Report

When Is a Rock Not a Rock?

A small court in The Hague wrestles with an existential question that could put a stop to China's maritime power grab.

A diplomatic standoff between China and the Philippines that flared up two years ago in a dispute over fishing rights at a tiny shoal in the South China Sea is coming to a head after Manila decided to ignore Chinese threats and sue Beijing in an international tribunal.

The legal case marks the first time that an arbitration panel will examine China's contentious, and oft-disputed, claims to most of the South China Sea, one of the world's busiest byways for shipping and a potentially rich source of oil and natural gas.

The suit itself, a gargantuan, 4,000 page "memorial" filed before the Permanent Court of Arbitration in The Hague, amounts to what is basically an existential question about rocks. Or rather, it's about the Philippines' desire for scores of specks in the South China Sea to be officially classified by the international panel as rocks, rather than islands. On such arcane definitions can hang the fate of nations -- or in this case, the extension of economic rights of states to the seas and seabed off their coasts.

Simply put, islands are land, which entitle their owners to enjoy exclusive economic rights for 200 nautical miles in all directions, including rights to fishing and energy extraction. Rocks aren't, and don't.

If the tribunal rules against the Philippine claim, then the stakes in the battle for those specks of land would be much higher: whichever side eventually has its claims to the specks recognized by international law would be able to lay claim to vast areas potentially rich in resources. If Beijing loses the case, it will have to choose whether to abide by an international court or ignore its ruling and claim those seas anyway.

"What kind of great power will China be? Are they willing to play by the rules of the game or overthrow the system?" said Ely Ratner, deputy director of the Asia-Pacific Security Program at the Center for a New American Security, a think tank. "As much as there ever is, this is a clear-cut test of their willingness to bind themselves to rules that may end up not being in their favor."

It hasn't started well. China has refused to participate in the international arbitration, and has several times admonished Manila for what it calls "unilateralism" and "provocation." Beijing summoned the Philippine ambassador Monday for a tongue-lashing, two days after Chinese coast guard vessels tried unsuccessfully to block a Philippine resupply run to another disputed shoal.

Much of the world is watching. The United States has expressed support for the Philippines' effort to seek arbitration under international laws governing the use of the sea; Japan, embroiled in its own volatile territorial dispute with China over the Senkaku Islands in the East China Sea, has also publicly backed Manila. But other countries in Southeast Asia who have their own territorial disputes with China have stayed quiet so far. Meanwhile, big oil companies are watching the legal showdown to see if it helps establish clarity that could make it easier to explore for oil and gas in a region that could have plenty of both.

The case is meant as a frontal challenge to China's infamous "Nine-dashed line," Beijing's vague but threatening effort to lay claim to nearly the entirety of the South China Sea to the detriment of neighbors including the Philippines, Vietnam, and Malaysia. Beijing inherited that map, and its ambitious claims, from the Nationalist government it defeated in the Chinese civil war in the 1940s. The expansive map has even become a fixture inside new Chinese passports.

Many scholars, though, think that China's claims are essentially bunk. The Law of the Sea Convention, which China signed and ratified, abolished the idea of historical claims as a way to determine maritime rights. Not surprisingly, Paul Reichler, the Washington lawyer who helped craft Manila's lawsuit, agrees. China, he says bluntly, "is violating international law and the [Law of Sea] Convention."

The suit doesn't seek to determine who actually owns the disputed specks of land, which include, fittingly enough, Mischief Reef. Instead, the issue is who owns the waters around them. Manila argues that the waters between its shores and the specks belong to the Philippines, because they are inside the 200-mile exclusive economic zone every country has. China says those waters belong to it.  

The suit has enraged Beijing, with the Chinese foreign ministry this week vowing that the Philippines will "face consequences" for making its legal case. While China refuses to take part in the arbitration -- which won't stop the process -- it has fired off a volley of arguments in recent days, the most detailed of which came from the Chinese embassy in Manila. In a nutshell, China says that it has the right to defend its own territory, and any disputes should be settled in a bilateral fashion, rather than through international arbitration.

"No matter how the Philippine memorial is packaged, the direct cause of the disputes between China and the Philippines is the latter's illegal occupation of some of China's islands and reefs in the South China Sea," Zhang Hua, the embassy spokesman, said in a posting on its website. "The Chinese side is steadfast in defending its territorial sovereignty and maritime interests and rights. The Philippines' plot is doomed to fail."

The standoff is sparking fresh fears of an armed conflict in the region. In recent years, China has ruffled feathers throughout Southeast Asia by pressing what many see as excessive territorial claims, and beefing up its civilian and military forces to back up its aggressive diplomacy.

"China was winning all its neighbors over to China's peaceful rise, and they have completely unraveled that in the region. Now, there are very few countries in the region who are not somewhere on the wary to skeptical to outright scared part of the spectrum," said Holly Morrow, an Asia expert at Harvard University's Belfer Center.

Particularly acute have been the naval tensions between China's muscular civilian patrol vessels and the overmatched coast guards of neighboring states. U.S. navy ships, including a guided missile destroyer, have also recently had close calls with Chinese vessels in the South China Sea. Experts worry that the lawsuit will prompt Beijing to take an even more aggressive stance in a bid to cow Manila.

"The rhetoric is becoming more shrill, and it's designed to dial up the pressure on the Philippines. In my mind, it's to threaten the use of force to change the dynamics in the negotiations" between the two sides, said Peter Dutton, the director of the China Maritime Studies Institute at the U.S. Naval War College.

Manila's quest for legal satisfaction in The Hague is an uphill struggle. The arbitration panel can't impose a settlement, and relies on the acquiescence of both parties to implement any ruling; China has made clear it will not cooperate. But in the court of public opinion, a Philippine victory sometime next year would make it much easier for Manila and Southeast Asian nations to push back against what they see as Chinese encroachment.

"The Philippines and other regional states would gain a strong public relations edge," making it easier for beleaguered countries in the region push back against Beijing, said Caitlyn Antrim, an expert on the Law of the Sea at the Stimson Center. Given China's interests in ensuring free navigation in more distant waters such as the Indian and Arctic oceans, the case may force it to rethink its strategy, she said.

"At some point China will have to choose either to fight for regional control, or global freedom of the seas."

Jay Directo - AFP - Getty

Report

The White House's Faulty Math on Gas Exports

The U.S. will soon be an energy exporter. But administration officials are overselling that potential.

The Obama administration has a simple message for European countries fearful that Russia might use its energy might as a weapon: Don't worry, because the United States can export as much natural gas in a day as the entire continent uses every 24 hours. It's a comforting message for allies wondering whether to alienate Moscow by backing Ukraine's fragile government. Unfortunately, it's also wrong.

The confusion began with President Obama. On March 26, after a meeting with European leaders, the president said that future overseas sales of American natural gas could reduce Europe's dependence on fickle energy suppliers like Russia.

"The United States is blessed with some additional energy sources that have been developed in part because of new technologies, and we've already licensed, authorized the export of as much natural gas each day as Europe uses each day," Obama said.

Secretary of State John Kerry made a similar claim in Brussels on Wednesday after a summit with European Union officials that was specifically dedicated to energy issues.

"Our new capacities as a gas producer and the approval of seven export licenses is going to help supply gas to global markets, and we look forward to doing that starting in 2015. And we will supply more gas than all of Europe consumes today," he said.

Neither statement, as expressed, is correct. For the moment, the U.S. is a net importer  of natural gas, which means America consumes more gas than it produces. Down the road, the U.S. will produce enough natural gas to begin selling significant amounts to foreign countries. That could meet some of Europe's gas demand, but not all of it.

Math is always fun, so here are the numbers in question. In 2013, the 28 countries of the European Union consumed about 44.7 billion cubic feet per day. In 2013, Europe imported about 4.6 billion cubic feet per day of liquefied natural gas aboard massive tankers, which is the way U.S. firms would send natural gas to the continent. They get the remaining 38.7 billion cubic feet per day from other sources, including local production and by pipelines.

To be sure, American overseas sales will soon start to grow somewhat significantly. The Department of Energy has approved seven natural gas terminals in recent years which can export a total of about 9.2 billion cubic feet per day. The department is considering whether to sign off on the construction of 30 other plants which would allow American firms to theoretically export nearly 27 billion cubic feet per day more to the EU's member nations. In practice, many of those terminals will never be built, and much of that gas will likely be sold to customers in Asian countries in any event.

All of that is to say that Obama's statement that Washington has already authorized the export of " as much natural gas each day as Europe uses each day" is incorrect. Asian countries have already signed long-term contracts to buy future American gas. That means it would literally be impossible for all of the future overseas sales that Obama is talking about to go to Europe.

To give the White House the benefit of the doubt, many energy experts initially puzzled by the president's remarks speculate that he may have meant to make a different, more nuanced point. They point out that future U.S. exports could provide more gas than Europe currently imports by tanker each day. The key words there are "by tanker." European consumers would still be consuming much more energy than U.S. firms would be selling. Spokespeople for the White House and State Department didn't respond to requests for comment.

Making the issue even more confusing is comparing future U.S. exports with current European consumption. Most U.S. export terminals won't be operational until later in the decade, by which time European liquefied natural gas imports are expected to have risen from their lowest level in a decade as the continent races to reduce its dependence on Russia. That would make the difference between what Europe consumes, even from tanker imports, and what America exports even larger.

Kerry added to the confusion this week when he said that the United States will "supply" more gas than Europe consumes, which is also not correct. It was not clear if he was referring only to the seven approved terminals, or the other 30 that have requested approval. But even if every single molecule of that gas went to Europe the U.S. would still be unable to meet the continent's energy needs.

One administration official, speaking on condition of anonymity, said that Kerry's remarks were meant to compare future U.S. gas exports to current European liquefied natural gas imports, and that that is the message he will stress in future speeches.

Elisabetta Villa - Getty