China is caught up in a very delicate balance. Beijing is being forced to walk a very fine line to keep up with growing energy demand while also shoring up the country’s energy security, and all without compromising the entire world’s ability to decarbonize quickly enough to avoid catastrophic climate change. So far, it looks like Beijing is struggling--if not outright failing--to pull it off. Despite the blow that China received as the first country to struggle with the novel coronavirus pandemic, the country achieved the amazing superlative of being the one and only major economy to achieve even a modicum of growth in 2020. As the country’s already massive industrial sector continues to grow and the middle class rapidly expands, China’s appetite for energy is voracious. While Beijing has made energy security a primary objective, China simply can’t create enough energy to keep up with demand and Beijing remains more dependent on energy imports than ever, a reality that was starkly underlined earlier this year when an unofficial embargo on Australian coal imports caused entire Chinese cities to go dark.
Further complicating the issue, while Beijing has managed to keep their economy going strong, “the speedy comeback also complicates a parallel push by Beijing to reach peak fossil energy consumption in this decade and turn the country into a nation of net-zero emissions less than 40 years later,” Bloomberg reported earlier this month. Although President Xi Jinping has made very ambitious and very public promises to lead his country to carbon neutrality by 2060 and to reach peak CO2 emissions by just 2030, these goals are starkly opposed to the country’s equally ambitious economic targets and energy security goals. At the very same time that Beijing has been busily repeating Paris climate accord talking points out of one side of its mouth, other Chinese provinces have been steadily returning to coal, both domestically and abroad, putting global climate goals further and further out of reach.
China also has a dangerous addiction to oil. Although coal emissions are a legitimate problem, China's coal consumption has already peaked--the same cannot be said for oil or natural gas, which China continues to consume at an ever-increasing rate. “Over the last three decades, China has been the dominant driver of the global oil market: demand has risen almost seven-fold to more than 14 million barrels a day, according to BP Plc data, turning from an exporter into the world's largest importer,” writes Bloomberg.
Related: U.S. Shale’s Struggles Will Be Help OPEC Stabilize Oil Prices
Chinese natural gas demand, too, is surging, and China has tried to ramp up its domestic production accordingly in order to secure ample supply without compromising its energy security targets. In fact, China is home to massive shale gas resources which may even outnumber the United State’s massive shale play. Despite China’s natural resources and best efforts, however, the country has not been able to get its own shale boom off the ground, and a recent analysis by Reuters shows that what progress Beijing has made toward its own shale revolution could already be obsolete by the middle of this decade. “Complex geology and failure to draw in more investors” are projected to make the industry’s expansion economically untenable.
“If that is the case, it would be a devastating setback to China’s efforts to further cut its reliance on gas imports, which currently make up 42 percent of the nation’s overall consumption,” the National Interest reported on Chinese shale’s curtailed life expectancy this week. “It would also likely mean that Beijing will have to ramp up development of other more costly gas resources, such as those located in the remote northwest portion of the country.”
What China chooses to do in response to this disappointing outcome is of utmost importance for all of us. Whether President Xi’s administration chooses to fill those gaps with coal or with green energy will make a huge and lasting difference for the Earth as a whole. We have just one decade to get on track to avoid the worst effects of climate change, and the clock is already ticking.
By Haley Zaremba for Oilprice.com
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