January 30, 2014

WHAT LIES BENEATH: China Leads First Oil & Gas Exploration in South China Sea in Years.

Just how much oil and gas lies under the seafloor in the South China Sea is the subject of much debate. China’s National Offshore Oil Company guessed that the area has 125 billion barrels of oil and 500 trillion cubic feet of natural gas. The U.S. Geological Survey says the figure is much lower: between five and 22 billion barrels of oil and between 70 and 290 trillion cubic feet of gas. How much of that can be feasibly extracted is up for debate as well. Like most offshore oil projects, the South China Sea would make for difficult operations even without the territorial disputes.

This expedition should go a ways toward answering questions about what kinds of natural resources and business opportunities are really at stake in the South China Sea dispute. At the moment everyone is fighting over a few rocks that jut a few feet about sea level, the abundant schools of fish that swim in the waters around them, and the strategic nature of the Sea itself. Soon we will also know if there is oil and gas worth fighting over as well.

Related: India’s Struggling Military Gets Major Boost From Japan.

India intends to buy 15 ShinMaywa Industries amphibious aircraft at a cost of about $110 million each, Reuters reports. “The plane has a range of over 4,500 km (2,800 miles), which will give it reach far into Southeast Asia from the base where the aircraft are likely to be located, in the Andaman and Nicobar island chain that is near the western tip of Indonesia.” India established itself as the world’s biggest arms importer last year.

Building deeper military ties between India and Japan suits both countries. For Japan it helps the economy emerge from years of sluggish growth, and for Abe this deal is a landmark in his quest to revive Japan’s sense of regional strength. India and Japan are the two largest and most powerful of China’s rivals, and cooperating to balance the tiger in the room is a no-brainer.

I think it was safer for everybody when the Pacific was under a Pax Americana. Those days appear to have ended.