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Key energy reserve blueprint on anvil
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The government is drafting a strategic reserve blueprint to ensure energy security - the move coming close on the heels of the construction of four oil reserve bases.

Ma Fucai, deputy director of the Office of the National Energy Leading Group, said the blueprint will focus on building strategic reserves for key resources ranging from natural gas and coal to uranium.

"Our top priority is to build strategic oil reserves, which are almost complete," he told China Daily. "The reserve system will then be expanded to other key energies."

Ma made the remarks on the sidelines of the ongoing annual session of the 11th National Committee of the Chinese People's Political Consultative Conference (CPPCC), of which he is a member.

"Given our growing demand for energy consumption, we should try our best to boost our energy security," Ma said.

He stressed that this winter's snowstorm, which led to severe power shortages in some booming provinces, underscores the urgency for a reserve system.

China is the world's second-largest oil consumer after the United States. It imported 163 million tons of crude oil and 33.8 million tons of refined oil last year, according to figures from the General Administration of Customs.

The country, however, did not set up a strategic oil reserve program until 2004, when it started building the four coastal reserve bases in the first phase to respond to emergencies or supply disruptions.

The first two in Zhenhai and Zhoushan of Zhejiang province are operational while the other two, in Huangdao of Shandong province and Dalian of Liaoning province, are near completion.

By 2010, the plan is to have 12 million tons of strategic oil reserves equivalent to 30 days of imported oil, the country's top planner - the National Development and Reform Commission (NDRC) - said earlier.

Ma disclosed that the government is looking for sites for the second phase of strategic oil reserve bases and the number "will definitely exceed four".

He said some of the new bases will likely be located in inland regions.

Under the energy reserve blueprint, a commercial reserve system will be mandated alongside the government's reserve to optimize the structure, Ma said, adding that the government will help State-owned oil companies build the reserves.

In a related development, a source with the China Coal Industry Association confirmed that Ma's office has entrusted it to conduct "strategic research" on exploration and consumption of coal, which forms nearly 70 percent of the country's energy mix.

About 40 top-notch energy experts are conducting research on coal, electricity and nuclear power, oil and natural gas as well as renewable energy.

According to official figures, the country's coal reserves are more than 1 trillion tons, about 320 billion tons of which can be extracted immediately. In an earlier interview, Huang Shengchu, president of the China Coal Information Institute, said the reserves "can satisfy our demand for at least 100 more years".

(China Daily March 11, 2008)

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