China and India are Asia’s two largest emerging economies. Both have large populations, industrializing economies and rising living standards and energy consumption. This slide show compares energy production, consumption and efficiency of both countries head-to-head and the environmental issues both are confronting as a result of their growing energy use. The numbers are drawn form official statistics, the Organization of Economic Cooperation and Development and the International Energy Agency and are the latest available full-year estimates. The energy intensity comparison is based on purchasing power parity conversion rates.
by Paul Maidment
China set up a state agency to tackle the damage its rapid industrialization was doing to the environment as long ago as 1998. But as China’s economy continues to grow, so does the country’s energy consumption, and with it the scale of the challenge that the State Environmental Protection Administration (SEPA) faces.
One measure of how fast the country’s energy demands are growing is its oil needs. China’s 2006 oil consumption is forecast to increase by almost half a million barrels per day from last year’s volumes, or 38% of the total growth in world oil demand. China is the world’s third-largest net importer of oil, behind the U.S. and Japan.
But pollution from burning the country’s highly sulfurous coal, China’s leading source of energy, is most damaging the health of Chinese, the quality of the air they breathe and the water they drink.
Half of the 2 billion tons of coal China burns each year, accounting for two-thirds of the country’s energy consumption, feeds industry. The sulfur dioxide and soot thrown off results not only in a polluted atmosphere but also acid rain that falls on a third of China’s cities.
Given the wide dispersion of China’s factories, a legacy of Mao Zedong’s economic decentralization, acid rain has had an additional harmful impact on agriculture. Water pollution, soil erosion, deforestation and desertification in the north, where rivers are drying up, have contributed to an estimated loss of one-fifth of agricultural land since 1949.
Concentration for most pollutants remains high despite legislation passed in 2002 to control emissions in ten of China’s biggest cities and several river valleys that provide industrial arteries into the interior from the heavily populated coasts. This followed a 1998 study by the World Health Organization that found that seven of the ten most polluted cities in the world were Chinese.
Making industry cleaner and more energy-efficient has been at the forefront of Beijing’s attempts to reduce emissions. Enterprises are being pressed to change over from coal to cleaner-burning natural gas and methane, and to be more energy-efficient by modernizing their plant equipment in the switch.
At the start of this year, China enacted new legislation, the Law on Renewable Energy, which promotes cleaner energy technologies. It also introduced a target of generating a tenth of the country’s electricity from renewable resources by 2010, up from 3% now.
China is already investing billions of dollars to substitute hydropower (which counts as a renewable energy source) for coal and gas in electricity generation. However, some of those projects, such as the gigantic Three Gorges project on the Yangtze River, due to start generating power in 2009, have created a separate set of environmental problems.
Wind power is also being experimented with in a small way for power generation in northern and western China, where it could supply electricity to rural villages in windswept and increasingly arid Inner Mongolia and Gansu Province that are still not on the grid.
Environmentalists also see potential for wind power generation along the coast, where windmills on islands could supply some big cities. However, China is still reliant on imported technology to drive its energy conservation and diversification.
The need for cleaner energy is urgent. Carbon emissions have more than doubled in the past 25 years. China is now the second-largest emitter of energy-related carbon dioxide emissions after the U.S.
But while the country’s energy intensity—the amount of energy required to produce a unit of economic growth—is improving, it is not improving enough to offset the pace of growth of the economy, the population and living standards.
A SEPA report in 2003 said officials were "not optimistic" about the success of their efforts to curb air pollution. Anti-pollution laws are only slowly being strengthened, and enforcement of existing ones has been lax, with small punishments for offenders. However, recently, environmental officials have become increasingly active in blocking new industrial development.
The growth of road freight and the more widespread use of private vehicles have made transportation the second area of priority for Beijing’s energy conservationists. Chinese bought 7 million new cars last year, making it the world’s second-largest car market after the U.S.
The World Bank has forecast that there will be 170 million vehicles on the roads in China by 2020, by which point the country would have overtaken the U.S. in total car ownership.
Once clogged with bicycles, Beijing is now clogged with cars—2.5 million of them. The capital is weaning its public transportation off gasoline. It has the largest fleet of natural gas-powered buses in the world. But the rapid growth of car ownership mitigates much of the public effort.
Car exhaust emissions in the U.S. account for 5% of worldwide carbon emissions. If China, which is investing heavily in developing a domestic auto industry, matches the U.S. in car ownership, it would exacerbate an already growing global problem.
Much will depend on whether China’s motorists decide to choose smaller, fuel-efficient vehicles favored in Japan and Europe or the larger gas guzzlers driven by Americans.
To encourage the answer it wants—and to cut back the country’s growing oil imports—Beijing has imposed taxes on high-gas-consumption autos, while adopting European auto emissions standards in 2004. The government has said it will raise those to the highest European standards in 2008.
China’s longer-term opportunity is to build an auto industry based not on the gasoline engine but on alternative fuels, skipping a generation of technology as it has done in areas such as telecoms.
It is a delicate balancing act: economic growth, public health and social stability. While China’s leaders know that, historically, challenges to Beijing’s power come from the countryside, it is in the many smog-ridden, traffic-clogged, dirty-water cities that a rising middle class may find political voice around the quality of urban life.
Etiquetas: China, Energy, environment, India, Manuel Torres Laveaga
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Oil Falls Below $51
The price of oil plummeted on Tuesday, falling below $51 per barrel following a statement by Saudi Oil Minister Ali Naimi saying that further production cuts are unnecessary.
That marked a 19-month low, but the price of light sweet crude doesn’t appear to be hitting its near-term bottom anytime soon. Analysts said the market interpreted Naimi’s statement as evidence that the Organization of Petroleum Exporting Countries will not hold a special meeting in February to discuss further cuts.
In late afternoon trading, February contracts for light sweet crude were trading down $1.78 to $51.21.
On Monday, Rafael Ramirez, Venezuela’s oil minister, called for a special meeting to discuss production cutbacks. He said his nation’s desire for further cuts is backed by other countries but would not say which ones.
Meanwhile, on Tuesday Edmund Daukoru, the Nigerian oil minister said that OPEC members should postpone any decisions until February.
"We cannot judge the market right now," he said.
John Kilduff, senior vice president of energy risk management at Fimat USA said in a note on Tuesday that "OPEC will probably still come forth with some action or at least some lip service to stem the slide in prices."
Yet he said a truly enforced cutback is unlikely.
"Reports from independent oil trackers last week showed OPEC exports rising last month and up again in January which casts a severely dark cloud over compliance and bodes ill for any proposal effecting future cutbacks aimed at controlling prices."
Kilduff said the disagreement over whether cutbacks are necessary coupled with continued expectations for warmer-than-usual weather may push oil prices as low as $46 dollars a barrel.
Recently, OPEC has said it will cut 1.7 million barrels a day, including a reduction of 500,000 barrels scheduled to begin on Feb. 1. Yet Peter Beutel, an analyst at Cameron Hanover said "the perception is that OPEC will not cut what it pledges to."
He said countries such as Saudi Arabia will wind up cutting according to their pledge, but that others such as Venezuela will not.
Since the early 90s, Beutel said countries Venezuela, Iran and others have felt that there should be less oil on the market but that large producers with smaller populations such as Saudi Arabia should be the one’s to bear the brunt of the cuts.
"At this point, if we don’t have a brutally cold weather between now and Feb. 28, my guess is that we will see prices continue to get lower."
He estimated the bottom at around $42 per barrel.
Etiquetas: markets, oil, OPEC, Torres Laveaga
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