Q: How much are the Spratly Islands worth to China? A: At least $50 billion a year.

The naval cat and mouse games in the South China Sea are about to develop a more somber character as China moves its next chess piece into the Spratly Islands: the 31,000 ton Marine Oil 981, an oil drilling platform that is scheduled to begin prospecting for wells as soon as this summer.  According to a report in Xinhua, the wells may bring in $50 billion worth of oil per year when up and running.  The reason for China’s recent provocations now become clear. There is a lot of money at stake in the southern sea, as well as a key piece of the nation’s energy security.

Many battles and wars have been fought over access to oil. Think about the political effect on Japan when America decided to stop selling her oil in 1941. Or Hitler’s decision to strike into southern Russia, opening a two front war in order to gain access to oil fields in the Caspian region.  The prospect of running out of gas is scary enough to drive political enemies together in pursuit of risky and bellicose policies. It is a threat even the average man on the street,  American or Chinese, can understand. As Allen Greenspan pointed out, the Iraq war was largely about oil. Some Americans may have supported the war hoping it would keep gas prices low.

For China, oil closer to home means having to worry less about commitments to shaky regimes in Iran and Sudan: the wells in the South China Sea would play the roll the Gulf of Mexico wells play in the United State’s energy policy.  The only problem is that the fields Marine Oil 981 is drilling in are a heck of a lot closer to the Philippines than China.  The Philippines has no modern air force to speak of and only one ancient, dilapidated battleship.  Which leaves one wondering… who’s going to stop Ol’ Number 981?

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