Natural Gas Pricing Mechanism Reform and its Impacts on Future Energy Options in China
Natural gas is the cleanest fossil fuel. In recent years, its demand in China has been increasing at a rapid pace, but its pricing mechanism is still based on the planned economy system and is not keeping up pace with that of its consumption. Therefore, reforming the existing pricing system is of great significance. This paper first reviews the evolution of the pricing mechanism of natural gas in China, and then examines with model predictions the feasibility of a nationwide implementation of the reform programs currently carried out in Guangdong and Guangxi and its possible impacts. The results show that the reform can: (a) benefit Chinese natural gas producers and importers by increasing their profits, (b) increase the production of natural gas and accelerate the development of the industry, (c) reduce the use of natural gas in the chemical industry and optimize the energy consumption structure in China, (d) change the current energy portfolio in China and achieve the goal of sustainable development, and (e) help Chinese companies enhance their ability of adapting to high prices and promote their international competitiveness.
Programs, Prices and Policies Towards Energy Conservation and Environmental Quality in China
China has gradually recognized that the conventional path of encouraging economic growth at the expense of the environment cannot be sustained. It has to be changed. This article focuses on China’s efforts towards energy conservation and environmental quality. The article discusses a variety of programs, prices, market-based instruments, and other economic and industrial policies and measures targeted for energy saving and pollution cutting, and the associated implementation and reliability issues. The article ends with some concluding remarks and recommendations.
Natural Gas Trade in North America: Building up to the NAFTA
This paper traces the evolution of natural gas trade among Canada, Mexico, and the United States in the 1967-1992 period. In addition, the provisions of the North American Free Trade Agreement (NAFTA) that relate to natural gas trade are examined in the light of the corresponding aspects of the Canada-United States Free Trade Agreement (FTA). One of the main conclusions to emerge is that exports from Canada to the United States would likely continue to dominate North American natural gas trade patterns under the NAFTA. Past experience suggests that regulatory policies play a crucial role in determining trade patterns. In the case of Canada and the United States, the policies of deregulation implemented by the two countries prior to 1989 have proven to be much more important than has the FTA in encouraging cross-border trade in natural gas. Since the NAFTA allows Mexico to maintain a highly interventionist approach to energy policy, an internally-driven process of policy change will be required to liberalize natural gas trade between Mexico and the other parties to the Agreement. A few specific developments relating to natural gas trade among the NAFTA parties are also examined in the light of the Agreement.