The government think-tank and the World Bank (WB) have
recommended that China set up a cabinet ministry to oversee energy
security.
The Development Research Center of the State Council and the WB
made the recommendation yesterday, saying that the proposed
ministry could improve energy co-ordination and supervision, and
help the country meet the energy challenges ahead.
They listed China's energy challenges as soaring consumption, an
impact on the environment, an inefficient decision-making process,
poor efficiency and growing exposure to the global market.
"While considering reform in the energy sector, we strongly
recommend that consideration be given to re-establishing a Ministry
of Energy," the report, published by the two organizations
yesterday, said.
The recommendation follows the central government's setting up
of a vice ministry-level energy office last year, following the
dismantling of the Ministry of Energy in 1993, and the
establishment of the Energy Bureau in 2003.
In view of huge changes taking place in China's energy sector,
the center concluded that re-establishing an energy ministry is an
urgent task.
The report, which is the result of two years of research, also
suggests creating a regulatory body for natural gas management.
It also calls for government agencies to be pushed to boost
energy efficiency and technological innovation.
"China's energy sector needs a coordinated policy," said Xie
Fuzhan, vice-president of the center at a seminar to discuss the
report yesterday.
Feng Fei, department director of the center, warned that China's
growing oil dependence and electricity shortage pose a risk to the
nation's sustained economic growth.
According to the WB and the center, at least half and perhaps as
much as two-thirds of China's oil will have to be imported by
2020.
By that time, the county's annual oil demand is expected to be
between 450 and 610 million tons.
Domestic oil output is expected to peak at about 200 million tons
in 2015. A similar high level of oil dependence has been reached in
most industrialized countries, with imports needed to fuel
growth.
But the organizations warned that the oil market is undergoing
significant change and future prices are likely to be far higher
than they are now.
"In a high oil price era, high dependency will make us
vulnerable if we don't take measures to address the security
issue," Feng said.
Meanwhile the National Development and Reform Commission said
there is tremendous potential for energy conservation in China, and
that the country can run almost entirely on domestically produced
energy.
"China still has great potential in domestic energy supply,"
said Zhang Guobao, vice-minister of the commission, at an energy
forum last week.
He said China has abundant coal resources and there is the
possibility that big oil and gas fields have yet to be discovered.
He also stressed the potential of China's hydropower, nuclear
power, wind power and other new resources.
Zhang said coal gas and renewable energy sources such as biomass
and solar power are expected to become "major alternatives."
(China Daily June 2, 2006)