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The Next Big Energy Standoff Will Happen Here

The Next Big Energy Standoff Will Happen Here thumbnail South China Sea

The Association of Southeast Asian Nations (ASEAN) and China have agreed on a so-called single  working text to continue negotiations for a Code of Conduct (COC) in the disputed South China Sea.

“I am pleased to announce yet another milestone in the COC process,” said Vivian Balakrishnan on Thursday, Singapore’s foreign minister, who is hosting the meeting of regional leaders.

They have also agreed on the “key modalities” for future rounds of negotiations, he said in opening remarks at the ASEAN-China Ministerial Meeting, one of several related meetings held alongside the ASEAN Foreign Ministers’ Meeting in Singapore this week.

Balakrishnan said that the single draft negotiating text will be the basis for future COC negotiations and a living document, which means it will be continually edited and updated as needed. He added that ASEAN and China settled on the negotiating text in June when both sides held talks in Changsha in China’s Hunan province

Both sides hailed the development and said that COC negotiations will accelerate.

Premature celebration

However, any celebrations that this is a major breakthrough should be carefully examined. ASEAN members have been trying to persuade China for several years to agree to a COC, which merely sets force non-enforceable rules on how each party should conduct itself in the South China Sea.

As far back as July 2012, China said it was open to launching negotiators over the COC. However, the same year China seized and took possession of Scarborough Shoal, which clearly lies within the Philippines’ (an ASEAN member) UN-mandated 200-nautical mile exclusive economic zone (EEZ).

Since 2012, China has mostly waffled at agreeing to a COC, as it continued to develop installations on reefs and islets in the South China Sea, including putting in place military assets, in an obvious attempt to militarize and control the area. The South China Sea includes shipping lanes that send vital crude oil, liquefied natural gas (LNG) and other goods to Japan, South Korea and Taiwan.

The fact that China, the master at delaying tactics, has agreed to a working text on a COC after several years of artificial island building is disingenuous at best. Moreover, a formal and completed COC is still likely many years away, allowing China even more time to continue its building in the area.

China’s South China Sea actions has also set Beijing and Washington on a potential collision course as the US navy continues to send what it calls “freedom of navigation voyages” near China’s disputed claims. Angst over China’s moves have also caused the US, Japan, India and Australia to work together to find ways to challenge Beijing’s South China Sea assertions. However, at the end of the day, occasional naval voyages pale in comparison to actual infrastructure and military assets already in place.

Going forward, it appears that China will remain unchecked in its claim to 90 percent of the South China Sea, referred to as its nine-dash line, at the dismay of rival claimants in the body of water: Vietnam, the Philippines, Taiwan, Brunei and Malaysia.


Despite diplomatic efforts by ASEAN over Beijing’s South China Sea buildup, several ASEAN members seem to be taking a different approach by strengthening their coastguards as a way to maintain a presence in the region without risking direct military engagement.

The Australian Strategic Policy Institute (ASPI) said in a report published on Wednesday that in an effort to stop maritime encounters, with China or each other, escalating into military conflicts, countries with claims to the disputed waterway have been transferring security forces from their navies to their coastguards. “The coastguards have become important strategic cushions between navies in ASEAN,” it said.

The primary reason for nations increasing their coastal forces has been “China’s aggressive maritime strategy,” including the construction of military outposts and distant fishing activities in other countries’ exclusive economic zones, the report said.


The use of civilian and coast guard maritime vessels however is already used to great effect by China. Often instead of sending its regular navy, officially called the People’s Liberation Army Navy, China sends its maritime defense vessels or coast guard to do its bidding.

Of the 45 major incidents reported in the South China Sea between 2010 and 2016, 32 involved at least one China Coast Guard or other Chinese maritime law enforcement vessel, the ASPI report added.

Concurrently, China is continually building up its so-called Blue Ocean navy. Peter Jennings, the ASPI director, and a former head of strategy for the Australian Defense Department, said in mid_July that China’s navy could challenge the supremacy of the U.S. Navy in the region within a year.

Oil and gas lurks in background

Oil and gas reserves set the backdrop for this ongoing and potentially explosive geopolitical quagmire. One Chinese estimate places potential oil resources in the South China Sea as high as 213 billion barrels, though many Western analysts have repeatedly claimed that this estimate seems extremely high. A conservative 1993/1994 US Geological Survey (USGS) report estimated the sum total of discovered reserves and undiscovered resources in the offshore basins of the South China Sea at 28 billion barrels – yet, this estimate, for its part, seems particularly low.

Moreover, the 1993/1994 USGS estimate states that natural gas is actually more abundant in the area than oil. According to the USGS, about 60 percent-70 percent of the area’s hydrocarbon resources are gas while the sum total of discovered reserves and undiscovered resources in the offshore basins of the South China Sea is estimated at 266 trillion cubic feet (tcf).

State-owned oil major China National Offshore Oil Company (CNOOC), responsible for most of China’s offshore oil and gas production, claims that the area holds around 125 billion barrels of oil and 500 tcf of gas in undiscovered areas, although the figures have not been confirmed by independent studies.

By Tim Daiss for


3 Comments on "The Next Big Energy Standoff Will Happen Here"

  1. makati1 on Thu, 9th Aug 2018 6:22 pm 

    If America and their poodle, Australia, would keep their war mongering noses out of the SCS, there would be no “trouble”. Duterte is negotiating an agreement with China to share exploration and recovery of resources, not fight over them. That is the best deal for ALL of the countries surrounding the SCS as only China has the re$ource$ to do so. Better to share than lose all. Stay home, America!

  2. makati1 on Thu, 9th Aug 2018 11:25 pm 

    “Chinese President Xi Jinping to visit Philippines as relations between two sides warm”

    “Foreign Secretary Alan Peter Cayetano said also that Philippine President Rodrigo Duterte had approved a proposal to form a group to study plans for the two countries to conduct a joint exploration in the disputed South China Sea….

    Relations between China and the Philippines soured when Duterte’s predecessor Benigno Aquino took their dispute over the South China Sea to an international tribunal in The Hague, which ruled against Beijing.

    But Duterte has since tried to mend ties, while China has pledged to boost investment in the Philippines and donated military equipment such as guns and patrol boats.”

    ““Joint exploration requires political trust,” he said. “Now is the best time to do it, with the smooth progress over the negotiations for a code of conduct for the South China Sea.””

    Movin’ on up…

  3. MASTERMIND on Thu, 9th Aug 2018 11:33 pm 


    China is on the brink of collapse…nothing can stop it now..And they are fucked when the oil shortage hits..No oil for slant eyes..

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