China’s Energy Security Meeting the Demand for the 21 st Century

1. China’s Energy Security Meeting the Demand for the 21st Century Chris Johnson, Esdras Miranda, Mike Morrissey, Mark Thornton

2. China’s Background • Worlds most populous country (1.3 billion) • 2nd largest energy consumer • Dominant source of fuel is coal • Production & consumption of coal is highest in the world • Becoming more competitive in world oil markets

3. 35% 30% 25% 15% 5%

4. What China will use for Energy in 2007 Oil 23% Gas 3.7% Coal Nuclear 1.2% Coal 69% Hydro 2.5%

5. China and Coal • 65% of primary energy consumption • Largest producer and consumer in the world • 2003: coal consumption was 1.53 billion short tons (28% of World)

6. GDP Compared to Energy • This Graph demonstrates the energy growth from 2001 to 2004 • China plans on quadrupling its gross domestic product before 2020 • This will not be achieved if energy consumption remains at a higher percentage than GDP

7. National Ministry of Energy • Implement comprehensive energy policies • Increase staffing of government officials in the energy sector • Include Stakeholders in decision makings of hydro and nuclear power plants

8. China’s Major Energy Companies CNPC- China National Petroleum Corporation specializes in crude oil production Sinopec- China Petrochemical Corporation Refining, Distribution CNOOC- China National Offshore Oil Corporation Offshore Exploration, Production,

9. China’s Decision Making • National Energy Strategy and Policy 2020 • Consider supply & demand of energy consumption • Create a new energy sector • National Ministry of Energy

10. China’s Major Domestic Energy Supplies j Daqing Xinjiang Russia Kazakhstan Mongolia Large Coal Deposits China Three Gorges Dam Nuclear Power Plants East and South China Sea

11. 2nd largest consumer of oil products in 2004 Source of around 40% of world oil demand growth in the last 4 years Oil demand estimated to reach 14.2 million bbl/d by 2025 85% of oil production is onshore Around half of imported oil comes from the Middle East Saudi Arabia alone accounted for 17% in first quarter of 2005 China’s Oil

12. China’s Oil Priorities • Stabilize production in the eastern regions • Increase production in new western fields • Develop infrastructure needed to deliver western oil and gas to the east • Offshore oil development

13. China’s Oil

14. Why is obtaining more oil so important for China’s Future? • Auto Market will be 2nd Largest in the world within the next ten years • 23 Million Cars now, 130 million by 2030- That’s 7.5% Growth per year • If the United States experienced that same rate of growth to its current 140 million car population for the next 25 years, we would have 800,000,000 cars!

15. Where Does China get it’s oil from now?

16. China’s Energy Routes are Vulnerable

17. China is looking to the West for Energy Kazakhstan-China Pipeline CNPC strikes deal with Iran Turkmenistan-China Natural Gas Pipeline Angarsk-Daqing Pipeline

18. Oman Yemen China’s Oil Deals Kazakhstan Uzbekistan Iran Iraq Algeria Kuwait Saudi Arabia Libya Egypt UAB Sudan

19. Strategy Proposal on Demand • Promote and raise public awareness of energy efficiency • Introduce fuel taxes and fuel efficiency standards in the transportation sector of the economy • Establish stricter energy efficiency ordinances for equipment in industrialized buildings

20. Strategy Proposal on Supply • Set up Environmentally Friendly Fund in order encourage cleaner coal • Accelerate natural gas market development • Accelerate construction of hydro and nuclear power plants • Institute property rights reform • End price controls and move towards public bidding and auctions