China's energy industry faces five challenges: a huge demand, an acute-shortage of liquid fuel, severe pollution, greenhouse emissions and increasing energy consumption in rural areas. China needs to adjust its energy policies as soon as possible and establish a definitive, comprehensive and strategic energy system. This was the opinion Ni Weidou from the Chinese Academy of Engineering expressed at the recent Inner Mongolian Economy and Development Forum.
Ni also said that China could not skip the development phase of medium-high energy consumption and heavy chemicals industry. The surge in the number of motor vehicles in China has caused a big shortage of crude oil in spite of the fact that China produces 170 million tons every year.
At present, 70 percent of China's energy comes directly from coal which produces harmful gases such as sulfur dioxide and carbon monoxide. Since the last decade of last century, China has produced about 3 billion tons of sulfur dioxide every year, and that figure continues to grow with time.
Energy consumption per capita in urban areas is 3.5 times that of rural areas. It is thought that China's rate of urbanization will be between 55 and 60 per cent in 2020, which means that rural areas will increase their energy consumption.
Ni emphasized the two unchangeable truths in China's energy crisis: the strong reliance on traditional energy resources like oil and coal and the fact that renewable energy resources cannot resolve any problems before 2020.
To maintain the status quo, China should consider the sustainable development of resources, energy and environment, while establishing a diverse and strategic energy-producing system.