Taiwan Expects Rare Break in Dry Search for Natural Gas

Taiwan claims the ocean from its south shore clear down to Singapore, but so do the more powerful China, the more assertive Vietnam and strong U.S. ally the Philippines. Unlike these rival claimants to the South China Sea, Taiwan has not cast under the ocean floor for an estimated 213 billion barrels of oil and 20 trillion cubic feet of natural gas. Taiwan is diplomatically isolated and can't afford to clash with neighbors.

But an unlikely ally has come along to help Taiwan, an increasingly impatient net importer of energy, in its normally dry search for natural gas. It's Germany. And the two sides have found resource potential in part of the sea that should be sheltered from the territorial dispute. That dispute has flared up and down since the 1970s, killing the odd seaman and straining China's relations with Southeast Asia and the United States, which depends on the sea's shipping lanes. China also claims sovereignty over self-ruled Taiwan, insisting that its reserve of 170-plus allies who include all of Asia avoid the place.

The de facto German embassy in Taipei said this month would put up 1.2 million euros (US$1.56 million) for research now and in June using research vessels from both sides. Taiwan research institutions will add 300,000 euros. They've picked three areas for exploration. No one's saying exactly where, but Germany notes "continental slopes" and sediments that are compressed as the Eurasian tectonic gets pushed under the Philippine plate. Those descriptions would put the sites close enough to Taiwan's south shore to keep other claimants quiet while giving Taiwan some natural gas.

"It is well known by Taiwanese research that there are abundant gas-hydrate concentrations off the Taiwanese coast," says Mirko Kruppa, the de facto embassy's deputy director general. "The German-Taiwanese research team has chosen three sites that they hope are adequate to test some hypotheses."

Once researchers confirm the overarching hypothesis that natural gas can be sweated out of the seabed, commercialization will follow. That would let Taiwan cut costly dependency on coil, oil, gas imports as its nuclear power program could be blocked by protests and alternative energy sources have been unable to expand.

Locally produced natural gas would cut energy costs for Taiwan's heavy industries, such as its petchem plants, stoking investment in those companies, says Liu Chia-jen, a petrochemicals analyst with KGI Securities in Taipei. Taiwan depends on exports of machinery, consumer electronics and petchem projects for economic survival. Natural gas also burns cleaner than oil or coal, crucial as Taiwanese environmental movements mushroom.

The island packed with industry and 23 million people had already looked on and offshore already for natural gas but turned up too little to mention. China, as part of its gambit to get on better with Taiwan (and lead the island to reunify with it politically without the use of force) since 2008, has offered joint gas exploration, but not much word on the results.

This time hopes are high for something down below. Taiwan studied with the German team for six years before launching the search for hydrates on March 31. The de facto German embassy says its researchers have tapped similar hydrates around Japan. "If Germany is involved, then Taiwan can borrow the German technology," Liu notes. "Taiwan has been lacking its own."