Experts on world energy future

CNC report from Houston
Added On March 11, 2013

At the CERAWeek energy conference, energy experts agreed that cooperation between China and the United States is a very important part of the secure and stable energy future.

LIFESTYLES has more.

IHS CERAWeek is widely considered to be the most prestigious annual meeting of the global energy industry.

This year's CERAWeek kicked off on Monday in Houston and convened more than 2,500 industry, policy and financial leaders from more than 50 countries and regions around the world to explore the challenges and opportunities which the energy world is facing.

Daniel Yergin, chairman of the CERAWeek, highlights the importance of Sino-U.S. cooperation in the energy industry during an exclusive interview with CNC World.

"I think the most important overall relationship between countries in the 21st century is the relationship between the United States and China. And it's important that relationship is being on a stable foundation. And cooperation in energy is a very important part of that."

Yergin also said as world's two largest importers, China and the United States have common interests in stable world market. They have common interests that come from the way that the two economies are so interconnected with each other, and that's the bases for going forward.

Yergin highly praised China's impressive performance on the global stage, and especially the achievements its energy industry has accomplished during the past a few years.

"China's energy industry has gone through tremendous development in the past a few decades that mirrors the tremendous changes in the Chinese economy. And you look at the state grids today that really doubled of the size of what it was in 2006."

Yergin said China’s electricity demand is growing rapidly because China's economy is growing. So China needs strong companies to support its economic growth. And that explains the birth of the Chinese oil companies and their growth has really been astonishing. These companies are playing increasingly important role in developing their resources around the world.

This year, a record of around 10 Chinese companies sent delegates to participate in IHS CERAWeek 2013, demonstrating that the thriving Chinese industry is eager to join in the global world and cash in on the lucrative market.

The world is experiencing an energy transition, a clear signal that has been recognized by the energy insiders worldwide, bringing opportunities and challenges at the same time.

"Energy demand is going to grow a great deal. In my book, The Quest, I see it perhaps about 30 percent growth over the next a couple of decades. That is a big challenge for the world to meet the energy needs. Renewables, alternatives will grow, so will the conventional energies. So you think the energies won’t look too different two decades from now. The real change will come after that, to see the impact, the technologies that are now being developed and now are being explored but are not yet being deployed in any significant scale."

Li Xihong, President of Economic & Development Research Institute, Sinopec, also pointed out the challenge facing the world energy industry.

"At present, 87% of the energy around the world is fossil energy, which took billions years of accumulation and transition. After 30 or 40 more years, with the significant increase in energy consumption, a major challenge will arise that whether fossil energy can meet the ever-increasing demands. So the theme we discussed in this meeting is about the change in future energy."

Li said the world will mainly rely on fossil energy in ten years but better renewable resources or bio-energy are to be explored more in the future, including solar energy, wind energy and hydro-energy.

Another focus of this meeting was nuclear energy. Except for the safety issue, nuclear energy is clean and very accessible.

Besides, tight oil and shale gas underground also attracted attention. American companies have made some technical breakthroughs in this field, which renews general conceptions about underground resources.

Foreseeing all the difficulties the energy world has to deal with, Yergin emphasizes that the global cooperation is crucial for the smooth transition.

"The world faces big challenges in shaping the energy future for a growing world economy that might be two or three times bigger in a few decades than it is today. It is a big challenge, but we have something going for us that we didn't have before, which is the globalization of innovation. It's not just innovations, not just concentrated in North America. It's in China. It's in India. And I think that cooperation, collaborations between China and the United States is a very important part of the secure and stable energy future."

Top energy specialists like Yergin and Li provided their suggestions on how to strengthen the bilateral ties in the energy industry.

"There are a lot to do in terms of technology innovation in sharing best practices. The new technology for shale gas, tight oil is developing in North America is clearly a technology that is going to be very active in China. Chinese companies are very good at taking certain kinds of oil fields that is really strengthening them and making them more productive. So I think the cooperation in the existing energy industries and certainly cooperation in energy research development and that’s what really shapes the future."

"In our cooperation with the American companies, the first step is to learn, to improve our flexibility, and gradually to achieve independent control over the energy. In the primary stage, it may be better for American companies to cooperate and share our stocks. In the future, with the development in our mutual trust, exchange in experiences and effective cooperation, more opportunities can be expected for our companies to go to America or to participate in exploring the resources in America."

The theme for IHS CERAWeek 2013 is Drivers of Change: Geopolitics, Markets and the New Map of Energy.