It's Not About the Oil -- It's About the Tiny Rocks

What everyone gets wrong about Beijing's bullying in the South China Sea.

As China jousts with Japan, Vietnam, the Philippines, and other neighbors over contested maritime territory, the conventional wisdom is that energy concerns are a motivating force. China claims virtually the entire South China Sea -- a claim disputed by its neighbors (most notably Vietnam and the Philippines) -- and there have been an increasing number of conflicts in recent years over who has the right to exploit the energy resources under the seabed in disputed waters. China's introduction of a deep-water drilling rig into contested waters around the Paracel Islands in the South China Sea -- an unprecedented effort by China to unilaterally move forward with energy development in these areas -- has reinforced the notion that energy is at the core of these disputes.

In reality, however, the pursuit of oil and gas in the East and South China seas is simply one manifestation of the more fundamental conflict over sovereignty in the region. China has a multipronged strategy to assert its dominance over the disputed maritime areas, including enhancing its military capability, research to show the historic basis for China's claims, and diplomacy to ensure that the Southeast Asian claimants do not unite against China. A tactic that China has been utilizing more recently has been to act as if China is the unquestioned sovereign in the contested areas, by doing what a country does in its own territory -- exploring for energy and building infrastructure. This is clear in the Aug. 4 comments by Yi Xianliang, deputy head of the Chinese Foreign Ministry's Boundary and Ocean Affairs departments regarding building activities in the South China Sea: "The Spratly Islands are China's intrinsic territory, and what China does or doesn't do is up to the Chinese government." In other words, China has sovereign control over the disputed territory -- and intends to exercise it.

Why isn't energy the key to the disputes? One regularly sees the words "vast" or "huge" applied to the hydrocarbon endowment of the South China Sea, and "resource-rich" has become a ubiquitous adjective when describing these waters. But the truth is, nobody knows: The contested areas around the Paracel and Spratly islands in the South China Sea have seen little exploration -- and without seismic soundings and experimental drilling, there is really no way of knowing how much oil and gas lies below the seafloor. That said, there's probably not all that much of it there. One of the most definitive sources of information on these topics is the U.S. Energy Information Agency's (EIA) 2013 report, entitled "Contested areas of the South China Sea likely have few conventional oil and gas resources." The EIA estimates that in disputed areas around the Spratly and Paracel islands, there is likely no oil and less than 100 billion cubic feet of gas -- a miniscule amount roughly equivalent to one week of China's gas consumption. The East China Sea -- where China and Japan spar over the Senkaku/Diaoyu islands -- is even more negligible in terms of hydrocarbons. The EIA estimates it contains 60 million to 100 million barrels of oil -- roughly two weeks of oil for China -- and between one and two TCF (trillion cubic feet) of natural gas, or about three to six months' worth of gas consumption in China.

As the world's largest energy importer, China should want the greatest possible development of global energy resources -- without worrying greatly about ownership. Because of the liquid nature of global energy markets, any additional molecule developed contributes to greater global supply and to lower prices, both of which directly benefit China as the world's largest energy consumer -- even if none of those molecules go to China.

In other words, if energy were truly Beijing's concern, its obstruction of other states' development of their oil and gas resources -- which prevents new supplies from coming online -- is self-defeating. Not to mention that it comes at the cost of alienating a number of Southeast Asian nations, which would otherwise be much more accommodating of China's rise in the region. Simply put, there are far easier ways to procure energy in the 21st century than occupying territory or starting conflicts with one's neighbors.

Beijing's territorial plays are not about energy security, either. One often reads -- in both Chinese and Western sources -- that China has unique energy security vulnerabilities that must shape its strategic thinking. This may come from mistaken analogies with other Asian "tigers" like Japan, Taiwan, or Singapore that instituted export-dependent industrialization in part because of their resource scarcity. Or it may come from reading too much into ex-president Hu Jintao's pronouncements in the mid-2000s that China faces a "Malacca dilemma." Because the majority of China's energy imports flow through the Malacca Strait, a narrow waterway between Indonesia and Malaysia, China is vulnerable to a crippling energy blockade -- or so the thinking goes.

But both of these are misleading. China is far from resource-poor: It has the world's fourth-largest oil production, the largest oil reserves in Asia, and probably the world's largest shale gas reserves. China's status as the world's largest oil importer stems not from a paucity of domestic resources but from the enormity of its domestic demand. Even so, China is still able to supply 90 percent of its overall energy needs.

Moreover, while nearly 80 percent of China's imported oil passes through the Malacca Strait, that amount represents only about half of its total oil consumption. And while the U.S. Navy could execute a blockade, that would have enormous consequences for U.S. allies in the Pacific, which are even more dependent on the Malacca Strait for energy. Further, because most oil is shipped by private fleets, which would refuse to go through the Pacific in the face of a U.S. blockade, this glancing blow to the Chinese economy would devastate the economies of Japan, South Korea, and Taiwan. In other words, if the United States were to attempt to blockade China's oil, it too would face its own "Malacca dilemma."

Any country that is a net importer of energy has some inherent energy security vulnerabilities, because it relies on global markets and sea-lanes it doesn't control. But China is in some ways much better off than other net importers -- both because it has a large domestic energy endowment and because it has methodically diversified its energy supply routes. Since 2006, China has signed major supply deals for overland pipeline oil and gas imports from Central Asia, Myanmar, and most recently, Russia, minimizing the disruption that can be caused by any one chokepoint.

Developing the resources of the South Sea or East China Sea would do virtually nothing to alter China's energy situation, particularly because China has been the main engine of energy demand growth and thus any new energy resource -- what the industry calls "incremental barrels" -- developed can be considered destined for China. In other words, China doesn't need to fight wars to secure its energy; it can simply purchase it from willing suppliers on the global market.

Maintaining that China's territorial disputes are about sovereignty rather than energy is a pessimistic view. If energy were the primary issue in China's territorial disputes, it would be easier for the claimant states to find win-win solutions. But China's energy exploration efforts are about demonstrating sovereignty and control, and not vice versa.

Energy resources are dividable and shareable; sovereignty is not. Viewing the South and East China Seas through the lens of sovereignty rather than energy makes these issues zero-sum and much more intractable; it also makes clear why efforts at joint development are likely to fail.

EPA/Vietnam Coast Guard


How to Fix It

Ending this war in Gaza begins with recognizing Hamas as a legitimate political actor.

Israelis and Palestinians are still burying their loved ones as Gaza's third war in six years continues. Since July 8, when this war began, more than 1,600 Palestinian and 65 Israeli lives have been sacrificed. Many in the world are heartbroken in the powerless certainty that more will die, that more are being killed every hour.

This tragedy results from the deliberate obstruction of a promising move toward peace in the region, when a reconciliation agreement among the Palestinian factions was announced in April. This was a major concession by Hamas, in opening Gaza to joint control under a technocratic government that did not include any Hamas members. The new government also pledged to adopt the three basic principles demanded by the Middle East Quartet comprised of the United Nations, the United States, the European Union, and Russia: nonviolence, recognition of Israel, and adherence to past agreements. Tragically, Israel rejected this opportunity for peace and has succeeded in preventing the new government's deployment in Gaza.

Two factors are necessary to make Palestinian unity possible. First, there must be at least a partial lifting of the 7-year-old sanctions and blockade that isolate the 1.8 million people in Gaza. There must also be an opportunity for the teachers, police, and welfare and health workers on the Hamas payroll to be paid. These necessary requirements for a human standard of living continue to be denied. Instead, Israel blocked Qatar's offer to provide funds to pay civil servants' salaries, and access to and from Gaza has been further tightened by Egypt and Israel.

There is no humane or legal justification for the way the Israeli Defense Forces are conducting this war. Israeli bombs, missiles, and artillery have pulverized large parts of Gaza, including thousands of homes, schools, and hospitals. More than 250,000 people have been displaced from their homes in Gaza. Hundreds of Palestinian noncombatants have been killed. Much of Gaza has lost access to water and electricity completely. This is a humanitarian catastrophe.

There is never an excuse for deliberate attacks on civilians in conflict. These are war crimes. This is true for both sides. Hamas's indiscriminate targeting of Israeli civilians is equally unacceptable. However, three Israeli civilians have been killed by Palestinian rockets, while an overwhelming majority of the 1,600 Palestinians killed have been civilians, including more than 330 children. The need for international judicial proceedings to investigate and end these violations of international law should be taken very seriously.

The U.N. Security Council should focus on what can be done to limit the potential use of force by both sides. It should vote for a resolution recognizing the inhumane conditions in Gaza and mandate an end to the siege. That resolution could also acknowledge the need for international monitors who can report on movements into and out of Gaza as well as cease-fire violations. It should then enshrine strict measures to prevent the smuggling of weapons into Gaza. Early discussions have already taken place. The Elders, an international group of elder statesmen of which we are a part, hope these discussions will continue and reach fruition.

At the Palestinians' request, the Swiss government is considering convening an international conference of the signatory states of the Geneva Conventions, which enshrine the humanitarian laws of warfare. This could pressure Israel and Hamas into observing their duties under international law to protect civilian populations. We sincerely hope all states -- especially those in the West, with the greatest power -- attend and live up to their obligations to uphold the Fourth Geneva Convention, which governs the treatment of populations in occupied territory.

Unity between Fatah and Hamas is currently stronger than it has been for many years. As Elders, we believe this is one of the most encouraging developments in recent years and welcome it warmly. This presents an opportunity for the Palestinian Authority to reassume control over Gaza -- an essential first step towards Israel and Egypt lifting the blockade.

The Palestinian Authority cannot manage the task of administering Gaza on its own. It will need the prompt return of the EU Border Assistance Mission, an international effort to help monitor border crossings that was launched in 2005 and suspended in 2007. EU High Representative Catherine Ashton has already offered to reinstate the program, covering not only Rafah but all of Gaza's crossings. Egypt and Israel would, in turn, cooperate with international monitors to be deployed in Gaza and along its borders, backed by a U.N. Security Council mandate to protect civilian populations. A valuable precedent for trust-building between Egypt and Israel is the international peacekeeping force operating in the Sinai, mandated by the peace treaty signed by the two countries in 1979.

The international community's initial goal should be the full restoration of the free movement of people and goods to and from Gaza through Israel, Egypt, and the sea. Concurrently, the United States and EU should recognize that Hamas is not just a military but also a political force. Hamas cannot be wished away, nor will it cooperate in its own demise. Only by recognizing its legitimacy as a political actor -- one that represents a substantial portion of the Palestinian people -- can the West begin to provide the right incentives for Hamas to lay down its weapons. Ever since the internationally monitored 2006 elections that brought Hamas to power in Palestine, the West's approach has manifestly contributed to the opposite result.

Ultimately, however, lasting peace depends on the creation of a Palestinian state next to Israel.

Leaders in Israel, Palestine, and the world's major powers should believe that policy changes are within reach that would move Israelis and Palestinians closer to a day when the skies over the Holy Land can forever fall silent.

Ahmed Hjazy/Pacific Press/LightRocket via Getty Images