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Energy is closely related to national security

At 3 pm on March 11th, the fourth plenary session of the 11th National People’s Congress was held at the Great Hall of the People in Beijing. During the session, State Councilor and Secretary-General of the State Council, Huajian Min, delivered a statement on the reform plan for the State Council. A key focus of this institutional restructuring was to enhance energy management. The establishment of the National Energy Commission as a high-level coordination body, along with the creation of the National Energy Administration under the National Development and Reform Commission, marked a significant step toward more centralized energy governance. According to an official from the China Development Research Foundation, energy issues are closely tied to national security. In recent years, as China's energy demand has surged, it has become the world's second-largest energy consumer. In 2007, total energy consumption reached 2.65 billion tons of standard coal, up 7.8% from the previous year. Crude oil use rose by 6.3% to 340 million tons, while natural gas consumption increased by 19.9% to 67.3 billion cubic meters. Despite this, per capita energy resources remain low—oil reserves are only 11% of the global average, and natural gas reserves fall below 5%. As a result, China relies heavily on imports to meet its growing needs. In 2007, oil imports approached 200 million tons, with a foreign dependence rate of nearly 50%. This growing reliance on external sources has made energy security a critical challenge for China's economic and social development. With rising international oil prices, energy concerns have become even more pressing. The "Eleventh Five-Year Plan," launched in early 2006, set a binding target: reducing energy consumption per unit of GDP by 20% by 2010 compared to 2005 levels. The revised "Energy Conservation Law," enacted in October 2007, further emphasized energy conservation as a fundamental national policy, stating that "the state will implement energy conservation and prioritize it in development." These measures signal a shift in how energy strategy is approached at the national level. This round of institutional reforms elevates the national energy strategy to a more strategic position. It is expected that the newly restructured energy management agencies will have greater authority and play a more active role in implementing energy policies. The petroleum and chemical industry, being one of the most energy-intensive sectors, faces particular urgency in improving efficiency. Among the 1,000 key energy-saving enterprises identified nationwide, 340 belong to the oil and chemical sector, making up one-third of the total. Energy costs constitute a large portion of production expenses, especially for high-energy products, where they can account for 60–70% of total costs. For general products, energy costs range between 20–30%. Industries like nitrogen fertilizer, soda ash, caustic soda, calcium carbide, and yellow phosphorus consume about 60% of the sector’s total energy. Despite these challenges, progress has been made. In the first three quarters of 2007, energy consumption per unit in six key energy-consuming industries within the petroleum and chemical sector showed a decline. For instance, the caustic soda industry saw a 3.6% drop, ethylene fell by 2.9%, crude oil processing, soda ash, and calcium carbide each decreased by 1.9%, and ammonia production dropped by 1.8%. While these achievements are encouraging, meeting the targets set by the "Eleventh Five-Year Plan" remains a major challenge. Strengthening energy management institutions will provide essential guidance and support for the industry’s energy-saving efforts. With coordinated efforts from both the government and enterprises, China is well-positioned to overcome energy challenges, ensure energy security, and safeguard national interests.

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