Analysts warn of need to reduce reliance on fossil energy
A government official predicted Thursday that demand for oil and gas in China will keep growing in the next decade, but some analysts suggested that reliance on imported fossil fuels should be reduced.
From 2016-25, the country's demand for oil and gas will reach 600 million tons, with imports accounting for 67 percent of that, Zhi Luxun, deputy director of the department of foreign trade at the Ministry of Commerce (MOFCOM), said on Thursday, according to domestic financial news website cnstock.com.
Zhi said the government had vowed to deepen urbanization while continuing to boost regional economic development, so the nation will continue to see increasing fuel imports.
Amid generally weak commodities prices, crude oil prices have plunged this year, which should be welcomed by oil importing countries, said Li Li, director of research at Shanghai-based consulting firm ICIS China.
Demand for gasoline has supported the growing need for energy imports, "which will continue to be a major trend in China," Li told the Global Times on Thursday.
The nation recorded imports of 248.62 million tons of crude oil from January to September, an increase of 8.8 percent year-on-year, according to data published by the General Administration of Customs in October. The country also imported 23.19 million tons of refined oil in the same period, up 4.7 percent on a yearly basis.
The growing imports of refined oil were mainly driven by increased gasoline imports, which reached 166,970 tons in the first nine months of 2015, up 397.6 percent year-on-year, according to the customs data.
Lower oil prices are supporting strong demand growth, and the world's top consumers, the US and China, are buying more oil, according to a report published by the International Energy Agency in October. However, the agency predicted that global demand growth is expected to slow in 2016 due to the downward pressure on the macroeconomic outlook.
However, some analysts held different views about whether the nation should increase its energy imports.
China is more likely to reduce its oil imports in the next decade as it has been pledging in recent years to increase its use of natural gas, a less environmentally harmful fossil fuel than coal and oil, Han Xiaoping, chief analyst at energy website china5e.com, told the Global Times on Thursday. "Fast-growing oil and gas imports would probably also raise concerns over the energy safety issue," Han noted.
Lin Jiang, senior analyst of China strategy at the US-based Energy Foundation, echoed Han's view. "One effective way to dismiss [energy safety] concerns would be to reduce the reliance on fossil energy," Lin told the Global Times Thursday.
In addition, the country has set a goal to raise non-fossil energy consumption to around 20 percent of the energy mix by 2030, according to the US-China joint announcement on climate change published by the US government in November 2014.
At the same time, the State Council, China's cabinet, issued the Energy Development Strategy Action Plan (2014-20), targeting a share of above 10 percent for natural gas, as part of strategic steps to modernize the country's energy structure, the Xinhua News Agency reported in November 2014.
Those moves will help China reduce its reliance on fossil fuels and boost the use of renewable energy such as solar power, Han noted.
To build a more sustainable energy structure, analysts noted that the country should be open to more diversified investment in the energy sector, such as in the oil sector. "Encouraging foreign investors to join the industry's restructuring may help companies like China National Petroleum Corp become more market-oriented," Han said.
