China eyes energy, environment ministries in March

BEIJING, Jan 14 (Reuters) - China will likely get an energy ministry in March and upgrade its environment watchdog to ministry status, sources said on Monday, as it aims to boost fuel security with oil at $100 a barrel and cut back on pollution.

If the massive shift in China’s unwieldy bureaucracy goes ahead, it would mark a sea-change in government priorities that will be welcomed by disparate groups ranging from oil industry executives to environmental campaigners.

At present energy policy-making and adminstration is scattered across several departments, which are understaffed and compete for power and influence.

The State Environmental Protection Administration (SEPA), while more unified, lacks the power or budget to consistently enforce anti-pollution rules and hold offenders to account.

The changes would likely be approved during the annual session of the country’s largely rubber-stamp Parliament, the National People’s Congress, held in Beijing from March 5.

“The energy ministry I think is highly likely... and I would say it is 99 percent (sure) that SEPA will become a ministry,” said an energy industry source with ties to government officials.

A foreign analyst who works closely with the Chinese government but declined to be named because of Beijing’s sensitivity about the reshuffle said he had also been told to expect an upgrade of the environmental administration.

The changes would be part of a drive to streamline the proliferation of ministries and other administrative bodies -- from an economic planner to regulators -- the cabinet oversees.

Plans for creating consolidated “super ministries” are nearing completion, with a report on the project expected to be submitted to the country’s State Council, or cabinet, by the end of this week, the China Business News reported on Monday.


Energy has shot up the government’s agenda in recent years in part because of worries about energy security as China’s dependence on imported crude edges towards 50 percent and global oil prices rally to over $100 a barrel.

Air pollution, climate change and a string of accidents in the world’s deadliest mining industry have also pushed Beijing to boost management of a key sector that has struggled for a voice since a previous energy ministry was dismantled in 1993.

Energy firms hope a well-staffed ministry could speed up vetting of new projects and improve policy coordination, both currently spread between several different departments with just a few dozen officials between them.

“I have had to go down to the National Development and Reform Commission myself, and sort through the papers on one official’s desk to find an urgent project and get them to approve it,” a senior executive of one state-owned firm told Reuters recenty.

“Their workload is just too large,” the executive added. However it is still not clear whether the planned ministry will be able to prise control of energy pricing away from the National Development and Reform Commission (NDRC), the economic planning super-ministry which runs policy with its energy bureau.

Beijing keeps a tight cap on power, oil and gas prices, and a ministry might struggle to push efficiency and some reforms if the NDRC was still holding onto this key policy lever.

The effectiveness of the upgrade of the environment ministry will also depend in large part on whether it will be able to control and fund provincial outposts, which are currently reliant on the local officials they are meant to p