Properly handling the five major relationships in energy development

Historically, since the Industrial Revolution, the economic development of all countries in the world has been accompanied by massive energy consumption. To ensure the energy needed for economic growth, some countries even went as far as to activate the war machine to plunder resources from other countries. China's rise is an economic phenomenon that occurred under the background of global nuclear terror balance and economic globalization. Compared with the re-rise of Britain, the United States, and Germany and Japan after World War II, the energy environment of China's rise is more complex, the energy cost is higher, the energy dilemma is more prominent, and the energy challenge is more severe. 

In this historical context, by objectively reviewing China's efforts over the years to ensure energy security, we must recognize that the energy constraints and pressures associated with China's rise have persisted. The improvement of energy security has been achieved through arduous efforts, and the challenges in energy security must be faced objectively. To solve China's energy problems and promote its energy development, five key relationships should be properly handled in the future. 

1. Properly handle the relationship between economic growth and energy development 

We need to ensure the supply of energy required for the sustained and rapid development of the national economy, while also moderately controlling the total energy consumption. Therefore, in the short term, it is impossible for China to completely decouple economic growth from the growth of energy consumption. Although I do not agree with overemphasizing the self-sufficiency rate of primary energy, China's efforts over the years to rely on domestic resources and maintain a primary energy self-sufficiency rate of around 90% have indeed significantly reduced the disruptions to economic development caused by fluctuations in the international energy market and geopolitical conflicts. 

Of course, ensuring supply does not mean that as much energy as the economy requires must be made available. Unrestricted supply that exceeds the economic limit, goes beyond the environmental capacity, is unsustainable, unrealistic, and will provide an excuse for extensive development. During the "Twelfth Five-Year Plan" period, China set a target to control the total energy consumption. This was an inevitable choice and the only feasible path. Ensuring supply must be based on the goal of controlling the total energy consumption. By forcing the adjustment of the energy structure and economic structure through the control of total energy consumption, and promoting the transformation of the economic development mode, true scientific development can be achieved. 

2. Properly handle the relationship between the adjustment of energy consumption structure and the replacement of resources 

China is committed to adjusting its energy consumption structure. It has set strict energy intensity targets domestically and has made commitments to the world to reduce carbon intensity and increase the proportion of non-fossil energy. However, we must clearly recognize that the energy consumption structure dominated by coal is unlikely to change in the short term. Fossil energy will remain the main body of China's energy consumption in the coming decades, and non-fossil energy will merely serve as a supplement to fossil energy. The targets for reducing energy intensity and carbon emission intensity can only be achieved by relying on the adjustment of the energy structure and even the economic structure. The increase in external dependence does not necessarily lead to the deterioration of the energy security situation. Especially for coal and natural gas， they can be significantly increased in imports and the degree of external dependence can be moderately increased. For the development of domestic resources， there is no need to "exhaust all resources and squeeze out every bit". There should be room for flexibility. We should view the old thinking of "relying on domestic resources" dialectically and make full use of both domestic and international markets and resources. "Relying on domestic resources" should mean doing a good job in strategic resource reserves domestically， leaving areas for deferred development， and clearly defining the sources of resource succession. It is not necessary to use the resources that future generations will use today. 

Natural gas will become the most important and realistic resource replacement source for China. Offshore oil and gas will play an increasingly significant role in resource replacement. The oil and gas resources in the southern part of the South China Sea have great strategic significance for China's resource replacement. Although the development of unconventional oil and gas resources has formed a boom, it still requires time, market and environmental tests to reach the goal of large-scale commercial development. Vigorously developing non-fossil energy can greatly increase the reserve life of China's onshore and offshore resources, and extend the time and space of China's energy security. Although the policies for the development of renewable energy still face significant controversy, the policy direction is consistent with the world's energy development trend. The energy policies for power development must be adhered to, and the institutional reforms for power reform must be vigorously promoted. One cannot expect to solve resource replacement in a short period of policy promotion. Whether it is the development of unconventional resources or non-fossil energy, they all need to undergo commercial and market tests. 

3. Properly handle the relationship between the eastward shift of energy consumption centers and the westward shift of production centers. 

From a global perspective, the center of world energy consumption is shifting to Asian countries and regions such as China, India, Japan, South Korea, and Southeast Asia. Due to the development of unconventional oil and gas resources in North America, the center of world energy production is gradually returning to the West. The shift of these two centers is bound to trigger significant changes in the global political and economic landscape and bring about major changes in the world energy pattern. Therefore, it is necessary to recognize the major trend of this shift from a strategic height and a global perspective. 

From a domestic perspective, the eastern region remains the main energy-consuming area, while the central and western regions have become the centers of energy production in China. The five regions of Shanxi, Ordos Basin, Inner Mongolia East, Southwest, and Xinjiang are the future five major national energy strategic bases of our country. The development of resource and energy exploitation should be coordinated with regional development, and be integrated with the country's positioning of different regions' main functional zones. The eastern region should bear higher costs for consuming a large amount of resources and energy. The central and western regions should achieve resource appreciation and keep the appreciation part locally for local economic development to make up for historical debts. We should continue to improve the energy transportation and transmission systems, significantly reduce the economic and institutional costs of energy flow, alleviate regional structural supply-demand contradictions, and solve the problems of "energy poverty" and "energy equity". The planning, layout, and improvement of the national energy network (power grid, gas network, oil network) should be included in the national planning. We should avoid administrative division and local protectionism, industry-centeredism, and explore the reform of the power grid and the nationalization of oil and gas pipelines, and implement them when conditions are ripe. 

4. Properly handle the relationship between energy industry reform and state-owned enterprise reform 

In recent years, the reforms of energy enterprises have achieved significant results. Chinese energy enterprises have basically established a relatively complete corporate governance structure, and have made considerable progress in modernization, internationalization and planning of enterprise management. The competitiveness and influence of energy enterprises have been greatly enhanced. 

However, the effectiveness of enterprise reforms cannot mask the lag in industry reforms. Most of the problems widely criticized by public opinion, such as "monopoly", excessive industry concentration, and the "big but not fragile" situation, are largely related to the lag in industry reforms. Industry reforms are beyond the capabilities of enterprises alone, nor can they be accomplished by a single department. Industry reforms require the political courage and boldness of a true "maverick", moving in a market-oriented direction, clearly defining industry standards, eliminating administrative entry barriers, and achieving diversification of competition entities. Only by involving more market entities in the energy industry can the efficiency of the energy market be improved and national energy security be effectively guaranteed. 

Therefore, in addition to continuing to deepen the reform of state-owned energy enterprises, relevant institutional arrangements should be made at the national level to promote comprehensive reforms in the energy industry. The reform of the prices of production factors such as resources and energy and their formation mechanisms should be implemented as soon as possible. As an important factor of production price, if the energy price cannot achieve at least partial marketization, the industry reform and enterprise reform will come to a standstill. It is necessary to fully recognize the significance of relaxing restrictions on crude oil imports and encouraging private capital to participate. 

5. Properly handle the relationship between energy diplomacy and "going global" 

For Chinese energy enterprises to "go global", they need the strong support of a stable and mature foreign policy from the state in order to achieve results and succeed. In recent years, energy diplomacy has become an important aspect of China's diplomatic activities, and has also become an important stage for China to participate in international affairs, exert its influence as a major country, and seek the expansion of national interests. 

The relationship between energy diplomacy and "going global" is actually a relationship between national interests and corporate interests. Most of the time, when enterprises "go global", it is within the framework of energy diplomacy. It's hard to imagine that enterprises would "travel" to hostile countries to "expand their territory". Diplomacy is the extension of domestic affairs in the international community. Energy diplomacy should serve the overall situation of domestic economic construction and energy development. Of course, under certain conditions, energy affairs should also serve diplomacy, but this is not something that often occurs. The stability, long-term nature, and consistency of diplomatic policies are crucial for energy enterprises to "go global". Many short-term investment behaviors of some energy enterprises overseas, apart from being related to the enterprise's system, are also related to whether the diplomatic policies can remain stable, long-term, and consistent. Should energy diplomacy and corporate "going global" follow actual material interests, or some concepts or values? In the long run, this is a question that decision-makers should seriously consider. Idealism or realism have never existed independently, but we need friends and also need a bottom line. 

Energy development is not just the responsibility of the energy industry. To a large extent, it is "the art lies beyond the words". If we stick to traditional thinking, many problems may remain unsolvable forever. Problems are not solved; they are simply forgotten. This is precisely because the way we think about and solve problems has changed.