Research on the current situations and countermeasures for the energy security in China Available online at www.sciencedirect.com Energy Procedia 5 (2011) 261–265 1876–6102 © 2011 Published by Elsevier Ltd. doi:10.1016/j.egypro.2011.03.046 IACEED2010 Research on the current situations and countermeasures for the energy security in China Luo Yixin* Departm ent of Industry and Com m erce Managem ent,Hunan College of Finance and Econom ics , P.R.China, 410205 Abstract Concretely , main p roblems in that security are analy zed, which ar e consid ered to affect Chin a and mostly embody in such five big ar eas as the great p ressure in ener gy supp ly , the scarcity of relative energy resources, the shortage of green ener gy , the relative backwardness of ener gy technology and the drastic chan ge of the international ener gy market; furthermore the counter-measures concerned are p rop osed, including p erfecting the laws in ener gy , carry ing out the dip lomacy in energy actively and initiatively , saving ener gy and increasin g the ener gy utilization rate, develop ing the new technology of energy resources forcefully and exp anding green energy and new ty p es of energy . Keywords: energy; safety; problem; countermeasure 1. Introduction Ene rgy is an important resource on which modern human survival and development depend. As China's economy booms, its demand for energy is growing. Whether there is adequate and stable energy has become an important factor affecting and constraining China's economic develop entering the 21st century, energy prices climb up quic kly, repeatedly rewrit ing historical records. The ent. Since ups and downs of international oil prices affect the world's nerves. Accordin g to the estimat ion of authoritative international institutions, the proven recoverable oil in the world, can only supply around 41 years of human needs (natural gas for 60 -70 years, the coal about 200 years), man is confronting the energy crisis which threatens energy security[1-2]. Energy proble m has become a g lobal proble m. The thorough * Corresponding aut hor. Tel.: 13319600498. E-m ail address: luoguiyuan@sina.com. Open access under CC BY-NC-ND license. © 2011 Published by Elsevier Ltd. Selection and peer-review under responsibility of RIUDS Open access under CC BY-NC-ND license. http://creativecommons.org/licenses/by-nc-nd/3.0/ http://creativecommons.org/licenses/by-nc-nd/3.0/ 262 Luo Yixin et al. / Energy Procedia 5 (2011) 261–265 settlement of the energy issues is related to resources, technology, environmental protection, finance, la w, regional security, counter-terroris m, and many other areas. No country can tackle it alone. Therefore , for the common interests of sustainable human development, all countries in the world a re required to carry out close cooperation; in particular, the major energy producers and major energy consuming countries need to cooperate closely. In order to effectively deal with the world's energy crisis, our country has made tremendous efforts in environmental protection and energy security and achieved rema rkab le results. But because of various reasons, there are still a lot of problems we need to solve in the area of energy security in our country. 2. The main problems and the current status analysis on China's energy security China's energy security problems are mainly embodied in the following five areas: 2.1. The big energy supply pressure and the relative shortage At present, our country is in the accelerat ion period of industrializat ion and urbanization, the energy consumption is of higher intensity. As the economy further e xpands its scale, energy de mand will continue to increase rapidly, which will create a great pressure on energy supply. The contradiction between supply and demand will e xist for long; oil and natural gas will further depend on imports. Although the total amount of Ch ina's energy resources is c onsiderable, the per capita is very low. Resources exploration has lagged behind, which has impacts the imp rovement of energy production capacity. At the same time, our country has very uneven distribution of energy resources; large -scale and long-distance energy transport result in unsatisfying transporting capacity with increased cost. The latest data shows that China's dependence on oil imports reached 42 percent, and is e xpected to grow to 60% by 2020. In fact, the most important issue about energy secu rity is whether energy supply can support China's rapid economic gro wth or not. In recent years, the development in this regard is not in a normal situation: high energy-consuming industry is growing rapidly, driving the energy industry's rapid development. This results in the mutual promotion between the high energy -consuming industry and energy industry and their u ltra-high-speed development, leading to imbalance in the entire national economy. The research report released by NPC Financial and Economic Co mmittee shows that in recent years, the speed of rapid growth of high energy -consuming products is basically doubled in a fe w years. Coal is not only the fuel for therma l power but also an important che mical ra w materia l. Driven by the double forces, fro m 2000 to 2004 Ch ina's coal output was nearly doubled in four years, fro m 1 b illion tons to 1.98 b illion tons. Even so, coal is still in shortage. 26 provinces limited the e lectricity supply, and the coal used to generate electricity was in great need. Fro m 1980 to 2000, in these 20 years, China's GDP average annual growth rate was 9.7 percent, ach ieving the first goal of quadrupling ahead of schedule. During this period, the average annual energy consumption growth was 4.1 percent, achiev ing the goal of doubling energy consumption to ensure quadrupling the GDP. If that were a llo wed to develop this way, not to say doubling energy consumption to quadruple the GDP, even if we quadruple energy consumption, we cannot ensure quadrupling GDP growth. Relevant departments ma ke assumptions, in accordance with the e xisting mode of growth, to achieve the goal of quadrupling 2000 GDP ratio by 2020, at least 5.2 billion tons of coal will be required. In fact It is the situation that leads to frequent mining accidents. High -energy consuming industries has driven the demand for electric ity, and thermal electric ity has driven the coal de mand. Insufficient coal supply cannot satisfy the market, thus coal prices soaring which ma kes a number of s ma ll coal mines’ profits doubled and redoubled. Ultra -high profits encourage some people to take risks. This is the deep -seated reason for the continuous mine accidents. Production safety inspection results show that 1 / 3 of two billion tons of Luo Yixin et al. / Energy Procedia 5 (2011) 261–265 263 coal in our country, that is, there is aroun d 700 million tons of coal are produced by the mines unavailable of the safety conditions of coal production. Most people think that China is very rich in coa l resources, and it is not true. Expe rts who conducted inspections in Xinjiang and Inner Mongolia found that the coal long-term reserves there are about one trillion tons, but the extractable reserves are far less than the figure. Now the reserves available for e xploitation a re only 110 billion tons. To achieve the goal in 2020, we need to find 120 bil lion tons of reserves available for e xp loitation. Therefore, our resources are not very rich, but not enough. In addition, on the one hand, resources are in shortage, while on the other hand, waste is very serious. Jia Zhijie pointed out that the national average recovery rate of coal is only 30%, and many sma ll mines’ recovery rate is only 10% to 15%, while in developed countries this data is much as 70-80%. 2.2. The lack of green energy Coal is Ch ina's basic energy, and it is difficult to change the energy structure that China is rich in coa l, lack of gas, and short of oil. China's coal clean ing using level is low, and the pollution caused by coal combustion is serious . If this situation continues, it will bring greater pressure on the ecological environment. At present, pollution caused by the use of coal and da mage to the ecological environ ment in China a re a lso very serious. Data shows that China’s emission of sulfur dio xide ranks first in the world and carbon dioxide e missions ranks second in the world a fter the Un ited States . Once our country is constrained by the "Kyoto Protocol”, the situation will be very serious. Take Shanxi Province as an e xa mple , one ton of coal min ing leads to loss of 250 million tons of water and loss of eight tons of reserves and associated ores. The indiscriminate digging at the mo ment has also brought the ecology and vegetation damage. These are realities that we have to face. 3. Countermeasures 3.1. Perfect the relevant energy laws Practice shows that one of the ma in proble ms is the lac k of a corresponding la w. Therefore , it is an urgent need to develop our country's energy security leading law. According to the latest reports, top leaders of our country have paid great attention to questions of energy, not only increas ing more than 20 organizations for the Bureau of Energy under National Deve lopment and Reform Co mmission in 2005, more importantly, they have made instructions to enact China's "energy law" as soon as possible [3-5]. At present, our country already has "Coal Law", " Electric ity Act" and other relevant law. " Energy La w" will be the top law of these laws. In the past, our manage ment of coal resources was only concerned about their physical property, that is, only managed these resources as fuels. On August 8, 2005, U.S. President George W. Bush signed a new energy bill, "National Energy Po licy Act of 2005." So me e xperts consider it as the most e xtensive energy of the world in the last 40 years. According to the briefing, this US new energy la w main ly include the following contents: provide consuming ta x pre ference, pro mote ho me energy effic iency; set a new min imu m energy effic iency standard, improve the effic iency of comme rcia l and household appliances; through tax incentives, repeal outdated provisions not conducive to infrastructure investment, to strengthen and upgrade the national power grid and other energy infrastructure; through tax cuts and other measures to promote renewable energy development and utilization; support energy -efficient automobile p roduction ; reduce dependence on foreign energy sources etc. Expe rts have long suggested that although the Chinese have "Coal La w", " Electric ity La w", " Energy Conservation Law", " Renewable Energy La w", we still lack of a "leading" Basic Ene rgy La w. And the 264 Luo Yixin et al. / Energy Procedia 5 (2011) 261–265 legal status and the principle for adjusting "Oil law", "Natural Gas La w "and" "Atomic Energy Act," need further study. In addition, some of the e xisting energy laws and regulations cannot adapt to the needs of the reform and development, or even become obstacles to reform, and new things arising from re form or organizations lac k legal basis and legal protection. In addition to the new birth of the " Renewable Energy La w", other laws are necessary to be revised. National depart ments did have the plan to revise these laws, but the progress is slow, and some even co me to a halt. Because there is not a basic energy law at the top, the amendments to the laws lack of a guiding principle for co -ordination. 3.2. Positive and proactive in carrying out energy diplomacy According to International Finance News reports, China's current dependence on foreign energy is a big constraint on China's development. It is predicted that China's future energy supply and demand gap will be bigger and b igger. According to international pract ice , when a country's oil imports reach more than 100 million tons, it often needs to use diplo matic and economic means to ensure oil security. In fact, energy diplo macy has become the third aspect in Ch ina's diplo mat ic strategy, second only to big power diplomacy, and surrounding diplomacy. At present, China has been carrying out a "going out" strategy to encourage energy enterprises "going out", to participate in the global energy openness, by increasing the supply of energy all over the world to protect China's energy needs. We need oil, so we should set up a good relationship with those oil- producing countries, as well as those potential oil -e xport ing countries. In fact, especially entering 2006, China's energy diplo macy has been very active. The series of dip lo matic actions in the New Yea r serve only as a pre lude to the future Chinese energy diplo macy. Over the past, in the energy issue, Ch ina always let a large-scale do mestic energy co mpanies fight on their own and did not want to cooperate with other countries. China, therefore, got the final price often h igher than the actual price, resulting in a certain degree of "disadvantage." At present, China has good relations with almost all oil-producing countries. Ideological diffe rences will not lead to the breakdown of energy cooperation. This is resulted fro m Ch ina’s moderate fo reign policy pursued in international polit ics and adherence to the principle of equality and mutual benefits in international econo mic and trade e xchanges. The kind of v iew to regar d energy diplo macy as a self -suffic ient energy supply policy precisely lacks of strategic vision. Although in the past few years, the international co mmunity has critic ized and alerted on the efforts of China to obtain overseas energy supply sources, China's sustained economic develop ment is essential to the stable development of world economy. There fore, China's fore ign policy in energy on the one hand should not be undermined by crit icis m and pressure; on the other hand, it is necessary for China to acquire a stable source of overseas energy supplies and use it as a means to promote the benefits and dispel misgivings with all stakeholders and relative countries. 3.3. Save energy and improve energy efficiency On the one hand, compared with developed countries, China's energy utilizat ion effic iency is lo w. GDP produced by per unit energy consumption, is equivalent to only 1 / 4 of developed countries. For e xa mp le, China's total energy consumption is as much as 1.7 times of Japan's, but its total GDP is only a bout 28 percent of Japan’s. The key to China's low energy effic iency lies in the high proportion of low -grade industrial structure and high-energy-consuming industries such as steel, e lectrolytic a lu minu m and cement etc. The proportion of those low-energy-consuming, h igh value-added industries such as electronic informat ion, precision manufacturing and third industries is too low. Because of the sole pursuit of economic growth and product quantity, so as to ignore product quality and economic benefits for a long time , China has formed an e xtensive growth mode with the characteristics of h igh -consumption, Luo Yixin et al. / Energy Procedia 5 (2011) 261–265 265 high input, and low-effic iency. Even though we have been aware of the proble m, because of the lack of effective mechanisms and policies, therefore, this lon g-term pro minent contradiction restricting China's healthy economic development has not been fundamentally resolved, despite that we have indeed achieved certain results in this respect. From 1997 to 2000, under the condition that total energy consumption was at zero growth or declined, GDP growth rate reached over 7.1 percent. But for the last three years, energy consumption elasticity coefficient rose markedly. Fro m 2000 to 2003, they were respectively 0.02, 0.47, 1.21 and l.45. In 2004, energy consumptio n grew 4.1 percentage points more than total GDP growing rate, but it still fa iled to satisfy the demand. On the other hand, Ch ina's energy -saving potential is huge. At p resent, the main energy -consuming equip ment and technologies are outdated. High energy-consuming products’ per unit energy consumption is about 40% mo re than the developed countries on average, and China’s energy consumption of per unit output value is 2.3 times of the world average level. Since the "Ninth Five-Yea r Plan", the energy conservation work has achieved remarkable results, the energy consumption of 10,000 yuan gross domestic product value dropped by 25% and the energy effic iency reached 5.6% , energy -saving rate ranking top in the world. However, energy conservation work can only be counted as a start, and a lot of things are still required to do. China's energy-saving should first start from the conservation of energy resources. It is necessary to close the small coal mines which undermine the bigger ones. Meantime, the state shou ld be determined to rectify the high-energy-consuming industries, close in accordance with the law the industrial enterprises leading to the destruction of resources, waste of energy, damage to the ecology, and serious pollution. For those enterprises with high energy, materia l and water consumption, the state should be determined to technologically transform them. 4. Summary 1) China's energy security situation is very serious, which we need to seriously deal with; 2) Ch ina's energy security problems are ma in ly reflected in the energy supply pressure, the relative shortage of energy resources, lack of green energy, relat ively backward energy technology and the changing international energy ; 3) put forward co rresponding measures such as set up a sound ene rgy law, actively ca rry out energy diplo macy, energy saving and improve energy effic iency, vigorously develop new energy resources technologies, green energy and new energy etc. References [1] Kong Lingbiao, Feng Shu-hu. Regarding quest ions of energy security Chinese Coal. 2004 [2] Zeng P eiyan. Five problems facing China's energy and t he complex sit uation Ht tp:www.gov.cn, 2005, 12-27 [3] Huadian News Net work. National P eople's Congress St anding Committee concerned about energy security .2005-12-29 [4] China's energy security and sust ainable development (1) http:www.st ock888.net, 2004 [5] Zhang Wenmu. China's energy securit y and policy options http://www.cngdsz.net, 2004