Chinese premier to head new energy agency

Chinese Premier Wen Jiabao will head a new national energy agency to co-ordinate his country's energy policy and planning development better, following a continuing higher domestic demand for energy.
The National Energy Commission (NEC) will draft national energy development policy, review energy security and co-ordinate international co-operation.

Vice Premier Li Keqiang will be its deputy which comprises 21 ministers and directors from different departments, including the National Development and Reform Commission, the National Energy Administration and the central bank. The decisions of the commission will have to be approved by the State Council, China's Cabinet.
The establishment of the NEC reflects the concern of Chinese leaders over growing dependence on imported energy as a potential long-term weakness. It also shows the desire to curb environmental degradation from the country's over-dependency on fossil fuels, including the high-polluting coal that accounts for 70 % of consumption.

China's import of crude oil in December last year was a record 21.26 mm tons, pushing up the yearly crude oil import to 203.8 mm tons, up by 13.9 % year-on-year, according to General Administration of Customs. This means 51.3 % of the Asian giant's crude oil requirements are being imported.
A research report by accounting firm KPMG shows that the consumption of electricity in China grew by 12.5 % annually between 2000 and 2008 and that this high rate is expected to continue through 2020.

China is the world's second-largest consumer of energy, next to the United States. As such, it has to ensure an uninterrupted supply of fuel, coal and natural gas.
This means resolving conflicts over pricing policies that caused widespread losses for refineries and utility companies.