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One traditional saying dominates the minds of planners in China: “Even a small act of lifting a strand of hair sets the whole body in motion.” The Western analogy is known as the “butterfly effect.” A centrally planned action in Beijing causes a reaction as far away as Brussels, Washington, Vienna, and Moscow. The Chinese government is determined to keep its country’s economic engine running in high gear, which will require an unprecedented alignment of foreign and domestic energy resources. China is slated to become the biggest single importer of all three primary fuels (oil, coal, and gas) in the next five years.
With China investing in oil, gas, coal, nuclear, and renewable energy, every single aspect of global energy balances will be influenced by the extensive growth in Chinese energy use. To help clients follow and understand this development, PIRA has undertaken a comprehensive study that examines the Chinese energy sector in depth and the new challenges — and opportunities — that buyers and sellers will face. "Tilting the Balances: A Comprehensive Look at Energy in China Through 2025" helps market participants follow and understand these dynamics, instructing them on how to take into account China’s future world role in the context of their respective businesses.
"Tilting the Balances" — though a comprehensive written report, database, and online presentation — is a truly exhaustive treatment on the Chinese energy complex, all the way down to the by-privince level. It includes data and analysis on the following key topics:
Companies purchasing the study will entitle 5 users to each of the following deliverables (licensing options are available to add extra users):
A detailed written report will spell out the findings of the study, the bases of underlying the Reference Case, and a discussion of key uncertainties that impact the major findings. Study outline:
Overview of China
Demand and Supply of Energy to 2025
Pricing of Energy Resources in China
Historical data back to 2005 and forecasts through 2025 in Excel spreadsheets for:
A live presentation, conducted online, presents the key results of the study, discuss the market implications of these findings, and offer the ability to question the study’s authors. The presentation was also recorded for online playback at the buyers’ convenience.
Study buyers may choose to have a private (online or on-site) briefing of the study’s findings for an additional fee. Such an option allows for a more thorough dialog with the authors as well as some customization of the presentation. Arrangements (location, date, etc.) are made on a case-by-case basis, which will determine the cost of the option. Please contact your PIRA account representative if you are interested.
The Chinese energy market is unique. No country faces as much pressure in providing so much energy to so many people in so little time. No single country carries as much weight in altering the incremental world energy balance as China. The country’s looming energy demand growth is casting a worrisome shadow on competing buyers while opening unprecedented opportunities to sellers.
From domestic production to international imports, China stands at center stage in terms of competitive fuel use and pricing, including oil vs. gas, coal vs. nuclear power, and greenhouse gas vs. renewable. What China cannot produce, it will import and is prepared to purchase these resources as far upstream as possible. The volume, quantity, price, and type of fuel will depend on where and when these needs occur. What central planners in China ultimately decide must benefit the country’s unique socioeconomic “ecosystem.” This process is the defining characteristic of Chinese energy policy and will determine the timing, volume, sources, and distribution pattern of various energy resources.
China’s breakneck pace of development calls for a top-to-bottom understanding of how much energy it wants, how much it needs, how much it is willing to pay, and how its goals can be reached. PIRA believes that any prognosis on China’s energy demand potential that is based solely on mechanical number crunching is clearly missing the point: Cultural and political positions carry at least as much weight. For example, the Chinese have believed for millenia that taming their ravaging rivers is a sign of positive governance; therefore, the enormous Three Gorges Water Dam was built despite controversies. PIRA’s China Study combines its industry-leading global energy forecasting prowess with an intimate interpretation of what motivates the Chinese.
The immense role that China will play in shifting future global energy balances is undeniable. Every aspect of the energy business — from gas reserves in North and South America to coal prices in Central Asia and electricity prices in South Africa — will be influenced by Chinese decisions on where it will buy reserves, what type of imports it will choose, and how it will plan to grow on a regional and country-wide basis. What the major Western oil companies were to the 20th century will be what Chinese firms will be in the 21st century. It will be hard to find a major transaction around the world that does not have some type of Chinese involvement in terms of bidding or procurement.
The following market participants will all benefit from "Tilting the Balances":
Mickey Kwong (Director, International Gas; Study Leader) is responsible for analyzing global gas pricing and market fundamentals, including business structures, demand, production, unconventional gas, and imports, and he contributes to all of the International Gas Group’s reports. He developed and maintains PIRA's LNG spot price calculator. In 2008 and 2011, he co-authored PIRA's Globalization of Natural Gas and Unconventional LNG: Monetizing North American Gas Exports multi-client studies, respectively. Mickey has also authored single-client special studies on topics ranging from LNG procurement strategy, business models, unconventional gas in China, to long-term international gas market developments. From 1998 to 2006, he was an LNG/natural gas consultant at Poten & Partners, where he advised clients from the Americas, Africa, Asia, and Europe on pricing, demand, and price risk management.
Dr. Mark Schwartz (President and Managing Director of the Scenario Planning Group) works closely with PIRA's Global Oil and Natural Gas groups to evaluate the key assumptions underlying their outlooks and to develop plausible alternative assumptions and outcomes, delivered in the Scenario Planning Service. Before joining PIRA in 2002, he was the Chief Economist of ExxonMobil Corp., where he was responsible for developing the company’s long-range economic and energy outlook. During his 25 years at Exxon he also had assignments in Upstream Planning, Treasurers, and Corporate Planning functions. Mark holds a Ph.D. in economics from the University of Pennsylvania.
Roman Kramarchuk (Managing Director, Emissions and Clean Energy) heads up PIRA's Greenhouse Gas Emissions and North American Environmental Markets services. Prior to joining PIRA in 2005, he was extensively involved in the development of the CAIR and CAMR (Mercury) Rules and the BART Guidelines with the U.S. EPA’s Clean Air Markets Division. Working at PG&E NEG and with PA Consulting / PHB Hagler Bailly, he evaluated strategies regarding power sector fuel choice, allowance purchases and capital investments in pollution control equipment and advised on plant development/acquisition and asset valuation. Roman also spent several years working on USAID- and World Bank-funded projects to develop power markets, market rules and regulatory capacity in Ukraine, Armenia and India. He has an M.P.P. from the Kennedy School of Government at Harvard and a B.A. in economics and B.S.E. in systems engineering from the University of Pennsylvania.
Daniel J. Klein (Senior Director, International Coal) heads up the International Coal Service and is the primary author of the International Thermal Coal Market Forecast and International Coal Markets Scorecard, as well as collaborating on the short- and long-term outlooks for the U.S. Coal Market. Prior to directing the International Coal Service, Mr. Klein was a member of PIRA’s North American Electricity team, beginning in 2003. He has a B.A. in economics from Calvin College.
Peter Jaquette (Director, Global Oil) is a key contributor to PIRA's Scenario Planning Service and is the coordinator of the Planning for Tomorrow study series, working closely with PIRA’s Global Oil, Refining, Biofuels and Freight groups. Peter joined PIRA in 2007 with more than 25 years of experience in corporate strategic planning and economic consulting, including 14 years with ARCO and nine years with Weyerhaeuser, where he was involved in evaluating cellulosic ethanol and other energy projects. Peter has a B.A. in economics from Swarthmore College and an M.A. in economics from Stanford University.
Miriam Levy (Senior Analyst, Global Oil) supports both the Political Risk and Global Oil groups, analyzing the downstream and upstream implications of political, economic, and fundamental issues. She is responsible for the weekly Energy Market Recap and contributes to special projects and multi-client studies. From 2006 to 2009, she consulted electric utilities on power procurement at NERA Economic Consulting. She also worked as an analyst at an emerging markets hedge fund. Miriam has a B.A. in Ethics, Politics, and Economics from Yale University and an M.A. from Columbia University in International Energy Management and Policy.
Nobuo Tarui (Associate Director, Global Oil) has over 10 years of experience in energy and economic issues and is responsible for tracking and analyzing economic data for energy market implications. He is responsible for PIRA’s weekly Economic Recap report as well as quarterly China and India oil demand reports. Prior to assuming his current position, he worked for the Dai-Ichi Kangyo Bank Research Institute as a U.S. macroeconomist and at UBS Energy as a U.S. natural gas market analyst. Nobuo holds a B.A. and an M.A. in economics from NYU.
Dr. Naing Oo (Associate Director, Global Oil) joined PIRA’s Global Oil Group in 1995. He focuses on quantitative and econometric analysis for forecasting oil demand and is responsible for maintaining PIRA’s global short-term oil demand model. Naing is also involved in both short- and long-term analysis of crude and product supply/demand balances and trade flows, and he has contributed to numerous PIRA multi-client studies and consulting projects. Naing holds a Ph.D. in economics from the City University of New York.
"Tilting the Balances: A Comprehensive Look at Energy in China through 2025" can be purchased by both current PIRA Retainer Clients and non-clients.
Existing PIRA retainer clients will receive a reduced price.
Private Workshop Option: The study may include a live video briefing at a mutually agreed upon time. For an additional charge (to be quoted by PIRA), clients may choose a customized on-site presentation. Contact your PIRA account representative.