Listening in

Last Wednesday, local time, I attended an informal talk given by former defense analysts of the Australian opposition, the Labor Party. It included a former Minister of Defense. The subject was whether the current Howard government was focusing on the correct strategic threats. The message of the defense analysts was that Howard was missing the point.

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The principle argument advanced was that China, not any conflict against terrorism in the Middle East, was the key strategic challenge facing Australia. The speakers then went on to catalogue the ominous signs. China was modernizing its military; active in espionage; spreading subversion throughout the Pacific. It was quietly suggested that recent unrest in the Southwest Pacific was caused by the "Chinese corruption and bribery" of politics in certain islands. And one of China's goals -- for which it could not be blamed -- was to improve the terms under which it could buy key minerals from Australia. Visions of Australia being turned into a Chinese sweatshop momentarily dangled before the audience.

And here was Howard, one of the speakers added, with an apparent pang of sincere dismay momentarily crossing his distinguished features, frittering away Australia's efforts on quixotic adventures in the Middle East. What was needed was to turn the focus closer to home. That provided the cue for some other speakers, responding to questions, to advance their other key thesis. China was in the ascent; the US was in relative decline vis-a-vis China in the Pacific; and therefore an enlightened Labor government should recognize the danger of a conflict between these two giant powers before it materialized by providing a moderating influence. By shaping the contours of the impending clash and ensuring conflict was confined to diplomatic and economic competition.

The former Defense Minister believed that the likeliest flashpoint lay in Taiwan. China, he claimed, was embarked on a relentless campaign to de-legitimize Taiwan. He was witness to diplomatic battles where Taiwan struggled furiously -- but ultimately in vain -- to retain recognition. In one place after the other, Chinese money and diplomatic power pushed Taiwan out of the community of states and into the shadows. And the time would come, or likely come, when China might make a play for Taiwan itself. That would be disaster, the former Defense Minister said, because contrary to popular opinion, the US Navy would probably be massacred in the littoral waters of the Taiwan Strait. Chinese diesel subs held all the advantages in the confined waters, which negated the speed and depth advantages of nuclear SSNs. Australia (and Japan he added) would be called on to save the US Navy. 'Our conventional subs are quieter than the Chinese conventional subs,' he added, 'and because we cannot refuse to help our allies in need we will regrettably be drawn into a struggle not of our making.'

It was a virtuoso performance, all the more impressive because the arguments advanced were fundamentally wrong. Or rather they were mixtures of right and wrong that ultimately led to flawed conclusions. The key to understanding why events in the Middle East and Central Asia are not irrelevant to Australia's security needs lies in this graph of Chinese oil imports.

The Energy Information Administration describes China's growing overseas network of oil sources (emphasis mine):

With China's expectation of growing future dependence on oil imports, the country has been acquiring interests in exploration and production abroad. CNPC has acquired exploration and production interests in 21 countries spanning four continents. During 2005, CNPC announced its intentions to invest a further $18 billion in foreign oil and gas assets between 2005 and 2020. In Sudan, CNPC has invested more than $8 billion in the country’s oil sector, including investments in a 900-mile pipeline to the Red Sea. In October 2005, CNPC finalized the purchase of PetroKazakhstan, whose assets include 11 oil fields and licenses to seven exploration blocks. In December 2005, this purchase was complemented by the completion of the 600-mile Sino-Kazakh oil pipeline that will deliver 200,000 bbl/d of crude oil to China by the end of 2006. In 2005, some of CNPC’s other overseas investments included purchasing Encana’s oil and gas assets in Ecuador and PetroCanada’s oil and gas assets in Syria.

Sinopec has also looked overseas for oil exploration and production opportunities. In June 2006, Sinopec acquired a 97 percent stake in Udmurtneft, a mid-sized unit of BP’s Russia vehicle TNK-BP, for $3.5 billion. Udmurtneft produces 120,000 bbl/d of crude oil and holds 1 billion barrels of proven reserves in Russia. In October 2004 Sinopec signed a Memorandum of Understanding (MOU) with the Iranian government to acquire a 51 percent stake in the large Yadavaran oil field, which industry reports suggest could produce 300,000 bbl/d. Both China and Iran are still considering the possible $70 billion deal, which would reportedly also include a commitment by China to import liquefied natural gas (LNG) from Iran. Sinopec has also acquired a 40 percent stake in Synenco Energy’s $4.5 billion Northern Lights oil sands project in Canada. The company expects the project to produce a total of 100,000 bbl/d of synthetic crude oil in 2010 when commercial operations are scheduled to begin.

CNOOC is also working to expand its international oil production and exploration assets. In August 2005, CNOOC withdrew its $18.5 billion bid to acquire Unocal after facing scrutiny from U.S. politicians. In 2005, CNOOC purchased Repsol-YPF’s oil field interests in Indonesia, making CNOOC the largest operator in the offshore Indonesian oil sector. In January 2006, CNOOC acquired a 45 percent stake in an oil and gas field in the Niger Delta for $2.3 billion. CNOOC has also reached smaller deals for exploration and development rights in Equatorial Guinea and Kenya, among other countries.

Japan and Korea have a strategic energy context similar to China. It is very clear that the Middle East and Central Asia, far from being irrelevant to the stability of the Pacific Rim, actually constitute its heart. The Labor defense analysts seem to miss the fact that while Australia is a regional power, China is a global power. Australia cannot hope to counter Chinese efforts to undercut Australian mineral prices; nor can it hope to manage the principle security threats to Asian stability without the help of its allies in Japan, Europe and most of all, the USA.

China's energy imports bear directly on the problem of the Taiwan Straits and should have changed the way the Labor defense analysts regarded it. Here is a map of the straits and its environs. Practically all the relevant tanker traffic from the Persian Gulf comes up around India, through the Malay barrier, past Luzon into two vital Chinese ports. Hong Kong is 432 nautical miles southwest of Taiwan and Shanghai a mere 364 nm to the northeast. Much of the traffic to China, Japan and Korea has to pass near Taiwan, and through the Straits.

Here's what the Hoover Institute has to say about China's efforts to secure its oil juggular:

China’s increasing reliance on foreign oil imported from unstable regions over huge dis­tances via sea lanes that are difficult to control has had a notable impact on its military planning. According to some Western experts, Beijing is intent on expanding its naval capacity well beyond what is required to protect its coasts and the Straits of Taiwan. In support of this view they point to the sizable submarine fleet Beijing has built up as well as its efforts to conclude agreements on the use of port facilities along the tanker routes in the South China Sea and in Myanmar, Bangladesh, and Pakistan. Such moves could cause friction if China fails to seek cooperation with other Asian countries with similar con­cerns and above all the United States, on which, at least until the second half of the century, the security of the world’s sea lanes will depend.

It should be self-evident that any Chinese efforts to turn the Taiwan Straits into a war zone would have the not inconsiderable side effect of blockading China itself -- and probably Japan and South Korea into the bargain. Until it can find ways to supply itself by overland pipeline from Central Asia, which may never be feasible because much of its industry lies on the coast, any invasion of Taiwan would not only require the protection of an invasion fleet from antishipping weapons as it lay deployed off the Taiwan Coast, but it would require protecting the Chinese ports from minelaying and protecting tanker traffic along the long route from the Persian Gulf.

This really goes to the heart of the for Labor defense minister's fallacious argument that US SSNs will be annihilated underwater dogfighting Chinese diesel subs in the Taiwan Straits. In any Taiwan invasion scenario, the idea will not be to keep the Taiwan Strait open. It will be to keep it closed. Why ever should they be dogfighting the Chinese diesel subs in the Strait? All the USN must do to gain superiority over the Chinese Navy achieve is mine their naval bases or destroy their fueling facilities. The diesel subs will then be on a one-way mission of limited endurance only while the US SSNs can sit out there forever. Moreover, what is known about US intentions to fight in the littoral abundantly suggests that it regards Unmanned Undersea Vehicles as the key warfighting tool in confined waters. America will fight standoff. For example, the newest Virginia Class of SSNs has this fitout: 38 weapons, including: Vertical Launch System Tomahawk Cruise Missiles, Mk 48 ADCAP Heavyweight Torpedoes, Advanced Mobile Mines, Unmanned Undersea Vehicles. All except the Mk 48 ADCAPs have a standoff mission. They are not going to dogfight the Chinese diesel subs. What they might aim for is described in this MILNET article. "Our scenario is fiction now, but in short order could become reality. It is just one of the missions under concept development by the Navy."

Imagine a remote operator aboard the U.S.S. Hawaii, a Virginia class nuclear attack sub. The operator has been tasked by the Undersea Warfare Officer to "put a tail on bogie 3". The bogie is an Iranian guided missile submarine which could, at any time, surface and attack shipping in the Persian Gulf. The sub, a Russian hand-me-down, is quiet and stealthy to an incredible degree, and a product of Soviet under water stealth technology, built a long time before Glasnost. The chances of Iran having built this on their own are nil. However, and regardless of the anger it might raise in a few cold war soldiers, the Iranians picked this beauty up for a song and now they patrol the Gulf with jealous zeal.

The operator obeys the order and the VLS launch crew, at his behest, moves a Mark II Track and Trail UUV into the receiving tray and then the tray moves the giant 10 ton device into the opening of number four VLS tube. Once sealed inside, water is pumped in, while a steam bubble is set up. At the operator's press of the launch button, the device is jetted out into the sea with hardly a burp, indistinguishable from a groan and whistle from a whale.

The whale sound aside, there is little anyone can use to distinguish that the Hawaii has put a miracle of science into the water. The UUV now streams away from the Hawaii on a course that should intercept the track of bogie 1. Shortly the UUV goes into autonomous mode, the distance and speed differential increasing as the Hawaii turns away from its target, and heads back to its normal patrol route.

Meanwhile the UUV on auto, picks up the telltale signature of the Iranian sub and begins to track. At certain points in its effort, a small buoy is released and once the signaling device nears the surface, a satellite message is squirted up to a COMs satellite watching the region. The message is relayed to the VLF array along the Pacific Coast of the USA or perhaps to similar site on some Pacific Island. The message gets back to the Hawaii within a few minutes, informing the operator that his "toy", designated tracker 1, is on the trail of the Iranian boat. Info includes speed, heading, and perhaps the last three changes in each. And of course GPS coordinates of the last buoy set free. The buoy, by the way, actually never reaches the surface, perhaps only an antenna hitting the surface for the few seconds of data burst, and then the buoy floods and heads to the bottom of the sea.

This is a critical mission for the toy. It helps the sub monitor a contact, without compromising the patrol mission of the sub, and with little risk of detection or confrontation with the eager to kill Iranian boat. Meanwhile, Hawaii might catch a whiff of another submarine lurking along the busy oil tanker routes in and out of the gulf.

This is one reason why new US (and British) SSNs are so volumetrically large. They need the space to host these Unmanned and Remotely Operated Underwater Vehicles. And space is something in very short supply aboard the "superior" conventional submarines.

The most perceptive question at the Labor defense analyst's talk came from a man I learned was a business intelligence analyst, specializing in data mining applications. "Instead of dealing with these Black Swan scenarios, like the invasion of Taiwan, shouldn't we be preparing for the much more likely problem of what to do if China experiences political or economic instability?" he said. And this goes to the heart of the problem. China's prosperity is now dependent on its participation in the Global Economy, a contraption which evolved like the Internet, and whose de facto system administrator, like the Internet, is the United States. Australia's involvement in the Middle East and Central Asia, far from being irrelevant, is an instance of the key strategic problem facing Australia. How to keep the world system going; how to create new methods and institutions for dealing with instability that threatens to wreck the principle source of energy not only for the world, but for China. One might even be tempted to say that the key diplomatic challenge of Australia is to help find ways to put the system administration of the Global Economy on a broader footing than mere reliance on the United States in an era where the United Nations has become irrelevant to the problem. The challenges of regional security are intimately linked to the problems of global security. We are one world in much more than the superficial sense. I came away from the talk last Wednesday thinking that I had listened to a group of well-meaning, intelligent and experienced men who mistakenly thought that John Howard had missed a key strategic point when they had missed it themselves. That's not to say that John Howard has successfully addressed these challenges, but he understands the right direction to go.

If Australia is to escape being turned into a satellite orbiting around the neighborhood giants of China, Japan and India its key resource lies in leveraging its alliances. And not, as one Labor defense analyst imagined, to serve as the cushion to prevent America from being drawn into yet another foolish adventure from which they must be protected from themselves.