market. The market will link mining rights to
resource reserves, quality and other objectives
that reflect the value of the deposits. The businesses that win the mining rights will do their
best to improve the rate of recovery, thus creating
a good interest-driven mechanism.
Natural gas is urgently needed to adjust the
energy mix and protect the environment. To
promote the exploration and production of gas,
especially shale gas, CBM and other unconventional resources with great potential, it is necessary to introduce tax incentives. In particular,
resource tax reductions or exemptions, preferential policies for corporate tax and VAT for
businesses that use gas as their main energy
source.
Sixth, the environmental supervision of the
exploration and production of unconventional
gas should be improved. China suffers from
frequent environmental pollution events, and the
public’s environmental sensitivity is rising. In the
future, environmental risks will intensify as
unconventional gas output increases. China must
pay attention to relevant environmental issues
and prevent pollution and incidents from occurring, as this would impact the industry’s development. The government must therefore create
an environmental regulatory regime, while
deregulating market access. Specifically, China
should: (i) develop an overall plan for setting up
a regulatory organisation to ensure environmental regulation is efficient; (ii) accelerate the
development and implementation of the laws,
regulations, technical standards and specifications for environmental regulation during the
development of the oil and gas sector; (iii) build
fundamental environmental regulation capabilities and improve the research and development
of environmental technologies to provide technical support for regulation; (iv) improve the
information disclosure mechanism and broaden
channels for public engagement; and (v) intensify the penalty criteria for environmental pollution and improve the reward and penalty
mechanism.
7 Strategies and Policies
7.1 Main Characteristics
of the Evolution of China’s
Energy Technology Policies
7.1.1 Energy Technologies Pass
Through Four
Development Stages
During Macro Energy
Trends
Energy is fundamental to the economy. It provides important material support to social and
economic activities and is influenced by
macroeconomic trends. The energy industry has
passed through four historical stages since its
initial reform and opening up. Each stage has
different characteristics that match the different
stages of China’s economic development, its
strategic orientation and support policies.
First, China’s initial energy development
strategies (1978–93). After the reform and
opening up, and to increase energy supply as fast
as possible, the Chinese government boosted
investment to accelerate the development of the
energy industry. However, due to the long construction cycle of energy infrastructure, the severe energy shortage became a bottleneck to
China’s economic growth. During this period,
the guiding idea for China’s energy strategies
was to increase energy supply, and the energy
technology strategies focused more on introducing production technologies to address the supply
shortage of coal, electricity and other energy
sources.
Second, adjusting and stabilising China’s
energy development strategies (1994–2003). The
energy bottleneck in China’s national economic
development was more or less eliminated in the late
1990s. During this period, China’s economic
growth underwent a transition from overheating to
soft landing, and a balance was achieved between
energy supply and demand that had not been possible for years. The relative oversupply of energy
changed China’s strict control over consumption.
386
S. Zifeng and N. Dickens
resource reserves, quality and other objectives
that reflect the value of the deposits. The businesses that win the mining rights will do their
best to improve the rate of recovery, thus creating
a good interest-driven mechanism.
Natural gas is urgently needed to adjust the
energy mix and protect the environment. To
promote the exploration and production of gas,
especially shale gas, CBM and other unconventional resources with great potential, it is necessary to introduce tax incentives. In particular,
resource tax reductions or exemptions, preferential policies for corporate tax and VAT for
businesses that use gas as their main energy
source.
Sixth, the environmental supervision of the
exploration and production of unconventional
gas should be improved. China suffers from
frequent environmental pollution events, and the
public’s environmental sensitivity is rising. In the
future, environmental risks will intensify as
unconventional gas output increases. China must
pay attention to relevant environmental issues
and prevent pollution and incidents from occurring, as this would impact the industry’s development. The government must therefore create
an environmental regulatory regime, while
deregulating market access. Specifically, China
should: (i) develop an overall plan for setting up
a regulatory organisation to ensure environmental regulation is efficient; (ii) accelerate the
development and implementation of the laws,
regulations, technical standards and specifications for environmental regulation during the
development of the oil and gas sector; (iii) build
fundamental environmental regulation capabilities and improve the research and development
of environmental technologies to provide technical support for regulation; (iv) improve the
information disclosure mechanism and broaden
channels for public engagement; and (v) intensify the penalty criteria for environmental pollution and improve the reward and penalty
mechanism.
7 Strategies and Policies
7.1 Main Characteristics
of the Evolution of China’s
Energy Technology Policies
7.1.1 Energy Technologies Pass
Through Four
Development Stages
During Macro Energy
Trends
Energy is fundamental to the economy. It provides important material support to social and
economic activities and is influenced by
macroeconomic trends. The energy industry has
passed through four historical stages since its
initial reform and opening up. Each stage has
different characteristics that match the different
stages of China’s economic development, its
strategic orientation and support policies.
First, China’s initial energy development
strategies (1978–93). After the reform and
opening up, and to increase energy supply as fast
as possible, the Chinese government boosted
investment to accelerate the development of the
energy industry. However, due to the long construction cycle of energy infrastructure, the severe energy shortage became a bottleneck to
China’s economic growth. During this period,
the guiding idea for China’s energy strategies
was to increase energy supply, and the energy
technology strategies focused more on introducing production technologies to address the supply
shortage of coal, electricity and other energy
sources.
Second, adjusting and stabilising China’s
energy development strategies (1994–2003). The
energy bottleneck in China’s national economic
development was more or less eliminated in the late
1990s. During this period, China’s economic
growth underwent a transition from overheating to
soft landing, and a balance was achieved between
energy supply and demand that had not been possible for years. The relative oversupply of energy
changed China’s strict control over consumption.
386
S. Zifeng and N. Dickens