China Gathers Key Asian Energy Consumers, Seeking Influence on Pricing and Suppliesadmin
Energy ministers from the U.S., China, India, Japan and South Korea are gathering in Beijing Saturday for a meeting aimed at boosting China’s influence over key energy markets while alleviating worries over its huge and growing appetite for oil.
The talks, hosted by China’s top economic planner, Ma Kai, are part of a broad diplomatic offensive intended to foster closer cooperation among the key oil consuming nations.
China recently announced it wants a negotiating mechanism with OPEC to ensure a stable, secure supply of oil for its booming economy. Already the world’s second largest oil consumer and third largest oil importer, China’s demand is forecast to more than double by 2025.
“The international energy situation is undergoing drastic changes and China’s demand for energy is huge due to its fast economic growth,” said Liu Jiangyong, a professor at the Institute of International Studies at Beijing’s prestigious Tsinghua University.
“China needs closer cooperation on the reasonable consumption of world energy resources,” Liu said.
The U.S. and other countries participating in Saturday’s meeting all likewise share a big stake in ensuring stable supplies and countering soaring oil prices. India depends on imports for three-quarters of its oil while Japan and South Korea import all their oil.
During Chinese President Hu Jintao’s visit to India last month, the two countries agreed to deepen civilian nuclear cooperation, although there were no firm commitments on the mechanics of such an arrangement. The two countries also are reportedly seeking ways to cooperate in bidding and exploring for oil and gas in other countries.
“I am confident about India-China cooperation in the oil and gas sector and our recent successes in joint bidding and exploration in countries like Syria, Sudan, Columbia and Nigeria should encourage us to engage in mutually beneficial tie-ups,” the Press Trust of India quoted Indian Petroleum Minister Murli Deora as saying Thursday.
A decade-long spree of overseas acquisitions by Chinese oil and gas companies, coupled with surging demand in both of those fast-growing Asian nations, has stirred U.S. fears over potential disruptions to world energy markets.
U.S. Energy Secretary Samuel Bodman said earlier this week that he planned to encourage Beijing to use its strategic petroleum reserves as a buffer against physical supply disruptions, rather than as a way to manipulate world prices. He also said he would like to see China rely more on the global energy market and less on acquisitions to fortify its energy security.
Bodman held talks with his counterparts in Japan and South Korea before attending China-U.S. trade talks in Beijing earlier in the week.
China started pouring commercial quantities of crude oil into newly built strategic storage tanks in August, and its efforts have prompted worries over secrecy and the absence of clear policies on managing the oil assets held in store.
Chinese officials say security of supplies to fuel the country’s booming industries is the top priority. But Beijing is also seeking ways to ensure sustainable and efficient energy use. Its cities among the most polluted on earth after decades of relying on coal-burning power plants, China is looking to advanced technology and alternative energy sources to help mitigate the damage.
Earlier this year, Japan’s Ministry of Economy, Trade and Industry said it would help China raise its energy efficiency and conserve its environment by sharing energy-saving technologies and its expertise in coal mining.
South Korea and China have also agreed to pursue joint projects in the fields of renewable energy, oil reserves, electricity and gas.
Still, in the midst of developing its own energy planning strategy, Beijing has no separate energy ministry of its own. Such resource-related issues are handled mainly by the country’s main planning agency, the National Development and Reform Commission, headed by Ma Kai.
The commission provided scant information about the agenda ahead of Saturday’s meeting. Officials said only that delegates would discuss ways to reduce energy consumption, raise efficiency and develop new energy sources.
In the near-term, China’s once acute shortages of coal and electricity have eased as new hydroelectric projects and railway lines — needed to ship coal from the resource-rich hinterland to coastal industrial zones — have come on line.
The country is also building scores of new nuclear power plants, negotiating with U.S.-based Westinghouse Electric Co. and Areva of France for the latest technology while working to shore up its own expertise.
China’s crude oil imports are expected to rise 10 percent this year to about 980 million barrels this year, or about half of all total crude oil demand, according to the Commerce Ministry.