Wenrang Jiang, University of Alberta Presentation

1. Border Energy Forum XVIII October 27, 2011 El Paso, Texas Wenran Jiang, Ph.D. Project Director, Canada-China Energy & Environment Forum Special Advisor on China, the Energy Council Senior Fellow, Asia Pacific Foundation of Canada Former Founding Director, China Institute University of Alberta CHINA ’ S DEMAND FOR ENEGY & Its Implications for the world NOT FOR DISTRIBUTION

2. OVERVIEW: I. Development Paradigm & China’s energy use II. China's "Go-out" Strategy in Full Speed III. Implications for North America China’s Demand for Energy & Its Implications

3. OVERVIEW: I. Development Paradigm & China’s energy use II. China's "Go-out" Strategy in Full Speed III. Implications for North America China’s Demand for Energy & Its Implications

5. China’s Share of the World Commodity Usage (%) Source: UN Comtrade, SinoLatin

6. China’s Share of the World Commodity Usage (%) Source: UN Comtrade, SinoLatin China’ s Domestic Oil Production and Total Demand

7. China ’s Energy Consumption Composition 2007 Source: Energy Research Institute, NDRC 2009

9. China’s explosive growth & energy use 1 st in foreign direct investment inflow 1 st international trader 1 st in foreign currency reserve 1 st in foreign trade to GDP ratio 2 nd largest economy 1 st comprehensive energy producer 1 st in overall energy consumption 1 st overall power market 1 st in wind turbine/solar panel installation 1 st in auto production & sales 1 st in CO2 emission 1 st in the number of cities heavily polluted China’s Demand for Energy & Its Implications

10. China’s contribution to oil demand growth, 2010‐15, kb/d

12. Energy Demand Forecasts (mtoe)

14. Source: UN Population Division

15. Urbanization and China’s emerging middle class Source: McKinsey & Co.

16. Energy consumption per capita versus the GNP per capita The graph plots the per capita energy versus the per capita income for all countries with more than 20 million inhabitants, the data more than 90% of the world's population. The image shows the broad relation between wealth and energy consumption.

17. OVERVIEW: I. Development Paradigm & China’s energy use II. China's "Go-out" Strategy in Full Speed III. Implications for North America China’s Demand for Energy & Its Implications

18. The growth drivers behind China’s outbound M&A Source: SinoLatin

19. Although China-Africa trade volume dropped to US$91.07 billion in 2009 as a result of the international financial crisis, China became Africa' s largest trade partner that year for the first time. [US-Africa $86.33 bil.] From January to November in 2010, China-Africa trade volume reached US$114.81 billion, a year-on-year growth of 43.5%. [US-Africa $103.05 bil.]

20. Latin America and the Caribbean – Share of the Main Destinations in Total Exports & Imports, 2000 - 2010

22. China Annual Outbound FDI 1980 –2010 (US$ billions) Source: MOFCOM, Various News Sources.

23. China Annual Outbound FDI 1980 –2010 (US$ billions) Source: MOFCOM, Various News Sources.

24. Major Chinese Acquisitions in Latin America Source: Kevin Gallaher

25. China’s loans-in-exchange-for-energy-&-resources deals since 2007 Russia $25 bil. Kazakhstan $10 bil. Brazil $10 bil. Venezuela $32 bil. Ghana $16 bil. DR Congo $9 bil. ($6 bil. modified) Nigeria $23 bil. (3 refineries) China’s Demand for Energy & Its Implications

26. Estimated Chinese share of overseas equity in oil exporting countries, Q1 2010

27. China has just begun to invest abroad Source: SAFE.

28. China’s Domestic Savings (1997-2020E) Source: JP Morgan, China Statistics Bureau, SLC estimates.

29. OVERVIEW: I. Development Paradigm & China’s energy use II. China's "Go-out" Strategy in Full Speed III. Implications for North America China’s Demand for Energy & Its Implications

31. Current and Projected Per Capita CO2 Emissions (metric tons)

32. Projected Annual CO2 Emissions (million metric tons)

37. Vehicle Penetration as an Income Function Projections to 2030

41. Sources of China's Crude Oil Imports Gradual increase of oil imports from Africa, corresponded with a recent decrease of Middle East crude. Source: Dow Jones, Reuters

43. China’s Malacca Dilemma

44. The First and Second Island Chains Conceived by the Chinese Military

45. Both China & USA are largest emitters More than 60% of China ’s exports are produced by Western firms

46. Canada as a Potential Energy Superpower Sources: Oil and Gas Journal – Dec 2002 Ranked as the second largest crude oil reserve in the world, next to Saudi Arabia.

47. North America only represents a tiny portion of China ’s overall OFDI in the world (2003-07) Sources: mofcom

48. Major Chinese Investment in North America Since late 2009 IN $ FROM AOSC $1.9 bil. PetroChina Syncrude $4.65 bil Sinopec Penn West Energy $1.25 bil China Investment Corp. Opti/Nexen $2.1 bil. CNOOC Daylight $2.2 bil. Sinopec Chesapeake $1.1 bil. CNOOC (Eagle Ford) Chesapeake $1.3 bil. CNOOC (Powder River) China’s Demand for Energy & Its Implications

50. China’s Demand for Energy & Its Implications THANK YOU Wenran Jiang, Ph.D Project Director, Canada-China Energy & Environment Forum Special Advisor on China, the Energy Council Senior Fellow, Asia Pacific Foundation of Canada Former Founding Director, China Institute University of Alberta 10-28 Tory Building, University of Alberta Edmonton, Alberta, Canada T6G 2R1 Tel. 780 492 9898 Fax. 780 492 1830 Email: [email_address]