By Greg Hugh, Staff Writer
The preceding headline was the topic of the June U.S.-China Business Connections (UCBC) meeting attended by a standing room only group. The presentation was delivered by Warren Vollmar, President, Forest Source, Inc.At the beginning of his presentation, Vollmar noted that China is at a crossroads regarding creating an infrastructure for its power and energy needs. It faces many conflicts with its need for energy vs. development, development vs. the environment, environment vs. energy, rural vs. urban, energy costs vs. social costs, food vs. fuel, cheap energy vs. reliability and alternative energy vs. cheap energy.
These conflicts can be attributed to China’s meteoric rise resulting in the second highest use of energy in the world and it is estimated that vehicle use by 2020 will exceed the United States. In 2006 China consumed 7.4 million barrels of oil per day of which 46 percent was imported and it is estimated that it will need to import 80 percent of its oil by 2020. Because of this growth, 70 percent of China’s economic output is from heavy industry, and the country is faced with the need to urbanize. It plans for 400 new cities by 2040 that each will have over 500,000 people and needs to move over 600 million people. Current energy growth exceeds GDP by 1.2-1.4 percent Unfortunately, 70 percent of China’s energy comes from coal which saw demand double from 2000 to 2006.
It is estimated that China has half of the world’s coal-fired plants and will boost CO2 worldwide by 14 percent. According to Vollmar, half of all coal plants built 2001 to 2005 were small, inefficient and polluting: making China the largest polluter of CO2. Besides rolling blackouts in the south and southeast, people in China are suffering devastating health consequences. Vollmar also discussed China’s Development Plans for 2020 that includes a goal to quadruple 2000 GDP of US$1.8 trillion, double energy production, increase per capita GDP from US$850 (2000) to US$3,000 and attain “Three Transcendences”:Sustainable Development, Peaceful Rise as a Great Power and Rule of Law:Harmonious Socialist Society. China also plans to implement an aggressive environmental plan with a goal of a 20 percent reduction in energy intensity by 2010 and produce 15 percent of all energy from renewable resources by 2010. It is also seeking 36 MPG for passenger vehicles in 2008,to enact a national building code and close many coal-fired plants by 2010. The country also plans to quadruple nuclear capacity to 40 GW by 2010. Nuclear power is the third most important generation method after coal and hydropower, and China is the third largest producer in Asia after Japan South Korea according to Vollmar.