Energy Shortfalls Prompt Elusive Reform

Experts struggle to evaluate the purpose of yet another commission to monitor energy supplies in China
Michael Lelyveld
coal_305 A worker piles coal in Huaibei, in eastern China's Anhui province, Feb. 7, 2010.

BOSTON--China has shaken up its energy administration for the fourth time in seven years, but it is unclear whether the moves will produce new policies, experts say.

On Jan. 27, the State Council announced the establishment of a National Energy Commission (NEC) headed by Premier Wen Jiabao to "step up strategic policy-making and coordination," the official Xinhua news agency reported.

But the announcement did not say whether the new body would immediately replace the National Energy Leading Group, also organized under Premier Wen to plan policy in 2005.

China's government has taken a series of similar bureaucratic steps in recent years, reflecting the importance of coordinating policies as energy use has soared.

It's a modest, small, incremental improvement in the focus of the leadership on energy

Each time, reports have noted that influence over energy issues is split up among many overlapping ministries, agencies, and state-controlled companies. Analysts wonder whether the latest move means the situation will change.

"It's a modest, small, incremental improvement in the focus of the leadership on energy," said Mikkal Herberg, research director for energy security at the Seattle-based National Bureau of Asian Research.


Herberg believes the NEC's job may be to address some of the energy problems identified by the Leading Group over the past four years, but he doubts it will cut through the mass of bureaucracy.

"This is not going to fundamentally solve the problem of lack of coordination among the ministries," Herberg told Radio Free Asia.

The commission, authorized by the National People's Congress (NPC) in March 2008, includes 21 members from various agencies, according to Xinhua. The government did not explain why it took so long for the NEC to start work.

The NPC also created a National Energy Administration (NEA) in March 2008. Before that, the government set up an Energy Bureau under the National Development and Reform Commission (NDRC) in May 2003.


In 1987, China had a full-scale Energy Ministry, but it was closed in 1993 following turf battles with other ministries and authorities.

The NEC announcement has led state media to speculate on the reasons for the latest bureaucratic shift.

The official English-language China Daily pointed to the Jan. 31 deadline for a U.N. climate change agreement, which includes China's pledge to cut the carbon intensity of its economic growth by 40-45 percent between 2005 and 2020.

In a signed commentary, the paper also urged the NEC to "stop energy giants from corruption," following recent scandals involving officials in the oil, coal, and nuclear industries.

But energy shortages and power problems this winter may also have driven the government to show signs of action to address complaints.

Shutdown threats

Despite a 12.7-percent increase in coal production to nearly 3 billion tons last year, many power plants have run short due to transport problems, threatening shutdowns. The problems have become common in recent years.

"The winter coal and electricity crisis is almost becoming an annual event," said Herberg. "There's social pressure in many of the regions to do something about this, so these crises are motivating the leadership to try to find a more effective administrative means."

Reports have also cited concern about last year's 13.9- percent rise in oil imports, which has pushed China's import dependence to nearly 52 percent.

In a People's Daily commentary to coincide with the NEC announcement, Zhang Guobao, NDRC vice chairman and director of the NEA, outlined the government's recent energy responses during the global recession.

Listing efforts to spur nuclear power, gas projects, and other measures, Zhang concluded that "China's energy sector responded adequately and satisfactorily ... to the global crisis." He did not say what steps the NEC plans to take next.

Coordination needed

Philip Andrews-Speed, a China energy expert at Scotland's University of Dundee in Edinburgh, said that divisions of authority over energy issues are common in many countries, making coordination necessary.

A true force for implementation, or just a discussion forum which meets twice a year?

But it is unclear whether controversial policies like government controls over fuel pricing are about to change.

"To me, the idea of having this commission is a good idea," Andrews-Speed said. "The open question is whether it is a true force for implementation, or is it just a discussion forum which meets twice a year?"

Officials have been discussing a new energy law and other major changes for at least three years, but it is hard to tell whether they are making any progress.

Andrews-Speed said the startup of the new organization may also be related to the approaching annual session of the NPC in March.

"Since they said they were going to set up this commission nearly two years ago, people are going to be asking, where is it?" he said. "It seems to be a belated response to an old initiative, and to remind people that the government is taking this challenge very seriously."

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