IEA: Nation should not become an 'energy scapegoat'

Despite the need for China to cutback on energy use, the country should not become the global scapegoat for surging oil prices and a tight energy supply, according to the International Energy Agency (IEA).

"Increased demand for energy from China is not the only thing driving up the global oil price," said Noe Van Hulst, director of Long-term Co-operation 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 does exert pressure on global energy prices, Van Hulst said. But it is wrong to say they are the only forces driving higher prices, he said.

There will be enough oil reserves for the development of the global economy, Van Hulst said. The key is whether there is enough investment poured 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 go down as investments in production and technology improvement increase, Van Hulst said.

The IEA's latest World Energy Outlook said the world is being confronted with 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 emission is more urgent than before."

In the report, the organization 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 either 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.

Source: China Daily