Resource analysis of the Chinese society 1980–2002 based on exergy—Part 1: Fossil fuels and energy minerals

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Energy Policy 35 (2007) 2038–2050 www.elsevier.com/locate/enpol

Resource analysis of the Chinese society 1980–2002 based on exergy—Part 1: Fossil fuels and energy minerals G.Q. Chen, B. Chen Department of Mechanics and Engineering Science, National Laboratory for Complex Systems and Turbulence, Peking University, Beijing 100871, China Available online 10 August 2006

Abstract The resource inflow to the Chinese society from 1980 to 2002 is investigated based on exergy as a unified quantifier of natural resources. The major resources entering the society are divided into 17 sectors, with the annual policy for the individual group is analyzed corresponding to the exergy resource inflow. This study is divided into five consequential parts. This paper as the first part introduces the fossil fuels and energy materials entering the society, including coal, crude oil, natural gas, iron ores, nonferrous metal ores and nuclear power. The coal production, which comes form unified central planning, collective and individual parts, is analyzed according to the administrative institutions associated with variable policies. The consumption of coal is also described concerning thermal power generation, coking, heating, private consumption and gasification. The storage capacity, investment and import in crude oil production, which is imperative for the rapid economic development, are depicted. The natural gas production, slowly expanding during the study period, is illustrated according to the discovered and operating gas fields. Production of iron ores and nonferrous metal ores and nuclear power produced from uranium ores are represented in this paper. r 2006 Elsevier Ltd. All rights reserved. Keywords: Exergy analysis; Fossil fuels; Energy minerals

1. Introduction

edge (Chen, 2005, 2006; Szargut, 1980, 2004; Szargut and Dziedziniewicz, 1971; Szargut and Morris, 1985), that is,

The driving force of the social-economic-ecological complex system is the resource, which poses unparalleled challenges on each level of the society. The quantity and quality scarcities of the diverse resources require an efficient, effective and interdependent utilization based on overall and unified accounting. Natural resources are traditionally described as energy resources and material resources. Wall (1977, 1986) introduced the concept of exergy, which is a unified measure of matter, energy and information, into resource accounting. Exergy for a given system is defined as the maximal amount of work that can be extracted from the system in the process of reaching equilibrium with its local environment, chosen to have a direct bearing on the behavior of the system with respect to the time and length scales, depending on the observer’s objectives and knowl-

tot E x ¼ T 0 ðStot eq  S Þ,

Corresponding author. Tel.:+86 1062 767167; fax: +86 1062 754280.

E-mail addresses: [email protected] (G.Q. Chen), [email protected] (B. Chen). 0301-4215/$ - see front matter r 2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.enpol.2006.06.009

(1)

where T 0 is the temperature of the environment, S tot eq and Stot are the entropies in thermodynamic equilibrium and at the given deviation from equilibrium, respectively, of the total system as a combination of the given system and the local environment. The exergy content of different energy and material resources is represented in detail by Wall (1977, 1986). The exergy of substances and materials is given below: X X ci Ex ¼ ni ðmi  mi0 Þ þ RT 0 ni ln , (2) ci0 i i where T 0 is the temperature of the environment; ni is the ith mole number; mi is the chemical potential of substance i in its present state; mi0 is the chemical potential of substance i in its environmental state; ci is the chemical concentration of substance i in its present state and ci0 is the chemical concentration of substance i in its environmental state.

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Regarding the resource level, exergy embodies the physical maximum work, which can be extracted from the system when it interacts with the environment. Thus, the definition, calculation and assessment of the resource depend on the determination of the boundary between the system and the environment. Different boundaries lead to different concepts of resources. The system and the environment are determined at the same time. Exergy stands facing both the system, which is the present, and the environment, which is the absent, revealing the differences between the system and the environment which indicate the essence of the resource. When the resource is perceived and revealed, the exergy efficiency is thereafter proposed to evaluate how to obtain, allocate and use the resource. Wall (1977, 1986) assumed the reference environment, defined by Szargut (1980, 1989), Szargut and Morris (1985) to be homogeneous, that is, in equilibrium state according to the time and length scale of the researcher. In addition, the environment is large enough that the variation of its parameters can be omitted when the system interacts with the environment. According to the second law of thermodynamics, exergy is the real scarce resource consumed in the physical irreversible process (Chen, 2005, 2006). Resource enters into society and becomes a commodity. The traditional commodity accounting is based on the quantities, regardless of the different qualities of the commodities. Exergy accounting provides a convenient way to unify and measure different types of materials and energy, and evaluate the quality of the resources and degradation in the conversion. Researches on the exergy conversion in the society have been done in Sweden, Japanese, Norway, Canada, Brazil, Turkey, Italy and the US, where appropriate structures of exergy utilization and effective usage of resources are represented and discussed (e.g., Ayres et al., 1998, 2003; Ayres, 2002; Dincer et al., 2004; Ertesva˚g and Mielnik, 2000; Ertesva˚g, 2001; I´lerı´ and Tu¨rkeer, 1998; O¨zdog˘an and Arikol, 1995; Rosen, 1992; Schaeffer and Wirtshafter, 1992; Wall, 1977, 1986, 1990, 1993, 1997a, b, 1998; Wall et al., 1994; Wall and Gong, 2001a, b). The exergy method applied to society can be grouped into two types. The first method, which follows Reistad’s idea, only considers the flows of energy carriers, whereas the latter, which follows Wall’s analysis, accounts for all the major energy and material flows (Ertesva˚g, 2001). In the present study, the resource inflow to the Chinese society from 1980 to 2002 is investigated, following Wall’s approach based on exergy as a unified quantifier of natural resources. The major resources entering the society are divided into 17 sectors, with the annual policy for the individual group analyzed corresponding to the exergy resource inflow. This study is divided into five consequential parts. The first part introduces the fossil fuels and energy materials entering the society, including coal, crude oil, natural gas, iron ores, nonferrous metal ores and nuclear power. Part 2 describes the renewable energy

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resources, including sunlight, wind power, tidal power, wave power, geothermal power, biomass, hydroelectric resource and forestry. Part 3 focuses on the variation of the organization and constitution of agriculture as well as productions of different agricultural products. Part 4 is objected to the fishery and rangeland resources. The last part analyses the resource structure and related intensity. This paper is presented as the first part.

2. Analysis For the national-scale system, the exergy input contains the imported, gathered, constrained and extracted commodities as exergy carriers (Wall, 1977). The whole country, except Hong Kong, Macao and Taiwan, is chosen as the boundary of the analysis. The input to the process contains the exploited natural resources and imported commodities flowing into the society. For avoidance of repetitive and cross calculations, the entrance boundary points are set at the same level of the exergy inflow. Most of the data available are from the statistical yearbook of the government (e.g., CCIY, 1982–2002; CESY, 1986, 1991, 1991/1996, 1997/1999, 2000/2002; CIESY, 1988–1990, 1992, 1995, 1998, 2001–2003; CPIY, 1994–2003; CSY, 1990–2003; CYNMI, 1991–2003; SYC, 1980–2002). Forestry products, harvested crops, aquatic products, rangeland resources and hydroelectric resources are regarded as funds while iron ores, nonferrous metal ores, coal, crude oil and natural gas as deposits. This study omits all the thermal exergy of the materials, for the difference between the temperatures of the materials and the environment is small and therefore the thermal exergy is much less than the chemical exergy of the materials according to the basic definition of exergy. Exergies of mechanics and electricity equal to their energy values. As the first part of the present study, this paper investigates the fossil fuels and energy minerals exergy input to the Chinese society from 1980 to 2002. The fossil fuels and energy minerals resource base includes coal, crude oil, natural gas, iron ores, nonferrous ores and nuclear power resources. The exergy content of fossil fuels, as a first approximation, is set equal to the lower heating values (Kotas, 1985; Morris and Szargut, 1986; Schaeffer and Wirtshafter, 1992; Wall, 1977, 1986). Exergy of the metals and minerals are calculated on the standard provided by Morris and Szargut (1986), Szargut (1989), Finnveden and O¨stlund (1997) and Ayres et al. (1998). The Chinese iron ore has an average iron content about 33%, which implies 1 kg of iron ore contains 9.8 moles of iron, thus the exergy content of the magnetite iron ore is calculated to be 0.42 MJ/kg (Wall, 1990; Wall et al., 1994). With relatively low grade of the ore output (aluminum 40%, copper 0.57%, lead 2.46%, zinc 4.09% and tin 0.87%), the exergy contents of the aluminum, copper, lead, zinc and tin are also estimated

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Yuan in 1996 with the promoted technology and reduced operating personnel. On the contrary, the recovery ration of the rural coal mines is always lower than 15% with even shorter lifetime. The coal industries developed sharply from 1949 to 1979, with 1498 new coal mines being exploited and production amounted to 15 EJ (6.36  108 t), of which state-controlled unified central planning was 8.44 EJ (3.58  108 t) and the local state-controlled 6.56 EJ (2.78  108 t) (compared to the 0.7 EJ (3.0  107 t) yielded in 1950). Although the technologies of the coal cutting, tunneling, transportation, lift, ventilation and drainage were gradually promoted, the hand operation mode was in general use associated with low capita production (less than 1 t daily per capita). The structure of the coal production was also simple, being directly utilized along a chain of ‘‘a fire, a stream of fumes and a pile of ashes’’, compared with the multiple utilization of the coal, such as the char coal and gases produced through the washery and post-treatment process in the other countries. In addition, the rapid growth in coal industry, highly administered and planned with state controlled sector, was obtained at the cost of increasing initial investment which was apportioned among the consumers, resulting in the stagnant and relative low-living standard of the people in China. From 1980 to 1981, the coal production (See Fig. 1) is adjusted because of the mismatch, which included irregular cutting and tunneling and chaotic management of the whole coal industry. The production in 1982 started to increase slightly, with 87 coal mines adjusted and the production capacity of the new established mines expanded to 2.83 EJ (1.2  108 t). The transportation facilities of the coal changed from lighttonnage carriage and locomotives to large-tonnage unit train and push boat. The coal production met the target 16.9 EJ (7  108 t) in 1983, which was scheduled to be met in 1985. The increase

in the same way to be 0.3, 0.026, 0.021, 0.046 and 0.0002 MJ/kg, respectively. 3. Results and discussion 3.1. Coal There are rich coal resources in China (with administrative map shown in Fig. A.1), amounted to be 9.99  1011 t (ensured reserves) on the average from 1980 to 2002. The distribution of the coal production is unbalanced with 14 ten-million-t coal complexes located in the north of the Yangtze River, of which 7 are located in north China, concentrated in Shanxi and Hebei associated with 1.2  108 t coal yields (Jin et al., 1997). The intensified exploration cannot meet the increasing demand for the coal as necessary resources to support the economic development in the southeast China, which subsequently resulted in the long-distance dispatching and transportation of the coal from north to the east and south. The coal production can be divided into three major parts according to the administrative institutions: state-controlled unified central planning, local state-controlled and rural coal mines. In 1990, the unified central planning, local statecontrolled and rural production amounted to 44.5%, 19.0% and 36.0% of the total production, respectively. Based on the exploitation and design standard, the stock reservation coefficient of the coal mine should be 1.4 and the recovery ratio 75%. The real recovery ratio is 50%, which indicates the service life of the central unified planning coal mines are 36 years or so (Jin and Jiang et al., 1997). The central unified planning coal industries are in deficit for years because of the price of the coal is state-fixed and the subsidy is not sufficient to support the increasing production, maintenance and mechanization of the whole exploitation process. The deficit was gradually decreasing from 11.99 billion Yuan in 1990 to 0.6 billion 3.50E+019

1.40E+009

Coal 3.00E+019

1.20E+009 2.50E+019

2.00E+019 8.00E+008 1.50E+019

6.00E+008

1.00E+019

4.00E+008

5.00E+018

2.00E+008 0.00E+000

0.00E+000 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Year

Fig. 1. Coal production exergy from 1980 to 2002 of China.

Production (t)

Exergy (J)

1.00E+009

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was the first time obtained with the balance of the preparation and mining work. Also, the policy was specified to develop the rural coal mines (increased to 40 thousands associated with 16% production increment), for the unemployment problem is serious and imperative to be solved by providing more jobs in coal industries regarding the return of thousands of the ‘‘educated youth’’1 and the surplus laborers released from the countryside and rural areas. In 1984, the coal production continued the upward trend, summing up to 18.6 EJ (7.9  108 t), of which the production of the rural coal mines amounted to 4.9 EJ (2.1  108 t) (27.5% upsurge compared with 1983). Considering the abundant coal resources, which distributed in more than 1100 cities and towns and was suitable for the peasants to exploit, the government encouraged the peasants to contract and operate the medium- and smallsized coal mines so as to meet the rising demand for the coal under poor transportation facilities. With the coal being permitted to be transacted in the market, the coal being transported freely throughout the whole country and the marginal and scrappy coal fields being distributed to the peasants, the number of the rural coal mines skyrocketed to 50,000 and the corresponding yields amounted for 62% of the total coal production increment. The central government put the ‘‘General Contract Programme’’ into practice in 1985. The quantities of the coal production was divided into definite targets and directly related to the economic benefits of each level of the coal production department. Thus, the coal production increased drastically to 20.6 EJ (8.7  108 t). The coal production mounted to 25.5 EJ (10.8  108 t) in 1990, accompanied by the improved mechanization and efficiency (1.217 t daily per capita). Despite of the growth, the state-fixed price of the coal was still extremely low and the state of the operation of the state-owned coal mines was terrible. From 1991 to 1993, the economy of the Chinese society experienced the most serious inflation. Macroeconomic polices were implemented to cool down the overheated investments in a wide range of the industry economy, therein the coal investment and production gradually contracted because the demand for the coal which is less than the supply suppressed the coal production. Thereafter, the coal production revived and the deficit was 1.97 billion Yuan, which is less than the ‘‘scheduled’’ deficit 2.00 billion Yuan in 1994 and the deficit 3.26 billion Yuan in 1993. In addition, the rural coal mines were initially reformed and consolidated, 13,000 small-sized coal mines without certification being closed. The deficit of the key state-owned coal mines decreased to 1 Educated youth refers to those young urban people (amounting to ten millions) who graduated from high schools and colleges and were sent to the countryside and rural areas to be reeducated in political consciousness by the poor peasants in response to Chairman Mao’s call from 1968 to 1975 in the Cultural Revolution. They spent years of toil with poor living and production conditions. Most of them had returned to the urban areas through the recruit of workers and students since 1980s.

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1.03 billion Yuan, for the whole coal industry began to be transferred from the conventional policy based on the state-fixed yields to the marketing balance between the supply and demand in 1995. The coal production in 1996 mounted to the maximum (32.9 EJ or 13.7  108 t), of which the central controlled unified planning production was 12.7 EJ (5.4  108 t), the local state-controlled 5.2 EJ (2.2  108 t) and the rural ones 14.4 EJ (6.1  108 t). The deficit of the key state-owned coal mines reduced to 0.6 billion Yuan, with the production, diversified management and logistics departments being separated and independently accounted. In 1997, rectification and readjustment were performed in order to balance the wide gap between the supply and demand, corresponding coal production being 32.4 EJ (13.3  108 t). Drastic measures were implemented in 1998, with the result that 94 key state-controlled coal mines associated with 237.9 billion asset and 4.35 million employees were handed over to the local government and no production plans and breakeven indices which was prescribed by the State Coal Industry Bureau was needed to be finished thereafter. The decision to close various small-sized coal mines and decrease 5.9 EJ (2.5  108 t) coal production was also made by the State Council. ‘‘14.40’’ Project was also scheduled to make 14 deficit coal enterprises bankrupted and 40 resourcedepleted and low-quality coal mines closed in 1999 so as to adjust the basic structure of the coal industry. The coal production in 1998 fell to 29.5 EJ (12.3  108 t). The coal production further reduced to 24.6 EJ (10.4  108 t), with 31.2 thousands closed small-sized coal mines, wherein 15.6 thousands illegal coal mines, and 6.3 EJ (2.68  108 t) contracted production of the rural coal mines in 1999. Alongside with the unemployment of the coal industry amounted to 0.4 millions, the deficit and debt of the coal industry were further decreased with much better technical and economic target. The coal production reached 20.8 EJ (9.99  108 t) in 2000, which was equal to the production in 1986. Until the end of 2000, 4.6  104 small-sized coal mines were closed with only 2.5  104 left. The coal business order was further rectified by the government. Moreover, to alleviate the pressure of the civil coal market, the government supported the coal export by providing the refund of the export tax rates and decreasing the freight base and commodity inspection expense, with the result that the coal export amounted to 12.9 EJ (5.5  107 t). From 2001 to 2002, the coal production rebounded, for the production structure was adjusted, the supply and demand tended to balance and the coal stocks continued to be disposed. Also, as regards the allocation of the statecontrolled coal mines restored to more than 80% of the total coal production (only 57% in 1997), the government reinstated to regulate and control the whole coal market (Fig. 2). The produced coal is mainly applied to private consumption, thermal power plant and coking industries,

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Exergy (J)

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3.40E+019 Unified central planning 3.20E+019 Collective 3.00E+019 Individual 2.80E+019 2.60E+019 2.40E+019 2.20E+019 2.00E+019 1.80E+019 1.60E+019 1.40E+019 1.20E+019 1.00E+019 8.00E+018 6.00E+018 4.00E+018 2.00E+018 0.00E+000 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 Year

Fig. 2. Unified central planning, collective and individual production exergy from 1980 to 2002 of China.

2.40E+019 2.20E+019

Power generation Coking

Exergy (J)

2.00E+019

Private consumption

1.80E+019

Heating

1.60E+019

Gasification

1.40E+019 1.20E+019 1.00E+019 8.00E+018 6.00E+018 4.00E+018 2.00E+018 0.00E+000 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 Year Fig. 3. Coal consumption exergy from 1980 to 2002 of China.

of which only about 0.3% is gasified as is shown in Fig. 3. However, it is essential to generalize the gasified coal with efficiency higher than 60% and less air pollution. Based on the washery of the coal, clean coal technology is needed to convert the crude coal in an efficient way, concentrating on the processing (dressing, slurry), combustion (fluidized bed furnace, advanced pulverized coal burner and unified coalfired recycle power generation), reforming (gasification, liquidation, coking and decomposition) and pollution control (purification of gas and integrated utilization of fly ash) procedures.

Notwithstanding the effect of the policies administrated by the central and local government are often obvious and powerful, China’s policy on coal industry has not followed a coherent program. Take the development of the smallsized rural coal mines for instance, coal resources were badly wasted when the policy made in 1984 to develop the rural coal mines triggered the high-speed growth in coal production. Every coin has its two sides. On one hand, the small-sized rural coal mines satisfied the imperative need of the coal demand, supplemented the scarce capital of the government and met the local need of coal when the rural

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transportation facilities were poor. On the other hand, most rural coal mines possessed the production capacity less than 5  104 t annually associated with extremely simple and crude exploitation equipments. Generally, the exploitation of the rural coal mines focused on the shallow surface coal seam. After years of exploitation, the shallow coal resources were nearly depleted. Meanwhile, accompanied with large amount of discharge of mine waste water, methane drainage and waste rock, the non-exploited coal seams left by the state-owned coal mines were spoiled by the rural coal industries in a predatory way, which led to serious destruction of the coal resources. Considering the profound ecological destruction and resource depletion, the central government changed the former policy in order to reverse the direction of the rural coal mines development. Higher cost had to be paid by the local rural coal industry. Albeit the central government regained powerful control of the integrated coal production, the losses of the local government and the peasants seemed to be covered. Thus, many rural coal mines rejected the prohibition and continued to operate under the acquiescence of the local government. 4. Crude oil The history of the utilization of crude oil can be traced back to 1300 years ago in North Song Dynasty, when the people started to drill the oil well manually in the northern Shaanxi. In Shen Gua’s Mengxi Bitan (1088 A.D.), the crude oil was recorded in detail and interestingly, the released smoke dust released by the burned crude oil was strongly commended not as a kind of useful fuel, but as a better choice of high-quality material for China ink. In 1878, the Qing dynasty government hired a team of drilling engineers from the US to drill the oil well located in Taiwan with 120 m depth and 1.5 t daily production (Wen,

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2002). From the first oil well drilled in Taiwan to the foundation of PRC, there had been 134 oil wells associated with 3  106 t oil yields. The first major onshore oil field located in northeast China, that is, Daqing oil field, which was discovered in 1959 and other explored oil fields had provided sufficient petroleum until the late 1970s. Because of the insufficient storage capacity and exploration investment, the crude oil production of the key onshore oil fields decreased in 1980 and 1981 (Fig. 4) while the demand of the oil accelerated. Moreover, inasmuch as the central government blueprinted the policy to ‘‘constrict, substitute and save’’ and export-increasing amount of crude oil, the fraction of the oil consumption continuously decreased compared with the coal consumption. The government subsequently planned to stabilize the crude oil production above 0.1 billion tons. Overall rationing system is thus established, wherein 94.5% of the crude oil and 90.5% of the oil refinery are unified planned and the surplus part of the crude oil and the products of the oil refinery are permitted to be exported and the 85% of the price margin is allowed to be stocked as exploration development fund and 15% as the bonus. However, expanded exportation, e.g., amounted to 29% of the production in 1985, constrained the increasing oil demand of the civil economic growth. There are three main oil and gas companies in China, CNPC (China National Petroleum Corporation), SINOPEC (China National Petrochemical Corporation) and CNOOC (China Offshore Oil Corporation). CNSPC (China New Star Petroleum Corporation) was established in 1997 and purchased by SINOPEC in 2000. CNOOC was founded in 1982 by the State Council of China, for the independent exploration of the abundant offshore reserve potential of the petroleum is necessary and cooperative exploration associated with foreign technology and investment are also needed.

7.50E+018

2x108 2x108 6.50E+018 2x108 6.00E+018 1x108 1x108 5.50E+018 1x108 5.00E+018 1x108 4.50E+018 1x108 4.00E+018 9x107 3.50E+018 8x107 3.00E+018 7x107 6x107 2.50E+018 5x107 2.00E+018 4x107 1.50E+018 3x107 1.00E+018 2x107 5.00E+017 1x107 0 0.00E+000 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Year Crude oil

Fig. 4. Crude oil production exergy from 1980 to 2002 of China.

Production (t)

Exergy (J)

7.00E+018

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Exergy (J)

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3.20E+018 3.00E+018 2.80E+018 2.60E+018 2.40E+018 2.20E+018 2.00E+018 1.80E+018 1.60E+018 1.40E+018 1.20E+018 1.00E+018 8.00E+017 6.00E+017 4.00E+017 2.00E+017 0.00E+000 -2.00E+017

Crude oil export Crude oil import

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

Year Fig. 5. Crude oil export and import exergy from 1986 to 2002 of China.

5. Natural gas The history of the utilization of natural gas can be traced even earlier to 1800 years ago in Sanguo period when the

500 Discovered oil fields Operating oil fields 400

Number

The crude oil production amounted to 23.26 EJ with 5.34 EJ exported during the sixth five-year plan period (1981–85) which in turn constrained the development of the civil transportation and heavy industries though the foreign exchange receipt about 26 billion dollars were gained. During the seventh five-year plan period (1986–90), the production of the former major oil industries located in the eastern China stabilized, the water content averaging 80% and the natural declining 14%. The exploitation transferred to the western areas, where the Talimu Basin oil field was being explored. Meanwhile, the production of Daqing, Liaohe, Shengli, Dagang and Zhongyuan fields continued to increase with adjustment to stabilize the declining ratio and water content. The explored reserves accumulated 0.89 billion tons and the total production amounted to 2.95 EJ, kept rising gradually during the eighth five-year period (1991–95) with four new million tonnages oil fields, that is, Tazhong, Shixi, Qiuling and Ansai being discovered In addition, the import crude oil exceeded the export the first time in 1993, which indicated the dramatically increasing demand for crude oil (See Fig. 5). The increasing crude oil production mainly depended on the production of the new discovered oil fields (See Fig. 6). In 1998, the petroleum industry was recombined. In addition, the oil supply exceeded the demand, due to the attack of the financial crisis of Asia and the severe smuggle in China.

300

200

100

0 1940

1950

1960

1970 Year

1980

1990

2000

Fig. 6. Discovered and operating oil fields from 1948 to 2000 of China.

people in Sichuan boiled the salt and cooked over the gas well. The Mozi Well, drilled in 1850 with the depth 1200 m and 5  104 m3 daily production, used to be the deepest well in the world (Wen, 2002). From the first oil well drilled in Taiwan to the foundation of PRC, there had been 1.2  109 m3 natural gas yields accompanied with the development of the petroleum industry. It was until 1980 that the first natural gas reservoir was put into operation in Daqing. In the following years (1980–95), the natural gas production developed slowly compared with the crude oil production (see Fig. 7). The investments in the natural gas industries are only tenth of the amount invested in petroleum industries and the heavy resource tax (2–15 Yuan/m3), added value tax

ARTICLE IN PRESS G.Q. Chen, B. Chen / Energy Policy 35 (2007) 2038–2050

2045 3.50E+010

1.40E+018

1.20E+018

3.00E+010

1.00E+018

2.50E+010

8.00E+017

2.00E+010

6.00E+017

1.50E+010

4.00E+017

1.00E+010

2.00E+017

5.00E+009

0.00E+000

Production (cum)

Exergy (J)

Natural gas (cum)

0.00E+000 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Year

Fig. 7. Natural gas production exergy from 1980 to 2002 of China.

oil fields. Seven gas fields were discovered and two were put into operation associated with production capacity 6.27  1011 m3 and associated gas 2.28  1011 m3. The supervisor mode transferred in 1997, from the focus on the simple safe and stable production to the multichannel marketing, which in turn stimulated the further production increment. From 1998 to 2002, the natural gas production skyrocketed, for the large scale explored gas fields, distributed in Zhungeer, Talimu, Shanxi–Gansu–Ningxia and Sichuan were discovered with generation of new technologies, e.g., high-resolution imaging well logging method. Investments in abroad natural gas resources and the obtained natural gas quotas also added to the civil increasing production.

160 140

Discovered gas fields Operating gas fields

Number

120 100 80 60 40 20 0 1940

1950

1960

1970 1980 Year

1990

2000

6. Iron ores

Fig. 8. Discovered and operating gas fields from 1948 to 2000 of China.

(13%) and income tax (33%) further impede the exploitation of natural gas. Also, the materials input to the natural gas industries are regulated by the market whereas the production is decided and fixed by the parent administrative department, at costs which the natural gas industries are always in deficit without the capability to operate at a profit to explore. Despite the disadvantages mentioned above, new gas fields discovered in the eighth 5-year period, encompassing Shaanxi–Gansu–Ningxia with 2.28  1011 m3 reserves, Eastern Sichuan with 2.0  1011 m3 reserves and Xinjiang with 1.87  1011 m3 reserves, provided sufficient resources to increase the production (see Fig. 8). The exploitation scale of the gas blanket expanded in Sichuan, Qinghai, Tuha and Xinjiang in 1996 in order to compensate the decreasing natural gas production accompanied by the declining crude oil production of the eastern

There are a great variety of mineral resources in China, of which 152 minerals have been explored. China has now become one of the largest mining countries in the world, with 8840 state-run mines at the county level or above and 230,000 collective-owned mines of local government (Zhu, K.F., 1994; Zhu, X., 1994). The iron ores is of great importance for the national economics. However, the mining intensities of the present national key open iron mines are less than half of the foreign mines’ intensities. The recovery rate of the mining and dressing is also relatively low, with the total combined utilization ratio being less than 30%. The poor grade and low iron content exacerbate the scarcity of the iron ores in China. According to the Statistical Yearbook of Chinese Iron and Steel, the total iron ore production is shown in Fig. 9. During the seventh 5-year period, imported iron ores amounted for more than 6  107 t. The iron ores were further imported by large margin in the eighth 5-year

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1.20E+017 Iron ore

1.10E+017 1.00E+017 9.00E+016

Exergy (J)

8.00E+016 7.00E+016 6.00E+016 5.00E+016 4.00E+016 3.00E+016 2.00E+016 1.00E+016 0.00E+000 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Year Fig. 9. Exergy inflow of the iron ores from 1980 to 2002 of China.

Table 1 Imported iron ores and its iron output (unit: t) Year

Imported iron ores

Iron output from the imported iron ores

National iron output

Fraction (%)

1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002

7.25E+06 1.01E+07 1.42E+07 4.12E+07 4.39E+07 5.51E+07 5.18E+07 5.53E+07 7.00E+07 9.23E+07 1.15E+07

4.68E+06 6.53E+06 9.16E+06 2.65E+07 2.83E+07 3.56E+07 3.34E+07 3.57E+07 4.51E+07 5.96E+07 7.19E+07

3.80E+07 4.68E+07 6.24E+07 1.05E+08 1.07E+08 1.15E+08 1.19E+08 1.25E+08 1.31E+08 1.56E+08 1.71E+08

12.31 13.95 14.68 25.21 26.40 30.89 28.18 28.45 34.46 38.29 42.12

period, mounting to 1.6  108 t. The imported iron ores and its iron output over the past years are recorded in Table 1. It can be seen that the iron output has been largely dependent on the importation in recent years. 7. Nonferrous metal ores According to the Statistical Yearbook of the nonferrous metal industry, the inflow of the nonferrous metal ores is described in Fig. 10. Before 1980, the nonferrous metal industry was running under the direct supervision of the government, with mandatory plan stipulated by the government, materials provided by the government, yields allocated by the government and prices decided by the government. In the following years, the mandatory plan was transferred to

guidance plan, which reduced 80 nonferrous metal products under the mandatory plan to 23 in 1985 and further 17 in 1988. The two-tier price system, that is, mandatory price and market price system, is gradually modified which in turn protect the incentive for production of the nonferrous metal industries. Powerful measures were also adopted to integrate the logistic of the production. Therefore, the production and the resource exergy inflow of the nonferrous metal ores continually increased from 1980 to 2002. 8. Nuclear power China has made progress in nuclear power plant (NPP) as shown in Fig. 11. Three hundred megawatt Qinshan NPP in 1991 and 2  600 MW Daya Bay NPP in 1994 were

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4.00E+016

2047

Nonferrous metal ores

3.50E+016

Exergy (J)

3.00E+016 2.50E+016 2.00E+016 1.50E+016 1.00E+016 5.00E+015 0.00E+000 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Year Fig. 10. Exergy inflow of the nonferrous metal ores from 1980 to 2002 of China.

1.00E+017 Nuclear power

2.50E+010

8.00E+016

6.00E+016 1.50E+010

4.00E+016

1.00E+010

2.00E+016

5.00E+009

0.00E+000

0.00E+000 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Year

Production (kWh)

Exergy (J)

2.00E+010

Fig. 11. Nuclear power exergy from 1980 to 2002 of China.

put into operation, respectively, supplying the need of Hong Kong and Guangdong (Zhao et al., 1997; Zheng and Yan, 1997). The second phase of 2  600 MW Qinshan NPP was put into operation in 2002 whereas the third phase of 2  700 MW Qingshan NPP in 2003. The first phase of 2  1000 MW Ling’ao NPP was also running in 2002, mainly supplying Guangdong. In addition, Tianwan NPP with 2  1000 MW is scheduled to be operated in July 2004. Also of concern is that the first phase of Qingshan NPP shut down in 1999 (about 1 year) due to the unscheduled maintenance of the reactor system, as well as the transformation from old seawater pipes to new ones in February 2000 for 2 weeks and the extensive repair in

November 2000 for 3 months (China Power Industry Yearbook, 1999–2003). In December 2002, the International Atomic Energy Agency (IAEA) evaluated the radiation protection state of Qingshan NPP based on the RAS/9/022 Project. Also, Cooperation Project with China and the US for Preventing Neural Tube Abnormality from 1991 to 2001 has shown that the birth defects rates stabilized at 7% annually compared with the mean annual rate 7.9% in Haiyan (http://www.chinanews.com.cn/200112-19/26/148005.html), in which the Qinshan NPP located, indicating the radiation impact of the Qinshan NPP on the local environment is in the safe range, for the exposure of the pregnant women to the over-dose radiation will lead to serious and increasing birth defects rate.

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Large amount of supporting facilities have been made in respect to the technical devices and fuel transportation to guarantee the safety of the NPPs. The development and use of nuclear power is to optimize the energy consumption structure, meet the need of the electricity for the economic development of the costal area in China and construct a new energy base in contrast with the north coal base and southwest hydropower base. Uranium resources, abundant in China with 5 main uranium mines, are explored and proved to be 2000 t, guaranteeing the normal running load and the further development of the NPPs. A complete fuel cycle system, which is formed during the development of the military nuclear industries, is also available to construct solid foundation for the NPP. The feasibility study report of the NPP is standardized by the Electricity Ministry. First, the necessity of the NPP should be analyzed based on the annual normal supply of the primary energy resources, illustrating the corresponding benefits of promoting the primary energy structure. Secondly, the factors of plant location, embracing the geographic position (especially the population distribution by 80 km radius), meteorological condition, hydrological data and seismic activities, should be illuminated. Thirdly, the water resource and supply, which depend on the cooling-down method, supply and sewerage of the NPP, should be guaranteed. Fourthly, the annual individual effective dose to the public living (adult) under normal operating condition, resulting from the radioactive materials released to the environment, as well as the collective effective dose to the public living in the accident in the 80 km zones surrounding the NPP, should conform to the National Standard (GB6249-86). Finally, the type of the nuclear fuel components associated with supply and the storage and transportation of the spent fuel and radioactive waste should be specialized. Along with the foundation of the National Nuclear Safety Administration (NNSA) in 1984, Chinese government had established nuclear safety supervision and management organization. In order to lower the environmental influence, the nuclear waste are timely arranged for the necessary treatment as several special disposal sites are constructed (Zheng and Yan, 1997). However, the health risk of the nuclear power cannot be neglected. The normalized annual collective effective e dose to the public living in the 80 km zones of NPP are roughly estimated to be 6.4, 0.57, 0.017, 0.20, 0.21, 15.2 manSv/GWa for mining, element fabrication, transportation, generation, tailing piles decommissioning and occupational radiation, respectively (Zhao et al., 1997). Also the normalized accident death rate for NPP is 3.5 deaths/GW a (Pan, 1996). 9. Conclusion This paper is concerned with the resource accounting, employing the concepts of exergy, which serve as basic indicators to reflect the status of the resource consumption, to investigate the resource inflow of the Chinese society

during 1980–2002 with respect to productions of coal, crude oil, natural gas, iron ores, nonferrous metal ores and nuclear power. The coal resource is abundant in China, though the spatial distribution is strongly unbalanced. Thus, dispatch and reallocation are needed through the complex transportation network based on the strategy of gradient development which favoring the eastern costal areas adopted by the central government. According to the different demands of the private consumption, thermal electric power generation, coking industry, construction industry and chemical industry in different provinces and areas, the central government predicts the consumption and thereby schedules the production and works out comprehensive plans to reallocate the coal resources from the abundant areas to the scarce areas, which deteriorated the degree of the inter-provincial disparity, especially the eastern coastal areas vis-a`-vis the northwest areas. The policy swings from one extremity that the whole national resources were shared based on egalitarian, often transferred from the developed areas, say, Shanghai, to the lagging areas, say, Shaanxi in the Cultural Revolution to another extremity that the major national resources, particularly the coal resources, were squeezed to support the high-speed economic development of the developed areas. Massive resource exergy flows from the rural areas and hinterland with undeveloped natural resources to the urban and industrial centers at the expense of the disappearing hope of the rural areas to catch up with the urban areas and gain the appropriate repayment under the big scissors difference existed in the resource pricing system where the natural crude resources are set at extraordinary low levels while the processed consumer commodities are set at high levels to expand the industrial production which further benefits the urban and developed areas. Considering the spatial distribution of the coal resources in China, the explored coal is not ready to be used or the end user in the society. The constant increment in coal transportation is necessary to reallocate the unbalance distributed coal resources. The local coal exergy resources are globally shared and the coal exergy, which is really available for the end use should embody the accumulated and added exergy in the conversion chain. Embodied exergy concept is thereby necessary to be introduced to clarify the real consumption of the exergy resources if the integrated conversion process from the natural resources to the real available resources is to be considered (Chen, 2005, 2006) and relative investigations will be presented in the other papers. Moreover, the policy on coal industry hasn’t followed a coherent program, especially for the development of the small-sized rural coal mines. The small-sized rural coal mines at the initial stage do satisfied the imperative need of the industries, comprising thermal power plant and coke industry. However, the devastating exploration way and associated environment impact and resource depletion urged the central government to shut down the small-sized

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rural coal mines, for all the local government benefited from the short term economic interests still rejected the straining order. The insufficient storage capacity and exploration investment in crude oil industry impelled the central government to stabilize and increase gradually the production by virtue of exploring new oil fields and increment of import when the oil supply exceeded the demand with the result of rapid economic development. Unlike the crude oil, the production of natural gas stagnated due to the little investment, heavy resource tax, added value tax and income tax in the early 1990s. Also, the institutional factor brought about the conflict between the production dependent on market and the circulation determined by the parent administrations. It was until 1997 that the institution conversion and new gas fields discovered accelerated the production of natural gas. The recovery rate of the mining and dressing being less than 30% and the poor grade and low iron content led to scarcity of the iron ores. From 1980 to 2002, the national iron production depended more and more on the imported iron ores. The production of the nonferrous metal ores continually increased in the past tow decades owing to the mandatory plan stipulated by the government under the two-tier price system, viz., mandatory price and market price system. Since the uranium resources is self-sufficient in China, the development and use of nuclear power is desirable to optimize the energy consumption structure, meet the need of the rapid development of the coastal area and construct a new energy base. The feasibility study report of the NPP is standardized by the Electricity Ministry, wherein the necessity, plant location, water resource and supply, annual individual effective dose and the type of the nuclear fuel components and radioactive waste are considered. To guarantee the safety of the NPPs, large amount of supporting facilities have been made as well as periodical maintenance. In addition, along with the foundation of NNSA, the nuclear safe supervision and management organization had been established to lower and control the NPP environment impact.

Acknowledgments This work was funded by the State Key Basic Research and Development Plan (973 Plan, Grant No. 2005CB 724204), National Nature Science Foundation of China (Grant No. 1037226) and China Postdoctoral Science Foundation (Grant No. 2005038036). We thank the anonymous reviewer and the Editor of Energy Policy for their useful suggestions and valuable comments.

Appendix A Administrative map shown in Fig. A.1.

2049

Fig. A.1. . Administrative Map of China.

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