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China: an increasing force in global energy markets
The world's proven reserves of oil are sufficient to last for 41 years, and natural gas reserves for 67 years, at current rates of production, according to a report by BP, the largest oil company in Europe.
Proven reserves of coal are sufficient to last 192 years, with most reserves in North America, the Asia Pacific region, and Europe and Eurasia, "Statistical Review of World Energy 2004" shows.
The annual review also noted that with its rapid increase of energy consumption, China has become an important influencing factor in the global energy market.
The British company released the review, which started to compile world energy statistics 53 years ago, in Beijing on Tuesday.
The China launch of the review reflects the importance of China's as well as BP's will to work with China to address its energy issue, said Byron Grote, managing director and chief financial officer of BP Group.
Oil and gas
The report said the proven oil reserves reached 1.15 trillion barrels, some 10 per cent higher than those previously reported for 2002.
Although the price of crude oil has surged to a 20-year high in 2003, there has been no physical shortage of oil, said Michael Smith, head of Global Energy Analysis of BP, at the press conference.
Global oil reserves have increased continuously over the past 25 years. Exploration success and technology innovation has led to current reserves that are 70 per cent higher than 1980 when the review was first published, the report said.
World oil production rose by 3.8 per cent last year while demand increased by 2.1 per cent.
Grote said: "The global energy market has continued to work effectively."
Stronger-than-expected oil demand, tight inventories, war in Iraq and strikes in key oil producing regions are responsible, at least in part, for the price hike of crude oil.
Though oil remains the major fuel, Smith said an important trend of the global energy market is that natural gas has increased rapidly. Global natural gas reserves reached 176 trillion cubic metres, 13 per cent higher than those reported for 2002.
The reserves have more than doubled since 1980 as a result of exploration, new technology and the commercialization of gas reserves through liquefied natural gas (LNG) and other technologies.
"The double-digit growth in LNG trade last year is one indicator of the fact that gas is now traded internationally as well as regionally," said Grote.
Grote said China has become an increasing force in global energy markets due to its rapid increase of energy consumption.
According to BP's statistics, China showed a surge of 13.8 per cent in total energy demand in 2003 on the back of its GDP growth of 9.1 per cent. China's consumption of oil, gas, coal and nuclear power all increased by more than 10 per cent in 2003, the report said.
China alone accounted for 41 per cent of the growth of total world oil demand, and its oil imports rose 32 per cent to 2.6 million barrels a day, it said.
"The challenge for China is to access global energy supplies at competitive prices and to create and apply appropriate technologies for transforming energy consumption, on which China's long term economic prosperity depends," Grote said.
"Chinese decisions on imports and trading links, for both oil and natural gas, will be a major influence on the world energy scene going forward," he added.
As China is becoming more reliant on imports to meet its energy demands, the security of a long-term stable energy supply has also aroused much concern.
Grote recommends five options for long term energy policy to safeguard energy security.
He noted that a sound market-based energy regulatory framework is vital as it promotes investment in the energy sector.
"This helps provide energy security by ensuring adequate energy infrastructure and maximizing the development of the lowest cost domestic energy resources," said Grote.
Deepening bilateral economic and political links with key energy suppliers such as in the Middle East, Russia, Kazakhstan and Indonesia could also provide a reciprocal incentive to maintain energy supplies, he continued saying.
In addition, China should co-operate with other energy consuming nations in the development and expansion of emergency preparedness in the event of a disruption to international energy supplies, Grote said.
China, in fact, is working on this regard. Twenty-two member nations of the Asia Co-operative Dialogue (ACD) both oil producers and consumers issued a "Qingdao Initiative" on energy co-operation in June, pledging to stockpile strategic energy reserves and a regional energy transportation network.
Grote added that efforts to control carbon emissions, and investment in energy-saving technology, fuel efficient vehicles, renewable energy and nuclear power will also pay off.
Since the energy supply shortage began last year, the government has been making efforts on energy conservation.
Premier Wen Jiabao has said the country will take energy-saving measures and building an energy-saving society as important state policies, promote technological processes and encourage rational consumption through economic restructuring.
Smith said energy consumption growing by 40 per cent last year does not look sustainable in the long-term to maintain a high economic growth rate.
"The increase of energy efficiency as well as the shift from heavy industry help the Western industrialized countries' economies recover from energy shortage, which I think is probably the pattern for China in the future," said Smith.