China’s Energy Industry（Part 2）

Domestic sources，however，still account for around two thirds of oil consumption.Traditional fields are located in China’s northeast，while a number of newer sources are under development.Rich offshore supplies exist in the Bohai Sea，the large gulf that stretches inland within less than 200 km of Beijing，in the Pearl River Delta near Guangdong，and East and South China Seas.Potential for oil extraction is the underlying root of enduring territorial disputes among countriessurrounding the South China Sea.Xinjiang in China’s far west holds significant oil production capacity；but the major obstacle of delivery to the East still exists.

China’s oil market opened somewhat in the early years of the 2lst century with the listing of its three largest oil industry firms Sinopec，CNPC and CNOOC.Major investors in the companies include Shell，BP and ExxonMobil，but the majority stake remains in the hands of the Chinese state.

Hydroelectric power，which already accounts for nearly 20 percent of China’s energy mix，has the potential to grow further.The flagship project is the Three Gorges dam on the Yangtze River，the world’s largest hydroelectric project.Due to be fully operational in 2009，the dam began producing electric power in 2003.

Several major dams are placed along China’s second largest river，the Yellow River to the North，and smaller power generation facilities are in operation on just about all of China’s waterways，but primarily in southwestern and south-central areas.

Natural gas，so far only accounting for 3%of China’s energy mix as compared to an average of 22%in developed countries，is the most important new introduction to China’s energy mix.With its low environmental impact，gas is an attractive alternative to coal in China’s heavily polluted environment.Gas fields mimic the general layout of oil sources located in north-eastern and north-central China and in offshore locations up and down the coast.

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