Promote dialogue
on energy co-operation
May 29, 2006 - China Daily
Author(s): Xiong Guangkai
The first few years of the 21st century have witnessed long queues at
petrol stations across the globe, while soaring prices in the New York
petroleum futures market remind us how grim the world energy security
situation is.
Increasingly strained relations between supply and demand, the rising
international oil price, strategic contentions focusing on energy
producing areas and environmental pollution caused by energy consumption
give us no cause for optimism, with the negative effects of soaring oil
prices already being felt by the global economy.
The driving force of global economic growth resides in the spiralling
increase in energy consumption. "World Energy Statistics, 2005," issued
by energy giant BP, shows that the average annual increase in global oil
consumption over the past decades hit 1.7 per cent. According to the
statement from the International Energy Agency, daily global oil demand
will grow by 50 per cent by 2030, reaching 130 million barrels a day.
That proves that the shortage of energy supply will become increasingly
aggravated.
The sharp fluctuation in oil prices will threaten the stability of
the international energy market. Beginning from 2000, the price of
international crude oil entered a new upswing, recording a steep climb
on the basis of an average of US$28.5 per barrel. At one point on August
29, 2005, the futures price of crude oil in the New York market hit a
historic new high of US$70.8 per barrel. Thereafter, the oil price
remained in a state of constant flux and yet, for a long time, the price
remained at around US$60 a barrel.
Global warming and damage to the environment starting from the 1990s
have gradually raised humankind's awareness of energy consumption
security and environmental protection. Statistics show that 75 per cent
of global emissions of carbon dioxide comes from the burning of oil,
coal and charcoal.
As the world's second-largest energy producer and the second- largest
energy consumer, China has a stake in global energy security.
China's total energy volume is by no means small, and yet its per
capita volume is fairly low, even below half the global average. In
recent years, economic growth in China has progressively swelled its
energy demand.
The Chinese Government is implementing a series of policies and
measures in a bid to solve the energy security issue, an issue which has
a strategic significance. Saving energy and slashing energy consumption
is regarded as a fundamental national policy. The 11th Five Year Plan
(2006-10) set out the goal of cutting the consumption of energy per unit
of GDP by a hefty 20 per cent over this period. The government work
report delivered to the National People's Congress this year has
explicitly stipulated that the consumption of energy per unit of GDP
will ease by about 4 per cent while the GDP will grow at roughly 8 per
cent.
The country has put in place the strategy of developing multiple
sources of energy, while also developing alternative sources of energy.
The Mid- and Long-Term Development Plan for China's Energy states
clearly that the central task of ensuring energy supply in China at
present and in the coming period is to optimize its energy structure by
way of gearing up the work of tapping hydro-electric power, stepping up
nuclear-electric power construction and encouraging the development of
wind power, biological energy sources and other renewable sources of
energy. It is designed to increase the proportion of renewable sources
of energy in the entire energy structure to around 15 per cent by 2020
from the current 7 per cent.
China is both an energy consumer and an energy producer. Based on
statistics from the State Information Centre, China's aggregate lump sum
energy consumption in 2004 stood at 1.97 billion tons of standard coal,
while the total lump sum energy production capacity was 1.846 billion
tons of standard coal, putting the degree of China's self-sufficiency in
energy at 93 per cent, outstripping the West's average level of 70 per
cent.
Per capita consumption indicates that the lump sum per capita
consumption of energy in China in 2004 stood at 1.08 tons of oil
equivalent, accounting for 66 per cent of the global average of 1.63
tons of oil equivalent, 13.4 per cent of the US figure of 8.02 tons of
oil equivalent, and 28.1 per cent of the Japanese 3.82 tons of oil
equivalent.
China's oil consumption in 2004 when a sharp increase was recorded,
stood at 300 million tons, roughly 8 per cent of the aggregate global
oil consumption; while US oil consumption was 938 million tons in the
same year, accounting for 25 per cent of global aggregate oil
consumption, outstripping China twice. In that year, China's net oil
imports were less than 149 million tons, about 6 per cent of the global
trade volume in oil; while US net oil imports in the same year stood at
590 million tons, outstripping China three times.
The above-mentioned facts, whether in terms of energy self-
sufficiency, per capita energy consumption, or oil consumption, prove
false the allegation that China poses a threat to world energy security.
The solution to the energy security issue lies in cementing co-operation
and in the joint efforts of all countries.
Fossil fuel will remain the dominant fuel in terms of energy
consumption in the early half of this century, and yet demand for oil
will continue to soar. Energy experts in every nation are generally of
the view that one of the major reasons causing a shortfall in oil
surplus capacity in the world today resides exactly in the
under-investment in oil industry in every country in recent years.
Feasible policies to increase energy supply and defuse the strained
situation of energy supply require all states to improve their
investment environment in order to ensure increased investment and to
boost investment in extracting, transporting and processing energy.
The current global energy security system was established in the
1970s, consisting primarily of such multilateral organizations as OPEC
representing the interests of oil exporting countries, the International
Energy Agency representing the interests of developed oil consumers, and
the International Energy Forum.
The changing international situation has given rise to signs that the
oil security system established to deal with oil crises is no longer
able to address today's complex global energy security situation. For
instance, intricate political and economic factors have contributed to
the reality that Asia has to pay a higher price for importing oil than
European and American states.
Some developing countries are currently joining the club of major
energy importers, and for that matter, how to ensure the energy security
of developing countries in the context of the new international trade
structure has become a novel topic.
Despite the various rivalries in tapping and exploiting overseas
resources, the globe's energy-consuming nations, especially developed
countries and the up-and-coming consumers, share common interests in
upholding the stability of the international market, tapping new energy,
saving energy, and environmental protection. We ought to further promote
dialogue between the energy producing states, the transporting countries
and consumer nations, and increase contacts and exchanges.
The author is chairman of China Institute for International Strategic
Studies.
© Copyright 2006 NetContent, Inc. Duplication and
distribution restricted.Visit http://www.powermarketers.com/index.shtml
for excellent coverage on your energy news front.
|