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China's Hu heads to US on energy efficiency wave

Posted on: Thursday, 13 April 2006, 04:41 CDT

By Emma Graham-Harrison

BEIJING (Reuters) - Chinese President Hu Jintao may find his energy saving initiatives an unlikely source of pride during a visit next week to the United States, where he faces criticism over human rights and Beijing's currency policy.

The two countries are the world's top oil consumers and emitters of greenhouse gases, but Hu has turned away from China's previous mantra of economic growth at almost any cost to spearhead a huge drive to cut wasteful energy use.

A hike in taxes on gas-guzzling cars, some of the world's strictest fuel economy targets and a new round of ambitious energy-efficiency goals are among the initiatives that have impressed environmentalists and energy analysts alike.

In contrast, U.S. counterpart George W. Bush has drawn flak

for his reluctance to tighten efficiency standards or raise fuel taxes, despite a pledge to tackle the country's addiction to oil.

"Based on apparent views from the top levels of government, China seems to be more proactive on sustainable energy development than the U.S.," said Chris Raczkowski, Beijing-based managing director of renewable energy firm Azure International.

Hu still faces obstacles implementing policy further down the chain of command, compared to some U.S. state governments that are having more success pushing an aggressive efficiency agenda.

"If you look more at the middle level, you see U.S. states and cities are sometimes very proactive in promoting cleaner energy, energy efficiency," said Raczkowski.

The U.S. government pulled out of the U.N. Kyoto Protocol on climate change, but Maryland has become the eighth U.S. state to join a pact seeking mandatory limits on carbon dioxide emissions, which most scientists believe contribute to global warming.

MIXED RESPONSE

U.S. utilities are planning a fleet of new coal plants due to bountiful domestic supplies and high gas prices, but only a fraction of those will use clean coal technology that gasifies coal before burning and captures carbon dioxide emissions.

The enthusiasm of China's leaders for energy efficiency grows from pragmatic concerns about dependence on costly imported oil and the impact of smog and greenhouse gases from coal.

China has plenty of room for improvement -- it uses over four times as much energy to generate GDP than the average Group of Seven nations, the Asian Development Bank said, and still relies on coal for around 70 percent of that energy.

Provincial officials used to putting wealth creation ahead of other aims may shy away from sacrificing growth for efficiency.

"It is really the top-level officials who have this vision about China's energy future," said Greenpeace energy and climate campaigner Yang Ailun. "It is difficult to enforce them at a local level, but you can see the attitude is really changing."

Despite both sides' efforts to boost efficiency, few analysts doubt oil consumption will continue to rise and growing competition for limited resources could be a source of tension.

The U.S. Congress's nonpartisan budget analyst said last week China's rising energy demand could boost global oil prices by as much as $14 a barrel over the next five years. But it did not address consumption in the U.S., where a population less than one-quarter that of China burns over three times as much oil.

The Center for Global Energy Studies expects Chinese demand growth of around 5 percent or 330,000 barrels per day (bpd) this year, versus a forecast increase of 1.3 percent in U.S. consumption that translates into a similar 270,000-bpd expansion.

China may trim oil demand growth if a string of projects to turn its vast coal reserves into synthetic gas or oil are successful. Analysts say these could account for nearly half of 2005's crude import volumes within a decade.

"China is taking this technology seriously and it's an area where they think they can place themselves at the cutting edge, stealing a march on the U.S.," said Tony Regan of energy consultancy Tri-Zen.

(Additional reporting by Neil Chatterjee)

Source: REUTERS

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