Center for a New American Security

One of the challenges with writing a paper like “The Role of Natural Resources in the South China Sea,” one of six chapters that appears in our new report, Cooperation from Strength: The United States, China and the South China Sea, is to make it accessible to a broad audience (i.e., those intimately familiar with resource issues in the region and those who know nothing about those issues at all). To do that I chose to avoid narrow recommendations that would have distracted the reader from the broader message I hoped to convey: that despite the complexity of resource challenges in the region (and potential for conflict), the United States can encourage policies that help promote peaceful competition over resources in the South China Sea, and thereby promote regional stability.

But for those interested, I’d like to share some ideas for how U.S. policymakers can encourage cooperation around several of the issues that I explore in the paper, beginning with energy. As I argue in the paper, the United States needs to focus beyond energy and give attention to fisheries, minerals and climate change, which are important resource issues that affect geopolitical behavior in the Asia-Pacific region. But I thought it would be good to start with energy, given that that’s where a lot of attention has been and is likely to be in the near future (for better or worse). Here’s what I would propose:

First, the United States should propose that APEC measure the hydrocarbon resources in the South China Sea in order to develop more realistic estimates.

Countries in the region are growing increasingly suspicious of unilateral efforts to survey oil and natural gas in contested territorial waters, in part because they may signal that the surveying country intends to develop those resources on its own – including in contested waters. For example, in May 2011, China severed the cables of an oil and natural gas survey vessel in Vietnam’s territorial waters. A similar incident in June 2011 involved a Chinese fishing boat ramming a Vietnamese survey ship. (Visit our Flashpoints feature for more information about these and other incidents.)Developing a common estimate of fossil fuel resources in the South China Sea would help reduce the tensions caused by unilateral surveying efforts. Moreover, if the estimates prove lower than many of that states expect – or indicate that exploiting the resources would be too costly – they may be less likely to aggressively pursue independent exploration. Since 1990, the Asia-Pacific Economic Cooperation (APEC) Energy Working Group has provided a forum for countries to address the region’s energy challenges, and it could lead the effort to develop common estimates. Even if China rejects cooperation through APEC, however, it would still be worth pursuing a multilateral estimate without China’s participation. Since any such estimate would likely be much lower than current Chinese estimates, the participating countries would have a common basis for contesting China’s claims, giving them greater diplomatic leverage. Moreover, given China’s penchant for engaging states bilaterally, developing a shared multilateral estimate would provide states common ground from which to negotiate with China even on a bilateral basis, thus magnifying their bargaining power that help promote broader regional interests.     

Second, the United States should aim to reduce the strategic importance of non-renewable resources in the South China Sea by keeping energy resources out of the geopolitical spotlight, and by helping states move away from petroleum as the dominant source of transportation fuels.

Specifically, the United States should encourage ASEAN to continue to address energy resources and other environmental issues at the working level, but – not at the ministerial level. High-level attention to these issues simply increases their strategic value, can harden bargaining positions and may push states to engage in risky behavior if they believe that not acting would cause them to lose face on the international stage. In contrast, working-level discussions enable productive discussions that can identify commons areas of agreement without the distractions and constraints of diplomatic fanfare. Moreover, discussing these issues only at the working level can help moderate potential domestic concerns, which would complicate international efforts to cooperate around important energy and other resource challenges in the South China Sea. 

The United States should also significantly increase cooperation with countries in the region on renewable energy resources in order to meet the world’s growing energy demands. Improving the availability of alternative energy sources that cost the same as or even less than the seabed energy resources will reduce competition for those resources. Military-to-military cooperation that includes fuel standards development and alternative fuel testing may provide a particularly good opportunity for the United States, as the U.S. military and other Asia-Pacific militaries continue to reduce their reliance on conventional fossil fuels. Indeed, given the U.S. military’s goals of reducing its dependence on petroleum and utilizing more sustainable liquid fuels, U.S. military aircraft and naval vessels in the region would benefit in the near- and long-term from access to foreign supplies of sustainable and compatible alternative liquid fuels.

Tune in tomorrow for my thoughts on how U.S. policymakers can promote cooperation around climate change.