1. 中国能源和世界 China and Rising Oil Prices William Chandler President Transition Energy International, Ltd. Updated 1 September 2005

2. Typical Media Story “The price of gasoline is rising because China and India are guzzling gasoline.” - Kiplinger Letter, quoted on WTOP Radio News, 20 March 2005 This view is partly correct, but probably unfair....

3. Source: British Petroleum, Statistical Review of World Energy, 2004

4. Tradition: Transport by Crude Vehicles & Bicycles

5. Today: Beijing Rush Hour

6. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 19802002 Source: BECon, 2004 Chinese Energy Use by Sector Residential Commercial Transport Construction Industry Agriculture

7. Chinese Energy Use by Type Year Use (EJ) Energy Use Mix (%) CoalOilGasOther 198015722134 199024 EJ761725 200236 EJ662438 Source: BECon, 2004

8. Projected Chinese Oil Imports, 2020 Source: U.S. Energy Information Agency, 2002; International Energy Agency, Paris, 1997

9. Forecasting Demand for Transportation Energy: Light Vehicles The projection in the previous slide was based on this—very conservative— assumption for vehicle ownership, meaning that Chinese imports will probably be even higher in 2020.

10. China’s Idea of Security Has Changed.... Headlines, Financial Times 23 August 2005 Chinese energy group wins PetroKaz in $4.18bn deal National Petroleum Corporation yesterday agreed to buy PetroKazakhstan, its central Asian rival, for $4.18bn (£2.3bn) in China's biggest cross- border takeover. 3 August 2005 CNOOC might look to Australian groups The failure of CNOOC's bid for Unocal has revived speculation that the company might set its sights on Australia's Woodside Petroleum or Santos. China now seeks security in resources beyond its borders. from this to this

11. Energy Geopolitics The Struggle to Control Pipelines and Shipping Lanes Source: Yukos

12. Energy/GDP Elasticity = ~0.6 for years Rapid economic development BECon Energy Efficiency Center BECon Functions Policy reform Technology transfer Demonstration Public information Success Stories in China

13. Conclusions About China and Oil n Oil demand is growing faster in China than anywhere else in the world n Automobile air pollution presents a serious environmental threat n Risk that China will not build efficient vehicles, endangering its security and unnecessarily threatening the environment