OIL & WAR:A NEW DIMENSION TO INTERNATIONAL SECURITY

By Alain Lillie, Gabe Lowenkroan

Wars have been fought throughout the history of mankind. Some have pitted ideologies against each other, others have warred over boundaries, and some have been fought in the name of religion. As the world enters the new millennium, it is entirely possible, if not probable, that history's list for the most common causes for war will be expanded as nations battle for a vital natural resource: oil. It is certainly true that a valid argument can be made that countries have already battled for this natural resource. However, events such as the CIA led coup in 1953 to rid Iran of its prime minister who resisted western oil corporations in his nation or the Gulf War could pale in comparison to the battles waged when nations finally realize that oil is not an inexhaustible resource. The basic claim of this paper, then, is that oil could be an salient source of conflict in the modern international community. To defend such a claim, a three prong approach will be used. The first section will build the foundation for this argument by looking at the disturbing societal attitudes and misperceptions in the United States regarding the world's supply of oil. From there, the dangers of worldwide overpopulation and the industrialization of third world countries will be discussed. The third and final section will examine China's present oil situation and discuss how this situation could eventually lead to military conflict.

PART I

In 1973 and again in 1978, Americans responded to the call to lessen their dependence on natural resources, namely oil. The Arab oil embargo in 1973 demonstrated the power that the Organization of Petroleum Exporting Countries (OPEC) held in dictating oil production and pricing. As oil prices quadrupled, the pocketbooks of Americans were hit hard at the gas pumps. To mitigate the effects of the oil embargo and the recognized dangers of dependence on foreign oil, Americans began to car pool, they reduced their miles driven, and generally they rallied behind the concept of "Project Independence," an effort to end reliance on imported oil. The nation's policy makers responded as well. In 1975, Congress approved higher fuel efficiency standards and a national highway speed limit of 55 miles an hour. The war between Iran and Iraq in 1978 prolonged the oil crisis until the mid-eighties. In 1986, oil exporters flooded the market in response to OPEC's failure to meet its production quotas in the face of weak demand. In turn, oil prices plummeted, all but ending the conservation efforts and gains of the seventies and early eighties.

Americans have virtually forgotten about conserving energy, especially oil. Sure, car pooling continues, but now it is in response to commute time, not to a reduction of gasoline usage. Furthermore, car pooling seems to be a dying breed as well. This is best illustrated on any highway near a major metropolitan area. It is not uncommon to see vehicles in the car pool lane moving along swiftly while the single-driver automobiles in the other three lanes could best be described as stuck in a quagmire. From 1970 to 1995, annual mileage traveled per U.S. vehicle, perhaps due to the middle-class' massive migration to the suburbs, increased 16% to 13,000 miles per year. As for "Project Independence," when was the last time you heard, read, or viewed on television that it is imperative that all Americans reduce their oil based energy consumption? The policies enacted during the oil crisis period have also been all but eroded. In 1995, Congress repealed the national speed limit, thus allowing states to set speed limits as high as 75 miles per hour. And while the efficiency for U.S. autos has improved greatly (the average miles per gallon for new cars rose from 15.3 in 1975 to 24.9 in 1995), mpg has actually been falling since 1991.1 Moreover, a loophole in efficiency standards helped pave the way for the phenomenal popularity of gas-guzzling pickups and sport utility vehicles.

Of course, these new "family vehicles" would not have gained such extraordinary popularity if gasoline prices were not so low. A major factor for low oil prices is the perception that the world is seemingly gushing with oil. In response to the oil crises in the 1970s, conservation efforts, new technologies to extract greater amounts of oil from each field, and the conversion by industry to alternative fuels led oil production to exceed its demand, thus lowering the prices and creating the appearance of abundance. Unlike most politicians, consumers, and, of course, the oil industry, two highly respected oil geologists, Colin Campbe and Jean Laherrere, believe that this perception of plenty is not only incorrect, but dangerous as well. They concluded in a 1998 article that industry has already found about 90% of the crude oil in the world and that "conventional oil will begin to decline sooner than most people think, probably within ten years."2 While these alarming predictions have attracted their fair share of criticism, few in the scientific community disagree with the crux of the argument: the world's supply of natural crude oil is not inexhaustible.

Since most, if not all, geologists agree that it is only a matter of time before the world's supply of crude oil runs out, the United States must take bold new measures to reverse its increasing consumption of oil. One such measure is for the U.S to implement a substantial gas tax similar to those in Western Europe and Japan. France, for example, levies a tax of $2.84 per gallon to effectively curtail fuel consumptions The United States, in contrast, averages about a 38 cents per gallon tax. Certainly France's lower consumption rate can be attributed to its mass transit system, but nonetheless, France's petrol tax serves not only a bulwark against energy waste, but also as a reminder that oil is a vital resource that is exhaustible. The time has come for the United States to substantially raise the price of gasoline, thus forcing a shift from oil, and not just imported oil, to alternative energy resources.

In addition to significantly reducing the billions spent on imported oil, a significant gas tax, perhaps $2 per gallon, would fund the research and development necessary for the continued advances in developing affordable alternative energy sources. For example, the cost of ethanol fuel was reduced from $3.60 a gallon to $1.00 in a period of about fifteen years. Advances were also being made with other types of biofuels, solar, fuel cells, and nuclear sources of energy until the drastic cuts made by Congress in the 1980s. The development of new energy sources would also create new industries and jobs. According to Joseph Romm, a former Energy Department executive in charge of efficiency programs, contends that a revolution in energy made possible by nearly two decades of U.S. investment is on the verge of creating an international market with annual sales in excess of 800 billion.4 Also, with tax breaks and capital improvement incentives, these new industries could implement the gradual conversion to new fuel sources for such industries as aviation, trucking, and mass transit. The United States has always been a leader in technology, and must continue to use its scientific expertise in finding affordable alternative energy sources to direct the world, and especially developing nations, away from the disturbing trend of oil dependence. A gas tax, therefore, would provide the funding necessary for such advances. Of course, selling this new tax increase to the American public and corporate America will prove to be the ultimate challenge.

This challenge will be especially difficulty for several reasons. First, the promise of jobs depends on the new advances in alternative energy sources, and new these new advances depend on funding for research and development. In other words, the gas tax must first be approved before new jobs will appear, thus the probability that Americans will invest in "future" jobs is unlikely. Second, the proposed tax will face enormous political pressure from the oil companies, automakers, energy-intensive industries, and consumer groups. This point is best illustrated by President Clinton's "BTU tax." His proposed tax that would have significantly increased the prices on all fossil fuels; however, it met all the above mentioned opposition and was ultimately shelved. Third, while the gas tax has far reaching implications regarding the environment, economy, and national security, the initial outcry will be at the gas pumps. The love affair Americans have with the automobile is well documented. From 1970 to 1995, the total number of cars and trucks on U.S. roads skyrocketed from 108 to 200 million.5 Fourth, the middle-class will oppose the tax, arguing that the burden of progress will once again have been placed on its shoulders. And while the tax revenue could, in theory, be redistributed back to those in need, the initial effect of the tax would pose an immediate burden on the middle-class. Fifth, and perhaps the most difficult obstacle to overcome, is that Americans are inherently opposed to any tax hike whatsoever. Regardless of the daunting challenges facing such a tax, it is not a matter of whether such a tax will be imposed, but rather when. Contending that oil supplies will eventually tighten, Romm recently said: "Ten years of 15 years from now, people will be desperate to take action."6

PART II

While America's nonchalant attitude towards oil conservation is alarming, East Asia's projected industrial explosion and the energy required to sustain it is also cause for concern. This is not intended to place all the blame on one region; however, East Asia, and particularly China, serves as an excellent example to illustrate the energy concerns associated with the effects of a rapidly expanding population and continued industrialization growth. This region's population, notably China and India's, is the fastest growing, and, obviously, with population growth comes the expanded need for energy and resources. Many experts predict that worldwide population will increase anywhere between 9-12 billion by the year 2050, with China accounting for about 1.5 billion of this growth alone. With these population estimates in mind, a passage from University of California (Berkeley) Professor John P. Holden presented at the Symposium of Population and Scarcity in 1991 becomes particularly pertinent:

When energy is scarce or expensive, people can suffer material deprivation 'and economic hardship. When ii is obtained in ways that fail to minimize environmental and political costs, these too can threaten human well-being in fundamental and pervasive ways. The energy problem today combines many of these syndromes: much of the 'World's population has too little energy to meet basic human needs .... and the sociopolitical risks of energy supply (above all the danger of conflict over oil and the links between nuclear energy and nuclear weapons) are growing too.

With natural oil reserves expected to dwindle within 10 to 50 years, the critical question is where will the oil come from? Again, China's growth warrants concern. Michael May, a Professor of Engineering-Economic systems at Stanford University, projects that China's consumption "will range from 10 to 20 percent of the world total by mid-century."7 Further complicating China's energy policy is that the decision-making process is divided among various political and private groups with differing viewpoints. This is particularly important when decisions must be made on how China will handle the massive demand for oil that will come from its mushrooming population, increase of automobiles on its roads, and new factories needed to fuel its emerging industry. The projected increase of five to sevenfold of China's energy consumption during the next fifty years has led its decision makers to search for new sources of natural oil within its own boundaries. China's domestic oil supply is a matter of debate. May explains that the proven reserves in northeast China were much smaller than anticipated and production from these supplies is "peaking or has peaked."8 If indeed China's reserves are already tapped, or nearly tapped, it will have to continue its reliance on the more than ninety countries it currently imports petroleum products from. The danger with this, of course, is the stability and geography of these exporting oil countries.

If the world's oil supply is indeed limited, what measures will powerful nations go to secure their share? In all probably, once the most powerful nations realize that the world's oil reserves are rapidly diminishing, the competition for these scarce resources will intensify and lead to increased tensions between the states that have the much sought after resources within their geographical borders and those who do not. What makes this particularly troubling is that about half of the world's oil comes from within the borders nations in or around the Middle East, Central Asia, and the Caspian Sea. The problem with this concentration of the world's oil reserves is obvious: These regions have a long history of unrest and internal conflicts. The Middle East has had recent wars in Iran and Iraq; Central Asia has had nearby wars in Afghanistan and Pakistan; and, of course, these nations involved with these conflicts are all in close proximity of the Caspian Sea. For the world's largest powers to depend on such a volatile region for a crucial energy resource is a very dangerous policy. What happens if China's emerging industry is suddenly jolted by a sharp price in crude oil? What happens if China is wrong about the oil supplies it believes is within its boundaries? It is very difficult, if not impossible, to stop the machine of industrial prosperity once it begins. If China proceeds to rely on oil imports as its major source for energy, then its dependence on oil from these regions, just as is the case for the United States, will increase the likelihood of tensions building between an expanding industrial giant and a host of other countries. Unless China, as well as the rest of the world, realizes the dangers associated with oil dependence and a sense that it is inexhaustible, the likelihood of war increases.

PART III

This third and final section examines China as case study of the potential link between the need for oil and the threat of conflict. Specifically, it looks at the economic, financial and geopolitical implications of China's search for new oil reserves in the South China Sea and whether China's thirst for oil could become a source of potential Asian conflict in the 21st century. The basic argument of this section is that the need for oil is one important security variable that must be taken into account when evaluating the possibility of conflict within a region and throughout the world.

Much has been written about China's emergence as a potential energy power.' Yet, despite its large coal and oil reserves and its huge untapped potential for hydroelectricity, China became a net energy importer in 1990 when its primary energy production of 672 million tons of oil equivalent (mtoe) fell short of its consumption of 677 mtoe. Since 1993 China has been struggling to simply maintain its current level of oil production. With a rapid growing population and economy, however, maintenance of existing levels will be insufficient to meet the nation's energy needs. As a result, China has been targeting a great deal of offshore exploration in the South China Sea. As we shall see, it is this area of exploration that could stand as a potential source of conflict. In order to understand fully understand this danger, however, it is first necessary to further explore China's precarious energy situation.

CHINA'S CRUDE OIL PRODUCTION AND CONSUMPTION

China is on track to become further dependent on oil importation. This is due to a lack of new proven oil reserves, a shortage of funds for investment, and falling domestic productivity. To compound the problem domestic oil consumption has been rising at an annual rate of 8% between 1990 and 1993, while production has rising by an average annual rate of less than 1% during the same period." In 1994, 74% of China's crude oil output came from just three aging oil fields in the coastal areas of the north-east. The north-east offshore sector produced another 6%. In total, 80% of China's oil output originated from fields near the north-east, many of which have already peaked." Put simply, China is quickly sapping away its proven oil reserves. Faced with declining oil reserves China is under increasing pressure to find new reserves. "If present trends continue," Salameh warns,

China's shortfall will have risen to 2.06 million barrels per day by 2000."

Furthermore, while China sucks out much of its proven oil reserves, the country's demand for oil only increases. Salameh has identified a 1.42 oil/gross domestic product (GDP) coefficient for China over the last 20 years. Put simply, this ratio means that every 1% increase in China's GDP roughly produces a 1.42% increase in oil demand. China's fast growing population and economy, then, requires the state to secure more and more oil at a time when proven supplies of such oil are becoming more and more depleted. Indeed, the magnitude of this danger can not be over stated. In the absence of new reserves and drastically increased oil importation, an 8% annual growth rate would exhaust China's oil reserves in 20 years, while a 10% growth rate would exhaust them in 19 years."

As these figures suggest, if China's economic growth rate continues at its current pace (8-10%/year), it will become one of the world's largest oil importers after the US and Japan. This could have a tremendous impact on global oil supplies, somewhat similar to the impact that the rapid economic development of Japan and the newly industrialized countries has already had on the international oil markets. In 1979, political unrest in Iran led to the emergence of the Spot Market in Rotterdam. Panic buying of crude oil, especially by Japan, forced the price of oil $44/barrel. Despite currently low prices for oil, the global oil demand is poised to increase more than 1 million barrels/day (mbd) in the next 10 years (assuming the Asian economic crisis does not significantly worsen). With this increase in demand will come a significant increase in price. Aware of this looming situation China has undertaken to find new sources of oil so that it can head-off growing dependence on expensive and potentially undependable foreign oil.

THE PROBLEMATIC SEARCH FOR OIL ON THE TARIM BASIN

In its drive to find new oil reserves, China has been targeting its onshore exploration on the Tarim Basin, the largest of three Basins located in the Xinjiang autonomous region in the north-west corner of the country. As we will discuss below, China has focused its offshore exploration in the South China Sea. According to the Canadian Energy Institute the Tarim Basin is the largest under-explored oil basin in the world. Unfortunately, any oil there is covered by uncommonly harsh terrain. The Tarim is bordered on three sides by mountains. Shifting dunes, reaching 70 story’s high in some places, can entrap even sturdy desert trucks. When the winds pick up, the sand can bury equipment within minutes and reclaim paths that took days to clear. Trapped under these harsh realities, however, lie vast potential oil reserves estimated at 147bb, or six times China's current proven reserves!

Although production in the Tarim Basin now accounts for only a fraction of China's total oil output, its potential is obviously huge. And China desperately needs oil. For while coal provides 3/4ths of the nation's energy needs, the situation, as already discussed, is rapidly changing a the economy surges ahead a double-degit growth pace. As a result China has altered its policy in the Tarim and has begun to allow multinational oil companies to begin exploring the expensive region (the area's harsh conditions make the cost of exploration prohibitive). Chinese officials seem to realize that China can not develop the region fast enough by itself.

One problem, however, is capital. Since 1989 $1.lbn in bank loans has financed China's exploration in the Tarim. Interest payments alone total $104 million/year, not to mention new investments. Another problem is that China lacks the technology to explore and develop such a complex terrain. The wells are the deepest in the world. The geological formations are also very complex (faulted), creating hard-to-find pockets of oil. All of these factors combine to make the Basin very expensive to dig in - assuming that the oil can be found at all. Even with foreign assistance, then, China realizes that the Basin is not an adequate solution to the nation's sort term oil needs. As a result, China has also spent a great deal of time, money and energy investigating the offshore sites of the South China Sea.

THE SOUTH CHINA SEA

Currently, it is believed that the South China Sea contains on oil reserve approaching 8bb; not an insignificant amount, but far less than the 147bb hidden beneath the Tarim Basin. This total for the South China Sea, however, excludes the potentially rich areas that are implicitly defined as by China as part of its continental self jurisdiction, but that are not treated as such in the United Nations' Law of the Sea Treaty (November 1994). Other areas in the South China Sea claimed by China have also been excluded as a result of disputes over sea boundaries. Indeed, this disputes are of great concern to China.

While experts disagree about the size of the potential oil reserves in the disputed territories surrounding the Spratly archipelago in the South China Sea, China is confident of the existence of a very large reserve. It was reported by the China Geology Newspaper in May 1989 that surveys by the Chinese Ministry of Geology and Mineral Resources indicated the presence of an estimated 130bb in the region, or 5.5 times China current proven reserve." This compares with 112bb for Iraq, which is ranked second after Saudi Arabia in terms of proven reserves. Although this estimate has yet to be independently verified, it is not hard to see why China has begun to look with to the South China Sea with such hope.

So then, this is the position that China is in: It possess a very large and fast growing economy. This size and high growth rate requires a prodigious amount of oil. The country's proven oil reserves are insufficient to keep pace with this high rate of growth. The Chinese government has identified two areas that may be able to augment the nation's oil reserves. One of them, however, (the Tarim Basin) is still somewhat inaccessible due to the huge cost of drilling in its tough terrain. Unfortunately for China, the other major source of oil it has identified (the South China Sea) is outside of the nation's recognized international authority. The situation could be ripe for conflict.

CHINA'S ECONOMIC SUCCESS AND SECURITY POLICY

China's influence will grow over the next decade or two as its economic power continues to develop. According to Salameh, "some analysts project that, by 2008 China's economy could become the second largest in the world after the U.S."" Furthermore, China's economy could even surpass that of the US by 2103, although others do not believe that this could happen until 2020. All, however, seem to agree that China can sustain growth rates of 7-10% per annum, implying a doubling of its GNP growth every 7-10 years.

Indeed, there is little doubt that China's economic power will affect the other Asian nations and will bring about a remarkable shift in the international balance of power. There is no reason to believe that China is an exception to the historical rule of thumb that countries with powerful economies become political and militarily powerful as well. A positive link exists between China's economic success and its security policy. This has been demonstrated in recent years by China's enhanced capacity for projecting power in and throughout the South China Sea in pursuit of its territorial and maritime claims. Economic success has enhanced Beijing's ability to support a major build-up of its armed forces, in particular it Navy in the South China Sea.

The South China Sea holds a special place in China's strategic and economic thinking because of the prospect of discovering and exploiting valuable crude oil and natural gas resources, which could, in turn, make a major contribution to continuing economic development.

But economic success could also act as a powerful constraint on Chinese security policy. will and economically powerful China risk upsetting its neighbors in South-eat Asia over the South China Sea when it is trying to attract investment and secure markets? The answer to that question will be determined by the balance of power in post-Deng China and also by China's need for foreign investment and technology. China's thrust for oil means that the development of the oil sector will be given top priority over other energy sectors of the economy in investment plans. This will entail an estimated investment of more than $15bn in the Tarim Basin and the South China Sea. However, the size of this investment is so substantial that some observers doubt whether China could muster the necessary resources on its own.

ASIAN CONFLICT AHEAD?

Oil wealth beneath the South China Sea is fueling an expensive arms race in South-east Asia. Other conflicts, such as those between South and North Korea, or China and Taiwan, could also contribute. However, it is China's need for oil and its claim of sovereignty over the South China Sea that is a major cause for concern among the five other claimants of the Spratly Islands. The most potentially explosive conflict could be between Vietnam and China over the oil exploration concessions in the Spratly archipelago. Every nation touching the waters between Japan and the Strait of Malacca has either announced or begun a major weapons build-up, fearing that post-Cold War withdrawal of the US and collapsing Russia will bring long suppressed territorial and maritime claims to a boil.

China is spreading alarm by claiming the Spratly Islands for itself. named after a ninteenth-century British whaling captain and claimed in whole or in part by China, Taiwan, the Philippines, Vietnam, Malaysia and Brunei, the Spratlys, which consist of hundreds of barren shoals and sandbanks are spread over 181,300 sq meters far out in the South China Sea. Many of them are under water at high tide and even the largest of them are inhabited only by a small number of military personnel. The Spratlys are a valuable strategic prize not only because of their potential oil and gas deposits, but because they lie along major shipping lanes and fishing grounds.

In January 1995, the Chinese Navy built a cluster of huts on Mischief Reef, a Philippinies-claimed part of the Spratly island chain, allegedly to shelter errant Chinese fisherman. This marked the most southernly projection of a Chinese presence and the first seizure of territory claimed by a member of the Association of South-east Asian Nations (ASEAN). Southeast Asian nations with claims on the Spratly archipelago are thus nervous about China's move into the Spratly water. They fear that the 'fisherman huts' are makers not only of China's claim to possible future oil and gas deposits, but also of Beijing's ultimate goal of making the South China Sea a Chinese lake.

China says that its claims to the Spratlys are based on 'historical use' the fact that Chinese ships have for centuries plied the seas around the Spratlys and the Parcaels, a chain of islands further to the north. In the past few years, South-east Asian nations have watched with growing alarm as China has developed a potent navy with which to back up its somewhat weak claim.

Among the nation's most suspicious of China's intentions is Vietnam. When circumstances have permitted in the past, China has been willing to use force to advance its territorial and maritime interests in the South China Sea. Military force was first used in 1974 against Vietnam to seize the Paracel Islands, which Vietnam had claimed and partially occupied for years. China used force again in 1988 and 1991 to seize control of a total of 15 islands claimed by Vietnam in the Spratly archipelago. Honoi fears Beijing has sin-Lilar designs for the rest of the Spratlys. The Paracels are potential stepping stones to the Spratlys, which lie 560km to the south. In August 1993 the Japanese press reported that the Chinese have built an airfield on Woody Island in the Paracels group.

Vietnam occupies some 20 islands and reefs in the Spratlys, more than any of the other five claimants. It wants to protect the status quo until some final resolution can be reached through negotiations. It hopes to soon have added leverage against China: in July 1005 Vietnam became the seventh member of ASEAN, three of whose members (the Philippines, Malaysia and Brunei) also claim part of the islands. Like Hanoi, ASEAN is growing more suspicious of China's South China Sea intentions and Beijing's naval buildup. Vietnam maintains that the Paracels Islands and the Spratlys are Vietnamese territory. Barring a negotiated settlement in the Spratlys China may soon have what it considers its historical right.

The dispute over the Spratlys also threatens to embroil Indonesia, which has traditionally acted as a broker between rival claimants. Indonesia officials were mystified when certain Chinese maps featured a dotted line around the Spratlys, which encompass Indonesia's Natuna gas field.

What makes the dotted line particularly disturbing for Indonesia is that Pertamina, Indonesia's state oil company, and the US oil giant Exxon agreed to develop the Natuna field in a $35bn deal signed at the end of 1994, after 14 years of negotiations. The gas field is estimated to have reserves of about 1,274bn cubic meters, making it one of the world's largest.

Meanwhile, Pertamina is negotiating with various oil companies to dispose of 39% of its 50% stake in the Natuna gas field. While China's claims have not scared off any of the negotiating parties, which include the US company Mobil and Japan's Mitsubishi and Mitsui, concerns still remain. The hope is that China will clarify its claims before parties start to discuss financing the project.

Should China succeed in achieving sovereignty over the South China Sea it will be able to extend its jurisdiction right up to the territorial waters of the countries surrounding the sea. This will allow China to control the maritime heat of South-eat Asia. This prospect is disturbing not only for those states that dispute China's territorial and maritime jurisdiction, but also for other Asian powers such as Japan, India, Thailand and Indonesia. None of China's South-east Asian neighbors can begin to match China as an emerging naval power. At this point, no one can say for sure whether China's current attempts to expand its influence reflect aggressive intentions or are simply natural consequences of rising power.

For the time being, however, while not conceding any point of principle over sovereignty, China could adopt a long-term, two-pronged strategy of full engagement with its South-east Asian neighbors in pursuit of its economic interests and a creeping piecemeal acquisition of unoccupied territory in the South China Sea.

Still, the threat of conflict is real. China threw down the gauntlet, in a sense, on 25 February 199w when it passed a law asserting sovereignty over the Spralty, Paracel and Senkaku Islands and other specks in the South China Sea, and warned it would defend them. But Japan told China bluntly that the Senkaku Islands were Japanese territory. Since then, Malaysia and the Philippines, as well as Vietnam, have reinforced their troop strength on the Spratly archipelago.

The ASEAN claimants have pursued a policy of engaging China since 1990 to dukes international cooperation and joint development. China has adamantly refused to discuss its territorial but has indicated its willingness to consider joint exploration of resources. So far, however, there has been no such joint development and China and Vietnam are pressing ahead with oil exploration in these contested waters. Under these conditions the risk of military conflict is high: China has indicated that it will give naval protection to private exploration companies.

Consequently, China's thirst for oil joined with this mix of overlapping territorial disputes, the continued build-up of military forces in close proximity to each other and the history of China's use of force in the recent past against Vietnam could give rise to the use of force. Furthermore, bilateral disagreement between China and its South-east Asian neighbors, particularly Vietnam, could easily be used as an excuse for territorial disputes to escalate in this contested area.

CONCLUSION

Traditionally, when one thinks about the causes of international conflict oil is not the first thing to come to mind. Indeed, popular history has focused much more upon ideologies and religion than energy sources such as crude oil. As this discussion has attempted to show, however, this view is very incomplete. The rise of industrialism in the 20th century has made oil the life blood of modern life. As countries continue to grow and/or industrialize the need for oil only increases. Unhappily, though, the world's supply of oil is not limitless. Although the international price of oil is currently quite low, this situation will not last indefinitely. Most of the world's leading oil-using nation realize that they must look to a time when currently proven/cheaply-accessible oil reserves have been depleted. As a result, these nations must make plans to secure oil well into the future. Seizing such oil by force stands as one possible policy for the world's most industrialized ( and militarily powerful) nations. It is not yet possible to suggest with certainty that this route will be taken by any particular nation. It is, however, time to realize that oil security must be tracked as one important variable when analyzing sources of conflict. As our discussion of China and the South China Sea situation should make clear, oil insecurity can make difficult situations even more tense. This lesson has applications far beyond South-east Asia.