China's Petroleum Security Strategy: A Dialogue with CHEN Jiulin

2015-05-19

On May 15, at the invitation of the Center for China in the World Economy (CCWE) at Tsinghua University, Dr. CHEN Jiulin, former Vice President of CNAF and Vice General Manager of CGGC International LTD., delivered a keynote speech entitled “China's Energy Security Strategy in the Changes in Petroleum.”

Dr. Chen put forward four points with regard to the issue of petroleum security strategy in China: (1) to fulfill the guidelines of a reasonable structure for the sale of petroleum; (2) to make efforts to utilize multiple energies and develop alternative energies effectively; (3) to establish the strategic system of petroleum security reserves with the greatest level of safety, and; (4) to make full use of the international petroleum market and establish a plural overseas petroleum supply system. Pertaining to how to improve China’s activities in petroleum, Dr. Chen suggested that relations with petroleum producers, especially members of the SCO, Central Asia, and Africa should be strengthened.

According to Dr. Chen, there are six major problems related to the development of energies in China: (1) an inappropriate energy consumption structure; (2) inadequate petroleum energy and resources; (3) poor utilization efficiency; (4) serious environmental pollution; (5) substantial conflict between the growth of GDP and the consumption of energies, and; (6) insufficient reserves of petroleum. To solve the problems in energies and development, Dr. Chen advised to (1) develop and make use of nuclear energy under the precondition of secured safety; (2) increase the importation of natural gas and the scale of natural gas utility; (3) further increase the use of renewable energies; (4) make active use of small-scale distributed power-generating technologies or decentralized power-generating technologies; (5) adopt energy-efficient technologies for buildings and means of transportation; and (6) strengthen investment in infrastructure and technologies with regard to energies.

The event concluded with an informative dialogue between students and Dr. Chen on the creation of a petroleum futures market, the establishment of an organization of petroleum importing countries, and the difficulties in the investment of private capital in overseas oil fields, among other topics Dr. Chen answered the questions in detail from perspectives such as the sharing of thoughts, development of talent, and the role of financial leverage.