China

The importance of China in the global energy economy can hardly be overstated. Chinese consumption drives the world market prices of oil, gas and coal. According to a new forecast from the US Energy Information Administration, China could well become the largest importer of oil in the world as soon as this autumn. But how secure is the Chinese economy and what would happen to the energy market if the glory days come to an end.?

To illustrate the current reality lets look at a few statistics. Read more

Energy policy has barely surfaced as an issue in the Australian election. Both of the main parties are committed to moving to an emissions trading system but neither seems likely to impose prices which fundamentally shift Australia’s energy mix away from hydrocarbons. The greater impact on the energy sector will come from international developments and that is where events are adding to Australia’s existing natural advantages. Read more

The Chinese, as reported by my colleague Guy Chazan, are in talks with EDF on sharing the costs of building the new nuclear plant at Hinkley Point in Somerset. Their price is an unspecified “degree of control”. The Russian company Rosatom announced a couple of weeks ago that it was considering joining the game with the aim of building future nuclear stations in the UK. Perhaps we should be grateful that such nice people have taken an interest in the UK’s energy needs. But before we roll over in gratitude perhaps we should consider the links between energy and security. Read more

Organisations die when they become irrelevant. That is what is happening to the G8 which, for reasons I can’t understand, continues to exclude China. When the G8 was formed in the 70s to bring together the leaders of the world’s main economic powers at a time of crisis and recession, China was tiny in global economic terms and focused on its own internal political struggles. Now it is at the heart of the global economy. Excluding the Chinese in favour of Canada or Italy is insulting. Read more

Success always brings its own burdens. The Chinese economy has grown in real terms by around 8 or 9 per cent a year since 1980. Some 800 million people have been lifted out of subsistence. Dozens of new cities have been built. The country is now one of the world’s great economic powers even if it is still not allowed to join the G8. And growth continues. China is the world’s biggest building site.

One of the burdens which has come with economic success is the need to import oil. China has found very little oil, despite extensive exploration efforts – especially in the South China sea. Net imports have therefore risen steadily from zero twenty years ago to 5.6m barrels a day last month. Read more