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    Partnerships will help solve energy conflicts
Xia Yishan
2005-10-28 05:43

In recent years, as the world economy has grown, demand for energy has risen. With oil prices constantly ascending, China's energy security has encountered severe challenges. China should adopt proactive measures to tackle the problem and ensure the sustainable growth of its economy.

First, the country should outline an energy strategy that is long-term, comprehensive, systematic, all-round and scientific. Solving the problem is a complicated matter and requires insight and knowledge. We have already made a medium and long-term plan, which has strategic significance.

Measures have to be co-ordinated. As China is a vast country, all measures have to be considered and effective approaches utilized.

China should speed up exploration and processing of oil and natural gas and, most importantly, practise conservation, which is cost-efficient, as the cost of saving a ton of oil equals only one-fifth of the cost of producing a ton of oil.

There is much more room for raising efficiency. Take coal, for example. China's efficiency is 10 per cent in utilization while that in developed countries is more than 30 per cent.

China should actively develop new and renewable energy resources, including solar, wind, underground heat, small hydro power and bio-energy, as well as nuclear, big hydro power and hydrogen. The country should also try to realize clean use of coal to raise efficiency and improve environmental conditions.

At the same time, China should divert more input for research and development to energy and building a strategic reserve to ward off risks.

Next is international co-operation and participation in the redistribution of world resources, which is currently unbalanced. China is the world's second largest consumer of oil. It imported 120 million tons of crude in 2004, or 150 millon including processed oil, which ranked it as the third largest importer. It has a 40 per cent dependency on foreign oil that will soon rise to 50 per cent.

That means China must take action to curb the growth of consumption at home or encourage the use of replacement products so that oil will account for a smaller share of energy consumption. At the same time, China needs to find more resources with which to build a long-term, stable and reliable system of supply.

Foreign supply consists of two parts - the purchase from international markets and equities in international oil companies. The process is difficult and competition can be fierce. To solve the problem, we must resort to co-operation, not vicious competition.

To embrace international co-operation, we should change our mindset and establish a new understanding of energy security.

Energy and security are inseparable.

Resources are not confined to one country, but shared by every nation. Only when global energy security is achieved will domestic security be guaranteed. Currently the whole world is in the same boat.

In an international energy relationship, co-operation, rather than competition, should be the motto.

Energy partnerships should have multiple layers. They should include exploration on a global scale, developing new fields, building up strategic reserves, guaranteeing the security of transportation routes, protecting the markets, finding renewable energy sources and researching conservation methods.

Geographically, co-operation can include sea areas that are disputed, by adopting a policy of "shelving dispute for common development" so these areas can be effectively explored. The exploration of the South China Sea by China, the Philippines and Viet Nam is a good example.

The goal of international co-operation is mutual benefit. Therefore, one must consider not only one's own interests, but those of other countries as well.

Co-operation should have flexible forms and cover various areas such as technology, capital, human resources, production, transportation and sales. China should have closer ties with international and regional energy organizations, such as OPEC, and join them in protecting the world oil supply and working to stabilize oil prices.

A trend of co-operation is in the interests of every country. China has already started the process with many oil-consuming and oil-producing countries. The prospects for bilateral and multilateral partnerships is bright.

The author is a researcher at the China Institute of International Studies

(China Daily 10/28/2005 page4)


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