Oil and gas in the Capitals ///

The Japan's energy challenge: Bobbing and weaving with China and Indonesia. Last month, Japan's parliament voted to upgrade the Japanese Defense Agency to cabinet status. As the Ministry of Defense, effective Jan. 9, 2007, the agency has more clout, thus signaling Japan's increased defense posturing—a controversial move to countries still simmering over Tokyo's role in World War II. Among the issues that triggered Japan's decision are North Korea's aggressive wrangling and missile tests, and Japan's contribution to the American-led war on terror and Iraq. Another reason is friction over regional gas reserves with China. Japan and China are in dispute over East China Sea islands that sit near an alleged 200-Bcm gas deposit, according to a 1999 Japanese survey. Japan calls the islands Senkaku. The Chinese refer to them as Diaoyu. They lie 200 mi west-southwest of Okinawa and 120 mi north-northeast of Taiwan.

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