DORIAN China Energy Security Johns Hopkins Speech

China: Energy Industry Trends and Security Implications: 

China: Energy Industry Trends and Security Implications by James P. Dorian, Ph.D. International Energy Economist Washington, D.C. Presentation made at the Conference on “Global Energy Perspectives: Supply Security, Economic Development, and Sustainability” USAEE and Johns Hopkins SAIS 26 April 2006

2005: Critical Year for Chinese Energy: 

2005: Critical Year for Chinese Energy Continued impact on global oil prices/markets. Expanded search for overseas oil and gas resources (Iran, Sudan, Venezuela, Canada, etc.). Robust economic growth placing enormous strain on energy, particularly coal and power. Domestically, “West-to-East Gas Pipeline” opens. China-US, China-Russia, and China-Iran energy dialogue stepped up.

Chinese Energy Consumption, 1990-2005: 

Chinese Energy Consumption, 1990-2005 Coal Total Oil Sources: International Energy Agency, Paris; various press reports. Gas Hydro

Chinese Electric Generation by Fuel, 1990-2005: 

Chinese Electric Generation by Fuel, 1990-2005 Coal Total Hydro Sources: International Energy Agency, Paris; various press reports. Oil, Gas, Nuclear

Coal Sector: At A Critical Crossroads: 

Coal Sector: At A Critical Crossroads Under serious stress to meet growing power demand and economic growth. Railroad transportation is strained and insufficient. $100 billion required in industry to 2025. 11th 5-Year Plan heavy focus on coal/transportation. Coal shortages have led to some power outages though less frequent than previous two years. Serious mine accidents continue. Coal will be ‘King’ for decades.

China Oil: Sector in Transition: 

China Oil: Sector in Transition Oil demand grew to 6.6 mln b/d in 2005; 7.0 mln b/d expected this year. China imported 2.7 mln b/d in 2005, up 300,000 b/d or 13%. Production remains flat at around 3.6 mln b/d. China could use between 10-15 mln b/d in 2020. Beijing is pushing domestic oil companies to actively invest in overseas oil projects and companies.

Global Implications of Increasing Chinese Energy Demand: 

Global Implications of Increasing Chinese Energy Demand Growing role in Central Asia, Russia, Asia/ASEAN countries and Middle East. Emerging competitor against Japan and US for imported oil (increasingly from Middle East). Strongly influencing world commodity prices and markets. Growing pollution becoming regional and international concern.

Domestic Energy Security:Issues and Concerns: 

Domestic Energy Security: Issues and Concerns Transportation of coal, oil. Scarce water, an ‘energy’ resource. Emerging bottlenecks’ impact on economic growth. Energy-private land rights conflict (hydro/wind). Low energy pricing, particular problem during periods of high global prices. Environmental degradation. Balancing other costly needs.

Foreign Energy Security: Issues and Concerns: 

Foreign Energy Security: Issues and Concerns Geopolitics of energy/competition (Sudan, Venezuela, Iran, Canada, etc.) Less than expected oil, gas from Russia. Exacerbating needs from elsewhere. Vulnerability of oil shipments. Dramatic increase in oil imports and nuclear to 2020-25. Global economy (recession, boom?).

Chinese Energy Consumption per Unit GDP: 1990-2005: 

Chinese Energy Consumption per Unit GDP: 1990-2005 Sources: International Energy Agency, Paris; various press reports.

Concluding Remarks: 

Concluding Remarks China may have the greatest impact on world energy over the next two decades and beyond. Increased attention needed on coal, vehicle use, and improved efficiencies. Security issues/concerns are domestic and foreign in nature. Potential energy bottlenecks could constrain future economic growth affecting both China and rest of world.