China’s energy investments are on the move, touching nearly every region of the globe from coal and liquefied natural gas imports from Australia to a recent natural gas agreement with Russia and expanded oil drilling in the South China Sea. [Video Above]
China’s growing demand for reliable energy sources to power its fast-growing economy will not only have major impacts on the global oil and gas markets but may trigger geopolitical tensions in Asia, said panelists at the Wilson Center on September 17. And a major push for shale gas – China has the largest reserves in the world – is not moving fast enough to diffuse such competition.
Increasing Regional Demand
“One point three billion [people] times everything is a lot,” said Robert Daly, the director of the Kissinger Institute on China and the United States at the Wilson Center. “China needs fuel.”
China is the world’s largest energy consumer and the second largest oil purchaser after the United States. The International Energy Agency predicts that China’s oil imports in 2030 could increase up to 1.6 times from 2011 levels.
The country’s rising middle class and rapid economic growth are placing tremendous pressure on its existing energy supplies. Meanwhile, public concerns over air pollution and other environmental issues are pushing the government to move away from dependency on coal, which currently supplies 70 percent of the country’s electricity.
Worse yet, India and other emerging countries in South and Southeast Asia are also experiencing strong growth in domestic energy demand, and will no longer be able to serve as major oil and liquefied natural gas suppliers to Northeast Asia. Thus, traditional importers such as China, South Korea, and Japan may need to look outside the Asia Pacific region to guarantee reliable and diverse natural gas resources.
Summary Authored By Qinnan Zhou and Originally Posted on New Security Beat October 15, 2014.