Tuesday, July 20, 2010

DTN News: China Denies IEA Claim On Energy Consumption

Defense News: DTN News: China Denies IEA Claim On Energy Consumption
Source: DTN News / Financial Times By Leslie Hook in Hong Kong
(NSI News Source Info) HONG KONG - July 21, 2010: China on Tuesday dismissed claims that it was the world’s largest energy consumer, calling the latest estimates from the International Energy Agency “not very credible”.
The energy watchdog disclosed on Monday that China had overtaken the US in energy consumption, according to preliminary estimates. The news – and China’s quick reaction – underlines the sensitivities that surround China’s thirst for energy, particularly as the government struggles to meet ambitious efficiency targets by the year’s end.
Zhou Xian, head of the general office of the Nat ional Energy Administration, dismissed the numbers. “When the IEA came to China to publish its energy outlook a couple of days ago, they also overestimated China’s energy consumption and carbon dioxide emissions,” he said. “We think that is because of a lack of knowledge about China, especially about China’s latest developments of energy conservation and renewable energy.”
The IEA’s estimates of energy use and demand can change between the preliminary forecasts and the final data – sometimes by a big margin. The IEA’s underestimation of energy demand in 2004 contributed to a global jump in oil prices.
Officials from the National Energy Administration have also previously forecast that China will soon overtake the US in energy consumption. It is just a question of when.
China’s booming energy demand is caused by rapid economic growth, particularly in heavy industry.
Beijing has had limited success in encouraging energy efficiency and in its efforts to ban electricity subsidies for industrial users. It hopes to reduce energy intensity – a measure of energy consumed per unit of GDP – by 20 per cent by the end of the year based on 2005 levels. That target will not be easily met, and the looming deadline puts pressure on officials to crack down on heavy energy users.
In a June interview China’s senior climate change negotiator proposed electricity caps in certain sectors. Last month the People’s Bank of China directed Chinese banks to stop lending to energy-intensive industries, according to the China Daily.
China’s own numbers for its 2009 energy consumption are lower than the IEA’s. But even those figures suggest that China and the US are neck and neck for the top consumption spot.
The IEA estimates that China consumed 2,265m tonnes of oil equivalent in 2009, whereas preliminary data from China’s National Bureau of Statistics puts consumption at about 3,100m tonnes of coal equivalent during the same period. That is about 2,170m tonnes of oil equivalent based on back-of-the-envelope conversions – lower than the IEA’s estimate but almost the same as US energy consumption during the same period. China’s 2009 energy use is still lower than that of the US between 2004 and 2008, according to the IEA.
The IEA has in the past said that it hopes China will eventually join the organisation.
This year’s statistical review by BP, which is the most widely followed economic review by any company, also found China’s energy use to have surpassed that of the US. BP calculated China had consumed 2.2bn tonnes of oil equivalent last year compared to the US’s 2.17bn.
One of the main differences between the IEA numbers and those of China is that the IEA includes China’s consumption of traditional biomass.
Fatih Birol, the IEA’s chief economist, said on Tuesday: “A Chinese person consumes only one-third of the amount of energy of someone living in the western world.” But he added that “in terms of energy usage, these do not change the fact that China has become the largest energy consumer in the world”.
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