January 09, 2012

This Weekend’s News: In China, Streamlining Energy Policy

This weekend, Reuters reported
that China
may reshuffle its cabinet in 2013 to create an energy “super-ministry”
would take control of China’s now-scattered energy policies. The sweeping
reform would merge the responsibilities of agencies like China’s National
Energy Administration, the state energy regulator, the National Development and
Reform Commission (NDRC), the body charged with setting energy prices, and may
even reign in powerful and often amorphous state-owned energy companies, like
the China National Petroleum Corporation or China National Offshore Oil
Corporation (CNOOC).

Experts say an energy super-ministry may help Beijing bolster
is energy security policy. Indeed, a new ministry with centralized powers may enable
Beijing to overcome bureaucratic hurdles that have prevented it from creating
important energy policies that conflict with bureaucratic interests, such as establishing
a strategic petroleum reserve or developing streamlined policy to reduce
greenhouse gas emissions. Yet reshuffling the cabinet won’t be easy given the
vested interests of energy bureaucrats, as well as other agencies that could be
affected by the change. “A
government official directly involved in Chinese energy policy said the
sprawling NDRC is likely to be the biggest stumbling block in the restructuring
,” Reuters reported. “The
challenge will not merely be the NDRC, already a huge ministry with
considerable powers over the energy sector, but also others with a say in
policy, like the water resources, transportation or agriculture ministries

The creation of an energy super-ministry would certainly
signal Beijing’s continued commitment to developing a long-term energy
strategy, which could have foreign policy repercussions for how China behaves
in regions like the South China Sea. In particular, a new energy ministry may
help Beijing keep its state-owned energy companies in check. In regions like
the South China Sea, state-owned companies like the China National Offshore Oil
Corporation (CNOOC) may be driving (at least in part) Beijing’s policy toward
the region, rather than the other way around. Indeed, given CNOOC’s interests
(both financial and political) in developing deep-sea oil and natural gas in
the South China Sea region, it is not difficult to imagine that CNOOC’s
bureaucrats are lobbying policymakers in Beijing for more assertive policies in
the region, even if those policies may conflict with China’s broader foreign
policy or energy goals. (Note: It is not very clear what role China’s
state-owned energy companies play, however, in part because they are often shrouded
in mystique.) A new energy ministry may strengthen Beijing’s hand in developing
and directing energy policies that avoid foreign policy pitfalls and bolster is
long-term energy strategy. Onlookers – including U.S. policymakers – will need
to keep a watchful eye on how this cabinet restructuring pans out.

This Week’s Events

This morning at 9 AM, the Mountain Institute will host Himalayan
Glacier Melt: Global & Regional Challenges

On Tuesday at 9 AM, don’t miss our CNAS rollout of our new
report on the South China Sea, Cooperation from Strength: The United
States, China and the South China Sea
Afterward, head over to the
Wilson Center for Political
Demography: Identity, Institutions, and Conflict

On Wednesday at 10 AM, the Press Club will have an event on
the New
Global Nuclear Materials Security Index

On Thursday at 11:45 AM, the Hudson Institute will explore Energy,
Water, and Debt: Linked Problems, Common Solutions?
Then at 12:30 PM, the
Worldwatch Institute will host an event on climate change and population sustainability:
Billion: Conversations that Matter