China's gas consumption swells

Energy trade deficit to continue in short term: expert

China registered the biggest increase in gas consumption in the world in 2013 as it continues to improve its energy mix, against the global backdrop of natural gas consumption poised to rival that of coal in about 20 years, an senior economist said on Tuesday.

China's natural gas consumption rose by 10.8 percent year-on-year in 2013, or 15.3 billion cubic meters (bcm), a major forward step in meeting its stated political goal of increasing the share of natural gas in its energy mix, Christof Rühl, chief economist at global oil giant BP, said at a press conference in Beijing.

The Chinese government said in an April statement that China's total gas supplies in 2020 would reach 420 bcm per year.

The importance given to coal, China's dominant energy source, and oil has declined and a growing focus has been shifted to natural gas, which saw its share doubled over the past decade.

"In China, coal consumption growth will slow down enormously due to the rebalancing of its economy and shrinking need from the industrial sectors," the BP chief economist noted.

Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, said the rapid growth in natural gas consumption is caused by its small base, rising living standards and an urgent need to burn gas instead of coal to fight air pollution as other alternatives are not available in the near-term.

China took up 22.4 percent of the world's total energy consumption in 2013, and the share of coal, oil and gas respectively accounted for 67.5 percent, 17.8 percent and 5.1 percent of its energy portfolio, according to BP statistical review of world energy published on June 16, 2014.

Last year, for the first time, China's energy trade deficit surpassed that of the US and became the biggest in the world, and half of China's trade surplus was chewed away by energy imports, according to the BP statistical review, noting energy imports as a share of GDP almost tripled from 2003 to 2013.

"Different from natural gas, which is sold at fixed-price basis, the volatile crude prices on the world market are a destabilizing factor for the stability of Chinese economy," Lin told the Global Times on Tuesday.

"A lot of China's oil consumption increase will be caused by a rise in car ownership as more Chinese join the middle class. Replacing gasoline-powered cars with electric-powered vehicles will enhance China's energy security, as we sit on the world's third largest coal reserve," Lin said.

China has no way to mitigate its energy trade deficit in the short term, but in the long term, the possibility of a reversal in energy deficit remains wide open, Rühl told the Global Times on Tuesday.