BIZCHINA> Review & Analysis
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BIZCHINA> Review & Analysis
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Blame oil prices on politics
By Zou Hanru (China Daily)
Updated: 2006-05-19 06:25
China is the fastest growing economy in the world. It has the fastest growing middle class. It is also one of the fastest growing fuel consumers. But that is the logical conclusion of the second proposition of the syllogism. Fuel consumption, however, doesn't seem to be a decision relying on the sovereignty of a country. There is the question of depleting the ozone layer, harming the environment and violating principles of sustainable development. Sustainable development must come first. The Commission on Sustainable Development (CSD-14) met earlier this month at United Nations headquarters for its 14th session. CSD-14 was to the review the "progress in energy for sustainable development, industrial development, air pollution/atmosphere and climate change, together with cross-cutting issues." As expected, the energy agenda dominated CSD-14, with discussions focused on "energy security, the impact of oil and gas prices and the respective roles of renewable energy technologies and fossil fuels." Needless to say, all these issues will dominate the world's energy mix in the future. The review session's non-negotiating format helped disguise simmering tensions over the future of fossil fuels, nuclear power and the climate regime after 2012. But the Chair's Summary, China and the Group of 77 countries charged, sidelined these countries' agenda, including the Millennium Development Goals and means of implementation. China and the Group of 77 countries said the Chair's Summary would jeopardize multilateralism by turning the agenda over to "corporations and privatization." And it comes back to fuel consumption. The West loves to say it aloud every time it gets a chance (and even when it doesn't get one) that China's rising consumption has been fuelling the oil prices. We are ready to forget that China is not the largest, or even the second-largest, consumer or importer of oil. But it's not possible to ignore what Qatar Oil Minister Abdullah Al Attiyah said just days ago. Speaking in Amman, Jordan, he said oil prices would remain volatile in the short- and medium-term because of political tensions, rather than supply and demand affecting its current levels. Oil prices are pressured more by politics than by supply and demand. And then there's the bombshell: "Supply is now greater than demand and there is not less than 1.5 million barrels of excess supply, but oil prices are unfortunately not influenced, as in the past, by supply and demand," said Al Attiyah. Add this to the role of "corporations and privatization," and no wonder crude oil has surpassed US$70 a barrel. Less than two years ago, the world seemed to have been hit by an atomic bomb when the crude price hit US$50 a barrel; it seemed the world was coming to an end. But the global economy is still alive and kicking. In fact, it's healthier than ever before, despite crude oil selling at 50 per cent higher than its two-year-ago price. So where does this leave China? Is China still fuelling rising oil prices? Or, is the supposed threat a ploy to deprive it of its share of energy to sustain its economic growth? The Middle East and Russia are supposed to be the richest oil reserves that will outlast those in the rest of the world. And since China gets most of its oil imports from the Middle East, the West sees it as depleting the reserves, for which only they, as the developed world, have a right to. But that doesn't mean we throw caution into the wind and embark on a mad fuel-burning journey. As a responsible nation, China's goal should be sustainable development, and we have already taken strides in that direction. But the important task is to maintain that progress towards sustainable development, irrespective of the din created by the West. (For more biz stories, please visit Industries)
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