China Energy Monthly - June

In addition to strengthening ties with Canada, the Chinese government is revising its oil and natural gas pipeline laws to emphasize safety in light of the BP Gulf oil spill. Other news items include BP investment in oil exploration in the South China Sea, nuclear leaks, more electric vehicles charging stations.

GOVERNMENT

China Attends the G20 Summit and Strengthens Canadian Ties (6-28-10)
President Hu Jintao visited Toronto, Canada for the G20 summit. Before the G20 summit, Present Hu met with Canadian leaders to discuss the expansion of bilateral cooperation in areas such as energy and natural resources, two way investment and trade cooperation. Several documents deal with energy cooperatives which will give China access to Canada’s oil sands and gas. Already apparent is China’s interest in shale natural gas. China’s largest state oil company, China National Petroleum Corporation, singed an initial agreement with Encana Corp. of Canada.
http://www.chinadaily.com.cn/china/2010g20canada/2010-06/28/content_10028057.htm
http://www.chinadaily.com.cn/china/2010g20canada/2010-06/26/content_10023108.htm
http://online.wsj.com/article/SB10001424052748703615104575328200873180036.html

“Draft oil and natural gas pipelines emphasize safety” (6-23-2010)
The latest draft oil and natural gas pipelines laws authorize the State Council to create regulations to protect offshore pipelines. A draft laws usually receives three reviews before it is submitted for a vote by the legislature. China built its first offshore oil and gas pipelines in the 1980s.
http://www.chinadaily.com.cn/china/2010-06/23/content_10005440.htm

China’s energy consumption may be the world’s highest in 2010 (6-21-2010)
China has been number two in energy consumption since 2002. In 2010, it may overtake the U.S. If its development continues at the same speed, China may consume half of the world’s total energy in 2020.
http://www.chinadaily.com.cn/bizchina/2010-06/21/content_9997383.htm

China will curb excess energy usage (6-17-10)
The National Development and Reform Commission (NDRC) announced that it will control energy supply and use to reach its 20% reduction in per unit of GDP energy consumption from 2005 levels by 2010. Starting in June, businesses that use large amounts of energy will be excluded from discounted electricity rates. The businesses may also be required to limit or stop production. The NDRC plans to increase enforcement of energy-saving practices in certain geographic areas.
http://www.chinadaily.com.cn/bizchina/2010-06/17/content_9984076.htm
http://www.chinadaily.com.cn/china/2010-06/11/content_9968379.htm

NUCLEAR

“China may finance Pakistan reactors” (6-23-10)
China plans on financing two nuclear reactors in Pakistan, in the Punjab Province. The Nuclear Suppliers Group (NSG), which represents 46 countries that control the world’s atomic trade, previously exempted U.S. sales of civilian nuclear technology to India. Pakistan seeks the same exemption. China asserts that the reactors are for peaceful purposes, will be available for the International Atomic Energy Agency’s (IAEA) inspection; therefore, it does not need NSG approval.
http://www.chinadaily.com.cn/cndy/2010-06/23/content_10006302.htm
http://www.chinadaily.com.cn/china/2010-06/24/content_10016613.htm

“Fuel Maker for Reactor Has China as Investor” (6-21-2010)
The Noble group, the world’s second largest commodities trading and logistics company, in which the Chinese government is a minority owner, has purchased a 5.1% stake in the only American-owned provider of enriched uranium used in civilian nuclear reactors. USEC, based in Bethesda, Maryland, supplies enriched uranium in the U.S., Japan, South Korea and Taiwan. Nobel group’s president states that the purchase was simply an investment decision and Nobel has no interest in weapons grade uranium.
http://dealbook.blogs.nytimes.com/2010/06/21/fuel-maker-for-reactors-has-china-as-investor/

“Leak at Nuclear Plant Spawns Worry in Hong Kong” (6-15-10)
Hong Kong recently learned of a radioactive leak on the mainland that occurred on May 23. The facility is approximately 50 kilometers from Hong Kong’s border. Although the Chinese government said it was “a very small leakage” at a fuel rod at the Guandong Daya Bay nuclear power station, the lack of transparency and public notice concerns Hong Kong.
http://online.wsj.com/article/SB10001424052748704009804575308202920515736.html

ENERGY TECH BUSINESS

“Calanese shows blue sky thinking” (6-28-10)
U.S. chemical manufacturer sets its energy efficiency goal at a 20% reduction by 2015. It will also decrease greenhouse gas emissions by 20%. Calanese states it is on track to reach its goals for 2010, which was to reduce energy use by 20% and greenhouse gas emissions by 30%. The Chinese plant has five times lower greenhouse gas emissions than its U.S. plant in Pampa, Texas. Calanese sold the Pampa plant to Babcock & Brown in 2007 and chemical production was set to continue until 2009. Babcock & Brown plans to develop the facility for power generation because of the facility’s established transmission lines.
http://www.chinadaily.com.cn/cndy/2010-06/28/content_10026642.htm
http://www.reuters.com/article/idUSBNG1090620070815http:/www.reuters.com/article/idUSBNG1090620070815

“BP, Chevron Seek Joint Deep-water China Project” (6-24-10)
BP teamed up with Chevron to bid for a South China Sea exploration block. Chevron will have a 60% stake in the block and act as the operator. BP will hold the remaining interest. Devon Energy Corp. of Oklahoma City owns Block 42/05, located 260 kilometers south of Hong Kong, encompassing approximately 7,000 square kilometers. Devon is selling its China assets as part of a pullout from offshore and international oil and gas operations to focus on onshore assets. Separately, Chevron is bidding for two other Devon assets in the South China Sea.
http://online.wsj.com/article/SB10001424052748704629804575324171925184824.html
http://www.chinadaily.com.cn/bizchina/2010-06/25/content_10020170.htm

World Bank to support energy efficiency lending by Minsheng Bank (6-25-10)
World Bank has approved a $100 million loan to China’s Minsheng Bank to help China attain the 20% energy intensity reduction goal by 2010. Minsheng Bank will provide an additional $500 million. The funds will support energy efficiency projects such as replacement of inefficient industrial technologies, recovery of by-products and installation of highly efficient mechanical and electric equipment. To meet efficiency targets of the near future, it is estimated that $20 billion will be required per year. World Bank helps with not only funding, but also with technical assistance to develop low-carbon lending businesses.
http://www.chinadaily.com.cn/bizchina/2010-06/25/content_10022245.htm

Hybrid Cars and U.S. Citizenship (6-23-10)
Hybrid Kinetic Motors, a U.S. subsidiary of the Hong-Kong listed Kinetic Group Ltd. announced last year it will produce one million hybrid cars that will run on natural gas, battery and gas, by 2018. Critics assert that the company cannot raise enough funds to reach this goal. The company relies on the EB-5 immigration program to fund its U.S. plants. The EB-5 program provides U.S. citizenship for individual foreign investors who invest at least $500,000 and create at least 10 jobs for Americans.
http://www.chinadaily.com.cn/bizchina/2010-06/23/content_10007621.htm

“China opens its largest E-car recharging station” (6-24-10)
Located in Linyi city in Shandong province, the recharging station can handle up to 15 electric cars and 30 electric buses at the same time. The total capacity is 3,200 kV, with 15 alternating current rechargers and 30 direct current rechargers. This is the seventh station operated by the State Grid Corp.
http://www.chinadaily.com.cn/bizchina/2010-06/24/content_10015969.htm

WIND

“Bids likely for offshore wind power projects” (6-8-10)
At an industry conference in Shanghai, a representative from the Hydropower Planning Research Institute, affiliated with the Ministry of Water Resources, stated that there will be more offshore wind power project in the next five years in order to reach an installed offshore wind-power capacity of 5 gW by 2015 and 30 gW by 2020. Currently under bidding are four projects in Jiangsu province with a combine capacity of one gW. A pilot offshore project has been completed at the East China Sea Bridge near Shaghai, with an installed capacity of 100mW. The project cost 2.5 times more than a land project of the same size.
http://www.chinadaily.com.cn/cndy/2010-06/08/content_9946432.htm