Power to secure energy supply
- Source: Global Times
- [03:17 December 14 2009]
- Comments
The economic crisis sweeping the world offers China a good opportunity to acquire more energy resources, and it is doing so right now. The situation requires China to have a comprehensive strategy in place for securing its long-term energy interests.
Just last week, China clinched another deal when the CNPC-led consortium won the contract to develop Iraq's Halfaya oilfield. On the diplomatic front, President Hu Jintao is visiting Central Asian countries Kazakhstan and Turkmenistan that are important energy partners of China.
The government is considering a national energy commission as an apex agency to oversee energy development strategies.
Since 1993, China has become a net energy importer, and the demand for energy continues to grow. At present, reliance on import is for 50 percent of the energy required. It is expected that in a decade this would grow to 70 to 80 percent.
The truth is that the global environment for China's energy acquisition will probably become worse.
A latecomer to international energy competition, for its justifiable energy demand, China is often depicted as a thirsty devil drinking dry the world's oil reserves.
Almost all of the energy acquisition negotiations are treated with suspicion by the international media and there is needless interference by some political forces.
With most of the productive oilfields having been grabbed long back by the petroleum giants, China is forced to seek energy deals in more dangerous and unstable places, which are in the midst of either military conflict or political upheaval.
Given its limited grasp of the oil pricing mechanism and control of the oil derivatives market, China is also exposed to the risk of fluctuating crude oil prices.
