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Why China's coal problem matters to you

The difficulty with understanding issues like global warming (beyond the simplistic Al Gore "the US is the energy satan of the world" interpretation) and the world economy is that, quite simply, most Americans don't have a single damn clue about conditions in other countries.

For example, we hear often enough about China as a growing competitor on the world oil market, which is partly responsible for driving our domestic energy prices up, but do we ever examine the internal energy situation in China?

Again I go back to Al Jazeera:

China is facing its worst-ever power shortage as winter weather puts pressure on dwindling coal supplies.

Officials say reserves are down to emergency levels with only enough coal to power the entire country for another eight days.

According to state media the shortage amounts to nearly 70 gigawatts, equivalent to about the entire generating capacity of the United Kingdom.

Across China 13 provinces including the southern industrial and export hub of Guangdong, have already begun rationing supplies, tiggering brown-outs across large areas.

Coal provides 78 per cent of China's energy needs, and the country is the world's biggest producer and consumer of coal.


Despite the opening of at least one new coal-fired power plant per week, China cannot keep up with the demand for energy produced by rising consumer expectations and made worse by government attempts to control energy prices.

Analysts say the problem largely stems from Beijing's attempts to control inflation and avoid social unrest by controlling the price of some types of energy, like power, while allowing others like coal to be liberalised.

That has been further compounded by the winter snows which are hampering transportation of coal supplies from the coal producing areas to the power plants.

With the government unlikely to lift caps on electricity prices any time soon, the impact of the coal shortage could spread to other markets.


Why should you care? Aside from the object lesson--ala California a couple years back--that government energy regulation (especially price caps) is almost always disastrous in the long run, here's why:

In summer 2004, during China's biggest previous power shortage, a rush for individual generators and diesel to run them helped push up international oil prices.


The more you know, the scarier the future looks some days.

Comments

Anonymous said…
"most Americans don't have a single damn clue about conditions in other countries."

A growing problem! People here just don't realize how good they have it. It seems the Socialists want more for the poor who are already richer than most of the world, and the Fascists want the richest of the rich (or the Government) to get richer.

For years the Gov. of China did not install heat in many houses built south of Beijing because they did not consider it got cold enough to warrant such a luxury. A friends Dad is an entrepreneur who has a BMW in the driveway of his unheated house. About now they are burning whatever they can find, including cow dung, to heat the house.

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