Taiwan must improve its energy resilience, as China might force a capitulation through “gray zone” tactics by throttling fuel supplies, while coordinated action by international partners are also crucial to deterring China’s aggression, the Foundation for Defense of Democracies think tank said in a report on Monday.
The Washington-based institute released the report, titled “Power Under Pressure: The Fight to Protect Taiwan’s Energy Lifelines from Beijing’s Aggression,” on its Web site, with the results taken from a tabletop exercise that involved a team from the Taipei-based Centre for Innovative Democracy and Sustainability at National Chengchi University in Taipei this summer.
Along with the report’s release, the institute hosted a panel discussion over the findings of the exercise, and the steps Taiwan and its partners can take to build resilience and improve deterrence.
Photo: screen grab from the CPC Corp, Taiwan Web site
Among the panelists was retired US Navy rear admiral Mark Montgomery, who is senior director of the institute’s Center on Cyber and Technology Innovation.
Taiwan imports about 98 percent of its fuel, a vulnerability that “creates an opportunity for Beijing to pursue its campaign to force Taipei’s capitulation through gray zone tactics, using economic, legal and cyberenabled economic warfare to throttle Taiwan’s fuel supply without firing a shot,” the report said.
China is slowly engineering the conditions for Taiwan’s total capitulation and at the core is energy coercion, it said, adding that it is more likely to begin with a subtle campaign involving administrative actions and regulatory pressure, rather than a sudden blockade or invasion.
“China’s goal is exhaustion, not escalation: A gray zone siege calibrated to degrade Taiwan’s resilience and coerce strategic surrender under the veneer of legality,” it said.
If China succeeded in squeezing Taiwan’s liquefied natural gas (LNG) supply to a trickle, it would cause a 50 percent reduction in Taiwan’s electrical grid capacity and force it into a difficult choice — powering civilian infrastructure, including public health and safety systems, or maintaining industrial production, including semiconductor manufacturers such as Taiwan Semiconductor Manufacturing Co, the report said.
The tabletop exercise highlighted that a Chinese Communist’s Party cyberenabled economic warfare campaign targeting the energy sector poses significant risks to Taiwan and without international support, it would have to make decisions about industrial production, which could turn from a regional security issue into a global economic issue, it said.
Taiwan, as well as the US, Japan, Australia and European allies and partners, must improve the nation’s capacity to resist and improve deterrence to counter China before a crisis, it said.
Taiwan should invest in energy resilience by diversifying LNG supply chains, expand and diversify energy storage facilities, reconsider the use of nuclear power through a mix of traditional nuclear power plants and investment in emerging small modular reactor technologies, improve public-private cooperation to protect critical infrastructure, and engage in joint cybersecurity training with allies and partners, it said.
Some top recommendations for the US include prioritizing convoy and escort planning and exercises, it said, adding that the US Navy should consider unilaterally planning for the possibility of “reflagging” vessels bound for Taiwan and escorting commercial shipping to demonstrate its operational readiness.
The US should increase LNG exports to Taiwan, prepare conditional sanctions packages for energy-related contingencies, and establish a naval and maritime security coordination structure, the report said.
Japan should coordinate with Taiwan over the use of LNG reserves, while Australia, the UK and the EU should partner with Taiwan to expand LNG capacity, as well as provide cybertraining and coordination, it said.
“While Taiwan must urgently address its own energy and societal vulnerabilities, actions by the United States, Japan, Australia and European partners can have a significant strategic impact on Beijing’s calculus,” the report said.
“Success depends on coordinated efforts to support deterrence and complicate Beijing’s strategic calculus — not just from Taipei and Washington, but from Tokyo, Canberra and Brussels as well,” it added.
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