BEIJING (Reuters) – China, hosting its first major energy summit on Saturday, urged top oil consumers to join together in the face of resurgent producer power and sought to paper over differences on how best to achieve energy security.
Ministers from the United States, India, Japan and South Korea — nations that consume nearly half the world’s oil — gathered in Beijing for the meeting, which marked a rare move by China to take a leadership role on global energy issues.
“We want to send out an important, positive message, which is: the world’s key energy consuming countries plan to strengthen mutual cooperation,” China’s top energy policy maker Ma Kai said.
“(We will) promote conservation of oil, improvement of energy efficiency, strong development of oil alternatives, and reduce reliance on oil,” he added in prepared remarks to the closed forum.
The call to action may reflect a growing desire by China to engage with other key energy users, some of whom have criticised its secretive approach, price controls and a strategy favoring Chinese ownership of resources over spot buying of oil.
It may also reflect shared concern over increasingly nationalistic policies in major oil and gas producers that threaten to stymie investment and limit new supplies.
In addition, producer cartel OPEC will see its power expand when new member Angola joins next year.
Ma emphasized that the five countries had common problems and could benefit from a joint approach to tackling them — but shied away from touching on the different approaches to security that have complicated some relationships.
Among bilateral deals finalized on the summit sidelines was a multi-billion dollar agreement for U.S.-based Westinghouse Electric Co. to build four nuclear plants in China.
The contract could help smooth a relationship dented last year when a bid by China’s CNOOC Ltd. (0883.HK) (NYSE:CEO – news) for U.S. producer Unocal was withdrawn in the face of fierce Congressional opposition.
Ma’s U.S. counterpart, Energy Secretary Sam Bodman, echoed calls for greater cooperation, but also highlighted U.S. concerns about subsidized prices and a global race for assets.
Although Bodman avoided mentioning any country by name, Beijing’s caps on fuel costs and its rush to buy up oil and gas fields worldwide have been top of the agenda in previous bilateral meetings between the two countries.
“I believe our mutual long term economic goals will be best served by relying on global markets to set prices, in both the upstream and the downstream and both internationally and domestically,” he added.
The United States has also tried to discourage Beijing’s pursuit of equity stakes in energy projects overseas, and Bodman repeated the U.S. position that well-functioning markets were a better guarantee of smooth supplies than owning oilfields.
“It seems as though there is a growing trend to equate energy security with ownership of energy reserves, rather than broad access to reserves,” he said, according to a copy of his remarks.
“Even under the best circumstances, in my view, only a fraction of any nation’s projected needs can be met through direct ownership of reserves,” he added.
Ma also reiterated Beijing’s core energy policy of self-sufficiency, a source of concern for environmentalists as China’s number one fuel resource is dirty-burning coal.
However Beijing is pouring money and expertise into programs designed to exploit its coal in cleaner ways, from liquefaction to chemicals production and zero-emissions projects.