China׳s energy security: Oil and gas

Abstract

China is currently the largest energy consuming country in the world. Until the early 1990s, China had long been a net energy exporter. The country became a net oil importer in 1993, the first time since the 1960s. For China, energy security first means oil supply security. China turned into a net natural gas importer in 2007 and then a net coal importer in 2009. In other words, China is now a net importer of all three types of fossil energy—oil, natural gas, and coal.In the context of rising oil imports and implementation of China׳s 12th Five-Year Program from 2011 to 2015, this paper examines China׳s energy security strategies with a focus on three leading elements, namely overseas oil investment, strategic petroleum reserves (SPR)and unconventional gas development. Our findings suggest that the Chinese government has promoted overseas investment strongly; its SPR program has been established though the progress for Phase II has been slower than expected and the government intends to boost the unconventional gas sector development. However, the challenges are enormous as well. As for future research, other elements for each dimension of energy security should be reviewed to reach a comprehensive conclusion about how well China has done and what steps are needed to move forward.