Methane hydrates: China's real South China Sea goal?

Extracting methane hydrates is expensive, technologically-challenging and time-consuming. Developing the resource will require political stability. And that will require either alot of gunboats or a lot of diplomacy.

At present, however, China's saber rattling over its expansive, unilateral claim to virtually the entire South China Sea is now driving the Philippines and Vietnam closer to a bilateral strategic partnership, one that might later be expanded to include Japan.

At best, this will complicate any Chinese plans to unilaterally develop methane hydrates in disputed South China Sea waters. The reason is that doing so will almost certainly require a overwhelming show of Chinese maritime force to ensure security for its exploration and production efforts.

This will raise the political and economic costs involved in developing methane hydrates. At worst, it could lead to a 1964 Tonkin Gulf-type incident at sea that leads to war. China's unlikely to want that.

Far better would be for China to deploy its sophisticated technology backed by the deep pockets of its Asian Infrastructure Investment Bank to create 'partnerships' with the Philippines and Vietnam to develop these offshore resources.

Indeed, China has often held up the idea of 'joint development' in the South China Sea.

For years now, Philippines exploration company Philex has been negotiating with China over Reed Bank.

Separately, China and Vietnam have agreed to jointly explore for oil and gas together on either side of their mutually recognized maritime equidistance line separating North Vietnam from Hainan Island. Both sides also have paid lip service to the concept of joint development in the South China Sea.

Progress in this direction, however, has been hampered by increasingly strident statements by China of 'indisputable' claims to virtually the entire South China Sea.

One way for China to restore eroding trust this is causing among its South China Sea neighbors is to create Joint Development Areas for development of methane hydrates.

Joint Development Areas exist all over the world. Two exist in the Gulf of Thailand. They are commonly used by disputing nations to freeze disputes indefinitely over offshore areas while they jointly develop the resources within them.

The economic and political logic behind Joint Development Areas is that they postpone final decisions on disputed sovereignty until far in the future when the stakes are lower because the resources have been developed.