Using regional tension to generate progress

As oil and gas flowed from the JDAs, they could be connected through the pipeline infrastructure to downstream markets. Access to the pipelines would subsequently be offered to new players bidding on new JDAs.

This would spur a virtuous circle of upstream investment encouraged by downstream access. Over time, high-capacity, high-voltage power lines could be laid alongside the pipeline network. So could fiber optics cable.

The resulting multi-dimensional network would increase efficiency across the board through enabling 'fuel switching' based upon changing relative prices. The result outcome would be an accelerated energy market 'discovery process' leading to expanded production of the most competitve, lowest priced energy.

In coming years, 'Asia' (defined here as China, Japan, South Korea, the ASEAN states, East Timor, Papua-New Guinea and Austraila) needs tens of trillions of dollars of infrastructure, the bulk of that for energy.

Meanwhile, recent exploration has revealed massive oil and gas potential in the South China Sea. China now claims virtually the whole area through its nine-dotted line ambit-claim. This has spurred 'me-too' ambit claims by Vietnam and the Philippines. These now all overlap.

The big risk now is a 1964 Gulf of Tonkin type incident that leads to a hot-headed shooting match at sea that drags Asia towards war. No one wants that.

JDAs solve that problem.

Under the United Nations Convention on the Law of the Sea, resolution of territorial claims can be set aside indefinitely while claimants cooperate to develop resources in the disputed areas.

JDAs have a long and proven history in the Arctic, West Africa and the Middle East.

In the Gulf of Thailand, Malaysia has had separate JDAs in place with Thailand and Vietnam since 1971. In 2008, China and Japan agreed to negotiate a JDA in disputed areas of the East China Sea. Philippine President Benigno Aquino also has publicly supported JDAs.

Elements of the ideas above already exist.

For instance, fiber optic cables already traverse this route. Furthermore, an offshore natural gas pipeline route similar to this was proposed in 2001. It was called 'Asian Gas Grid.' Portions of it have since been included in the Association of Southeast Asian Nations' (ASEAN) proposed Trans-ASEAN Gas Pipeline.