How to Neutralize Energy Competition in the South China Sea

This post originally appeared on the Choke Points blog at ConsumerEnergyReport.com on September 11, 2012.

During her visit to the Asia Pacific last week, Secretary of State Hillary Rodham Clinton spoke to the dispute over the South China Sea, arguably one of the region’s most intractable challenges that, left unmanaged, could uproot stability in East Asia. Those countries at the heart of the dispute — particularly China, Vietnam and the Philippines — need to “establish rules of the road and clear procedures for peacefully addressing disagreements,” Secretary Clinton urged.

High Stakes at Sea

The dispute is complex. States ringing the sea are becoming increasingly assertive in their claims, driven by concerns of nationalism, sovereignty, and even the need to stake claims to the region’s lucrative (but dwindling) fish stocks.  And then there are the potential petroleum resources. Estimates of the region’s energy potential ranges widely, according to the independent U.S. Energy Information Agency: U.S. estimates suggest the region could contain roughly 28 billion barrels of oil; while Chinese estimates are much more optimistic, projecting more than 200 billion barrels of oil beneath the sea.

Despite much uncertainty about the size of the region’s oil and natural gas resources, countries in the region are increasingly behaving as though access to those potential petroleum reserves is zero-sum — a winner take all and leave none for the loser approach — that is pitting countries against each other to tap into those resources first. Indeed, China, Vietnam and the Philippines are actively soliciting bids from petroleum companies to explore for oil and gas in contested waters, escalating tensions and reinforcing this zero-sum perspective. This continued competition is destabilizing and countries in the region need to take efforts to tilt the balance of behavior toward cooperation so that countries across the region can benefit from the sea’s potential resource wealth.

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