Study On China's Petroleum Resources Security From The View Of Supply-Demand Balance

Petroleum resources are the most important energy whose scope of application is broad, and which are indispensable elements of the production and life of human beings. As non-renewable resources, petroleum resources would be exhausted if over exploited and over consumed, which finally leads to petroleum scarcity. It is value of resources depends on that resource scarcity. In order to scramble for petroleum resources, countries intensify competition for petroleum;Meanwhile, petroleum scarcity contributes to the constant price fluctuations of the world petroleum market and affects the changes of petroleum supply and demand. Furthermore, petroleum resources are related to the geographical distribution. Different regions and countries have varying petroleum deposits. This kind of imbalance has brought the monopoly and competition of the world petroleum market in which both petroleum-importing and petroleum-exporting countries are involved. Petroleum resources have decisive position in the worldwide economy, international politics and military defense because of its scarcity, imbalance and dependence. Petroleum resources bring such huge effects on human beings life that not only they are the material basis of the modern society, but also are the main elements of the national economy. Therefore, the supply and demand of petroleum resources, the rise and fall of petroleum production, the fluctuations of world oil price and the intricacies of energy diplomacy result in petroleum security problems that have aroused the concern of governments, experts and scholars.As we all know, petroleum resources has triggered three large-scale petroleum crises as the fuse in 1970s, which brought enormous impact on the United States, Japan,EU and other developed countries, and greatly effected the world petroleum market. China is the largest developing country of the world. With the rapid economic development, China increases constantly the demand of petroleum resources which have become significant protection of developing national economy and improving the living standard of people. China has become net importer of petroleum since 1993. Supply and demand of petroleum resources are more and more imbalanced. And the gap between supply and demand is expanding which results in a series of petroleum security problems. Therefore, according to Chinese, current situation, to explore deeply the status of supply and demand of China, predict future supply and demand situation of petroleum resources, research and evaluate petroleum security from the perspective of supply-demand balance, and provide suggestions have great theoretical and practical meaning. In addition, petroleum resources are vital strategic resources, it affects directly national security. Every country has referred to petroleum security as strategic issue. Petroleum security has impacted on the cooperation and development in the world. Understanding correctly issues of petroleum security, enacting strategic policy, ensuring the sustainable development of petroleum resources have strategic significance in Chinese social and economic development.Foreign scholars'studies on petroleum resources cover the petroleum crises, the development history of petroleum, petroleum strategies, petroleum price and etc, while very few do research on the petroleum security of one country from the view of supply- demand balance. Majority of Chinese research results are in the area of energy policy. Chinese academic studies elaborate the development process of the world petroleum, petroleum crises, petroleum diplomacy, problems and development trend of petroleum security through discussing the economy development and geopolitics, while very few predict the future of the supply and demand of China's petroleum resources. Besides, the studies on China's petroleum security by choosing the key indicators to make a quantitative assessment are even fewer. This thesis fills the gap in the limitations above mentioned and makes innovation based on the previous studies.The thesis consists of eight chapters in addition to conclusion.Chapter one introduces the research background, significance, methodology, outline and data sources.Chapter two is the theoretical basis of the thesis. First, it provides the definition of energy security and petroleum security. Secondly, it demonstrates related theories including supply and demand of economics, resources scarcity and resources allocation. Finally, it analyses the factors affecting the supply and demand of petroleum resources. There is close relationship between economic growth and petroleum resources development. On the one hand, economic growth increases material needs which stimulates the consumption demand for petroleum. On the other hand, economic growth improves technologies, which contributes to enlarging production scale. The rise of petroleum price is unfavorable for the international balance of payments and domestic economic development, increases production cost and affects oil supply, and aggravates supply -demand balance of petroleum.Chapter three analyses the supply-demand situation of China's petroleum resources from the view of world petroleum resources. According to the supply- demand status of world petroleum resources, although the world petroleum resources deposits are abundant, its consumption goes up as well. The supply-demand imbalance is main problems all petroleum-consuming countries encounter. Under such circumstances, economy, politics and diplomacy affect petroleum world market. Supply-demand trend of world petroleum resources is complicated. Based on the supply-demand situation of China's petroleum resources, the consumption demand of petroleum constantly rises while petroleum production is growing slowly which leads to the imbalance between supply and demand, and the contradiction is becoming more and more serious. Therefore, China has to depend on importing petroleum to meet domestic consumption demand. Petroleum security situation is grim.Chapter four predicts the future of supply and demand of China's petroleum resources. The prediction result shows that petroleum production will increase slowly in the future, consumption growth is relatively faster. Petroleum supply could not yet meet consumption demand in the next few decades.Chapter five analyses the current situation and future trend of China's petroleum security. First, it demonstrates the strategic significance of China's petroleum resources. Petroleum security plays significant strategic role in promoting domestic economic development quickly, enhancing world competition and improving political status in the world. Secondly, it analyses the security situation of China's petroleum resources affected by supply and demand. At present, China lacks perfect petroleum reserve system. Dependence on importing petroleum leads to oil security problems, such as unsafe petroleum transportation, threats from the imbalance between supply, and petroleum domestically, saving and consumption reducing. Finally, it provides the development trend of China's petroleum security. The security situation will be severe in the future affected by many factors.Chapter six makes an assessment on China's petroleum security. It takes advantage of principal component analysis and uses SPSS16.0 software to carry out comprehensive evaluation on petroleum security with many elements index system. The comprehensive evaluation shows that general trend has been decreasing since 1993, that especially from 2002 the numerical value of comprehensive evaluation decreased year by year and turned to negative from positive. Petroleum security level reduced. Additionally, this chapter introduces briefly other methods to assess China's petroleum security.Chapter seven conveys the strategies and enlightenments of petroleum security in developed countries. It mainly manifests the petroleum resources situation and petroleum security strategies in the United States, Japan and EU respectively. Petroleum reserve levels of the United States, Japan and EU are very high. They develop active energy diplomacy, expand sources of importing petroleum, develop substitution energies, save using of energy and improve using efficiency.Chapter eight comes up with petroleum resources countermeasures considering Chinese practical situation. The countermeasures to supply of petroleum resources, petroleum price and petroleum saving.Final part concludes the study. Through the analysis of the whole thesis it is known that domestic supply and demand of petroleum resources has become more and more imbalanced since China became a net importer in 1993. The gap between supply and demand grows. The contradiction between supply and demand becomes conspicuous. Petroleum security faces a series of problems. First, China has to depend on importing petroleum to make supply and demand balance, so that the degree of import dependency increases. It reached 49.97% in 2007. Secondly, import sources are highly concentrated. The concentration degree was 61% in 2007 which increased insecurity of petroleum supply. Thirdly, petroleum security is great influenced by fluctuation of petroleum price and change of world politics. Foreign exchange payment of China's petroleum import is increasing. The pressure of world energy diplomacy is greater. According to security trend, reserve, import, transport and imbalance between supply and demand of China's petroleum resources all face dangers which threat petroleum security. In the future, petroleum security situation remains grim, the contradiction between supply and demand becomes more and more prominent, Malacca dilemma can't be resolved soon, world political situation is unstable, the capability of dealing with petroleum risk is fragile, the competition on petroleum among countries is intensified.Based on the analysis of supply-demand situation of China's petroleum resources, petroleum security situation and the experience of the United States, Japan, EU and other countries, China can take many specific measures to ensure petroleum security. Firstly, China should perfect legal and regulatory system, adopt advanced technology to increase production, build petroleum reserve system, improve reserves, take advantage of multi-channel to import petroleum and guarantee petroleum transportation security, which will help to ensure supply security of petroleum resources. Secondly, China should reform and clear away the defects of formative mechanism of petroleum price, adjust decision-making function of the government, set up domestic futures market of petroleum to deal with disadvantageous effects caused by price fluctuation. Finally, China should improve the utilization efficiency of petroleum resources, build saving-petroleum industries, develop substitutive energies, and implement clean development mechanism and sustainable development strategies of energy, to achieve the target of saving petroleum and mitigating conflict of supply and demand.