China considers new ‘super ministry’ for energy in 2013

BEIJING - Reuters

A worker performs a routine check of the valves at a natural gas appraisal well of Sinopec in China’s Sichuan province. REUTERS photo

China is considering a proposal to create an energy “super-ministry” as part of a sweeping cabinet reshuffle in 2013, two sources said, a step that would help Beijing impose its will on an industry beset by bureaucratic infighting.

The new ministry would replace the National Energy Administration (NEA), China’s main energy regulator, and would take on the energy-related duties scattered across other government bodies, said the sources, who spoke on condition of anonymity.

The super ministry would also handle long-term planning and policy making for the sector.
“Various interest groups are now wrestling (over the plan), but there is a need for an energy super-ministry,” a source with ties to China’s top leadership told Reuters.

China, the world’s biggest energy consumer, has been trying to draw up a long-term strategy for the sector that will address the security of overseas oil-and-gas supplies, rationalize pricing and taxation policies, boost new energy like nuclear and renewables and cut pollution and greenhouse gas. Ministries in China also often overlap as regulator.

Without a unified energy regulator, Beijing has struggled to achieve many of its priorities, including establishing a strategic petroleum reserve and reining in its perilous and chaotic coal industry.
Among other changes, the proposal calls for giving the new ministry the power to set oil, gas, coal and electricity prices. Today, that work is handled by the powerful National Development and Reform Commission (NDRC).

It is not clear if the move would abolish the National Energy Commission, a supervising body set up at the same time as the NEA and chaired by Premier Wen Jiabao.

China formed its first energy ministry in 1988 from the remnants of the old electricity, coal and oil bureaus, but dissolved it in 1993 after the regulator failed to control the powerful state-owned enterprises that dominate the sector. Its duties were eventually swallowed up by at least 13 other ministries and bureaus.