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Although there's a need for China to reduce energy use, the country shouldn't become the world scapegoat for surging oil prices and a tight energy supply, according to the International Energy Agency (IEA).

 

"Increased demand for energy from China isn't the only thing driving up the global oil price," said Noe Van Hulst, director of Long-term Cooperation and Policy Analysis at the IEA. "In fact, market fundamentals demonstrate that as long as investment goes to fuelling oil production, there will be enough oil at affordable prices for the world economy."

 

The development of emerging economies such as China and India did exert pressure on global energy prices, Van Hulst said. But it was wrong to say they're the only forces driving prices up, he added.  

 

There would be enough oil reserves for the development of the global economy, Van Hulst said. The key is whether there is enough investment put into production.

 

The Paris-based IEA is an energy policy advisor for 26 industrialized nations and is considered the world's energy watchdog. The organization predicts the price for oil and natural gas will stay high into the future due to robust demand and restricted investment in production.

 

By 2010, however, oil prices may fall as investments in production and technology improvements increase, Van Hulst said.

 

The IEA's latest World Energy Outlook says the world is being confronted by a lack of adequate and secure energy supplies at affordable prices as well as environmental hazards triggered by over-consumption.

 

According to the IEA report, "The need to curb the growth in fossil-energy demand, to increase geographic and fuel-supply diversity and to mitigate climate-destabilizing emissions is more urgent than before." In the report, the IEA called for China to cut back on oil imports and put restrictions on energy use.  

 

Van Hulst advised that China should consider alternative energy options and rely on policy guidance to enhance energy efficiency. "Stricter and higher energy efficiency standards involving emission benchmarks, power generation or other areas should be applied by the authority to curb demands," Van Hulst said. "What should follow next is to encourage the adoption and development of cleaner and renewable energy resources such as clean coal, wind and solar energy."

 

China should also reduce or stop subsidizing dirty energy industries and businesses such as coal production, he said.

 

Han Wenke, deputy director of the Energy Research Institute under the National Development and Reform Commission, said the government should support renewable energy resources. "Developing renewable energy is investing for the future and the state should subsidize promising options," Han said.

 

(China Daily November 28, 2006)