China Prepares for Peak Oil by Stockpiling Gas and Diversifying Supplies
China's latest five-year plan for its oil and gas sector reveals ongoing anxieties about geopolitical tensions, future conflicts, reliance on energy imports, and dwindling crude supplies. Released by the National Development and Reform Commission and the National Energy Administration, the plan aims to build up China's strategic reserves of natural gas and import capacities. Specifically, it targets 200 million tonnes of terminal capacity, 114 billion cubic metres of pipeline capacity, and ensures that natural gas storage capacity outpaces national consumption by 13 percent by 2030.
The plan also outlines a strategy to ramp up domestic oil production and reach peak oil consumption, which some experts contend could happen as soon as this year. While these goals may seem contradictory, they ultimately serve the same strategic priority - achieving energy independence and weaning China off foreign fuel imports.
China's focus on increasing domestic output, electrification, diversification, and stockpiling has been 'vindicated' by the war in Iran, which left many of its neighbors without access to global oil markets. Beijing's massive stockpiles and contingency plans allowed the country to absorb the shock, and it may emerge even stronger from the crisis.
Josh Freed, head of climate and energy at Third Way, notes that while China will take a hit from peak oil, 'it will end up in a stronger position on the other side.'