US-China energy talks progress, differences remain
Source: Reuters
By Chris Baltimore WASHINGTON, Dec 19 (Reuters) - The United States and China, the world's top two oil guzzlers, made some key energy-related advances during last week's top-level meeting in Beijing, but some differences remain on how to address future energy needs, a U.S. Energy Department official said on Tuesday. Meeting with top Bush administration officials, China pledged to use its oil stockpiles to meet shortfalls, not to manipulate prices. It also said it would buy U.S. nuclear reactors, and participate in a zero-emissions coal plant. After talks in Beijing with U.S. Energy Secretary Sam Bodman, Treasury Secretary Henry Paulson and others, the two nations still have different views on how to obtain energy to fuel their giant economies. "The only point of difference ... is do you have to own the resources to actually have access to them," said Karen Harbert, assistant secretary for policy and international affairs at the U.S. Energy Department. The United States stresses supply diversity and reliance on the global energy market. China, on the other hand, has pursued giant oil deals in places like Venezuela and Canada, where Beijing has sought an equity stake in a portion of oil produced. "It is not feasible for China to own all the resources and reserves it will need to fuel its economy." Harbert said. Chinese officials have told U.S. counterparts they don't intend to take majority stakes in most of their international oil ventures, Harbert said. "The point that they have made to us is that in most of these international pursuits, they maintain a minority," she said. "They remain comfortable being a minority partner at this point." At a meeting with energy ministers from Japan, India, South Korea and the United States, Chinese officials also pledged to use their strategic oil stockpiles only to fill serious supply shortages. China's plans to store about 100 million barrels of crude oil by 2008 had raised concerns among industrialized nations that it could use its stocks to control world crude oil prices. The U.S. strategic oil reserve is about 700 million barrels. "We had been concerned that (China) would use their strategic oil reserve as a source of price manipulation," Harbert said. "They clearly have rejected that idea and said that it would only be used in the case of a supply disruption." Chinese officials also said "that they would be inclined to participate in any sort of international response to a supply disruption should it happen around the world," Harbert said. That happened in 2005, when industrialized nations released crude oil and refined product stockpiles to alleviate shortages after Hurricane Katrina slammed into the heart of the U.S. oil patch in the Gulf of Mexico. Harbert noted that Beijing also pledged to buy four nuclear reactors from U.S.-based Westinghouse Electric and to help build FutureGen - a $1 billion coal-burning power plant that emits no harmful air emissions. "We want to find a way to work with China," Harbert said. "We do not see China competing for resources with us." The United States is the world's biggest oil user, consuming about 20 million barrels per day (bpd). China uses about 6 million bpd. But domestic oil demand in China, the world's fourth-largest economy, is expected to more than double to 15 million bpd by 2030.
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