Exclusive: China plans to create energy
ministry in government shake-up - sources
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[March 08, 2018]
By Josephine Mason and Benjamin Kang Lim
BEIJING (Reuters) - China plans to create
an energy ministry to oversee the country's vast oil, natural gas, coal
and power sectors, part of a government shake-up to make policymaking
more efficient, four sources with ties to the country's leadership said
this week.
The new ministry would replace the existing regulator, the National
Energy Administration (NEA), which was created a decade ago and is part
of the powerful state economic planner, the National Development &
Reform Commission (NDRC).
The new ministry would not be under the NDRC and would handle
energy-related duties currently scattered across many government
agencies, the sources said.
The planned shake-up is part of a broader reshuffle of government
departments, which will be presented to China's largely rubber-stamp
parliament on Tuesday. It is not clear if details of the changes will
immediately be made public.
China is also expected to overhaul its financial regulatory set-up,
possibly merging different agencies to improve the ability to control
financial risk, said four additional sources familiar with the matter.
The NEA declined to comment and the NDRC did not respond to requests for
comment.
It was not known who will be appointed to run the new ministry. Nur
Bekri heads the NEA and is a vice minister of the NDRC.
Removing energy from the NDRC's portfolio reflects the growing
importance of the oil, gas and clean fuel sectors in the world's biggest
energy consumer.
The plan comes after the ruling Communist Party agreed in late February
to deepen reform of party and government departments to improve their
function.
While the February statement did not say which departments may be
merged, re-organised or eliminated, it said the moves would strengthen
market supervision and management of natural resources and environmental
protection.
The new ministry will be responsible for major ongoing tasks including a
push to liberalise China's electricity market, opening energy
infrastructure such as gas pipelines and oil storage to private and
foreign players, boosting renewable energy use and weaning the country
off coal, its favourite fuel.
The reorganisation comes as China prepares this month to launch its
long-awaited crude oil futures contract, which will be Asia's first
pricing benchmark, giving the world's top oil importer greater clout on
the global market.
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Chinese President Xi Jinping leaves after the opening session of the
Chinese People's Political Consultative Conference (CPPCC) at the
Great Hall of the People in Beijing. REUTERS/Damir Sagolj
It's not known if the new department will also oversee the three
state oil majors, Sinopec, and China National Petroleum Corp
[CNPET.UL] and CNOOC.
UNIFIED STRUCTURE
Unifying energy supervision under a standalone regulator may also
help to reduce overlaps that have complicated the implementation of
major policy in recent years.
"If this happened, the energy ministry would have more unified power
to push through reform and regulate the market," said Lin Boqiang,
an energy expert with Xiamen University. He did not know about the
plan.
"The big question is whether the NDRC is willing to hand over its
responsibility for the energy sector."
In 2016, government-enforced cuts in coal mining as part of
Beijing's supply-side reform and war on smog caused shortages of the
fuel and a surge in prices, hurting utilities. Later, the NDRC had
to reverse some of the most stringent measures.
This past winter, Beijing's push to heat homes with gas and
electricity created chaos as some homes were freezing and factories
were forced to shut due to lack of fuel.
China formed its first energy ministry in 1988 from the remnants of
the old electricity, coal and oil bureaus, but dissolved it in 1993.
China set up the NEA in 2008 to improve coordination and conduct
planning, but it has no policymaking powers and its decisions remain
subject to the NDRC's approval.
(Reporting by Josephine Mason and Benjamin Kang Lim; Additional
reporting by Kevin Yao and Meng Meng in BEIJING; Editing by Tony
Munroe, Christian Schmollinger and Adrian Croft)
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