March 5, 2011

China's Oil Dependence

The New York Times reports that China will announce in the next few weeks new five year targets for limiting the growth of energy consumption. In coming years, China is projected to import a greater proportion of its oil than the United States, and it is even now more dependent on the Persian Gulf than the United States. Of course, that's why America is in the Gulf: to protect China's oil imports.

From the Times:
Any energy policy moves by Beijing hold global implications, given that China is the world’s biggest consumer of energy and largest emitter of greenhouse gases. And even the new efficiency goals assume that China’s overall energy consumption will grow, to meet the needs of the nation’s 1.3 billion people and its rapidly expanding economy.

As a net importer of oil, China tends to view its energy needs as a matter of national security. And so, even as Beijing tries to quell any signs of the Arab world’s social unrest striking a political chord with Chinese citizens, the government is also intent on not letting similar upheaval impinge on its energy needs.

Zhang Guobao, who was China’s longtime energy czar until his retirement in January and is still a power broker on energy issues, said Friday that China must undertake an “arduous” task to protect its security. “Oil security is the most important part of achieving energy security,” Mr. Zhang told the official Xinhua news agency. “Preparations for alternative energies should be made as soon as possible.”

China has placed a big bet on renewable energy, emerging as the world’s biggest and lowest-cost manufacturer of wind turbines and solar panels. But the country remains heavily reliant on coal for its electricity. And its oil imports are surging after auto sales have surpassed the American market in each of the last two years.

China has also moved ahead of the United States as the biggest buyer of oil and natural gas from Saudi Arabia, which has so far avoided social upheaval but is on Mideast analysts’ watch lists. That oil is shipped in tankers that travel along sea lanes controlled by India and the United States, which adds to Beijing’s jitters.

Iran, hardly a bastion of stability, is another large supplier of crude oil to China. . . .

An important feature of the five-year plan is its call to double the share of natural gas in Chinese energy consumption, to 8 percent in 2015 from 4 percent last year . . .

As part of its effort to curb oil demand, the Chinese government has already been pursuing an aggressive program to develop electric cars, although these would run at least initially on a national grid that still relies heavily on coal.

China aims to limit energy consumption in 2015 to four billion metric tons of coal or its equivalent in other fuels . . .

Meeting the new target of no more than four billion metric tons of coal or its equivalent will require further improvements in efficiency if the economy expands 7 percent a year in the coming years.  
Much greater efficiency gains would be needed if the economy grows even faster, as most economists predict. The Chinese economy expanded 10.3 percent last year. . . .

Mr. Zhang and other Chinese officials have made little mention of climate change, which has ranked far behind energy security as a priority in Chinese policy making.

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