Wed, Dec 05, 2007 page11

• China releases energy bill

  BETTER DEVELOPMENT The draft law would establish an energy bureaucracy directly under the State Council, but environmental protection measures remain vague

  • AP
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  China has released a draft of a long-awaited energy law that calls for the country to keep larger reserves of oil, uranium and other key resources and to set up a new government department.

  But the draft law makes scant mention of measures needed to counter soaring emissions of greenhouse gases linked to global climate change.

  Beijing has no separate energy ministry, and the lack of unified policies for the industry is viewed as one factor behind recent fuel shortages, price gouging and other problems.

  The new law is intended to help the country better develop the strategically vital energy sector. The government will collect opinions on the draft until Feb. 2 and later is expected to present it to the National People's Congress for approval.

  The draft law calls for setting up an energy department directly controlled by the State Council to oversee related industries.

  According to state media reports on the law, the department would exercise stronger control over market entry and pricing than the energy division that's now part of China's main planning agency, the National Development and Reform Commission.

  China, the world's second-largest consumer and importer of oil after the US, has made improved management of its energy sector a strategic priority.

  "China ... needs a unified, agreed-upon energy department. Otherwise everyone will carry on according to his own agenda and that doesn't benefit the country's energy strategy," the state-run newspaper Shanghai Securities News quoted Yan Luguang (嚴陸光), a researcher at the China Academy of Sciences, as saying.

  Article 5 of the proposed law calls for China to adjust its energy use to help protect the environment. The government would support recycling, emissions reductions and development of "clean" energy resources such as solar, wind and tidal power and other changes "effective against climate change," according to a copy of the draft distributed online by the newspaper.

  As it rivals the US as the world's leading emitter of greenhouse gases, China has pledged to raise efficiency and reduce emissions.

  But it has fallen short of national targets and shied away from binding international commitments such as the Kyoto Protocol, saying such requirements would interfere with economic development.

  Meanwhile, it remains heavily dependent on highly polluting coal for three-quarters of its electricity.

  The draft energy law takes the form of broad guidelines that would be later implemented through more detailed administrative regulations. It does not specify any detailed measures for emissions reductions and other environmental issues.

  One major focus of the new law is energy security -- an obsession for a country growing increasingly dependent on imports of oil, coal and other key commodities.

  Major investments in energy industries must be controlled by the state, the draft says.

  The draft law requires Chinese oil companies to build up their own government-managed reserves to supplement government stockpiles that began filling last year.

  Such a plan would add to pressures on China's oil and refining companies, whose profits have already been squeezed because government price controls prevent them from passing surging costs for crude oil on to consumers.
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