The demand for energy is growing in Asia. But the energy resources are limited and exploitation has consequences. The claims over contested territories are posing serious threat to security in a situation where there is no credible mechanism to resolve territorial claims and disputes.
In the absence of legitimate, credible and equitable structures to mediate disputes, any minor confrontation can go out of control given the high stakes involved.
A report by the U.S. Energy Information Administration (EIA) says the South China Sea has 11 billion barrels (BBL) of oil reserves and 190 trillion cubic feet (Tcf) of natural gas reserves.
The U.S. Geological Survey (USGS) analysed the potential for undiscovered conventional oil and gas fields within several geologic provinces of Southeast Asia in 2010 as part of its World Petroleum Resources Assessment Project.
The study included a significant area of the South China Sea, which the USGS estimates may contain anywhere between 5 and 22 billion barrels of oil and between 70 and 290 trillion cubic feet of gas in as-yet undiscovered resources (not including the Gulf of Thailand and other areas adjacent to the South China Sea).
Dispute over the South China Sea is cited as one of the most complex examples of maritime disputes. There are seven parties involved in the disputes over sovereignty of the islands, namely, Brunei, China, Indonesia, the Philippines, Malaysia, Taiwan and Vietnam.
Each party’s sovereignty claims overlap with those of at least two or three of the other countries making it an extremely complex dispute.
China cites 2,000 year-old legislation and history to justify its claim over the South China Sea islands; Vietnam claims rights to the Paracel and Spratly islands, as well as the western half of the South China Sea; the Philippines claims rights to the Spratly islands and the area surrounding them, Taiwan claims the Paracel islands; Brunei, Indonesia and Malaysia have overlapping Exclusive Economic Zones and claims to the continental shelf.
According to BP Statistical Review of World Energy 2015, China, which accounts for 19 percent of the world’s 7.3 billion people, accounted for 22.4 percent of the world energy consumption in 2013, compared with 17.8 percent in the USA, which has just 4.4 percent of the world population.
It also means that 40 percent of the world energy is consumed by just two countries.
China has begun to explore the potentials hidden beneath the South China Sea, giving task of exploration to China National Offshore Oil Corporation (CNOOC).
While Indonesia, Malaysia and Brunei commenced extraction in the region; the Philippines and Vietnam are also preparing to begin their own extraction operations.
One of the major issues confronting South China Sea is freedom of navigation especially between the United States and China over the right of U.S. military vessels to operate in China's two-hundred-mile Exclusive Economic Zone.
Imagine the crisis if the United States is drawn into a China-Philippines conflict because of its 1951 Mutual Defence Treaty with the Philippines.
The Treaty states that each party recognizes that an armed attack in the Pacific Area on either of the parties would be dangerous to its own peace and safety and declares that it would “act to meet the common dangers in accordance with its constitutional processes."
The risk of conflict in the South China Sea cannot be dismissed given the competing territorial and jurisdictional claims particularly over rights to exploit extensive reserves of oil and gas.