Time:2013/6/18

On the morning of April 8, 2013, the “Workshop on China-U.S. Cooperation of Energy Security” was held in the School of International Studies (SIS), PKU. The workshop was initiated by the U.S. Embassy in China and hosted by the Center for International and Strategic Studies (CISS), PKU. Officials from the U.S. Department of State and U.S. Embassy in China, together with researchers on energy and Chinese energy policies discussed energy security and cooperation, especially how both countries can address mutual concerns in the energy sphere and make it an area of enhancing mutual trust at a time when energy production in the U.S. has been changing the international structure of energy supply and demand..

The workshop was hosted by Prof. Zha Daojiong of SIS, PKU, and academic member of CISS. The U.S. delegation was led by Mr. Robert Hormats, the Under Secretary of State for Economic Growth, Energy, and the Environment. Attending the workshop were also Chinese delegates from the School of International Studies and the School of Engineering, Peking University; the Energy Research Institute of National Development and Reform Commission; the School of International Studies of Renmin University of China; and the China University of Petroleum and the China Institutes of Contemporary International Relations. More than twenty graduate students of SIS, PKU also attended the workshop.

In his opening remarks, Mr. Hormats pointed out that demands for energy resources such as oil and gas in new Asian economies including China and India are increasing rapidly. Areas surrounding the Pacific and the Indian Ocean will replace the trans-Atlantic region as the main actors of global gas and oil trade. In recent years, the revolution in energy production in the U.S. has increased the export potential of that country, which would actively increase her production by exploiting domestic gas and oil resources and alleviate her reliance on imported resources by developing new resources. Moreover, the U.S is interested in taking part in the commercial development of non-traditional energy resources, e.g., shale gas, of China in order to achieve mutual benefits in four areas. First, China would be able to reduce air and other environmental pollutants by expanding the use of natural gas and help the global efforts in environmental protection. Second, China could reduce her reliance on imported energies by substantially increasing her energy production using shale gas, and bring more commercial interest to the U.S. Third, increased abilities of producing energy domestically would help China and the U.S to enhance mutual trust in energy and other areas, and reduce security concerns on maritime transportation routes. Finally, the new administration in China and the second term of President Obama would find a good start for bilateral interaction by cooperating in energy issues. Mr. Hormats explained that the dispute between China and the U.S. in energy security is much smaller than that in areas like intellectual property and cyber security. One of the practical challenges is to accelerate the transformation from technological exchanges between China and the U.S. in areas like shale gas, towards more commercial successes by further reforming the institutions of managing foreign investment on energy in China.

Prof. Zha Daojiong pointed out that since the 1980s, the basic framework of China’s energy policy toward the U.S. has been to help promote China’s energy self-supply ability, which has contributed to the development of China’s energy industry, including oil, natural gas, coal bed gas and renewable energy sources. Nowadays, while the U.S. is going towards energy independence, China has to rely more on imported energy sources. Thus, various voices appear in China about the future directions of U.S. energy diplomacy. As a step to promote the strategic trust between China and the U.S., there would be benefits only if the U.S. can expand her basic approach of energy diplomacy with China to include China as an energy export target. In fact, the 2007 Fujian quad-lateral cooperation project of refinery and petro chemistry among Saudi Aramco, Exxon Mobil, Sinopec and Fujian Province has provided an example for energy co-funding and cooperation between China and the U.S. Expanding the China-U.S. energy trade products from coal to liquefied natural gas (LNG) and oil would help reduce the suspicions in China about changes in future energy diplomacy of the U.S. Seen from China’s urgent demand of improving the air quality in coastal areas, where most energy is consumed, the integration of LNG supply and marketing of foreign companies, including U.S. companies, should be put on the agenda of inter-government discussions. Of course, China’s accelerating policy adjustment about the participation of U.S. and other foreign capitals in mining non-traditional energy sources like shale gas, would also help achieve her double goals of increasing energy production and improving environmental protection.

In the following discussion, participants pointed out that, in order to cooperate more comprehensively in the energy field, both China and the U.S. need to adjust their diplomatic policies on energy development and overcome domestic obstructions. Researchers of international relations and energy policies can contribute to this goal by reviewing the overall history of interactions between the governments and enterprises in the two countries and reveal mutual commercial interest in the energy industry. Such knowledge could enlighten other groups in the energy industry who may be stuck in the mindset of “cooperation of confrontation” in regard to energy production and shift the discussion from mutual mistrust to mutual support.

At the end of the workshop, participants from both sides agreed that, although the workshop was only two hours, it was still a positive effort to expand the energy dialogue between China and the U.S. from governmental, technological and commercial groups to academic research groups. The participants agreed that more dialogues between governments, industries and academia could take place in the future.