WASHINGTON — International disputes over offshore resources are on the rise. From the Arctic to the Falkland Islands and the Eastern Mediterranean, quarrels over access rights for fish, minerals, oil, and natural gas are becoming increasingly heated and potentially violent, as detailed in the Transatlantic Academy’s recent report, The Global Resource Nexus . By far the most dangerous case concerns the South and East China Seas. This large maritime region straddles important sea lanes and is host to several overlapping territorial claims. Some disagreements date back to the end of the Cold War, others as far back as World War II. Not only do these seas harbor substantial fish stocks and provide passage for some 30 percent of the world’s seaborne trade, they are also believed to host significant hydrocarbon resources. As a nexus point for international trade, energy supplies, and big power politics, the China Seas represent a glaring example of an offshore resource dispute that the transatlantic community cannot afford to ignore.

Several recent incidents in the South and East China Seas suggest cause for concern. While disputes between China and the Philippines over the Spratly Islands, the Scarborough Shoal, and the Macclesfield Bank date back decades, tensions markedly increased in the late 2000s as oil prices rose. The latest encounter at the Scarborough Shoal resulted from the attempt by a Philippine patrol vessel to arrest Chinese fishermen just 220 kilometers off the Philippine island of Luzon. In September 2010, two Chinese fishing boats allegedly rammed a Japanese coastguard vessel. December 2011 saw the death of a South Korean coast guard captain at the hands of Chinese fishermen. And in March 2012, China arrested two Vietnamese fishing boats near the Paracel Islands. In a further assertion of China’s rights last week, the China National Offshore Oil Corporation (CNOOC) started drilling its first deep-water oil exploration well in the South China Sea, 320 kilometers southeast of Hong Kong.

While the triggers for many of these clashes were fishermen who most likely had little knowledge of or respect for international maritime law, the speed and manner of escalation is reflective of long-standing tensions between the coastal states in the region. Unlike many other offshore boundary disputes, these disagreements about boundaries are fundamental, deriving from China’s claim of historic rights over large areas of the China Seas. The provisions of the United Nations Convention on the Law of the Sea (UNCLOS) that address the demarcation of Exclusive Economic Zones appear to be unacceptable to China. As the largest and most powerful country in the region, China believes it has both the right and the clout to have its way. Its behavior in these seas over the last few years also reflects bureaucratic tensions between institutions that wish to secure their own private interests and foreign ministry officials who wish to present China as a responsible international citizen.

Irrespective of who in China is responsible, the net result is that other littoral states are strengthening their own maritime forces and going to considerable lengths to ensure that the U.S. military remains engaged in East Asia. Recent statements by the U.S. government, including its intention to establish a new base in Darwin, Australia, suggest U.S. maritime power will continue to be a dominant presence in the region. The danger is that if China eventually decides to impose its will on the China Seas, it will have the economic leverage and military assets to back up its rhetoric, although that day has fortunately not yet come. And although the European Union emphasizes the need for the peaceful resolution of these disputes on the basis of international law, particularly UNCLOS, the United States cannot take this approach as it has not ratified this convention.

The apparent clarification by a government official in February that China does not claim sovereignty over the entire South China Sea provides an opportunity for the transatlantic community to persuade China to submit its claims to UNCLOS in order to resolve these disputes peacefully. A useful first step, however, would be for the U.S. Senate to ratify UNCLOS. Only then could the transatlantic community act together to bring China to this multilateral forum.

Geoffrey Kemp and Philip Andrews-Speed are Senior Fellows with the Transatlantic Academy in Washington, DC.

WASHINGTON– Political realities facing the leaders of the United States and Iran mean that military confrontation between the two states is a distinct possibility. In late December, the Iranian armed forces conducted a number of war games — which included the live firing of missiles — in the Straits of Hormuz and adjacent waters of the Persian Gulf and the Gulf of Oman. When the aircraft carrier USS John Stennis sailed for a routine repositioning from the Gulf to the North Arabian Sea, Iran told the United States not to return it to the Persian Gulf region. The commander of Iran’s army, General Ataollah Salehi, later reiterated that “The Islamic Republic will not repeat its warning.”

On January 6, three armed patrol boats of the Iranian Revolutionary Guard Corps came within several hundred yards of a U.S. amphibious assault ship, the USS New Orleans. This is precisely the sort of cat-and-mouse games at sea that can lead to serious miscalculations and subsequent escalation. Many Americans will recall that in 1964 a military encounter between North Vietnamese torpedo boats and the USS Maddox resulted in a pitched sea battle, which was enough to persuade the U.S. Congress to pass the Gulf of Tonkin Resolution that gave President Lyndon Johnson authority to begin the massive escalation in Southeast Asia.

In addition to military brinksmanship, covert military action against Iran’s nuclear establishment appears to be increasing. On January 11, the Iranians announced that one of their nuclear scientists had been assassinated in Tehran. They blamed both the United States and Israel though they offered no explicit proof. Some Iranians have publicly called for retaliatory killings. Assassinations and reprisals have long been an important driver in the paths to war. Remember the attempted assassination in London of Israel’s ambassador to the United Kingdom, Shlomo Argov on June 3, 1982? This attack was attributed to the Palestinian Liberation Organization and provided the pretext for Israel’s invasion of Lebanon three days later.

Why might Iran be willing to risk confrontation with the United States at this time? It faces draconian new international sanctions, led by the United States, and if the EU agrees to ban imports of Iranian oil at the end of January, its financial situation will further deteriorate. Its currency is in freefall and the business community appears to be in a state of panic. Even Iran’s great friend China is cutting back on oil purchases. The regime in Tehran also faces the possibility that its closest Middle East ally, Syria, is edging towards civil war and there is a chance that the Bashar al-Assad regime could eventually be ousted. This would radically change the balance of power in the region and undermine other Iranian allies, especially Hezbollah. While Iran has signaled a willingness to return to Turkey for nuclear talks, it has simultaneously blamed the United States for attacks on its people and financial system.

The Obama administration, meanwhile, is being savaged by Republican opponents for appearing weak on Iran, despite warnings that any interference with international traffic through the Straits of Hormuz “will not be tolerated.” When U.S. Secretary of State Hillary Clinton condemned the killing of the Iranian scientist and stated that Washington had played no role in his killing, former Senator and current presidential candidate Rick Santorum stated bluntly that the condemnation was a mistake. Santorum, along with fellow presidential candidates Newt Gingrich and Mitt Romney, have all taken a much harder line on Iran than the White House and, along with Israel’s most right-wing supporters in the United States, are goading the administration to be tougher on Iran, even to the point of launching a military strike against its nuclear facilities.

Given the fragility of the U.S. economy, which seems just on the cusp of recovery, the Obama administration does not want a war with Iran. But the president cannot control or predict Iranian behavior. A truly provocative act by Iran — such as the sinking of a U.S. warship — would force Obama’s hand, especially in an election year, but he must nevertheless resist the temptation to attack Iran’s nuclear facilities. This could only be justified if Iran had provided unambiguous evidence that it was determined to develop a nuclear weapon. Under these circumstances, international support for war would likely be forthcoming.

Geoffrey Kemp is a Senior Fellow with the Transatlantic Academy at the German Marshall Fund of the United States in Washington DC.

Image by the United States Department of Defense.

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WASHINGTON—Slowly but surely, climate change is opening up the Arctic. Greenland’s glaciers and ice fields are melting, sea ice around the North Pole is decreasing each year, and the huge permafrost areas of Russia and Canada are beginning to thaw. This has led to widespread speculation of a Great Game-style scramble for the region’s abundant resources. Many studies, including those by the private sector and the U.S. Geological Survey, confirm that there are vast treasure-troves of oil, gas, and minerals in the Arctic. Yet, with the exception of iron ore in Greenland, these resources have not yet been exploited. In fact, despite rising temperatures, the impediments to extracting and transporting most resources from the Arctic will remain formidable for the foreseeable future.

One factor facing developers is that, despite global warming, the Arctic remains largely inhospitable, and there are innumerable obstacles to cashing in on its riches. Oil rigs require airstrips, roads, electricity generation, and pipelines; mining operations require port facilities and technology to withstand the bitterest winters; and all resource extraction requires a specialized labor force. For the private sector to develop any part of the Arctic, enormous investments of capital and labor would be necessary.

While there is a possibility that the Arctic seaways – running through Canada and along the northern Russian coast – will become open to transportation for most of the year, large container ships are unlikely to use these routes. The Arctic will remain a dangerous trade route for commercial shipping, and neither Canadian nor Russian authorities can offer much in the way of support and rescue facilities in the event of emergencies along their northern borders. The dangers are further evidenced by recent investments in traditional sea routes and facilities, such as the Panama Canal. By contrast, the port of Reykjavik in Iceland, which would be ideally positioned to serve as a future hub for northern sea routes, has seen no such investment.

In the long run, permafrost thawing may prove to be the greatest obstacle to Arctic developers. It has made the construction of roadways and airfields much more difficult, and in some cases has caused extractive projects to be abandoned. This process has already caused enormous problems in Russia, where large cities such as Yakutsk and several large river ports, pipelines, conventional hydro electricity plants, and even a nuclear power station lie in permafrost areas. Yakutsk in particular has seen severe damage to its infrastructure and the closure of a runway of its airport as a result of the land below melting.

Despite these continuing challenges to development, there is no question that, for better or worse, relations between the countries of the region are gradually changing. One view of the Arctic’s future stability is that governance of the region is evolving peacefully and will likely continue to do so. An Arctic Council was established in 1996, building on the momentum of a 1987 speech by Soviet leader Mikhail Gorbachev calling for the Arctic to be a “zone of peace.” The Council, which includes not only the five Arctic Ocean countries – Russia, the United States, Canada, Denmark, and Norway – but also Finland, Iceland, and Sweden, has reached agreements that advance cooperation on oil spills and drilling disasters. Most geographical boundaries in the region have also now been agreed upon, with questions about the international status of the Canadian Northwest Passages marking the rare exception.

A second view is that growing nationalism over the Arctic and its resources, particularly in Canada and Russia, paints a far bleaker picture. The current Canadian Prime Minister, Stephen Harper, has asserted Canada’s rights in the region, with some critics labeling him a “purveyor of polar peril.” Meanwhile, the Russians have made dramatic and provocative gestures, such as sending a submarine to the North Pole to plant a Russian flag on the seabed. With mutual suspicions on the rise, Russia, Canada, and Norway are all investing in maritime reconnaissance and long-range strike capabilities. And for the first time, Canada is building Arctic-capable offshore patrol vessels.

But despite such saber rattling, it is still premature to describe the competition over resources and northern sea routes as a race for the Arctic. There are encouraging signs of cooperation and wise, if limited, development of resources. However this is a region where isolated incidents can quickly turn nasty. Moreover climate change and permafrost thawing are already changing the game on the ground, and there is little reason to hope that any of these processes can be reversed in the near future. While there may be little real cause for competition over remote and costly Arctic resources, there is always the chance that the purveyors of polar peril might yet have their way in the end.

Geoffrey Kemp and Tim Boersma are fellows and Nicholas Siegel is program officer at the Transatlantic Academy in Washington DC. 

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WASHINGTON—Both President George W. Bush and President Barack Obama have tried hard to prevent Iran from developing and deploying nuclear weapons. The preferred strategy for achieving this objective has been to work closely with key European allies and to put pressure on Russia and China to support tough UN sanctions against the Iranian regime, all in order to get Teheran to come clean about its nuclear activities. The latest report from the International Atomic Energy Agency makes it clear that it has evidence Iran has made considerable progress in pursuing a nuclear weapons program that would allow Teheran to put warheads on surface-to-surface missiles. But both Russia and China have rejected calls for tougher sanctions.

For this reason there has been a growing debate in Israel and the United States about using force as a last resort to stop the program, or at least to set it back several years. Several of the top Republican contenders to challenge President Obama in 2012 — most notably former Massachusetts Governor Mitt Romney and former Speaker of the House Newt Gingrich — are on record as supporting the use of force if more vigorous sanctions are ineffective in changing Iranian behavior. They argue that the Obama administration has failed to slow down Iranian nuclear developments and, if elected, they would pursue a much more aggressive policy.

The very public debate in Israel is unique in that it pits former senior military and intelligence officers who explicitly reject the use of force against the prime minister, Benjamin Netanyahu, and his minister of defense, Ehud Barak, who are both more open to an Israeli preemptive attack.

Yet a use of force would have many downsides. Not the least of them is that there is no certainty it would be successful, given the dispersal, redundancy, and hardening of Iran’s numerous nuclear facilities. Furthermore, any pre-emptive attack would probably require targeting those Iranian air and naval assets that pose a threat to U.S. or Israeli air and maritime forces. Iran has many ways in which it can retaliate against what it would regard as an act of war. It could attack U.S. forces in Iraq and Afghanistan. Its proxies, such as Hezbollah in Lebanon, could fire thousands of rockets and missiles against Israeli cities.

Perhaps the strongest argument against the use of force concerns the impact a new war in the Gulf would have on oil markets. Following any attack, the price of oil would spike to new highs, rising to perhaps $150 or even $200 a barrel. The fear would be that Iran might, in retaliation, target Arab oil producers and try to disrupt tanker traffic through the Straits of Hormuz. The longer the war, the more uncertainty there would be in the markets and the more protracted would be the price rise. Coming at a time when the world economy is still suffering from the 2008 crisis and the current crisis in the euro zone, such price rises could plunge the world into a new recession or even depression.

There are ways to limit the long-term impact of oil disruptions in the Gulf, but these would not happen immediately, and, to be effective, close cooperation among all major producers and consumers of petroleum would be required. Unless there is some international consensus that war with Iran was necessary, such cooperation will not happen. At this time, indeed, there is almost universal rejection of the use of force, with the exception of Israel and possibly the key Arab Gulf countries, including Saudi Arabia, who fear an Iranian bomb, though they would prefer to be associated with a U.S. rather than an Israeli attack. Russia, China, France, and Germany have spoken out against military action. And even the overstretched U.S. military establishment appears to harbor no wish to engage in yet another war with a Muslim state. Most experts who talk to Iranian opposition leaders, especially those in the Green Movement, believe that an attack on Iran would strengthen an unpopular regime, not weaken it.

It can be safely predicted that the upcoming election season in the United States will include an acrimonious debate about Iran policy, and how the administration is handling relations with Israel. The Obama administration will support greater military cooperation with Israel while pushing strongly for tougher sanctions against Iran’s financial institutions. But it will resist pressures to contemplate the military option absent a major provocation by Iran.

Geoffrey Kemp is a Fellow of the Transatlantic Academy and Director of Regional Security Programs at the Center for the National Interest.

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