On Energy, China Argues Against Western Expertise... Again

China, ever growing in power (no pun intended) and influence, is again questioning Western experts inclined to tell it where it stands on the global stage, this time in terms of energy usage.

On Monday, the Paris-based International Energy Agency (IEA) announced China had overtaken the US as the world’s largest energy consumer. By Tuesday, China’s National Energy Administration had promptly shot down the allegation, suggesting that the IEA lacks understanding of China’s “energy conservation and renewable energy.”

According to the Financial Times:

“China on Tuesday dismissed claims that it was the world’s largest energy consumer, calling the latest estimates from the International Energy Agency ‘not very credible.’ […] Zhou Xian, head of the general office of the National Energy Administration, dismissed the numbers. ‘When the IEA came to China to publish its energy outlook a couple of days ago, they also overestimated China’s energy consumption and carbon dioxide emissions,’ he said. ‘We think that is because of a lack of knowledge about China, especially about China’s latest developments of energy conservation and renewable energy…’

“…The IEA estimates that China consumed 2,265m tonnes of oil equivalent in 2009, whereas preliminary data from China’s National Bureau of Statistics puts consumption at about 3,100m tonnes of coal equivalent during the same period. That is about 2,170m tonnes of oil equivalent based on back-of-the-envelope conversions – lower than the IEA’s estimate but almost the same as US energy consumption during the same period. China’s 2009 energy use is still lower than that of the US between 2004 and 2008, according to the IEA.

“The IEA has in the past said that it hopes China will eventually join the organisation. This year’s statistical review by BP, which is the most widely followed economic review by any company, also found China’s energy use to have surpassed that of the US. BP calculated China had consumed 2.2bn tonnes of oil equivalent last year compared to the US’s 2.17bn.”

It’s generally going to be difficult for different organizations to pull together numbers at this scale that all agree with one another, especially given China’s behemoth size and limited infrastructure. It doesn’t help that the IEA translates all sources of energy usage into oil equivalent units while China uses a coal equivalency. Further, China is still not, as of yet, one of the IEA’s 28 member states. Discrepancies are bound to crop up.

However, it remains notable that China is increasingly taking its own unilateral (and almost US-like) stance on issues that previously have been only considered legitimate when delivered by globally-recognized, and generally Western, bodies.

There has been similar disagreement with Google over internet usage in China. Yet, perhaps more poignantly, it’s also happened with Beijing-based Dagong Global Credit Rating Co.’s recent downgrade of US debt. Not only did the newly-founded assessment by a clearly not “nationally-recognized” rating organization drop the US two grades with a negative outlook, but it also went ahead and squeezed an upgraded and stable-outlook China in above it. For better or for worse, China is now insistent on having its own unique version of reality heard.

You can read more details in Financial Times coverage of China denying the accuracy of the IEA’s estimate of its energy consumption.


Rocky Vega,
The Daily Reckoning