China and Its Energy Needs and Strategies

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Table of Contents

Introduction
Current energy status in China
Global perspectives on China’s energy quest
Hydro-electric power issues in China
Alternative sources of energy in China
The Three Gorges Project
Coal usage in China
Conclusion
Works cited

Introduction

China has great, untapped energy reserves. It has rich coal deposits, and adequately supports 68% of its national energy needs from these deposits. Its hydro-electric potential remains largely untapped, although there have been recent attempts at maximizing this potential. It is also still in the initial stages of developing nuclear, wind and biomass power sources. Its present priorities in the energy scene are energy conservation and development, but with a higher emphasis on conservation. With all these in place, China just might turn around the impending doom created by the rising energy needs (Chinamining).

When China got admitted into the world trade organization, its overall development pace shot up. Presently, the gross domestic product is growing at a rate of 8-10 % per year. And with the highest population in the world at about 1.3 billion people, this growth rate is being reflected on the growing energy needs. China’s energy needs are expected to grow by 150 % by 2020 (Travels). In line with this projection, its oil consumption is now growing at a rate of 7.5% per year. This high rate (seven times faster than that of the US) has been mainly as a result of the mass transition in transport from bicycles to automobiles. The automobile population is now growing at a rate of 19% per year. For how long can this vast population sustain its rising energy needs?

Current energy status in China

About 68% of China’s energy needs are sourced from coal. Most of the remaining percentage is got from oil. However, with the onshore oil fields drying out, and the offshore fields close behind, China has become a net importer of oil. The future is not very promising for a country yet to maximize on its energy use through industrial appliances like air conditioners and other conveniences. Already, several cities within China regularly experience power blackouts, with resultant spikes in oil prices soon afterwards. This is despite China’s elaborate scheme of controlling oil prices internally.

China has devised ways of controlling oil prices within its territories. The Beijing government uses the global oil trading levels in the preceding months to control the present prices. This allows the present prices to be within 8% of the global prices, in essence limiting the price fluctuation of crude oil. In this way, China has managed to maintain its gasoline price amongst the lowest in the world. The prices are now about a third of those in Europe and Japan, where high taxations have attempted to discourage the use of this energy source. But even with such controls in place, China’s energy needs are on a relentless upward march (Travels).

In the 70s and 80s, China used to be a net oil exporter. Its oil reserves were producing more than enough petroleum for the then much lower energy needs. But with the rising industrialization, China’s demands for oil outstripped its internal production in 1993, and it begun to rely on imports. The present established oil reserves are likely to be exhausted within the next two decades. The fraction of imported oil (32%) is likely to double in the next two years. The reality of this eventuality has led China to spearhead oil exploration and production in several other countries. Its main supply of oil remains the Middle East, however. And with this high reliance, several other factors are coming into play.

Global perspectives on China’s energy quest

Presently, about 58% of all oil imported by China comes from the Middle East. This fraction is expected to rise to 70% by 2015. As a way of reciprocating, China sells arms to that region. This however is seen, especially by the US, as evidence of China being sympathetic and supportive of dual use technology and state supporters of terrorism. This perception is straining relationships between China and the US. And China’s interferences with US’s attempts to chastise Iran and Iraq’s questionable activities are only further alienating the two.

China’s quest to acquire oil security is facing resistance from other quarters too. For example, it has been involved in territorial disputes with the Philippines, Malaysia, Taiwan and Vietnam in the South China Sea. The oil rich reserves of the Spratly and Paracel islands are at the centre of this dispute. In the East China Sea, it is facing rivalry from Japan over sovereign demarcations. Japan is also resisting its quest to control the Russian oil supplies. They have been bidding for months over the control of a major oil pipeline from Russia. At the same time, China has deployed workforce into Sudan’s oil fields, and its dealings with that government has raised eyebrows. It has been supplying arms to the Sudanese militia and generally supporting the civil war there (Gal).

Hydro-electric power issues in China

Although oil and coal are the main energy sources within China, there is a small fraction of hydro-electric energy that factors into the national grid. Hydro-electricity accounts for about 6 % of the national power consumed within China. This present amount is calculated to be about a quarter of the country’s full potential, as far as hydro-electricity is concerned. But even with such a vast potential still in the offing, the Chinese remain reserved about investing in this form of energy. This is because the land in China is highly unstable, and building huge dams has in the past resulted in massive property loss in the event of the dam breaking down. For example, in May 2008 the Tanjiashan Lake broke down, and hundreds of human lives were threatened. It took the intervention of numerous engineers and workmen to avert a potential disaster (Stephen).

The Tanjiashan incident brought forth questions about the long-term feasibility of hydro-electric energy. It also forced the government to come clean on the national position, as far as dams and reservoirs were concerned. The earthquake that had destroyed Tanjiashan had also affected a huge number of other dams in the vicinity. The water ministry admitted that 69 dams were on the verge of collapse, and a further 3000 had some serious damage. Millions of lives downstream were in danger. This reflected badly on China’s notable disregard of warnings about building dams on seismic fault lines. It also exposed China’s desperate bids to solve the rising energy needs. This frantic bid has seen over 28,000 major dams constructed, and now many of them are in dire need of repairs (Stephen).

The bad planning for energy sourcing exposed by the Tanjiashan incident is evident in other sectors of the energy scene of China (Stephen). For example, China is reportedly three times more inefficient in its energy usage than the US. However, the government shies off from addressing this inefficiency due to the additional costs that such a reform would attract. Instead, coal is turned on as a solution because whilst even more inefficient, it is cheaper and still helps alleviate the power shortages experienced in the country.

China’s present ambitions to double its current usage of renewable energy by 2015 are marred by several factors. For example, if it were to build dams over the major Tibetan rivers, it would affect the water supply of the downstream Indian and Bangladesh population. Dams tend to accumulate toxic wastes from factories and households. They also depend too heavily on rainfall patterns, and as the 2003 drought showed, this dependence can be disastrous. 2003 was marked with stark power outages all over the country.

With the ever growing population in China, demand for energy can be counted on to remain a pressing issue. Present indicators of how critical the issue may become include the recently skyrocketing oil prices. This defiance to the state regulation of oil prices shows that matters are getting out of hand. Oil distributors are being faced with progressively smaller margins. The flip side to this is that this may spur an initiative to reduce wastage by increasing efficiency along the oil supply chain.

Alternative sources of energy in China

There have been recent initiatives to determine the feasibility of other energy sources within China. These sources include wind, natural gas and nuclear energy. Of these, natural gas and nuclear are expected to dominate the new energy source scene (Goran). Plans are underway to provide low interest and clear regulation incentives for foreign investors and technological know-how for this. And despite the increasing calls for privatization of energy companies, the critical role of joint ventures between sovereign entities remains vivid.

China has about 700,000 tons of uranium. This estimate accounts only for the economically-recoverable fraction. This amount can not satisfy the country’s energy deficit, but would at least take care of the military. Deposits in several parts of the country remain largely untapped due to technological constraints. Presently, nine nuclear plants are supplying about 6,000 megawatts of power to the national grid. This accounts for about 2% of the total energy consumed by the country. But plans are underway to source additional uranium from Australia- the world’s largest supplier of this nuclear source of energy. There are also plans to build additional nuclear power plants and raise the fraction of energy supplied from them to about 4% (Mary-Ann).

The Three Gorges Project

From 1997, a plan to form the world’s largest hydro-electric plant was started in China. This evolved as the Three Gorges Project. This project is built into the Yangtze River, Asia’s largest river. The ultimate aim is to build 26 power generators into it, and produce a total of 18,200 megawatts of energy by 2009. This is about a tenth of China’s current power needs. The project has the additional aim of reducing downstream flooding, which claims many lives on a regular base. And with its central location in China, it has investments from the East China Power Network, The Central China Network, and the Sichuan Provincial Network. The only drawbacks concerning this project are ecological and demographic in nature. With the dam’s final height of 185 meters, it is expected to cause a significant disruption to silting and deprive farms downstream of essential nutrients. And the fact that about 1.2 million people will eventually have to be relocated is making the project even less popular. Despite all this, the project is still ongoing, with the project leaders saying that the merits outweigh the demerits (Power-technology).

Coal usage in China

Overall, there is a clear emphasis on finding cleaner sources of energy within China. Presently, coal accounts for about 68% of the country’s total energy used (Stephen). The result of this usage is a layer of smog over almost every city in China. In addition, there have been instances of acid rain, water pollution and climate change. Brown coal is the type most widely used, and this type has a high content of the environmentally-degrading sulfur (Mary-Ann). But even with these grim features, there are positive signs in China: compact fluorescent bulbs in the streets and homes, a still heavy reliance on bicycle transport, and solar heaters within the homes All in all, China’s per capita use of energy is still an eighth of what the average American uses (Adam).. And in 2005, it established a goal to reduce its energy use for every GDP unit by 20% by 2010 (Logan).

Despite all these attempts at reducing use of coal, the most recent statistics still show a heavy reliance on it as a source of energy. In 2007, coal usage accounted for 68% of all the energy used in the country. By comparison, crude oil accounted for 21.8%, while hydro-electric energy accounted for 6.7%. Natural gas made up for a paltry 2.8%. A renewable energy law was passed in February 2008. In line with this law, coal usage is expected to reduce by 3% for every year up to 2020. The target is to reduce coal consumption by 1.4 billion tons of coal equivalent (China daily).

Conclusion

The future for China hence remains hazy at best, as far as the energy situation is concerned. On the one hand, there are all sorts of projects being initiated to satisfy the rising energy needs. On the other hand, the rate at which the energy needs are rising is proving hard to keep up with. A country that was once a net exporter of energy (oil) is now a net importer. And despite having various native resources that could feasibly become energy sources, there are numerous economical, political and environmental factors that are slowing down the utilization of these resources. One thing is certain, however: unless something dramatic is done to the energy situation, China’s progress may soon be significantly affected by lack of adequate energy.

Works cited

Adam Stein. 2006. How will China meet its energy goal?
Chenzen Daily. 2005. Coal to remain top energy for China. Web.
China mining. China mainly relies on domestic supply to meet energy need.
Gal Luft. Fueling the dragon: China’s race into the oil market. Web.
Goran Mijuk. 2005. China seeks cleaner, more efficient forms of energy.
Logan, Jeffrey: Diverging energy and economic growth in China: Where has all the coal gone? In: Pacific and Asian Journal of Energy, Vol. 11, No. 1 pg 10
Mary-Anne Toy Herald. 2006. China’s energy needs drive uranium search. Web.
Power-Technology. Three Gorges Dam Hydroelectric Power Plant, China. Web.
Stephen McCutcheon. 2008. Figuring out China’s energy needs.
Travels. 2005. China Energy Needs! Underlining reasons for China’s energy requirements.

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