China expected to face coal shortage

China is expected to consume 2.2 bn tpy of coal by 2010, resulting in a shortage of 330 mm tpy. China now produces about 1.67 bn tpy of coal, Wang Xianzheng, a vice director of the State Administration of Work Safety, was quoted as saying. By 2010, output is expected to rise to 1.87 bn tpy, far below the projected level of consumption, he said.
"The present size and scale of China's coal industry are far from being able to meet the country's future market demand. Insufficient supply will continue to be a major problem," Wang was quoted as telling an energy conference in Beijing.

Wang said China was seeking to diversify its energy supplies to rely more on other resources. Coal presently accounts for more than two-thirds of energy consumption.
Meanwhile, an energy expert forecast that China will depend heavily on foreign oil and gas in the future, as domestic production increasingly lags behind soaring demand. By 2020, China will consume 450 mm tons (3.1 bn barrels) of crude oil and 200 bncm (7 tcf) of natural gas a year, and about half of its oil will come from imports, Wang Gongli, president of the China Oil and Natural Gas Designing Institute, was quoted as saying.

China produced 175 mm tons (1.2 bn barrels) of crude oil in 2004. Its maximum annual output will not exceed 200 mm tons (1.4 bn barrels) in the future, Wang said. China now produces 40.8 bn cm (1.4 tcf) of natural gas a year. The gap between domestic demand and supply would reach 8 bn cm (283 bn cf) by 2020, he said.
Massive demand for coal is driving managers to ignore safety, making China's mines the world's deadliest with more than 5,000 fatalities each year. Only about 1.2 bn tons of coal produced last year was done so under acceptable safety standards, Wang said.

The report is in line with a recent projection by the US-based Rand Corp. that China will depend on imports for 60 % of its oil supply and 30 % of its natural gas by 2020.
China is the world's second largest importer of crude oil after the United States. In 2004, Chinese imports soared 35 % on-year to 122 mm tons (854 mm barrels). Total demand for petroleum is forecast to rise about 10 % in 2005 to 354 mm tons (2.5 bn barrels).