Diaoyu and its affiliated islands have been China’s inherent territory since ancient times. China requires the Japanese side stop illegal activities in the waters and airspace of the Diaoyu islands.”
As you might guess, what’s really at stake here is not the rocky Senkakus themselves, nor the feral goats that are among the few full-time residents, but what lies below them. China estimates that one of the world’s largest natural gas deposits, containing some 250 trillion cubic feet (CF), lies untapped in the East China Sea. (U.S. estimates are much lower, but still considerable.) The threat of conflict between China and Japan over the waters around the Senkakus reflects a wider semicircle of energy-rich, and disputed, waters that stretch from Okinawa to Bangkok, and which could turn into a regional naval war as China jockeys with Japan, the Philippines, Thailand, Vietnam, and Indonesia in some of the busiest shipping lanes in the world.
Mind the Trough
“Energy is clearly what’s driving a lot of Chinese behavior,” Sheila Smith, a senior fellow at the Council on Foreign Relations, told National Geographic in December.
The disputes, which China has refused to submit to international mediation (presumably because the Chinese government knows that its claims to complete sovereignty over the South and East China seas are unlikely to hold up in international courts), present a delicate diplomatic tangle for the Obama administration, which has reaffirmed its support for Japanese territorial rights while attempting to avoid overt confrontation with China.
Complicating matters further is the fact that the richest petroleum deposits lie in the Okinawa Trough, an 8,200-foot (2.5 kilometer) gash in the seafloor that separates the Chinese continental shelf from the Western Pacific. Only since the mid-2000s has the drilling technology to exploit such ultra-deepwater reserves existed, and it’s almost certain that neither China nor Japan has the deepwater capability to do so. A foreign partner – most likely a Western oil giant – would be needed to tap the oil and gas fields.
China, which has embarked on a major naval arms buildup in recent years, appears to believe that it can bluff and bluster its way to supremacy in the surrounding seas, but its neighbors are not standing passively by. Japan’s Coast Guard announced this week it plans to create a fleet of 12 cutters to patrol the waters around the Senkakus, and India, which is partnering with Vietnam to develop deep-sea oilfields in the South China Sea, has declared its readiness to dispatch warships to the area to protect its interests from Chinese incursions. Most ominously, Japanese Prime Minister Shinzo Abe has publicly said he will void the country’s constitutional ban on armed self-defense, a legacy of World War II. Abe may use an upcoming joint review with the United States of defense cooperation plans to eliminate that restriction.
A new energy war in the Pacific is the last thing the world needs, as governments face grave environmental challenges and the need to invest billions of dollars in clean and renewable energy sources, but the chances of that happening have increased in recent weeks.