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Last Updated: Thursday, 16 February 2006, 00:25 GMT
Satisfying China's demand for energy

By Rupert Wingfield-Hayes
BBC correspondent, Beijing

As part of the BBC's Fuelling the Future season, Rupert Wingfield-Hayes looks at the factors fuelling growing demand for energy in China, and how the country plans to cope once the oil age is over.

Passengers try to push start stalled bus in Beijing
What will China do when the oil runs out?
The hair-raising amount it now costs you to fill up your car with petrol is apparently all China's fault! Or so you might think to read some of the more alarmist reports in the western media.

China has, we are told, been running around the world signing oil deals with everyone from Iran, to Sudan to Angola. In the race to secure future oil resources China is prepared to deal with even the dodgiest regimes, and pay the highest prices.

Like all good stories they carry more than a grain of truth. China has been on a buying spree, and is prepared to pay top-dollar to get its hands on the oil it needs. But it is more than a slight exaggeration to say China is to blame for $70 a barrel oil prices.

In fact China, with a fifth of the world's population, consumes only 4% of the world's daily oil output. It imports about three million barrels a day. A lot to be sure, but far below American consumption.

Onward and upward

The real reason why everybody is suddenly talking about China is that 15 years ago, it imported virtually no oil - it was self-sufficient.

But as China's economy has surged ahead at 10% a year, its own supplies of oil have begun to dry up. The only option has been to import.

From zero 15 years ago, China last year became the world's number two oil importer.

Go out on the streets of Beijing and you can see why. Fifteen years ago, the roads were empty, save for the constant stream of bicycles.

Today they are jammed from morning to night with close to three million private cars.

A thousand new cars hit the city's streets every day. By 2020 China will have 140 million private cars, more even than the United States.

One among many

That means that China is going to continue signing deals. According to James Brock, an energy analyst based in Beijing, we're going to have to get used to ever higher oil prices.

Your grandchildren will ask you, what's a petrol car granddad?
James Brock
Energy analyst

"China is only one of many factors pushing prices" he says.

"The cost of getting the oil out of the ground is going up, the amount of water in it is increasing, and there's less and less of the really good oil down there. All of this is forcing the prices up."

Ultimately the oil is going to run out - and, according to James Brock, sooner than many of us may realise.

"Your grandchildren will ask you, what's a petrol car granddad?"

"It'll be as soon as that," he says.

Dirty, bad and dangerous

So what will China do when the oil runs out?

Chinese coal vendors

The answer is that to fuel its future China will go back to the past. China's future fuel will be coal.

Coal has a bad reputation. Dirty, dangerous and highly polluting, the prospect of a coal powered future will fill many with dread.

China is already by far the world's biggest producer and consumer of coal.

Its 30,000-odd mines churned out more than two billion tonnes of the stuff last year. That's more than a third of all the coal produced in the world.

It also cost the lives of 6,000 Chinese miners, and is the main reason why China is now second only to the US in its output of greenhouse gases.

But coal's dirty reputation may be about to change. China has recently given the go-ahead for construction of several huge new projects to turn dirty coal in to clean gas.

Three Gorges Dam
The five great rivers of Asia all rise in China.... China wants to dam them all

The science and technology behind 'coal gasification' has been understood for years.

But only with oil prices at $60-70 a barrel has it finally become profitable to go ahead and build the multi-billion dollar plants needed to carry out the process.

According to the experts these new mega-plants will take dirty sulphur rich coal and turn it in to clean, sulphur-free gases like methane, all ready to be liquefied and put in to the tanks of China's millions of cars, or burned it its power stations.

Push for renewables

But even that won't be enough. That's why China is also pumping billions of dollars in to renewable energy. Everything from solar, to wind power, to biomass. By 2020 China wants 15%of its power to come from renewable sources. Most of that will come from one source, hydro-power.

The five great rivers of Asia all rise in China; the Yellow river, the Yangtze, the Mekong, the Salween and the great Brahmaputra. China wants to dam them all.

Bikes at busy Beijing intersection
The bike used to be king on all Beijing streets
On the middle reaches of the Yangtze work is nearing completion on the biggest of them all, the Three Gorges Dam. When it's finished in three years time the world's biggest turbines deep inside the world's biggest dam will pump out 25 gigawatts of electricity. That's equivalent to one-third of the UK's total energy output.

But that's only the start. Plans have just been approved to build another mega dam, higher up the river, across the Tiger Leaping Gorge, one of the most beautiful and spectacular river gorges in the world. Further west close to the Burma border plans to build a series of dams across the Salween (Nu Jiang) have recently been given the green light. Environmental groups are purple with rage.

But the simple fact is that China will need all of these projects simply to keep up with its breakneck economic growth




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