To realize China's modernization of economy, two approaches areindispensable- further industrialization and urbanization. But neithercan we get to without sufficient energy supply. The problem is how wewill deal with the increasing demand for energy.
Nearly 70% of China's primary energy is derived from its vastcoal reserves - the second in the world. But coal is an aggressive pol-lutant, and one of the main sources of greenhouse gases. What's more,most of China's coal mines are far from the centers of economic activi-ties, thus creating problematic transportation bottlenecks. Gas, whichis much cleaner, is in limited supply and faces similar geographicalchallenges, requiring costly pipeline infrastructure. The spectacularcar boom has made China the second largest consumer of oil in theworld (after the U.S.). This has put considerable pressure on energysupplies, and with imports from such countries as Saudi Arabia, thegeopolitical tensions are not negligible.
The modern industrial world isunderpinned by energy and alsodriven by energy. Today 80%of the world's energy comes from coal,oil and natural gas. China is known asa country and also one of the largestenergy suppliers in the world. Officialstatistics show that China consumed 2.46billion tons of standard coal in 2006.Among this figure, coal consumptionamounted to 2.37 billion tons, crude oilconsumption reached 0.32 billion tonsand natural gas, 55.6 billion cubic me-ters.
Any discussion of China's energybegins with coal. Coal is the backboneof China's energy supply and it has beensince the earliest days of its industrial-ization. Nearly 70% of China's primaryenergy consumption (by fuel) comesfrom its vast coal reserves - the secondlargest in the word, accounting for 13%of the world's total. With the advantageof reliable and cost-effective, coal hasbecome an indispensable energy andmaintains its domination in China's en-ergy mix.