China’s energy consumption rate slows to match economic growth rate

BEIJING, June 30 — China’s growth rate of energy consumption dropped to 9.5% last year from 15.5% in 2004, while the country maintained a 9.9% economic growth rate in 2005, reports Xinhua.

According to a joint press conference held here Friday by the BP Group, the National Development and Reform Commission (NDRC) and the National Bureau of Statistics (NBS), China has seen a sharp decline in oil consumption in 2005 as compared with 2004.

The benchmark Brent dated oil price averaged US$54.52 (RMB426.6) per barrel in 2005, up 40% from the 2004 average while China’s oil demand growth slowed dramatically to 3% compared to 17% in 2004.

So it is “unfair and incomplete” to blame China for high oil prices, said Gary Dirks, president of BP China.

Indeed, surging demand in China is just part of the equation and there are other more important factors behind the oil price rally, he said.

According to Dirks, those factors include very low spare production capacity which is about half of the normal, loss of production due to natural disasters such as hurricanes, civil unrest in oil-producing countries such as Nigeria, geopolitical uncertainties in major oil-producing regions, and speculative investments.

China has become the world’s biggest coal producer and consumer in 2004 after it successfully solved the problem of insufficient supply of coal used for generating electricity.

Last year, China’s coal consumption grew 10.9%, which was relatively low compared to the 14.4% growth rate in 2004.

China is also the world’s biggest hydroelectricity producer, said a press release of the conference.

In 2005, the global hydroelectricity production grew 4.2 percent mainly thanks to the strong growth of China’s hydroelectricity production.

The press release for the launch of the BP Statistical Review of World Energy 2006 and China Energy Statistical Yearbook 2005 said the world’s primary energy consumption grew 2.7% in 2005, a bit lower than the 4.4 percent increase rate in 2004. However, the growth rate of energy consumption was still higher than the world average level in the past decade.

The growth rate of primary energy consumption in the Asian Pacific region reached 5.8% last year, the highest in the world, the press release said.

Energy prices have been going up for three years, said BP chief executive John Browne. He pointed out that despite energy price rise, short supply of crude oil and natural gas has not actually happened.

Last year, the world oil consumption was reduced by 1.8 million tons (1.6 million tonnes) per day, mainly as a result of decreasing oil consumption of the United States and China, and weak oil consumption of the Asian and Pacific region, the press release said.

In 2005, it said, the world oil production grew by 889,000 tons per day, up 1 percent year-on-year. The increase was mainly attributed to oil production increase of OPEC. However, the increase was below the expectations due to several factors, such as the security issue in Iraq. hurricane in the United States and diminishing oil output in the North Sea.

The press release also said the growth rate of world natural gas consumption fell by 2.3% last year due to the slowed growth rate of the global economy.

Meanwhile, it said, more and more energy consuming countries are showing interest in developing green energy resources. In 2005, the installed generating capacity of wind power grew 28.6%, accounting for 0.7 percent of the world’s total generated electricity.

Last year, the output of biofuel ethanol grew 10% to hit 16 million tons, making up 0.4% of the world’s total oil consumption.

London-based BP is one of the world’s biggest oil, natural gas and petrochemical products producers.

BP’s accumulated investment in China has amounted to 3.5 billion U.S. dollars since it began expanding business in the country in 1973. Currently, it has more than 30 joint and solely-funded ventures in China.

BP’s businesses in China mainly include natural gas production and import, jet fuel supply, import and sales of LPG and LNG, retail sales of fuels and lubricating oil.

(Source: Xinhua)

About James Ockenden (228 Articles)
Journalist covering energy and power markets since 1996.
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