[Russia]What is the deep meaning of expanding China-Russia energy cooperation?
Author: Wang Yichen
Translated from https://mp.weixin.qq.com/s/K19270Zpcw0pVHvyd2YqYA
One is the world's largest energy consumer and the other is one of the world's largest oil and gas producers, what sparks will emerge from energy cooperation between the two countries? Recently, the 4th China-Russia Energy Business Forum was held offline and online in both Beijing and Moscow, releasing signals that the two countries will continue to deepen and expand their energy cooperation. At a time of heightened volatility in the international energy market, this initiative is of great significance in ensuring the energy security of both countries and even in maintaining the stability of the global energy market and leading the world's green and low-carbon energy transition.
Energy security is an important basis for countries to achieve economic development and social stability. The global economy and society have undergone systematic changes under the "double carbon" target, and the green and low-carbon transformation of energy has become the consensus of all countries. However, this year, due to changes in the global geopolitical and economic landscape, as well as the unstable supply of new energy sources such as wind power generation, which has exacerbated the volatility of the energy market, energy security has overtaken energy transition and become a priority concern for most countries, and traditional energy security risks related to oil and gas supply have once again become the focus of global attention.
It is precisely oil and gas cooperation that is the top priority of Sino-Russian energy cooperation. The energy crisis in Europe and the localised power shortages in China last year have once again proved how important it is to provide sufficient energy supply security for the economy. Only a considered and rational view of the current value of fossil energy can effectively guarantee national energy security. The misjudgement of the pace of the energy transition by some Western countries has led to a significant decline in the willingness to invest in traditional fossil energy sources, and the global market has begun to experience a significant shortage of oil and gas supplies, disrupting normal production and life. For the time being, securing an adequate supply of fossil energy for a considerable period of time will ensure a smooth and reliable transition to a low-carbon energy future for a country.
Sino-Russian oil and gas cooperation has natural complementary advantages and is a major strategic cooperation involving the energy security of both countries. China's external dependence on oil and natural gas is as high as 70% and 40% respectively, and by the end of 2020, China's remaining proven technically recoverable reserves of crude oil will be 3.619 billion tonnes, accounting for only 1.5% of the world's proven oil reserves, so the effective use of external resources is an inevitable step for China to ensure energy security. Russia is the world's largest natural gas exporter and the second largest oil exporter, which provides extensive scope for mutually beneficial cooperation between China and Russia. From a geopolitical perspective, China and Russia are in close proximity to each other, and the development of land-based energy import trade with Russia can help alleviate China's "Malacca worries".
In the new era of Sino-Russian energy cooperation, Russia is no longer a "one-man show", and China's renewable energy technologies will also be featured in the vast territory of Russia. At present, the implementation of green, low-carbon and sustainable development has become a global consensus, and has been further translated into global action. Our country and Russia share a common position on the prospect of developing renewable energy as the most important part of achieving the UN Sustainable Development Goals. China has a complete research and development, production and manufacturing industry chain for hydropower, wind power and photovoltaic power generation equipment, with world-leading technology and industry scale, high cost performance of equipment products and strong overall competitiveness. Russia has abundant renewable energy resources and huge development potential. The Russian market can become an important bridge for China's renewable energy industry to Europe and even the global market.
Energy cooperation has always been the most important, fruitful and wide-ranging area of practical cooperation between China and Russia, and has a solid foundation. 1996 saw the signing of the Sino-Russian Joint Declaration and the Sino-Russian Agreement on Joint Cooperation in the Energy Sector, which kicked off Sino-Russian energy cooperation. After more than 20 years, the pace of Sino-Russian energy cooperation has been gradually accelerated and the scope of cooperation has been gradually expanded from oil and gas to coal and nuclear energy. In 2021, China's imports of energy products from Russia increased by 47.4% year-on-year, making Russia the largest source of energy imports into China.
The current international environment is becoming increasingly complex and volatile, the pattern of energy supply and demand is undergoing structural reshaping, and the energy industry is facing the dual challenges of green and low-carbon transformation and digital intelligence transformation. Under the new situation, we should face up to the fact that there are still gaps or shortcomings in some areas of Sino-Russian energy cooperation, for example, the main content of cooperation is still based on primary products such as bulk energy raw materials, and there is insufficient cooperation in the field of energy technology; there are also certain differences on the pricing of oil and gas trade.
In the future, the two countries should respond to the changing situation and the requirements of the times and expand energy cooperation on a wider scale, at a deeper level and in a wider range of areas. On the basis of the existing foundation, we will continue to explore new modes and paths of cooperation, deepen cooperation in the upstream, midstream and downstream of the entire traditional energy industry chain, and jointly address the structural shortage and rising costs of energy faced by the energy transition. We will also actively explore the potential of green and low-carbon cooperation, strengthen collaboration in areas such as photovoltaics, wind power, hydrogen energy, energy storage and green finance, and lead the green and low-carbon transformation of global energy.