Energy problems looming for ever-growing China
- Source: Global Times
- [21:00 February 08 2010]
- Comments
GT: What energy issues does China have to tackle to ensure continued economic development?
Lin: The most important issue for the NEC is to manage the general direction of China's energy strategy. China faces a severe situation when it comes to energy supply.
China owns a large amount of coal, but limited oil and natural gas. Currently, coal is China's major energy supply, accounting for about 70 percent of consumed energy, but coal produces the largest amount of carbon dioxide among all main energy resources.
Due to the limits on carbon emissions, we have to explore other cleaner sources of energy and change China's energy supply structure.
Another crucial problem is that China depends a lot on imported oil. Today 52 percent of the oil is imported and the figure is growing annually. As per capita oil consumption is relatively low at present (only 277 kilos in 2007, one-ten of that of the US that year), and China promoting car sales, the country will probably have to import more oil in the future and its dependency on imported oil will likely exceed that of the US.
That's dangerous, as the US also has massive oil reserves and the changing price in the international market has relatively smaller domestic effect, but China, as a new buyer in the oil market, will have to absorb most of the shock of shifting prices.
The better solution is to use less oil and turn to other energy. The electric vehicles are a good option.
GT: What problems does China face on overseas energy cooperation?
Lin: 2009 saw a good performance of China's enterprises in purchasing overseas energy and cooperating with foreign businesses.
The Sinopec group purchased Addax Petroleum Corp, a Switzerland-based corporation; the China National Petroleum Corporation purchased a Kazakhstan-based company. The two also acquired oil assets in Iraq, the US and other counties.
China's performance is good because the financial crisis makes it easy to bargain.
Further, when oil price were low, these countries also needed money. All these made "going out" much easier. But the good oil fields have all been ac-quired by other countries, leaving only costly leftovers for China.
Guan: The Chinese government and energy enterprises should cooperate more closely on acquiring overseas energy resources.
When a country's dependence on imported energy resources reaches over 50 percent, it will use all its powers and resources to ensure its energy safety, including the safety of its energy transport channels.
I think China's military should play its part. It's good that the NEC has leaders from the Ministry of State Security and the Headquarters of the PLA General Staff , meaning that China is making cross-institutional efforts to ensure energy security.
GT: How do you evaluate China's new energy industries?
Lin: Nuclear power is a necessary choice for China. It's clean and comparatively cheap. Solar power and wind power are relatively expensive and currently subsidized by the government. Hydroelectricity is limited by geography.
Guan: Which types of renewable energy will become the major resources in the future still depends on the market. Clean, convenient and inexpensive energy will be the hallmarks of the future.
Wind power is expensive and unstable; nuclear power costs a lot and poses waste disposal issues and possible safety risks. All renewable energy resources currently have their own shortcomings.
Strict polices on carbon emissions will promote the use of renewable energy resources, but this depends on every country's efforts. China is no exception.
I think in the next 10 to 20 years, renewable energy resources will account for a growing proportion of energy consumption, but fossil energy resources will still be the majority.
In China, many enterprises will try hard to expand their share of renewable energy resources, regardless of what problems this may cause. It's natural, since if they act slowly, it'll be harder for them to enter the market later.
