Chinese geologists have, since the 1980s, continuously reported encouraging new findings in exploring energy resources in the 370,000-square kilometer basin, which covers Shaanxi, Shanxi, Gansu provinces and Ningxia Hui and Inner Mongolia autonomous regions.

The basin is proved to have reserves of 8.59 billion tons of oil, 10.7 trillion cubic meters of natural gas and 3.98 trillion tons of coal, along with rich uranium, underground water and terrestrial heat resources.

Jia Zhibang, governor of Shaanxi, said the province plans to invest more than 1.2 10 billion US dollars in initiating some major energy projects this year, including a 1.2-million-kw coal-fueled power plant, the first phase of a 1.2-million-ton carbinol project and a 300,000-ton PVC project, and an 8-million-ton coal mine.

"After more than ten years of construction, the coal and oil exploiting industries have taken shape in the province, and the time is ripe for pacing up development and promoting comprehensive utilization of resources," said Jia.

In neighboring Inner Mongolia, the construction of a coal liquefaction project has started at a cost of 30 billion US dollars in the Shenhua Group, a major energy company in China. The first phase of the project is expected to go into operation in 2005.

Energy has long been a bottleneck for China's economic development. Though China boasts rich mineral resources, the per capita occupation is only about 90 tons in terms of standard coal, while the per capita consumption is less than 1.2 tons of standard coal, which is less than a half of the world's average.

Energy experts agree that as China maintains sustained rapid economic growth, the country will have a even tighter energy supply.

The State Council Development and Research Center says in its latest research report that China's annual economic growth rate is expected to reach 7 percent to 7.9 percent in the 2001-2010 period, which will inevitably stimulate greater demand for energy consumption.

The International Energy Agency predicted that China's energy demand will grow by 2.7 percent annually in the years to 2030, when annual demand will reach 3.19 billion tons of standard coal.

Meanwhile, experts are optimistic about the prospects of the Ordus Basin, saying that China's policy to develop the vast western region provides a good opportunity for development of energy resources in the basin.

In the past decades, China's energy development projects were mostly located in the eastern part. "But focus of energy development will gradually be moved to the west as demand further increases with rapid economic growth in the coastal eastern areas," said oil expert Wang Daofu, general manager of Changqing Oil Exploration Company under the China Petrol Group.

Wang's company is now in charge of oil exploration in the Ordus Basin.

Under China's energy development blueprint, the government has listed optimizing the structure of energy resources as "the priority among priorities."

Currently coal and oil products from the Ordus Basin have played an important role in China's economic development. The basin is now providing 4.75 billion cubic meters of natural gas to15 large and medium-sized cities including Beijing and Tianjin. Natural gas will also be pumped to cities along the eastern coast such as Shanghai and Nanjing starting this October.

(People's Daily April 14, 2003)