(EnergyAsia, February 29 2012, Wednesday) — China’s oil imports exceeded five million b/d for the first time last year, raising the country’s dependence on external supplies beyond 55% and putting it on course to reach 67% by 2020, according to an analysis by the CNPC Economics& Technology Research Institute.
Of growing concern to Chinese policy makers is the country’s increasing dependence on a few oil producing countries from the politically volatile Middle East and Africa. Last year, the Middle East accounted for 51% of China’s 251.2 million tons or 5.05 million b/d of crude imports while Africa supplied 24%.
Saudi Arabia, Angola and Iran were among the three most important suppliers as China’s total oil consumption rose 4.5% to another record high of 470 million tons or 9.46 million b/d in 2011. China’s crude oil consumption rose 3.4% to reach 454 million tons or 9.14 million b/d, said the institute.
Amid an expected economic slowdown and improving energy efficiency, the institute does not expect China’s oil demand to grow by more than 5% this year and therefore not breach the 10 million b/d level.
In a landmark report released this week, the World Bank and China’s State Council said the world’s second largest economy faces growing risks of an economic crisis if it fails to implement radical reforms. The 468-page report, “China 2030: Building a Modern, Harmonious, and Creative High-Income Society,” was jointly prepared by the World Bank and the Development Research Center under the State Council.
One of the risks cited in the report is that China’s growth has depended heavily on energy and natural resource use, contributing to a widening environmental deficit and exposing the economy to commodity price shocks.
“While the rise in energy intensity in individual industries has eased steadily, rapid growth, growing urbanisation, and structural change within manufacturing have combined to make China the world’s largest energy user, outstripping the US in 2010.
“Similarly, rapid growth has led to substantial natural resource depletion and serious environmental pollution. Uncorrected, these trends could, in time, serve as a serious constraint on growth.”
The World Bank noted that China’s rapid growth in energy demand has strained domestic supplies of electricity, raised coal prices, and made the country increasingly dependent on imported energy.
If China stayed the course, it may have to import 75% of its oil (making it the world’s largest oil importer) and 50% of its natural gas by 2030.
“The efficient use and better governance of land will help reduce urban congestion and sprawl. Improving the quality of land and water will help raise agricultural output. Better energy efficiency will ease infrastructure constraints, particularly for handling coal,” said the report.