China establishes new energy agency

China's National Development and Reform Commission (NDRC) established a new nine-department government agency, the National Energy Administration (NEA), to secure energy supplies.

Jul 31st, 2008

Eric Watkins
Senior Correspondent

LOS ANGELES, July 31 -- China's National Development and Reform Commission (NDRC) established a new nine-department government agency, the National Energy Administration (NEA), to secure energy supplies.

Lin Boqiang, an economics professor at Xiamen University, said the consolidation of agencies under NEA signals that China will focus more on energy strategy and planning for sustainable development.

Of the nine merged departments, four were in charge of separate energy sectors, while the other five were involved in policy, development planning, energy conservation, and international cooperation.

Responsibility for domestic pricing of energy will be shared by NEA and NDRC. NEA will make proposals concerning price adjustments but will need approval from NDRC and the State Council, while NDRC will consult NEA when it adjusts energy prices.

Apart from pricing, however, NEA will assume NDRC's responsibilities in several other key areas to include charting energy strategy and policies as well as managing separate sectors for oil, gas, coal, electricity, nuclear, and renewable energy.

NEA will manage China's strategic oil reserves, including building and releasing such reserves and supervising the management of commercial reserves.

The new agency will have approval of the biggest overseas investments in energy resources and will negotiate and sign energy contracts with foreign governments and institutions.

The Chinese government announced plans in March to create a bureau to integrate energy management, marking the first time it has established a central organization to deal with energy issues since dissolving the ministry of energy in 1993.

Contact Eric Watkins at hippalus@yahoo.com.

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