Energy Drives Asian Military Confrontation

China's Ministry of Defense on November 30th at 10 AM local time began enforcing an expanded Air Defense Identification Zone, which now covers a huge off-shore expanse that includes the disputed oil-rich Diaoyu/ Senkaku Islands in the East China Sea. Forced to rely the Middle East oil for electrical production, Asian energy costs are surging and supply has become unstable due to continuing Arab Spring turmoil. With American domestic energy costs falling as supplies surge due to the boom in fracking for shale oil and gas, Chinese manufacturers are becoming economically uncompetitive on a cost basis compared to the U.S. producers. With China, Japan, Taiwan, and South Korea equally desperate to save jobs by exploiting potentially cheap and abundant off-shore oil, energy economics will drive military confrontations in Asia. The Chinese claim the discovery and control of the Diaoyu Islands from the 14th Century, but Japan took control of the islands from 1895 until its surrender to the...(Read Full Article)

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