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How China's Successful Combustible Ice Extraction Will Affect South China Sea, Southeast Asia
Yicai Global
DATE:  Jun 26 2017
/ SOURCE:  Yicai
How China's Successful Combustible Ice Extraction Will Affect South China Sea, Southeast Asia How China's Successful Combustible Ice Extraction Will Affect South China Sea, Southeast Asia

(Yicai Global) June 26 -- The Ministry of Land and Resources' China Geological Survey has extracted natural gas from the combustible ice mineral reserve in the South China Sea, which is 1,266 meters below sea level, since May 10, 2017 in the country's first successful trial mining of combustible ice at sea. Combustible ice, which is also known as natural gas hydrate, is regarded as a new energy source and many hope it can replace coal and oil.

Continuous gas production took place for 31 days from May 10 to June 10, setting a record of one full month. The gas output of the trail extraction on the Shenhu Sea Area Platform has reached 210,000 cubic meters, and the average daily output was 6,800 cubic meters. The production process is currently smooth, the well bottom is in good condition, and 2.64 million pieces of data have been collect, laying a sound foundation for further work.  

This historical technological breakthrough will be instrumental in China's energy structure and safety, and the global energy supply setup. Its influence should not be underestimated.  

Combustible Ice Cooperation

The ASEAN claimants in the South China Sea mainly include Vietnam, the Philippines, Malaysia, Brunei and Indonesia, which use fossil fuels such as oil, natural gas and coal as their primary sources of energy utilization. Brunei, Indonesia and Malaysia are oil and gas resource exports and a large portion of their exports are energy related. Vietnam and the Philippines are energy-deficient and have a relatively scarce domestic energy resource supply and an urgent demand for energy resources for economic development. 

Energy resources are the lifeblood of economic development. For ASEAN claimants in the South China Sea, both the oil and gas exporters and those with energy deficiencies, the strategic value of energy resources for economic development and international competitiveness is self-evident. As traditional oil and gas resources will be exhausted by continuous development and utilization, it is imperative that alternative energy sources are sought out. It is estimated that the South China Sea has nearly 80 billion tons of combustible ice reserves. With such a huge amount of combustible ice resources, the ASEAN claimants will not be indifferent.

As mining the deep seabed's combustible ice is extremely difficult, mining technology research and development requires sizable investments, and the technical entry threshold is very high. In the future, combustible ice commercialization technology will probably be held by big powers such as China, Japan and the United States. ASEAN claimants that have weak industrial bases and invested limited amounts in combustible ice mining R&D will cooperate with powerful countries that possess mature combustible ice resource mining technology to harness combustible ice resources in the South China Sea. 

So far, China has become the first country capable of carrying out test exploitation in its sea areas and achieving continuous and stable gas production. China's trials marked the world's first secure and controllable exploitation of the sandstone-type natural gas hydrate that accounts for over 90 percent of global combustible ice resources and is the most difficult to exploit. 

After China's commercialized exploitation model of combustible ice is mature, the new energy resource can be used as a substitute for traditional oil and gas resources. China's technological superiority will contribute to the willingness of South China Sea claimants in ASEAN to exploit combustible ice resources in the sea area by cooperating with China. 

Those that rely on oil and gas resources such as Brunei, Indonesia and Malaysia will look to alternative energy sources as new drivers for their economies. Countries suffering from a shortage of oil and gas resources such as Vietnam and the Philippines will look to use alternative energy and change their traditional energy exploitation patterns.

China's head start in the commercialized exploitation of combustible ice will become an opportunity for energy cooperation in the South China Sea. Provided China keeps its leading position in commercialized combustible ice exploitation technologies and develops exclusive technologies, the country will be better equipped to prevent major countries from outside the region from interfering.

China's leading position will also help it spot common interests with sovereignty claimants for the South China Sea in ASEAN during their dispute. If concerned parties work together to make use of combustible ice resources in the area, they will mutually benefit and achieve win-win results. This could ease tension in the South China Sea, and the parties could jointly maintain peace and stability in the area. 

Maintain Leading Position 

In the future, major countries will compete more fiercely to make combustible ice exploitation technologies. The leader in mastering commercialized combustible ice exploitation technologies will be the frontrunner in the combustible ice revolution. Whether China can cooperate with South China Sea claimants in ASEAN to make use of local combustible ice resources and maintain stability in the area depends on if it can maintain its leading global position in commercialized exploitation technologies. 

So far, China's exploitation technology is still being tested, and technological improvement and experience will be required before extensive commercialized exploitation can take place. 

Firstly, China should establish the position of combustible ice as a key breakthrough in China's national energy strategy, give priority to the creation of a medium- and long-term plan for combustible ice development, and expand investment of investors and personnel in exploration and development of combustible ice. 

China should stick to the strategic plan of exploring and developing combustible ice resources both in the sea and on land, strengthen international exchanges and cooperation in exploration technologies, step up combustible ice production tests at sea and on land, and gain experience while promoting commercial development technologies.

By summarizing test knowledge, it is expected that production test technology will be optimized, advanced experience from developed countries will be absorbed, and technical standards and systems that match the resource features of China will be established and improved. China should set up key national laboratories, engineering technical centers and other innovation platforms to improve its R&D and innovation ability in the exploration and development of combustible ice and in deep sea technology. 

Secondly, China should vigorously defend its ocean energy resource rights and interests and expand international cooperation to boost combustible ice exploration and development. The ocean contains vast strategic energy resources that play an increasingly critical role in safeguarding China's energy supply security. Thus, China should firmly resist ocean resource invasions from other countries, and defend its sovereignty and interests. 

At the same time, China should rely on its technological advantages in the exploration and development of combustible ice and enhance resource development cooperation with surrounding countries and those along the Belt and Road to benefit countries endowed with combustible ice reserves and contribute to the energy transition of surrounding countries and around the globe. 

The combustible ice reserves at the pelitic siltstone reservoir are widely distributed across countries along the Maritime Silk Road. China's advanced development technologies in this respect can be applied in these areas, which will help resolve energy problems in countries along the route and promote the integrated economic development of those countries. 

China's technological strengths should be fully leveraged so it can collaborate with ASEAN countries to mine combustible ice in disputed waters of the South China Sea. The "dual-track approach" principle and the Declaration on The Conduct of Parties in the South China Sea should be upheld to jointly make use of the rich ocean energy in the South China Sea, relieving tension and safeguarding peace and stability in the region. 

Information from China-ASEAN Research Institute, Sohu Business, Sina and Southcn.com summarized by Gan Quan.

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Keywords:   BELT AND ROAD,Southeast Asia,South China Sea,Combustible Ice,Alternative Energy