Observing the perspectives of the birth of the economy: Seven major issues facing the energy industry

More than a dozen experts from the China Energy Research Association and senior officials from major state-owned energy companies recently gathered in Xinjiang to discuss the pressing challenges facing China's energy sector. They identified seven key issues, including insufficient supply, severe waste, high demand, and structural imbalances. The country’s energy consumption has become increasingly inefficient, with energy-intensive industries expanding rapidly since 2002. While primary energy production grew by only 11%, crude oil output rose by just 1.8%. In western regions like Shaanxi, Inner Mongolia, and Ningxia, energy-consuming industrial parks are proliferating, exacerbating the strain on local resources. Zhang Shourong, an academician of the Chinese Academy of Engineering, highlighted that developed countries have strict regulations on energy-intensive projects, pushing such industries to China, where standards are lower. This has worsened domestic energy shortages. China's overall energy efficiency stands at 34%, lagging behind developed nations by about 10 percentage points. The industrial sector alone consumes 200–300 million tons of standard coal annually, accounting for roughly one-fifth of total energy use. Bai Hong, deputy director of the Shaanxi Provincial Coal Industry Bureau, noted that the national coal recovery rate should be at least 75%, but in Shaanxi, it is below 30%. Similarly, in Xinjiang, township coal mines recover only 10–15% of available resources, while state-owned mines reach about 30%. These inefficiencies contribute significantly to waste. As urbanization accelerates, energy demand continues to rise. Bao Yunyun, vice president of the China Energy Research Institute, pointed out that infrastructure development in cities has driven massive consumption of steel, cement, and electricity. The energy structure remains heavily reliant on coal, which accounts for 92% of reserves, compared to 2.9% for oil and 0.2% for natural gas. Despite efforts to develop alternative energy sources, coal will likely remain dominant for decades. Bao Yunxuan predicts that by 2050, coal will still make up at least 50% of China’s total energy mix. The uneven distribution of energy resources also poses challenges. Most energy is concentrated in western provinces, while eastern and southern regions—home to economic hubs—have limited access. Energy must often be transported over 3,000 kilometers, leading to inefficiencies and significant losses during transit. Environmental degradation is another critical issue. High-energy industries and coal-based production have caused serious ecological damage, especially in resource-rich areas. Data shows that nearly 50% of monitored cities suffered from moderate to severe pollution, and 30% of water sources were heavily contaminated. Desertification has expanded to 2.6 million square kilometers, and metal tailings grow by 500 million tons yearly. Oil security is also under threat. With domestic production expected to peak at 180–200 million tons per year, China will need to import 300 million tons by 2020, making its reliance on foreign oil exceed 60%. Xu Daxuan, an engineering academician, urged the government to implement stricter energy policies, promote conservation, and invest in renewable and nuclear energy to ensure long-term energy security.

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