Wednesday, April 4, 2012

China's Jugular Vein: Straits of Malacca and Oil

     In recent years there has been much talk about the strength of the Chinese economy, and wethere or not the U.S. could win a war versus China. However, what is not usually discussed in China's energy situation. China as of 2010, China consumed 9 billion barrels of oil per day (bbl/d), of which 4.8 billion barrels were imported, roughly 53%. In comparison the U.S. the consumed 19.2 bbl/d in 2010, of which 10.2 billion barrels were imported (53%). These numbers show that China is heavily dependent on foreign oil, and if that oil could not reach China, their economy would grind to a halt.
     Most of China's oil passes through the Strait of Malacca, and or the Lombok Strait. The Strait of Malacca is the body of water between Singapore, and Indonesia, and is 3km wide at it's widest. The Sraait carried 13.6  million bbl/d in 2009 to Asian markets (South Korea, Japan, China, Taiwan, etc). The Lombok Strait is only used by ships too large to pass through the Strait of Malacca, and is not draft limited. If the Straits of Malacca and the Lombok Strait were to be closed, say by quickstrike mines and a few 688 SSNs, things would get very hairy for the Chinese due to the fact that they have no meaningful strategic oil reserves. However, the problem arises as to what happens to the oil supply of U.S. allies Japan, South Korea, Taiwan, and the Philippines.

     
The other oil choke point for China is her refineries, without which crude oil is just a flammable black liquid. Most of China's refineries are located on the coast, around Shanghai and to the north. If these refineries are hit by a cruise missile strike it would destroy China's ability to produce refined oil products such as jet fuel, gasoline, along with diesel and petroleum-based lubricants.
      The Spratley Islands. China has laid claim to the entire South China Sea, even going as far as to question an Indian Navy ship what it was doing in the area. China desperately needs needs new oil reserves, as all their current fields have reached maturity, and with oil consumption rising they need new oil fields to satiate their demand for oil. The Spratley Islands are sitting on top of an estimated 213 billion barrels of oil and 5 trillion cubic feet of natural gas. China wants this oil, as do Vietnam, Malaysia, Borneo, the Philippines, and Taiwan. We cannot allow China to take control of the South China Sea region, this is why the U.S. has been selling the Philippines several old Coast Guard cutters, and is among other reasons why most countries on South China Sea are building up their navy. 
     Finally, strategic oil reserves. If China's oil supply were cut, they would automatically switch over to the oil in storage. However, China only has about storage for 270 million barrels of crude oil, plus 300 million barrels is commercial storage, assuming these facilities were filled to capacity. The Chinese government also plans to establish a stockpile of 80 million barrels of refined petroleum products. This would not pose a problem to destroying the Chinese economy and military as these are fixed targets, and could be destroyed by cruise missiles like the refineries.
     This idea is primarily meant to cripple the ability of the Chinese military to function with economic effects being a side benefit. I might add that electricity production would be relatively unaffected by this, as most of it is produced by coal and natural gas. Still, the Chinese Navy would be unable to sail a great deal, and the  Air Force would be for the most part grounded for a lack of gas. And there is a historical precedent for, back in WWII the U.S. Navy specifically targeted Japanese tankers, thereby denying the IJN and IJAF of gas.


Charts from the U.S. Energy Information Administration 

     

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