Lukewarm Reaction to Energy Commission

A long-anticipated national commission to guide China's energy development was unveiled, but industry experts have jumped to question its future effectiveness.

On January 27, the State Council, China's cabinet, announced the establishment of the National Energy Commission, headed by Premier Wen Jiabao, with Vice Premier Li Keqiang acting as deputy head. The commission also includes more than 20 representatives from key ministries including finance, foreign affairs, commerce and environment.

Zhang Ping, the director of National Development and Reform Commission (NDRC), was named as the director of the commission's general affairs office, while Zhang Guobao, head of the National Energy Administration (NEA) will take the position of deputy office director.

According to the State Council's statement, the new commission "will be responsible for drafting national energy development plans, reviewing energy security and coordinating international cooperation." 

The line-up of high-ranking personnel reflects the important status of the new commission. But some experts from academic and industry circles expressed concern over whether the commission can indeed carry out its assigned tasks and fit with current energy oversight.

China has undergone several administrative reshuffles in its energy sector. However, the result has often fallen short of industry expectations. In 2008, the National Energy Administration was set up under the NDRC. A "high-level coordination body," termed later as the National Energy Commission, was proposed during this time.

But the establishment of the commission was postponed, owing to the fact that the NEA had difficulties in carrying out many of its assigned tasks. Zhang Guobao, the head of NEA, said in early 2009 that the administration struggled with the lack of administrative authority and resources for national energy sector oversight. Decision-making was spread among a number of central government departments while many reforms faced hurdles at the local government level.

As China's energy demand swells, the country has confronted increasingly complicated issues in the sector. Dispersed power and inefficient coordination has emerged as major hurdles that have stunted industry development and energy policy implementation.

The establishment of the new commission has mostly garnered cynical outlooks. An expert from Sinopec said that "previous practices were in vain, and the new one will prove the same."

Another source from CNNOC said that establishment of the commission is far from fundamental reform of the system.

(Translated by HW)

Full Article in Chinese: http://business.caing.com/2010-01-29/100111928.html