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\\\\Vice-Premier Says China Become Further Reliant on External Energy Sources

Posted on: Wednesday, 28 December 2005, 06:00 CST

Text of report by Zeng Peiyan, carried by official Chinese news agency Xinhua (New China News Agency)

Beijing, 27 December: Reporting to the 19th meeting of the 10th National People's Congress [NPC] Standing Committee on 27 December regarding the current situation in China's energy sources and its energy security, State Council Vice-Premier Zeng Peiyan said that ensuring energy source security, including all aspects that affect the stable, economic, safe and clean supply of energy sources, is the inevitable demand of preserving economic and national security and achieving the strategic goals of modernization. The situation facing China's energy source security is extremely complicated at present and in the coming period.

Zeng Peiyan listed the problems facing China's energy source security in five aspects:

- The sustained increase in energy source demand forms very great pressure on energy source supply. As China is now in a period of speeding up its industrialization and urbanization process, the intensity of energy source consumption is relatively high. As the scale of the economy expands further, energy source demand will continue to increase at a relatively high rate, forming very great pressure on energy source supply; the supply-demand contradiction will exist for a long time, and reliance on external sources for oil and natural gas will rise further.

- Relative shortage of resources has constrained development of the energy source industry. China has considerable energy source resources, but the per-capita figure is relatively low. Resource prospecting is rather sluggish, affecting the enhancement of energy source productivity. At the same time, the distribution of China's energy source resources is very unbalanced, and the large-scale long- distance transportation of coal causes transport shortages and higher production costs, affecting the coordinated development of the energy source industry.

- A coal-based energy source structure is not beneficial for protecting the environment. Coal is China's basic energy source, and the energy source structure of abundant coal and little gas and oil is hard to change. China is at a low level in clean use of coal, and the burning of coal produces a great deal of pollution. If this state of affairs continues, it will put very great pressure on the ecological environment.

- Relative backwardness in energy source technology has affected the enhancement of energy source supply capability. Although China has achieved relatively great progress in energy source technology, it lags far behind the demands of development. Development of technology such as renewable, clean, and substitute energy sources is relatively sluggish; application of technology such as conserving energy and cutting consumption and cleaning up pollution is not widespread, and the level of our own design and manufacture of certain major energy source technological equipment is not high.

- The changes in the international energy source market have a relatively big impact on China's energy source supply. China's oil and natural gas resources are insufficient, and we need to expand international energy source cooperation while basing our efforts on domestic production to ensure supply. At present, however, the global energy source supply-demand balance relationship is delicate, there are frequent fluctuations in the oil market, international oil prices oscillate at a high level, and various kinds of non-economic factors also affect international energy source cooperation. This requires that we make all-round arrangements for internal [resource] development and external cooperation, to enhance the degree of energy source security.

Source: BBC Monitoring Asia Pacific

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